EX-99.1 2 a12-3496_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Contact:                                                   Ron Albrecht, Chief Financial Officer

Innovative Solutions & Support, Inc.

610-646-0350

 

Innovative Solutions & Support, Inc. Announces First Quarter Fiscal 2012

Financial Results

 

Exton, PA. — January 25, 2012 — Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today announced its financial results for the first quarter of fiscal 2012, ending December 31, 2011.

 

Net revenues for the first quarter of fiscal 2012 were $4.8 million, compared to $6.5 million in the first quarter of fiscal 2011.  The Company reported a fiscal first quarter 2012 loss of $343,000 or ($0.02) per fully diluted share, compared to net income of $285,000, or $0.02 per fully diluted share, in the same quarter a year ago.  The company generated $622,000 of cash flow from operations in the first quarter of fiscal 2012.

 

Geoffrey Hedrick, Chairman and Chief Executive Officer of Innovative Solutions & Support, Inc., said, “In the first quarter, deliveries were impacted temporarily by pricing renegotiations.  That said, we generated positive cash flow and achieved

 


 

significant progress on our customer funded engineering modification and development (EMD) projects.  Those projects represent opportunities to expand our product portfolio and to increase our addressable market.  In addition to the programs under contract entering the quarter, EMD revenues included also two new contracts signed during the quarter, both of which will lead to OEM production, one for an advanced avionics suite for the Eclipse E550 aircraft and the other for a flight information computer - a new program arising out of our ability to leverage the technology of our flat panel display systems and related avionics into a broader product offering. Our fiscal 2012 represents an important transition year.  We are focused intently on delivering these development contracts on time, on budget and at the same high level of quality for which we are respected, so that we will have a set of new products that address these large and expanding markets.”

 

For the first quarter of fiscal 2012, the Company generated over $600,000 of positive operating cash flow.  At December 31, 2011, the Company had $42.8 million of cash on hand, an increase from the $42.6 million of cash at September 30, 2011.  The Company remains free of long-term debt.  Cash at December 31, 2011 is net of approximately $350,000 used during the first quarter to repurchase Company stock.  Backlog was approximately $25.7 million at December 31, 2011 compared to $27.5 million at September 30, 2011.  Backlog continues to reflect the engineering value of the new products currently under development, but does not include the prospective production value associated with many of these programs.

 

At the end of the quarter, the Company had $902,000 due from American Airlines, Inc. of which $760,000 relates to sales prior to bankruptcy.  Based upon the present status of the bankruptcy proceeding, we are not able to determine the amount, if any, that would be uncollectible.

 


 

Roman Ptakowski, President of the Company, added, “During the quarter our EMD efforts were focused upon accelerating and capitalizing on the growth opportunities represented by the customer-funded projects.  Over the quarter, we made progress on all the major new platforms currently in development, including the aerial refueling operator control and display unit for the KC46A tanker, the complete systems integration and CNS/ATM avionics upgrade for the B737-400 aircraft, the Advanced Avionics Suite for the OEM production Eclipse E550 aircraft, and an advanced flight information computer.

 

The combination of near term orders and engineering investment for future opportunities is setting the stage for a period of steady growth as new product introductions build on our solid foundation of highly-reliable and cost-effective technology.”

 

Business Outlook

 

For the fiscal year ending September 30, 2012, the Company continues to expect revenues to increase modestly relative to fiscal 2011, notwithstanding potential disruptions from the current uncertain market conditions.  The Company’s new product and expanded platform initiatives are expected to increase the proportion of revenues and margins from EMD sales in fiscal 2012.  The Company’s ability to provide specific targets and ranges remains difficult as a result of the current economic climate.  Management will provide additional commentary during the earnings conference call.

 


 

Conference Call

 

The Company will be hosting a conference call January 26, 2012 at 10:00 a.m. EST time to discuss these results and its business outlook.  Please use the following dial in number to register your name and company affiliation for the conference call: 888-339-3401. The conference ID# is 5958846. The call will also be carried live on the Investor Relations page of the Company web site at www.innovative-ss.com.

 

About Innovative Solutions & Support, Inc.

 

Headquartered in Exton, PA. Innovative Solutions & Support, Inc. (www.innovative-ss.com) is a systems integrator engaged in the design, manufacture and marketing of Flat Panel Display Systems, Air Data equipment, Flight Information Computers, Engine and Fuel Measurement and Control Computers, 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 critical engine parameters.

 

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.

 


 

Innovative Solutions and Support, Inc.
Consolidated Balance Sheet
(unaudited)

 

 

 

December 31,
2011

 

September 30,
2011

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

42,783,639

 

$

42,625,854

 

Accounts receivable, net

 

2,560,402

 

3,124,114

 

Inventories

 

4,143,521

 

3,508,595

 

Deferred income taxes

 

435,872

 

438,635

 

Prepaid expenses and other current assets

 

980,836

 

875,636

 

Total current assets

 

50,904,270

 

50,572,834

 

Property and equipment, net

 

7,463,211

 

7,476,362

 

Other assets

 

166,400

 

208,408

 

Total Assets

 

$

58,533,881

 

$

58,257,604

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Current portion of capitalized lease obligations

 

$

9,980

 

$

13,189

 

Accounts payable

 

1,027,020

 

443,516

 

Accrued expenses

 

2,238,621

 

2,551,389

 

Deferred revenue

 

917,920

 

232,630

 

Total current liabilities

 

4,193,541

 

3,240,724

 

Deferred income taxes

 

564,367

 

566,963

 

Other liabilities

 

68,004

 

189,130

 

Total Liabilities

 

4,825,912

 

3,996,817

 

Commitments and contingencies

 

 

 

 

 

Shareholders’ Equity

 

—

 

—

 

Preferred Stock, 10,000,000 shares authorized, $.001 par value, of which 200,000 shares are authorized as Class A Convertible stock. No shares issued and outstanding at December 31, 2011 and September 30, 2011

 

—

 

—

 

Common stock, $.001 par value: 75,000,000 shares authorized, 18,297,734 and 18,286,884 issued at December 31, 2011 and September 30, 2011, respectively

 

18,298

 

18,287

 

Additional paid-in capital

 

47,345,531

 

47,206,690

 

Retained earnings

 

26,283,263

 

26,626,242

 

Treasury stock, at cost, 1,633,426 and 1,544,910 shares at December 31, 2011 and September 30, 2011, respectively

 

(19,939,123

)

(19,590,432

)

Total Shareholders’ Equity

 

53,707,969

 

54,260,787

 

Total Liabilities and Shareholders’ Equity

 

$

58,533,881

 

$

58,257,604

 

 


 

Innovative Solutions and Support, Inc.
Consolidated Statement of Operations
(unaudited)

 

 

 

Three months ended
December 31,

 

 

 

2011

 

2010

 

 

 

 

 

 

 

Sales

 

$

4,755,459

 

$

6,529,811

 

 

 

 

 

 

 

Cost of Sales

 

2,629,860

 

2,935,655

 

 

 

 

 

 

 

Gross Profit

 

2,125,599

 

3,594,156

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Research and development

 

790,223

 

1,353,607

 

Selling, general and administrative

 

1,993,575

 

2,089,349

 

Total operating expenses

 

2,783,798

 

3,442,956

 

 

 

 

 

 

 

Operating (loss) income

 

(658,199

)

151,200

 

 

 

 

 

 

 

Interest income

 

21,779

 

47,592

 

Interest expense

 

(237

)

(458

)

Other income

 

42,069

 

150,003

 

 

 

 

 

 

 

(Loss) income before income taxes

 

(594,588

)

348,337

 

 

 

 

 

 

 

Income tax (benefit) expense

 

(251,609

)

63,557

 

 

 

 

 

 

 

Net (loss) income

 

$

(342,979

)

$

284,780

 

 

 

 

 

 

 

Net (loss) income per Common Share

 

 

 

 

 

Basic

 

$

(0.02

)

$

0.02

 

Diluted

 

$

(0.02

)

$

0.02

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

Basic

 

16,721,494

 

16,770,415

 

Diluted

 

16,721,494

 

16,810,278