Innovative Solutions & Support Inc. (NASDAQ:ISSC) Q2 2020 Earnings Conference Call - Final Transcript

May 14, 2020 • 10:00 am ET

Previous

Innovative Solutions & Support Inc. (NASDAQ:ISSC) Q2 2020 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good day and welcome to Innovative Solutions and Support Second Quarter 2020 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the call over to Geoffrey Hedrick, Chairman and Chief Executive Officer. Please go ahead sir.

Executive
Geoffrey Hedrick

Good morning. This is Geoff Hedrick. Welcome this morning to our conference call to discuss our performance for the second quarter of fiscal 2020, current business conditions, and our outlook for the coming year. Joining me are Shahram Askarpour, our President; and Relland Winand, our CFO.

Before I begin, I would like Rell to read the Safe Harbor message. Thanks.

Executive
Relland Winand

Thank you, Geoff and good morning everyone. I would remind our listeners that certain matters discussed in the conference call today, including new products and operational and financial results for future periods, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, either better or worse from those discussed, including other risks and uncertainties reflected in our Company's 10-K, which is on file with the SEC and other public filings.

Now, I'll turn the call back over to Geoff.

Executive
Geoffrey Hedrick

The coronavirus pandemic is reshaping the way we live and work including the lives of our many dedicated employees of IS&S. As the business deemed as essential, we have managed to safely keep our operations open to meet our obligations to our customers, which includes markets that are vital to the nation's safety and security such as the military, as well as cargo air carriers, who are playing an increasingly crucial role in getting medical supplies that are needed throughout the country. And we recognize these challenges early on. We took aggressive steps to protect the health and well-being of our employees, our families, our customers, and our partners, as well as immediate and remedial actions to minimize the impact to our business. The results of these efforts have been rewarding. All 100% of the IS&S team members have complied with the new safety procedures and have come to work, my personal heroes.

These past three months resulted in a quarter-over-quarter revenue growth and the sixth quarter in the last seven in which we have generated sequential revenue growth. We generated strong cash flow and had one of the strongest quarters of new business and our backlog has increased to nearly $10 million, highest in years. The margins were impacted by period cost fluctuations in the quarter. We expect them to rebound to prior levels in subsequent quarters. We will deliver production -- we will deliver production quantities of our Autothrottle to the OEM this quarter, which would represent the second major OEM contract in the general aviation market. The Autothrottle has been six years in development, culminating with the FAA Certification of OEI upset protection and adoption into a major OEM production.

The general aviation