Geoff Hedrick - Chairman and CEO John Long - CFO Roman Ptakowski - President

Alex Hamilton - Jesup & Lamont Securities Corp. David Campbell - Thompson, Davis & Co. Michael Ciarmoli - Boenning & Scattergood Inc.

Good morning. My name is Lisa and I will be your conference operator today. At this time I would like to welcome everyone to the Innovative Solution & Support third quarter financial results 2009 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions). Thank you. Mr. Hedrick, you may begin your conference.

Good morning. This is Geoff Hedrick, I am the chairman and CEO of Innovative Solutions & Support and I would like to welcome you this morning to our conference call to discuss the third quarter 2009 results, current business conditions, and outlook. Joining me today in our Exton headquarters are Roman Ptakowski, our president; and John Long, our CFO. Before I begin, I would like to ask John to read our Safe Harbor statement. John?

Thanks Geoff. Good morning. I’d like to remind our listeners that certain matters discussed in the conference call today including operational and financial results for future periods are forward-looking statements and are subject to the risks and uncertainties that could cause actual results to differ materially, either better or worse than those discussed includes the risks and uncertainties reflected in our company’s 10-K which is on file with the SEC. I will now turn the call back over to Geoff Hedrick, CEO. Geoff?

Thanks John. We again reported another profitable quarter within the period ending June 30, 2009 so we have extended our sequential profitable quarters this fiscal year. For the quarter, we report a net income of $1.3 million or $0.07 per fully diluted share an encouraging improvement over the comparable year earlier and especially in a most difficult economy. Over the past three profitable quarters this year, we have increased revenue by more than 40%, we have also once again achieved our cash flow goal by generating $1.8 million in cash flow in the third quarter. All in all another quarter that is consistent with our objectives for the year. We remarked last quarter how deteriorating conditions were going to pose a challenge sustaining the revenue levels that we had achieved for the first half of the year. The decrease in revenues to $7.8 million in the third quarter was anticipated. In addition to interest rate conditions, revenues in the quarter were impacted by a customer initiated production schedule change at the end of this quarter. In light of both the weak industry conditions and the loss of grant revenues due to customer deferral, we believe our results are indicative of the strength of our business and the result of our management (inaudible). Gross margin were 53.3% and operating margin of 13% for the third quarter, so despite the topline increase we were able to adapt quickly to the changed conditions and generate margins consistent with if not better than the first half. Cash flow was also strong this quarter at $1.8 million as we continued to reduce inventory, closely monitor receivable levels, and make other changes to better manage our working capital. Cash at the end of the quarter was at a recent high of $39.3 million. Our creditable financial performance and solid balance sheet are on track to meet our financial performance objectives for the year. Our products are all manufactured and tested to the most recent industry standards and are all qualified for application into all three of the markets we serve. This provides flexibility in our production to meet variable demand in each market segment. Lately we have been having success in the military market both home and abroad. In the immediate term [ph] it appears that the military market has managed to remain rather resilient. In the third quarter, we booked a number of new military contracts and we are optimistic we will see more of our proposals transition into firm orders. Although the overall general aviation market has suffered, we are nearly at an inflection point with our Cessna relationship. The company flight testing is successfully completed and Cessna plans to start FAA ground and flight test for the FTC of our Flat Panel Display System this week, with the slow down in new aircraft demand its very cost-effective upgrade program is expected to expand quickly. Though the (inaudible) has not materially increased many of our new programs are shifting away from traditional long-term contracts to book and ship and similar contractual relations. This year we have de-booked $6 million of G8 orders impacted by slow certification and the industry slowdown. This was done in the December quarter. Under new agreements including Cessna, the work never enters backlog and although the relationship may ultimately result in sales that could reach millions. Our bid pipeline is also strong with over 100 million in outstanding proposals are being worked including a letter of intent from an international airline for retrofit of their fleet. I would like to turn it over to John Long now to review the financial results before we wrap up.

Thanks, Jeff, and thanks again for joining our call this morning. Revenues in the third quarter were $7.8 million, down 11.3% from $8.8 million a year ago. However in 2008 third quarter revenues included $3.2 million of shipments of products to an OEM customer that was subsequently discontinued. Excluding the revenues from that one product revenues from our core products were up in the quarter. Also as indicated in the earnings release, one of our larger customers changed their delivery schedule during the quarter to equal [ph] further production that we had originally planned for both the third and fourth quarters. Our guidance in the earnings release considers the effect of these changes and this change. In the quarter, flat panel display related revenues were $5.4 million while air data product revenues were approximately $2.4 million. From an end market perspective, the military was our biggest customer indirectly with revenue of $3.4 million or 44% of our quarterly total. Gross margins in the quarter were 53.3%, the highest margins achieved this year even though revenues were sequentially down. For year to date, we have sustained production levels that have enabled us to achieve gross margins of roughly 51%, which is well above our mid-to-high 40% targeted range. Over the long term, quarterly consolidated margins will vary with changes in volume and product mix but should remain within that target range. Total operating expenses for the quarter were $3.1 million, of that research and development expense was $1.3 million or approximately 16.6% of revenue for the quarter, which is relatively consistent with the first half of the year and is tracking with our long-term historical average. Year to date, R&D is running at approximately 14.5% of revenues. Selling, general and administrative spending in the quarter totaled $1.8 million compared to about $3.7 million in the year ago quarter. Last year the G&A included about $0.5 million in the quarter of legal expense. SG&A this quarter is again below the quarterly run rate we had anticipated for this year and is also down from the $2.3 million in the second quarter and $2.4 million in the first quarter. For the quarter, SG&A was 23.7% of revenue and for year to date 22.5%. We reported third quarter 2009 net income of $1.3 million or $0.07 per diluted share and net income represents about 16.1% return on revenues. For the quarter, we had a tax credit of approximately $200,000 which was primarily the result of an update to the anticipated annual effective tax rate as required under APB28, we anticipate an effective tax rate of 0% for the year and that is driven primarily by the current year tax deduction that we are obtaining related to the Eclipse bad debt. Our financial position remains strong. At June 30, we had over $39 million in cash and shareholder equity of over $51 million or approximately $3.08 per share and we are also generating substantial cash from operations and focus on continuing improvement in the management of our working capital. Sequentially both the inventory and accounts receivables were further reduced which again helped drive that up for international. We are in the process of redeeming the $4.3 million of our revenue (inaudible) debt that we currently have outstanding. The elimination or pay off of this debt in this fourth quarter will improve our net interest income and more importantly remove the restrictive covenant that will improve our overall financial flexibility. Now I would like to turn the call over to Roman for some comments on the current market conditions and new products (inaudible) Roman?

Thank you, John. Let me first address activities on the most recent quarter. The quarter’s revenues were generated across our diverse customer base from each of our three market segments. In the commercial air transport market segment, we continued to ship Flat Panel Display Systems above cargo carriers as to revenue passenger airlines. General aviation revenue this quarter included shipments for Pilatus PC-12 applications and additional shipments to support Cessna. In our military sector, the company’s revenues were generated from C-130, KDC10, P3, and Homeland Security applications. Included in our military segment were shipments of our high-resolution 20-inch diagonal displays and air data products as well as Flat Panel Display Systems for cockpit upgrades. The Cessna aircraft company has successfully completed its initial flight-testing of the IS&S Flat Panel Display Systems. The test aircraft the Citation 5 is now scheduled for final FAA testing. The cockpit has been upgraded with the IS&S Flat Panel Display Systems, the aircraft interior has been refreshed, the exterior has been repainted and it is offered for sale featuring the AdViz glass cockpit. The AdViz cockpit upgrade has been certified for the Cessna citation 500, 501, 550, 551, the S550, 560 and the 650. Cessna has 34 centers around the world that will offer the AdViz cockpit upgrade. As we have said before, there are 4500 eligible aircraft for the Cessna AdViz upgrade program. Success of the Cessna program has found new opportunities for the company. We have already introduced our Vantage cockpit IP solution for broader general aviation applications. We are now in discussions with a number of additional OEMs that would like to opt for their own version of the Flat Panel Display System upgrade for their aircraft models. The Vantage cockpit IP allows operators to retrofit their aircraft with a new Flat Panel Display System while leaving existing third party avionics installed in the aircraft minimizing the cost of the upgrade. It also provides the owner of the opportunity to upgrade the new radios, transponders, GPS or other third-generation avionics. They can select from the best of breed from all the major vendors. The Vantage product provides service centers with improved logistics. The service centre needs to make a minimal inventory investment because the single product can be retrofitted into a number of different airplanes. In the third quarter we were awarded $5 million of military orders. As we said before, these contracts from the Department of Defense and Homeland Security represent a bridge into the world’s largest aircraft market. Our successful Flat Panel Display System implementations on foreign military aircraft on the B757 and the B767 and on Homeland Security projects has solidified our reputation within the military and won us the credibility we need to take the next big step into their broader retrofit programs. As an example, IS&S has just been awarded a contract to provide Flat Panel Display Systems to be used by the US Navy on their C130 aircraft to replace their ageing engine instrumentation. Currently, we have $48 million of military proposals outstanding. We are optimistic about our growth opportunities in the military and defense industry. We also remain optimistic about our prospects in our other market segments. Proposals for the commercial and general aviation segments now total over $62 million. Combined we have outstanding proposals valued at over $110 million. Backlog at the end of the third quarter was $39 million essentially unchanged from March 31 with approximately $7 million of new business booked in the quarter about equal to quarterly shipments. So in spite of the difficult overall economic climate, our outlook both near and intermediate term is to be able to make profitable sales, generate cash, and increase our footprint in all three of our market segments, commercial, general aviation and military. I would now like to turn the call back to Geoff, Thank you.

Thanks Roman. Before concluding our call for today, I would like to make a couple of summary comments. We have discussed backlog and its erosion. The erosion has been (inaudible) as you can see by new and strong orders on the military especially. The year that we have looked at has accommodated a cancellation of a very large OEM customer last year, which took 50% of our revenues away. We made that up, the economy at the same time collapsed, and despite all of that we managed to grow our business by almost 40% this year so far and I think it is a remarkable and incredible accomplishment. I am very proud of the team. We operate very efficiently when we are investing heavily in engineering, new product development almost 16% of revenues and we are doing that in an effective way by having our customers share in the cost of modifications of our equipment for their specific application so that we are able to leverage a lot more of our engineering dollar than we have in the past. This has allowed us to accomplish significant new business with both in the military and the general aviation marketplace. Finally, people across the board are finding that upgrading existing fleets is far more cost effective especially in an economy that is typical as we are in today. New purchases of aircraft are being deferred and upgrading their existing aircraft is essential and this is a market that we serve and (inaudible). This is true in the military especially where as we are aware major programs are being cut, these are major new aircraft programs and modification of existing aircraft like the C130 are now on the top burner because they provide the stainless capability at a fraction of the cost. Let me provide you with expectations for 2009. We finally are looking at $35 million to $37 million range with a 15% growth rate compared to 2008. This performance I am very enthusiastic is a confident one that we can readily achieve and look forward to real growth next year. I would like to turn it over to questions.

Thank you. (Operator instructions) Your first question comes from the line of Alex Hamilton with Jesup & Lamont Securities Corp.. Alex Hamilton - Jesup & Lamont Securities Corp.: Good morning.

Good morning Alex. Hello?

Hello? Alex Hamilton - Jesup & Lamont Securities Corp.: Hi, good morning guys, I am sorry. You talked about backlog and how it is sort of eroding, it is no longer really relevant going forward and I know especially on the long term that is sort of hard to gauge. For us in the investment community, what do you think would be the better thing to focus on, would it be exactly these STCs and the bidding proposals? Can you help put our arms around that a little bit and how we gauge the company going forward?

If I could, I think backlog has some relevance but owing to the extent that it shows – I think in my opinion at roughly a year at present rate it has always been a pretty solid backlog. Much more than that it implies only very, very long-term contracts, which as you know we do not probably book. So it is relevant to the extent that it shows that we have at least a solid base that we can leverage off of. Yes, I think that it is going to be watching us develop the marketplaces over the next year or so in general aviation as we did with Cessna and several other manufacturers have talked to us as well and in the military. In the military, the cuts in the military are huge, I mean massive cuts and it leaves only the existing fleets and new aircrafts not going to be replacing the existing fleets so they have to do upgrades which they have put off for many years and now we are going to have to do. So we see that as a growing market. I guess a good measure is going to be seeing how we do with booking some new business and hopefully you will see that develop. The disciplines that we have gone through which is trying to get the business back into an efficient and productive state, which I think that we have proven that we have and some productability in the outcome and the results was essential for us as a foundation going forward. Now, we are going to look into the bookings and see how we are doing with the bookings. Alex Hamilton - Jesup & Lamont Securities Corp.: Great thank you and you guys have done a fantastic job at cost control and I guess to that question, how much more cost can you strip out, how much more efficiency do you think you can garner or is that just sort of crazy question because as you are running the company you always have your eye to do that?

Well the fact is it is a kind of a different question, but I do not think – we are not going to cut costs any more. I think what we are looking at doing is we may have talked about it in the past but as we go now, we have our review, everybody gets a performance review every three months and that is actually a check well time of the year and it has been very effective because it provides guidance to every importantly on what is going on, where they can contribute, and frankly tough people who are not performing well they can ask either they can improve themselves or where they should follow maybe a different career path. So we do not look at cutting or stripping but we actually look at trying to get more, continually improve the efficiencies and I am used to the term efficiencies in my write-up as opposed to productivity and I know it is a subtle difference but I see productivity as typical as an example in manufacturing plants where overseas they expect workers to work on their own time to get the job done if they do not complete it during the work day. You get productivity that way but it is not an efficient way of doing it. Efficiency I look at is finding both the tools and the guidance to get a more effective output. We are doing a terrific job in engineering, the cost and the time to design and test both software and hardware has literally been cut into half. It is an amazing change and I give them all a huge amount of credit. I think that is going to be the key to our success because our growth is based on our ability to generate new products. So I think the question was a valid one. Alex Hamilton - Jesup & Lamont Securities Corp.: Great, thank you guys.

Thank you.

(Operator instructions) Your next question comes from the line of David Campbell with Thompson, Davis & Co.

Good morning David. David Campbell - Thompson, Davis & Co.: How are you doing?

Doing all right, actually. David Campbell - Thompson, Davis & Co.: Good. I have a couple of things here. For the taxes for the year I assume zero so I have not added up that would be clearly be included in your forecast $0.01 profit in the fourth quarter?

Actually $0.02 David, yes 0.4% [ph] effective tax rate for the year as a whole and that is incorporated into the readings that we put in the earnings release.

Dave, if I remember it, the tax consequences for this quarter improved the quarter by about $0.02. So without the zero tax consequence we would have made still about a nickel, which is pretty remarkable. David Campbell - Thompson, Davis & Co.: It was my estimate, $0.05 was my estimate.

Yes, we are doing all right. David Campbell - Thompson, Davis & Co.: So we are doing fine.

We had to do some scrambling. David Campbell - Thompson, Davis & Co.: Yes, I can count on you from scrambling. You have always been a scrambler Geoff.

Yes, go ahead David. David Campbell - Thompson, Davis & Co.: $1.8 million of cash from operations in the third quarter, did I get that right?

Yes, around $1.8 million, near $1.9 million actually, yes, that is correct. David Campbell - Thompson, Davis & Co.: Okay and the schedule change at the end of the quarter for the Flat Panel release to the passenger airline I assume that means that the fourth quarter will take up a lot of that casual change and at all the ships that they are using yet.

It will impact it. We are sitting and discussing rescheduling them now, they expect to put a number of lines in place to accelerate the consumption of these units and they want units on the shelf and they have agreed to work with us. They have been very cooperative and very enthusiastic about the program. You know, running an airline requires you to adapt to a whole bunch of other issues when you have a large fleet like they did. So, yes, the fourth quarter is going to be a real challenge but that is what we get paid to do to be blunt with you. David Campbell - Thompson, Davis & Co.: So should we expect any revenues from that program in that quarter?

We do not expect, we are not planning them, we are assuming we are going to get none but at the same time we are negotiating with them to see if we cannot get some. David Campbell - Thompson, Davis & Co.: So it just adds to their inventory of unused ships there.

Actually not necessarily because they are actually installing them. It is not like they have stopped installing them, they are installing them but not at the rate they anticipated. So they have this large backlog. So if we were to deliver a modest amount of equipment which still would significantly impact our topline they would likely use them in the quarter so that back there inventory would not grow, it would probably go down anyway but it will not be until the beginning of next year that they actually start the high rate installations. We are talking about upwards to five or six lines running simultaneously. They want to get this in place, they want to put it in because it actually saves them money as you can probably guess. It is actually an extra seat on the airplane. David Campbell - Thompson, Davis & Co.: I cannot wait for them to get rid of the MD80s [ph] this will still help. And the new contract in the fourth quarter may include some of this proposal for international airline, is that a possibility?

Sure is. We are going to try and induce something there. David Campbell - Thompson, Davis & Co.: Is that a potentially bigger contract than the American contract?

I am sorry, what did you say? David Campbell - Thompson, Davis & Co.: Is that potentially bigger than the American contract?

No, American has got I guess the second largest fleet of 5767s in the world. The only carrier that has got vigorous, especially now that it is merged with Northwest, is Delta. David Campbell - Thompson, Davis & Co.: Right that is not –

You know we are showing some real promise, in the commercial application, the weight savings literally provides an extra seat in the airplane. David Campbell - Thompson, Davis & Co.: Right, okay so it is not as big as American but it is still a big one.

It is business, whatever it is it is business. But we are pleased to see it is a diversity of customers. It would be nice to get four of five or six customers, maybe much smaller but each one working for the product. So we are happy to take any customer, we are pleased. As long as they pay, we are happy. David Campbell - Thompson, Davis & Co.: Right. What I meant is $110 million of total new proposals there including 38 military so the balance of the proposals is (inaudible).

Roman will comment on it, it is $48 million.

$48 million of military and the balance is in the general aviation and commercial air transport. David Campbell - Thompson, Davis & Co.: That is the $110 million, yes. Okay, all right, and obviously the way the company seems to be headed at least in the short run, we are probably going to get increasing military business and decreasing commercial businesses, is that one way to look at it?

Yes. David Campbell - Thompson, Davis & Co.: Of course, that is not bad, I mean that is good because you can always get additional commercial business.

We continue to look that our business is going to come in nominally one-third, one-third, one-third from each of the three segments.

It is an ideal situation. It really actually ends up the third, third and third but you at least hope and drive for that because it gives you some stability in revenues if you have a fall up in one area. Importantly the downturn in the economy has literally put pressure on the retrofits. I mean, it makes a huge difference this upgrading of Cessna Citation, you end up with almost a new looking aircraft with a completely new flight deck for well under $3 million that is quite remarkable. David Campbell - Thompson, Davis & Co.: Yes, with the Cessna program, it will have revenues this fiscal year but it should have more in fiscal ’10, right?

Bet you. We expect it will be a very good, very strong program. David Campbell - Thompson, Davis & Co.: Right, and what about the PC-12, I see you have got some new agent in Europe it is Rheinland Air Service.

Yes, PC-12 continues to – actually we have done a fair amount of work in the military as well for PC-12, so it is turning out to be a good program and we have now an ability to offer some additional features to PC-12 customers including satellite where the radar and as I noted in my program here, we are actually in slight test development for our flight management system which can be integrated in with the flight deck which is quite remarkable and will be available we hope to equip some of this in another six months or so. David Campbell - Thompson, Davis & Co.: Is this PC-12 contract with Germany, the Rheinland Air Service, is there any in the backlog, any orders there or is it just a new agreement?

We have already shipped against the agreement with them and the next step is we have applied to EASA for the foreign certification and that is in works and they have a number of customers that they have lined up and we intend to be servicing them very quickly. David Campbell - Thompson, Davis & Co.: Right, right. Okay, good. And I want to ask something else here, it is a question about what you talked about Roman the AdViz program for, I guess that is with Cessna is -- what is the full description of that program? It is not the Vantage System, right?

It is somewhat a Vantage but it is what Cessna has branded their own marketing campaign AdViz for advanced vision utilizing our cockpit display system. So those are primary flight displays, multifunction displays with opportunities for the owner operator to chose operations like electronic charts, satellite weather, these enhanced vision systems you know clear-type cameras, radio tuning and so on. So it has a lot of flexibility and as Cessna notes in their literature is its prime for easy adaptation for future requirements such as ADS-B and other things that are on the horizon. David Campbell - Thompson, Davis & Co.: So AdViz is just their name for it?

That is correct.

They have unique features for the Cessna Citation aircraft, they way they display the fuel gauging system and things like that and those are all unique to that Cessna but it is built around the basic Vantage cockpit system. David Campbell - Thompson, Davis & Co.: Right. You mentioned $5 million of military orders in the third quarter and $7 overall. So, I guess the other two were in miscellaneous commercial and aviation?

It is in the general aviation. David Campbell - Thompson, Davis & Co.: Right. Okay, so it sounds like you are really doing well on especially the military. Congratulations, that is a big help in this downturn.

Thank you.

Thanks Dave. David Campbell - Thompson, Davis & Co.: Thanks. I will let somebody else ask their questions.

Right Dave.

Your next question comes from the line of Michael Ciarmoli with Boenning & Scattergood Inc. Michael Ciarmoli - Boenning & Scattergood Inc.: (inaudible) how are you, Geoff. I know you are de-emphasizing something, you are de-emphasizing the backlog. Did you actually give the backlog number in the quarter, I might have missed that?

The backlog number is $39 million. Michael Ciarmoli - Boenning & Scattergood Inc.: $39 million and what were the bookings in the quarter.

$7 million. Michael Ciarmoli - Boenning & Scattergood Inc.: $7 million, okay.

About $800,000 gap. Michael Ciarmoli - Boenning & Scattergood Inc.: Okay. Do you guys have initial shipment expectations for Cessna? Do you know what their first kind of ship set take will be or is that still kind of being determined?

We do have it, I am not going to give you specifics only because it is covered by contract but we have been already shipping production volumes into their service centers as they are keying up for the program. They have trained their service center people to market the program. They have started advertising the program on their own Web sites and in other venues that they use. So we do have that but I just cannot give you those numbers because we are covered contractually. Michael Ciarmoli - Boenning & Scattergood Inc.: Okay that is fair. And then just on the proposals you talked about, I guess there were $105 million outstanding last quarter, now there is a $110 million, can you give us an update in terms of how those are progressing? Is it taking longer to convert these proposals into final sales given the economic challenges or how much of those proposals do you anticipate to close within the next three months, six months, twelve months, if you can give us some kind of context around that?

We would expect to be closing some 10% to 15% of those in each quarter as we look forward, possibly more if we – some of these people get the funding, with the military programs there is a number of these, the funding requests are out there, there is some short-term funding available yet before the end of this fiscal year and then there is funding for fiscal year ’10 which starts, you know government funding starts October 1, and that would break the lot damn loose. Michael Ciarmoli - Boenning & Scattergood Inc.: Okay. What funding bucket are the dollars coming from?

They come from both capital and from maintenance budgets out of the government, commercial it obviously comes out of the same type of thing and then generally aviation, the funding comes out of the individual owner operator who decides to upgrade their aircraft. Michael Ciarmoli - Boenning & Scattergood Inc.: Okay. So in the government is there, for the C130, is there line items funding there that we can look up or is that more of a broad-based bucket where the dollars are coming from?

I would say it is more the latter – Michael Ciarmoli - Boenning & Scattergood Inc.: Okay.

Although it is the – the program offices for the different fleets request their own numbers and what we have seen is some of the very well publicized new aircraft programs are getting struck by the Defense Department so that puts as you can imagine even more pressure on maintenance, support, upgrade of the existing aircraft as they are going through life extension programs. So we see again in the military as in the overall economy that people are spending money to maintain what they have as opposed to buying new aircrafts which cost you multiple times as much as an upgrade program and can get the same functionality, can get the performance that they need.

Michael, just to give you some sense, we have one customer, one service customer we will go unnamed but they came in and they said that when they thought their budget pretty well settled they were informed, this was within a week or so, that they just lost $800 million out of their budget. That kind of pressure is huge and where it all goes to is it goes to new equipment because they have got to keep their existing equipment and then they have to keep their existing equipment going. So it shows – what we are seeing is a reaction to this and strengthening of orders from operation and in fact it gets new orders from that operation despite the cut. Michael Ciarmoli - Boenning & Scattergood Inc.: Okay, that is helpful. Just one final question regarding the backlog, is it fair to say the same amount as last quarter is shippable in the next 12 months, I think last quarter you were looking at roughly $16 million in shippable and kind of six months with the balance in the longer term is it still kind of the mix there?

You are right in the same kind of mix number, correct. Michael Ciarmoli - Boenning & Scattergood Inc.: Okay, fair enough. All right, thanks guys.

Thank you.

Thanks Mike.

(Operator instructions) Your next question comes from the line of Alex Hamilton with Jesup & Lamont Securities Corp. Alex Hamilton – Jesup & Lamont Securities Corp.: Hi guys. Actually everything has been answered. Thank you.

Okay, thank you.

Your last question comes from the line of David Campbell with Thompson, Davis & Co. David Campbell - Thompson, Davis & Co.: This is a follow-up question, regarding the Cessna program, in my notes I had that you are going to flight test in May the aircraft and now it is next week, so what has caused the delay?

We flight-tested, we completed the company flight test and then they sent it out for painting for three and a half weeks. So it just came back from painting and now it is going into FAA flight test. You go through company flight-testing making sure all the systems work, it is a massive amount of change to the aircraft as you can imagine. There is a huge amount of equipment removed and they did all the successful integration, working with the radar and ground prox and air data system and all the engines and fuel gauging systems, all of those systems are integrated and working perfectly and tested by Cessna and then Cessna has to have a company flight test which they did and we have made one or two minor modifications for the display to make it better for the aircraft and it is all done and now the FFA I think today starts the ground test, a couple of days of ground test and then we will start final test for the FTC. So it is FAA week this week. David Campbell - Thompson, Davis & Co.: So in the meantime they wanted to have the plane painted?

Yes. David Campbell - Thompson, Davis & Co.: Does that sound ridiculous, to delay the whole thing ay three weeks to get it painted?

It is a hell of a question. David Campbell - Thompson, Davis & Co.: I don’t know, the FAA did not need to have it painted, did they?

They had reasons to do that, I am sure and it looks terrific by the way and the airplane is really amazing, we will send you some pictures down, it is really remarkable. The flight deck is a huge, huge thing, it is amazing, it looks incredible. David Campbell - Thompson, Davis & Co.: This is Citation, right?

Yes, Citation. David Campbell - Thompson, Davis & Co.: And it will work for all the other models that you mentioned?

Yes, they is a whole bunch – they are all Citations, there are Citation 2s, 3s and 4s and 5s etc they use the 500, 550, 560 designations and there is I guess 4000 of them or something and so it is applicable to all of them and the centers are all keyed up to start installation as soon as we are ready to go. David Campbell - Thompson, Davis & Co.: You do not need to flight test all those other --

No, no. Apparently they flight-tested the most advanced model and it is applicable especially since the manufacturer is flight-testing it facilitates the ST segment [ph]. David Campbell - Thompson, Davis & Co.: And the economy is not affecting the potential for the Cessna program.

Let me ask you a question, if you were a corporate executive and had an airplane, which would you rather do, go to your stockholders and say guys I need a new airplane because I want a new flight deck or would you rather fix the one you have for a tenth of the cost, which do you think you would do? David Campbell - Thompson, Davis & Co.: I would rather go for a Gulfstream international flight

Yes, I know and you would better have a steal collar because they will hang it when you do it. David Campbell - Thompson, Davis & Co.: I count on you Geoff to support it.

No I think it is really very good cost effective solution and it normally expands the capability of the aircraft and really provides some real safety features to the airplane. Cessna has done an outstanding job of implementing this. They have tested on schedule and on price it is terrific. They have done a great job. I am very pleased to be part of the program. David Campbell - Thompson, Davis & Co.: Okay and I guess you are focused on this debt redemption before you provide any stock back, is that the current thought?

Yes, we have had the building loan out for I guess

Nine years.

Seven, eight, nine years and it is costing us a premium to maintain this industrial development bond which is a hell of a lot higher than any interest savings we might have made. So we end up saving $50,000 or $100,000 a year by redeeming the bond. We have the cash and it makes sense to do it. And as I said in the beginning of the year we are going to generate cash this year. So I am pleased we are doing that and hope by the way we actually see an upturn in the backlog. The backlog is now on an upswing. We dramatically reduced its reduction and we hope to start growing it. David Campbell - Thompson, Davis & Co.: What about that cash flow in the fourth quarter.

Fourth quarter David, as you know, we are driving hard to manage that working capital, drive the inventory down a bit further than we have and get the turns moving. Days sales again were on the credit front doing very well. Our AR and cash flow, I can tell you this month, has indeed reported to be strong. So we are going to keep driving that positive cash flow.

So we expect to be positive again in the fourth quarter, David Campbell - Thompson, Davis & Co.: Another $1.8 million.

I am not going to get into the numbers.

I am not sure of that. You know we tried very hard to stay on a predictable result and that is make a profit, try to keep positive cash flow and keep a sound structured business as a foundation so we could grow on that and that is where we are, so far so good. David Campbell - Thompson, Davis & Co.: Yes.

Let me know when you need a room with Pan Club. I am going to call off the questions and sort of summarize where we stand. The company was established and focused on upgrading existing fleets of aircraft. We felt that that was a sound market to be in because when the economy was strong, people were expanding their fleets, there was always a demand for more lift than they could satisfy with new aircrafts and the customers upgraded the existing aircraft. In the downturn like we have had exactly the same thing happened. This is the time when people own an aircraft they can significantly improve it by updating the flight deck and if appropriate repainting the aircraft and even modifying the interior for a fraction of the cost of a new airplane and it is an effective solution. So Cessna has done a remarkable thing in supporting its customers and has initiated this AdViz program which supports the customer base that they have and what will be (inaudible) to give them new aircraft when they are ready and the people that have upgraded their airplanes will have a far more marketable and a far more valuable aircraft. We think we are in the right place. We have got to run the business well, I think we have a good team in place to do that. So I am optimistic about the future and we appreciate your interest and support. Thank you.

This concludes today’s conference. You may now disconnect.