EXTON, Pa. - Innovative Solutions & Support, Inc. (NASDAQ:ISSC) has expanded its partnership with Honeywell International (NASDAQ:HON), Inc. through an exclusive licensing agreement and the acquisition of additional assets for certain Communication and Navigation product lines. This deal, announced today, builds upon a previous asset acquisition from Honeywell completed in June 2023.
The new agreement grants IS&S exclusive Intellectual Property rights to manufacture, upgrade, and repair additional Honeywell Communication and Navigation products. Also included in the purchase are the existing inventory and assets necessary to support these activities.
Shahram Askarpour, CEO of IS&S, expressed confidence that this opportunity aligns with the company's growth strategy and will enhance their offerings in the air transport, business aviation, and military markets. Askarpour anticipates that these new products will establish relationships with key customers and optimize the operational capacity of their Exton manufacturing facility, similar to the benefits realized from the prior year's transaction with Honeywell.
Jeff DiGiovanni, CFO of IS&S, echoed the sentiment, noting that the additional product lines are in line with their acquisition strategy's key pillars. DiGiovanni also highlighted that following the transaction, IS&S maintains a solid financial profile, with sufficient liquidity to support operations and the flexibility to pursue further growth objectives, including potential acquisitions.
IS&S, headquartered in Exton, Pa., is known for designing and manufacturing flight guidance and cockpit display systems for both OEMs and retrofit applications, supplying advanced technology like Flight Management Systems and GPS receivers for precision navigation.
The information provided is based on a press release statement, which also includes forward-looking statements subject to risks, uncertainties, and assumptions. Factors influencing future results include the company's ability to integrate acquisitions and respond to economic and competitive changes. The company cautions that actual results may differ from those projected in forward-looking statements due to various factors, including operational challenges and market conditions.
In other recent news, Innovative Solutions & Support (IS&S) has made notable strides in its operations. The company reported a substantial 46% increase in revenues for the second quarter of fiscal 2024, alongside a rise in net income compared to the previous year. IS&S is also in the process of integrating the Honeywell acquisition, with the expectation to complete this by the end of summer.
Additionally, the company announced a special award of restricted stock units (RSUs) to its Chief Financial Officer, Jeffrey DiGiovanni. The RSUs are set to vest incrementally until full vesting in 2027, contingent upon DiGiovanni's continued employment with the company. A Change in Control Agreement has also been entered into with DiGiovanni, outlining terms should a change in company control occur.
IS&S has expanded its Board of Directors with the appointment of Major General Garry Dean as an independent director, bringing his military aviation and government relations experience to the board. These recent developments underscore IS&S's ongoing strategic moves to strengthen its market position and financial performance.
InvestingPro Insights
Innovative Solutions & Support, Inc. (ISSC) has shown a promising trajectory with analysts anticipating sales growth in the current year. This optimism is reflected in the company's impressive gross profit margins, which stand at a robust 58.42% for the last twelve months as of Q2 2024, underlining the efficiency of their operations. Notably, ISSC operates with a moderate level of debt, providing a stable financial foundation for future endeavors, such as the recent expansion of their partnership with Honeywell International, Inc.
InvestingPro Data reveals a market capitalization of $103.56 million, and an attractive P/E ratio of 16.48, which adjusts to a slightly lower 15.34 when considering near-term earnings growth. The PEG ratio, which is a metric that relates the P/E ratio to the growth rate of a company's earnings, is particularly compelling at 0.54, suggesting that the stock could be undervalued relative to its growth prospects.
Despite the stock taking a significant hit over the last six months with a price total return of -29.17%, InvestingPro Tips highlight that analysts predict the company will be profitable this year. Additionally, ISSC does not pay a dividend to shareholders, which may be an important consideration for income-focused investors.
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