Company Still Posts Profit, Thanks To Legal Settlement
Innovative Solutions & Support announced this week its
financial results for the fourth quarter and year ended September
30... and while the news was mostly positive, the woes of one
client in particular strained the company's resources in 2008.
Net sales for the fourth quarter of 2008 were $10.2 million, up
100% from $5.1 million in the fourth quarter of the previous year.
The Company reported fourth quarter 2008 net income of $7.6
million, or $0.45 per fully diluted share, which includes the
receipt of a $17 million legal settlement, compared to a fourth
quarter 2007 net loss of $4.0 million.
IS&S states fourth quarter 2008 results also include
approximately $6 million in charges associated with the suspension
of production on a "large, general aviation OEM contract" --
referring to struggling planemaker Eclipse Aviation, for which
IS&S is the primary partner on the Avio NG avionics suite.
"This has been a transitional period for ISSC with the
successful production ramp on a number of our contracts offset by
the untimely suspension of a large, general aviation OEM contract,"
said Geoffrey Hedrick, IS&S Chairman and Chief Executive
Officer. "Results in the fourth quarter reflect the financial
impact of the actions we undertook based upon our assessment of the
current risks associated with this customer."
IS&S was signed in March 2007
to handle systems integration for Eclipse's Avio NG
avionics package, one month after Eclipse terminated
its prior agreement with Avidyne. The new suite was initially
comprised of IS&S displays, with systems from Chelton Flight
Systems, Garmin International, Honeywell, and PS Engineering,
As ANN has reported, Eclipse is on the ropes
as it desperately fights to secure needed funding to stay in
business. The company was only able to meet last week's payroll
thanks to a last-minute bridge loan.
According to the company, the $6
million aggregate charge represents a $4.1 million increase in the
allowance for "doubtful" accounts, and a $1.9 million increase in
reserve for "obsolete inventory"... code words for the distinct
possibility Eclipse will fold, leaving IS&S with a large unpaid
bill and a number of proprietary Avio NG units that can't be fitted
to any other aircraft.
IS&S' core business is the supply of flat-panel display
screens to manufacturers of business and commercial