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): August 11, 2021
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 August 11, 2021, Innovative Solutions and Support, Inc. issued a press release announcing its financial results for its fiscal third quarter ended June 30, 2021. 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 11, 2021, announcing financial results for the third fiscal quarter ended June 30, 2021 |
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 11, 2021 | By: | /s/ Relland M. Winand |
| Relland M. Winand | ||
| Chief Financial Officer |
Exhibit 99.1
Innovative Solutions & Support, Inc. Announces Third Quarter Fiscal 2021 Financial Results
08/11/2021
EXTON, Pa.--(BUSINESS WIRE)-- Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the third quarter of fiscal 2021, ended June 30, 2021.
For the third quarter of fiscal 2021, the Company reported net sales of $6.2 million up 3% from the third quarter a year ago. The Company reported net income of $2.7 million, or $0.16 per share, which includes a $1.5 million tax benefit from the release of the deferred tax valuation allowance, up 108% from the third quarter of fiscal 2020.
Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “Revenues in the quarter were up both year-over-year, as well as sequentially from the second quarter of this year, as momentum builds. This growth was achieved during difficult times with the ongoing pandemic which is most encouraging and bodes well for the Company’s future.”
“We continue to expand in a number of our key markets. In air cargo conversions, demand remains robust for our Boeing 757 and 767 Flat Panel Display Systems, particularly from a premier on-line retailer, contributing to both our solid third quarter performance and growth in our backlog. OEM activity was also strong during the quarter, with an increase in the pace of autothrottle deliveries to Textron for the King Air. In fact, the August 2021 issue of Flying Magazine reviewed the King Air 360 and made it a point to feature our autothrottle with positive reviews. Flying Magazine called it ‘surely the star of the King Air 360’ from a pilot’s perspective, while Textron’s 360 technical marketing advisor and sales engineer called our autothrottle an ‘elegant little engineering solution.’ I’m pleased this highly respected aviation publication has validated the effort we have put into this groundbreaking control and safety solution for single-pilot aircraft. We look forward to building on our growing foundation of both retrofit and OEM programs as our strategy to create additional value for our shareholders.”
The Company’s cash on hand increased to $7.5 million on June 30, 2021, with net cash flows from operating activities of $1.5 million in the third quarter. Since September of 2020, nearly $20 million of cash has been distributed to shareholders while the Company remains in a strong financial position with significant liquidity and no debt.
New orders in the third quarter of fiscal 2021 were approximately $9.0 million and backlog as of June 30, 2021 increased 40% to $9.5 million, up from $6.7 million at March 31, 2021. New orders for the nine- month period ended June 30, 2021 were approximately $22.0 million. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, Textron King Air and the KC-46A programs, which the Company expects to remain in production for approximately a decade. The Company expects that these contracts will add to production sales already in backlog.
Nine Months Results
Total sales for the nine months ended June 30, 2021 were $16.2 million up 6% from the nine months ended June 30, 2020. Net income for the nine months ended June 30, 2021 was $3.5 million, or $0.21 per share, up 75% from the first nine months of fiscal 2020. Net income in the first nine months of fiscal 2021 included $1.4 million of tax benefits, primarily those recognized in the third quarter as noted above.
Conference Call
The Company will be hosting a conference call on Thursday, August 12, 2021, at 11:00 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 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), Auto-Throttle 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 | ||||
| June 30, | September 30, | |||||||
| 2021 | 2020 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 7,482,863 | $ | 12,603,967 | ||||
| Resticted cash | - | 11,180,900 | ||||||
| Accounts receivable | 4,293,727 | 4,369,111 | ||||||
| Inventories | 4,838,811 | 4,291,335 | ||||||
| Prepaid expenses and other current assets | 697,329 | 675,109 | ||||||
| Total current assets | 17,312,730 | 33,120,422 | ||||||
| Property and equipment, net | 8,220,942 | 8,175,872 | ||||||
| Deferred income taxes | 1,331,928 | - | ||||||
| Other assets | 151,364 | 249,543 | ||||||
| Total assets | $ | 27,016,964 | $ | 41,545,837 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 936,042 | $ | 790,892 | ||||
| Dividend payable | - | 11,180,900 | ||||||
| Accrued expenses | 1,543,487 | 1,361,960 | ||||||
| Contract liability | 1,528,694 | 313,365 | ||||||
| Total current liabilities | 4,008,223 | 13,647,117 | ||||||
| Non-current deferred income taxes | - | 129,689 | ||||||
| Total liabilities | 4,008,223 | 13,776,806 | ||||||
| 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 June 30, 2021 and September 30, 2020 | $ | - | $ | - | ||||
| Common stock, $.001 par value: 75,000,000 shares authorized, 19,342,823 and 19,310,835 issued at June 30, 2021 and September 30, 2020, respectively | 19,343 | 19,311 | ||||||
| Additional paid-in capital | 51,771,014 | 51,458,787 | ||||||
| (Accumulated deficit) | (7,413,079 | ) | (2,340,530 | ) | ||||
| Treasury stock, at cost, 2,096,451 shares at June 30, 2021 and September 30, 2020 | (21,368,537 | ) | (21,368,537 | ) | ||||
| Total shareholders' equity | 23,008,741 | 27,769,031 | ||||||
| Total liabilities and shareholders' equity | $ | 27,016,964 | $ | 41,545,837 | ||||
| Innovative Solutions and Support, Inc. | ||||||||||
| Consolidated Statements of Operations | ||||||||||
| (unaudited) | ||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net Sales | 6,180,183 | 5,953,689 | 16,171,680 | 15,300,182 | ||||||||||||
| Cost of sales | 2,825,681 | 2,559,016 | 7,348,364 | 7,008,691 | ||||||||||||
| Gross profit | 3,354,502 | 3,394,673 | 8,823,316 | 8,291,491 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 646,795 | 870,805 | 1,936,747 | 2,249,439 | ||||||||||||
| Selling, general and administrative | 1,512,138 | 1,279,422 | 4,847,410 | 4,514,085 | ||||||||||||
| Total operating expenses | 2,158,933 | 2,150,227 | 6,784,157 | 6,763,524 | ||||||||||||
| Operating income | 1,195,569 | 1,244,446 | 2,039,159 | 1,527,967 | ||||||||||||
| Interest income | 107 | 7,767 | 1,138 | 152,358 | ||||||||||||
| Other income | 17,231 | 16,261 | 50,994 | 44,760 | ||||||||||||
| Income before income taxes | 1,212,907 | 1,268,474 | 2,091,291 | 1,725,085 | ||||||||||||
| Income tax (benefit) expense | (1,473,014 | ) | 8,616 | (1,443,352 | ) | (300,786 | ) | |||||||||
| Net income | $ | 2,685,921 | $ | 1,259,858 | $ | 3,534,643 | $ | 2,025,871 | ||||||||
| Net income per common share: | ||||||||||||||||
| Basic | $ | 0.16 | $ | 0.07 | $ | 0.21 | $ | 0.12 | ||||||||
| Diluted | $ | 0.16 | $ | 0.07 | $ | 0.21 | $ | 0.12 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 17,230,387 | 16,952,973 | 17,222,312 | 16,931,049 | ||||||||||||
| Diluted | 17,231,438 | 17,087,275 | 17,223,908 | 17,097,414 | ||||||||||||