Exhibit 99.1
Innovative Solutions & Support, Inc. Announces 3rd Quarter and Year-To-Date
Results for the Period ended June 30, 2006
EXTON, Pa.—(BUSINESS WIRE)—July 26, 2006—Innovative Solutions & Support, Inc. (NASDAQ:ISSC) today announced financial results for the third quarter and year-to-date periods ended June 30, 2006.
Backlog at the end of the third quarter was $34.3 million, a 21% increase from $28.3 million at the end of the second quarter. The increase in backlog was primarily due to gains in Flat Panel Display orders which had a quarter end backlog of $22.1 million. This represents an increase of $5.8 million or 36% from the second quarter and accounts for 64% of the Company’s total backlog at June 30, 2006.
In the third quarter, Flat Panel Display System sales were $1.2 million, up from $0.5 million in the prior year’s third quarter. Total third quarter sales were $3.0 million compared to $17.1 million in the prior year’s third quarter. For the nine months ending June 30, 2006, Flat Panel Display System sales were $5.3 million, an increase of $4.4 million or 489% from the prior year’s nine-month period. Total year-to-date sales were $12.1 million compared to $55.1 million for the first nine months of fiscal 2005, which benefited from RVSM compliance deadlines.
Roman Ptakowski, President of Innovative Solutions & Support, Inc., commented, “Our Flat Panel Display Systems business continues to gain momentum as evidenced by the upturn in Flat Panel orders as well as the record backlog level in the quarter. We continue to experience accelerating interest from an increasing variety of markets and our Flat Panel Systems strategy - targeting markets consisting of large numbers of aircraft, furthering our price leadership, and exploring partnerships and other alliances that can help drive growth — remains intact. At the same time, demand for our Air Data products improved reflecting replacement needs for aging aircraft.”
The Company reported a net loss in the third quarter of $(1.2) million or $(0.07) per fully diluted share after investing $1.7 million in Engineering, Research and Development (ER&D) spending in the quarter for both new and current product development and certification efforts. This compared to $4.9 million of net income or $0.27 per fully diluted share in the third quarter of fiscal 2005. Fiscal year-to-date, the Company reported a net loss of $(1.9) million or $(0.11) per fully diluted share after investing $5.1 million in ER&D. This compared to net income of $17.4 million or $0.95 per fully diluted share in the first nine months of fiscal 2005.
The Company’s cash position at June 30th was $66.7 million and reflected the Company’s $18.1 million purchase of its common stock during the 2nd and 3rd quarters of this fiscal year. Without the purchase of the 1,272,510 shares of its common stock, the cash balance would have been $84.8 million, reflecting a positive cash flow of $1.6 million in the fiscal nine month period. Please refer to the accompanying schedules highlighting our Statement of Operations and Balance Sheet.
Mr. Ptakowski continued, “The Company’s growing backlog reflects the acceptance of our Flat Panel System in the marketplace and the ongoing demand for Air Data products. Despite the year over year revenue and earnings decline, the company still
delivered gross margins in excess of 44% and continued to invest in Flat Panel Display Systems, aircraft certification efforts and other products to ensure the company’s future.”
The company will host a conference call tomorrow morning, July 27, 2006 at 9:30 am local time (EST) to discuss these results as well as our business outlook. Please call in to participate at (800) 500-0311. 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 Flat Panel Display Systems, Air Data, 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 other 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
