EX-99.1 2 a05-21502_1ex99d1.htm EXHIBIT 99

Exhibit 99.1

 

Press Release

Innovative Solutions & Support, Inc. Announces Record Sales, Net Income and EPS for the Fiscal Year Ended September 30, 2005.

 

Exton, PA.—(BUSINESS WIRE)—December 6, 2005—Innovative Solutions & Support, Inc. (NASDAQ:ISSC-news) today announced record results for the Fiscal Year ended September 30, 2005. For the year, the Company reported record sales of $63.3 million, record net income of $18.6 million and record diluted earnings per share of $1.02.

 

Fourth Quarter Results

 

Sales in the fourth quarter ended September 30, 2005 were $8.2 million compared to the prior year’s $14.4 million. The portion of fourth quarter sales that were Flat Panel Systems, however, grew to more than $3.0 million from less than $0.2 million in the prior year’s fourth quarter. Net income in the fourth quarter of 2005 was $1.2 million or $0.07 per diluted share compared to the prior year’s net income of $4.5 million or $0.25 per diluted share.

 

Fiscal Year 2005 Results

 

Sales, Net Income and Diluted Earnings per Share in 2005 increased 37%, 56% and 52% to new full year records of $63.3 million, $18.6 million and $1.02 per share, respectively. Cash flow was also a record $17.3 million in the year. At year end, backlog was $12.9 million compared to $35.4 million last year.

 

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

 

A Company spokesperson commented: “In the first three quarters we experienced strong demand for our Air Data equipment as the commercial air transport and general aviation segments of our industry rushed to become compliant with the FAA’s mandate for Domestic Reduced Vertical Separation Minimum (DRVSM). This robust growth in the initial three quarters of the year provided momentum to achieve these record fiscal 2005 results.”

 

“The anticipated rapid fall off in Air Data orders coupled with a slower than expected start-up in Flat Panel Display System orders created 4th quarter weakness. We remain confident; however, that demand for Air Data products will rebound as we provide equipment for the 30% of the general aviation fleet a recent FAA report indicated was still not DRVSM compliant as well as meet the equipment replacement needs of aging fleets of both commercial and military aircraft.”

 

“We also anticipate a significant and growing demand for Flat Panel Display Systems. Recently, the Company received a Technical Standard Order (TSO) and a Supplemental Type Certificate (STC) from the FAA for the Primary Flight and Navigation Flat Panel

 


 

Display System for B-767 aircraft. These certifications coupled with several previously announced awards all create momentum and lead to significant interest for retrofit applications on both commercial and military planes. As the standard of excellence in older airplanes, we believe entire fleets are candidates for retrofit, despite any near term market weakness.”

 

The company will host a conference call tomorrow morning, December 7, 2005 at 10:00 am local time (EST) to discuss these results as well as our business outlook. Please call in to participate at (866) 425-6193, conference ID# 6771466. 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) is a systems integrator engaged in the design, manufacture and marketing of Air Data,  Flight Information Computers, Engine and Fuel Measurement and Control 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 and instrument measurements.

 

Certain matters contained herein that are not descriptions of historical facts are “forward-looking” (as such term is defined in the Private Securities Litigation Reform Act of 1995).  Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the Company with the Securities and Exchange Commission. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflects management’s views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

Contact Mr. James Reilly at (610) 646-9800

 


 

INNOVATIVE SOLUTIONS AND SUPPORT, INC.

CONSOLIDATED BALANCE SHEET

 

 

 

As of

 

As of

 

 

 

September 30, 2004

 

September 30, 2005

 

ASSETS

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

65,867,167

 

$

83,172,582

 

Accounts receivable, less allowance for doubtful accounts of $100,000 at September 30, 2004 and 2005

 

5,003,100

 

5,479,936

 

Inventories

 

5,191,628

 

3,911,626

 

Deferred income taxes

 

984,111

 

956,070

 

Prepaid expenses and other current assets

 

665,276

 

4,028,498

 

 

 

 

 

 

 

Total current assets

 

77,711,282

 

97,548,712

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

Computers and test equipment

 

3,933,326

 

4,278,748

 

Corporate airplane

 

2,998,161

 

2,998,161

 

Furniture and office equipment

 

622,364

 

734,038

 

Manufacturing facility

 

5,414,986

 

5,420,741

 

Land

 

1,021,245

 

1,021,245

 

 

 

13,990,082

 

14,452,933

 

Less- Accumulated depreciation and amortization

 

(4,369,851

)

(5,091,881

)

 

 

 

 

 

 

Net property and equipment

 

9,620,231

 

9,361,052

 

 

 

 

 

 

 

Deposits and other assets

 

137,114

 

125,114

 

 

 

 

 

 

 

Total assets

 

$

87,468,627

 

$

107,034,878

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Current portion of notes payable

 

$

100,000

 

$

100,000

 

Current portion of capitalized lease obligations

 

7,257

 

7,257

 

Accounts payable

 

1,696,247

 

305,516

 

Accrued expenses

 

4,754,641

 

3,503,814

 

Deferred revenue

 

526,023

 

176,650

 

 

 

 

 

 

 

Total current liabilities

 

7,084,168

 

4,093,237

 

 

 

 

 

 

 

Note payable

 

4,235,000

 

4,235,000

 

Long-term portion of capitalized lease obligations

 

20,681

 

13,113

 

Deferred revenue

 

261,934

 

191,463

 

Deferred income taxes

 

411,857

 

635,967

 

Commitments and contingencies

 

—

 

—

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

Preferred stock, 10,000,000 shares authorized-Class A Convertible stock, $.001 par value, of which 200,000 shares authorized as Class A convertible stock. No shares issued and outstanding at September 30, 2004 and 2005.

 

—

 

—

 

 

 

 

 

 

 

Common stock, $.001 par value: 75,000,000 shares authorized, 20,272,995 and 18,047,425 shares issued and outstanding at September 30, 2004 and 2005

 

20,273

 

18,047

 

Additional paid-in capital

 

48,712,289

 

41,926,318

 

Retained earnings

 

37,336,182

 

55,921,733

 

Treasury stock, at cost, 2,535,039 and 0 shares at September 30, 2004 and 2005

 

(10,613,757

)

—

 

 

 

75,454,987

 

97,866,098

 

Total shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

87,468,627

 

$

107,034,878

 

 


 

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

 

 

 

Three Months ended

 

Twelve Months ended

 

 

 

September 30,

 

September 30,

 

 

 

2004

 

2005

 

2004

 

2005

 

Revenues

 

$

14,411,501

 

$

8,182,914

 

$

46,099,777

 

$

63,264,359

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

4,462,484

 

3,082,402

 

15,663,108

 

20,888,729

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

9,949,017

 

5,100,512

 

30,436,669

 

42,375,630

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

949,844

 

1,736,415

 

4,811,156

 

6,057,889

 

Selling, general and administrative

 

1,967,499

 

2,076,940

 

7,567,959

 

8,898,622

 

Total Operating Expenses

 

2,917,343

 

3,813,355

 

12,379,115

 

14,956,511

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

7,031,674

 

1,287,157

 

18,057,554

 

27,419,119

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

186,760

 

683,965

 

532,745

 

1,939,397

 

Interest expense

 

(33,817

)

(47,221

)

(128,018

)

(175,151

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

7,184,617

 

1,923,901

 

18,462,281

 

29,183,365

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

2,719,459

 

704,455

 

6,530,084

 

10,598,563

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,465,158

 

$

1,219,446

 

$

11,932,197

 

$

18,584,802

 

 

 

 

 

 

 

 

 

 

 

Net Income Per Common Share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.25

 

$

0.07

 

$

0.69

 

$

1.04

 

Diluted

 

$

0.25

 

$

0.07

 

$

0.67

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

17,714,696

 

18,042,523

 

17,400,380

 

17,873,780

 

Diluted

 

18,219,156

 

18,312,651

 

17,928,180

 

18,259,856