Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the second quarter of fiscal year 2023, which ended March 31, 2023.

For the second quarter of fiscal 2023, net sales increased 7.2% to $7.3 million compared to $6.8 million in the second quarter a year ago. Gross profit in the second quarter of 2023 was $4.7 million, or 64.6% of sales, compared to $4.2 million, or 61.1% of sales in the second quarter of 2022. The Company reported net income of $1.3 million, or $0.07 per share in the second quarter, compared to $1.4 million, or $0.08 per share in the second quarter of fiscal 2022. The modest decrease in net income was driven by an increase in general and administrative expenses, attributable to an expansion of the Company’s sales and business development teams, and non-cash long-term incentive compensation. R&D spending also climbed due to the addition of resources to enhance product development. The impact of additional expenses was offset by increased sales and operating leverage. Tax expense in the second quarter of fiscal 2023 was $0.3 million compared to $0.4 million in the second quarter of fiscal 2022.

Shahram Askarpour, Chief Executive Officer of IS&S, said, “We reported a strong second quarter with growth driven by higher sales in our aftermarket portfolio. This was one of our strongest quarters in recent years and demonstrates a continuation of demand for our innovative products.”

Askarpour continued, “Going forward we see significant opportunities to invest organically and inorganically in order to drive higher production capacity utilization rates to enhance our gross margin. Important to these efforts, I am pleased to report that we successfully updated our Articles of Incorporation at our recent Annual Meeting on April 13, 2023. This update meaningfully improves our ability to execute on our inorganic growth objectives and strengthens access to growth capital to execute our long-term plan.”

The Company’s cash on hand increased to $19.8 million as of March 31, 2022, with $0.4 million generated from operating activities during the three months ended March 31, 2023. IS&S continues to maintain its strong financial condition and flexibility with significant liquidity and no debt.

New orders in the second quarter of fiscal 2023 were approximately $13.6 million, and backlog as of March 31, 2023 was $14.8 million, compared to backlog of $7.5 million as of March 31, 2022. Only purchase orders in hand are included in our sales backlog, which primarily consist of orders from our OEM customers that have long-term programs-- Pilatus PC-24, Textron King Air, Boeing T-7 Red Hawk and the Boeing KC-46A. IS&S expects these programs to remain in production for approximately a decade and anticipates that they will continue to add to the total backlog.

Conference Call

The Company will be hosting a conference call on Monday May 8, 2023 at 4:30 PM 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: 877-451-6152 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.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230508005549/en/