Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: John Long, Chief Financial Officer
Innovative Solutions & Support, Inc.
610-646-0350
Innovative Solutions & Support, Inc. Announces Financial Results for the Fiscal Year Ended September 30, 2009
Completes year of profitability, revenue growth and positive operating cash flow
Exton, Pa – December 9, 2009 – Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today announced financial results for the fourth quarter and year ended September 30, 2009.
Revenues for the year were $36.7 million, up 20% from $30.5 million in fiscal 2008. Net income for the year was $5.0 million, or $0.30 per diluted share, compared to a net loss of $7.9 million, or ($0.47) per diluted share, in the year ended September 30, 2008.
Geoffrey Hedrick, Chairman and Chief Executive Officer of Innovative Solutions & Support, Inc. said, “For fiscal 2009 we accomplished our objectives to grow revenues over the prior year; and to achieve profitability with positive operating cash flow in each quarter; representing a significant turnaround in financial performance relative to fiscal 2008. Our results continue to reflect the success of our strategic initiatives to improve
operational efficiency while broadening our product offerings and extending our reach within each of our markets - commercial air transport, general aviation and military. With significant progress already achieved in improving performance, we believe we are well-positioned to capitalize on demand from the aviation industry for new cockpit technology that enhances situational awareness and improves safety, reliability and efficiency.”
For the fourth quarter of fiscal 2009, the Company reported net income of $0.6 million, or $0.03 per fully diluted share, on revenues of $7.9 million. Net income in the fourth quarter of fiscal 2009 was negatively impacted by $0.3 million for product support reserves charged to cost of sales and $0.2 million for bad debt reserves charged to operating expenses. In the fourth quarter of fiscal 2008, the Company reported net income of $7.6 million, or $0.45 per fully diluted share, primarily the result of a legal settlement, on revenues of $10.2 million. Net income in the fourth quarter of fiscal 2008 includes $17.3 million in legal settlement proceeds, offset by approximately $6.0 million in charge offs associated with an OEM contract that was subsequently discontinued and approximately $0.9 million of costs associated with a reduction in workforce that occurred during the quarter.
At September 30, 2009, the Company had $35.6 million of cash on hand with no long term-debt and a released backlog of $34.1 million.
Roman Ptakowski, President of the Company added, “We have made significant progress penetrating the military markets and initiating the rollout of our global Cessna program over the past few months. Together with the programs in our backlog and the significant new opportunities we are
pursuing, we have a solid base from which to extend our track record of revenue growth, profitability and cash flow generation for fiscal year 2010. Over the long term, our investment in innovative technology, operational efficiency and strong relationships throughout the aviation industry provides us with a significant competitive advantage that will enable us to create value for shareholders.”
Business Outlook
The deterioration of the market that started in the third quarter of 2008 deepened as our fiscal year progressed. We believe this economic uncertainty caused our customers to defer procurements impacting the second half of fiscal year 2009 and the first half of fiscal year 2010. We are seeing new order activity, which strengthens our guarded optimism for the second half of fiscal year 2010.
Conference Call
The Company will be hosting a conference call on December 10, 2009 at 10:00 AM local time 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: 877-856-1960. The conference ID# is 4251282. 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) designs, manufactures, and markets flight information computers, electronic displays, and advanced monitoring systems that measure and display critical flight information. This includes data relative to aircraft separation (RVSM), airspeed, and altitude, as well as engine and fuel data 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.
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TABLES FOLLOW:
Innovative Solutions and Support, Inc.
Consolidated Statement of Operations
(unaudited)
| | Three months ended September 30, | | For the Fiscal Year Ended September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | |
Sales | | 7,933,778 | | 10,221,995 | | 36,734,150 | | 30,533,311 | |
| | | | | | | | | |
Cost of sales | | 3,802,153 | | 8,222,878 | | 17,895,984 | | 20,551,857 | |
| | | | | | | | | |
Gross profit | | 4,131,625 | | 1,999,117 | | 18,838,166 | | 9,981,454 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Research and development | | 1,134,422 | | 2,876,293 | | 5,313,007 | | 10,304,279 | |
Selling, general and administrative | | 2,175,548 | | 8,353,481 | | 8,647,506 | | 22,306,016 | |
Asset Impairment | | — | | — | | — | | 2,475,000 | |
Total operating expenses | | 3,309,970 | | 11,229,774 | | 13,960,513 | | 35,085,295 | |
| | | | | | | | | |
Operating income (loss) | | 821,655 | | (9,230,657 | ) | 4,877,653 | | (25,103,841 | ) |
| | | | | | | | | |
Interest income | | 37,134 | | 222,698 | | 398,041 | | 1,576,599 | |
Interest expense | | (7,763 | ) | — | | (82,276 | ) | (160,867 | ) |
Other income | | 26 | | 17,000,000 | | 50,099 | | 17,300,000 | |
Income (loss) before income taxes | | 851,052 | | 7,992,041 | | 5,243,517 | | (6,388,109 | ) |
Income taxes expense (benefit) | | 265,618 | | 418,318 | | 234,856 | | 1,509,139 | |
Net income (loss) | | $ | 585,434 | | $ | 7,573,723 | | $ | 5,008,661 | | $ | (7,897,248 | ) |
| | | | | | | | | |
| | | | | | | | | |
Net income (loss) per common share: | | | | | | | | | |
Basic | | $ | 0.03 | | $ | 0.45 | | $ | 0.30 | | $ | (0.47 | ) |
| | | | | | | | | |
Diluted | | $ | 0.03 | | $ | 0.45 | | $ | 0.30 | | $ | (0.47 | ) |
| | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | |
Basic | | 16,745,379 | | 16,893,499 | | 16,745,379 | | 16,887,049 | |
| | | | | | | | | |
Diluted | | 16,748,168 | | 16,893,499 | | 16,760,500 | | 16,887,049 | |
Innovative Solutions and Support, Inc.
Consolidated Balance Sheets
(unaudited)
| | September 30, | | September 30, | |
| | 2009 | | 2008 | |
ASSETS | | | | | |
CURRENT ASSETS: | | | | | |
Cash and cash equivalents | | $ | 35,565,694 | | $ | 35,031,932 | |
Accounts receivable, net | | 6,188,706 | | 4,218,443 | |
Inventories | | 5,306,985 | | 9,361,257 | |
Deferred income taxes | | 503,993 | | 414,636 | |
Prepaid expenses and other current assets | | 1,227,413 | | 1,406,260 | |
| | | | | |
Total current assets | | 48,792,791 | | 50,432,528 | |
| | | | | |
Property and equipment, net | | 8,343,701 | | 8,958,346 | |
| | | | | |
Other assets | | 399,520 | | 505,840 | |
| | | | | |
TOTAL ASSETS | | $ | 57,536,012 | | $ | 59,896,714 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
CURRENT LIABILITIES: | | | | | |
Current portion of capitalized lease obligations | | $ | 9,908 | | $ | 9,908 | |
Accounts payable | | 1,207,989 | | 2,349,981 | |
Accrued expenses | | 2,785,560 | | 5,130,463 | |
Deferred revenue | | 164,856 | | 450,923 | |
| | | | | |
Total current liabilities | | 4,168,313 | | 7,941,275 | |
| | | | | |
Note payable | | — | | 4,335,000 | |
Long-term portion of capitalized lease obligations | | 26,991 | | 37,633 | |
Deferred revenue | | 60,792 | | 114,075 | |
Deferred income taxes | | 642,651 | | 414,636 | |
Other liabilities | | 238,522 | | 249,969 | |
| | | | | |
Total liabilities | | 5,137,269 | | 13,092,588 | |
| | | | | |
SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Common Stock | | 18,207 | | 18,177 | |
Additional paid-in capital | | 46,462,135 | | 45,767,960 | |
Retained earnings | | 25,161,277 | | 20,152,615 | |
Treasury stock | | (19,242,876 | ) | (19,134,626 | ) |
| | | | | |
Total shareholders’ equity | | 52,398,743 | | 46,804,126 | |
| | | | | |
Total liabilities and shareholders’ equity | | $ | 57,536,012 | | $ | 59,896,714 | |
