Innovative Solutions And Support, Inc. · NASDAQ:ISSC
Innovative Solutions And Support — Q2 2009 Earnings Presentation
22 slides from Innovative Solutions And Support's earnings presentation, Feb 9, 2009
Slide 1: Innovative Solutions & Support Second Quarter 2009
1 Innovative Solutions & Support NASDAQ: ISSC Second Quarter 2009
Slide 2: Safe Harbor Statement
2 SAFE HARBOR STATEMENT This presentation includes forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve risks and uncertainties and our actual experience may differ materially, either better or worse, from that anticip
Slide 3: Company Description
3 Company Description Leading provider of air data equipment and advanced flight monitoring systems that measure and display critical flight information – especially Flat Panel Display Systems (FPDS, Cockpit/IP™, Vantage) Started: 1988 NASDAQ: ISSC FYE: September 30 Overview Serving: A large and gro
Slide 4: Key Initiatives - FY09 vs. FY08
Key Initiatives - FY09 vs. FY08 Structural Changes Reduction in force – right sized to market Engineering efficiency gains Cash Generation Inventory reduction 32 DSO – Blue Chip customers Intellectual Property Portfolio Valuable (successful lawsuit outcome) Growing Overview
Slide 5: Financials
innovative Solutions & Support FINANCIALS
Slide 6: Q2 FY Guidance
7 Q2 FY 09 Guidance > 45% Q2 09 Q1 09 Q4 08 Guidance Actual Comparable Revenues $9.50 - $10.50 $10.6 $10.2 Gross Margin 50% 36% Operating Margin 10% - 16% 16% N/A Effective Tax Rate 10% 4% - EPS $0.06 - $0.09 $0.11 ($0.13)
Slide 7: Positioned for Growth: Balance Sheet statistics
8 Positioned for Growth Balance Sheet statistics Cash - $34 Million No Debt (except low rate Ind. Dev. Bond) Current ratio: ~ 10 to 1 Tangible Book Value ~ $3/share Current share price at 2/3/09 – $3.32 Current capacity can accommodate 100% increase in volume ISSC has a strong financial position
Slide 8: Market
9 Market
Slide 9: Shift from steam gauge to electronic instrument displays
10 Aircraft industry completely shifting from traditional “steam gauge” to electronic instrument displays Flat panels are “The Standard” on new aircraft production Current economic environment creating large retrofit opportunity FPDS benefits Reduced cost of operation (e.g. fuel savings, weight redu
Slide 10: Market for Air Data Continues
11 Market for Air Data Continues Air Data Units Manufacture Full Line of Leading Air Data Products Approximately 20% of Q1 Revenues Redirection of more DoD funding to refurbishing aircraft boosting Air Data product demand
Slide 11: Market Opportunity
12 Market Opportunity Economic conditions creating shift from purchasing new aircraft to upgrades and retrofit of existing fleet Flat Panel Display System Market Potential: Commercial (11,000 + units) $2.6 billion Military (8,000 + units) $1.9 billion Business Aviation (12,000 + units) $2.8 billion
Slide 12: Segmentation – Commercial Air Transport
13 Segmentation – Commercial Air Transport The Market – Segment Analysis 11,000 Active Aircraft Retrofit Focus Targeting 6,786 Aircraft Targeting an Estimated $1,240M Market Data Source: * ACAS Database IS&S B757 / 767 Solution:
Slide 13: B757/B767 Upgrade Economics
B757/B767 Upgrade Economics Minimal Downtime to Upgrade Lower Cost of Operation Removes 23 aging components Reduces weight by over 180 pounds 70% reduction in power consumption Reduced Training Costs Common look and feel Mixed fleet flying Growth Platform On Aircraft software updates Electronic Flig
Slide 14: Segmentation – Military Aircraft
15 Segmentation – Military Aircraft The Market – Segment Analysis Targeting 6,577 Active Aircraft Retrofit Focus Targeting an Estimated $872M Market 8,000 Active Aircraft Data Source: * MiliCAS Database IS&S C-130 Flight Deck Upgrade:
Slide 15: Existing C-130 Cockpit
e282 cen Existing C-130 Cockpit
Slide 16: Modernized C-130 Cockpit
Modernized C-130 Cockpit = el
Slide 17: Segmentation – Business & General Aviation
Segmentation – Business & General Aviation The Market – Segment Analysis Data Source: * General Aviation Manufacturers Association (GAMA) 2007 Shipments **FAA Statistics released December 2007 (does not include Foreign Markets) Retrofit Focus Estimated $2,776M Market Targeting 11,870 Active Aircraft
Slide 18: Cessna Opportunity
Cessna Opportunity Cessna selected IS&S as their FPDS upgrade manufacturer Ground testing complete/flight testing imminent 34 Cessna Service Centers around the world 2,500 Cessna aircraft candidates for a FPDS retrofit Cessna emphasizing repair and retrofit work in light of slowing new airframe dema
Slide 19: Vantage
Vantage New General Aviation Flat Panel Display System introduced Open Architecture – Interfaces with “Best of Breed” support avionics Minimizes cost of upgrade Interfaces with a wide variety of equipment for retrofit applications FBOs can now stock one part number to service multiple airframes
Slide 20: Positioned for Growth: Production Readiness for FPDS Market
21 Positioned for Growth Production Readiness for FPDS Market Capital equipment in place and proven Material assets in place and pipeline primed Bill of materials on budget Assembly labor minor part of cost base Gross margin in line with previous projections and expectations (Q1 GM 50%) Financial, O
Slide 21: Summary
22 Summary Market leader in FPD System retrofits and Air Data Equipment Weak economy increasing retrofit market demand Best value proposition Growing installed base Backlog exceeds 15 months based upon run rate Additional revenue potential over life of Cessna, FedEx, other agreements Strong Balance
Slide 22: innovative
@: innovative Innovative Solutio ns & Support Proprietary Information
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