EX-99.1 2 a12-10533_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 Second Quarter Fiscal 2012

Financial Results

 

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

 

Net revenues for the second quarter of fiscal 2012 were $6.8 million, up compared to $6.7 million in the second quarter of fiscal 2011.  The Company reported fiscal second quarter 2012 net income of $289,000, or $0.02 per fully diluted share, compared to net income of $499,000, or $0.03 per fully diluted share, in the same quarter a year ago.  The company generated $628,000 of cash flow from operations in the second quarter of fiscal 2012.

 

Geoffrey Hedrick, Chairman and Chief Executive Officer of Innovative Solutions & Support, Inc., said, “Revenues for the quarter were up slightly from a year ago largely on the strength of the progress achieved on certain customer arrangements which support ongoing engineering product development programs. Each of these programs has the potential to significantly increase our addressable market, as Shahram

 


 

Askarpour outlines below.  Gross margins reflected this increased proportion of lower margin EMD revenues. Our ability to adjust resources to current project demands enabled us to achieve our profitability and cash flow objectives in the quarter.   Backlogs have remained relatively stable, although each of our military, commercial air transport and general aviation end markets is working through independent but concurrent industry issues.

 

By focusing on broadening our range of products and services, such as system integration and advanced avionics, we are creating the opportunity for larger contracts in previously untapped markets and building recognition for the Innovative Solutions & Support brand throughout both the domestic and international markets.”

 

At March 31, 2012, the Company had $43.2 million of cash on hand, an increase from the $42.8 million cash balance at December 31, 2011.  The Company remains free of long-term debt.  Cash at March 31, 2012 is net of approximately $210,000 used to repurchase Company stock in the second quarter.  Backlog was approximately $25.5 million at March 31, 2012, little changed from $25.7 million at December 31, 2011.  Backlog reflects the engineering value of the EMD development, but does not include the prospective production revenues associated with these programs.

 

At the end of the quarter, accounts receivable included $760,000 from sales to American Airlines, Inc., prior to its bankruptcy.  Based upon the present status of the bankruptcy proceeding, we are not able to determine when or the extent to which the receivable will be collected.

 


 

Six Month Results

 

Revenues for the six months ended March 31, 2012 were $11.5 million, compared to $13.3 million for the six months ended March 31, 2011. For the six months ended March 31, 2012, the net loss was $54,000, or ($0.00) per diluted share, compared to net income of $784,000, or $0.05 per diluted share, for the first half of last fiscal year. Cash flow from operating activities for the first half of the year was $1.2 million, compared to $1.7 million for the same period in 2011.

 

Shahram Askarpour, President of ISSC, added, “The second quarter was a period of progress on our four large EMD programs: an aerial refueling operator control and display unit, a complete systems integration and CNS/ATM avionics upgrade, an OEM Advanced Avionics Suite, and an advanced electronic monitoring and control system.  These large programs generally are higher dollar value orders, which translate into top line growth as they move into production. They also position the company to obtain other programs as a system integrator and on additional aircraft types.

 

As always, we are pursuing our growth strategy while managing costs to maintain a strong financial condition and to build long-term value for shareholders.”

 

Business Outlook

 

Looking to the full year, the Company is forecasting revenues to be roughly comparable to the last fiscal year.  However, given the risks in the present economic environment, revenue for the year may end up being less than last year, which could also result in negative profitability for the year.  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.   Management will provide additional commentary during the earnings conference call.

 

Conference Call

 

The Company will be hosting a conference call April 26, 2012 at 10:00 a.m. EDT 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: 877-397-0286. The conference ID# is 3441450. 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 that designs and manufactures flight guidance and cockpit display systems for Original Equipment Manufacturers (OEM’s) and retrofit applications. The company supplies integrated Flight Management Systems (FMS) and advanced GPS receivers for precision reduced carbon footprint navigation.

 

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)

 

 

 

March 31,

 

September 30,

 

 

 

2012

 

2011

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

43,197,526

 

$

42,625,854

 

Accounts receivable, net

 

3,582,988

 

3,124,114

 

Inventories

 

4,478,872

 

3,508,595

 

Deferred income taxes

 

428,786

 

438,635

 

Prepaid expenses and other current assets

 

1,253,226

 

875,636

 

 

 

 

 

 

 

Total current assets

 

52,941,398

 

50,572,834

 

 

 

 

 

 

 

Property and equipment, net

 

7,336,930

 

7,476,362

 

 

 

 

 

 

 

Other assets

 

161,000

 

208,408

 

 

 

 

 

 

 

Total Assets

 

$

60,439,328

 

$

58,257,604

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Current portion of capitalized lease obligations

 

$

6,712

 

$

13,189

 

Accounts payable

 

1,620,466

 

443,516

 

Accrued expenses

 

1,921,215

 

2,551,389

 

Deferred revenue

 

2,319,265

 

232,630

 

 

 

 

 

 

 

Total current liabilities

 

5,867,658

 

3,240,724

 

 

 

 

 

 

 

Deferred income taxes

 

557,449

 

566,963

 

Other liabilities

 

78,722

 

189,130

 

 

 

 

 

 

 

Total Liabilities

 

6,503,829

 

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 March 31, 2012 and September 30, 2011

 

—

 

—

 

 

 

 

 

 

 

Common stock, $.001 par value: 75,000,000 shares authorized, 18,308,259 and 18,286,884 issued at March 31, 2012 and September 30, 2011, respectively

 

18,308

 

18,287

 

 

 

 

 

 

 

Additional paid-in capital

 

47,495,010

 

47,206,690

 

Retained earnings

 

26,572,139

 

26,626,242

 

Treasury stock, at cost, 1,633,426 and 1,544,910 shares at March 31, 2012 and September 30, 2011, respectively

 

(20,149,958

)

(19,590,432

)

 

 

 

 

 

 

Total Shareholders’ Equity

 

53,935,499

 

54,260,787

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

60,439,328

 

$

58,257,604

 

 


 

Innovative Solutions and Support, Inc.

Consolidated Statement of Operations

(unaudited)

 

 

 

Three months ended

 

Six months ended

 

 

 

March 31

 

March 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Sales

 

6,760,221

 

$

6,746,070

 

11,515,680

 

13,275,881

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

3,659,505

 

2,873,414

 

6,289,365

 

5,809,069

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

3,100,716

 

3,872,656

 

5,226,315

 

7,466,812

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

926,379

 

1,556,827

 

1,716,602

 

2,910,434

 

Selling, general and administrative

 

1,827,794

 

1,849,143

 

3,821,369

 

3,938,492

 

Total operating expenses

 

2,754,173

 

3,405,970

 

5,537,971

 

6,848,926

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

346,543

 

466,686

 

(311,656

)

617,886

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

20,156

 

45,263

 

41,935

 

92,855

 

Interest expense

 

(180

)

(404

)

(417

)

(862

)

Other income

 

8,568

 

—

 

50,637

 

150,003

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

375,087

 

511,545

 

(219,501

)

859,882

 

 

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

86,214

 

12,393

 

(165,395

)

75,950

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

288,873

 

$

499,152

 

$

(54,106

)

$

783,932

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per Common Share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

$

0.03

 

$

(0.00

)

$

0.05

 

Diluted

 

$

0.02

 

$

0.03

 

$

(0.00

)

$

0.05

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

 

 

 

 

Basic

 

16,636,725

 

16,782,684

 

16,679,109

 

16,782,684

 

Diluted

 

16,636,732

 

16,838,662

 

16,679,109

 

16,829,918