IA 8-K
Innovative Solutions & Support Inc (IA)
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): December 9, 2020
INNOVATIVE SOLUTIONS AND SUPPORT, INC.
(Exact name of registrant as specified in its charter)
| Pennsylvania | 0-31157 | 23-2507402 |
| (State or other jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ 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:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.001 per share | ISSC | Nasdaq Stock Market LLC |
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 ¨
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. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On December 9, 2020, Innovative Solutions and Support, Inc. issued a press release announcing its financial results for its fourth quarter and fiscal year ended September 30, 2020. 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 December 9, 2020, announcing financial results for the fourth quarter and fiscal year ended September 30, 2020. |
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: December 9, 2020 | By: | /s/ Relland M. Winand |
| Relland M. Winand | ||
| Chief Financial Officer | ||
Exhibit 99.1
Innovative Solutions & Support, Inc. Announces Fourth Quarter and Full Year Fiscal 2020 Financial Results
December 9, 2020
EXTON, Pa.--(BUSINESS WIRE)--Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (ISSC) today announced its financial results for the fourth quarter and full year fiscal 2020, ended September 30, 2020.
For the fourth quarter of fiscal 2020, the Company reported net sales of $6.3 million, an increase of 31% from $4.8 million in the fourth quarter a year ago. The Company reported fourth quarter net income of $1.2 million, or $0.07 per share, compared to $1.0 million, or $0.06 per share, in the fourth quarter of fiscal 2019. Total sales for the fiscal year ended September 30, 2020, were $21.6 million, an increase of 23% from $17.6 million for full year 2019. The Company reported fiscal 2020 net income of $3.3 million, or $0.19 per share, an increase over $1.9 million, or $0.11 per share, for fiscal 2019.
Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “I am pleased to report our second consecutive year of growth in revenues, earnings and cash flow, and the Company’s best annual operating profit in 10 years. We’ve achieved these results while remaining committed to implementing precautions against COVID-19 that seek to ensure the safety of our employees, suppliers and customers. As a result of this steady progress, as well as our confidence in our continued success, in September we declared a special, $0.65 per share dividend as a means to provide tangible returns to our shareholders. We remain in excellent financial condition with significant liquidity and no debt.”
“Among the many achievements driving our success was an OEM supply contract signed with Textron for our ThrustSense® Autothrottle with LifeGuard™ protection, which will now come as standard equipment on all of Textron’s new King Air 360 and King Air 260 turboprops. In addition, by working with Textron, we will be able to better pursue the significant retrofit opportunities represented by the approximately 5,000 King Air’s currently in service. And, in September, we announced that the FAA had certified our Synthetic Vision (SVS) installation and Autothrottle Upgrade for the Eclipse Jet, which marks our first upgrade offered directly to Eclipse owners. We already are shipping orders. Our strategy to concentrate our focus on technological innovation with substantial growth opportunities, continues to yield rewarding results. As a result, we are building a foundation of long-term OEM contracts that we believe will provide an underlying base of recurring production orders. Our goal remains to leverage our innovative cost-for-performance to serve the growing needs of the commercial air transport, military and business aviation markets.”
At September 30, 2020, the Company had $12.6 million of cash on hand. On September 4, 2020, the Board of Directors declared a special cash dividend in the amount of $0.65 per share, or approximately $11.2 million, which was paid on October 1, 2020, and which appears as a dividend payable on the September 30, 2020, balance sheet, offset by a corresponding restricted cash . Net cash flows from operating activities were $2.2 million for the year, with $1.6 million of the total realized in the fourth quarter.
New orders in the fourth quarter of fiscal 2020 were over $3.4 million and backlog as of September 30, 2020, was $3.6 million. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, the KC-46A and the Textron King Air 360 and King Air 260 ThrustSense® Autothrottle programs, all of which are currently in production. The Company expects these programs to remain in production for multiple years and that these contracts will add to production sales already in backlog.
Full Year Results
Total sales for the fiscal year ended September 30, 2020, were $21.6 million, an increase of 23% from $17.6 million for full year 2019. The Company reported fiscal 2020 net income of $3.3 million, or $0.19 per share, an increase over $1.9 million, or $0.11 per share, for fiscal 2019.
Conference Call
The Company will be hosting a conference call on Thursday, December 10, 2020, 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: 844-739-3798 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 web site 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), Autothrottle Systems 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
(unaudited)
| September 30, | September 30, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 12,603,967 | $ | 22,416,830 | ||||
| Restricted cash | 11,180,900 | - | ||||||
| Accounts receivable | 4,369,111 | 2,348,537 | ||||||
| Contract asset | - | 80,182 | ||||||
| Inventories | 4,291,335 | 4,470,694 | ||||||
| Prepaid expenses and other current assets | 675,109 | 642,049 | ||||||
| Total current assets | 33,120,422 | 29,958,292 | ||||||
| Property and equipment, net | 8,175,872 | 8,444,692 | ||||||
| Other assets | 249,543 | 154,041 | ||||||
| Total assets | $ | 41,545,837 | $ | 38,557,025 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 790,892 | $ | 1,079,073 | ||||
| Dividends payable | 11,180,900 | - | ||||||
| Accrued expenses | 1,361,960 | 1,110,918 | ||||||
| Contract liability | 313,365 | 29,231 | ||||||
| Total current liabilities | 13,647,117 | 2,219,222 | ||||||
| Non-current deferred income taxes | 129,689 | 129,651 | ||||||
| Total liabilities | 13,776,806 | 2,348,873 | ||||||
| Commitments and contingencies | - | - | ||||||
| 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 September 30, 2020 and 2019 | - | - | ||||||
| Common stock, $.001 par value: 75,000,000 shares authorized, 19,310,835 and 19,005,487 issued at September 30, 2020 and 2019, respectively | 19,311 | 19,006 | ||||||
| Additional paid-in capital | 51,458,787 | 51,987,096 | ||||||
| (Accumulated deficit) retained earnings | (2,340,530 | ) | 5,570,587 | |||||
| Treasury stock, at cost, 2,096,451 shares at September 30, 2020 and at September 30, 2019 | (21,368,537 | ) | (21,368,537 | ) | ||||
| Total shareholders' equity | 27,769,031 | 36,208,152 | ||||||
| Total liabilities and shareholders' equity | $ | 41,545,837 | $ | 38,557,025 | ||||
Innovative Solutions and Support, Inc.
Consolidated Statements of Operations
(unaudited)
| Three months ended | Twelve months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Sales | $ | 6,295,017 | $ | 4,801,988 | $ | 21,595,199 | $ | 17,572,589 | ||||||||
| Cost of sales | 2,784,532 | 1,942,734 | 9,793,224 | 7,676,119 | ||||||||||||
| Gross profit | 3,510,485 | 2,859,254 | 11,801,975 | 9,896,470 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 706,537 | 522,427 | 2,955,976 | 2,489,806 | ||||||||||||
| Selling, general and administrative | 1,586,461 | 1,463,794 | 6,100,545 | 5,877,920 | ||||||||||||
| Total operating expenses | 2,292,998 | 1,986,221 | 9,056,521 | 8,367,726 | ||||||||||||
| Operating income | 1,217,487 | 873,033 | 2,745,454 | 1,528,744 | ||||||||||||
| Interest income | 2,592 | 101,672 | 154,950 | 249,620 | ||||||||||||
| Other income | 15,737 | 16,423 | 60,497 | 73,737 | ||||||||||||
| Income before income taxes | 1,235,816 | 991,128 | 2,960,901 | 1,852,101 | ||||||||||||
| Income tax (benefit) expense | (8,096 | ) | (5,989 | ) | (308,882 | ) | 1,805 | |||||||||
| Net income | $ | 1,243,912 | $ | 997,117 | $ | 3,269,783 | $ | 1,850,296 | ||||||||
| Net income per common share: | ||||||||||||||||
| Basic | $ | 0.07 | $ | 0.06 | $ | 0.19 | $ | 0.11 | ||||||||
| Diluted | $ | 0.07 | $ | 0.06 | $ | 0.19 | $ | 0.11 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 16,964,059 | 16,888,692 | 16,939,302 | 16,867,550 | ||||||||||||
| Diluted | 17,164,525 | 17,074,825 | 17,114,191 | 16,942,447 | ||||||||||||