MIRA INFORM REPORT

Report Date :

16.07.2012

IDENTIFICATION DETAILS

Name :	INNOVATIVE SOLUTIONS & SUPPORT INC

Registered Office :	720 Pennsylvania Drive Exton, PA 19341-1129

Country :	United States

Financials (as on) :	30.09.2011

Date of Incorporation :	12.02.1988

Legal Form :	Public Parent

Line of Business :	Designs, manufactures and sells Flat Panel Display Systems, Flight Information Computers and advanced monitoring systems to the Department of Defense (DoD), government agencies, defense contractors, commercial air transport carriers, original equipment manufacturers (OEMs), and corporate/general aviation markets.

No. of Employees :	117

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2012

Country Name

Previous Rating

(31.12.2011)

Current Rating

(31.03.2012)

United States

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name and address

Top of Form

Bottom of Form

Top of Form

Innovative Solutions & Support Inc

720 Pennsylvania Drive


Exton, PA 19341-1129
United States



Tel:	610-646-9800
Fax:	610-646-0149
Toll Free:	866-359-7876

www.innovative-ss.com

Employees:

117

Company Type:

Public Parent

Corporate Family:

6 Companies

Traded:

NASDAQ:

ISSC

Incorporation Date:

12-Feb-1988

Auditor:

Deloitte & Touche LLP

Financials in:	USD (mil)

Fiscal Year End:	30-Sep-2011
Reporting Currency:	US Dollar
Annual Sales:	25.7 ¹
Net Income:	0.7
Total Assets:	58.3 ²
Market Value:	54.9
	(29-Jun-2012)

Business Description

Innovative Solutions and Support, Inc. (IS&S) designs, manufactures and sells Flat Panel Display Systems, Flight Information Computers and advanced monitoring systems to the Department of Defense (DoD), government agencies, defense contractors, commercial air transport carriers, original equipment manufacturers (OEMs), and corporate/general aviation markets. The Company launched a wide area augmentation system (WAAS) program with Lateral and Vertical Precision Performance with a fully coupled auto-pilot for its PC-12 COCKPIT/IP Flat Panel Display System. WAAS capability allows PC-12 operators to fly precision approaches at smaller airports. This capability is also available on other aircraft platforms. IS&S received amended Supplemental Type Certificates (STC) for the Boeing 757/767 platform from the Federal Aviation Administration (FAA). The Companyâ€™s line of products includes flat panel display systems and air data systems and components. For the three months ended 31 December 2010, Innovative Solutions & Support, Inc.'s revenues increased 42% to $6.5M. Net income totaled $285K vs. a loss of $1.1M Revenues reflect a decrease in income from product sales due to higher demand for the products of the company. Net income also reflects a significant increase in gross & operating margin, a rise in interest income and higher other other income.

Industry

Industry	Software and Programming
ANZSIC 2006:	7000 - Computer System Design and Related Services
NACE 2002:	7222 - Other software consultancy and supply
NAICS 2002:	334511 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
UK SIC 2003:	7222 - Other software consultancy and supply
US SIC 1987:	7371 - Computer Programming Services

Key Executives (Emails Available)

Name	Title
Geoffrey S. M. Hedrick	Chairman of the Board, Chief Executive Officer
Shahram Askarpour	President
Ronald C. Albrecht	Chief Financial Officer
Ross Cairns	Vice President-Business Development
Sam Yeager	Network, Sharepoint Admin

Significant Developments

Topic	#*	Most Recent Headline	Date
Officer Changes	1	Innovative Solutions and Support Inc Announces Appointment Of Shahram Askarpour As President	2-Apr-2012
Business Deals	2	Eclipse Aerospace Selects Innovative Solutions & Support's Vantage Premier Avionics For Eclipse 550 Production Model	19-Oct-2011
Other Earnings Pre-Announcement	4	Innovative Solutions and Support Inc Comments On FY 2012 Revenue Guidance	25-Apr-2012
Share Repurchases	1	Innovative Solutions and Support Inc Authorizes Stock Repurchase Program	3-Feb-2012

News

Title	Date
Innovative Solutions & Support opens sales and field service office in Atlanta EquityBites (93 Words)	13-Jul-2012
CONTRACT AWARD - Purchase of 10" Flat Panel Display FedBizOpps (132 Words)	13-Jul-2012
Innovative Solutions & Support Opens Field Office In Atlanta Business Wire (380 Words)	12-Jul-2012
Q2 2012 Innovative Solutions and Support, Inc. Earnings Conference Call - Final FD (Fair Disclosure) Wire (3496 Words)	11-May-2012
Innovative Solutions & Support Q2 net income decreases Datamonitor TechnologyWire (221 Words)	2-May-2012

Financial Summary

As of 31-Mar-2012

Key Ratios	Company	Industry
Current Ratio (MRQ)	9.02	1.68
Quick Ratio (MRQ)	8.26	0.85
Debt to Equity (MRQ)	0.0001	1.38
Sales 5 Year Growth	9.01	7.46
Net Profit Margin (TTM) %	-0.51	6.92
Return on Assets (TTM) %	-0.20	6.28
Return on Equity (TTM) %	-0.22	24.25

Stock Snapshot

Traded: NASDAQ: ISSC

As of 29-Jun-2012

Financials in: USD

Recent Price	3.30	EPS	0.04
52 Week High	5.95	Price/Sales	2.13
52 Week Low	3.02	Price/Book	1.02
Avg. Volume (mil)	0.0082	Beta	0.49
Market Value (mil)	54.89

	Price % Change	Rel S&P 500%
4 Week	-1.49%	-7.57%
13 Week	-25.17%	-22.62%
52 Week	-39.67%	-41.51%
Year to Date	-4.07%	-11.43%

1 - Profit & Loss Item Exchange Rate: USD 1 = USD 1
2 - Balance Sheet Item Exchange Rate: USD 1 = USD 1

Corporate Overview

Location
720 Pennsylvania Drive
Exton, PA, 19341-1129
Chester County
United States

Tel:	610-646-9800
Fax:	610-646-0149
Toll Free Tel:	866-359-7876

www.innovative-ss.com

Quote Symbol - Exchange
ISSC - NASDAQ

Sales USD(mil):	25.7
Assets USD(mil):	58.3
Employees:	117
Fiscal Year End:	30-Sep-2011


Industry:	Software and Programming

Incorporation Date:	12-Feb-1988
Company Type:	Public Parent
Quoted Status:	Quoted


Chairman of the Board, Chief Executive Officer:	Geoffrey S. M. Hedrick

Company Web Links

Company Contact/E-mail

Corporate History/Profile

Employment Opportunities

Contents

Key Corporate Relationships

Additional Information

Industry Codes

ANZSIC 2006 Codes:
2419	-	Other Professional and Scientific Equipment Manufacturing
7000	-	Computer System Design and Related Services

NACE 2002 Codes:
3320	-	Manufacture of instruments and appliances for measuring, checking, testing, navigating and other purposes, except industrial process control equipment
7222	-	Other software consultancy and supply

NAICS 2002 Codes:
334511	-	Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

US SIC 1987:
3812	-	Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments
7371	-	Computer Programming Services

UK SIC 2003:
3320	-	Manufacture of instruments and appliances for measuring, checking, testing, navigating and other purposes, except industrial process control equipment
7222	-	Other software consultancy and supply

Business Description

Innovative Solutions and Support, Inc. (IS&S), incorporated on February 12, 1988, designs, manufactures and sells Flat Panel Display Systems, Flight Information Computers and advanced monitoring systems to the Department of Defense (DoD), government agencies, defense contractors, commercial air transport carriers, original equipment manufacturers (OEMs), and corporate/general aviation markets. The Company launched a wide area augmentation system (WAAS) program with Lateral and Vertical Precision Performance with a fully coupled auto-pilot for its PC-12 COCKPIT/IP Flat Panel Display System. WAAS capability allows PC-12 operators to fly precision approaches at smaller airports. This capability is also available on other aircraft platforms. IS&S received amended Supplemental Type Certificates (STC) for the Boeing 757/767 platform from the Federal Aviation Administration (FAA). The Companyâ€™s line of products includes flat panel display systems and air data systems and components.

Flat Panel Display Systems

IS&S developed a Flat Panel Display System that can replace conventional analog and digital displays used in a cockpit and can display additional information that is not commonly displayed in the cockpit. Its COCKPIT/IP is capable of displaying nearly all types of air data, engine and fuel data, altitude, heading and navigational data, and alternative source information. The Company designed its COCKPIT/IP to be capable of displaying information generated from a variety of sources, including its reduced vertical separation minimum (RVSM) air data system, engine and fuel instrumentation, and third-party data and information products.

Air Data Systems and Components

The Companyâ€™s air data products calculate and display various measures, such as aircraft speed, altitude and rate of ascent and descent. IS&S sells individual components, as well as partial and complete air data systems. Its components and systems include digital air data computers, which calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack and other information derived from the measure of air pressure; integrated air data computers and display units, which calculate and convey air data information; altitude displays, which convey aircraft altitude measurements; airspeed displays, which convey various types of airspeed measurements including vertical airspeed and rates of ascent and descent, and altitude alerters, which allow the pilot to select a desired cruising altitude that the aircraft will reach and maintain, and also provide warnings to pilots when an unacceptable deviation occurs.

IS&S develops, manufactures and markets engine and fuel displays. Its solid-state multifunction displays convey information with respect to fuel and oil levels and engine activity, such as oil and hydraulic pressure and temperature. This instrumentation includes individual and multiple displays clustered throughout an aircraft's cockpit. Its displays can be used in conjunction with its own engine and fuel data equipment or that of other manufacturers. Its products have been installed on C-130H, DC-9, DC-10, P-3, F-16 and A-10 aircraft.

The Company competes with Honeywell International Inc., Rockwell Collins, Inc., Thales, and GE Aviation, Honeywell, Rockwell Collins, Inc., L-3 Communications and GE Aviation

More Business Descriptions

Flight Avionics Products Designer, Mfr & Sales

Establishments primarily engaged in providing computer programming services on a contract or fee basis. Establishments of this industry perform a variety of additional services, such as computer software design and analysis; modifications of custom software; and training in the use of custom software.

Innovative Solutions and Support, Inc. (IS&S) is engaged in designing, manufacturing, and marketing of flat panel display systems, flight information computers, air data equipment, engine and fuel measurement computers, and advanced monitoring systems. It also provides Reduced Vertical Separation Minimum (RVSM) solutions, and 3 E-charts to measure and display air data.The company operates in one principal business segment, which designs, produces and sells flight information computers, flat panel displays and advanced monitoring systems to the DoD, government agencies, commercial air transport carriers and corporate/general aviation markets.It has developed a flat panel display system that can replace conventional analog and digital displays presently used in a cockpit and can display additional information that is not now commonly displayed in the cockpit. Its flat panel display systems are available in different sizes and are designed with a built-in Symbol Generator, providing superior performance with a high resolution XGA multi-color LCD flat panel display. During 2010, the company generated 68% of its total revenue from sales of Flat Panel Display Systems.Its air data products include air data display unit (ADDU), integrated air data display unit (IADDU), installation configuration module (ICM), air data module (ADM), air data sensor (ADS), analog interface init (AIU), alerter, altimeter, central air data computer (CADC), digital air data computer (DADC), mach airspeed indicator (MASI), and solid state barometric altimeter. The company's air data products calculate and display various measures like aircraft speed, altitude and rate of ascent and descent. During fiscal year 2010, the company generated 32% of its total revenue from sales of air data systems and related products.The companyâ€™s indicator products include fuel quantity indicator/totalizer (FQI), shaft horse power (SHP), and turbine inlet temperature indicator (TITI). Its SHP provides indication of shaft horsepower at a constant 13,820 RPM. Its TITI provides an updated form, fit and function replacement for its earlier P-3 TIT Indicator, which was made by Lockheed.The company provides advanced integrated primary flight and navigation display system to commercial air transport market. This sunlight readable display system provides an exceptional cross-cockpit viewing angle. Its major commercial air transport products include B757/B767 Cockpit/IP, B737 Cockpit/IP, and B747 Engine Instrument Display System (EIDS). Its military platforms and systems include C-130 Cockpit/IP, C-130 EIDS, Tristar L1011 Cockpit/IP, and (K) DC-10 Cockpit/IP. The companyâ€™s business and aviation products include Cessna Citation AdViz Flat Panel Display, Dassault Falcon 2000/2000EX, Eclipse 500 Avio NG, Pilatus PC-12 (a Primary Flight and Multi-Function Flat Panel Displays), vantage Cockpit/IP for PC-12, and Vantage Cockpit/IP Flat Panel Display System.The company services customers in commercial air transport carriers, defense contractors, Department of Defense (DoD), original equipment manufacturers (OEMs), government agencies, and corporate/general aviation markets. Some of its major customers include ABX Air, American Airlines, The Boeing Company, Bombardier Aerospace, Cessna Aircraft Corporation, Eclipse Aerospace, Inc., Federal Express Corporation, L-3 Communication, Lockheed Martin Corporation, Raytheon, Rockwell Collins, Marshalls of Cambridge, United Kingdom, and the Department of National Defense, Canada, among others.In July 2011, IS&S received a contract from the National Nuclear Security Administration worth $5m for the complete Systems Integration and Cockpit Avionics upgrade of their B737-400 classic aircraft. In June 2011, the company has been awarded a contract by Boeing for the Aerial Refueling Operator Control and Display Units for the KC-46A Tanker.

Innovative Solutions and Support, Inc. (IS&S) is a US-based leading systems integrator, engaged in designing, manufacturing, and marketing of air data equipment, flight information computers, and flat panel display systems to commercial air transport, military, and business aviation markets. The company also provides engine and fuel measurement and control computers, and advanced monitoring systems. The company offers its products and solutions to commercial air transport carriers, defense contractors, Department of Defense (DoD), original equipment manufacturers (OEMs), government agencies, and corporate/general aviation markets. It principally operates in the US. IS&S headquartered in Pennsylvania, the US.The company reported revenues of (U.S. Dollars) USD 25.74 million during the fiscal year ended September 2011, an increase of 1.90% over 2010. The operating profit of the company was USD 0.61 million during the fiscal year 2011, an increase of 50.87% over 2010. The net profit of the company was USD 0.72 million during the fiscal year 2011, a decrease of 4.14% from 2010.

Innovative Solutions & Support is a diversified international avionics supplier to civil, military, business and commercial markets and operators. IS&S manufactures a range of reduced vertical separation minimums-compliant air data systems, flat panel display systems, fuel quantity, and flow measurement and engine hydraulic displays. The company specializes in retrofit systems that enhance performance and reliability. IS&S air data systems offer a range of instruments that are RVSM-compliant, such as altimeters, mach air speed indicators, digital air data computers, air data display units, and alerters and analog interface units. Its engine instruments include the engine instrument display system and P-3 engine indicators. The company's integrated flat panel display systems have been designed for various applications, such as primary flight and navigation display, display of mission data, multifunction display and display of the engine instrument parameters. Innovative Solutions & Support is ISO 9001:2000 and AS9100 revision B certified and is headquartered in Exton, Penn.

Manufacturer and developer of avionics equipment including flat panel displays, flight information computers, and monitoring systems. Products are sold to the aerospace and defense industries.

Product Codes

Product Code	Product Description
COM-SP-IA	Aerospace computer systems
PHO-DI-A	Flat panel displays
TRN-AS-ED	Avionics displays
TRN-AS-F	Aircraft fuel systems and equipment
TRN-AS-P	Cockpit instrumentation

Financial Data

Financials in:	USD(mil)

Revenue:	25.7
Net Income:	0.7
Assets:	58.3
Long Term Debt:	0.0
Total Liabilities:	4.0
Working Capital:	0.1

Date of Financial Data:	30-Sep-2011

1 Year Growth

1.9%

-4.2%

1.2%

Market Data

Quote Symbol:	ISSC
Exchange:	NASDAQ
Currency:	USD
Stock Price:	3.3
Stock Price Date:	06-29-2012
52 Week Price Change %:	-39.7
Market Value (mil):	54,888.1

SEDOL:	2616397
ISIN:	US45769N1054

Equity and Dept Distribution:
Common Stock $.001 Par, 12/10, 75M auth., 18,252,925 issd. less treas shs 1,482,510 @ $19.3M. Insiders stakeholders control 23.66%. PO 8/4/00, 3M shares @ $11 byFriedman Billings Ramsey. *All Preferred stock converted into Common upon completion of IPO. 7/05, 3-for-2 stock split.

Key Corporate Relationships

Auditor:	Deloitte & Touche LLP

Auditor:	Deloitte & Touche LLP

Additional information

ABI Number:

529332975

Innovative Solutions & Support Inc

Strengths/Weaknesses (SWOT)

Helpful
to achieving the objective

Harmful
to achieving the objective

Internal Origin
(attributes of the organization)

Strengths

· Strong Research & Development

· Comprehensive Offerings

· Strong Liquidity

Weaknesses

· Decline in Profitability

· Legal proceedings

· Over-dependence on Limited Customers

External Origin
(attributes of the environment)

Opportunities

· Long-term Outlook for Aerospace Industry

· Strong Order Backlog

· Escalating Military Expenditure in the US

Threats

· Rapid Technological Changes

· Government Regulations

· Intense Competition

Overview

Innovative Solutions and Support, Inc. (IS&S) designs, manufactures, and markets air data equipment, flight information computers, and flat panel display systems to aviation industry. Its products and systems measure and display important flight information, including data relative to aircraft separation, airspeed, altitude as well as engine and fuel data measurements. The companyâ€™s wide portfolio of products gives it a broad customer base. However, intense competition in the aerospace and defense industry could affect the profitability of the company.

Strengths

Strong Research & Development

IS&S maintains a strong focus on its research and development (R&D) activities, which helps it in maintaining its competitive position in the industry. It developed a flat panel display system, which can replace conventional analog and digital displays currently used in a cockpit. The flat panel display system reflects the companyâ€™s ability to manufacture products by selective application of non-avionic technology. During fiscal year 2010, the company invested $5.2m on its R&D activities. As of September 30, 2010, IS&S holds 22 US patents and two pending US patent applications. Besides, the company also holds 27 international patents and 24 pending international patent applications. These patents and patent applications cover the technologies related to air data measurement systems, flat panel display systems, and its COCKPIT/IP solutions. A strong focus on R&D helps the company in responding to the ever changing needs of the market promptly.

Comprehensive Offerings

IS&S offers a wide portfolio of products, which mitigates its business risk. The products offered by the company principally fall into two categories, namely, flat panel display systems; and air data systems and components. During the fiscal year ended 2010, the flat panel display systems manufactured by the company contributed 68% of its total revenue and 32% from air data systems and components. The air data systems and components provided by the company include digital air data computers, integrated air data computers and display units, altitude displays, airspeed displays, and altitude alerters. The companyâ€™s products cater to the Department of Defense (DoD), government agencies, defense contractors, commercial air transport carriers, original equipment manufacturers (OEMs), and corporate/general aviation markets.

Strong Liquidity

The liquidity position of IS&S remained strong during fiscal year 2010. The strong liquidity of the company supports expansion and provides business stability to the company. Its current ratio was 15.05 times in the fiscal year ended 2010, as compared to 11.71 times in 2009. The strong liquidity position of the company can be attributed to an increase in the cash and cash equivalents of the company, which increased from $35.57m in 2009 to $40.92m in the fiscal year ended 2010. In addition, the total current liabilities of the company declined from $4.17m in 2009 to $3.30m in 2010 while the total current assets of the company increased from $48.79m in 2009 to $49.61m in 2010. Besides, the companyâ€™s quick and cash ratios also improved from 11.71 times and 8.53 times in 2009 to 13.64 times and 12.41 times, respectively, in the fiscal year ended 2010.

Weaknesses

Decline in Profitability

The declining performance in the companyâ€™s top line resulted in a decrease in its operating income and margin levels. Its operating margin was 1.59% for the fiscal year ended 2010 as against 13.27% in 2009. This represents a decline of 1168 bps in the companyâ€™s operating margin over 2009, which shows management's low focus on profitability. Its compound annual growth rate (CAGR) for revenue was 10.86% during 2006-2010. IS&S reported revenue of $25.26m during the fiscal year ended September 2010, representing a decrease of 31.24% over revenue in 2009. The operating profit of the company was down by 91.74% and plunged to $0.40m during the fiscal year ended 2010. In addition, its net profit was $0.75m in 2010, a decrease of 85.07% over that in 2009.

Legal proceedings

IS&S is involved in some legal proceedings, which could have a negative impact on its credibility. In November 2010, Jeoffrey L. Burtch, the Chapter 7 Trustee for AE Liquidation, Inc. filed avoidance actions against the company. The petition has been filed on grounds of avoidance of seven payments amounting to $321,095 as allegedly preferential transfers paid to the company during the 90 days before the filing of the bankruptcy petition of Eclipse Aviation Corporation in November 2008. In January 2007, IS&S filed a case against Strathman Associates, accusing it of improper use of IS&S trade secret and proprietary information for developing the J2/Kollsman Air Data Computer. Legal proceedings, irrespective of their outcome, divert the time and attention of the management to unproductive issues and besides putting unnecessary burden on the finances of the company.

Over-dependence on Limited Customers

IS&S depends heavily on limited customers for a significant portion of its net sales, which makes it vulnerable to associated market risks of being over dependent on concentrated revenue channels. During the fiscal year ended 2010, the company generated 48% of its revenue from five customers. In fiscal 2010, two of its largest customers, Lockheed Martin and FedEx, accounted for 11% and 10% of its net sales, respectively. The companyâ€™s financial performance could fluctuate from quarter to quarter depending upon the timing of its customerâ€™s purchases. The loss of any of its major customers could negatively impact its business, as it depends largely upon a relatively small number of customers for a significant percentage of its net sales.

Opportunities

Long-term Outlook for Aerospace Industry

The global aerospace industry is expected to grow significantly. The global commercial and business aircraft market is expected to have a huge potential over next 10 years. Also, global business aircraft fleet is expected to increase at a compound annual growth rate (CAGR) of over 6% during 2009-2018 to reach 23,800 units. Global business aircraft order intake is expected to reach 1,400 units per year by 2013. According to the latest reports, it is estimated that the North American fleet and European fleet are expected to grow at an average annual rate of over 4% and 5% till 2024, respectively. The company is a leading provider of air data products and flat panel display systems for the aircraft. The company, with significant operations in the aerospace market, is expected to benefit from the growing market.

Strong Order Backlog

The company could benefit from its strong order backlog that provides a future source of revenue. IS&Sâ€™ order backlog as of September 2010 totaled $32.3m. In July 2011, IS&S received a contract from the National Nuclear Security Administration worth $5m for the complete Systems Integration and Cockpit Avionics upgrade of their B737-400 classic aircraft. In June 2011, the company has been awarded a contract by Boeing for the Aerial Refueling Operator Control and Display Units for the KC-46A Tanker. In October, 2009, the company was selected by BAE Systems for integration and installation of its Engine Instrument Display System (EIDS) on the US Navy C-130T fleet. Integration and installation, which was scheduled to begin in early 2010, would be completed within the next two years. In April, 2009, IS&S signed an agreement with Rheinland Air Service (RAS), under which RAS will distribute and install the company's Cockpit/IP Flat Panel Display System (FPDS) for PC-12 aircraft in Europe. This agreement will expand the companyâ€™s operations to the European market besides widening its customer base. In addition, the company also won some important contracts, which included a contract by Dassault Falcon for providing cockpit display retrofit contract for Falcon 2000 and 2000EX aircraft; and an order valued at over $4 million to provide B757 Cockpit/IP Flat Panel Display System. Such new as well as repeat orders improve the brand image and enhance the revenue of the company.

Escalating Military Expenditure in the US

Increased military expenditure in the US offers growth potential for IS&S as it supplies products to the defense and military customers. The US defense spending has gone up sharply since 1998 ($361.5 billion). This increase in the US defense budget is attributed to War on Terror, among others. The annual defense spending increased to $696.5 billion in 2008, which is 92.7% more than the 1998 level. The total DoD budget allocation came down slightly in 2009, when the military expenditure was $661 billion. But it is likely to increase to around $700 billion in 2011. For fiscal year 2010, the Obama administration allocated an average of $545 billion per year to the DoD's base budget for 2011-2017. It also set aside a sum of $50 billion per year for military operations, recognizing that actual war costs will vary. In addition to this, Pentagon is expected to request for around $163 billion for contingency operations in 2011. The estimated total world military expenditure in 2009 was $1,531 billion (at current prices), which represents an increase of 5.9 % (in real terms) over 2008. The significant increase in defense spending by the government offers potential for growth.

Threats

Rapid Technological Changes

The aviation market is subject to rapid changes, and, to compete effectively, the company must continually introduce new products that achieve market acceptance. The industry is characterized by fast technological changes, evolving industry standards, changing market conditions and frequent new product and service introductions and enhancements. The introduction of products using new technologies or the adoption of new industry standards can make the existing products or products under development obsolete or unmarketable. In order to remain competitive and in order to increase its sales, the company needs to adapt to the rapidly changing business environment.

Government Regulations

The companyâ€™s operations are subjected to a number of government laws and regulations. The company could be held liable, if it does not comply with these government regulations. Its products are subjected to direct regulations by the Federal Aviation Administration (FFA), European Aviation Safety Administration (EASA), and other similar international regulatory bodies. Its products must be approved by these bodies, before they are used in aircraft. In addition, although, FFA approves its products, European Aviation Safety Administration (EASA), and other related bodies should certify its products, which are to be installed outside the US. Any delay in receiving such certification for newly developed products or any loss of certification for existing products could affect its sales.

Intense Competition

IS&S operates in a highly competitive aerospace and defense industry. The market for flat panel display systems, and air data products is highly competitive. IS&S competes with a wide range of global companies, which might have greater sales, assets and financial resources than the company. The increase in competition may result in technological up-gradations, price reductions, fewer customer orders, gross margin reduction, and loss of market share. The main competitors of the company in the air data systems and related products category include Honeywell International Inc., Rockwell Collins, Inc., Thales, and GE Aviation. With respect to its flat panel displays, IS&S competes with Honeywell, Rockwell Collins, Inc., L-3 Communications and GE Aviation. This highly competitive market could have an adverse impact on the companyâ€™s profitability, financial position and cash flow, if the company fails to attract new clients and customers.

Location
720 Pennsylvania Dr Exton, PA 19341-1129 United States

County:	Chester
MSA:	Philadelphia, PA

Phone:	610-646-9800
Fax:	610-646-0149
URL:	http://innovative-ss.com

ABI^©:	529332975

Annual Sales:	$25,738,000 (USD)
Employees:	117

Facility Size(ft²):	2,500 - 9,999
Facility Own/Lease:	Lease

Business Type:	Public
Location Type:	Headquarter

Ticker:	ISSC
Exchange:	NASDAQ



Primary Line of Business:
SIC:	7371-03 - Computers-System Designers & Consultants
NAICS:	541511 - Custom Computer Programming Svcs
Secondary Lines of Business:
SICs:	4729-01 - Airline Ticket Agencies
	5049-10 - Aircraft Instruments (Whls)
	5088-17 - Aircraft Avionics-Sales & Service (Whls)
	9999-66 - Federal Government Contractors
NAICS:	423490 - Other Professional Equip Merchant Whols
	561599 - All Other Travel Arrangement Svcs
	423860 - Other Transportation Goods Merchant Whols

Corporate Structure News

Innovative Solutions & Support Inc Total Corporate Family Members: 6

Company Name	Company Type	Location	Country	Industry	Sales (USD mil)	Employees
Innovative Solutions & Support Inc	Parent	Exton, PA	United States	Software and Programming	25.7	117
IS&S Holdings, Inc.	Subsidiary	Exton, PA	United States	Aerospace and Defense		175
Innovative Solutions and Support, LLC	Subsidiary	Exton, PA	United States	Aerospace and Defense		100
IS&S Aviation, Inc.	Subsidiary	Exton, PA	United States	Aerospace and Defense		100
IS&S Delaware, Inc.	Subsidiary	Exton, PA	United States	Aerospace and Defense		100
IS&S Aviation, LLC	Subsidiary	Exton, PA	United States	Aerospace and Defense

Innovative Solutions & Support Inc

Competitors Report

CompanyName	Location	Employees	Ownership
GE Aviation Systems LLC	Cincinnati, Ohio, United States	10,000	Private
General Electric Company	Fairfield, Connecticut, United States	301,000	Public
Honeywell International Inc.	Morristown, New Jersey, United States	132,000	Public
L-3 Communications Corp	New York, New York, United States	61,000	Private
L-3 Communications Holdings, Inc.	New York, New York, United States	61,000	Public
Rockwell Collins, Inc.	Cedar Rapids, Iowa, United States	20,000	Public
Thales Communications, Inc.	Clarksburg, Maryland, United States	350	Private
Thales SA	Neuilly-Sur-Seine, France	68,325	Public

Executives Report

Board of Directors

Name

Title

Function

Geoffrey S. M. Hedrick

Chairman of the Board, Chief Executive Officer

Chairman

Biography:

Mr. Geoffrey S. M. Hedrick is Chairman of the Board, Chief Executive Officer of Innovative Solutions & Support Inc. He was the Chief Executive Officer from the time he founded the Company in February 1988 through June 4, 2007 and was reappointed as Chief Executive Officer on September 8, 2008. He has also been Chairman of the Board since 1997. Prior to founding IS&S, Mr. Hedrick served as President and Chief Executive Officer of Smiths Industries North American Aerospace Companies. He also founded Harowe Systems, Inc. in 1971, which was subsequently acquired by Smiths Industries. Mr. Hedrick has over 35 years of experience in the avionics industry, and he holds a number of patents in the electronics, optoelectric, electromagnetic, aerospace and contamination-control fields.

Age: 69

Compensation/Salary:$400,000

Compensation Currency: USD

Glen R. Bressner

Independent Vice Chairman of the Board

Vice-Chairman

Biography:

Mr. Glen R. Bressner serves as an Independent Vice Chairman of the Board of Innovative Solutions & Support Inc., since 1999. He has been a Managing partner of Mid-Atlantic Venture Funds and Originate Ventures, venture capital firms, since 1997. Mr. Bressner is also a partner of NEPA Venture Fund, L.P., a venture capital firm, a position he has held since 1985. From 1996 to 1997, Mr. Bressner served as the Chairman of the Board of Directors of the Greater Philadelphia Venture Group. Mr. Bressner holds a Bachelor of Science degree in Business Administration from Boston University and a Masters of Business Administration degree from Babson College.

Age: 51

Education:

Babson College, MBA
Boston University, BS (Business Administration)

Winston J. Churchill

Independent Director

Director/Board Member

Biography:

Mr. Winston J. Churchill, Jr., is an Independent Director of Innovative Solutions & Support Inc. He has been managing general partner of SCP Partners since he founded it in 1996, and has over 25 years experience in private equity investing. Previously, he had formed Churchill Investment Partners, Inc. in 1989 and CIP Capital, L.P., another venture capital fund, in 1990. Prior to that, he was a managing partner of a private investment firm that specialized in leveraged buyouts on behalf of Bessemer Securities Corporation. From 1967 to 1983, he practiced law at the Philadelphia firm of Saul, Ewing, Remick and Saul and served as Chairman of its Banking and Financial Institutions Department, Chairman of the Finance Committee and a member of its Executive Committee. He is a Director of Amkor Technology, Inc., Rodman & Renshaw Capital Group, Inc. and Griffin Land and Nurseries, Inc., as well as a number of private companies. From 1989 to 1993, he served as Chairman of the Finance Committee of the Pennsylvania Public School Employees' Retirement System. He is currently a trustee of Fordham University, Georgetown University, Immaculata University, American Friends of New College Oxford, England, The Gesu School and Young Scholars Charter School. He was awarded a BS in Physics, summa cum laude, from Fordham University followed by a M.A. in Economics from Oxford University where he studied as a Rhodes Scholar, and a J.D. degree from Yale Law School.

Age: 71

Education:

Yale University, JD
University of Oxford, MA (Economics)
Fordham University, BS (Physics)

Ivan M Marks

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Director

Director/Board Member

Robert A. Mionis

Independent Director

Director/Board Member

Biography:

Mr. Robert A. Mionis has been appointed as an Independent Director of Innovative Solutions & Support, Inc. Mr. Mionis has been the President and Chief Executive Officer of Standard Aero, a Dubai Aerospace Enterprise (DAE) subsidiary, since September 2008. From September 2006 to September 2008, Mr. Mionis served as President and CEO of DAE Engineering and Manufacturing. From November 2002 to September 2006, Mr. Mionis served as Vice President of Integrated Supply Chain at Honeywell Aerospace, with responsibilities including manufacturing, quality, repair, and overhaul and supply chain management. Before joining Honeywell, Mr. Mionis was a Corporate Officer and Senior Vice President and General Manager for Global Operations for Axcelis Technologies, a semiconductor equipment manufacturer. Mr. Mionis began his career with General Electric in its Manufacturing Management program, advancing to positions of increasing responsibility among businesses including GE Aerospace and GE Engines. Following GE, Mr. Mionis served on several boards, including the Board of Directors of the General Aviation Manufacturers Association, the Board of Advisors for the University of San Diego Supply Chain Institute and the University of Massachusetts College of Engineering Advisory Board. Mr. Mionis is a graduate of the University of Massachusetts with a degree in Electrical Engineering.

Age: 49

Education:

University of Massachusetts (Electrical Engineering)

Robert E. Mittelstaedt

Independent Director

Director/Board Member

Biography:

Mr. Robert E. Mittelstaedt, Jr., is an Independent Director of Innovative Solutions & Support Inc. Mr. Mittelstaedt served as the Non-Executive Chairman of the Board of Directors of Innovative Solutions & Support Inc. from 1989 to 1997. Since July 1, 2004 Mr. Mittelstaedt has been Dean of the W.P. Carey School of Business at Arizona State University. Prior to that, Mr. Mittelstaedt was Vice Dean of The Wharton School of the University of Pennsylvania since 1989. Mr. Mittelstaedt also serves on the Board of Directors of Laboratory Corporation of America Holdings, Inc. and is a member of the Board of Directors of W.P. Carey & Co. LLC. Mr. Mittelstaedt holds a Bachelor of Science degree in Mechanical Engineering from Tulane University and a Masters of Business Administration degree from The Wharton School of the University of Pennsylvania.

Age: 68

Education:

The Wharton School of the University of Pennsylvania, MBA
Tulane University, BS (Mechanical Engineering)

Robert H. Rau

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Independent Director

Director/Board Member

Biography:

Mr. Robert H. Rau serves as an Independent Director of Innovative Solutions & Support Inc., since 2001. He retired as President of the Aerostructures Group of The Goodrich Company on December 31, 1998 . Prior to its merger with Goodrich, Mr. Rau was President and Chief Executive Officer of Rohr, Inc. from 1993 to 1997. Before joining Rohr, he was an Executive Vice President of Parker Hannifin Corporation and President of its Aerospace Sector. In addition, Mr. Rau is a past member of the Board of Governors of the Aerospace Industries Association, a past Chairman of the General Aviation Manufacturers Association, and Chairman of the International Advisory Panel of Singapore Aerospace. Mr. Rau received a Bachelor of Arts degree in Business Administration from Whittier College in 1962.

Age: 75

Education:

Whittier College, BA (Business Administration)

Executives

Name

Title

Function

Geoffrey S. M. Hedrick

Chairman of the Board, Chief Executive Officer

Chief Executive Officer

Biography:

Age: 69

Compensation/Salary:$400,000

Compensation Currency: USD

Shahram Askarpour

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President

Biography:

Dr. Shahram Askarpour has been appointed as President of Innovative Solutions and Support, Inc., effective April 2, 2012. Dr. Askarpour joined the Company in 2003 and has been the Vice President of Engineering for the past seven years. Prior to joining the Company, Dr. Askarpour held managerial and engineering positions with companies such as Smiths Aerospace (a division of Smiths Group PLC), Instrumentation Technology and Marconi Avionics. He holds of a number of key patents in the aviation field.

Education:

Brunel University, MS (Systems Engineering)
Brunel University, PhD (Electrical Engineering)
Middlesex University, BS (Electrical Engineering)

Robert M Hyland

Vice President-Operations

Operations Executive

Education:

Pratt Institute of Technology, BS (Industrial Engineering)
Xavier University, MBA
Xavier University.Back, MBA

Charlotte Schold

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Operations

Operations Executive

Brian Urbanski

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Vice President-Quality

Operations Executive

Biography:

Brian Urbanski is vice president of quality. As a certified master black belt, Urbanski manages all Six Sigma projects. Prior to joining IS&S, he was site master black belt for raytheon Corporation. Previous to his stint at Raytheon, Urbanski was project engineer and technical excellence black belt for Allied Signal.

Sam Yeager

Network, Sharepoint Admin

Administration Executive

Ronald C. Albrecht

Chief Financial Officer

Finance Executive

Biography:

Mr. Ronald C. Albrecht is a Chief Financial Officer of Innovative Solutions and Support, Inc., since August 2010. Prior to joining the Company, Mr. Albrecht served in a number of executive positions, both operational and financial, with Smiths Aerospace (UK) and later GE Aviation Systems (GEAS) following the GEAS purchase of Smiths Aerospace in 2007. Recently he has served as Vice President and General Manager of Smiths and later GEAS' Electro Mechanical Business. Prior to his operational roles, he served as Chief Financial Officer of Smiths Aerospace, based in London and has substantial mergers & acquisition and strategic planning experience. Mr. Albrecht received a B.A. in Government and Economics from Dartmouth College and an MBA in Finance from Stanford University. He is a Certified Public Accountant (California/Inactive).

Age: 66

Education:

Stanford University, MBA (Finance)
Dartmouth College, BA (Economics and Government)

Compensation/Salary:$258,000

Compensation Currency: USD

Anita Broady

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Director-Human Resources

Human Resources Executive

Chad Hammerly

Manager-Customer Service

Sales Executive

Farhad Daghigh

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Director-Military Marketing

Marketing Executive

J Patterson

Marketing

Marketing Executive

Laura Vasko

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Marketing

Marketing Executive

George Beard

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Information Technology

Information Executive

Brian Woodward

Software Engineer

Engineering/Technical Executive

Ross Cairns

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Vice President-Business Development

Business Development Executive

Phil Warmuth

Master Production Scheduler and Materials Supervisor

Manufacturing Executive

Tom Campana

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Facilities Manager

Facilities Executive

Joseph Odenthal

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Manager Military System Engineering

Other

Significant Developments

Innovative Solutions and Support Inc Comments On FY 2012 Revenue Guidance

Apr 25, 2012

Innovative Solutions and Support Inc announced that for fiscal 2012, it expects revenues to be roughly comparable to fiscal 2011. However, given the risks in the present economic environment, revenue for fiscal 2012 may end up being less than fiscal 2011, which could also result in negative profitability for fiscal 2012. The Company's new product and expanded platform initiatives are expected to increase the proportion of revenues and margins from EMD sales in fiscal 2012. The Company reported revenue of $25.7 million in fiscal 2011.

Innovative Solutions and Support Inc Announces Appointment Of Shahram Askarpour As President

Apr 02, 2012

Innovative Solutions and Support Inc announced that Shahram Askarpour has been appointed President of Innovative Solutions and Support, Inc., replacing Roman Ptakowski, who is retiring after nine years as President. For the seven years prior to his promotion, Dr. Askarpour served as Vice President of Engineering for the Company. Mr. Ptakowski will continue to serve the Company as a consultant.

Innovative Solutions and Support Inc Authorizes Stock Repurchase Program

Feb 03, 2012

Innovative Solutions and Support Inc announced that the Board of Directors has approved a stock repurchase program pursuant to which the Company may repurchase up to 1 million shares of its common stock. The program will remain in effect until February 10, 2013, unless extended by the Board of Directors. This program replaces the Company's previous stock repurchase program, which expires as of February 10, 2012.

Innovative Solutions & Support Issues Reaffirms FY 2012 Revenue Guidance

Jan 25, 2012

Innovative Solutions & Support announced that for fiscal 2012, it continues to expect revenues to increase modestly relative to fiscal 2011, notwithstanding potential disruptions from the current uncertain market conditions. The Company reported revenue of $25.7 million in fiscal 2011.

Innovative Solutions & Support Issues FY 2012 Revenue Guidance

Dec 07, 2011

Innovative Solutions & Support announced that for fiscal 2012, it expects revenues to increase modestly relative to fiscal 2011, notwithstanding potential disruptions that may arise from current market conditions. The Company reported revenue of $25.7 million for fiscal 2011.

Eclipse Aerospace Selects Innovative Solutions & Support's Vantage Premier Avionics For Eclipse 550 Production Model

Oct 19, 2011

Innovative Solutions & Support announced that it has been selected by Eclipse Aerospace to provide an advanced avionics suite for the production model Eclipse 550. Under this agreement, the Company will be the supplier of Primary Flight and Multi-Function Displays as well as the Integrated Flight Management (IFMS) and Electronic Flight Bag System. The advanced avionics suite will include dual flight management systems, auto throttles, synthetic vision and enhanced vision (FLIR). Innovative Solutions and Support expects this multi-year agreement to generate revenues in excess of $25 million in addition to the revenues from the ongoing retrofit upgrades of the existing Eclipse fleet of some 260 aircraft.

Innovative Solutions & Support Receives Order From National Nuclear Security Administration For System Integration And Performance Upgrade Of B737 Classic Aircraft

Jul 27, 2011

National Nuclear Security Administration announced that it has placed an order valued at more than $5 million with Innovative Solutions & Support, Inc. for the complete Systems Integration and Cockpit Avionics upgrade of their B737-400 classic aircraft. This initial order for retrofit of two B737-400 aircraft will provide NNSA full CNS/ATM capabilities and similar efficiency and performance to the NG (Next Generation) at a fraction of the cost.

Innovative Solutions & Support Comments On Q4, FY 2011 Earnings Guidance

Jul 27, 2011

Innovative Solutions & Support announced that it expect the fourth quarter of 2011 to be profitable and will result in a second consecutive full year (fiscal 2011) of profitability. According to I/B/E/S Estimates, analysts on an average were expecting the Company to report EPS of $0.020 for the fourth quarter of 2011; EPS of $0.100 for fiscal 2011.

Annual Income Statement

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Net Sales	25.7	25.3	36.7	30.5	18.3
Revenue	25.7	25.3	36.7	30.5	18.3
Total Revenue	25.7	25.3	36.7	30.5	18.3

Cost of Revenue	11.9	11.5	17.9	20.6	14.2
Cost of Revenue, Total	11.9	11.5	17.9	20.6	14.2
Gross Profit	13.8	13.7	18.8	10.0	4.2

Selling/General/Administrative Expense	7.7	8.1	8.6	22.3	15.8
Total Selling/General/Administrative Expenses	7.7	8.1	8.6	22.3	15.8
Research & Development	5.5	5.2	5.3	10.3	5.2
Impairment-Assets Held for Use	-	-	0.0	2.5	0.0
Unusual Expense (Income)	-	-	0.0	2.5	0.0
Total Operating Expense	25.1	24.9	31.9	55.6	35.2

Operating Income	0.6	0.4	4.9	-25.1	-16.8

Interest Expense - Non-Operating	0.0	0.0	-0.1	-0.2	-0.2
Interest Expense, Net Non-Operating	0.0	0.0	-0.1	-0.2	-0.2
Interest Income - Non-Operating	0.1	0.2	0.4	1.6	3.1
Interest/Investment Income - Non-Operating	0.1	0.2	0.4	1.6	3.1
Interest Income (Expense) - Net Non-Operating Total	0.1	0.2	0.3	1.4	2.9
Other Non-Operating Income (Expense)	0.2	0.1	0.1	17.3	0.0
Other, Net	0.2	0.1	0.1	17.3	0.0
Income Before Tax	0.9	0.6	5.2	-6.4	-13.9

Total Income Tax	0.2	-0.1	0.2	1.5	-5.1
Income After Tax	0.7	0.7	5.0	-7.9	-8.8

Net Income Before Extraord Items	0.7	0.7	5.0	-7.9	-8.8
Net Income	0.7	0.7	5.0	-7.9	-8.8

Income Available to Common Excl Extraord Items	0.7	0.7	5.0	-7.9	-8.8

Income Available to Common Incl Extraord Items	0.7	0.7	5.0	-7.9	-8.8

Basic/Primary Weighted Average Shares	16.8	16.8	16.7	16.9	16.9
Basic EPS Excl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Basic/Primary EPS Incl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Dilution Adjustment	-	-	-	0.0	0.0
Diluted Net Income	0.7	0.7	5.0	-7.9	-8.8
Diluted Weighted Average Shares	16.8	16.8	16.8	16.9	16.9
Diluted EPS Excl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Diluted EPS Incl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Dividends per Share - Common Stock Primary Issue	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	16.7	0.0
Interest Expense, Supplemental	0.0	0.0	0.1	0.2	0.2
Depreciation, Supplemental	0.5	0.8	0.9	1.0	0.9
Total Special Items	-	-	0.0	2.5	0.0
Normalized Income Before Tax	0.9	0.6	5.2	-3.9	-13.9

Effect of Special Items on Income Taxes	-	-	0.0	0.9	0.0
Inc Tax Ex Impact of Sp Items	0.2	-0.1	0.2	2.4	-5.1
Normalized Income After Tax	0.7	0.7	5.0	-6.3	-8.8

Normalized Inc. Avail to Com.	0.7	0.7	5.0	-6.3	-8.8

Basic Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Diluted Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Amort of Intangibles, Supplemental	0.1	0.1	0.2	0.1	0.1
Rental Expenses	0.0	0.0	0.0	0.2	0.1
Research & Development Exp, Supplemental	5.5	5.2	5.3	10.3	5.2
Normalized EBIT	0.6	0.4	4.9	-22.6	-16.8
Normalized EBITDA	1.2	1.3	6.0	-21.5	-15.8
Current Tax - Domestic	0.2	0.0	0.1	0.2	-4.5
Current Tax - Local	0.0	-0.1	0.0	0.0	0.0
Current Tax - Total	0.2	-0.1	0.1	0.2	-4.5
Deferred Tax - Domestic	0.0	0.0	0.0	0.9	-0.6
Deferred Tax - Local	0.0	0.0	0.1	0.4	0.0
Deferred Tax - Total	0.0	0.0	0.1	1.3	-0.6
Income Tax - Total	0.2	-0.1	0.2	1.5	-5.1
Defined Contribution Expense - Domestic	-	0.2	0.2	0.2	0.0
Total Pension Expense	-	0.2	0.2	0.2	0.0

Annual Balance Sheet

Financials in: USD (mil)

Financial Glossary

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Cash & Equivalents	42.6	40.9	35.6	35.0	49.2
Cash and Short Term Investments	42.6	40.9	35.6	35.0	49.2
Accounts Receivable - Trade, Gross	3.3	2.7	6.4	4.2	6.2
Provision for Doubtful Accounts	-0.2	-0.2	-0.2	0.0	0.0
Trade Accounts Receivable - Net	3.1	2.5	6.2	4.2	6.2
Other Receivables	0.4	0.4	0.5	-	-
Total Receivables, Net	3.5	3.0	6.7	4.2	6.2
Inventories - Finished Goods	0.8	1.7	1.5	1.6	0.7
Inventories - Work In Progress	0.2	0.2	0.3	3.0	2.2
Inventories - Raw Materials	2.5	2.7	3.5	4.7	6.4
Total Inventory	3.5	4.7	5.3	9.4	9.4
Prepaid Expenses	0.3	0.3	0.3	1.4	6.2
Deferred Income Tax - Current Asset	0.4	0.5	0.5	0.4	0.9
Other Current Assets	0.2	0.3	0.4	-	-
Other Current Assets, Total	0.7	0.8	0.9	0.4	0.9
Total Current Assets	50.6	49.6	48.8	50.4	71.9

Land/Improvements	1.0	1.0	1.0	1.0	1.0
Machinery/Equipment	16.0	15.8	15.7	15.6	15.1
Property/Plant/Equipment - Gross	17.0	16.8	16.8	16.6	16.1
Accumulated Depreciation	-9.6	-9.0	-8.4	-7.7	-6.7
Property/Plant/Equipment - Net	7.5	7.8	8.3	9.0	9.4
Intangibles - Gross	0.6	0.5	0.5	0.4	2.9
Accumulated Intangible Amortization	-0.4	-0.3	-0.2	-0.1	0.0
Intangibles, Net	0.2	0.2	0.3	0.3	2.8
Deferred Income Tax - Long Term Asset	-	-	-	0.0	0.3
Other Long Term Assets	-	-	0.1	0.2	0.2
Other Long Term Assets, Total	-	-	0.1	0.2	0.5
Total Assets	58.3	57.6	57.5	59.9	84.6

Accounts Payable	0.4	0.5	1.2	2.3	4.1
Accrued Expenses	2.6	2.6	2.7	4.3	3.7
Notes Payable/Short Term Debt	0.0	0.0	0.0	0.0	0.0
Current Portion - Long Term Debt/Capital Leases	0.0	0.0	0.0	0.0	0.0
Customer Advances	0.2	0.2	0.2	0.5	0.7
Income Taxes Payable	-	0.0	0.1	0.8	1.0
Other Current liabilities, Total	0.2	0.2	0.3	1.2	1.6
Total Current Liabilities	3.2	3.3	4.2	7.9	9.4

Long Term Debt	-	-	0.0	4.3	4.3
Capital Lease Obligations	0.0	0.0	0.0	0.0	0.0
Total Long Term Debt	0.0	0.0	0.0	4.4	4.4
Total Debt	0.0	0.0	0.0	4.4	4.4

Deferred Income Tax - LT Liability	0.6	0.6	0.6	0.4	0.0
Deferred Income Tax	0.6	0.6	0.6	0.4	0.0
Other Long Term Liabilities	0.2	0.2	0.3	0.4	0.1
Other Liabilities, Total	0.2	0.2	0.3	0.4	0.1
Total Liabilities	4.0	4.1	5.1	13.1	13.9

Preferred Stock - Non Redeemable	0.0	0.0	0.0	0.0	-
Preferred Stock - Non Redeemable, Net	0.0	0.0	0.0	0.0	-
Common Stock	0.0	0.0	0.0	0.0	0.0
Common Stock	0.0	0.0	0.0	0.0	0.0
Additional Paid-In Capital	47.2	46.8	46.5	45.8	44.6
Retained Earnings (Accumulated Deficit)	26.6	25.9	25.2	20.2	44.2
Treasury Stock - Common	-19.6	-19.3	-19.2	-19.1	-18.1
Total Equity	54.3	53.5	52.4	46.8	70.7

Total Liabilities & Shareholdersâ€™ Equity	58.3	57.6	57.5	59.9	84.6

Shares Outstanding - Common Stock Primary Issue	16.7	16.8	16.7	16.7	16.9
Total Common Shares Outstanding	16.7	16.8	16.7	16.7	16.9
Treasury Shares - Common Stock Primary Issue	1.5	1.5	1.5	1.4	1.3
Employees	117	133	140	165	171
Number of Common Shareholders	16	15	16	20	19
Accumulated Intangible Amort, Suppl.	0.4	0.3	0.2	0.1	0.0
Deferred Revenue - Current	0.2	0.2	0.2	0.5	0.7
Deferred Revenue - Long Term	0.0	0.0	0.1	0.1	0.1
Total Long Term Debt, Supplemental	0.0	-	-	-	4.3
Long Term Debt Maturing within 1 Year	0.0	-	-	-	-
Long Term Debt Matur. in Year 6 & Beyond	0.0	-	-	-	4.3
Total Capital Leases, Supplemental	0.0	0.0	0.0	0.1	0.1
Capital Lease Payments Due in Year 1	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 2	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 3	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 4	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 5	0.0	0.0	0.0	-	0.0
Capital Lease Payments Due in 2-3 Years	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in 4-5 Years	0.0	0.0	0.0	0.0	0.0
Total Operating Leases, Supplemental	-	-	-	0.0	0.1
Operating Lease Payments Due in Year 1	-	-	-	0.0	0.1
Operating Lease Payments Due in Year 2	-	-	-	-	0.0
Operating Lease Pymts. Due in 2-3 Years	-	-	-	-	0.0
Oper. Lse. Pymts. Due in Year 6 & Beyond	-	-	-	0.0	0.0

Annual Cash Flows

Financials in: USD (mil)

Financial Glossary

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Restated Normal 30-Sep-2009	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Net Income/Starting Line	0.7	0.7	5.0	-7.9	-8.8
Depreciation	0.7	0.8	1.1	1.0	0.9
Depreciation/Depletion	0.7	0.8	1.1	1.0	0.9
Deferred Taxes	0.0	0.0	-0.1	1.2	-0.6
Unusual Items	0.0	0.1	0.1	2.5	0.0
Other Non-Cash Items	0.9	0.4	1.4	7.0	0.8
Non-Cash Items	0.9	0.5	1.4	9.5	0.8
Accounts Receivable	-0.6	3.7	-2.2	-2.0	-2.9
Inventories	0.7	0.7	3.5	-1.9	-3.0
Prepaid Expenses	0.1	0.3	0.2	4.8	-2.1
Other Assets	-0.1	0.0	0.0	0.0	-0.1
Accounts Payable	-0.1	-0.7	-1.1	-1.7	3.7
Accrued Expenses	-0.2	-0.2	-1.7	1.0	1.5
Taxes Payable	0.2	-0.1	-0.7	0.0	0.0
Other Liabilities	0.1	-0.1	-0.2	0.1	0.0
Changes in Working Capital	0.0	3.5	-2.1	0.3	-2.9
Cash from Operating Activities	2.3	5.6	5.3	4.2	-10.6

Purchase of Fixed Assets	-0.3	-0.2	-0.3	-0.6	-1.3
Capital Expenditures	-0.3	-0.2	-0.3	-0.6	-1.3
Sale of Fixed Assets	0.0	0.0	0.0	0.0	0.0
Other Investing Cash Flow	-	-	-	-	-2.6
Other Investing Cash Flow Items, Total	0.0	0.0	0.0	0.0	-2.6
Cash from Investing Activities	-0.3	-0.2	-0.3	-0.6	-3.9

Other Financing Cash Flow	0.0	0.0	0.0	0.0	0.2
Financing Cash Flow Items	0.0	0.0	0.0	0.0	0.2
Cash Dividends Paid - Common	-	0.0	0.0	-16.7	0.0
Total Cash Dividends Paid	-	0.0	0.0	-16.7	0.0
Repurchase/Retirement of Common	-0.3	0.0	-0.1	-1.0	0.0
Common Stock, Net	-0.3	0.0	-0.1	-1.0	0.0
Options Exercised	-	0.0	0.0	0.0	0.5
Issuance (Retirement) of Stock, Net	-0.3	0.0	-0.1	-1.0	0.5
Long Term Debt Reduction	0.0	0.0	-4.3	0.0	0.0
Long Term Debt, Net	0.0	0.0	-4.3	0.0	0.0
Issuance (Retirement) of Debt, Net	0.0	0.0	-4.3	0.0	0.0
Cash from Financing Activities	-0.3	-0.1	-4.5	-17.7	0.6

Net Change in Cash	1.7	5.4	0.5	-14.1	-13.8

Net Cash - Beginning Balance	40.9	35.6	35.0	49.2	63.0
Net Cash - Ending Balance	42.6	40.9	35.6	35.0	49.2
Cash Interest Paid	0.0	0.0	0.0	0.1	0.2
Cash Taxes Paid	0.0	0.1	0.8	-5.1	0.0

Annual Income Statement

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Revenues	-	-	-	0.0	-
Product	25.2	23.4	31.9	25.9	15.1
Engineering	0.6	1.9	4.9	4.6	3.3
Total Revenue	25.7	25.3	36.7	30.5	18.3

Cost of Sales	-	-	-	0.0	-
Product	11.8	10.7	16.6	17.6	9.0
Engineering	0.2	0.8	1.3	3.0	5.2
Research & Development	5.5	5.2	5.3	10.3	5.2
Asset Impairment	-	-	0.0	2.5	0.0
Selling, general and administrative	7.7	8.1	8.6	22.3	15.8
Total Operating Expense	25.1	24.9	31.9	55.6	35.2

Interest Income	0.1	0.2	0.4	1.6	3.1
Interest Expense	0.0	0.0	-0.1	-0.2	-0.2
Other income	0.2	0.1	0.1	17.3	0.0
Net Income Before Taxes	0.9	0.6	5.2	-6.4	-13.9

Provision for Income Taxes	0.2	-0.1	0.2	1.5	-5.1
Net Income After Taxes	0.7	0.7	5.0	-7.9	-8.8

Net Income Before Extra. Items	0.7	0.7	5.0	-7.9	-8.8
Net Income	0.7	0.7	5.0	-7.9	-8.8

Income Available to Com Excl ExtraOrd	0.7	0.7	5.0	-7.9	-8.8

Income Available to Com Incl ExtraOrd	0.7	0.7	5.0	-7.9	-8.8

Basic Weighted Average Shares	16.8	16.8	16.7	16.9	16.9
Basic EPS Excluding ExtraOrdinary Items	0.04	0.04	0.30	-0.47	-0.52
Basic EPS Including ExtraOrdinary Item	0.04	0.04	0.30	-0.47	-0.52
Dilution Adjustment	-	-	-	0.0	0.0
Diluted Net Income	0.7	0.7	5.0	-7.9	-8.8
Diluted Weighted Average Shares	16.8	16.8	16.8	16.9	16.9
Diluted EPS Excluding ExtraOrd Items	0.04	0.04	0.30	-0.47	-0.52
Diluted EPS Including ExtraOrd Items	0.04	0.04	0.30	-0.47	-0.52
DPS-Common Stock	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	16.7	0.0
Normalized Income Before Taxes	0.9	0.6	5.2	-3.9	-13.9

Inc Tax Ex Impact of Sp Items	0.2	-0.1	0.2	2.4	-5.1
Normalized Income After Taxes	0.7	0.7	5.0	-6.3	-8.8

Normalized Inc. Avail to Com.	0.7	0.7	5.0	-6.3	-8.8

Basic Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Diluted Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Research & Development Expense	5.5	5.2	5.3	10.3	5.2
Interest Expense	0.0	0.0	0.1	0.2	0.2
Rental Expense	0.0	0.0	0.0	0.2	0.1
Amortization of Intangible	0.1	0.1	0.2	0.1	0.1
Depreciation	0.5	0.8	0.9	1.0	0.9
Current Tax - Federal	0.2	0.0	0.1	0.2	-4.5
Current Tax - State	0.0	-0.1	0.0	0.0	0.0
Current Tax - Total	0.2	-0.1	0.1	0.2	-4.5
Deferred Tax - Federal	0.0	0.0	0.0	0.9	-0.6
Deferred Tax - State	0.0	0.0	0.1	0.4	0.0
Deferred Tax - Total	0.0	0.0	0.1	1.3	-0.6
Income Tax - Total	0.2	-0.1	0.2	1.5	-5.1
Defined Contribution Plan	-	0.2	0.2	0.2	0.0
Total Pension Expense	-	0.2	0.2	0.2	0.0

Annual Balance Sheet

Financials in: USD (mil)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Cash & Cash Equivalents	42.6	40.9	35.6	35.0	49.2
Inventories	-	-	-	0.0	-
Accounts Receivable	3.3	2.7	6.4	4.2	6.2
Doubtful Account	-0.2	-0.2	-0.2	0.0	0.0
Raw Materials	2.5	2.7	3.5	4.7	6.4
Work in Process	0.2	0.2	0.3	3.0	2.2
Finished Goods	0.8	1.7	1.5	1.6	0.7
Deferred income taxes	0.4	0.5	0.5	0.4	0.9
Revenue recognized not yet invoiced	0.4	0.4	0.5	-	-
Deferred engineering costs	0.0	0.0	0.1	-	-
Income tax assets	0.0	0.0	0.0	-	-
Other	0.2	0.2	0.3	-	-
Prepaid Expenses	0.3	0.3	0.3	1.4	6.2
Total Current Assets	50.6	49.6	48.8	50.4	71.9

Property and equipment, net	-	-	-	0.0	-
Computer equipment	2.1	2.0	2.0	2.0	-
Equipment	4.2	4.1	4.0	3.9	-
Computer & Test Equipment	-	-	-	-	5.4
Corporate Airplane	3.1	3.1	3.1	3.1	3.1
Furniture & Office Equipment	1.1	1.1	1.1	1.1	1.0
Manufacturing Facility	5.6	5.6	5.6	5.6	5.6
Land	1.0	1.0	1.0	1.0	1.0
Depreciation	-9.6	-9.0	-8.4	-7.7	-6.7
Intangible Assets	0.6	0.5	0.5	0.4	2.9
Amortization of Intangibles	-0.4	-0.3	-0.2	-0.1	0.0
Deposits & Other Assets	-	-	0.1	0.2	0.2
Deferred income taxes	-	-	-	0.0	0.3
Total Assets	58.3	57.6	57.5	59.9	84.6

Current Portion of Lease	0.0	0.0	0.0	0.0	0.0
Accounts Payable	0.4	0.5	1.2	2.3	4.1
Accrued Expenses	2.6	2.6	2.7	4.3	3.7
Income Taxes Payable	-	0.0	0.1	0.8	1.0
Deferred Revenue	0.2	0.2	0.2	0.5	0.7
Total Current Liabilities	3.2	3.3	4.2	7.9	9.4

Capital Lease	0.0	0.0	0.0	0.0	0.0
Note Payable	-	-	0.0	4.3	4.3
Total Long Term Debt	0.0	0.0	0.0	4.4	4.4

Deferred Revenue	0.0	0.0	0.1	0.1	0.1
Deferred income taxes	0.6	0.6	0.6	0.4	0.0
Other Liabilities	0.2	0.2	0.2	0.2	0.0
Total Liabilities	4.0	4.1	5.1	13.1	13.9

Preferred Stock, 10,000,000 shares autho	0.0	0.0	0.0	0.0	-
Common Stock	0.0	0.0	0.0	0.0	0.0
Paid in Capital	47.2	46.8	46.5	45.8	44.6
Retained Earning	26.6	25.9	25.2	20.2	44.2
Treasury Stock	-19.6	-19.3	-19.2	-19.1	-18.1
Total Equity	54.3	53.5	52.4	46.8	70.7

Total Liabilities & Shareholders' Equity	58.3	57.6	57.5	59.9	84.6

S/O-Common Stock	16.7	16.8	16.7	16.7	16.9
Total Common Shares Outstanding	16.7	16.8	16.7	16.7	16.9
T/S-Common Stock	1.5	1.5	1.5	1.4	1.3
Deferred Revenue - Current	0.2	0.2	0.2	0.5	0.7
Deferred Revenue - Non Current	0.0	0.0	0.1	0.1	0.1
Accumulated Amortization Intangible	0.4	0.3	0.2	0.1	0.0
Full-Time Employees	117	133	140	165	171
Number of Common Shareholders	16	15	16	20	19
LT Debt Maturing within 1 Year	0.0	-	-	-	-
LT Debt Remaining Maturities	-	-	-	-	4.3
Total Long Term Debt, Supplemental	0.0	-	-	-	4.3
Capital Lease Maturing within 1 Year	0.0	0.0	0.0	0.0	0.0
Capital Lease Maturing within 2 Years	-	-	0.0	0.0	0.0
Capital Lease Maturing within 3 Years	0.0	0.0	0.0	0.0	0.0
Capital Lease Maturing within 4 Years	-	0.0	0.0	0.0	0.0
Capital Lease Maturing within 5Years	0.0	0.0	0.0	-	0.0
Total Capital Leases	0.0	0.0	0.0	0.1	0.1
Operating Lease Maturing within 1 Year	-	-	-	0.0	0.1
Operating Lease Maturing within 2 Year	-	-	-	-	0.0
Total Operating Leases	-	-	-	0.0	0.1

Annual Cash Flows

Financials in: USD (mil)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Restated Normal 30-Sep-2009	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Net Income	0.7	0.7	5.0	-7.9	-8.8
Depreciation	0.7	0.8	1.1	1.0	0.9
Disposal Fixed Asset	0.0	0.1	0.1	0.0	0.0
Loss on disposal of property and equipme	0.0	0.0	0.0	0.0	-
Asset impairment	-	0.0	0.0	2.5	0.0
Excess and obsolete inventory cost	0.5	0.0	0.5	1.9	0.1
Disposal of Obsolete Inventory	-	-	-	-	0.0
Deferred Taxes	0.0	0.0	-0.1	1.2	-0.6
Stock Based Compensation	0.2	0.2	0.5	0.9	0.5
Excess Tax Benefits	-	0.0	0.0	0.0	-0.2
Provision for loss on accounts receivabl	0.0	0.0	0.2	4.1	0.0
Nonvested stock awards	0.0	0.0	0.0	0.0	-
Stock options	-	0.0	0.0	0.0	-
Stock to Directors	0.2	0.2	0.2	0.2	0.2
Option Tax Benefits	-	-	-	-	0.2
Accounts Receivable	-0.6	3.7	-2.2	-2.0	-2.9
Inventories	0.7	0.7	3.5	-1.9	-3.0
Prepaid Expense & Other	0.1	0.3	0.2	4.8	-2.1
Accounts Payable	-0.1	-0.7	-1.1	-1.7	3.7
Income taxes payable	0.2	-0.1	-0.7	0.0	0.0
Accrued Expenses	-0.2	-0.2	-1.7	1.0	1.5
Other non-current assets	-0.1	0.0	0.0	0.0	-0.1
Other non-current liabilities	0.0	0.0	0.1	0.2	0.0
Deferred Revenue	0.1	-0.1	-0.3	-0.1	0.0
Cash from Operating Activities	2.3	5.6	5.3	4.2	-10.6

Purchase of other assets	-	-	0.0	0.0	-
Capital Expenditures	-0.3	-0.2	-0.3	-0.6	-1.3
Proceeds from the sale of property and e	0.0	0.0	0.0	0.0	0.0
Capital Expenditure- Other Assets	-	-	-	-	-2.6
Cash from Investing Activities	-0.3	-0.2	-0.3	-0.6	-3.9

Repayment of Industrial Development Bond	0.0	0.0	-4.3	0.0	0.0
Other	0.0	0.0	0.0	-	-
Repayment of Leases	0.0	0.0	0.0	0.0	0.0
Exercise of Options	-	0.0	0.0	0.0	0.5
Excess Tax Benefits	-	0.0	0.0	0.0	0.2
Dividend paid	-	0.0	0.0	-16.7	0.0
Purchase Treasury	-0.3	0.0	-0.1	-1.0	0.0
Cash from Financing Activities	-0.3	-0.1	-4.5	-17.7	0.6

Net Change in Cash	1.7	5.4	0.5	-14.1	-13.8

Net Cash - Beginning Balance	40.9	35.6	35.0	49.2	63.0
Net Cash - Ending Balance	42.6	40.9	35.6	35.0	49.2
Cash Interest Paid	0.0	0.0	0.0	0.1	0.2
Cash Taxes Paid	0.0	0.1	0.8	-5.1	0.0

Financial Health

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Key IndicatorsÂ USD (mil)
Â	Quarter Ending 31-Mar-2012	Quarter Ending Yr Ago	Annual Year End 30-Sep-2011	1 Year Growth	3 Year Growth	5 Year Growth
Total Revenue (?)	6.8	0.21%	25.7	1.90%	-5.54%	9.01%
Research & Development (?)	0.9	-40.50%	5.5	5.09%	-18.88%	-4.01%
Operating Income (?)	0.3	-25.75%	0.6	50.67%	-	-
Income Available to Common Excl Extraord Items (?)	0.3	-42.13%	0.7	-4.25%	-	-
Basic EPS Excl Extraord Items (?)	0.02	-41.41%	0.04	-4.47%	-	-
Capital Expenditures (?)	0.1	44.93%	0.3	34.60%	-23.62%	-10.94%
Cash from Operating Activities (?)	1.2	-23.99%	2.3	-59.36%	-18.45%	-
Free Cash Flow (?)	1.1	-27.39%	2.0	-62.65%	-17.68%	-
Total Assets (?)	60.4	2.88%	58.3	1.16%	-0.92%	-7.76%
Total Liabilities (?)	6.5	50.73%	4.0	-3.05%	-32.67%	-15.05%
Total Long Term Debt (?)	0.0	-	0.0	-	-	-
Employees (?)	-	-	117	-12.03%	-10.83%	-3.25%
Total Common Shares Outstanding (?)	16.7	-0.64%	16.7	-0.12%	0.02%	-0.09%
Market Cap (?)	73.5	-25.10%	80.9	-1.35%	-3.93%	-19.84%

Key Ratios
Â	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Profitability
Gross Margin (?)	53.59%	54.39%	51.28%	32.69%	22.86%
Operating Margin (?)	2.36%	1.60%	13.28%	-82.22%	-91.71%
Pretax Margin (?)	3.50%	2.53%	14.27%	-20.92%	-75.98%
Net Profit Margin (?)	2.78%	2.96%	13.63%	-25.86%	-48.21%
Financial Strength
Current Ratio (?)	15.61	15.05	11.71	6.35	7.63
Long Term Debt/Equity (?)	0.00	0.00	0.00	0.09	0.06
Total Debt/Equity (?)	0.00	0.00	0.00	0.09	0.06
Management Effectiveness
Return on Assets (?)	1.24%	1.30%	8.53%	-10.93%	-10.30%
Return on Equity (?)	1.33%	1.41%	10.10%	-13.44%	-11.88%
Efficiency
Receivables Turnover (?)	7.97	5.25	6.74	5.83	3.83
Inventory Turnover (?)	2.93	2.31	2.44	2.20	1.79
Asset Turnover (?)	0.44	0.44	0.63	0.42	0.21

Market ValuationÂ USD (mil)
Enterprise Value (?)	11.7	.	Price/Sales (TTM) (?)	2.29
Enterprise Value/Revenue (TTM) (?)	0.49	.	Price/Book (MRQ) (?)	1.02
Enterprise Value/EBITDA (TTM) (?)	48.19	.	Market Cap (?)	54.9

Ratio Comparisons

Traded: NASDAQ: ISSC	Financials in: USD (actual units)
Industry: Aerospace & Defense	As of 29-Jun-2012
Sector: Capital Goods

	Company	Industry	Sector	S&P 500
Valuation Ratios
P/E Excluding Extraordinary (TTM) (?)	-	17.92	22.07	19.68
P/E High Excluding Extraordinary - Last 5 Yrs (?)	113.41	26.44	37.65	32.79
P/E Low Excluding Extraordinary - Last 5 Yrs (?)	16.76	7.78	7.33	10.71
Beta (?)	0.49	1.16	1.34	1.00
Price/Revenue (TTM) (?)	2.29	1.41	1.52	2.57
Price/Book (MRQ) (?)	1.02	6.50	4.76	3.67
Price to Tangible Book (MRQ) (?)	1.02	9.00	7.19	5.21
Price to Cash Flow Per Share (TTM) (?)	123.92	12.93	15.36	14.22
Price to Free Cash Flow Per Share (TTM) (?)	34.49	34.04	32.27	26.26

Dividends
Dividend Yield (?)	-	2.35%	1.88%	2.26%
Dividend Per Share - 5 Yr Avg (?)	0.00	1.93	1.73	1.99
Dividend 5 Yr Growth (?)	-	8.65%	7.09%	0.08%
Payout Ratio (TTM) (?)	-	29.83%	27.79%	25.98%

Growth Rates (%)
Revenue (MRQ) vs Qtr 1 Yr Ago (?)	0.21%	5.07%	13.77%	15.58%
Revenue (TTM) vs TTM 1 Yr Ago (?)	-16.02%	2.07%	9.04%	17.69%
Revenue 5 Yr Growth (?)	9.01%	7.46%	6.24%	8.97%
EPS (MRQ) vs Qtr 1 Yr Ago (?)	-41.43%	-3.38%	8.64%	19.49%
EPS (TTM) vs TTM 1 Yr Ago (?)	-103.51%	31.46%	48.61%	32.55%
EPS 5 Yr Growth (?)	-	14.33%	11.11%	9.86%
Capital Spending 5 Yr Growth (?)	-10.94%	2.40%	2.27%	-2.04%

Financial Strength
Quick Ratio (MRQ) (?)	8.26	0.85	1.00	1.24
Current Ratio (MRQ) (?)	9.02	1.68	1.91	1.79
LT Debt/Equity (MRQ) (?)	0.00	1.27	0.99	0.64
Total Debt/Equity (MRQ) (?)	0.00	1.38	1.16	0.73
Interest Coverage (TTM) (?)	-	13.62	11.79	13.80

Profitability Ratios (%)
Gross Margin (TTM) (?)	48.18%	21.13%	24.70%	45.21%
Gross Margin - 5 Yr Avg (?)	44.32%	23.04%	24.93%	44.91%
EBITD Margin (TTM) (?)	1.01%	13.37%	12.97%	24.43%
EBITD Margin - 5 Yr Avg (?)	-22.94%	12.71%	12.28%	22.84%
Operating Margin (TTM) (?)	-1.34%	10.62%	9.82%	20.63%
Operating Margin - 5 Yr Avg (?)	-26.38%	10.16%	9.51%	18.28%
Pretax Margin (TTM) (?)	-0.75%	9.75%	8.95%	17.95%
Pretax Margin - 5 Yr Avg (?)	-9.92%	9.41%	8.79%	17.10%
Net Profit Margin (TTM) (?)	-0.51%	6.92%	6.41%	13.65%
Net Profit Margin - 5 Yr Avg (?)	-7.52%	6.58%	6.01%	12.10%
Effective Tax Rate (TTM) (?)	-	28.22%	29.26%	28.45%
Effective Tax rate - 5 Yr Avg (?)	-	29.60%	31.03%	29.92%

Management Effectiveness (%)
Return on Assets (TTM) (?)	-0.20%	6.28%	6.25%	8.54%
Return on Assets - 5 Yr Avg (?)	-3.09%	6.78%	6.69%	8.40%
Return on Investment (TTM) (?)	-0.22%	4.67%	4.72%	7.90%
Return on Investment - 5 Yr Avg (?)	-3.38%	5.37%	5.72%	8.27%
Return on Equity (TTM) (?)	-0.22%	24.25%	18.99%	19.72%
Return on Equity - 5 Yr Avg (?)	-3.55%	32.26%	23.87%	20.06%

Efficiency
Revenue/Employee (TTM) (?)	204,935.50	317,656.24	357,573.83	927,613.77
Net Income/Employee (TTM) (?)	-1,038.03	22,109.46	23,741.62	116,121.92
Receivables Turnover (TTM) (?)	7.79	7.58	8.63	13.25
Inventory Turnover (TTM) (?)	2.76	9.07	8.11	14.53
Asset Turnover (TTM) (?)	0.40	0.97	1.00	0.93

Annual Ratios

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Financial Strength
Current Ratio (?)	15.61	15.05	11.71	6.35	7.63
Quick/Acid Test Ratio (?)	14.24	13.31	10.14	4.94	5.88
Working Capital (?)	47.3	46.3	44.6	42.5	62.5
Long Term Debt/Equity (?)	0.00	0.00	0.00	0.09	0.06
Total Debt/Equity (?)	0.00	0.00	0.00	0.09	0.06
Long Term Debt/Total Capital (?)	0.00	0.00	0.00	0.09	0.06
Total Debt/Total Capital (?)	0.00	0.00	0.00	0.09	0.06
Payout Ratio (?)	0.00%	0.00%	0.00%	0.00%	0.00%
Effective Tax Rate (?)	20.41%	-17.06%	4.48%	-	-
Total Capital (?)	54.3	53.5	52.4	51.2	75.1

Efficiency
Asset Turnover (?)	0.44	0.44	0.63	0.42	0.21
Inventory Turnover (?)	2.93	2.31	2.44	2.20	1.79
Days In Inventory (?)	124.75	157.84	149.58	166.28	204.10
Receivables Turnover (?)	7.97	5.25	6.74	5.83	3.83
Days Receivables Outstanding (?)	45.80	69.59	54.15	62.56	95.30
Revenue/Employee (?)	219,980	189,905	262,387	185,050	107,299
Operating Income/Employee (?)	5,196	3,034	34,840	-152,144	-98,403
EBITDA/Employee (?)	10,324	9,800	42,698	-145,478	-92,555

Profitability
Gross Margin (?)	53.59%	54.39%	51.28%	32.69%	22.86%
Operating Margin (?)	2.36%	1.60%	13.28%	-82.22%	-91.71%
EBITDA Margin (?)	4.69%	5.16%	16.27%	-78.62%	-86.26%
EBIT Margin (?)	2.36%	1.60%	13.28%	-82.22%	-91.71%
Pretax Margin (?)	3.50%	2.53%	14.27%	-20.92%	-75.98%
Net Profit Margin (?)	2.78%	2.96%	13.63%	-25.86%	-48.21%
R&D Expense/Revenue (?)	21.37%	20.72%	14.46%	33.75%	28.23%
COGS/Revenue (?)	46.41%	45.61%	48.72%	67.31%	77.14%
SG&A Expense/Revenue (?)	29.85%	32.07%	23.54%	73.05%	86.33%

Management Effectiveness
Return on Assets (?)	1.24%	1.30%	8.53%	-10.93%	-10.30%
Return on Equity (?)	1.33%	1.41%	10.10%	-13.44%	-11.88%

Valuation
Free Cash Flow/Share (?)	0.12	0.32	0.30	0.22	-0.70
Operating Cash Flow/Share (?)	0.14	0.33	0.32	0.25	-0.63

Current Market Multiples
Market Cap/Earnings (TTM) (?)	-459.73
Market Cap/Equity (MRQ) (?)	1.02
Market Cap/Revenue (TTM) (?)	2.29
Market Cap/EBIT (TTM) (?)	-170.65
Market Cap/EBITDA (TTM) (?)	226.12
Enterprise Value/Earnings (TTM) (?)	-97.97
Enterprise Value/Equity (MRQ) (?)	0.22
Enterprise Value/Revenue (TTM) (?)	0.49
Enterprise Value/EBIT (TTM) (?)	-36.37
Enterprise Value/EBITDA (TTM) (?)	48.19

Stock Report

Stock Snapshot

Traded: NASDAQ: ISSC

As of 29-Jun-2012 US Dollars

Recent Price	$3.30	EPS	$0.04
52 Week High	$5.95	Price/Sales	2.13
52 Week Low	$3.02	Price/Book	1.02
Avg. Volume (mil)	0.01	Beta	0.49
Market Value (mil)	$54.89

	Price % Change	Rel S&P 500%
4 Week	-1.49%	-7.57%
13 Week	-25.17%	-22.62%
52 Week	-39.67%	-41.51%
Year to Date	-4.07%	-11.43%

2 Year Weekly End Price & Volume

Stock History

Market Cap History
	31-Mar-12	% Chg	31-Dec-11	% Chg	30-Sep-11	% Chg	30-Jun-11	% Chg	31-Mar-11	% Chg
Total Common Shares Outstanding	17	0.1	17	-0.5	17	-0.3	17	0.1	17	0.1
Market Cap	73.5	28.3	57.3	-29.1	80.9	-12.0	91.9	-6.4	98.2	3.3

Yearly Price History
	2012	% Chg	2011	% Chg	2010	% Chg	2009	% Chg	2008	% Chg
High Price	4.75	-23.4	6.20	-13.2	7.14	17.8	6.06	-51.9	12.61	-57.1
Low Price	3.02	-5.6	3.20	50.9	2.12	-15.9	2.52	-16.6	3.02	-66.4
Year End Price	3.30	-4.1	3.44	-39.3	5.67	23.5	4.59	16.2	3.95	-59.2

Monthly Price History
Price Ending Date	Open	High	Low	Close	Volume
29-Jun-12	3.32	3.66	3.10	3.30	202,433
31-May-12	4.05	4.08	3.02	3.53	159,857
30-Apr-12	4.31	4.75	4.06	4.27	155,103
30-Mar-12	4.26	4.51	4.00	4.41	157,836
29-Feb-12	3.84	4.30	3.80	4.27	208,570
31-Jan-12	3.50	4.19	3.50	3.90	134,917
30-Dec-11	3.97	4.10	3.20	3.44	599,866
30-Nov-11	4.60	4.61	3.79	3.99	153,592
31-Oct-11	4.80	4.82	4.37	4.70	156,005
30-Sep-11	4.82	4.85	4.21	4.83	141,049
31-Aug-11	5.35	5.57	4.44	4.80	232,943
29-Jul-11	5.52	5.95	5.25	5.29	254,071
30-Jun-11	5.49	5.63	5.10	5.47	312,207

Annual Income Statement

Standardized

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Net Sales	25.7	25.3	36.7	30.5	18.3
Revenue	25.7	25.3	36.7	30.5	18.3
Total Revenue	25.7	25.3	36.7	30.5	18.3

Cost of Revenue	11.9	11.5	17.9	20.6	14.2
Cost of Revenue, Total	11.9	11.5	17.9	20.6	14.2
Gross Profit	13.8	13.7	18.8	10.0	4.2

Selling/General/Administrative Expense	7.7	8.1	8.6	22.3	15.8
Total Selling/General/Administrative Expenses	7.7	8.1	8.6	22.3	15.8
Research & Development	5.5	5.2	5.3	10.3	5.2
Impairment-Assets Held for Use	-	-	0.0	2.5	0.0
Unusual Expense (Income)	-	-	0.0	2.5	0.0
Total Operating Expense	25.1	24.9	31.9	55.6	35.2

Operating Income	0.6	0.4	4.9	-25.1	-16.8

Interest Expense - Non-Operating	0.0	0.0	-0.1	-0.2	-0.2
Interest Expense, Net Non-Operating	0.0	0.0	-0.1	-0.2	-0.2
Interest Income - Non-Operating	0.1	0.2	0.4	1.6	3.1
Interest/Investment Income - Non-Operating	0.1	0.2	0.4	1.6	3.1
Interest Income (Expense) - Net Non-Operating Total	0.1	0.2	0.3	1.4	2.9
Other Non-Operating Income (Expense)	0.2	0.1	0.1	17.3	0.0
Other, Net	0.2	0.1	0.1	17.3	0.0
Income Before Tax	0.9	0.6	5.2	-6.4	-13.9

Total Income Tax	0.2	-0.1	0.2	1.5	-5.1
Income After Tax	0.7	0.7	5.0	-7.9	-8.8

Net Income Before Extraord Items	0.7	0.7	5.0	-7.9	-8.8
Net Income	0.7	0.7	5.0	-7.9	-8.8

Income Available to Common Excl Extraord Items	0.7	0.7	5.0	-7.9	-8.8

Income Available to Common Incl Extraord Items	0.7	0.7	5.0	-7.9	-8.8

Basic/Primary Weighted Average Shares	16.8	16.8	16.7	16.9	16.9
Basic EPS Excl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Basic/Primary EPS Incl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Dilution Adjustment	-	-	-	0.0	0.0
Diluted Net Income	0.7	0.7	5.0	-7.9	-8.8
Diluted Weighted Average Shares	16.8	16.8	16.8	16.9	16.9
Diluted EPS Excl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Diluted EPS Incl Extraord Items	0.04	0.04	0.30	-0.47	-0.52
Dividends per Share - Common Stock Primary Issue	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	16.7	0.0
Interest Expense, Supplemental	0.0	0.0	0.1	0.2	0.2
Depreciation, Supplemental	0.5	0.8	0.9	1.0	0.9
Total Special Items	-	-	0.0	2.5	0.0
Normalized Income Before Tax	0.9	0.6	5.2	-3.9	-13.9

Effect of Special Items on Income Taxes	-	-	0.0	0.9	0.0
Inc Tax Ex Impact of Sp Items	0.2	-0.1	0.2	2.4	-5.1
Normalized Income After Tax	0.7	0.7	5.0	-6.3	-8.8

Normalized Inc. Avail to Com.	0.7	0.7	5.0	-6.3	-8.8

Basic Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Diluted Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Amort of Intangibles, Supplemental	0.1	0.1	0.2	0.1	0.1
Rental Expenses	0.0	0.0	0.0	0.2	0.1
Research & Development Exp, Supplemental	5.5	5.2	5.3	10.3	5.2
Normalized EBIT	0.6	0.4	4.9	-22.6	-16.8
Normalized EBITDA	1.2	1.3	6.0	-21.5	-15.8
Current Tax - Domestic	0.2	0.0	0.1	0.2	-4.5
Current Tax - Local	0.0	-0.1	0.0	0.0	0.0
Current Tax - Total	0.2	-0.1	0.1	0.2	-4.5
Deferred Tax - Domestic	0.0	0.0	0.0	0.9	-0.6
Deferred Tax - Local	0.0	0.0	0.1	0.4	0.0
Deferred Tax - Total	0.0	0.0	0.1	1.3	-0.6
Income Tax - Total	0.2	-0.1	0.2	1.5	-5.1
Defined Contribution Expense - Domestic	-	0.2	0.2	0.2	0.0
Total Pension Expense	-	0.2	0.2	0.2	0.0

Interim Income Statement

Standardized

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	31-Mar-2012	31-Dec-2011	30-Sep-2011	30-Jun-2011	31-Mar-2011
Period Length	3 Months	3 Months	3 Months	3 Months	3 Months
UpdateType/Date	Updated Normal 31-Mar-2012	Updated Normal 31-Dec-2011	Updated Normal 30-Sep-2011	Updated Normal 30-Jun-2011	Updated Normal 31-Mar-2011
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1

Net Sales	6.8	4.8	6.5	6.0	6.7
Revenue	6.8	4.8	6.5	6.0	6.7
Total Revenue	6.8	4.8	6.5	6.0	6.7

Cost of Revenue	3.7	2.6	3.3	2.8	2.9
Cost of Revenue, Total	3.7	2.6	3.3	2.8	2.9
Gross Profit	3.1	2.1	3.2	3.2	3.9

Selling/General/Administrative Expense	1.8	2.0	1.9	1.9	1.8
Total Selling/General/Administrative Expenses	1.8	2.0	1.9	1.9	1.8
Research & Development	0.9	0.8	1.2	1.4	1.6
Total Operating Expense	6.4	5.4	6.4	6.1	6.3

Operating Income	0.3	-0.7	0.1	-0.1	0.5

Interest Expense - Non-Operating	0.0	0.0	0.0	0.0	0.0
Interest Expense, Net Non-Operating	0.0	0.0	0.0	0.0	0.0
Interest Income - Non-Operating	0.0	0.0	0.0	0.0	0.0
Interest/Investment Income - Non-Operating	0.0	0.0	0.0	0.0	0.0
Interest Income (Expense) - Net Non-Operating Total	0.0	0.0	0.0	0.0	0.0
Other Non-Operating Income (Expense)	0.0	0.0	0.0	0.0	0.0
Other, Net	0.0	0.0	0.0	0.0	0.0
Income Before Tax	0.4	-0.6	0.1	-0.1	0.5

Total Income Tax	0.1	-0.3	0.1	0.0	0.0
Income After Tax	0.3	-0.3	0.0	-0.1	0.5

Net Income Before Extraord Items	0.3	-0.3	0.0	-0.1	0.5
Net Income	0.3	-0.3	0.0	-0.1	0.5

Income Available to Common Excl Extraord Items	0.3	-0.3	0.0	-0.1	0.5

Income Available to Common Incl Extraord Items	0.3	-0.3	0.0	-0.1	0.5

Basic/Primary Weighted Average Shares	16.6	16.7	16.8	16.8	16.8
Basic EPS Excl Extraord Items	0.02	-0.02	0.00	0.00	0.03
Basic/Primary EPS Incl Extraord Items	0.02	-0.02	0.00	0.00	0.03
Dilution Adjustment	0.0	0.0	0.0	0.0	0.0
Diluted Net Income	0.3	-0.3	0.0	-0.1	0.5
Diluted Weighted Average Shares	16.6	16.7	16.9	16.8	16.8
Diluted EPS Excl Extraord Items	0.02	-0.02	0.00	0.00	0.03
Diluted EPS Incl Extraord Items	0.02	-0.02	0.00	0.00	0.03
Dividends per Share - Common Stock Primary Issue	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	0.0	0.0
Interest Expense, Supplemental	0.0	0.0	0.0	0.0	0.0
Depreciation, Supplemental	0.1	0.1	0.1	0.1	0.1
Normalized Income Before Tax	0.4	-0.6	0.1	-0.1	0.5

Inc Tax Ex Impact of Sp Items	0.1	-0.3	0.1	0.0	0.0
Normalized Income After Tax	0.3	-0.3	0.0	-0.1	0.5

Normalized Inc. Avail to Com.	0.3	-0.3	0.0	-0.1	0.5

Basic Normalized EPS	0.02	-0.02	0.00	0.00	0.03
Diluted Normalized EPS	0.02	-0.02	0.00	0.00	0.03
Amort of Intangibles, Supplemental	0.0	0.0	0.0	0.0	0.0
Research & Development Exp, Supplemental	0.9	0.8	1.2	1.4	1.6
Reported Gross Profit	3.1	2.1	3.2	3.2	3.9
Normalized EBIT	0.3	-0.7	0.1	-0.1	0.5
Normalized EBITDA	0.5	-0.5	0.2	0.1	0.6

Annual Balance Sheet

Standardized

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Cash & Equivalents	42.6	40.9	35.6	35.0	49.2
Cash and Short Term Investments	42.6	40.9	35.6	35.0	49.2
Accounts Receivable - Trade, Gross	3.3	2.7	6.4	4.2	6.2
Provision for Doubtful Accounts	-0.2	-0.2	-0.2	0.0	0.0
Trade Accounts Receivable - Net	3.1	2.5	6.2	4.2	6.2
Other Receivables	0.4	0.4	0.5	-	-
Total Receivables, Net	3.5	3.0	6.7	4.2	6.2
Inventories - Finished Goods	0.8	1.7	1.5	1.6	0.7
Inventories - Work In Progress	0.2	0.2	0.3	3.0	2.2
Inventories - Raw Materials	2.5	2.7	3.5	4.7	6.4
Total Inventory	3.5	4.7	5.3	9.4	9.4
Prepaid Expenses	0.3	0.3	0.3	1.4	6.2
Deferred Income Tax - Current Asset	0.4	0.5	0.5	0.4	0.9
Other Current Assets	0.2	0.3	0.4	-	-
Other Current Assets, Total	0.7	0.8	0.9	0.4	0.9
Total Current Assets	50.6	49.6	48.8	50.4	71.9

Land/Improvements	1.0	1.0	1.0	1.0	1.0
Machinery/Equipment	16.0	15.8	15.7	15.6	15.1
Property/Plant/Equipment - Gross	17.0	16.8	16.8	16.6	16.1
Accumulated Depreciation	-9.6	-9.0	-8.4	-7.7	-6.7
Property/Plant/Equipment - Net	7.5	7.8	8.3	9.0	9.4
Intangibles - Gross	0.6	0.5	0.5	0.4	2.9
Accumulated Intangible Amortization	-0.4	-0.3	-0.2	-0.1	0.0
Intangibles, Net	0.2	0.2	0.3	0.3	2.8
Deferred Income Tax - Long Term Asset	-	-	-	0.0	0.3
Other Long Term Assets	-	-	0.1	0.2	0.2
Other Long Term Assets, Total	-	-	0.1	0.2	0.5
Total Assets	58.3	57.6	57.5	59.9	84.6

Accounts Payable	0.4	0.5	1.2	2.3	4.1
Accrued Expenses	2.6	2.6	2.7	4.3	3.7
Notes Payable/Short Term Debt	0.0	0.0	0.0	0.0	0.0
Current Portion - Long Term Debt/Capital Leases	0.0	0.0	0.0	0.0	0.0
Customer Advances	0.2	0.2	0.2	0.5	0.7
Income Taxes Payable	-	0.0	0.1	0.8	1.0
Other Current liabilities, Total	0.2	0.2	0.3	1.2	1.6
Total Current Liabilities	3.2	3.3	4.2	7.9	9.4

Long Term Debt	-	-	0.0	4.3	4.3
Capital Lease Obligations	0.0	0.0	0.0	0.0	0.0
Total Long Term Debt	0.0	0.0	0.0	4.4	4.4
Total Debt	0.0	0.0	0.0	4.4	4.4

Deferred Income Tax - LT Liability	0.6	0.6	0.6	0.4	0.0
Deferred Income Tax	0.6	0.6	0.6	0.4	0.0
Other Long Term Liabilities	0.2	0.2	0.3	0.4	0.1
Other Liabilities, Total	0.2	0.2	0.3	0.4	0.1
Total Liabilities	4.0	4.1	5.1	13.1	13.9

Preferred Stock - Non Redeemable	0.0	0.0	0.0	0.0	-
Preferred Stock - Non Redeemable, Net	0.0	0.0	0.0	0.0	-
Common Stock	0.0	0.0	0.0	0.0	0.0
Common Stock	0.0	0.0	0.0	0.0	0.0
Additional Paid-In Capital	47.2	46.8	46.5	45.8	44.6
Retained Earnings (Accumulated Deficit)	26.6	25.9	25.2	20.2	44.2
Treasury Stock - Common	-19.6	-19.3	-19.2	-19.1	-18.1
Total Equity	54.3	53.5	52.4	46.8	70.7

Total Liabilities & Shareholdersâ€™ Equity	58.3	57.6	57.5	59.9	84.6

Shares Outstanding - Common Stock Primary Issue	16.7	16.8	16.7	16.7	16.9
Total Common Shares Outstanding	16.7	16.8	16.7	16.7	16.9
Treasury Shares - Common Stock Primary Issue	1.5	1.5	1.5	1.4	1.3
Employees	117	133	140	165	171
Number of Common Shareholders	16	15	16	20	19
Accumulated Intangible Amort, Suppl.	0.4	0.3	0.2	0.1	0.0
Deferred Revenue - Current	0.2	0.2	0.2	0.5	0.7
Deferred Revenue - Long Term	0.0	0.0	0.1	0.1	0.1
Total Long Term Debt, Supplemental	0.0	-	-	-	4.3
Long Term Debt Maturing within 1 Year	0.0	-	-	-	-
Long Term Debt Matur. in Year 6 & Beyond	0.0	-	-	-	4.3
Total Capital Leases, Supplemental	0.0	0.0	0.0	0.1	0.1
Capital Lease Payments Due in Year 1	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 2	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 3	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 4	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in Year 5	0.0	0.0	0.0	-	0.0
Capital Lease Payments Due in 2-3 Years	0.0	0.0	0.0	0.0	0.0
Capital Lease Payments Due in 4-5 Years	0.0	0.0	0.0	0.0	0.0
Total Operating Leases, Supplemental	-	-	-	0.0	0.1
Operating Lease Payments Due in Year 1	-	-	-	0.0	0.1
Operating Lease Payments Due in Year 2	-	-	-	-	0.0
Operating Lease Pymts. Due in 2-3 Years	-	-	-	-	0.0
Oper. Lse. Pymts. Due in Year 6 & Beyond	-	-	-	0.0	0.0

Interim Balance Sheet

Standardized

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	31-Mar-2012	31-Dec-2011	30-Sep-2011	30-Jun-2011	31-Mar-2011
UpdateType/Date	Updated Normal 31-Mar-2012	Updated Normal 31-Dec-2011	Updated Normal 30-Sep-2011	Updated Normal 30-Jun-2011	Updated Normal 31-Mar-2011
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1

Cash & Equivalents	43.2	42.8	42.6	42.6	42.5
Cash and Short Term Investments	43.2	42.8	42.6	42.6	42.5
Trade Accounts Receivable - Net	3.6	2.6	3.1	3.1	2.6
Other Receivables	0.8	0.4	0.4	0.3	0.4
Total Receivables, Net	4.4	3.0	3.5	3.3	3.0
Inventories - Finished Goods	0.5	0.6	0.8	1.3	1.0
Inventories - Work In Progress	0.6	0.5	0.2	0.3	0.7
Inventories - Raw Materials	3.3	3.0	2.5	2.7	2.8
Total Inventory	4.5	4.1	3.5	4.4	4.5
Prepaid Expenses	0.1	0.1	0.3	0.1	0.2
Deferred Income Tax - Current Asset	0.4	0.4	0.4	0.4	0.4
Other Current Assets	0.4	0.4	0.2	0.2	0.3
Other Current Assets, Total	0.8	0.9	0.7	0.7	0.7
Total Current Assets	52.9	50.9	50.6	51.1	50.9

Land/Improvements	1.0	1.0	1.0	1.0	1.0
Machinery/Equipment	16.1	16.1	16.0	16.0	15.9
Property/Plant/Equipment - Gross	17.2	17.2	17.0	17.0	16.9
Accumulated Depreciation	-9.8	-9.7	-9.6	-9.4	-9.3
Property/Plant/Equipment - Net	7.3	7.5	7.5	7.6	7.6
Intangibles - Gross	0.6	0.6	0.6	0.6	0.6
Accumulated Intangible Amortization	-0.4	-0.4	-0.4	-0.4	-0.3
Intangibles, Net	0.2	0.2	0.2	0.2	0.3
Total Assets	60.4	58.5	58.3	58.9	58.7

Accounts Payable	1.6	1.0	0.4	1.1	0.8
Accrued Expenses	1.9	2.2	2.6	2.3	2.4
Notes Payable/Short Term Debt	0.0	0.0	0.0	0.0	0.0
Current Portion - Long Term Debt/Capital Leases	0.0	0.0	0.0	0.0	0.0
Customer Advances	2.3	0.9	0.2	0.3	0.4
Income Taxes Payable	-	-	-	0.0	0.0
Other Current liabilities, Total	2.3	0.9	0.2	0.4	0.4
Total Current Liabilities	5.9	4.2	3.2	3.7	3.6

Capital Lease Obligations	-	-	0.0	0.0	0.0
Total Long Term Debt	0.0	0.0	0.0	0.0	0.0
Total Debt	0.0	0.0	0.0	0.0	0.0

Deferred Income Tax - LT Liability	0.6	0.6	0.6	0.5	0.5
Deferred Income Tax	0.6	0.6	0.6	0.5	0.5
Other Long Term Liabilities	0.1	0.1	0.2	0.2	0.2
Other Liabilities, Total	0.1	0.1	0.2	0.2	0.2
Total Liabilities	6.5	4.8	4.0	4.5	4.3

Preferred Stock - Non Redeemable	0.0	0.0	0.0	0.0	0.0
Preferred Stock - Non Redeemable, Net	0.0	0.0	0.0	0.0	0.0
Common Stock	0.0	0.0	0.0	0.0	0.0
Common Stock	0.0	0.0	0.0	0.0	0.0
Additional Paid-In Capital	47.5	47.3	47.2	47.1	47.0
Retained Earnings (Accumulated Deficit)	26.6	26.3	26.6	26.6	26.7
Treasury Stock - Common	-20.1	-19.9	-19.6	-19.3	-19.3
Total Equity	53.9	53.7	54.3	54.4	54.4

Total Liabilities & Shareholdersâ€™ Equity	60.4	58.5	58.3	58.9	58.7

Shares Outstanding - Common Stock Primary Issue	16.7	16.7	16.7	16.8	16.8
Total Common Shares Outstanding	16.7	16.7	16.7	16.8	16.8
Treasury Shares - Common Stock Primary Issue	1.6	1.6	1.5	1.5	1.5
Accumulated Intangible Amort, Suppl.	0.4	0.4	0.4	0.4	0.3
Deferred Revenue - Current	2.3	0.9	0.2	0.3	0.4
Deferred Revenue - Long Term	-	-	0.0	0.0	0.0

Annual Cash Flows

Standardized

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Restated Normal 30-Sep-2009	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Net Income/Starting Line	0.7	0.7	5.0	-7.9	-8.8
Depreciation	0.7	0.8	1.1	1.0	0.9
Depreciation/Depletion	0.7	0.8	1.1	1.0	0.9
Deferred Taxes	0.0	0.0	-0.1	1.2	-0.6
Unusual Items	0.0	0.1	0.1	2.5	0.0
Other Non-Cash Items	0.9	0.4	1.4	7.0	0.8
Non-Cash Items	0.9	0.5	1.4	9.5	0.8
Accounts Receivable	-0.6	3.7	-2.2	-2.0	-2.9
Inventories	0.7	0.7	3.5	-1.9	-3.0
Prepaid Expenses	0.1	0.3	0.2	4.8	-2.1
Other Assets	-0.1	0.0	0.0	0.0	-0.1
Accounts Payable	-0.1	-0.7	-1.1	-1.7	3.7
Accrued Expenses	-0.2	-0.2	-1.7	1.0	1.5
Taxes Payable	0.2	-0.1	-0.7	0.0	0.0
Other Liabilities	0.1	-0.1	-0.2	0.1	0.0
Changes in Working Capital	0.0	3.5	-2.1	0.3	-2.9
Cash from Operating Activities	2.3	5.6	5.3	4.2	-10.6

Purchase of Fixed Assets	-0.3	-0.2	-0.3	-0.6	-1.3
Capital Expenditures	-0.3	-0.2	-0.3	-0.6	-1.3
Sale of Fixed Assets	0.0	0.0	0.0	0.0	0.0
Other Investing Cash Flow	-	-	-	-	-2.6
Other Investing Cash Flow Items, Total	0.0	0.0	0.0	0.0	-2.6
Cash from Investing Activities	-0.3	-0.2	-0.3	-0.6	-3.9

Other Financing Cash Flow	0.0	0.0	0.0	0.0	0.2
Financing Cash Flow Items	0.0	0.0	0.0	0.0	0.2
Cash Dividends Paid - Common	-	0.0	0.0	-16.7	0.0
Total Cash Dividends Paid	-	0.0	0.0	-16.7	0.0
Repurchase/Retirement of Common	-0.3	0.0	-0.1	-1.0	0.0
Common Stock, Net	-0.3	0.0	-0.1	-1.0	0.0
Options Exercised	-	0.0	0.0	0.0	0.5
Issuance (Retirement) of Stock, Net	-0.3	0.0	-0.1	-1.0	0.5
Long Term Debt Reduction	0.0	0.0	-4.3	0.0	0.0
Long Term Debt, Net	0.0	0.0	-4.3	0.0	0.0
Issuance (Retirement) of Debt, Net	0.0	0.0	-4.3	0.0	0.0
Cash from Financing Activities	-0.3	-0.1	-4.5	-17.7	0.6

Net Change in Cash	1.7	5.4	0.5	-14.1	-13.8

Net Cash - Beginning Balance	40.9	35.6	35.0	49.2	63.0
Net Cash - Ending Balance	42.6	40.9	35.6	35.0	49.2
Cash Interest Paid	0.0	0.0	0.0	0.1	0.2
Cash Taxes Paid	0.0	0.1	0.8	-5.1	0.0

Interim Cash Flows

Standardized

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

Financial Glossary

	31-Mar-2012	31-Dec-2011	30-Sep-2011	30-Jun-2011	31-Mar-2011
Period Length	6 Months	3 Months	12 Months	9 Months	6 Months
UpdateType/Date	Updated Normal 31-Mar-2012	Updated Normal 31-Dec-2011	Updated Normal 30-Sep-2011	Updated Normal 30-Jun-2011	Updated Normal 31-Mar-2011
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1

Net Income/Starting Line	-0.1	-0.3	0.7	0.7	0.8
Depreciation	0.3	0.2	0.7	0.5	0.3
Depreciation/Depletion	0.3	0.2	0.7	0.5	0.3
Deferred Taxes	0.0	0.0	0.0	0.0	0.0
Unusual Items	-	-	0.0	0.0	0.0
Other Non-Cash Items	0.3	0.1	0.9	0.3	0.2
Non-Cash Items	0.3	0.1	0.9	0.3	0.2
Accounts Receivable	-0.5	0.6	-0.6	-0.5	0.0
Inventories	-1.0	-0.6	0.7	0.3	0.1
Prepaid Expenses	-0.3	0.0	0.1	0.3	0.0
Other Assets	0.0	-	-0.1	-0.1	-0.1
Accounts Payable	1.2	0.6	-0.1	0.5	0.2
Accrued Expenses	-0.5	-0.2	-0.2	-0.3	-0.2
Taxes Payable	-0.3	-0.4	0.2	0.1	0.1
Other Liabilities	2.1	0.7	0.1	0.2	0.2
Changes in Working Capital	0.7	0.7	0.0	0.4	0.3
Cash from Operating Activities	1.2	0.6	2.3	1.9	1.6

Purchase of Fixed Assets	-0.1	-0.1	-0.3	-0.2	-0.1
Capital Expenditures	-0.1	-0.1	-0.3	-0.2	-0.1
Sale of Fixed Assets	-	-	0.0	-	-
Other Investing Cash Flow Items, Total	-	-	0.0	-	-
Cash from Investing Activities	-0.1	-0.1	-0.3	-0.2	-0.1

Other Financing Cash Flow	-	-	0.0	-	-
Financing Cash Flow Items	-	-	0.0	-	-
Repurchase/Retirement of Common	-0.6	-0.3	-0.3	0.0	0.0
Common Stock, Net	-0.6	-0.3	-0.3	0.0	0.0
Issuance (Retirement) of Stock, Net	-0.6	-0.3	-0.3	0.0	0.0
Long Term Debt Reduction	0.0	0.0	0.0	0.0	0.0
Long Term Debt, Net	0.0	0.0	0.0	0.0	0.0
Issuance (Retirement) of Debt, Net	0.0	0.0	0.0	0.0	0.0
Cash from Financing Activities	-0.6	-0.4	-0.3	0.0	0.0

Net Change in Cash	0.6	0.2	1.7	1.7	1.6

Net Cash - Beginning Balance	42.6	42.6	40.9	40.9	40.9
Net Cash - Ending Balance	43.2	42.8	42.6	42.6	42.5
Cash Interest Paid	0.0	0.0	0.0	0.0	0.0
Cash Taxes Paid	0.2	0.2	0.0	0.0	0.0

Annual Income Statement

As Reported

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Revenues	-	-	-	0.0	-
Product	25.2	23.4	31.9	25.9	15.1
Engineering	0.6	1.9	4.9	4.6	3.3
Total Revenue	25.7	25.3	36.7	30.5	18.3

Cost of Sales	-	-	-	0.0	-
Product	11.8	10.7	16.6	17.6	9.0
Engineering	0.2	0.8	1.3	3.0	5.2
Research & Development	5.5	5.2	5.3	10.3	5.2
Asset Impairment	-	-	0.0	2.5	0.0
Selling, general and administrative	7.7	8.1	8.6	22.3	15.8
Total Operating Expense	25.1	24.9	31.9	55.6	35.2

Interest Income	0.1	0.2	0.4	1.6	3.1
Interest Expense	0.0	0.0	-0.1	-0.2	-0.2
Other income	0.2	0.1	0.1	17.3	0.0
Net Income Before Taxes	0.9	0.6	5.2	-6.4	-13.9

Provision for Income Taxes	0.2	-0.1	0.2	1.5	-5.1
Net Income After Taxes	0.7	0.7	5.0	-7.9	-8.8

Net Income Before Extra. Items	0.7	0.7	5.0	-7.9	-8.8
Net Income	0.7	0.7	5.0	-7.9	-8.8

Income Available to Com Excl ExtraOrd	0.7	0.7	5.0	-7.9	-8.8

Income Available to Com Incl ExtraOrd	0.7	0.7	5.0	-7.9	-8.8

Basic Weighted Average Shares	16.8	16.8	16.7	16.9	16.9
Basic EPS Excluding ExtraOrdinary Items	0.04	0.04	0.30	-0.47	-0.52
Basic EPS Including ExtraOrdinary Item	0.04	0.04	0.30	-0.47	-0.52
Dilution Adjustment	-	-	-	0.0	0.0
Diluted Net Income	0.7	0.7	5.0	-7.9	-8.8
Diluted Weighted Average Shares	16.8	16.8	16.8	16.9	16.9
Diluted EPS Excluding ExtraOrd Items	0.04	0.04	0.30	-0.47	-0.52
Diluted EPS Including ExtraOrd Items	0.04	0.04	0.30	-0.47	-0.52
DPS-Common Stock	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	16.7	0.0
Normalized Income Before Taxes	0.9	0.6	5.2	-3.9	-13.9

Inc Tax Ex Impact of Sp Items	0.2	-0.1	0.2	2.4	-5.1
Normalized Income After Taxes	0.7	0.7	5.0	-6.3	-8.8

Normalized Inc. Avail to Com.	0.7	0.7	5.0	-6.3	-8.8

Basic Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Diluted Normalized EPS	0.04	0.04	0.30	-0.37	-0.52
Research & Development Expense	5.5	5.2	5.3	10.3	5.2
Interest Expense	0.0	0.0	0.1	0.2	0.2
Rental Expense	0.0	0.0	0.0	0.2	0.1
Amortization of Intangible	0.1	0.1	0.2	0.1	0.1
Depreciation	0.5	0.8	0.9	1.0	0.9
Current Tax - Federal	0.2	0.0	0.1	0.2	-4.5
Current Tax - State	0.0	-0.1	0.0	0.0	0.0
Current Tax - Total	0.2	-0.1	0.1	0.2	-4.5
Deferred Tax - Federal	0.0	0.0	0.0	0.9	-0.6
Deferred Tax - State	0.0	0.0	0.1	0.4	0.0
Deferred Tax - Total	0.0	0.0	0.1	1.3	-0.6
Income Tax - Total	0.2	-0.1	0.2	1.5	-5.1
Defined Contribution Plan	-	0.2	0.2	0.2	0.0
Total Pension Expense	-	0.2	0.2	0.2	0.0

Interim Income Statement

As Reported

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	31-Mar-2012	31-Dec-2011	30-Sep-2011	30-Jun-2011	31-Mar-2011
Period Length	3 Months	3 Months	3 Months	3 Months	3 Months
UpdateType/Date	Updated Normal 31-Mar-2012	Updated Normal 31-Dec-2011	Updated Normal 30-Sep-2011	Updated Normal 30-Jun-2011	Updated Normal 31-Mar-2011
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1

Product	5.3	4.0	6.1	5.9	6.7
Engineering—modification and devel	1.5	0.7	0.4	0.1	0.0
Total Revenue	6.8	4.8	6.5	6.0	6.7

Product	2.8	2.0	3.2	2.8	2.9
Engineering—modification and devel	0.9	0.6	0.1	0.0	0.0
Research and development	0.9	0.8	1.2	1.4	1.6
Selling, general and administrative	1.8	2.0	1.9	1.9	1.8
Total Operating Expense	6.4	5.4	6.4	6.1	6.3

Interest Income	0.0	0.0	0.0	0.0	0.0
Interest expense	0.0	0.0	0.0	0.0	0.0
Other income	0.0	0.0	0.0	0.0	0.0
Net Income Before Taxes	0.4	-0.6	0.1	-0.1	0.5

Provision for Income Taxes	0.1	-0.3	0.1	0.0	0.0
Net Income After Taxes	0.3	-0.3	0.0	-0.1	0.5

Net Income Before Extra. Items	0.3	-0.3	0.0	-0.1	0.5
Net Income	0.3	-0.3	0.0	-0.1	0.5

Income Available to Com Excl ExtraOrd	0.3	-0.3	0.0	-0.1	0.5

Income Available to Com Incl ExtraOrd	0.3	-0.3	0.0	-0.1	0.5

Basic Weighted Average Shares	16.6	16.7	16.8	16.8	16.8
Basic EPS Excluding ExtraOrdinary Items	0.02	-0.02	0.00	0.00	0.03
Basic EPS Including ExtraOrdinary Item	0.02	-0.02	0.00	0.00	0.03
Dilution Adjustment	0.0	0.0	0.0	0.0	0.0
Diluted Net Income	0.3	-0.3	0.0	-0.1	0.5
Diluted Weighted Average Shares	16.6	16.7	16.9	16.8	16.8
Diluted EPS Excluding ExtraOrd Items	0.02	-0.02	0.00	0.00	0.03
Diluted EPS Including ExtraOrd Items	0.02	-0.02	0.00	0.00	0.03
DPS-Common Stock	0.00	0.00	0.00	0.00	0.00
Gross Dividends - Common Stock	0.0	0.0	0.0	0.0	0.0
Normalized Income Before Taxes	0.4	-0.6	0.1	-0.1	0.5

Inc Tax Ex Impact of Sp Items	0.1	-0.3	0.1	0.0	0.0
Normalized Income After Taxes	0.3	-0.3	0.0	-0.1	0.5

Normalized Inc. Avail to Com.	0.3	-0.3	0.0	-0.1	0.5

Basic Normalized EPS	0.02	-0.02	0.00	0.00	0.03
Diluted Normalized EPS	0.02	-0.02	0.00	0.00	0.03
Research & Development Expense	0.9	0.8	1.2	1.4	1.6
Interest Expense	0.0	0.0	0.0	0.0	0.0
Depreciation	0.1	0.1	0.1	0.1	0.1
Amortisation expense	0.0	0.0	0.0	0.0	0.0
Gross profit	3.1	2.1	3.2	3.2	3.9

Annual Balance Sheet

As Reported

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Updated Normal 30-Sep-2008	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Cash & Cash Equivalents	42.6	40.9	35.6	35.0	49.2
Inventories	-	-	-	0.0	-
Accounts Receivable	3.3	2.7	6.4	4.2	6.2
Doubtful Account	-0.2	-0.2	-0.2	0.0	0.0
Raw Materials	2.5	2.7	3.5	4.7	6.4
Work in Process	0.2	0.2	0.3	3.0	2.2
Finished Goods	0.8	1.7	1.5	1.6	0.7
Deferred income taxes	0.4	0.5	0.5	0.4	0.9
Revenue recognized not yet invoiced	0.4	0.4	0.5	-	-
Deferred engineering costs	0.0	0.0	0.1	-	-
Income tax assets	0.0	0.0	0.0	-	-
Other	0.2	0.2	0.3	-	-
Prepaid Expenses	0.3	0.3	0.3	1.4	6.2
Total Current Assets	50.6	49.6	48.8	50.4	71.9

Property and equipment, net	-	-	-	0.0	-
Computer equipment	2.1	2.0	2.0	2.0	-
Equipment	4.2	4.1	4.0	3.9	-
Computer & Test Equipment	-	-	-	-	5.4
Corporate Airplane	3.1	3.1	3.1	3.1	3.1
Furniture & Office Equipment	1.1	1.1	1.1	1.1	1.0
Manufacturing Facility	5.6	5.6	5.6	5.6	5.6
Land	1.0	1.0	1.0	1.0	1.0
Depreciation	-9.6	-9.0	-8.4	-7.7	-6.7
Intangible Assets	0.6	0.5	0.5	0.4	2.9
Amortization of Intangibles	-0.4	-0.3	-0.2	-0.1	0.0
Deposits & Other Assets	-	-	0.1	0.2	0.2
Deferred income taxes	-	-	-	0.0	0.3
Total Assets	58.3	57.6	57.5	59.9	84.6

Current Portion of Lease	0.0	0.0	0.0	0.0	0.0
Accounts Payable	0.4	0.5	1.2	2.3	4.1
Accrued Expenses	2.6	2.6	2.7	4.3	3.7
Income Taxes Payable	-	0.0	0.1	0.8	1.0
Deferred Revenue	0.2	0.2	0.2	0.5	0.7
Total Current Liabilities	3.2	3.3	4.2	7.9	9.4

Capital Lease	0.0	0.0	0.0	0.0	0.0
Note Payable	-	-	0.0	4.3	4.3
Total Long Term Debt	0.0	0.0	0.0	4.4	4.4

Deferred Revenue	0.0	0.0	0.1	0.1	0.1
Deferred income taxes	0.6	0.6	0.6	0.4	0.0
Other Liabilities	0.2	0.2	0.2	0.2	0.0
Total Liabilities	4.0	4.1	5.1	13.1	13.9

Preferred Stock, 10,000,000 shares autho	0.0	0.0	0.0	0.0	-
Common Stock	0.0	0.0	0.0	0.0	0.0
Paid in Capital	47.2	46.8	46.5	45.8	44.6
Retained Earning	26.6	25.9	25.2	20.2	44.2
Treasury Stock	-19.6	-19.3	-19.2	-19.1	-18.1
Total Equity	54.3	53.5	52.4	46.8	70.7

Total Liabilities & Shareholders' Equity	58.3	57.6	57.5	59.9	84.6

S/O-Common Stock	16.7	16.8	16.7	16.7	16.9
Total Common Shares Outstanding	16.7	16.8	16.7	16.7	16.9
T/S-Common Stock	1.5	1.5	1.5	1.4	1.3
Deferred Revenue - Current	0.2	0.2	0.2	0.5	0.7
Deferred Revenue - Non Current	0.0	0.0	0.1	0.1	0.1
Accumulated Amortization Intangible	0.4	0.3	0.2	0.1	0.0
Full-Time Employees	117	133	140	165	171
Number of Common Shareholders	16	15	16	20	19
LT Debt Maturing within 1 Year	0.0	-	-	-	-
LT Debt Remaining Maturities	-	-	-	-	4.3
Total Long Term Debt, Supplemental	0.0	-	-	-	4.3
Capital Lease Maturing within 1 Year	0.0	0.0	0.0	0.0	0.0
Capital Lease Maturing within 2 Years	-	-	0.0	0.0	0.0
Capital Lease Maturing within 3 Years	0.0	0.0	0.0	0.0	0.0
Capital Lease Maturing within 4 Years	-	0.0	0.0	0.0	0.0
Capital Lease Maturing within 5Years	0.0	0.0	0.0	-	0.0
Total Capital Leases	0.0	0.0	0.0	0.1	0.1
Operating Lease Maturing within 1 Year	-	-	-	0.0	0.1
Operating Lease Maturing within 2 Year	-	-	-	-	0.0
Total Operating Leases	-	-	-	0.0	0.1

Interim Balance Sheet

As Reported

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	31-Mar-2012	31-Dec-2011	30-Sep-2011	30-Jun-2011	31-Mar-2011
UpdateType/Date	Updated Normal 31-Mar-2012	Updated Normal 31-Dec-2011	Updated Normal 30-Sep-2011	Updated Normal 30-Jun-2011	Updated Normal 31-Mar-2011
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate	1	1	1	1	1

Cash & Cash Equivalents	43.2	42.8	42.6	42.6	42.5
Accounts receivable, net	3.6	2.6	3.1	3.1	2.6
Raw Materials	3.3	3.0	2.5	2.7	2.8
Work in Progress	0.6	0.5	0.2	0.3	0.7
Finished Goods	0.5	0.6	0.8	1.3	1.0
Deferred income taxes	0.4	0.4	0.4	0.4	0.4
Revenue recognized not yet invoiced	0.8	0.4	0.4	0.3	0.4
Prepaid Insurance	0.1	0.1	0.3	0.1	0.2
Deferred Engineering costs	-	-	0.0	0.0	0.0
Income tax asset	0.1	0.1	0.0	0.0	0.0
Other	0.3	0.3	0.2	0.2	0.3
Total Current Assets	52.9	50.9	50.6	51.1	50.9

Equipment	4.3	4.3	4.2	4.2	4.1
Computer equipment	2.1	2.1	2.1	2.0	2.0
Corporate Airplane	3.1	3.1	3.1	3.1	3.1
Furniture & Office Equipment	1.1	1.1	1.1	1.1	1.1
Manufacturing Facility	5.6	5.6	5.6	5.6	5.6
Land	1.0	1.0	1.0	1.0	1.0
Depreciation	-9.8	-9.7	-9.6	-9.4	-9.3
Intangible assets	0.6	0.6	0.6	0.6	0.6
Accumulated amortisation	-0.4	-0.4	-0.4	-0.4	-0.3
Total Assets	60.4	58.5	58.3	58.9	58.7

Current Portion of Lease	0.0	0.0	0.0	0.0	0.0
Accounts Payable	1.6	1.0	0.4	1.1	0.8
Accrued Expenses	1.9	2.2	2.6	2.3	2.4
Income taxes payable	-	-	-	0.0	0.0
Deferred revenue	2.3	0.9	0.2	0.3	0.4
Total Current Liabilities	5.9	4.2	3.2	3.7	3.6

Capital Lease	-	-	0.0	0.0	0.0
Total Long Term Debt	-	-	0.0	0.0	0.0

Other liabilities	0.1	0.1	0.2	0.2	0.2
Deferred revenue	-	-	0.0	0.0	0.0
Deferred income taxes	0.6	0.6	0.6	0.5	0.5
Total Liabilities	6.5	4.8	4.0	4.5	4.3

Preferred Stock	0.0	0.0	0.0	0.0	0.0
Common Stock	0.0	0.0	0.0	0.0	0.0
Paid in Capital	47.5	47.3	47.2	47.1	47.0
Retained Earnings	26.6	26.3	26.6	26.6	26.7
Treasury stock	-20.1	-19.9	-19.6	-19.3	-19.3
Total Equity	53.9	53.7	54.3	54.4	54.4

Total Liabilities & Shareholders' Equity	60.4	58.5	58.3	58.9	58.7

S/O-Common Stock	16.7	16.7	16.7	16.8	16.8
Total Common Shares Outstanding	16.7	16.7	16.7	16.8	16.8
T/S-Common Stock	1.6	1.6	1.5	1.5	1.5
Deferred Revenue - Current	2.3	0.9	0.2	0.3	0.4
Deferred Revenue - Non Current	-	-	0.0	0.0	0.0
Accumulated amortisation	0.4	0.4	0.4	0.4	0.3

Annual Cash Flows

As Reported

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	30-Sep-2011	30-Sep-2010	30-Sep-2009	30-Sep-2008	30-Sep-2007
Period Length	12 Months	12 Months	12 Months	12 Months	12 Months
UpdateType/Date	Updated Normal 30-Sep-2011	Updated Normal 30-Sep-2010	Updated Normal 30-Sep-2009	Restated Normal 30-Sep-2009	Updated Normal 30-Sep-2007
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1
Auditor	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP	Deloitte & Touche LLP
Auditor Opinion	Unqualified	Unqualified	Unqualified	Unqualified	Unqualified

Net Income	0.7	0.7	5.0	-7.9	-8.8
Depreciation	0.7	0.8	1.1	1.0	0.9
Disposal Fixed Asset	0.0	0.1	0.1	0.0	0.0
Loss on disposal of property and equipme	0.0	0.0	0.0	0.0	-
Asset impairment	-	0.0	0.0	2.5	0.0
Excess and obsolete inventory cost	0.5	0.0	0.5	1.9	0.1
Disposal of Obsolete Inventory	-	-	-	-	0.0
Deferred Taxes	0.0	0.0	-0.1	1.2	-0.6
Stock Based Compensation	0.2	0.2	0.5	0.9	0.5
Excess Tax Benefits	-	0.0	0.0	0.0	-0.2
Provision for loss on accounts receivabl	0.0	0.0	0.2	4.1	0.0
Nonvested stock awards	0.0	0.0	0.0	0.0	-
Stock options	-	0.0	0.0	0.0	-
Stock to Directors	0.2	0.2	0.2	0.2	0.2
Option Tax Benefits	-	-	-	-	0.2
Accounts Receivable	-0.6	3.7	-2.2	-2.0	-2.9
Inventories	0.7	0.7	3.5	-1.9	-3.0
Prepaid Expense & Other	0.1	0.3	0.2	4.8	-2.1
Accounts Payable	-0.1	-0.7	-1.1	-1.7	3.7
Income taxes payable	0.2	-0.1	-0.7	0.0	0.0
Accrued Expenses	-0.2	-0.2	-1.7	1.0	1.5
Other non-current assets	-0.1	0.0	0.0	0.0	-0.1
Other non-current liabilities	0.0	0.0	0.1	0.2	0.0
Deferred Revenue	0.1	-0.1	-0.3	-0.1	0.0
Cash from Operating Activities	2.3	5.6	5.3	4.2	-10.6

Purchase of other assets	-	-	0.0	0.0	-
Capital Expenditures	-0.3	-0.2	-0.3	-0.6	-1.3
Proceeds from the sale of property and e	0.0	0.0	0.0	0.0	0.0
Capital Expenditure- Other Assets	-	-	-	-	-2.6
Cash from Investing Activities	-0.3	-0.2	-0.3	-0.6	-3.9

Repayment of Industrial Development Bond	0.0	0.0	-4.3	0.0	0.0
Other	0.0	0.0	0.0	-	-
Repayment of Leases	0.0	0.0	0.0	0.0	0.0
Exercise of Options	-	0.0	0.0	0.0	0.5
Excess Tax Benefits	-	0.0	0.0	0.0	0.2
Dividend paid	-	0.0	0.0	-16.7	0.0
Purchase Treasury	-0.3	0.0	-0.1	-1.0	0.0
Cash from Financing Activities	-0.3	-0.1	-4.5	-17.7	0.6

Net Change in Cash	1.7	5.4	0.5	-14.1	-13.8

Net Cash - Beginning Balance	40.9	35.6	35.0	49.2	63.0
Net Cash - Ending Balance	42.6	40.9	35.6	35.0	49.2
Cash Interest Paid	0.0	0.0	0.0	0.1	0.2
Cash Taxes Paid	0.0	0.1	0.8	-5.1	0.0

Interim Cash Flows

As Reported

Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)

	31-Mar-2012	31-Dec-2011	30-Sep-2011	30-Jun-2011	31-Mar-2011
Period Length	6 Months	3 Months	12 Months	9 Months	6 Months
UpdateType/Date	Updated Normal 31-Mar-2012	Updated Normal 31-Dec-2011	Updated Normal 30-Sep-2011	Updated Normal 30-Jun-2011	Updated Normal 31-Mar-2011
Filed Currency	USD	USD	USD	USD	USD
Exchange Rate (Period Average)	1	1	1	1	1

Net Income	-0.1	-0.3	0.7	0.7	0.8
Depreciation	0.3	0.2	0.7	0.5	0.3
Deposit forfeiture, installation kit	-	-	0.0	0.0	0.0
Excess and obsolete inventory cost	-	-	0.5	-	-
Stock Based Compensation	0.2	0.1	0.2	0.1	0.1
Stock to Directors	0.1	0.0	0.2	0.1	0.1
Provision for loss on accounts receivabl	-	-	0.0	-	-
Deferred income tax	0.0	0.0	0.0	0.0	0.0
Nonvested stock awards	0.0	0.0	0.0	0.0	0.0
(Gain) loss on disposal of fixed assets	-	-	0.0	0.0	0.0
Accounts Receivable	-0.5	0.6	-0.6	-0.5	0.0
Inventories	-1.0	-0.6	0.7	0.3	0.1
Prepaid Expense & Other	-0.3	0.0	0.1	0.3	0.0
Other non-current assets	0.0	-	-0.1	-0.1	-0.1
Accounts Payable	1.2	0.6	-0.1	0.5	0.2
Income taxes payable	-0.3	-0.4	0.2	0.1	0.1
Accrued Expenses	-0.5	-0.2	-0.2	-0.3	-0.2
Other non-current liabilities	-	-	0.0	-	-
Deferred Revenue	2.1	0.7	0.1	0.2	0.2
Cash from Operating Activities	1.2	0.6	2.3	1.9	1.6

Proceeds from the sale of property and e	-	-	0.0	-	-
Capital Expenditures	-0.1	-0.1	-0.3	-0.2	-0.1
Cash from Investing Activities	-0.1	-0.1	-0.3	-0.2	-0.1

Repayment of Industrial Development Bond	-	-	0.0	-	-
Other	-	-	0.0	-	-
Repayment of Lease	0.0	0.0	0.0	0.0	0.0
Treasury Stock	-0.6	-0.3	-0.3	0.0	0.0
Cash from Financing Activities	-0.6	-0.4	-0.3	0.0	0.0

Net Change in Cash	0.6	0.2	1.7	1.7	1.6

Net Cash - Beginning Balance	42.6	42.6	40.9	40.9	40.9
Net Cash - Ending Balance	43.2	42.8	42.6	42.6	42.5
Cash Interest Paid	0.0	0.0	0.0	0.0	0.0
Cash Taxes Paid	0.2	0.2	0.0	0.0	0.0

Bottom of Form

Standard & Poor’s

United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative

Publication date: 05-Aug-2011 20:13:14 EST

· We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

· We have also removed both the short- and long-term ratings from CreditWatch negative.

· The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

· More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

· Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

· The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

TORONTO (Standard & Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for

debt service--remains 'AAA'.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions ," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements,

the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).

Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.

We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.65
UK Pound	1	Rs.85.89
Euro	1	Rs.67.88

INFORMATION DETAILS

Report Prepared by :

PRL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.