EXTON, PA — Innovative Solutions & Support Inc. (NASDAQ: ISSC) has reported a strong start to fiscal 2024, with first-quarter sales surging 43% to $9.3 million, compared with $6.5 million in the same period a year ago. The Chester County-based company’s net income also rose 51% to $1,057,350, or 6 cents per share, up from $698,651 or 4 cents per share in the first quarter of fiscal 2023.
The company’s financial performance was bolstered by its acquisition of product lines from Honeywell International Inc., a deal that closed in the third quarter of 2023. The new products have not only expanded the IS&S portfolio but also introduced the firm to a new market segment, contributing to the ongoing growth in revenues and earnings.
“Our debt position was reduced to $10.6 million as of December 31, 2023, approximately $8.9 million less than just three months ago,” said Shahram Askarpour, Chief Executive Officer of IS&S. He added that the integration of the Honeywell product lines is progressing smoothly and is generating recurring revenues for the company.
IS&S’s gross profit for the first quarter of 2024 stood at $5.5 million, representing 59.3% of sales. This compares favorably to the $3.7 million, or 57.1% of sales, recorded in the first quarter of 2023. The company’s cash flow from operations in the first quarter reached $4.2 million.
The company also reported new orders worth approximately $10.4 million in the first quarter of fiscal 2024. The backlog as of December 31, 2023, was $14.6 million, primarily comprising orders from OEM customers with long-term programs such as 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, anticipating they will continue to generate future sales. However, due to their nature, the products licensed from Honeywell do not typically enter backlog.
The company’s robust Q1 results and its ongoing success in integrating the Honeywell product lines indicate a promising outlook for the remainder of fiscal 2024. The firm appears well-positioned to reach its goal of growing annualized revenues by approximately 40% compared to pre-acquisition levels upon the completion of the integration.
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