Press Release
INNOVATIVE SOLUTIONS & SUPPORT, INC. ANNOUNCES EPS GROWTH OF 127% TO A RECORD
$1.00/SHARE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004.
Exton, PA.--(BUSINESS WIRE)--November 17, 2004--Innovative Solutions & Support,
Inc. (NASDAQ:ISSC-news) today announced the following results for the 4th
quarter and fiscal year ended September 30, 2004:
Q4 FY 2004
o Sales up 43% to a record $14.4 million.
o Net income up 59% to a record $4.5 million.
o EPS, diluted up 61% to a record $0.37 a share
o Released Backlog up 47% to a record $35.4 million
o Cash Flow from Operations up 188% to record $7.0 million
o Cash Flow Record $7.2 million or $0.59 a share
Fiscal Year 2004
o Sales up 64% to a record $46.1 million
o Net Income up 115% to a record $11.9 million
o EPS, diluted up 127% to a record $1.00 a share
o Cash Flow from Operations up 165% to a record $16.1 million
o Cash Flow Record $17.1 million or $1.41 a share
Please refer to the accompanying schedules highlighting our Statement of
Operations and Balance Sheet.
Geoffrey S.M. Hedrick, Chairman and CEO, commented: "The demand for our Air Data
equipment has materialized as anticipated and is expected to continue beyond the
FAA's RVSM compliance date of January 20, 2005. Continued demand for the
replacement of obsolete and troublesome equipment will augment the significant
number of installations on aircraft that missed the FAA compliance date."
The General Aviation market (business jets) currently represents the largest
demand for RVSM 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.
At September 30, 2004 the Company's backlog of released business reached a
record $35.4 million. This reflects a 47% increase from the September 30, 2003
backlog of $24.1 million. In addition the Company has an additional $10 million
in follow-on options for release in subsequent periods that has not yet been
recognized in firm backlog.
Along with our sales increase, the Company increased its investment in
Engineering & Product Development by $1.4 million or 42% in the year. This
investment was substantially linked to the issuance of the Cockpit/IP(TM) TSO
certification received on July 2nd from the FAA. Further, this continued level
of investment would support new Flat Panel and Air Data System development and
follow-on product introductions in calendar 2004 and 2005.
The company will host a conference call tomorrow morning, November 18, 2004 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 displays and advanced monitoring systems that
measure and display critical flight information. This includes data relative to
aircraft separation, airspeed and altitude as well as engine and 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 AND SUPPORT, INC.
BALANCE SHEET
ACTUAL ACTUAL
SEPTEMBER 30, 2003 SEPTEMBER 30, 2004
------------------ ------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 48,789,744 $ 65,867,167
Accounts receivable 6,955,207 5,003,100
Inventories 2,840,648 5,191,628
Deferred income taxes 673,134 984,111
Prepaid expenses 660,430 665,276
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Total current assets 59,919,163 77,711,282
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Property and equipment, net 9,548,491 9,620,231
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Other assets 408,971 137,114
-------------- --------------
TOTAL ASSETS $ 69,876,625 $ 87,468,627
=======================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of note payable $ 100,000 $ 100,000
Current portion of capitalized lease obligation - 7,257
Accounts payable 578,306 1,696,247
Accrued expenses 3,146,409 4,754,641
Deferred revenue 98,036 526,023
-------------- --------------
Total current liabilities 3,922,751 7,084,168
-------------- --------------
Note payable 4,235,000 4,235,000
-------------- --------------
Capitalized lease obligation - 20,681
-------------- --------------
Deferred revenue 332,407 261,934
-------------- --------------
Deferred income taxes 328,177 411,857
-------------- --------------
SHAREHOLDERS' EQUITY:
Common stock 13,081 13,515
Additional paid-in capital 46,248,224 48,712,289
Retained earnings 25,410,742 37,342,940
Treasury stock (10,613,757) (10,613,757)
-------------- --------------
Total shareholders' equity 61,058,290 75,454,987
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 69,876,625 $ 87,468,627
=======================================
INNOVATIVE SOLUTIONS AND SUPPORT, INC.
STATEMENT OF OPERATIONS
THREE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2003 2004 2003 2004
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Revenues $10,103,904 $14,411,501 $28,168,752 $46,099,777
Cost of Sales 3,593,590 4,462,484 11,346,057 15,663,108
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Gross profit 6,510,314 9,949,017 16,822,695 30,436,669
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Research and development 952,702 949,844 3,376,849 4,811,156
Selling, general and administrative 1,560,020 1,967,499 5,890,362 7,567,959
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Operating income 3,997,592 7,031,674 7,555,484 18,057,554
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Interest income 118,640 186,760 582,023 532,745
Interest expense (29,922) (33,817) (131,602) (128,018)
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Income before income taxes 4,086,310 7,184,617 8,005,905 18,462,281
Income tax expense 1,271,022 2,719,459 2,464,715 6,530,084
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Net Income $ 2,815,288 $ 4,465,158 $ 5,541,190 $11,932,197
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Net Income per Common Share
Basic $ 0.24 $ 0.38 $ 0.45 $ 1.03
Diluted $ 0.23 $ 0.37 $ 0.44 $ 1.00
Weighted Average Shares Outstanding
Basic 11,739,659 11,809,797 12,261,084 11,600,253
Diluted 12,007,643 12,146,104 12,495,774 11,952,120