Innovative Solutions And Support, Inc. · NASDAQ:ISSC
Innovative Solutions And Support — Gabelli & Company 15th Annual Aerospace/Defense Conference (September 2009)
28 slides from Innovative Solutions And Support's conference presentation, Sep 10, 2009
Slide 1: Innovative Solutions & Support - Gabelli Aerospace/Defense Conference
1 Innovative Solutions & Support NASDAQ: ISSC Gabelli & Company, Inc. 15th Annual Aerospace/Defense Conference
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 Positive Operating Cash Flow Generation Gross margins > 50% YTD Operating expenses aligned with volume Inventory reduction on track Focused on working capital management Overvie
Slide 5: Company positioning
Company positioning Open Architecture FMS functionality Interfaces with “Best of Breed” 3rd party avionics OEM Supplier System Integration capabilities Engineering efficiency Doubled Customer cost sharing Overview
Slide 6: Financials
6 FINANCIALS
Slide 7: FY09 vs FY08 Improvement
7 FY09 VS FY08 Improvement Nine Nine Months ended Months ended June 30, 2009 June 30, 2008 Growth Revenues (MM) $28.8 $20.3 42% Gross Margin (%) 51.1% 40.8% 25% Operating Margin 14.1% -78.1% 92% Improvement Effective Tax Rate 0% NM NM Net Income (Loss) (MM) $4.4 ($15.5) $19.9 Improvement EPS $0.26 (
Slide 8: FY Guidance
8 FY 09 Guidance Year ending Actual Sept. 30, 2009 Sept. 30, 2008 Growth Revenues (MM) $35.0 - $37.0 $30.5 18% Gross Margin ~ 50% 33% 52% Operating Margin 12.0% - 14.0% -82.2% 95% Improvement Effective Tax Rate 0% NA NM Net Income (Loss) (MM) $4.5 - $4.8 ($7.8) $12.5 Improvement EPS $0.27 - $0.29 ($
Slide 9: Positioned for Growth - Balance Sheet
9 Positioned for Growth Balance Sheet (as of June 30, 2009) Cash - $39.3 Million Cash per share ~ $2.35 Current ratio: ~ 14 to 1 Capacity utilization ~ 50% Debt - $4.3 Million (IDA Bond redeemed 8/09) Current share price at 9/4/09 – $4.55 (ISSC) ISSC has a strong financial position
Slide 10: Market
10 Market
Slide 11: Flat Panel Display Systems
11 Flat panels are “The Standard” on new aircraft production Current economic environment creating large retrofit opportunity FPDS benefits Enables compliance with current and future regulatory requirements (e.g. ADS-B) Reduced cost of operation (e.g. fuel savings, weight reduction) Expandable Growt
Slide 12: Market for Air Data Continues
12 Market for Air Data Continues Air Data Units Manufacture Full Line of Leading Air Data Products Approximately 20% of Revenues Redirection of more DoD funding to refurbishing aircraft boosting Air Data product demand
Slide 13: Market Opportunity
13 Market Opportunity Economic conditions creating shift from purchasing new aircraft to upgrades and retrofit of existing fleet Flat Panel Display System Retrofit Market Potential: Currently Outstanding Total Addressable Proposals $6.0 B $2.9B $ 113MM+ and growing Positioned for Growth
Slide 14: B757/B767 Upgrade Economics
B757/B767 Upgrade Economics Already captured 17% of the population; only certified solution Lower Cost of Operation Removes 23 aging components Reduces weight by over 180 pounds 70% reduction in power consumption Reduced Training Costs Minimal downtime to upgrade Growth Platform Compliant with upcom
Slide 15: Existing C-130 Cockpit
Existing C-130 Cockpit Military
Slide 16: Modernized C-130 Cockpit
Modernized C-130 Cockpit Military
Slide 17: Cessna
Cessna Cessna selected IS&S as their FPDS upgrade supplier Ground testing complete/flight testing imminent 34 Cessna Service Centers around the world will have FPDs on their shelves 2,500 Cessna aircraft candidates for a FPDS retrofit Cessna emphasizing repair and retrofit work in light of slowing n
Slide 18: Vantage Cockpit/IP
Vantage Cockpit/IPTM An ideal OEM solution as well as retrofit Open Architecture – Interfaces with “Best of Breed” support avionics Minimizes cost of upgrade FBOs can now stock one part number to service multiple airframes General Aviation
Slide 19: Additional opportunities
Additional opportunities Platform Leverage/Technology B737 Existing B757/B767 architecture Eclipse Aerospace Established proven product General Aviation Vantage product 19 Positioned for Growth
Slide 20: Positioned for Growth - Production Readiness
20 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 margins in line with previous projections and expectations (GM > 50%) Financial, O
Slide 21: FY 2009 Technical Achievements
FY 2009 Technical Achievements Design and successful FAA flight testing of Cessna Adviz Cockpit Upgrade Design and Successful flight test of Open architecture Vantage system Design and STC certification of Autopilot Coupled LPV Approach Design and Flight testing of IS&S Flight Management System Expa
Slide 22: Falcon 2000 Cockpit Upgrade
Falcon 2000 Cockpit Upgrade After Before
Slide 23: Citation Cockpit Upgrade
Citation 550 Cockpit Upgrade After Before
Slide 24: FY 2009 Significant Outstanding Proposals
FY 2009 Significant Outstanding Proposals 747 Full Cockpit CNS/ATM System Integration Proposal C-130 Full Cockpit CNS/ATM System Integration Proposal A300 Full Cockpit EFIS/ECAM System Integration Proposal B737 Full Cockpit EFIS/ECAM System Integration Proposal Two Major Business Jet Full Cockpit EF
Slide 25: B747 System Architecture
B747 System Architecture
Slide 26: C130 System Architecture
C130 System Architecture
Slide 27: Summary
27 Summary Market leader in FPD System retrofits and Air Data Equipment Weak economy increasing retrofit market demand Positioned to be an OEM supplier Best value proposition Growing installed base Backlog exceeds 12 months based upon run rate Additional revenue potential over life of Cessna, FedEx,
Slide 28: Innovative Solutions & Support
@: innovative Innovative Solutio ns & Support Proprietary Information