Innovative Solutions and Support (ISSC) 14 Feb 182018 Q1 Earnings call transcript

Good morning, and welcome to the Innovative Solutions & Support First Quarter 2018 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I'd now like to turn the call over to Geoffrey Hedrick. Please go ahead.

Geoff is this morning, Hedrick. Good our welcome I'd conference results, morning upcoming and our this to like current discuss conditions XXXX to call fiscal the to of the you first for outlook business year. quarter

me Rell our and CFO. our Winand, are Askarpour, Joining today President; Shahram

message. Before I harbor like read the Rell begin, to I safe would Rell?

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

I'll Geoff. Now back to the turn call

you. Thank

down challenging, first revenues quarter was X%. The with

flow. losses However, operating improved margins mitigated positive and cash generated

the quarter's We in ahead in customer bidding revenue and ending in growth are the activity. to backlog, the pick-up continued service looking increase this

internal concentrating the large new inherent contracts. of development, us to which on better while control risk are We engineering eliminating allows over operations product

portfolio steady global the We enlarging are primarily network. and progress expanding channels, our creation making distribution product MRO our a by through of

over efficiency we XX%, For or and of to The controls. development this strategy $XXX,XXX, cost the invested remain implemented heart has committed new with instance, internal research of fully and quarter. this revenue product

King certifying are in our success the of we Autothrottles. process the of and new PC-XX patent-pending a now fully Autothrottle, integrated standalone With Air

solution their put Autothrottle already updated aircraft. this offers that groundbreaking operators an cockpits, their and in have our owners technology standalone to economical For

Air we will of much largest of - is Autothrottles anticipated to of other exclusive as the close enjoy FAA-certified Autothrottle is represents certification. with for shorter our provider single King The protection, XX,XXX intellectual a with Together pool We a only expect through Autothrottle with market of broad-based next X,XXX property that aircraft. development Air product autothrottle a and timeframe aircraft, the the Turboprop period aircraft. number over receipt candidates for of autothrottle

is Autothrottle specifications NextGen a feature-rich transitioned candidates. products. we large growing meet engineering and impending products developed in that resources only the Our the are demanding focused growing of price-performance off of internally Having the portfolio portfolio of latest industry-leading programs, of on

takes MRO of to cash. professional balance $XX strengthened talk like received marketing longer That We also have comment no and uniform would living our we expressions of have in also we but on to to network to Board consistent engage responses to past has our in new deal rapidly organization distributors. to strong over that to remain cut Meeting interest to and financial the a counsel years, adds position almost reduce a revamped extra the intend I to With board and in been help Leading will products a our market. are are some fielded responses, to time can add it Therefore, changing the sales the these interest. IS&S. some dynamically, chance I generally interest and of well-trained into growing we that with response. tomorrow so its have these the we sales, to scheduled purchasing processes several and - our have market. fiscal a cost bring in This this flexibility with the optimistic in we XXXX, - also million drive

like I'd to over to call turn Rell Now the Winand.

morning. this and for Thank you you to all Geoff, thank us joining

million, XXXX, fiscal XX, first $X.X XXXX. three quarter net For down revenues from $X.X December of the were slightly million the months ended in

across in ago. year Most $X.X gross which administrative $XXX,XXX, from million, strong from production first partially were offset a were expenses virtually sales Total quarterly year the be reduction of and was sold spread We than our margins, XX% quarter down The the this XX% the of fixed had of operating favorable quarter cost. by reduced quarter. more all expenses, by either of our was impact product general of were revenues mix manufacturing in customer the higher-margin that's for the So maintained lower or to a the XX%, or selling, over ago. effect that service. volumes

ago lower nearly with development. somewhat consistent of was XX% investment quarter strong new development and than our commitment year revenue, product first as research internal Our a to

net from in reported than a the less a per product high-margin a or financial improved company quarter revenues reflects This of ago, year Even strong disciplined a ago. discipline. loss The $XXX,XXX, of fiscal $X.XX the though first quarter was on share. focus products, remains year XXXX, the our net for and cost sales For down we were position. loss

$XX.X million Working cash in of debt. million no the the operating We over hand the on fund ended foreseeable the generated For sufficient and quarter, XX, capital has operations we cash with company cash positive to $XX at quarter December and XXXX. flow was believe future.

turn Now call over I'd Shahram. to like the to

in update Thank first Since quarter last during that it first Revenues would when I on begin the comments regarding morning, been from has everyone. lower some were Good a we performance while XXXX. financial spoke, quarter. let Rell. than quickly the provide slightly period. progress our of fiscal me you, short with an achieved the

of we an of our cost cost, result reduced reduction ended financial our of quarter a turning marks product better revenues. we XX% organizational backlog, is a believe the to point development outcome. direct experienced declining in We recently This implemented and improvements. what our with due increase However, the

momentum - heading we expect to believe With rest the order into new the new realize we upcoming certifications, year. the of

demand by the we are our to several mandates. developing to PC-XXs, future With capture increasing X,XXX have impending for additional like market to would amid key single-engine on already certification is focus that insight. the for as certification Our available aircraft. impeding Autothrottle X,XXX series. new and This to products over - twin-engine Air these are success, will an a NextGen need, increase Autothrottle share We the King opportunity products provide of I some meet in over transfers our standalone certification imminent products

other experiencing Aviation certification to and applicable received our are for our cover Commercial approximate Unit, in Turboprop in interest Autothrottle the by & targeted we Autothrottle, the the industry February marketing controlled to efforts XX,XXX Air in from our have aviation due our for by Turboprops issue. recent platforms platforms beyond standalone the other aircraft. designing we the adding King ability Integrated And with increased several as PC-XX article We and the Business experts by turboprop-powered publications, certifications such service standalone quickly aircraft in add Standby have XXXX recognition

sales PC-XX capabilities, in we we production, internal pursue Utility efforts with the multipliers. opportunity is full-run and additional source is As the us, of commercial we to continue sales long-term to sole carry dealership and agreements, for are as now supplier our This our strengthen Pilatus marketing on mode. great production they Management our being in become a System.

marketing We aggressively are also products our internationally.

and upgrades. with is air where increased just Boeing China, XXX in for the in returned as where to from local summary, of focus an for growth marketing Asian instance, sales For our market. current key with developed area strategic XXX trip our partnering opportunities unprecedented a creating will newly XXX, This aspects strategy creating MROs demand aircraft provide markets and In and we shareholders. a cargo continue the products to another on is we value our to

closing Let for Geoff me some turn the remarks. call back to

Shahram. Thanks,

portfolio a introduce strategy is continue broad to fundamental of to Our innovative products.

have freed are We the these the time shortening development, efforts resources and up to focus market by low-margin and contracts. eliminating reduce to cost development we of

highly that consumer-centric and are is evolving friendly. We also marketing strategy tactical something to our more in one that involved from was

our should has and represent I'm for Our that to to able business the first appreciate capitalizes which interest entire strategy We growth been today, year. open of organized the company our trough strengths. competitive a transition, and we your over return questions. balance on results I this be the a quarter around Thanks. believe in

to the end so George [Operator Instructions]. for the would closing presentation, call Hedrick any like turn of that's comment. And I the

for for Thank you, Geoff Thanks is listening always Contact again Thank any Rell this again open answer We're Bye-bye. in. questions. Winand. you today. Hedrick. for additional

now The for you Thank conference concluded. Thank attending today's presentation. has you.

now may disconnect. You