UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  August 7, 2019

 

 

INNOVATIVE SOLUTIONS AND SUPPORT, INC.

(Exact name of registrant as specified in its charter)

 

 

 

720 Pennsylvania Drive

Exton, Pennsylvania 19341

(Address of principal executive offices) (Zip Code)

 

(610) 646-9800

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company

o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.         o

 

 

 

Item 2.02              Results of Operations and Financial Condition.

 

On August 7, 2019, Innovative Solutions and Support, Inc. issued a press release announcing its financial results for its fiscal quarter ended June 30, 2019.  A copy of that press release and the attached financial schedules are attached as Exhibit 99.1 to this report and incorporated herein by reference.

 

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 9.01              Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press Release, dated August 7, 2019, announcing financial results for the fiscal quarter ended June 30, 2019.

 

2

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	INNOVATIVE SOLUTIONS AND SUPPORT, INC.
Date: August 7, 2019	By:	/s/ Relland M. Winand
		Relland M. Winand
		Chief Financial Officer

 

3

Exhibit 99.1

 

 

Innovative Solutions & Support, Inc. Announces Third Quarter Fiscal 2019 Financial Results

 

EXTON, Pa.—(BUSINESS WIRE)—Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (ISSC) today announced its financial results for the third quarter of fiscal 2019, ended June 30, 2019.

 

For the third quarter of fiscal 2019, the Company reported net sales of $4.6 million, an increase of 35% as compared to net sales of $3.4 million in the third quarter a year ago. The Company reported third quarter net income of $511,000, or $0.03 per share, compared to a net loss of $1.0 million, or ($0.06) per share in the third quarter of fiscal 2018. Revenues are also up sequentially from $4.2 million in the second quarter of fiscal 2019.

 

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “Third quarter results for revenues, net income and cash flow, continue to reflect the steady improvement seen over the course of this fiscal year.  In addition, during the quarter we received the first and only Federal Aviation Administration (FAA) Supplemental Type Certification (STC) for its patented ThrustSense® Autothrottle for retrofit in the King Air, a dual turbo prop aircraft. This STC serves as the

 

 

foundation for additional STCs that we believe will open significant market opportunity.”

 

At June 30, 2019, the Company had $22.6 million of cash on hand, an increase as net cash flows from operating activities were in excess of $1.3 million for the quarter. New orders in the third quarter of fiscal 2019 were approximately $3.9 million, and backlog as of June 30, 2019, was $4.6 million. Backlog excludes potential future sole-source production orders from the Pilatus PC-24 and the KC-46A programs, both of which are currently in production. The Company expects both programs to remain in production for multiple years and that these contracts will add to production sales already in backlog.

 

Nine Months Results

 

Total sales for the nine months ended June 30, 2019, were $12.8 million compared to $10.2 million for the nine months ended June 30, 2018. For the nine months ended June 30, 2019, the Company reported net income of $0.9 million, or $0.05 per share, a significant improvement from a net loss of $3.2 million, or ($0.19) per share for the first nine months of fiscal 2018.

 

Conference Call

 

The Company will be hosting a conference call on Thursday, August 8, 2019, at 10:00 a.m. ET to discuss these results and the Company’s business outlook and product development. Please use the following dial in number to register your name and company affiliation for the conference call: 877-270-2148 and ask to be joined into the Innovative Solutions & Support call. The call will also be carried live on the Investor Relations page of the Company website at www.innovative-ss.com.

 

 

About Innovative Solutions & Support, Inc.

 

Headquartered in Exton, Pa., Innovative Solutions & Support, Inc. (www.innovative-ss.com) is a systems integrator that designs and manufactures flight guidance and cockpit display systems for Original Equipment Manufacturers (OEMs) and retrofit applications. The company supplies integrated Flight Management Systems (FMS) and advanced GPS receivers for precision low carbon footprint navigation.

 

Certain matters contained herein that are not descriptions of historical facts are “forward-looking” (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the Company with the Securities and Exchange Commission. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

Innovative Solutions and Support, Inc.

Consolidated Balance Sheets

 

		June 30,			September 30,
		2019			2018
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	22,563,411		$	20,390,713
Accounts receivable		1,441,827			3,449,893
Contract asset		30,170			—
Inventories		4,445,184			4,280,108
Prepaid expenses and other current assets		576,842			544,234
Total current assets		29,057,434			28,664,948
Property and equipment, net		8,541,798			8,786,737
Other assets		160,157			181,993
Total assets		$	37,759,389		$	37,633,678
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	823,137		$	1,529,792
Accrued expenses		1,412,579			1,463,021
Contract liability		183,011			356,801
Total current liabilities		2,418,727			3,349,614
Non-current deferred income taxes		129,627			129,594
Total liabilities		2,548,354			3,479,208
Commitments and contingencies (See Note 6)
Shareholders’ equity
Preferred stock, 10,000,000 shares authorized, $.001 par value, of which 200,000 shares are authorized as Class A Convertible stock. No shares issued and outstanding at June 30, 2019 and September 30, 2018		$	—		$	—
Common stock, $.001 par value: 75,000,000 shares authorized, 19,005,487 and 18,937,050 issued at June 30, 2019 and September 30, 2018, respectively		19,006			18,937
Additional paid-in capital		51,987,096			51,783,779
Retained earnings		4,573,470			3,720,291
Treasury stock, at cost, 2,096,451 shares at June 30, 2019 and September 30, 2018		(21,368,537		)	(21,368,537		)
Total shareholders’ equity		35,211,035			34,154,470
Total liabilities and shareholders’ equity		$	37,759,389		$	37,633,678

 

 

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

(unaudited)

 

		Three months ended						Nine months ended
		June 30,						June 30,
		2019			2018			2019			2018
Net Sales		4,589,824			3,389,663			12,770,601			10,204,851
Cost of sales		2,064,617			1,806,980			5,733,385			5,482,596
Gross profit		2,525,207			1,582,683			7,037,216			4,722,255
Operating expenses:
Research and development		722,525			1,028,271			1,967,379			2,983,614
Selling, general and administrative		1,416,053			1,626,640			4,414,126			5,005,941
Total operating expenses		2,138,578			2,654,911			6,381,505			7,989,555
Operating income (loss)		386,629			(1,072,228		)	655,711			(3,267,300		)
Interest income		99,916			15,164			147,948			36,469
Other income		24,714			16,128			57,314			53,224
Income (loss) before income taxes		511,259			(1,040,936		)	860,973			(3,177,607		)
Income tax expense		—			101			7,794			61,920
Net income (loss)		$	511,259		$	(1,041,037	)	$	853,179		$	(3,239,527	)
Net income (loss) per common share:
Basic		$	0.03		$	(0.06	)	$	0.05		$	(0.19	)
Diluted		$	0.03		$	(0.06	)	$	0.05		$	(0.19	)
Weighted average shares outstanding:
Basic		16,880,341			16,816,838			16,860,503			16,800,070
Diluted		16,978,643			16,816,838			16,898,321			16,800,070