Innovative Solutions & Support, Inc. Announces Fourth Quarter and Full Year Fiscal 2023 Financial Results
Innovative Solutions & Support, Inc. (ISSC) reported strong financial results for Q4 and full fiscal year 2023, with net sales of $13 million, up 79% from the previous year's Q4. The company reported net income of $2.6 million, or $0.15 per share, marking a 63% and 67% increase, respectively. The increase in sales and earnings is primarily due to the addition of product lines acquired from Honeywell International, Inc. The company expects annualized revenues to increase by approximately 40% from pre-acquisition levels once operations have been fully integrated in fiscal 2024. The company also generated $2.1 million of cash flow from operations in fiscal 2023 and had $3.1 million of cash on hand as of September 30, 2023, which has increased to over $8 million as of December 19, 2023. New orders in Q4 were approximately $12.7 million, with backlog as of September 30, 2023, at $13.5 million. Total revenues for fiscal 2023 were $34.8 million, up 26% from fiscal 2022, with a net income of $6.0 million, or $0.35 per share.
Innovative Solutions & Support, Inc.'s (IS&S) financial results for the fourth quarter and full fiscal year 2023 demonstrate significant growth. The reported 79% increase in net sales and the 63% rise in net income for the quarter are substantial when compared to the previous year. This performance is indicative of successful strategic moves, notably the acquisition of product lines from Honeywell. The financial data suggests an effective integration of these new product lines, which is expected to bolster annualized revenues by approximately 40% post-full integration in fiscal 2024.
The company's cash position has strengthened, with cash on hand increasing to over $8 million due to efficient receivables collection and asset sales. The solid order backlog , which includes long-term OEM customer programs, provides a predictable revenue stream for the coming decade. However, it is important to note that the Honeywell-licensed products do not typically enter into backlog, which may affect the predictability of future revenues from these sources.
The aviation and aerospace sector is characterized by long product lifecycles and high barriers to entry, which is reflected in IS&S's long-term programs with OEM customers. The company's focus on Air Transport, Military and Business Aviation Markets is strategic, as these segments often require sophisticated, high-margin products. The integration of Honeywell's product lines not only diversifies IS&S's offerings but also opens up new market opportunities through expanded customer relationships.
Investors should consider the potential for supply chain disruptions that could impact delivery schedules and the company's ability to meet demand. The mention of customer-directed accelerated shipments to mitigate potential delivery delays is a proactive measure, but it also hints at underlying challenges in the supply chain.
The company's performance must be contextualized within the broader economic environment , which includes factors such as fluctuating demand for air travel, defense spending and competition within the aerospace industry. The cash flow generation of $2.1 million from operations in fiscal 2023 indicates a healthy operational efficiency, which is crucial in an industry that requires significant capital investment.
Looking ahead, the company's growth trajectory and backlog suggest resilience in the face of economic headwinds. However, macroeconomic factors such as interest rate changes, inflation and global economic slowdowns could impact both the company's operational costs and its customers' purchasing power, potentially affecting future financial performance.
12/20/2023 - 04:15 PM
EXTON, Pa. --(BUSINESS WIRE)--
Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the fourth quarter and full fiscal year 2023, which ended September 30, 2023.
For the fourth quarter of fiscal 2023, IS&S reported net sales of $13 million 79% from $7.3 million $2.6 million $0.15 63% and 67% , respectively, compared to $1.6 million $0.09
Gross profit in the fourth quarter of 2023 was $8.1 million 62% of sales, compared to $4.5 million 62% of sales in the fourth quarter of 2022.
The increase in sales and earnings in the fourth quarter of 2023 primarily reflects the impact of the previously announced addition of the product lines acquired from Honeywell International, Inc. (“Honeywell”) pursuant to an exclusive license and asset acquisition that closed in the third quarter of 2023.
Shahram Askarpour, Chief Executive Officer of IS&S, said, “I am pleased to report our fifth consecutive year of both top and bottom-line growth as a result of one of the best quarters in the Company’s recent history. The results include some customer-directed accelerated shipments of the acquired Honeywell products to mitigate any impacts from potential delivery delays over the next two quarters as equipment and inventory are transferred to IS&S. The ongoing integration of the Honeywell product lines is proceeding well, and we remain confident that annualized revenues will increase by approximately 40% from pre-acquisition levels once operations have been fully integrated in fiscal 2024. The integration of the Honeywell product lines enhances our current product offerings in the Air Transport, Military and Business Aviation Markets and has provided us with an introduction to numerous operators with whom we did not previously have relationships, thereby opening a large new market opportunity for our other products.”
For the fiscal year 2023, the Company generated $2.1 million $3.1 million $8 million
New orders in the fourth quarter of fiscal 2023 were approximately $12.7 million $36.5 million $13.5 million
Full Year Fiscal 2023 Results
Total revenues for the fiscal year ended September 30, 2023, were $34.8 million 26% from $27.7 million $6.0 million $0.35 $5.5 million $0.32 $1.1 million
Conference Call
The Company will be hosting a conference call on Thursday, December 21, 2023 at 10:00 AM 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: 844-739-3798 and ask to join 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.
FORWARD LOOKING STATEMENT DISCLAIMER
In addition to the historical information contained herein, this press release contains “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, statements about future revenue, financial performance and profitability, future business opportunities, , the integration of the Honeywell product lines, including how the product lines enhance our current product offerings in the Air Transport, Military and Business Aviation Markets and have provided us with an introduction to numerous operators with whom we did not previously have a relationship, creating a large new market for many of our other products, the impact of licenses, including the Honeywell license, and the timing of our long-term programs remaining in production and expectations regarding a large new market opportunity for our other products. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions, 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, the Company’s ability to efficiently integrate acquired and licensed product lines, including the Honeywell product lines, into its operations; a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the economic and business environments in which the Company operates. Such factors are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022, and subsequent reports filed 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. 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,
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
3,097,193
$
17,250,546
Accounts receivable
9,743,714
4,297,457
Contract asset
487,139
162,742
Inventories
6,139,713
5,349,104
Prepaid inventory
12,069,114
-
Prepaid expenses and other current assets
1,073,012
1,142,470
Asset held for sale
2,063,818
-
Total current assets
34,673,703
28,202,319
Goodwill
3,557,886
-
Intangible assets, net
16,185,321
60,348
Property and equipment, net
7,892,427
6,292,189
Deferred income taxes
456,392
46,487
Other assets
191,722
103,980
Total assets
$
62,957,451
$
34,705,323
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt
$
2,000,000
$
-
Accounts payable
1,337,275
708,845
Accrued expenses
2,918,325
2,972,275
Contract liability
143,359
259,183
Total current liabilities
6,398,959
3,940,303
Long-term debt
17,500,000
-
Other liabilities
421,508
15,065
Total liabilities
24,320,467
3,955,368
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, 19,543,441 and 19,412,664 issued at September 30, 2023 and 2022, respectively
19,543
19,413
Additional paid-in capital
54,317,265
52,458,121
Retained earnings (accumulated deficit)
5,668,713
(359,042
)
Treasury stock, at cost, 2,096,451 shares at September 30, 2023 and at September 30, 2022
(21,368,537
)
(21,368,537
)
Total shareholders' equity
38,636,984
30,749,955
Total liabilities and shareholders' equity
$
62,957,451
$
34,705,323
Innovative Solutions and Support, Inc.
Consolidated Statements of Operations
(unaudited)
Three months ended
Twelve months ended
September 30,
September 30,
2023
2022
2023
2022
Sales
$
12,992,596
$
7,263,121
$
34,808,513
$
27,740,695
Cost of sales
4,880,125
2,795,585
13,497,442
11,066,314
Gross profit
8,112,471
4,467,536
21,311,071
16,674,381
Operating expenses:
Research and development
741,579
642,303
3,129,518
2,705,140
Selling, general and administrative
3,718,293
1,527,900
10,822,505
6,753,915
Total operating expenses
4,459,872
2,170,203
13,952,023
9,459,055
Operating income
3,652,599
2,297,333
7,359,048
7,215,326
Interest (expense)
(393,281
)
-
(393,281
)
-
Interest income
85,693
50,179
518,188
61,051
Other income
19,813
15,931
151,317
65,232
Income before income taxes
3,364,824
2,363,443
7,635,272
7,341,609
Income tax expense
730,202
761,468
1,607,517
1,817,831
Net income
$
2,634,622
$
1,601,975
$
6,027,755
$
5,523,778
Net income per common share:
Basic
$
0.15
$
0.09
$
0.35
$
0.32
Diluted
$
0.15
$
0.09
$
0.35
$
0.32
Weighted average shares outstanding:
Basic
17,400,659
17,256,750
17,411,684
17,256,750
Diluted
17,451,314
17,257,871
17,427,278
17,257,871
View source version on businesswire.com: https://www.businesswire.com/news/home/20231220435820/en/
Rell Winand – CFO
Source: Innovative Solutions & Support, Inc.
What are the financial results reported by Innovative Solutions & Support, Inc. (ISSC) for Q4 and full fiscal year 2023?
The company reported net sales of $13 million for Q4, up 79% from the previous year's Q4. The company reported net income of $2.6 million, or $0.15 per share, marking a 63% and 67% increase, respectively.
What led to the increase in sales and earnings for Innovative Solutions & Support, Inc. (ISSC) in Q4 of 2023?
The increase in sales and earnings is primarily due to the addition of product lines acquired from Honeywell International, Inc.
What are the expected annualized revenue increases for Innovative Solutions & Support, Inc. (ISSC) once operations have been fully integrated in fiscal 2024?
The company expects annualized revenues to increase by approximately 40% from pre-acquisition levels once operations have been fully integrated in fiscal 2024.
What were the total revenues and net income for fiscal 2023 for Innovative Solutions & Support, Inc. (ISSC)?
Total revenues for fiscal 2023 were $34.8 million, up 26% from fiscal 2022, with a net income of $6.0 million, or $0.35 per share.
