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Innovative Solutions and Support, Inc. (ISSC)

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5.89-0.04 (-0.67%)
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  • C
    CherkOn
    They are obviously referring to Amazon:
    "IS&S Receives Flat Panel Display System Orders From Online Retailers’ Air Carrier Operation
    Innovative Solutions & Support (IS&S) (NASDAQ: ISSC) was contracted by a premier on-line retailer for upgrades to its expanding air carrier operation, and is now retrofitting this operator’s Boeing aircraft with their state-of-the-art Cockpit/IP® Primary Flight/Navigation Flat Panel Display System. Initial orders are for 11 ship sets of the system."
  • C
    CherkOn
    Glad to see that despite the high COVID-19 cases during the past quarter, they recorded very good new orders numbers and increased their backlog. Keep in mind the note on what the backlog excludes below:

    "New orders in the second quarter of fiscal 2021 were $7.6 million, and backlog as of March 31, 2021 was $6.7 million, an increase from $4.2 million at December 31, 2020. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, Textron King Air and the KC-46A programs, which the Company expects to remain in production for a decade. The Company expects that these contracts will add to production sales already in backlog."

    With the COVID-19 numbers down significantly in the Spring and the great vaccination progress, I would expect accelerated growth in the coming quarters especially on the AutoThrottle upgrade business line.
  • C
    CherkOn
    The latest earnings report confirms the ramp in revenue is beginning to accelerate. The operative word being "beginning" because revenue growth will continue to accelerate as the three OEM programs fully ramp, and Auto-throttle retrofits continue to increase. Additional certifications for other planes and more OEM deals will accelerate the growth for years to come. Notice the big percentage of the growth in revenue that ends up on the bottom line, resulting in EPS growth rate that is much faster than revenue growth as expenses/overheads remain steady even as revenue grows.

    "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."
  • C
    CherkOn
    Askarpour Shahram have now exercised his 500,000 employee stock options. He now owns 192,458 shares.
    Note that the 141,524 and 172,518 shares being reported on the Form 4 is not him selling some shares. They were shares 'withheld by the issuer to cover the option exercise price and tax withholding obligations related to the net exercise of the options.'
    For those who are curious why exercising 500,000 options would result in him only ending up with 192,458 shares:
    It costs money to exercise the stock options, and he has to pay taxes on the amount he's making by exercising the options.
    Half the options are exercised at $2.48 a share and the other half at $4.06.
    The cost of exercising those options would be (2.48 * 250,000) + (4.06 * 250,000) = 620,000 + 1,015,000 = $1,635,000

    204,120 shares at $8.01 per share were withheld to pay for the cost of exercising the options. 204,120 * 8.01 = $1,635,000

    His gain (for tax purposes) for the options exercised at 2.48 is (8.01-2.48) * 250,000 = $1,382,500
    PLUS the options exercised at 4.06 is (8.01-4.06) * 250,000 = $987,500
    That's a total of $2,370,000 income for tax purpose.

    The company had to withhold about 37.15% or $880,475 for taxes. They did that by withholding 109,922 shares. 8.01 * 109,922 = $880,475

    So in summary, 314,042 shares out of 500,000 shares exercised were withheld to cover the option exercise price and taxes. 500,000 - 314,042 = 185,958 + 6,500 (he previously owned) = 192,458 (he now owns)
  • C
    CherkOn
    The special dividend is a positive for ISSC for multiple reasons.
    1. For those holding a large number of shares and was thinking of selling some to either for diversification purposes or to pay certain expenses could be satisfied by the dividend. Therefore, they would not need to sell any shares, or at least not sell as many shares. This would result in less upside resistance by keep supply in check.
    2. For those who didn't the money from the dividend, they might reinvest the dividend back into ISSC shares, thereby increasing the demand.
    3. The dividend might result in ISSC being included in stock screeners that filters based on dividend payouts. More investors would learn about this company as a result, and ultimately increase demand. Remember that ISSC is still relatively unknown, which is why someone from the latest earnings call suggested that the company participate in investor conferences.
    4. The special dividend payout is also a vote of confidence. It's also a better alternative than share buybacks since the float is relatively low.
  • C
    CherkOn
    As expected:
    "Innovative Solutions & Support (NASDAQ: ISSC) has signed agreements to supply the recently certified ThrustSense® auto-throttle as standard equipment on new aircraft production. This patented automatic thrust control system provides a revolutionary improvement in flight safety, reduced pilot workload and a major improvement in engine protection."
  • C
    CherkOn
    Another profitable quarter and also note the higher new orders for the quarter that is 26% higher than revenue for the quarter, which is predictive of future revenue growth. That is especially promising given that the FAA Supplemental Type Certification (STC) for King Air was just announced yesterday. Therefore, I would expect new orders to increase even faster with the new certification.
  • A
    Augustine
    The most positive part of the earnings release:
    "The signing of a multi-year agreement with an aircraft manufacturer to supply the recently certified ThrustSense® auto-throttle as standard equipment on new aircraft production. "
  • C
    CherkOn
    OEM officially announced:
    The Beechcraft King Air 360/360ER is designed and manufactured by
    Textron Aviation Inc., a Textron Inc. (NYSE:TXT) company.

    "A key feature of the King Air 360 cockpit is the addition of the Innovative Solutions & Support (IS&S) ThrustSense Autothrottle. The autothrottle supports pilots in their critical mission of delivering people or cargo safely by automatically managing engine power from the takeoff roll through the climb, cruise, descent, go-around and landing phases of flight. This enhancement reduces pilot workload and supports them in their continuous vigilance to prevent over-speed or under-speed, over-temp and over-torque conditions. "
  • C
    CherkOn
    Make sure you listen to the Q&A part of the earnings call.
    They are shipping OEM and retrofit units regularly now. Service centers are aggressively marketing the retrofits; 'exponential growth expected.' Keep in mind that the company ships and book the revenue for those units before they are installed on the planes.
  • C
    CherkOn
    While reading about AIN's Top Flight Awards nominees, where ISSC's ThrustSense Autothrottle was included in the list, I also noticed Garmin's Autoland. Anyone else think that it would make a lot of sense for Garmin to acquire ISSC? Garmin is certainly big enough offer a high premium, and accelerate the adoption and monetization of ISSC's ThrustSense Autothrottle. It would be a great investment for Garmin as they can also likely integrate the IP in their other product as well as coming up with new products that further automate the full flight workload. The big question is what is Hedrick willing to sell it for.
  • j
    jcmcn54
    I'm not sure why this post was taken down before, so let me try it again.

    Question for those of you who may know more than I. The cash dividend was a nice piece of news. My only concern is that the net cash position was part of the valuation built into the stock price. With this announcement, ISSC will be paying out most of its net cash position. There might be $4 million left, or about $0.25 per share. So the stock is going to have to be valued on its cash flow, like everyone else. But with TTM net cash flow of $2.2 million as per press release, the stock, at $7.50, is valued at about 50 times cash flow and 5 times sales. Not cheap any more. So the question is how fast will they be able to grow cash flow? I know Hedrick said sales will grow "exponentially", but that's a bold word that doesn't really mean much with specifics.

    So, can anyone give any estimates as to what cash flow will look like going forward?
  • C
    CherkOn
    IS&S ThrustSense Autothrottle for Twin Turboprops has been selected as one of the nominees for AIN's First Annual Top FLight Awards in the Safety category.
    "The Top Flight Awards nominees will be highlighted in AIN's December issue and in AIN newsletters and online, culminating with the announcement of the winners in January."
  • C
    CherkOn
    The IS&S website has a page listing the ThrustSense Autothrottle Dealers.
    Looks like there are currently 40 locations:
    "All Textron King Air Service Center Locations" which includes 11 Domestic and 12 International Centers
    There are also 17 other centers listed on their site from other companies.
    Not sure how many centers have completed training and started installing the ThrustSense Autothrottle already, but you can bet that if they're taking the time to be trained on the installation, they'll want to help market it and actually do those upgrades for the revenue.
  • C
    CherkOn
    Consider the significance of the huge jump in new orders and backlog and Revenue numbers when Autothrottle is shipped to OEM next quarter :
    "New orders in the second quarter of fiscal 2020 were $8.3 million, and backlog as of March 31, 2020, was nearly $10 million, the highest backlog in several years. Backlog excludes potential future sole-source production orders from the Pilatus PC-24 and the KC-46A programs both of which the Company expects to remain in production for a decade."
  • Y
    Yahoo Finance Insights
    Innovative Solutions is up 6.38% to 6.00
  • C
    CherkOn
    Time to accumulate now that the company is profitable again and the share price is still close to its lows? Expenses are under control and new product looks very promising.
  • R
    Ricky
    INNOVATIVE SOLUTIONS and SUPPORT INC, INNOVATIVE SOLUTIONS and amp, SUPPORT INC
    Annual Report Available on 10-K
    https://sec.report/Document/0001104659-19-075583/
    Bullish
  • Y
    Yahoo Finance Insights
    Innovative Solutions reached a 52 Week high at 7.72
  • t
    tom
    Exton, PA — March 31, 2020 — Innovative Solutions Support, Inc.(ISS) (NASDAQ: ISSC) has been awarded Transport Canada Civil Aviation (TCCA) Supplemental Type Certification (STC) for ThrustSense on the Pilatus PC-12 Legacy and NG. The ThrustSense A
    Exton, PA — March 31, 2020 — Innovative Solutions Support, Inc.(ISS) (NASDAQ: ISSC) has been awarded Transport Canada Civil Aviation (TCCA) Supplemental Type Certification (STC) for ThrustSense on the Pilatus PC-12 Legacy and NG. The ThrustSense A
    presscenter.innovative-ss.com