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 | |
| | | | | | | | | | | | | | | | | | |
