Exhibit 99.1

 

Innovative Solutions & Support, Inc. Announces Third Quarter Fiscal 2020 Financial Results

Recent OEM Contract with Textron Further Solidifies Growing ThrustSense® Auto-Throttle Franchise

EXTON, Pa.—August 5, 2020 (BUSINESS WIRE)--Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the third quarter of fiscal 2020, ended June 30, 2020.

For the third quarter of fiscal 2020, the Company reported net sales of $6.0 million, up 30% from $4.6 million in the third quarter a year ago. The Company reported third quarter net income of $1.3 million, or $0.07 per share, an increase of 146% and 133% respectively, as compared to the $0.5 million, or $0.03 per share, in the third quarter of fiscal 2019.

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “The necessary and prudent actions we implemented early on to reduce the impact of the pandemic have once again led to a strong performance. Revenues increased 30% in the third quarter as compared to the prior quarter, and we generated our best quarterly operating income in thirteen quarters and our best nine months operating income in four years. We signed an OEM contract to supply Textron with our ThrustSense® Auto-throttle with LifeGuard™ Protection as standard equipment on all their new King Air 360 turboprops. Textron will also offer Auto-throttle with LifeGuard™ Protection for retrofit at all of its service centers to the thousands of King Airs currently in use. Our financial performance over the last few quarters, as well as the expanding number of new OEM platforms on which IS&S is standard equipment, are strong indicators of the value of our innovative technology. We believe our increased market presence will lead to more profitable growth opportunities and continue to build shareholder value.”

At June 30, 2020, the Company had $23.0 million of cash on hand, as net cash flows from operating activities were $0.6 million over the first nine months of the year. New orders in the third quarter of fiscal 2020 were approximately $2.7 million, and backlog as of June 30, 2020 was $6.5 million. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, KC-46A and the Textron King Air 360 all of which are currently in production. The Company expects these programs to remain in production for multiple years and that these contracts will add to production sales already in backlog.

Nine Months Results

Total sales for the nine months ended June 30, 2020, were $15.3 million, up 20% from $12.8 million for the nine months ended June 30, 2019. For the nine months ended June 30, 2020, the company reported net income of $2.0 million, or $0.12 per share, an increase of 137% and 140% respectively, as compared to the $0.9 million, or $0.05 per share, for the first nine months of fiscal 2019.

Conference Call

The Company will be hosting a conference call on Thursday, August 6, 2020, 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.

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Innovative Solutions and Support, Inc.

Consolidated Balance Sheets

	June 30			September 30,
	2020			2019
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	22,984,249		$	22,416,830
Accounts receivable		3,864,656			2,348,537
Contract asset		-			80,182
Inventories		4,709,342			4,470,694
Prepaid expenses and other current assets		1,107,723			642,049
Total current assets		32,665,970			29,958,292
Property and equipment, net		8,225,732			8,444,692
Other assets		205,276			154,041
Total assets	$	41,096,978		$	38,557,025
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	949,080		$	1,079,073
Accrued expenses		1,506,790			1,110,918
Contract liability		106,341			29,231
Total current liabilities		2,562,211			2,219,222
Non-current deferred income taxes		129,689			129,651
Other liabilities		2,241			-
Total liabilities		2,694,141			2,348,873
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 June 30, 2020 and September 30, 2019	$	-		$	-
Common stock, $.001 par value:  75,000,000 shares authorized, 19,080,877 and 19,005,487 issued at June 30, 2020 and September 30, 2019, respectively		19,081			19,006
Additional paid-in capital		52,155,835			51,987,096
Retained earnings		7,596,458			5,570,587
Treasury stock, at cost, 2,096,451 shares at June 30, 2020 and
September 30, 2019		(21,368,537	)		(21,368,537	)
Total shareholders' equity		38,402,837			36,208,152
Total liabilities and shareholders' equity	$	41,096,978		$	38,557,025

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

(unaudited)

	Three months ended				Nine months ended
	June 30,				June 30,
	2020		2019		2020			2019
Net Sales		5,953,689		4,589,824		15,300,182			12,770,601
Cost of sales		2,559,016		2,064,617		7,008,691			5,733,385
Gross profit		3,394,673		2,525,207		8,291,491			7,037,216
Operating expenses:
Research and development		870,805		722,525		2,249,439			1,967,379
Selling, general and administrative		1,279,422		1,416,053		4,514,085			4,414,126
Total operating expenses		2,150,227		2,138,578		6,763,524			6,381,505
Operating income		1,244,446		386,629		1,527,967			655,711
Interest income		7,767		99,916		152,358			147,948
Other income		16,261		24,714		44,760			57,314
Income before income taxes		1,268,474		511,259		1,725,085			860,973
Income tax expense (benefit)		8,616		-		(300,786	)		7,794
Net income	$	1,259,858	$	511,259	$	2,025,871		$	853,179
Net income per common share:
Basic	$	0.07	$	0.03	$	0.12		$	0.05
Diluted	$	0.07	$	0.03	$	0.12		$	0.05
Weighted average shares outstanding:
Basic		16,952,973		16,880,341		16,931,049			16,860,503
Diluted		17,087,275		16,978,643		17,097,414			16,898,321