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): February 14, 2024

  

 

INNOVATIVE SOLUTIONS AND SUPPORT, INC.

(Exact name of registrant as specified in its charter)

 

 

Pennsylvania	001-41503	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 February 14, 2024, Innovative Solutions and Support, Inc. issued a press release announcing its financial results for its first quarter ended December 31, 2023. A copy of that press release is 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 February 14, 2024, announcing financial results for the fiscal first quarter ended December 31, 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: February 14, 2024	By:	/s/ Relland Winand
		Relland Winand
		Interim Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

Innovative Solutions & Support, Inc. Announces First Quarter Fiscal 2024 Financial Results

 

EXTON, Pa. – February 14, 2024 – (BUSINESS WIRE) Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the first quarter of fiscal 2024, which ended December 31, 2023.

 

For the first quarter of fiscal 2024, IS&S reported net sales of $9.3 million, up 43% from $6.5 million in the first quarter a year ago. The Company reported net income of $1,057,350, or $0.06 per share, increases of 51% and 50%, respectively, compared to $698,651, or $0.04 per share, in the first quarter of fiscal 2023.

 

Gross profit in the first quarter of 2024 was $5.5 million, or 59.3% of sales, compared to $3.7 million, or 57.1% of sales in the first quarter of 2023.

 

Sales and earnings in the first quarter of 2024 continued to benefit from 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, “We are pleased to report another quarter of year-over-year growth in both revenues and earnings. The integration of the product lines acquired from Honeywell is progressing and ongoing. These products complement our existing portfolio of products, offer recurring revenues, and introduce IS&S to a new market segment. As we continue to generate gross margins approaching 60% and strong cash flow, our debt position was reduced to $10.6 million as of December 31, 2023, or approximately $8.9 million less than just three months ago. Revenues were up 43% in the quarter, keeping us on pace with our goal to grow annualized revenues by approximately 40% compared to our pre-acquisition revenue levels upon the completion of the integration.”

 

For the first quarter of fiscal 2024, the Company generated $4.2 million of cash flow from operations.

 

New orders in the first quarter of fiscal 2024 were approximately $10.4 million. Backlog as of December 31, 2023, was $14.6 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 backlog.

 

 

 

Conference Call

 

The Company will be hosting a conference call on Thursday, February 15, 2024 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: 844-739-3798 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. In this press release, the words “anticipates,” “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “forecasts,” “expects,” “plans,” “could,” “should,” “would,” “is likely”, “projected”, “might”, “potential”, “preliminary”, “provisionally” and similar expressions, as they relate to the business or to its management, are intended to identify forward-looking statements, but they are not exclusive means of identifying them. All 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 statements regarding the ongoing integration, how the product lines complement our existing portfolio of products, offer recurring revenues and introduce us to a new market segment, and expectations regarding growth of annualized revenues upon completion of such integration; and the timing of our long-term programs remaining in production and continuing to generate future sales. 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 September 30, 2023, 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)

 

		December 31,				September 30,
		2023				2023
ASSETS
Current assets
Cash and cash equivalents		$	467,334			$	3,097,193
Accounts receivable			5,583,593				9,743,714
Contract asset			647,644				487,139
Inventories			7,799,935				6,139,713
Prepaid inventory			11,509,067				12,069,114
Prepaid expenses and other current assets			919,639				1,073,012
Asset held for sale			-				2,063,818
Total current assets			26,927,212				34,673,703
Goodwill			3,557,886				3,557,886
Intangible assets, net			15,916,821				16,185,321
Property and equipment, net			7,931,009				7,892,427
Deferred income taxes			1,141,048				456,392
Other assets			224,221				191,722
Total assets		$	55,698,197			$	62,957,451
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of lomg-term debt		$	10,611,514			$	2,000,000
Accounts payable			1,545,799				1,337,275
Accrued expenses			2,984,947				2,918,325
Contract liability			228,306				143,359
Total current liabilities			15,370,566				6,398,959
Long-term debt			-				17,500,000
Other liabilities			427,581				421,508
Total liabilities			15,798,147				24,320,467
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 December 31, 2023 and September 30, 2023			-				-
Common stock, $.001 par value:  75,000,000 shares authorized, 19,550,184 and 19,543,441 issued at December 31, 2023 and September 30, 2023, respectively			19,549				19,543
Additional paid-in capital			54,522,975				54,317,265
Retained earnings			6,726,063				5,668,713
Treasury stock, at cost, 2,096,451 shares at December 31, 2023 and at September 30, 2023			(21,368,537	)			(21,368,537	)
Total shareholders' equity			39,900,050				38,636,984
Total liabilities and shareholders' equity		$	55,698,197			$	62,957,451

 

 

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

(unaudited)

 

		Three months ended
		December 31,
		2023				2022
Net Sales:
Product		$	4,424,108			$	5,088,208
Customer service			4,227,247				1,061,149
Engineering development contracts			656,708				366,899
			9,308,063				6,516,256
Cost of sales:
Product			1,781,345				2,415,944
Customer service			1,726,961				319,102
Engineering development contracts			276,595				57,406
Total cost of sales			3,784,901				2,792,452
Gross Profit			5,523,162				3,723,804
Operating expenses:
Research and development			901,144				670,445
Selling, general and administrative			3,006,819				2,261,863
Total operating expenses			3,907,963				2,932,308
Operating income			1,615,199				791,496
Interest (expense)			(360,013	)			-
Interest income			79,479				115,892
Other income			17,699				18,196
Income before income taxes			1,352,364				925,584
Income tax expense			295,014				226,933
Net income		$	1,057,350			$	698,651
Net income per common share:
Basic		$	0.06			$	0.04
Diluted		$	0.06			$	0.04
Weighted average shares outstanding:
Basic			17,451,362				17,316,766
Diluted			17,474,906				17,326,177

 

 

v3.24.0.1

Cover	Feb. 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 14, 2024
Entity File Number	001-41503
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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