Exhibit 99.1
Press Release
Innovative Solutions & Support, Inc. Announces 49% Increase in 3rd Quarter Net Income.
Exton, PA.—(BUSINESS WIRE)—July 20, 2005—Innovative Solutions & Support, Inc. (NASDAQ:ISSC-news) today announced the following results for the 3rd quarter and for the Fiscal Year-To-Date Periods ended June 30, 2005:
Q3 FY 2005 | |
* | Sales | up 39% to $17.1 million. |
* | Net income | up 49% to $4.9 million. |
* | EPS, diluted(1) | up 50% to $0.27 a share |
| |
Year-To-Date FY2005 | |
* | Sales | up 74% to a record $55.1 million |
* | Net Income | up 132% to a record $17.4 million |
* | EPS, diluted(1) | up 126% to a record $0.95 a share |
* | Cash Flow | Record $17.4 million |
* | Backlog | $13.7 million |
(1) EPS numbers reflect the recent 3 for 2 common stock split that became effective on July 8, 2005.
Please refer to the accompanying schedules highlighting our Statement of Operations and Balance Sheet.
A Company spokesperson commented: “In the past three quarters we experienced very strong demand for our Air Data equipment as the mandatory compliance date of January 20, 2005 for Domestic Reduced Vertical Separation Minimum (DRVSM) passed. As expected, demand for our Air Data equipment continued beyond the compliance date because 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, third 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 of $55.1 million and $0.95 per share, respectively for the year-to-date results. Also, as expected, the third quarter reflected diverse orders for the Flat Panel product that provides optimism for a strong transition into FY06.”
The company will host a conference call tomorrow morning, July 21, 2005 at 10:00 am local time (EST) to discuss these results, our business outlook and the expansion of Flat Panel Display System opportunities including recent new Flat Panel orders. 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) 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.
Statement of Operations
(unaudited)
| | Three months ended | | Nine months ended | |
| | June 30, | | June 30, | |
| | 2004 | | 2005 | | 2004 | | 2005 | |
| | | | | | | | | |
Revenues | | $ | 12,269,653 | | $ | 17,101,620 | | $ | 31,688,276 | | $ | 55,081,445 | |
| | | | | | | | | |
Cost of Sales | | 4,056,372 | | 5,846,912 | | 11,200,624 | | 17,806,327 | |
| | | | | | | | | |
Gross profit | | 8,213,281 | | 11,254,708 | | 20,487,652 | | 37,275,118 | |
| | | | | | | | | |
Research and development | | 1,363,143 | | 1,501,475 | | 3,861,311 | | 4,321,474 | |
Selling, general and administrative | | 2,090,357 | | 2,489,287 | | 5,600,461 | | 6,821,682 | |
| | | | | | | | | |
Operating income | | 4,759,781 | | 7,263,946 | | 11,025,880 | | 26,131,962 | |
| | | | | | | | | |
Interest income | | 116,110 | | 543,857 | | 345,985 | | 1,255,431 | |
Interest expense | | (31,197 | ) | (48,796 | ) | (94,201 | ) | (127,930 | ) |
| | | | | | | | | |
Income before income taxes | | 4,844,694 | | 7,759,007 | | 11,277,664 | | 27,259,463 | |
| | | | | | | | | |
Income tax expense | | 1,559,086 | | 2,860,294 | | 3,810,625 | | 9,894,108 | |
| | | | | | | | | |
Net Income | | $ | 3,285,608 | | $ | 4,898,713 | | $ | 7,467,039 | | $ | 17,365,355 | |
| | | | | | | | | |
Net Income per Common Share | | | | | | | | | |
Basic | | $ | 0.19 | | $ | 0.27 | | $ | 0.43 | | $ | 0.97 | |
Diluted | | $ | 0.18 | | $ | 0.27 | | $ | 0.42 | | $ | 0.95 | |
| | | | | | | | | |
Weighted Average Shares Outstanding | | | | | | | | | |
Basic | | 17,499,959 | | 17,909,270 | | 17,296,491 | | 17,814,504 | |
Diluted | | 17,941,119 | | 18,360,921 | | 17,801,727 | | 18,314,568 | |
Innovative Solutions and Support, Inc.
Balance Sheet
(unaudited)
| | September 30, 2004 | | June 30, 2005 | |
ASSETS | | | | | |
CURRENT ASSETS: | | | | | |
Cash and cash equivalents | | $ | 65,867,167 | | $ | 83,219,709 | |
Accounts receivable | | 5,003,100 | | 7,510,876 | |
Inventories | | 5,191,628 | | 3,660,592 | |
Deferred income taxes | | 984,111 | | 984,111 | |
Prepaid expenses | | 665,276 | | 1,344,642 | |
Total current assets | | 77,711,282 | | 96,719,930 | |
| | | | | |
Property and equipment, net | | 9,620,231 | | 9,378,576 | |
| | | | | |
Other assets | | 137,114 | | 128,114 | |
| | | | | |
TOTAL ASSETS | | $ | 87,468,627 | | $ | 106,226,620 | |
| | | | | |
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 | | 409,418 | |
Accrued expenses | | 4,754,641 | | 3,683,789 | |
Deferred revenue | | 526,023 | | 735,463 | |
Total current liabilities | | 7,084,168 | | 4,935,927 | |
| | | | | |
Note payable | | 4,235,000 | | 4,235,000 | |
Capitalized lease obligation | | 20,681 | | 15,035 | |
Deferred revenue | | 261,934 | | 209,081 | |
Deferred income taxes | | 411,857 | | 411,857 | |
| | | | | |
SHAREHOLDERS’ EQUITY: | | | | | |
Common stock | | 13,515 | | 18,027 | |
Additional paid-in capital | | 48,712,289 | | 41,699,407 | |
Retained earnings | | 37,342,940 | | 54,702,286 | |
Treasury stock | | (10,613,757 | ) | — | |
Total shareholders’ equity | | 75,454,987 | | 96,419,720 | |
| | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 87,468,627 | | $ | 106,226,620 | |
