Innovative Solutions & Support, Inc. Announces Fourth Quarter and Full Year Fiscal 2021 Financial Results | Financial Buzz

Innovative Solutions & Support, Inc. Announces Fourth Quarter and Full Year Fiscal 2021 Financial Results

Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the fourth quarter and full fiscal year 2021 ended September 30, 2021.

For the fourth quarter of fiscal 2021, the Company reported net sales of $6.9 million up over 9% as compared to $6.3 million in the fourth quarter a year ago. The Company reported net income of $1.5 million, or $0.09 per share, an increase of 23% compared to $1.2 million, or $0.07 per share, in the fourth quarter of fiscal 2020. The Company recorded tax expense in the fourth quarter of fiscal 2021 of $0.4 million, no tax expense was incurred in the fourth quarter of fiscal 2020.

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “The fourth quarter was a strong finish to another year of solid growth. Revenues and earnings were up for the third consecutive year and, led by an expansion in gross margins, it was our most profitable year in over a decade. Cash flows from operating activities more than doubled from a year ago, and we once again ended the year in a strong financial position.

“Just as importantly, we continued to strengthen our franchise this quarter. During the quarter we were awarded European Union Aviation Safety Agency (EASA) and Transport Canada Civil Aviation (TCCA) Supplemental Type Certifications (STC) for our ThrustSense® Full Regime Autothrottle for King Air so that now over forty countries outside of the US have approved our revolutionary auto-throttle technology. In addition, we announced we are taking orders for the ThrustSense® Autothrottle system with LifeGuard™ Protection for CJ series aircraft outfitted with Pro Line 21, Pro Line Fusion, and Garmin avionics for delivery in early 2022. Both of these accomplishments serve to deepen and broaden our addressable market. We are already entering the new year with a backlog that is almost triple that of a year ago, and with this continued enhancement and expansion of our product portfolio, we believe we can continue to profitably grow the business in the coming year.”

The Company’s cash on hand increased to $8.3 million at September 30, 2021, with net cash flows from operating activities of $800,000 in the fourth quarter. The company generated $4.6 million of cash flows from operating activities for the full fiscal year 2021. Since September of 2020, nearly $20 million of cash has been distributed to shareholders while the Company has maintained a healthy financial condition with significant liquidity and no debt.

New orders in the fourth quarter of fiscal 2021 were approximately $6.5 million and backlog as of September 30, 2021 was $9.1 million. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, Textron King Air and the KC-46A programs, which the Company expects to remain in production for a decade. The Company expects that these contracts will add to production sales already in backlog.

Full Year Fiscal 2021 Results

Total sales for the fiscal year ended September 30, 2021, were $23.0 million up 6.7% compared to $21.6 million for the fiscal year ended September 30, 2020. Net income for fiscal 2021 was $5.1 million, or $0.29 per share, compared to $3.3 million, or $0.19 per share, in fiscal 2020. Net income in fiscal 2021 included a $1.1 million tax benefit from the release of the deferred tax valuation allowance in the third quarter.

Conference Call

The Company will be hosting a conference call on Thursday, December 9, 2021, at 10:00 a.m. ET to discuss these results and the Company’s business outlook and product development. Please use the following dial in number to register your name and company affiliation for the conference call: 877-270-2148 and ask to be joined into the Innovative Solutions & Support call. The call will also be carried live on the Investor Relations page of the Company web site at www.innovative-ss.com.

About Innovative Solutions & Support, Inc.

Headquartered in Exton, Pa., Innovative Solutions & Support, Inc. (www.innovative-ss.com) is a systems integrator that designs and manufactures flight guidance and cockpit display systems for Original Equipment Manufacturers (OEMs) and retrofit applications. The company supplies integrated Flight Management Systems (FMS), Auto-Throttle Systems and advanced GPS receivers for precision low carbon footprint navigation.

Certain matters contained herein that are not descriptions of historical facts are “forward-looking” (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the Company with the Securities and Exchange Commission. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Innovative Solutions and Support, Inc.

Consolidated Balance Sheets

(unaudited)

 

September 30,

September 30,

2021

2020

ASSETS

Current assets
Cash and cash equivalents

$

8,265,606

 

$

12,603,967

 

Restricted cash

 

 

 

11,180,900

 

Accounts receivable

 

4,046,337

 

 

4,369,111

 

Inventories

 

4,545,392

 

 

4,291,335

 

Prepaid expenses and other current assets

 

833,076

 

 

675,109

 

 
Total current assets

 

17,690,411

 

 

33,120,422

 

 
Property and equipment, net

 

8,143,483

 

 

8,175,872

 

Deferred income taxes

 

1,063,822

 

 

 

Other assets

 

188,284

 

 

249,543

 

 
Total assets

$

27,086,000

 

$

41,545,837

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 
Current liabilities
Accounts payable

$

623,620

 

$

790,892

 

Dividends payable

 

 

 

11,180,900

 

Accrued expenses

 

1,431,115

 

 

1,361,960

 

Contract liability

 

417,504

 

 

313,365

 

 
Total current liabilities

 

2,472,239

 

 

13,647,117

 

 
Deferred income taxes

 

 

 

129,689

 

Other liabilities

 

28,680

 

 

 

 
Total liabilities

 

2,500,919

 

 

13,776,806

 

 
Commitments and contingencies

 

 

 

 

 
Shareholders’ equity
 
Preferred stock, 10,000,000 shares authorized, $.001 par value, of which
200,000 shares are authorized as Class A Convertible stock. No shares issued
and outstanding at September 30, 2021 and 2020

 

 

 

 

 
Common stock, $.001 par value: 75,000,000 shares authorized, 19,342,823 and
19,310,835 issued at September 30, 2021 and 2020, respectively

 

19,343

 

 

19,311

 

 
Additional paid-in capital

 

51,817,095

 

 

51,458,787

 

(Accumulated deficit)

 

(5,882,820

)

 

(2,340,530

)

Treasury stock, at cost, 2,096,451 shares at September 30, 2021 and at
September 30, 2020

 

(21,368,537

)

 

(21,368,537

)

 
Total shareholders’ equity

 

24,585,081

 

 

27,769,031

 

 
Total liabilities and shareholders’ equity

$

27,086,000

 

$

41,545,837

 

 

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

(unaudited)

 

Three months ended

Twelve months ended

September 30,

September 30,

2021

2020

2021

2020

 
Sales

$

6,873,116

$

6,295,017

 

$

23,044,796

 

$

21,595,199

 

 
Cost of sales

 

2,914,802

 

2,784,532

 

 

10,263,166

 

 

9,793,224

 

 
Gross profit

 

3,958,314

 

3,510,485

 

 

12,781,630

 

 

11,801,975

 

 
Operating expenses:
Research and development

 

686,172

 

706,537

 

 

2,622,919

 

 

2,955,976

 

Selling, general and administrative

 

1,410,322

 

1,586,461

 

 

6,257,732

 

 

6,100,545

 

Total operating expenses

 

2,096,494

 

2,292,998

 

 

8,880,651

 

 

9,056,521

 

 
Operating income

 

1,861,820

 

1,217,487

 

 

3,900,979

 

 

2,745,454

 

 
Interest income

 

96

 

2,592

 

 

1,234

 

 

154,950

 

Other income

 

23,912

 

15,737

 

 

74,906

 

 

60,497

 

 
Income before income taxes

 

1,885,828

 

1,235,816

 

 

3,977,119

 

 

2,960,901

 

 
Income tax expense (benefit)

 

355,569

 

(8,096

)

 

(1,087,783

)

 

(308,882

)

 
Net income

$

1,530,259

$

1,243,912

 

$

5,064,902

 

$

3,269,783

 

 
Net income per common share:
Basic

$

0.09

$

0.07

 

$

0.29

 

$

0.19

 

Diluted

$

0.09

$

0.07

 

$

0.29

 

$

0.19

 

 
 
Weighted average shares outstanding:
Basic

 

17,234,757

 

16,964,059

 

 

17,225,423

 

 

16,939,302

 

Diluted

 

17,234,757

 

17,164,525

 

 

17,226,620

 

 

17,114,191

 

 

Contacts

Relland Winand, Chief Financial Officer

Innovative Solutions & Support, Inc.

610-646-0350

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