Innovative Aerosystems, Inc. (ISSC) Q4 2019 Earnings Report, Transcript and Summary

Good morning, and welcome to Innovative Solutions and Support's Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.I would like to turn the conference over to Chairman and CEO, Geoffrey Hedrick. Please go ahead.

Good morning, this is Geoff Hedrick. I'd like to welcome you this morning to our conference call to discuss our performance for the fourth quarter and full fiscal year 2019, current business conditions and our outlook for the coming year. Joining me today are Shahram Askarpour, our President; and Relland Winand, our CFO.Before I begin, I'd like Rell to read the safe harbor message. Thanks.

Thank you, Geoff, and good morning, everyone. I would remind our listeners that certain matters discussed in the conference call today, including new products and operational and financial results for future periods, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially either better or worse from those discussed, including other risks and uncertainties reflected in our company's 10-K, which is on file with the SEC, and other public filings.Now I'll turn the call back to Geoff.

Thanks, Rell. The company's revenue, operating results and operating cash flow showed significant improvements from both a year ago and a quarter as well sequentially from the third quarter of this fiscal year. Fiscal 2019 results reflect cost controls and marketing focus I initiated in fiscal 2018. This strong finish enabled us to record a significant increase in all our key financial metrics this year, with revenues growing 27% over fiscal 2018.We ended fiscal 2019 with the best quarter of new orders and the highest quarterly intake in more than two years. And that only includes a portion of the orders we expect to get from Pilatus for their production of the very successful PC-24 and in 2020, they have indicated they intend to increase annual production by 25% from the 40 aircraft they will deliver in 2019. I attribute these results to a disciplined commitment to better leverage our core technologies and innovation in our designs in both the commercial, general aviation and military markets.Driven by the growth of production sales of our flat panel displays utility management systems, as well as ongoing contribution of our repair and maintenance operation we expanded gross margins to over 56% this year.Our primary focus is production revenues developing new products has been the foundation in which the company has built. It is why compared to many other companies like ourselves, we believe we have a higher proportion of investment in research and development. So we're open to opportunistic funded development contracts such as new air data in computer being developed for the Navy aircraft, which we believe has both domestic and international production sales potential.Our focus on innovation is why we have adopted a strategy of investing in a fewer, but more promising markets and products. One of the more promising technology we have developed is a patented ThrustSense Auto-throttle. With Auto-throttle STCs for both single and twin-engine aircraft secured we have products that address a market that is estimated to be over 5,000 aircraft.The FAA’s certification of engine out loss of control mitigation function is a breakthrough and a major milestone this service -- this certification Auto-throttle technology on the market and is certified to mitigate uncontrolled catastrophic accidents and engine out situations of multiengine aircraft. Loss of control mitigation is a major safety feature of the Auto-throttle. So it required a separate special FAA certification which took us over two years to complete, principally because it's never been done before. We're humbled to bring this new technology that has potential to save lives.In order to make the ThrustSense more cost effective, we're also developing means and methods to reduce installation time, which not only helps get the aircraft operational sooner, but can reduce costs to the aircraft owner and operator.Right now our plan is to continue to pursue additional STCs in the retrofit market on aircraft with large existing fleets. We are also talking to a number of OEMs of expressed interest in our Auto-throttles. Expanding our OEM business should we believe provide an additional stability in our revenues.We see a large market opportunity for the ThrustSense and we continue to increase its function by adding new enhancements. So in the fourth quarter revenues up sequentially for the seventh time in eight quarters and an improvement in bookings we have a solid foundation to build our Auto-throttle business.Let me turn it over to Rell for discussion on financials.

Thank you, Jeff, and thank you all for joining us this morning. For the fourth quarter of 2019 the company reported net sales of $4.8 million, a 33% increase from $3.6 million in the fourth quarter a year ago. That is our fourth consecutive quarter of revenue growth, seventh quarter in the last eight we have generate sequential revenue growth and follows the 35% growth of revenues achieved in the third quarter.We had another strong quarter of product sales and customer service revenue which led to a very strong 59.5% gross margin our best quarterly gross margin in several years. Margins are benefiting from the steady increases in revenue, which has enabled us to better leverage our fixed manufacturing costs and lower material costs due to product mix. In addition, the company also benefited from reduced warranty costs in the quarter, reflecting both reduced warranty costs being incurred and reserves that were required for longer term warranty periods ending.Total operating expenses for the fourth quarter of fiscal 2019 were $2 million, a decrease of $300,000 from the same quarter a year ago. Total operating expenses are also down sequentially from the third quarter.Research and development expenses in the quarter were $522,000, which is less than that of a year ago, reflecting our strategy to narrow our new product development efforts on fewer, but more promising new technologies.Selling, general and administrative expenses in the quarter were down approximately $200,000 from the fourth quarter of fiscal 2018. Since the workforce reduction in late in fiscal 2018, general and administrative expenses have normalized at this quarter's current rate.In the quarter, we earned $118,000 of other income, primarily in interest from our cash balances. In the fourth quarter, we recorded a small Income Tax Benefit, reflecting the utilization of some of our available tax loss carryforwards.The company reported its most profitable quarter in several years, nearly doubling our net income from just three months ago with fourth quarter net income of $1 million, or $0.06 per share. In the fourth quarter of last year we reported a net loss of $414,000, or $0.03 per share.Quickly looking at the results for the year, total revenues were $17.6 million, up 27% from $13.9 million for full year 2018. The company reported fiscal 2019 net income of $1.9 million, or $0.11 per share, a significant improvement from a net loss of $3.7 million or $0.22 per share for fiscal 2018.We believe that the company remains in a strong financial position. We generated over $2 million of positive cash flow in fiscal 2019 and had $22.4 million of cash on hand at September 30, 2019, the company is debt free. We believe the company has sufficient cash to fund operations for the foreseeable future.Now I'd like to turn the call over to Shahram.

Thank you. Rell. Good morning everyone. As Geoff reiterated, we had good performance in the fourth quarter, which led to the significant year-over-year increase in all of our key financial metrics revenue, margins, earnings and cash flow. Many of the factors that drove our success over the last 12 months are holding pace and in some cases improving. But headed into the New Year, we believe our greatest growth opportunity lies in our latest technology, our ThrustSense Auto-throttle.So let me take a minute to elaborate on some of our comments to provide a better appreciation of why we so strongly believe in this technology. We now have STCs on both single and twin engine general aviation aircraft. And we are working on additional STCs, as well as developing additional features that enhance the value of our existing certified auto-throttles.Included in the new technologies in our proprietary is our proprietary VMCA mitigation technology, which believe is by far the most valuable. The VMCA mitigation is the first of kind STC. And since this catastrophic loss of control mitigation feature has never been done before, the FAA had no reference certification background to consult, when evaluating our technology. Three separate organizations within the FAA being our Aircraft Certification Office, the Small Airplane Standard Branch and Small Aircraft Evaluation Group had to come to terms and develop acceptable means for certification of the safety critical system.With the announcement and demonstrations made by IS&S to me mitigate the fatal condition caused by loss of directional control during an engine out condition, the industry expert and media have published various supporting articles for our technology.Consequently, you can appreciate why the recent receipt of this STC has us greatly excited about the prospects for all auto-throttle especially installed in multiengine aircraft types.While VMCA mitigation is the biggest new feature of our auto-throttle programs, we're making other valuable improvements as well. Previously, we had emphasized on the importance of reducing the installation time and we have cut our King Air auto-throttle installation time almost in half by including our standby instrument within the same unit that performs the auto-throttle functionality as part of this recent STC.A final note on the auto-throttle is that we are in negotiations with some OEMs for inclusion of our auto-throttle as standard equipment in their production aircraft.We believe that these efforts would lead to a strong demand for this technology that not only reduces pilot workload, but is believed to be potentially life-saving. And as previously mentioned, while we are investing heavily in the growth of our auto-throttle business, it comes at a time when the performance of our base business remains solid.Just quickly reviewing the programs, driving current results, the PC-24 program has been running at a fairly healthy level in support of 40 aircraft Pilatus expects to deliver this year. That should jump to around 50 next year to meet the increasing demand for what has been quickly recognized as one of the most successful new aircraft launches in recent memory.Again, since this is a long-term contract, which we believe will span multiple years and generate demand for thousands of units, only a fraction of that ultimate value is in our backlog.In the commercial air transport market, we are experiencing steady demand for our Boeing 75 and 767 portfolio of cockpit technology. As I mentioned last quarter, we believe impart due to the sun setting of support for the remaining CRT displays in service.Many of the domestic and international owners flying these aircraft tend to be smaller operators that typically rely on the MRO channels for upgrades and therefore we continue to support our distribution channels. Many of these sales are of products that are close to off the shelf, making them more profitable.The military market, our production KC-46 program continues forward as new orders are being received. The Navy F-5 engineering contract to develop a new data computer has been completed. We anticipate a production order will be awarded to us to retrofit the U.S. Navy F-5 fleet with the new air data computer.New orders in the fourth quarter were our best in two years, and at September 30th, we had the highest year-end backlog in three years. We have also seen a steady flow of repair and maintenance revenue, as the company continues to ship more equipment in the field it follows that they need to support and maintain that equipment continues to grow.Let me turn the call back to Jeff, for some closing remarks.

Thank you, Shahram. Fiscal 2019 was a year strong financial performance, as well as a year of encouraging progress, creating virtually an entirely new market. As we previously discussed, we are taking a very measured and deliberate approach to a -- approach in maturing a auto-throttle market.At the same time we're committed to leveraging our existing technologies to generate profits and cash and provide the time we need to make sure that our new technology has a greatest opportunity for success. The new certification currently awarded for VMCA mitigation is really a pivotal event in the evolution of this emerging market.We continue to invest resources as needed to cultivate the market and believe over time, this investment will be rewarded.I'll turn over to the operator.

Thank you. [Operator Instructions] Our first question comes from David Campbell of Thompson, Davis & Company.

Good morning everybody. Thanks for having such a good quarter. And you're beginning to be substantially profitable again. I take at the PC-24 production increase projected for next year. Now is that any of that in the backlog of $6 million.

Virtually none.

Virtually none. So, though the backlog is for contracts for the KC-46 and some other military applications?

Right. We have -- remember our fiscal year is offset from the calendar year. But there's not a lot of PC-24 in there. PC-24 has been probably the most remarkably successful [indiscernible] program we've seen in a long time and done a great job. And we're fortunate to be on it. The KC-46 is an ongoing program and we continue to support and have a pretty much a planned revenue stream continuous for a long time.

Great. The auto-throttle however did have -- you received approval from the FAA, but you add revenues from it in the quarter is that right?

We've received a number of STCs recently, but the most important and most significant is the one for multiengine aircraft. This business about mitigating an engine out, which sadly ends up being a catastrophic event. So, the FAA has approved that and that will go into production this coming calendar year. And we are optimistic because it works is probably the best part.

Is that what you're principally negotiating with original equipment manufacturers?

Yes. We’ve had, as you could expect there have been a number of OEMs that have expressed interest in it. It has application also to the military and commercial markets as well. It is applicable to any multiengine aircraft, in which a loss of a single engine can cause an out of control condition that sadly doesn't end well typically.So -- and anyway, that's what it's there for. It works and the FAA has approved it and they showed really very good thorough judgment and investigated. As they said this is new technology and it requires a great deal of review before certification is approved.

And this should be primarily for manufacturers of business aircraft?

No it's applicable to military aircraft, lift aircraft throttle broad number of as well as air transport. Any -- I mean there was an airplane. What happens is the airplane slows down a little too much when an engine out or folding. It rolls over on its back or when it does it’s extremely difficult to recover from. And what our system does is it anticipates that condition and makes modifications to the thrust to allow the flight crew to maintain control of the airplane.

And none of this is in the backlog. Right?

None of it's in the backlog. We don't take orders until we have the certification. And it's been a long road. But we've tested it a lot. I can attest to that by the way. It's exciting when it doesn’t work, I can tell you.

This is not -- the PC-24 is not -- does not use this equipment, is that right?

PC-24, right now we're focused on Turboprop airplane. And that's a turbofan aircraft. The PC-24 has its own mitigation system that does something similarly.

Okay.

It doesn't do the same thing, but because we have some patents on -- the patents pending on this mitigation technology.

Right, right. So, at this point as far as revenues are concerned for fiscal 2020 you don't really know what they're going to be. But if this program is successful out of the up from 2019, is that right?

That's true. Depends on how fast it swings into production. But well, I guess the truth is, we're optimistic, we know there is a significant revenue and profit opportunity out in the future, the exact timing again is a little uncertain because it's all new technology.

Right. And you are not -- competition can't take the business from you?

I never say that. I never say. I can only tell you that there's nobody else is doing what we’re doing. It's taken us two years to get it certified and we have a number of patents and patents pending. So other than that I can only say that if we do our job, we'll run like fevers and work our butts off to make it happen. So, if we do them, we have a wonderful opportunity.

All right. Well thank you very much Jeff and Shahram and Rell. I appreciate the help.

All right, thank you.

Our next question comes from George Marema of Pareto Venture.

Hi, good morning. Thank you, gentlemen. I had some questions regarding the auto-throttle. I'm trying to understand better the cadence of the go-to-market on this. So is it ready for sale today or do we need one more clearance or is it ready to go now?

It is very ready for sale today. We have developed a couple of improvements, which we believe should be included in the production installations. So the answer is yes and no. Yes, it's ready to go and we can sell it today and install it. But we expect a couple of improvements, which we will have implemented within a month or so. So it's on track, I guess, is the more accurate explanation.

And then on the go-to-market for the 2020, I hear a lot of talk on OEMs. Is -- walk me through the cadence of your strategy? Is it mostly OEM stuff you're trying to go more to the MROs in the aftermarkets or how you are going to market on this and what's the cadence of it?

Well, you have equipment manufacturers, OEM [ph] equipment manufacturers that have expressed interest. We've had once in Europe and in United States. And we're talking to them about them implementing it in their production aircraft. But the unit was actually intended and designed for retrofit application, where there's an enormous existing market much bigger than even sustained production for the next 10 years would look like. And that market is - continues to look very strong and we're expanding in that. So when we do it, we go after it as we've been pursuing the aftermarket through FPOs and certified installers.And depending on the aircraft through MROs, in some cases there may be military aircraft where you have military installers. It's kind of very cost effective. It's the auto-throttle systems is typically half or a third the cost of previous competitive systems. And it has the added feature for this loss of control mitigation.

So have MROs that have started placing orders yet for this for 2020?

They haven't, because we haven't had it certified. It literally became certified four days ago. So we could sell the auto-throttle, but we knew the -- any -- they knew that we were working on VMCA mitigation and until that gets STC we can't install it in an airplane. And so it's -- the markets will be quickly something new it’s never been done before. So we don't have any historical reference.

Okay. So I would expect a lot of pent up demand given the recent crashes and on the activity.

The older I get, the more prudent I become. I'm delighted and excited about it. It's really just almost humbling. But I think we need to do our job and work hard and see if it matures until as big an opportunities we initially believe.

Okay, thank you.

Thank you.

Our next question comes from Charlie Pine of Van Clemens & Co.

Hi. good morning, everyone. And first of all, congratulations on a great quarter. And congratulations on a wonderful turnaround year. The hard work is starting to pay off and delighted to see it.

Thank you for that. But it's been very rewarding as you can imagine and Shahram and the team have done a great job. So we're delighted. We've been able to develop new really innovative technology, while we've been able to produce some profit and show some reasonable growth in the business. So we're pleased, we need to keep it up, I guess.

Well, hopefully it will be even more rewarding in the next couple of years.

We hope so.

Okay. I have a couple of questions and I want to scratch the surface a little bit more on this -- on the recent developments with the auto-throttle. So I understood I guess from your answer to the previous question that you just got the engine out certification on December 8th, is that correct?

Monday.

Monday. Okay.

It’s been a long time between trends [ph], trust me.

Okay. Yes, it has been. Do you anticipate putting out a separate press release for that?

We will. Obviously, because of the timing, which do we release first and because we have great respect for the SEC we thought we will be approved.

Okay, I totally understand. The other thing I guess I'm a little bit confused about, you said that there's a few little miffs and talks that have to be done to really get this to the point where you're going to actually start putting it into aircraft like the King Air. So, Geoff, when do you actually really believe that you'll start to get to actually recognize some revenue and do some of the first installs? It doesn't sound like it's going to happen in the current quarter. But do you think we'll start to see some of this in the January quarter or is it going to be pushed back into the March to June quarter?

Well for sure not this quarter. Because we don’t have the time to do anything, but…

Yeah, I get that.

We would expect that the market to start and initialization to start in the first or second quarter of next year, calendar quarter.

Going to start slow, because there [indiscernible] in the installation. I mean…

I'm sorry Shahram, can you say that I didn’t hear it, can you say that again, please.

I was explaining [indiscernible] unless that that the aircraft yet to schedule in you have to have time with the installer you have to get the equipment delivered on lead-time. And all of that is typically three to six months. So those delays are built into the market accepted per se of the equipment.

Okay. So we should factor a fairly deliberate and slow ramp than over the next few quarters though with the idea though that we will begin to see installs in 2020.

Yes. And importantly you just have to watch this climate as it -- this is one of those programs I believe that will generate momentum behind it. And so as it proceeds you'll see it foresee more rapidly and the growth will be more exponential rather than test linear.

What about the uptake with the ThrustSense, the STC that I guess you got what was the PC-12 are you getting any installs in that?

Yes, we're starting with that as well. So both areas are going well. We're looking -- our focus right now is just to let you know is to look at a number of new aircraft primarily multiengine because most new airplanes have multiengine.But it offers for both aircraft the engine protection, which is important as you over temperature an engine you're talking about probably $100,000 check just to make sure it's okay. So things like that really pay off so they can be quantified, precisely obvious performance and safety advantages.

Alright. Finally, the last thing I'd like to get clarified, can you refresh my memory against what's the -- what particular aircraft that you have the computer contract with the navy for, what was that?

F-5.

Yes, you say the F-5.

That's correct.

Okay. And if I heard you correctly, you said that that air data development computer that has been completed at this point. Is that -- did I hear correctly?

That’s correct, [multiple speakers] flight tests that so.

We're now waiting for the go ahead so it's a retrofit program. We're waiting for that to start and more prepared to do it. We've made a lot of as you know we may not know. We have made probably 6,000 computers of various types over the years. So it’s something new, but it’s -- and probably one of the reasons we won the program.

I see well that's great. What about when you think that you indicated that you're expecting to get production orders. What would be a reasonable timeframe for receipt of such?

As I have said before, I don't want to speculate. I mean there are a lot of thesis that get started, but we would hope early next year we would start seeing influx of production orders. And it's a limit of how many we can take it. Remember we got to get installers lined up and trained, et cetera so that the lead times all stretch it out. As Shahram commented we started slowly and build from there.

Okay. Well thank you very much for providing this additional color to me and to other people I'm sure that are listening. And, once again, we're really pleased to see the results for this year and looking forward to what's going to be occurring over the next couple of years. So I will get off and let somebody else take.

Thank you for your interest and I’m glad I now know that I'm here to provide color. Am I correct?

Don't get too colorful now.

I do always will be colorful. Go ahead.

Our next question comes from Erwin Goldman [ph], a Private Investor.

Good morning. I'm the old guy, you remember me?

Yes, yes. You keep moving -- you keep doing [indiscernible], I understand.

Actually I'm just out of the hospital and I am in a rehab.

I am sorry to hear that, but and I hope you're recovering well.

Thank you. I've always been curious about the employment level. How many people are working and are we hiring?

We're hiring and I won't tell you how many people. But we're hiring.

Okay. The other thing, I think the questions got answered, we have not sold any Auto Thrust yet. And we do not expect to for a number of quarters, is that correct?

No, that's not correct. We have sold a number of auto-throttles to the PC-12 markets.

You did, very good.

And continue to do that. The product has been an evolution, we’re spending time now trying to optimize the installation, which ends up being an important issue because the installers have a limited throughput capacity. So if we can reduce the time, it takes to install and we can put in more at a higher rate, obviously.Secondly, we continue to find improvements and enhancements to its function. So, we add those as well. But, I guess, we've already installed then we've gotten very good results in the field, no problems. And the latest installation and approval by the FAA, will start opening up an additional channel. In addition we're going to look at a number of new aircraft, a number of aircraft, different aircrafts and some much larger aircraft that we can provide, what is a really strong improvement in aircraft safety and true workload.

All right. My last question is, as Pilatus notified you to increase production for them, for the next couple of quarters, I understand the aircraft is extremely successful?

On PC-24, yes. It struck it’s a wonderful airplane, Pilatus has always done a great job. As you know, we bought a PC-12 in 2000. So I've been extremely happy with the aircraft and the support. PC-24 is a wonderful airplane.

Okay.

And they’ve announced towards their increase in production by 25% year-over-year, which is pretty remarkable.

All right. And Geoff, I thank you very much. I want to congratulate you guys for doing such a wonderful job and giving us such a future of extremely exuberant, okay? So thank you. I hope next…

[Indiscernible] yourself. I'm glad to hear you're out. I want to make sure you're on the next phone call, all right? So thank you.

All right. I thank you. I hope to see you at the next Annual Meeting.

That will be great. Look forward to one.

Thank you.

Bye-bye.

[Operator Instructions]. Our next question comes from Michael Fredrik [ph], a Private Investor.

Good morning, gentlemen. I had just a question about the flat panel display units. They appear to be the main driver of the company's sales over the last 10 years or so. How much of a contribution can we expect from that area going forward? And has that been the main driver of growth for the year so far?

PC-24 was also a big driver of growth last year. We expect that the revenues from the air transport side of the flat panels that would stay at this level for the near future at least.

Okay. And I know you've been installing these for quite a while. I mean, what is the life of this installation? How often does it need to be turned over? Or is it just something that requires a software upgrade every once in a while? Is there any repeat business on this installation?

Once they actually get -- once it gets installed in an airplane and one of the remarkable things we've seen, we looked at the American airline fleet, for example. And we were getting over 100,000 hours of meantime between failures. That's many years going without any failures, which is remarkable. And so this is why they have a very good name in the industry. We've referenced to those air transport displays. And we get repeat business just by other people coming in and buying our system despite the OEM is one of our competitors and they provide the retrofit solution for the same airplane. But people tend to buy ours because of our quality and long history.

And our focus towards minimizing the cost and time to install equipment, if you take a commercial air transport, as an example. Our system installs in a matter of three or four days, competitive systems are as much as 30 days. And when an airplane sits on the ground, it loses revenue of somewhere depending on the aircraft from $50,000 to $75,000 a day. The installation becomes all virtually an order of the magnitude more of an impact the delay than cost of the basic equipment.

Okay, great. And well, just one quick general question and that would be, if you talk to any of the installers right now, I think most of them are still pretty busy with the FAA mandates for this year. But can you give a little bit of an idea of once this -- once the next gen. installations go into play how much more valuable is something like ThrustSense in that world than sort of the world we're leaving behind?

We have with our ThrustSense been able to provide a huge number of aircraft potentially. The ability to do what is becoming an increasing demand for required navigational performance. That is ADSP [ph] and next gen is trying to keep the aircraft position, very well controlled and the timing of the aircraft as it goes through its flight base very, very carefully defined. That enables them to put more aircraft in play or in service over the same airspace.And the auto-throttle is in many of those cases invaluable. It's been proven in the necessity for the system in flight management systems and commercial and military aircraft. It was proven in 40 years ago we first did performance compute.So anyway, I believe that that it will have [indiscernible] next gen. will put an additional demand in -- demand on ThrustSense.

Great, great. And just one more quick question, I'll let you go. And that is the newly certified STC. How much will -- will that make a material change in the cost of the purchase of an auto thrust? In other words, will that be an additional purchase that goes with the existing auto thrusters as part of the overall package?

If I understand your question, you’re saying the new STC for the VMCA, is that going to increase the cost of installations.

Not the cost of installation, but the actual cost of the purchase?

So, yes, I mean, we had a pricing strategy to potentially offer that as an option. But we believe that everybody is going to not take that option.

Okay. Okay.

It's not a huge cost increase, but obviously when you need it it's a very nice thing to have. Sadly there've been actions, most recently in places like Texas and Hawaii. And they even -- this is applicable to even piston twins [ph] like went down right in our neighborhood. You don't know exactly what the cause was, but it is well understood that if you end up with a single engine, within an engine out that you risk, you have to keep the speed up. You don't keep the speed up. It can end badly.

Yes. The Texas one certainly sounded like that's what have -- or at least that could've been because of what happened anyway. So all right gentlemen. Thank you for your time and good luck.

You're welcome. Thank you for your interest. I guess, that's the end of it. I appreciate everybody's interest today. Thanks for attending.

This concludes the question-and-answer session and concludes the Innovative Solutions & Support fourth quarter 2019 earnings call. We thank you for attending today's presentation. You may now disconnect.