8-K

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 20, 2005

INNOVATIVE SOLUTIONS AND SUPPORT, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	0-31157	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:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

On April 20, 2005, Innovative Solutions & Support, Inc. issued a press release announcing its financial results for its second quarter and year-to-date periods ended March 31, 2005.  A copy of that press release along with the press release 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.

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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 & Support, Inc.
Date: April 21, 2005	By:	/s/ James J. Reilly
		James J. Reilly
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated April 20, 2005 announcing financial results for the second quarter and year-to-date periods ended March 31, 2005.

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EX-99.1

Exhibit 99.1

Press Release

Innovative Solutions & Support, Inc. Announces 144% Increase in 2nd Quarter Net Income.

Exton, PA.—(BUSINESS WIRE)—April 20, 2005—Innovative Solutions & Support, Inc. (NASDAQ:ISSC-news) today announced the following record results for the 2^nd quarter and for the Fiscal Year-To-Date Periods ended March 31, 2005:

Q2 FY 2005
*	Sales	up 74% to a record $19.0 million.
*	Net income	up 144% to a record $6.3 million.
*	EPS, diluted	up 132% to a record $0.51 a share
Year-To-Date FY2005
*	Sales	up 96% to a record $38.0 million
*	Net Income	up 198% to a record $12.5 million
*	EPS, diluted	up 191% to a record $1.02 a share
*	Cash Flow	Record $10.5 million
*	Backlog	up 9% to 29.4 million

Please refer to the accompanying schedules highlighting our Statement of Operations and Balance Sheet.

A Company spokesperson commented: “In both the 1^st and 2^nd quarters we experienced very strong demand for our Air Data equipment. As compliance for Domestic Reduced Vertical Separation Minimum (DRVSM) passed the mandatory compliance date of January 20, 2005, demand continued unabated through quarter two. As expected, demand for our Air Data equipment continues beyond the compliance date as a result of as many as 3,700 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’.”

“As a result of the DRVSM opportunities discussed above, second quarter results were supported by continued demand for DRVSM products well after the mandatory implementation date of January 20, 2005. This contributed to record sales and record earnings per share in the first half of $38 million and $1.02 per share, respectively. EPS in the first half of this year exceeded EPS for the entire prior year by $0.02. The third quarter continues to show strong demand for developing orders for the Flat Panel product and creates optimism for a strong transition into the fourth quarter of FY05 and first quarter of FY06”.

The recent activity in Flat Panel orders and the FAA TSO Approval to the latest safety guidance, strengthens our optimism for a robust product demand in corporate aviation. A major modification center has placed significant initial orders for King Air Flat Panel Display Systems.  Over 6000 King Airs have been produced.

In the military market, we have recent orders from our 3^rd C-130 customer and are expecting orders from our 4^th customer.  There are in excess of 1000 candidates for the IS&S C130 flight deck

In the commercial market, IS&S has been notified of its selection to upgrade the primary flight and navigation displays for several specialized commercial air transport cockpits.

At the 10:00 am Conference Call on Thursday, April 21, 2005 management will provide an upwardly revised outlook for quarter 3 and quarter 4.

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.

The company will host a conference call tomorrow morning, April 21, 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 September 30, 2004			Actual March 31, 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	65,867,167		$	76,350,457
Accounts receivable	5,003,100			6,449,260
Inventories	5,191,628			5,320,820
Deferred income taxes	984,111			984,111
Prepaid expenses	665,276			642,840
Total current assets	77,711,282			89,747,488
Property and equipment, net	9,620,231			9,452,201
Other assets	137,114			131,115
TOTAL ASSETS	$	87,468,627		$	99,330,804
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			1,192,322
Accrued expenses	4,754,641			3,927,562
Deferred revenue	526,023			557,219
Total current liabilities	7,084,168			5,784,360
Note payable	4,235,000			4,235,000
Capitalized lease obligation	20,681			16,937
Deferred revenue	261,934			226,699
Deferred income taxes	411,857			411,857
SHAREHOLDERS’ EQUITY:
Common stock	13,515			11,867
Additional paid-in capital	48,712,289			38,834,503
Retained earnings	37,342,940			49,809,581
Treasury stock	(10,613,757		)	—
Total shareholders’ equity	75,454,987			88,655,951
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	87,468,627		$	99,330,804

Innovative Solutions and Support, Inc.

Statement of Operations

	Three months ended									Six months ended
	March 31,									March 31,
	2004				2005					2004				2005
Revenues	$	10,895,287			$		19,001,021			$		19,418,623		$	37,979,825
Cost of Sales	3,662,841				5,777,273					7,144,252				11,959,415
Gross profit	7,232,446				13,223,748					12,274,371				26,020,410
Research and development	1,488,893				1,548,468					2,498,169				2,819,999
Selling, general and administrative	1,869,484				2,303,928					3,510,103				4,332,395
Operating income	3,874,069				9,371,352					6,266,099				18,868,016
Interest income	117,204				428,325					229,875				711,575
Interest expense	(31,148			)	(39,395				)	(63,003			)	(79,134			)
Income before income taxes	3,960,125				9,760,282					6,432,971				19,500,457
Income tax expense	1,386,044				3,486,443					2,251,540				7,033,815
Net Income	$		2,574,081		$	6,273,839				$	4,181,431			$		12,466,642
Net Income per Common Share
Basic	$		0.22		$			0.53		$	0.36			$		1.05
Diluted	$		0.22		$			0.51		$	0.35			$		1.02
Weighted Average Shares Outstanding
Basic	11,513,478				11,854,638					11,462,771				11,844,643
Diluted	11,862,085				12,210,986					11,819,584				12,195,386