Innovative Solutions and Support makes its living by outfitting aircraft with flight guidance, display systems and other aircraft cockpit equipment. Customers include commercial aircraft operators, aircraft modification centers and both U.S. and foreign military. The Company has several competitors that provide some but not all the same lines of products and services to the aerospace industry. Innovative Solutions is differentiated by strong customer service and the capacity to address the particular needs of each customer.
In the twelve months ending March 2024, the Company reported $8.4 million in operating income on $41.0 million in total sales, representing an operating profit margin of $20.5%. During the same period the Company converted $10.5% of each sales dollar to operating cash flow for a total of $4.3 million. Strong internal cash generation has made it possible for the Company to keep leverage to a minimum. The debt-to-equity ratio at the end of March 2024, was 0.12.
The stock price has been roiled in recent weeks by the receipt of a buyout offer by an existing significant share holders. The offer of $7.25 per share was deemed leadership as undervaluing the operation and was rejected. Some traders may have preferred a certain exit price at a modest level to continue at risk in the wait for a price recovery. Nonetheless, we expect the patient trader to achieve a favorable outcome as the Company achieves sales and earnings growth through continued market penetration.
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