EX-99 2 ex99-1.txt EXHIBIT 99.1 Press Release INNOVATIVE SOLUTIONS & SUPPORT, INC. ANNOUNCES RECORD 1ST QUARTER FULLY DILUTED EPS GROWTH OF 264% TO $0.51/SHARE FOR THE THREE MONTHS ENDED DECEMBER 31, 2004. Exton, PA.--(BUSINESS WIRE)--January 19, 2005--Innovative Solutions & Support, Inc. (NASDAQ:ISSC-news) today announced the following record results for the 1st quarter ended December 31, 2004: Q1 FY 2005 o Sales up 123% to a record $19.0 million. o Net income up 285% to a record $6.2 million. o EPS, diluted up 264% to a record $0.51 a share o Backlog up 39% to a record $36.2 million o Cash Flow Record $7.5 million Please refer to the accompanying schedules highlighting our Statement of Operations and Balance Sheet. A Company spokesperson commented: "In the 1st quarter we experienced strong demand for our Air Data equipment as compliance for Domestic Reduced Vertical Separation Minimum (DRVSM) approaches its effective date of January 20, 2005. We also expect demand for our Air Data equipment beyond the compliance date as a result of delayed DRVSM installations. According to a January 10, 2005 article in Aviation Week & Space Technology magazine, 'only 6,100 business jets or 62% of the eligible fleet have been outfitted'. Beyond DRVSM, we expect on going demand for the replacement of aged, obsolete and troublesome Air Data equipment." The General Aviation market (business jets) currently represents the largest demand for DRVSM solutions. In this market, Innovative Solutions is a leading supplier of Air Data equipment with certified solutions for Falcon, Cessna Citation, Learjet, Gulfstream, Sabreliner, Raytheon King Air, Beechjet, Westwind, Hawker and Challenger business aircraft. The Company also has certified solutions for a wide variety of commercial air transport aircraft including DC-8's, DC-9's, B-707's, B-727's and B-737's, and Military aircraft including A-10's, KC-135's, RC-135's and C-130's. At December 31, 2004 the Company's backlog reached a record $36.2 million. This reflects a 39% increase from the December 31, 2003 backlog of $26 million. The company will host a conference call tomorrow morning, January 20, 2005 at 10:00 am local time (EST) to discuss these results and our business outlook. Please call in to participate at (888) 792-8459. Also, our web site (www.innovative-ss.com) will carry the conference call live and have it available for subsequent listening for a period of 30 days. Headquartered in Exton, PA. Innovative Solutions & Support, Inc. (www.innovative-ss.com) designs, manufactures and markets Air Data flight information computers, Flat Panel display systems and advanced monitoring systems that measure and display critical flight information. This includes data relative to aircraft separation, airspeed and altitude as well as fuel measurements. Certain matters discussed in this news release, including operating 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 the Company's prospectus and Form 10-K annual report on file with the SEC. Contact Mr. James Reilly at (610) 646-9800 INNOVATIVE SOLUTIONS & SUPPORT, INC. BALANCE SHEET
ACTUAL ACTUAL SEPTEMBER 30, 2004 DECEMBER 31, 2004 ------------------ ----------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 65,867,167 $ 73,340,686 Accounts receivable 5,003,100 5,196,164 Inventories 5,191,628 5,543,742 Deferred income taxes 984,111 984,111 Prepaid expenses 665,276 580,648 ------------ ------------ Total current assets 77,711,282 85,645,351 ------------ ------------ Property and equipment, net 9,620,231 9,552,118 ------------ ------------ Other assets 137,114 134,114 ------------ ------------ TOTAL ASSETS $ 87,468,627 $ 95,331,583 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of note payable $ 100,000 $ 100,000 Current portion of capitalized lease obligation 7,257 7,257 Accounts payable 1,696,247 1,347,804 Accrued expenses 4,754,641 6,381,509 Deferred revenue 526,023 523,732 ------------ ------------ Total current liabilities 7,084,168 8,360,302 ------------ ------------ Note payable 4,235,000 4,235,000 ------------ ------------ Capitalized lease obligation 20,681 18,819 ------------ ------------ Deferred revenue 261,934 244,316 ------------ ------------ Deferred income taxes 411,857 411,857 ------------ ------------ SHAREHOLDERS' EQUITY: Common stock 13,515 13,536 Additional paid-in capital 48,712,289 49,125,767 Retained earnings 37,342,940 43,535,743 Treasury stock (10,613,757) (10,613,757) ------------ ------------ Total shareholders' equity 75,454,987 82,061,289 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 87,468,627 $ 95,331,583 ============ ============
INNOVATIVE SOLUTIONS & SUPPORT, INC. STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, ------------------------------------- 2003 2004 ------------------------------------- Revenues $ 8,523,336 $ 18,978,804 Cost of Sales 3,481,411 6,182,143 ------------------------------------- Gross profit 5,041,925 12,796,661 ------------------------------------- Research and development 1,009,275 1,271,531 Selling, general and administrative 1,640,620 2,028,467 ------------------------------------- Operating income 2,392,030 9,496,663 ------------------------------------- Interest income 112,671 283,250 Interest expense (31,855) (39,738) ------------------------------------- Income before income taxes 2,472,846 9,740,175 Income tax expense 865,496 3,547,372 ------------------------------------- Net Income $ 1,607,350 $ 6,192,803 ------------------------------------- Net Income per Common Share Basic $ 0.14 $ 0.52 Diluted $ 0.14 $ 0.51 Weighted Average Shares Outstanding Basic 11,412,614 11,835,138 Diluted 11,776,015 12,180,275