Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today
announced its financial results for the fourth quarter and full
fiscal year ended September 30, 2015.
Revenues for fiscal 2015 were $20.1 million compared to $44.1
million for fiscal 2014. Operating loss for the current year was
$(2.2) million, and the net loss for the current year was $(4.7)
million or $(0.28) per share, which included the effect of a $3.7
million, or $(0.22) per share, non-cash valuation allowance of the
Company’s deferred tax assets some or all of which may be
recoverable in future profitable periods. Although the Company
incurred a net loss in fiscal 2015, cash generated from operating
activities was $1.4 million compared to cash used in operating
activities of $0.7 million in fiscal 2014. Net income for fiscal
2014 was $0.2 million, or $0.01 per share, which included a charge
of $(2.6 million) after-tax, or $(0.15) per share, related to the
Delta Airlines, Inc. (“Delta”) contract termination.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
Innovative Solutions & Support, Inc. said, “Fiscal 2015 was a
year of recovery from a major program cancellation, Delta. We
achieved significant progress redeploying our resources from a
narrow concentration on select engineering development programs to
a broader focus on the opportunities arising from our growing
portfolio of industry-leading products. We believe the results are
starting to emerge. In the fourth quarter, we began to convert our
pipeline to backlog, with orders of $6.0 million for the period and
quarter-end backlog increasing for the first time this year. The
trend has continued into the first quarter of fiscal 2016, where we
have already booked in excess of $10.0 million in new orders. What
is particularly exciting about these new orders is that they are
primarily comprised of existing products, which can enter
production quickly with only a minimum amount of engineering
expended and over 99% will ship in fiscal 2016. Production revenue
has historically carried our widest margins. While we believe our
financial performance for the year was disappointing, we still
generated positive cash flow from operations, strengthening our
balance sheet and setting the stage for what we believe can be a
new period of future growth. We are excited about our newest
product, the Auto-Throttle designed for the Pilatus PC12. The
Auto-Throttle has patents pending and is also applicable to most
PT-6 engine aircraft. With a strong portfolio of
price-for-performance products, we have an opportunity to
capitalize on the military, commercial air transport, and business
jet markets' concern for safety and efficiency and growing demand
for cost-effective solutions to today's more stringent regulatory
requirements."
At September 30, 2015, the Company had $16.3 million of cash on
hand and remained debt free. Cash increased by over $1 million
during the course of fiscal 2015. New orders for the fourth quarter
of fiscal 2015 were $6.0 million, and backlog at September 30, 2015
was $7.6 million, up $2.8 million, or approximately 60% from $4.8
million at June 30, 2015. Backlog excludes potential future
sole-source production orders from products in development under
the Company’s engineering development contracts, including the
Eclipse 550, the Pilatus PC-24, and the KC-46A, all of which the
Company expects to remain in production for a decade following
completion of their respective development phases. The Company
expects that these contracts will add to production sales already
in backlog.
For the fourth quarter of fiscal 2015, the Company reported
revenues of $3.1 million, compared to revenues of $9.9 million for
the fourth quarter of fiscal 2014. Cash provided by operating
activities was approximately $0.5 million for the quarter. The
Company reported a fourth quarter 2015 operating loss of $(1.5)
million and a net loss of $(1.4) million, or $(0.08) per share. The
Company reported a fourth quarter 2014 net loss of $(2.1 million),
or $(0.12) per share, which includes a charge of $(0.15) per share
related to the termination by Delta of its contract with the
Company.
Shahram Askarpour, President of ISSC, commented, "The increased
activity levels witnessed over the past few quarters have led to a
steady increase in the orders for our existing products across the
platforms where we have had the greatest success, namely the B-737,
757 and 767, as well as the C-130, all of which are large fleets
which we believe represent additional potential opportunity. In
addition, orders have ranged from our more established products,
such as Flat Panel Display systems, to some of our newest products
arising from internally funded research and development investment,
including our new Integrated Global Navigation System (IGNS). We
are experiencing growing demand from international markets, where
our sales and marketing efforts have recently been concentrated.
Since most of these new orders are for our existing solutions, we
can quickly put them into production where they are expected to
yield attractive gross margins we have been able to generate
historically. Heading into fiscal 2016, our goal is to continue to
build on our momentum and establish Innovative Solutions &
Support as a partner on which owners and operators can rely to
cost-effectively outfit their cockpits with technology that
improves aircraft performance and safety."
Conference Call
The Company will be hosting a conference call Thursday, December
17, 2015, at 10:00 AM ET to discuss these results and its business
outlook. Those planning to dial in to the call should dial the
following number and register their names and company affiliations:
1-877-883-0383 and enter the PIN number 4298455. 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 (OEM’s) and retrofit applications.
The company supplies integrated Flight Management Systems (FMS) 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, 2015 2014
ASSETS
Current assets Cash and cash equivalents $ 16,282,039 $ 15,214,584
Accounts receivable 2,394,695 4,419,863 Unbilled receivables, net
5,220,209 7,425,728 Inventories 4,664,105 5,470,786 Deferred income
taxes 722,817 3,245,223 Prepaid expenses and other current assets
1,205,725 750,108
Total current assets
30,489,590 36,526,292 Property and equipment, net 7,095,330
7,467,663 Non-current deferred income taxes - 57,707 Other assets
168,948 110,848 Total assets $
37,753,868 $ 44,162,510
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities Accounts payable $ 1,435,981 $ 2,402,652
Accrued expenses 2,533,007 4,077,290 Deferred revenue
756,745 526,320 Total current
liabilities 4,725,733 7,006,262 Non-current deferred income
taxes 546,032 132,999 Other liabilities 2,826
11,725 Total liabilities 5,274,591
7,150,986 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, 2014 and 2013
- -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,756,089 and 18,714,449 issued at September
30, 2015 and 2014, respectively
18,756 18,715
Additional paid-in capital 51,148,722 50,697,497 Retained earnings
1,955,559 6,684,902
Treasury stock, at cost, 1,846,451 shares
at September 30, 2015 and 1,756,807 at September 30, 2014
(20,643,760 ) (20,389,590 ) Total
shareholders' equity 32,479,277 37,011,524
Total liabilities and shareholders' equity $
37,753,868 $ 44,162,510
Innovative Solutions and Support, Inc.
Consolidated Statements of Operations (unaudited)
Three months ended Twelve months ended September 30,
September 30, 2015 2014 2015 2014 Sales $ 3,137,089 $
9,918,221 $ 20,067,084 $ 44,095,023 Cost of sales
2,028,338 7,059,709 12,681,487
30,508,823 Gross profit 1,108,751 2,858,512
7,385,597 13,586,200 Operating expenses: Research and
development 954,944 682,361 3,056,756 2,618,054 Selling, general
and administrative 1,635,725 5,477,183
6,547,271 11,111,014 Total operating
expenses 2,590,669 6,159,544 9,604,027 13,729,068 Operating
(loss) (1,481,918 ) (3,301,032 ) (2,218,430 ) (142,868 )
Interest income 6,535 5,510 24,804 21,756 Other income 1,878
10,451 33,283 37,758
(Loss) before income taxes (1,473,505 ) (3,285,071 )
(2,160,343 ) (83,354 )
Income tax (benefit) expense
(46,484 ) (1,195,496 ) 2,569,000
(283,622 ) Net income (loss) $ (1,427,021 ) $ (2,089,575 ) $
(4,729,343 ) $ 200,268 Net income (loss) per common
share: Basic $ (0.08 ) $ (0.12 ) $ (0.28 ) $ 0.01 Diluted $
(0.08 ) $ (0.12 ) $ (0.28 ) $ 0.01 Weighted
average shares outstanding: Basic 16,905,526 16,956,247 16,924,189
16,927,879 Diluted 16,905,526 17,171,828 16,924,189 17,149,106
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version on businesswire.com: http://www.businesswire.com/news/home/20151216006217/en/
Innovative Solutions & Support, Inc.Relland Winand, Chief
Financial Officer610-646-0350
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