ISSC Innovative Solutions and Support Inc

 

 

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 20, 2023

  

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 20, 2023, Innovative Solutions and Support, Inc. issued a press release announcing its financial results for its fourth quarter and fiscal year ended September 30, 2023. 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 20, 2023, announcing financial results for the fourth quarter and fiscal year ended September 30, 2023.
104	Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the inline XBRL document.

 

 

 

 

 

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 20, 2023	By:	/s/ Relland Winand
		Relland Winand
		Interim Chief Financial Officer

 

 

 

 

 

 

 Exhibit 99.1

 

 

Innovative Solutions & Support, Inc. Announces Fourth Quarter and Full Year Fiscal 2023 Financial Results

 

EXTON, Pa. – December 20, 2023 – (BUSINESS WIRE) Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the fourth quarter and full fiscal year 2023, which ended September 30, 2023.

 

For the fourth quarter of fiscal 2023, IS&S reported net sales of $13 million, up 79% from $7.3 million in the fourth quarter a year ago. The Company reported net income of $2.6 million, or $0.15 per share, increases of 63% and 67%, respectively, compared to $1.6 million, or $0.09 per share, in the fourth quarter of fiscal 2022.

 

Gross profit in the fourth quarter of 2023 was $8.1 million, or 62% of sales, compared to $4.5 million, also 62 % of sales in the fourth quarter of 2022.

 

The increase in sales and earnings in the fourth quarter of 2023 primarily reflects the impact of the previously announced addition of the product lines acquired from Honeywell International, Inc. (“Honeywell”) pursuant to an exclusive license and asset acquisition that closed in the third quarter of 2023.

 

 

 

 

Shahram Askarpour, Chief Executive Officer of IS&S, said, “I am pleased to report our fifth consecutive year of both top and bottom-line growth as a result of one of the best quarters in the Company’s recent history. The results include some customer-directed accelerated shipments of the acquired Honeywell products to mitigate any impacts from potential delivery delays over the next two quarters as equipment and inventory are transferred to IS&S. The ongoing integration of the Honeywell product lines is proceeding well, and we remain confident that annualized revenues will increase by approximately 40% from pre-acquisition levels once operations have been fully integrated in fiscal 2024. The integration of the Honeywell product lines enhances our current product offerings in the Air Transport, Military and Business Aviation Markets and has provided us with an introduction to numerous operators with whom we did not previously have relationships, thereby opening a large new market opportunity for our other products.”

 

For the fiscal year 2023, the Company generated $2.1 million of cash flow from operations. The Company had $3.1 million of cash on hand as of September 30, 2023, which has increased during the quarter ended December 31, 2023 because of the collection of receivables and the sale of the Company’s King Air aircraft. As of December 19, 2023 the Company’s cash on hand is currently over $8 million.

 

New orders in the fourth quarter of fiscal 2023 were approximately $12.7 million and were $36.5 million for the full fiscal 2023 year. Backlog as of September 30, 2023, was $13.5 million. Only purchase orders in hand are included in our sales backlog, which primarily consists of orders from our OEM customers that have long-term programs-- Pilatus PC-24, Textron King Air, Boeing T-7 Red Hawk and the Boeing KC-46A. IS&S expects these programs to remain in production for approximately a decade and anticipates that they will continue to generate future sales. Due to their nature, the products licensed from Honeywell do not typically enter into backlog.

 

 

 

Full Year Fiscal 2023 Results

 

Total revenues for the fiscal year ended September 30, 2023, were $34.8 million, up 26% from $27.7 million for the fiscal year ended September 30, 2022. Net income for fiscal 2023 was $6.0 million, or $0.35 per share, compared to $5.5 million, or $0.32 per share, in fiscal 2022. Net income in fiscal 2022 included a $1.1 million gain on the sale of an asset.

 

Conference Call

 

The Company will be hosting a conference call on Thursday, December 21, 2023 at 10:00 AM 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: 877-451-6152 and ask to join 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.

 

FORWARD LOOKING STATEMENT DISCLAIMER

 

In addition to the historical information contained herein, this press release contains “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, statements about future revenue, financial performance and profitability, future business opportunities, , the integration of the Honeywell product lines, including how the product lines enhance our current product offerings in the Air Transport, Military and Business Aviation Markets and have provided us with an introduction to numerous operators with whom we did not previously have a relationship, creating a large new market for many of our other products, the impact of licenses, including the Honeywell license, and the timing of our long-term programs remaining in production and expectations regarding a large new market opportunity for our other products. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions, 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, the Company’s ability to efficiently integrate acquired and licensed product lines, including the Honeywell product lines, into its operations; a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the economic and business environments in which the Company operates. Such factors are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent reports filed 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. 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,
		2023				2022
ASSETS
Current assets
Cash and cash equivalents		$	3,097,193			$	17,250,546
Accounts receivable			9,743,714				4,297,457
Contract asset			487,139				162,742
Inventories			6,139,713				5,349,104
Prepaid inventory			12,069,114				-
Prepaid expenses and other current assets			1,073,012				1,142,470
Asset held for sale			2,063,818				-
Total current assets			34,673,703				28,202,319
Goodwill			3,557,886				-
Intangible assets, net			16,185,321				60,348
Property and equipment, net			7,892,427				6,292,189
Deferred income taxes			456,392				46,487
Other assets			191,722				103,980
Total assets		$	62,957,451			$	34,705,323
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of lomg-term debt		$	2,000,000			$	-
Accounts payable			1,337,275				708,845
Accrued expenses			2,918,325				2,972,275
Contract liability			143,359				259,183
Total current liabilities			6,398,959				3,940,303
Long-term debt			17,500,000				-
Other liabilities			421,508				15,065
Total liabilities			24,320,467				3,955,368
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, 2021 and 2020			-				-
Common stock, $.001 par value:  75,000,000 shares authorized, 19,543,441 and
19,412,664 issued at September 30, 2023 and 2022, respectively			19,543				19,413
Additional paid-in capital			54,317,265				52,458,121
Retained earnings (accumulated deficit)			5,668,713				(359,042	)
Treasury stock, at cost, 2,096,451 shares at September 30, 2023 and at
September 30, 2022			(21,368,537	)			(21,368,537	)
Total shareholders' equity			38,636,984				30,749,955
Total liabilities and shareholders' equity		$	62,957,451			$	34,705,323

 

 

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

(unaudited)

 

		Three months ended								Twelve months ended
		September 30,								September 30,
		2023				2022				2023				2022
Sales		$	12,992,596			$	7,263,121			$	34,808,513			$	27,740,695
Cost of sales			4,880,125				2,795,585				13,497,442				11,066,314
Gross profit			8,112,471				4,467,536				21,311,071				16,674,381
Operating expenses:
Research and development			741,579				642,303				3,129,518				2,705,140
Selling, general and administrative			3,718,293				1,527,900				10,822,505				6,753,915
Total operating expenses			4,459,872				2,170,203				13,952,023				9,459,055
Operating income			3,652,599				2,297,333				7,359,048				7,215,326
Interest (expense)			(393,281	)			-				(393,281	)			-
Interest income			85,693				50,179				518,188				61,051
Other income			19,813				15,931				151,317				65,232
Income before income taxes			3,364,824				2,363,443				7,635,272				7,341,609
Income tax expense			730,202				761,468				1,607,517				1,817,831
Net income		$	2,634,622			$	1,601,975			$	6,027,755			$	5,523,778
Net income per common share:
Basic		$	0.15			$	0.09			$	0.35			$	0.32
Diluted		$	0.15			$	0.09			$	0.35			$	0.32
Weighted average shares outstanding:
Basic			17,400,659				17,256,750				17,411,684				17,256,750
Diluted			17,451,314				17,257,871				17,427,278				17,257,871

 

 

 

v3.23.4

Cover	Dec. 20, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 20, 2023
Entity File Number	0-31157
Entity Registrant Name	INNOVATIVE SOLUTIONS AND SUPPORT, INC.
Entity Central Index Key	0000836690
Entity Tax Identification Number	23-2507402
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	720 Pennsylvania Drive
Entity Address, City or Town	Exton
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19341
City Area Code	610
Local Phone Number	646-9800
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	ISSC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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