EX-99.1 2 a05-7024_1ex99d1.htm 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 2nd 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 1st and 2nd 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 3rd C-130 customer and are expecting orders from our 4th 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