Good morning, welcome to the Innovative Solutions & Support fourth quarter 2019 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference call over to Chairman and CEO, Geoffrey Hedrick. Please go ahead.
Good morning. This is Jeff 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 are Shahram Askarpour, our President, and Rel Anand, our CFO. Before I begin, I'd like Rel to read our safe harbor message. Thanks.
Thank you, Jeff, 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 10K, which is on file with the SEC and other public filings. Now I will turn the call back to Jeff.
Thanks, Rel. 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 entered fiscal 2019 with the best quarter of new orders and the highest quarterly intake in more than two years. That only includes a portion of the orders we expect to get from Pilatus for their production of the very successful PC-24. 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 our 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. We're open to opportunistic funded development contracts, such as new air data 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 technologies we have developed is a patented ThrustSense autothrottle. With autothrottle 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 certification, autothrottle technology on the market, and is certified to mitigate uncontrolled catastrophic accidents in engine out situations of multi-engine aircraft. Loss of control mitigation is a major safety feature of the autothrottle, 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 are humbled to bring this new technology that has potential to save lives.
In order to make the ThrustSense more cost-effective, we are 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 aircraft with large existing fleets. We are also talking to a number of OEMs who have expressed interest in our autothrottles. Expanding our OEM business should, we believe, provide an additional stability in our revenues. We see a large market opportunity for the ThrustSense. We continue to increase its function by adding new enhancements. In the fourth quarter, revenues were up sequentially for the seventh time in eight quarters and an improvement in bookings. We have a solid foundation to build our autothrottle business. Let me turn it over to Rel for a 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, the seventh quarter in the last eight we have generated 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 fully 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 fiscal 2018, general and administrative expenses have normalized at this quarter's current rates.
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 carry-forwards. The company reported its most profitable quarter in several years, nearly doubling on 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 30th, 2019. The company is debt-free. We believe the company has sufficient cash to fund operations for the foreseeable future. I'd like to turn the call over to Shahram.
Thank you, Rel. Good morning, everyone. As Geoffrey related, 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 flows. Many of the factors that drove our success over the last 12 months are holding pace, in some cases, improving. Headed into the new year, we believe our greatest growth opportunity lies in our latest technology, our ThrustSense autothrottle. 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 autothrottles.
Included in the new technologies is our proprietary VMCA mitigation technology, which we believe is by far the most valuable. The VMCA mitigation is the first of its 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 Standards Branch, and Aircraft Evaluation Group, had to come to terms and develop acceptable means for certification of this safety-critical system. Since the announcement and demonstrations made by IS&S to mitigate the fatal condition caused by loss of directional control during an engine out condition.
The industry experts and media have published various supporting articles for our technology. You can appreciate why the recent receipt of this STC has us greatly excited by the prospects for autothrottle, especially installed in multi-engine aircraft types. While VMCA mitigation is the biggest new feature of our autothrottle programs, we are making other valuable improvements as well. Previously, we had emphasized on the importance of reducing the installation time, we have cut our King Air autothrottle installation time almost in half by including our standby instrument within the same unit that performs the autothrottle functionality as part of this recent STC. Our final note on the autothrottle is that we are in negotiations with some OEMs for inclusion of our autothrottle as standard equipment in their production aircraft.
We believe that all these efforts will lead to a strong demand for this technology that not only reduces pilot workload, but is believed to be potentially life-saving. As previously mentioned, while we are investing heavily in the growth of our autothrottle 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 the 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.
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 757 and 767 portfolio of cockpit technology. As I mentioned last quarter, we believe in part due to the sunsetting 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 channel for upgrades, 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. In 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 air 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. 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 the 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 of 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 in maturing a autothrottle 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 the 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 it over to the operator.
Thank you. At this time, we will open the floor for questions. If you would like to ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your headset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. Our first question comes from David Campbell of Thompson, Davis & Company.
Good morning, everybody.
Good morning.
Thanks for having me. Good. Thanks for having such a good quarter. You're beginning to be substantially profitable again. I take it the PC-24 production increase projected for next year, is any of that in the backlog of $6 million?
No.
Some of it is.
Some of it.
Well, virtually none.
Virtually none?
Yeah.
The backlog is for contracts for the KC-46 and some other military applications?
That's correct.
C-130.
Remember, our fiscal year is offset from the calendar year. There's not a lot of PC-24 in there. The PC-24 has been probably the most remarkably successful new airplane program we've seen in a long time. They've done a great job, and we're fortunate to be on it. The KC-46 is an ongoing program that we continue to support and have pretty much a planned revenue stream, continuous for a long time.
Right. The autothrottle, however, you received approval from the FAA, but you had revenues from it in the quarter. Is that right?
We received a number of STCs recently, the most important, the most significant, is the one for multi-engine aircraft. This business about mitigating an engine out, which sadly ends up being a catastrophic event. 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?
Yeah. As you can 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 multi-engine aircraft, in which a loss of a single engine can cause an out-of-control condition that sadly doesn't end well, typically. At any rate, that's what it's there for. It works, and the FAA has approved it, and they showed really very good thorough judgment in investigating it. As they said, this is new technology, and it requires a great deal of review before certification is approved.
This would be primarily for manufacturers of business aircraft?
No, it's applicable to military aircraft, lift aircraft for a broad number of-
As well as air transport.
Air transport. There was an airplane. What happens is, if the airplane slows down a little too much with an engine out or folding, it rolls over on its back, and when it does, it's extremely difficult to recover from. 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.
None of this is in the backlog, right?
None of it's in the backlog, no. We don't take orders until we have the certification, and it's been a long road. We've tested it a lot. I can attest to that, by the way. It's exciting when it works. When it doesn't work, let me tell you.
Now, the PC-24 does not use this equipment. Is that right?
No. PC-24. Right now, we're focused on turboprop aircraft, 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, because we have some patents pending on this mitigation technology.
Right. 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, they ought to be up from 2019. Is that right?
That's true. Depends on how fast it swings into production.
Yeah.
Well, 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. Competition can't take the business from you?
I never say that. I never say that. I can only tell you that there's nobody else that's 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. Other than that, I can only say that if we do our job, we'll run like beavers and work our butts off to make it happen. If we do that, we have a wonderful opportunity.
Right. Well, thank you very much, Jeff and Shahram and Rel.
Okay.
I appreciate the help.
All right. Thank you.
Our next question comes from George Marema of Pareto Ventures.
Hi. Good morning. Thank you, gentlemen. I have some questions regarding the autothrottle. I'm trying to understand better the cadence of the go-to-market on this. Is it ready for sale today, or do we need one more clearance, or is it ready to go now?
It is, in theory, ready for sale today. We have developed a couple of improvements which we believe should be included in the production installations. The answer is yes and no. It's yes, it's ready to go, and we can sell it today and install it. We expect a couple of improvements which we will have implemented within a month or so. It's on track, I guess, is a more accurate explanation.
Then on the go to market for 2020, I hear a lot of talk on OEMs. Walk me through the cadence of your strategy. Is it mostly OEM stuff? Are you trying to go more to the MROs and the aftermarkets, or how are you going to market on this, and what's the cadence of it?
Well, you have equipment manufacturers, multi-engine equipment manufacturers, that have expressed interest. We've had ones in Europe and in the United States. We're talking to them about them implementing it in their production aircraft. 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. That market continues to look very strong, and we're expanding in that. The way we do it, we go after it, is we've been pursuing the aftermarket through FBOs and certified installers. Depending on the aircraft through MROs, in some cases, there may be military aircraft where you have military installers.
It's very cost effective, the autothrottle system is typically a half or a third the cost of previous competitive systems, and it has the added feature for this loss of control mitigation.
Have MROs and installers 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.
Oh, okay.
We could sell the autothrottle, but they knew that we were working on VMCA mitigation. Until that gets STC, we can't install it in an airplane.
Got you.
The market's moving quickly. It's something new. This has never been done before, so we don't have any historical reference.
I would expect a lot of pent-up demand given the recent crash and all the activity.
The older I get, the more prudent I become. I'm delighted and excited about it. It's really almost humbling. I think we need to do our job and work hard and see if it matures into as big an opportunity as we initially believed.
Okay. Thank you.
Thank you.
Our next question comes from Charlie Pine of Van Clemens & Co.
Hi. Good morning, everyone. First of all, congratulations on a great quarter, congratulations on a wonderful turnaround year. The hard work is starting to pay off, delighted to see it.
Well, thank you for that. It's been very rewarding, as you can imagine.
Yeah.
Shahram and the team have done a great job, we're delighted. We've been able to develop new, really innovative technology while we've been able to produce a profit and show some reasonable growth in the business. 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 questions, and I want to scratch the surface a little bit more on the recent developments with the autothrottle. 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.
Wherever that was.
Monday. Okay.
It's a long time between drinks, trust me.
Okay. Yeah, it has been. Do you anticipate putting out a separate press release for that?
We will. Obviously, because of the timing, it was which do we release first? Because we have great respect for the SEC, we thought we'd be prudent.
Okay. I totally understand. The other thing, I guess, I'm a little bit confused about, you said that there's a few little nips and tucks 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 Airs. Jeff, 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 any time to do anything.
Yeah, I get that.
We would expect the market to start, and installation to start, in the first or second quarter of next year. Calendar quarter.
It's going to start slow, because they still have to come to terms with the installation and.
I mean-
I'm sorry, Shahram, can you say that again? I didn't hear you. Can you say that again, please?
Shahram was explaining over his bagel that the aircraft, you have to schedule it 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. Those delays are built into the market, acceptance, per se, of the equipment.
Okay. We should factor a fairly deliberate and slow ramp then over the next few quarters, though. With the idea, though, that we will begin to see installs in 2020.
Yes. Importantly, you just have to watch this climb. This is one of those programs I believe that will generate momentum behind it. As it proceeds, you'll see it proceed more rapidly, and the growth will be more exponential rather than just linear.
What about the uptake with the ThrustSense, the STC that I guess you got for, what was it, the PC-12? Are you getting any installs in that?
Yes. We're starting with that as well. Both areas are going well. Our focus right now, just to let you know, is to look at a number of new aircraft, primarily multi-engine, because most new airplanes are multi-engine. It offers, for both aircraft, engine protection, which is important. If you over-temperature an engine, you're talking about probably a $100,000 check just to make sure it's okay. Things like that really pay off, so they can be quantified besides the obvious performance and safety advantages.
All right. Finally, the last thing I'd like to get clarified. Can you refresh my memory again for what particular aircraft that you have the computer contract with the Navy for? What was that?
F5.
You said the F-5?
That's correct.
Okay. If I heard you correctly, you said that that air data development computer, that has been completed at this point. Did I hear correctly?
That's correct.
That's correct.
The development and flight test set.
We're now waiting for the go ahead. It's a retrofit program. We're waiting for that to start. We're prepared to do it. We've made a lot of, as you know, well, may not know, we've made probably 6,000 [or 8,000] computers of various types over the years. It's nothing new. That's probably one of the reasons we won the program.
I see. Well, that's great. You indicated that you're expecting to get production orders. What would be a reasonable timeframe for receipt of such?
As I said before, I don't want to speculate. There are a lot of pieces that get started, but we would hope early next year we would start seeing an influx of production orders. There's a limit of how many we can take in. Remember, you got to get installers lined up and trained, et cetera, so the lead times all stretch it out. As Sherm commented, you start 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. Once again, we're really pleased to see the results for this year and just looking forward to what's going to be occurring over the next couple of years. I'll get off and let somebody else take it.
Thank you for your interest. I'm glad I now know that I'm here to provide color. I'll tell my director that.
Well, don't get too colorful, now.
I'm too old to be colorful. Go ahead.
Our next question comes from Irvin Goldman, a private investor.
Good morning.
Morning.
I'm the old guy. You remember me?
Yeah. You keep doing one-upsmanship on me. I understand.
Actually, I'm just out of the hospital, and I'm in a rehab.
I'm happy to hear that, 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 question's got answered. We have not sold any autothrottle yet. We do not expect to for a number of quarters. Is that correct?
No, that's not correct. We have sold a number of autothrottles to the PC-12 market.
Oh, you did? Very good.
Continue to do that. The product has been an evolution. We're spending time now trying to optimize its installation, which ends up being an important issue because the installers have a limited throughput capacity. If we can reduce the time it takes to install it, we can put in more at a higher rate, obviously.
Obviously.
Secondly, we continue to find improvements and enhancements to its function, so we add those as well.
Okay.
The tests we've already installed them, we've gotten very good results in the field. No problems. 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 aircraft, and some much larger aircraft, that we can provide what is a really strong improvement in aircraft safety and crew workload.
All right. My last question is, has Pilatus notified you to increase production for them for the next couple of quarters? I understand the aircraft is extremely successful.
On the PC-24, yes. It's a wonderful airplane. Pilatus has always done a great job. As you know, we bought a PC-12 in 2000. I've been extremely happy with the aircraft and the support. The PC-24 is a wonderful airplane.
Okay.
They've announced to us they're increasing production by 25% year-over-year, which is pretty remarkable.
All right. Jeff, 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 exuberance. Okay. Thank you.
Thank you. Take care of yourself. I'm glad to hear you're out. I want to be sure you're on the next phone call, all right? Take care.
All right. I thank you. I hope to see you at the next annual meeting.
That'd be great. Look forward to it.
Thank you.
Bye-bye.
One final time, as a reminder, you may press star then one if you would like to ask a question. Our next question comes from Michael Frederick, a private investor.
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? 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. I know you've been installing these for quite a while. 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 it gets installed in an airplane, one of the remarkable things we've seen, we looked at the American Airlines fleet, for example, we were getting over 100,000 hours of mean time between failures. That's many years going without any failures, which is remarkable. This is why we have a very good name in the industry with reference to those air transport displays. 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 a retrofit solution for the same airplane. People tend to buy ours because of our quality and long history.
Our focus toward minimizing the cost and time.
Installation
install the 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.
When an airplane sits on the ground, it loses revenue of somewhere, depending on the aircraft, from $50,000-$75,000 a day.
Wow.
The installation becomes virtually an order of magnitude more of an impact, the delay, than the cost of the basic equipment.
Okay, great. 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. Can you give a little bit of an idea of once the NextGen installations go into play, how much more valuable is something like ThrustSense in that world than 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 increasing demand for Required Navigation Performance. That is, ADS-B and NextGen is trying to keep the aircraft position very well controlled and the timing of the aircraft as it goes through its flight phase very carefully defined. That enables them to put more aircraft in play or in service over the same airspace. The autothrottle is, in many of those cases, invaluable. It's been proven in the necessity for the system in flight management systems in commercial and military aircraft. It was proven even 40 years ago when we first did performance compute compensation. I believe that the NextGen will put an additional demand on ThrustSense.
Great. Just one more quick question, and I'll let you go. That is the newly certified STC. Will that make a material change in the cost of the purchase of an autothrottle? In other words, will that be an additional purchase that goes with the existing autothrottle, or is that part of the overall package?
If I understand your question, you're saying that the new STC for the VMCA, is that going to increase the cost of the installation?
Not the cost of installation, but the actual cost of the purchase.
Price. Yeah. We have a pricing strategy to potentially offer that as an option. We believe that everybody's going to take that option.
Okay.
It's not a huge cost increase. Obviously, when you need it's a very nice thing to have.
Okay.
Sadly, there've been accidents most recently in places like Texas and Hawaii, and this is applicable to even piston twins, 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, with an engine out, that you have to keep the speed up. If you don't keep the speed up, it can end badly.
Yeah. The Texas one certainly sounded like that's what happened, or at least that could have been the cause of what happened anyway. All right, gentlemen. Well, 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.