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): April 25, 2012
INNOVATIVE SOLUTIONS AND SUPPORT, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania |
|
000-31157 |
|
23-2507402 |
(State or other jurisdiction of |
|
(Commission File |
|
(I.R.S. Employer Identification No.) |
720 Pennsylvania Drive
Exton, Pennsylvania 19341
(Address of principal executive offices) (Zip Code)
(610) 646-9800
(Registrants 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))
Item 2.02 Results of Operations and Financial Condition.
On April 25, 2012, Innovative Solutions and Support, Inc. (the Company) issued a press release announcing its financial results for its second quarter ended March 31, 2012. 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 (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 or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
|
Description |
|
|
|
99.1 |
|
Press Release, dated April 25, 2012, announcing financial results for the second quarter ended March 31, 2012. |
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: April 25, 2012 |
By: |
/s/ Ronald C. Albrecht |
|
|
Ronald C. Albrecht |
|
|
Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Ron Albrecht, Chief Financial Officer
Innovative Solutions & Support, Inc.
610-646-0350
Innovative Solutions & Support, Inc. Announces Second Quarter Fiscal 2012
Financial Results
Exton, PA. April 25, 2012 Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today announced its financial results for the second quarter of fiscal 2012, ending March 31, 2012.
Net revenues for the second quarter of fiscal 2012 were $6.8 million, up compared to $6.7 million in the second quarter of fiscal 2011. The Company reported fiscal second quarter 2012 net income of $289,000, or $0.02 per fully diluted share, compared to net income of $499,000, or $0.03 per fully diluted share, in the same quarter a year ago. The company generated $628,000 of cash flow from operations in the second quarter of fiscal 2012.
Geoffrey Hedrick, Chairman and Chief Executive Officer of Innovative Solutions & Support, Inc., said, Revenues for the quarter were up slightly from a year ago largely on the strength of the progress achieved on certain customer arrangements which support ongoing engineering product development programs. Each of these programs has the potential to significantly increase our addressable market, as Shahram
Askarpour outlines below. Gross margins reflected this increased proportion of lower margin EMD revenues. Our ability to adjust resources to current project demands enabled us to achieve our profitability and cash flow objectives in the quarter. Backlogs have remained relatively stable, although each of our military, commercial air transport and general aviation end markets is working through independent but concurrent industry issues.
By focusing on broadening our range of products and services, such as system integration and advanced avionics, we are creating the opportunity for larger contracts in previously untapped markets and building recognition for the Innovative Solutions & Support brand throughout both the domestic and international markets.
At March 31, 2012, the Company had $43.2 million of cash on hand, an increase from the $42.8 million cash balance at December 31, 2011. The Company remains free of long-term debt. Cash at March 31, 2012 is net of approximately $210,000 used to repurchase Company stock in the second quarter. Backlog was approximately $25.5 million at March 31, 2012, little changed from $25.7 million at December 31, 2011. Backlog reflects the engineering value of the EMD development, but does not include the prospective production revenues associated with these programs.
At the end of the quarter, accounts receivable included $760,000 from sales to American Airlines, Inc., prior to its bankruptcy. Based upon the present status of the bankruptcy proceeding, we are not able to determine when or the extent to which the receivable will be collected.
Six Month Results
Revenues for the six months ended March 31, 2012 were $11.5 million, compared to $13.3 million for the six months ended March 31, 2011. For the six months ended March 31, 2012, the net loss was $54,000, or ($0.00) per diluted share, compared to net income of $784,000, or $0.05 per diluted share, for the first half of last fiscal year. Cash flow from operating activities for the first half of the year was $1.2 million, compared to $1.7 million for the same period in 2011.
Shahram Askarpour, President of ISSC, added, The second quarter was a period of progress on our four large EMD programs: an aerial refueling operator control and display unit, a complete systems integration and CNS/ATM avionics upgrade, an OEM Advanced Avionics Suite, and an advanced electronic monitoring and control system. These large programs generally are higher dollar value orders, which translate into top line growth as they move into production. They also position the company to obtain other programs as a system integrator and on additional aircraft types.
As always, we are pursuing our growth strategy while managing costs to maintain a strong financial condition and to build long-term value for shareholders.
Business Outlook
Looking to the full year, the Company is forecasting revenues to be roughly comparable to the last fiscal year. However, given the risks in the present economic environment, revenue for the year may end up being less than last year, which could also result in negative profitability for the year. The Companys new product and
expanded platform initiatives are expected to increase the proportion of revenues and margins from EMD sales in fiscal 2012. Management will provide additional commentary during the earnings conference call.
Conference Call
The Company will be hosting a conference call April 26, 2012 at 10:00 a.m. EDT to discuss these results and its business outlook. Please use the following dial in number to register your name and company affiliation for the conference call: 877-397-0286. The conference ID# is 3441450. 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) and advanced GPS receivers for precision reduced 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 Companys future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflects managements 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 Sheet
(unaudited)
|
|
March 31, |
|
September 30, |
| ||
|
|
2012 |
|
2011 |
| ||
ASSETS |
|
|
|
|
| ||
Current Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
43,197,526 |
|
$ |
42,625,854 |
|
Accounts receivable, net |
|
3,582,988 |
|
3,124,114 |
| ||
Inventories |
|
4,478,872 |
|
3,508,595 |
| ||
Deferred income taxes |
|
428,786 |
|
438,635 |
| ||
Prepaid expenses and other current assets |
|
1,253,226 |
|
875,636 |
| ||
|
|
|
|
|
| ||
Total current assets |
|
52,941,398 |
|
50,572,834 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
|
7,336,930 |
|
7,476,362 |
| ||
|
|
|
|
|
| ||
Other assets |
|
161,000 |
|
208,408 |
| ||
|
|
|
|
|
| ||
Total Assets |
|
$ |
60,439,328 |
|
$ |
58,257,604 |
|
|
|
|
|
|
| ||
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current Liabilities |
|
|
|
|
| ||
Current portion of capitalized lease obligations |
|
$ |
6,712 |
|
$ |
13,189 |
|
Accounts payable |
|
1,620,466 |
|
443,516 |
| ||
Accrued expenses |
|
1,921,215 |
|
2,551,389 |
| ||
Deferred revenue |
|
2,319,265 |
|
232,630 |
| ||
|
|
|
|
|
| ||
Total current liabilities |
|
5,867,658 |
|
3,240,724 |
| ||
|
|
|
|
|
| ||
Deferred income taxes |
|
557,449 |
|
566,963 |
| ||
Other liabilities |
|
78,722 |
|
189,130 |
| ||
|
|
|
|
|
| ||
Total Liabilities |
|
6,503,829 |
|
3,996,817 |
| ||
|
|
|
|
|
| ||
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 March 31, 2012 and September 30, 2011 |
|
|
|
|
| ||
|
|
|
|
|
| ||
Common stock, $.001 par value: 75,000,000 shares authorized, 18,308,259 and 18,286,884 issued at March 31, 2012 and September 30, 2011, respectively |
|
18,308 |
|
18,287 |
| ||
|
|
|
|
|
| ||
Additional paid-in capital |
|
47,495,010 |
|
47,206,690 |
| ||
Retained earnings |
|
26,572,139 |
|
26,626,242 |
| ||
Treasury stock, at cost, 1,633,426 and 1,544,910 shares at March 31, 2012 and September 30, 2011, respectively |
|
(20,149,958 |
) |
(19,590,432 |
) | ||
|
|
|
|
|
| ||
Total Shareholders Equity |
|
53,935,499 |
|
54,260,787 |
| ||
|
|
|
|
|
| ||
Total Liabilities and Shareholders Equity |
|
$ |
60,439,328 |
|
$ |
58,257,604 |
|
Innovative Solutions and Support, Inc.
Consolidated Statement of Operations
(unaudited)
|
|
Three months ended |
|
Six months ended |
| ||||||||
|
|
March 31 |
|
March 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Sales |
|
6,760,221 |
|
$ |
6,746,070 |
|
11,515,680 |
|
13,275,881 |
| |||
|
|
|
|
|
|
|
|
|
| ||||
Cost of Sales |
|
3,659,505 |
|
2,873,414 |
|
6,289,365 |
|
5,809,069 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross Profit |
|
3,100,716 |
|
3,872,656 |
|
5,226,315 |
|
7,466,812 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Research and development |
|
926,379 |
|
1,556,827 |
|
1,716,602 |
|
2,910,434 |
| ||||
Selling, general and administrative |
|
1,827,794 |
|
1,849,143 |
|
3,821,369 |
|
3,938,492 |
| ||||
Total operating expenses |
|
2,754,173 |
|
3,405,970 |
|
5,537,971 |
|
6,848,926 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating (loss) income |
|
346,543 |
|
466,686 |
|
(311,656 |
) |
617,886 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
|
20,156 |
|
45,263 |
|
41,935 |
|
92,855 |
| ||||
Interest expense |
|
(180 |
) |
(404 |
) |
(417 |
) |
(862 |
) | ||||
Other income |
|
8,568 |
|
|
|
50,637 |
|
150,003 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
(Loss) income before income taxes |
|
375,087 |
|
511,545 |
|
(219,501 |
) |
859,882 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax (benefit) expense |
|
86,214 |
|
12,393 |
|
(165,395 |
) |
75,950 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net (loss) income |
|
$ |
288,873 |
|
$ |
499,152 |
|
$ |
(54,106 |
) |
$ |
783,932 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net (loss) income per Common Share |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
0.02 |
|
$ |
0.03 |
|
$ |
(0.00 |
) |
$ |
0.05 |
|
Diluted |
|
$ |
0.02 |
|
$ |
0.03 |
|
$ |
(0.00 |
) |
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted Average Shares Outstanding |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
16,636,725 |
|
16,782,684 |
|
16,679,109 |
|
16,782,684 |
| ||||
Diluted |
|
16,636,732 |
|
16,838,662 |
|
16,679,109 |
|
16,829,918 |
|