Innovative Solutions & Support, Inc. Announces Fiscal 2009 Second Quarter Financial Results

Revenues Up 53% from Year Ago Quarter, Operating Margin of 13.0% and Earnings
Per Share of $0.08 in Second Quarter
EXTON, Pa.--(Business Wire)--
Innovative Solutions & Support, Inc. (NASDAQ:ISSC) today announced its financial
results for the second quarter of fiscal 2009 ending March 31, 2009.

Net revenues for the second quarter of fiscal 2009 were $10.5 million, up 53%
from $6.8 million in the second quarter fiscal 2008. The Company reported fiscal
2009 second quarter net income of$1.3 million, or $0.08 per fully diluted share,
compared to a fiscal second quarter 2008 net loss of ($7.1 million), or ($0.42)
per fully diluted share. Cash flow was also strong in the quarter, reversing the
working capital changes that reduced cash flow growth in the first quarter of
fiscal 2009.

"We are again reporting results consistent with our expectations," said Geoffrey
Hedrick, Chairman and Chief Executive Officer of Innovative Solutions & Support,
Inc. "We have retooled and reorganized operations to improve productivity and
reduce fixed overhead burden so we can effectively leverage our growth into more
significant bottom line improvement. Both gross margin and operating margin
performance are clearly demonstrating that the decisive actions taken this year
are having the intended effect."

Compared to the year ago period, the improvement in operating margins this
quarter are in part due to the reduction in legal expenses, which amounted to
over $1.3 million last year during the vigorous pursuit of the successful
prosecution of a trade secret matter. The case was settled in the fourth fiscal
quarter of 2008.

Mr. Hedrick added, "As new aircraft build slows, operators are budgeting to
improve the safety and performance of their existing fleets as well as to extend
their life. Economic uncertainty has severely impacted both the commercial
airline transport and business jet industry. In these difficult and uncertain
economic times, our unequaled performance/price strengthens demand for ISS
products.

Several OEM`s have recently contacted us for retro-fit solutions in their
existing fleets. It is in the OEM`s interest to support the existing operators
during this difficult economic time with a low-cost solution for their existing
aircraft. These upgrades, while providing significant improvement in operation
and situational awareness, make the resale of these aircraft far more attractive
when the user decides to upgrade to a new aircraft in the future. While the
general economic malaise has impacted our sales, we have been able to grow the
company by an estimated 25% this year.

Six Month Results

Revenues for the six months ended March 31, 2009 were $21.0 million, up 82% over
revenues for the six months ended March 31, 2008 of $11.6 million. For the six
months ended March 31, 2009, net income was $3.2 million or $0.19 per diluted
share compared to a net loss of ($11.2 million) or ($0.66) per fully diluted
share for the six months ended March 31, 2008. Legal expenses associated with
the successful prosecution of the trade secret matter were $4.9 million in the
six months ended March 31, 2008. For the six months ended March 31, 2009, gross
margin was 50% and our cash and cash equivalents increased by $2.5 million.

Roman Ptakowski, President, added, "Relative to our current operations, we have
a healthy order book, including a substantive and growing intra-quarter
book-and-ship business. Over $4 million of recent orders and early indications
by the military for further awards are indicative of our increasing success
penetrating that very large market. With flight testing nearly completed, the
Cessna Flat Panel Display will be more widely available in the very near future.
We are also optimistic about the growth opportunities for our extremely
versatile new Vantage Flat Panel Display System. Also, by leveraging our
technology into new applications such as our mission displays and marketing our
legacy retrofit expertise, there are numerous opportunities available to expand
our presence throughout the entire aircraft industry."

Business Outlook

For the fiscal year 2009, based upon existing backlog, current production
schedules and improving operating efficiency, the Company expects net revenues
$37.0 - $39.0 million; and positive operating cash flow. This outlook represents
a 25% increase in revenue over the prior fiscal year. We will provide additional
details related to our outlook during the conference call.

The Company will be hosting a conference call Thursday, April 30, 2009 at 10:00
a.m. EDT 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: 888-562-3654. The conference ID# is 95611570. 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) is a systems integrator engaged in the design,
manufacture and marketing of Flat Panel Display Systems, Air Data equipment,
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 fuel and critical engine parameters.

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.

Innovative Solutions and Support, Inc.
Consolidated Balance Sheets
(unaudited)
March 31, September 30,

2009
2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 37,518,990 $ 35,031,932
Accounts receivable, net 5,764,620 4,218,443
Inventories 5,945,812 9,361,257
Deferred income taxes 301,841 414,636
Prepaid expenses and other current assets 1,277,542 1,406,260

Total current assets 50,808,805 50,432,528

Property and equipment, net 8,681,807 8,958,346

Other assets 503,114 505,840

TOTAL ASSETS $ 59,993,726 $ 59,896,714

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of capitalized lease obligations $ 9,908 $ 9,908
Accounts payable 1,638,298 2,349,981
Accrued expenses 2,805,843 5,130,463
Deferred revenue 241,509 450,923

Total current liabilities 4,695,558 7,941,275

Note payable 4,335,000 4,335,000
Long-term portion of capitalized lease obligations 32,403 37,633
Deferred revenue 86,844 114,075
Deferred income taxes 301,841 414,636
Other liabilities 294,428 249,969

Total liabilities 9,746,074 13,092,588

Commitments and contingencies -

SHAREHOLDERS' EQUITY:

Common stock 18,189 18,177
Additional paid-in capital 46,148,808 45,767,960
Retained earnings 23,323,531 20,152,615
Treasury stock (19,242,876 ) (19,134,626 )

Total shareholders' equity 50,247,652 46,804,126

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 59,993,726 $ 59,896,714

Innovative Solutions and Support, Inc.
Consolidated Statement of Operations
(unaudited)

Three months ended March 31, Six months ended March 31,
2009 2008 2009 2008

Sales 10,465,726 6,824,360 21,041,072 11,560,007

Cost of sales 5,217,613 3,790,661 10,472,786 7,449,720

Gross profit 5,248,113 3,033,699 10,568,286 4,110,287

Operating expenses:
Research and development 1,610,687 2,776,576 2,891,188 4,517,244
Selling, general and administrative 2,272,080 4,734,446 4,631,387 10,670,352
Total operating expenses 3,882,767 7,511,022 7,522,575 15,187,596

Operating income (loss) 1,365,346 (4,477,323 ) 3,045,711 (11,077,309 )

Interest income 97,227 441,779 298,313 1,031,140
Interest expense (19,241 ) (38,580 ) (54,715 ) (89,119 )
Other income - 300,000 50,073 300,000
Income (loss) before income taxes 1,443,332 (3,774,124 ) 3,339,382 (9,835,288 )

Income taxes expense 95,802 3,286,033 168,466 1,346,810

Net income (loss) $ 1,347,530 $ (7,060,157 ) $ 3,170,916 $ (11,182,098 )

Net income (loss) per common share:
Basic $ 0.08 $ (0.42 ) $ 0.19 $ (0.66 )

Diluted $ 0.08 $ (0.42 ) $ 0.19 $ (0.66 )

Weighted average shares outstanding:
Basic 16,718,209 16,890,942 16,718,209 16,895,720

Diluted 16,718,215 16,890,942 16,735,645 16,895,720

Innovative Solutions & Support, Inc.
John Long, Chief Financial Officer
610-646-0350

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