Exhibit 99.1
Press Release
Innovative Solutions & Support, Inc. Announces Results for First Quarter 2006
Exton, PA.—(BUSINESS WIRE)—January 26, 2006—Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today announced financial results for the period ended December 31, 2005, the first quarter of fiscal 2006.
For the first quarter, Flat Panel System sales were $3.1 million, a better than tenfold increase from $0.3 million in the prior year’s first quarter. For the quarter, Flat Panel Systems orders were a record $9.4 million and ending Flat Panel Systems backlog a record $12.1 million. Total first quarter 2006 revenues were $5.4 million compared to $19.0 million in the prior year’s first quarter.
Roman Ptakowski, President of Innovative Solutions & Support, Inc., commented, “We achieved record levels of Flat Panel Systems revenues, orders and backlog as we continue to experience accelerating interest from an increasing variety of markets. Our goal is to expand our Flat Panel Systems opportunity by targeting markets consisting of large numbers of aircraft, furthering our price leadership, and exploring partnerships and other alliances that can help drive growth.”
Net income in the first quarter of fiscal 2006 was essentially breakeven. This compared to $6.2 million or thirty four cents ($0.34) per fully diluted share in the first quarter of fiscal 2005. The Company ended the period with $83 million of cash and a total backlog of $18.2 million. Please refer to the accompanying schedules highlighting our Statement of Operations and Balance Sheet.
Mr. Ptakowski continued, “We are very pleased that we were able to post a modest profit this quarter despite significantly lower volumes of Air Data product shipments relative to last year when demand benefited from the approaching RVSM compliance deadlines. We remain confident that demand for Air Data products will rebound, especially from the general aviation fleet that missed the January, 2005 deadline, as well from the aging fleets of both commercial and military aircraft. Our recent $7.4 million contract with the Department of Defense underscores the Company’s position as a leading supplier of Air Data equipment to all major aviation markets.”
The company will host a conference call tomorrow morning, January 27, 2006 at 10:00 am local time (EST) to discuss these results as well as our business outlook and recent new business. Please call in to participate at (866) 425-6191, conference ID# 6936252.
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.
Balance Sheet
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| Actual |
| Actual |
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| September 30, 2005 |
| December 31, 2005 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
| $ | 83,172,582 |
| $ | 82,631,890 |
|
Accounts receivable |
| 5,479,936 |
| 5,316,834 |
| ||
Inventories |
| 3,911,626 |
| 3,648,493 |
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Deferred income taxes |
| 956,070 |
| 701,102 |
| ||
Prepaid expenses |
| 4,028,498 |
| 4,314,267 |
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Total current assets |
| 97,548,712 |
| 96,612,586 |
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Property and equipment, net |
| 9,361,052 |
| 9,262,409 |
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Other assets |
| 125,114 |
| 518,114 |
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TOTAL ASSETS |
| $ | 107,034,878 |
| $ | 106,393,109 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Current portion of note payable |
| $ | 100,000 |
| $ | 100,000 |
|
Current portion of capitalized lease obligation |
| 7,257 |
| 7,257 |
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Accounts payable |
| 305,516 |
| 337,265 |
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Accrued expenses |
| 3,503,814 |
| 2,561,927 |
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Deferred revenue |
| 176,650 |
| 209,611 |
| ||
Total current liabilities |
| 4,093,237 |
| 3,216,060 |
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|
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Note payable |
| 4,235,000 |
| 4,235,000 |
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Capitalized lease obligation |
| 13,113 |
| 10,537 |
| ||
Deferred revenue |
| 191,463 |
| 173,845 |
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Deferred income taxes |
| 635,967 |
| 581,307 |
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SHAREHOLDERS’ EQUITY: |
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Common stock |
| 18,047 |
| 18,058 |
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Additional paid-in capital |
| 41,926,318 |
| 42,230,444 |
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Retained earnings |
| 55,921,733 |
| 55,927,858 |
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Total shareholders’ equity |
| 97,866,098 |
| 98,176,360 |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
| $ | 107,034,878 |
| $ | 106,393,109 |
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Innovative Solutions and Support, Inc.
Statement of Operations
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| Three months ended |
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| December 31, |
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| 2004 |
| 2005 |
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Revenues |
| $ | 18,978,804 |
| $ | 5,405,387 |
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Cost of Sales |
| 6,182,143 |
| 2,702,018 |
| ||
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|
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|
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Gross profit |
| 12,796,661 |
| 2,703,369 |
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Research and development |
| 1,271,531 |
| 1,535,001 |
| ||
Selling, general and administrative |
| 2,028,467 |
| 1,896,836 |
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Operating income (loss) |
| 9,496,663 |
| (728,468 | ) | ||
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|
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Interest income |
| 283,250 |
| 781,445 |
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Interest expense |
| (39,738 | ) | (43,512 | ) | ||
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Income before income taxes |
| 9,740,175 |
| 9,465 |
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Income tax expense |
| 3,547,372 |
| 3,340 |
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Net Income |
| $ | 6,192,803 |
| $ | 6,125 |
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Net Income per Common Share |
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Basic |
| $ | 0.35 |
| $ | 0.00 |
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Diluted |
| $ | 0.34 |
| $ | 0.00 |
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Weighted Average Shares Outstanding |
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|
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Basic |
| 17,752,707 |
| 18,055,243 |
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Diluted |
| 18,270,413 |
| 18,272,423 |
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