Innovative Solutions and Support Inc. (ISSC, Financial) filed Quarterly Report for the period ended 2009-12-31.
Innovative Solutions And Support Inc. has a market cap of $70.4 million; its shares were traded at around $4.2 with a P/E ratio of 38.2 and P/S ratio of 2. ISSC is in the portfolios of Ronald Muhlenkamp of Muhlenkamp Fund, Chuck Royce of ROYCE & ASSOCIATES.
Cost of sales. Cost of sales decreased $2.4 million or 46%, to $2.8 million, or 62% of net sales in the three months ended December 31, 2009 from $5.3 million, or 50 % of net sales in the three months ended December 31, 2008. The decrease was primarily the result of the decrease in variable production costs during the quarter which account for $2.4 million of the decrease and was offset by a $0.2 million increase in EMD related costs. The reduced sales volume for the three months ended December 31, 2009 had a negative impact on gross margin as compared to the prior year period.
Research and development. Research and development expense decreased $0.1 million or 9% to $1.2 million or 25% of net sales in the three months ended December 31, 2009 from $1.3 million or 12% of net sales in the three months ended December 31, 2008. The decrease in research and development expense in the quarter was primarily due to the change in indirect project costs.
Net (Loss) income. As a result of the factors described above, our net loss for the three months ended December 31, 2009 was ($1.1 million). Net income for the three months ended December 31, 2008 was $1.9 million. On a fully diluted basis, the loss per share of ($0.07) for the three months ended December 31, 2009 compares to income per share of $0.11 for the three months ended December 31, 2008.
Cash provided by operating activities was $1.0 million for the three months ended December 31, 2009 as compared to cash used in operating activities of $1.2 million for the three months ended December 31, 2008. The improvement was due to strong working capital management, despite the Company experiencing a net loss of $1.1 million for the three months ended December 31, 2009 versus net income of $1.8 million for comparable period in the prior year. The cash provided by operating activities during the three months ended December 31, 2009 was primarily due to a decrease in accounts receivable, decrease in prepaid expenses, and decrease in inventories of $2.7 million, $0.4 million and $0.1 million, respectively. This was partially offset by the net loss experienced for the period, a decrease in accrued expenses and decrease in accounts payable of $1.1 million, $0.6 million and $0.4 million, respectively.
As of December 31, 2009 and September 30, 2009, our backlog was $34.3 million and $34.1 million, respectively. The $0.2 increase in backlog was the result of $4.8 million in new business offset by $4.6 million of recognized revenue. Air Data product backlog as of December 31, 2009 increased $1.8 million from September 30, 2009; while Flat Panel Display Systems backlog as of December 31, 2009 decreased $1.6 million from September 30, 2009.
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Innovative Solutions And Support Inc. has a market cap of $70.4 million; its shares were traded at around $4.2 with a P/E ratio of 38.2 and P/S ratio of 2. ISSC is in the portfolios of Ronald Muhlenkamp of Muhlenkamp Fund, Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:
Net sales. Net sales decreased $6.0 million, or 56%, to $4.6 million for the three months ended December 31, 2009 from $10.6 million in the three months ended December 31, 2008. For the three months ended December 31, 2009, product sales decreased $5.1 million and EMD sales decreased $0.9 million from the same period in the prior year. The decrease in both product and EMD sales was primarily driven by customer delays in delivery schedules for backlog orders.Cost of sales. Cost of sales decreased $2.4 million or 46%, to $2.8 million, or 62% of net sales in the three months ended December 31, 2009 from $5.3 million, or 50 % of net sales in the three months ended December 31, 2008. The decrease was primarily the result of the decrease in variable production costs during the quarter which account for $2.4 million of the decrease and was offset by a $0.2 million increase in EMD related costs. The reduced sales volume for the three months ended December 31, 2009 had a negative impact on gross margin as compared to the prior year period.
Research and development. Research and development expense decreased $0.1 million or 9% to $1.2 million or 25% of net sales in the three months ended December 31, 2009 from $1.3 million or 12% of net sales in the three months ended December 31, 2008. The decrease in research and development expense in the quarter was primarily due to the change in indirect project costs.
Net (Loss) income. As a result of the factors described above, our net loss for the three months ended December 31, 2009 was ($1.1 million). Net income for the three months ended December 31, 2008 was $1.9 million. On a fully diluted basis, the loss per share of ($0.07) for the three months ended December 31, 2009 compares to income per share of $0.11 for the three months ended December 31, 2008.
Cash provided by operating activities was $1.0 million for the three months ended December 31, 2009 as compared to cash used in operating activities of $1.2 million for the three months ended December 31, 2008. The improvement was due to strong working capital management, despite the Company experiencing a net loss of $1.1 million for the three months ended December 31, 2009 versus net income of $1.8 million for comparable period in the prior year. The cash provided by operating activities during the three months ended December 31, 2009 was primarily due to a decrease in accounts receivable, decrease in prepaid expenses, and decrease in inventories of $2.7 million, $0.4 million and $0.1 million, respectively. This was partially offset by the net loss experienced for the period, a decrease in accrued expenses and decrease in accounts payable of $1.1 million, $0.6 million and $0.4 million, respectively.
As of December 31, 2009 and September 30, 2009, our backlog was $34.3 million and $34.1 million, respectively. The $0.2 increase in backlog was the result of $4.8 million in new business offset by $4.6 million of recognized revenue. Air Data product backlog as of December 31, 2009 increased $1.8 million from September 30, 2009; while Flat Panel Display Systems backlog as of December 31, 2009 decreased $1.6 million from September 30, 2009.
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