Buoyed by strong sales of its RVSM cockpit equipment to airlines and business aircraft operators, Exton, Pa.-based Innovative Solutions & Support (IS&S) this year looks on pace to post record revenue and profits. While that’s certainly good news for the upstart avionics maker, it doesn’t mean that it is too soon to start questioning what the company will do for an encore.
The answer may lie in a line of lower cost cockpit displays that IS&S has been developing over the last several years. The FAA recently awarded TSO approval for the company’s first such product, an impressive 12- by 9-inch active-matrix LCD flat-panel. Roman Ptakowski, company president, said the certification clears the way for applications of the display in military, commercial and general aviation markets, with all three apparently high on IS&S’s list of targets.
The publicly traded company already provides flat-panel displays to the military for its Boeing tankers, but the long-awaited FAA TSO opens possibilities for the LCD screens in business aircraft and, perhaps more important from a revenue standpoint, airlines seeking to upgrade from CRT equipment.
IS&S designs, manufactures and markets flight reference computers, electronic displays, advanced monitoring systems and other equipment, but it is best known in business aviation circles for its line of low-cost RVSM avionics. Earlier this year, IS&S was the beneficiary of a $4 million order from Bombardier for air-data displays and analog interface units developed for RVSM upgrades in Learjet 31s, 35/36s and 55s.
Meanwhile, Gulfstream has ordered almost $1 million worth of avionics from IS&S for Gulfstream II/IIBs. This is in addition to the STCs the company has obtained for its RVSM air-data display units in the Challenger 600, Hawker 700, Sabre 60 and 65, JetStar, King Air 200 and 350, Piaggio Avanti and other aircraft.
With the deadline for domestic RVSM in the U.S. fast approaching, IS&S earlier this year commissioned Frost & Sullivan to perform a review of the North American RVSM market. The survey found that 4,000 to 6,000 business jets do not yet comply with the RVSM mandate, meaning the tap for this type of work certainly is not about to run dry. The DRVSM mandate takes effect in U.S. airspace on January 20.
Not long ago, 80 percent of IS&S’s revenue came from military contracts. Today, the mix has reversed, with the company deriving 80 percent of its revenue from civil contracts. Still, IS&S was recently awarded $8.5 million in new military contracts, including one for $5.5 million to replace air-data equipment in the U.S. Air Force’s fleet of A-10s. Financial analysts who are keeping tabs on IS&S would like to see an equal mix of display sales to the military and civil customers.