Category: Aerospace

AeroVironment, Inc. Announces Fiscal 2013 Second Quarter Results

AeroVironment, Inc. (AVAV) today reported financial results for its second quarter ending October 27, 2012.

"Strong second quarter performance, including a 30 percent increase in year-over-year diluted earnings per share to $0.39, resulted from continued demand for our market-leading solutions, favorable product mix and our focus on cost management. Revenue of $80 million included a majority, but not all of the international small UAS orders that had been working through the export administrative process," said Tim Conver, AeroVironment chairman and chief executive officer. "Because of contracting delays on key programs, revenue in our second half will be more heavily weighted to our fourth quarter, historically the highest revenue quarter of our year.

Looking beyond fiscal 2013, in addition to executing effectively in our current businesses, our team made significant progress during the quarter on development programs such as Switchblade, Mission Services and larger, vertical takeoff UAS, all of which are poised to drive long-term growth in adjacent and new markets."

 

FISCAL 2013 SECOND QUARTER RESULTS

Revenue for the second quarter of fiscal 2013 was $80.3 million, down $0.1 million from second quarter fiscal 2012 revenue of $80.4 million. The decrease in revenue resulted from decreased sales in our Unmanned Aircraft Systems (UAS) segment of $1.5 million offset by increased sales in our Efficient Energy Systems (EES) segment of $1.4 million.

Income from operations for the second quarter of fiscal 2013 was $13.1 million, an increase of 37% from income from operations for the second quarter of fiscal 2012 of $9.6 million. The increase in income from operations resulted from higher gross margin of $5.0 million, offset by higher selling, general and administrative (SG&A) expense of $0.9 million and research and development (R&D) expense of $0.6 million.

Net income for the second quarter of fiscal 2013 was $8.7 million, an increase of $2.1 million from net income for the second quarter of fiscal 2012 of $6.6 million.

Earnings per diluted share for the second quarter of fiscal 2013 were $0.39, an increase of $0.09 from second quarter fiscal 2012 earnings per diluted share of $0.30.

FISCAL 2013 YEAR-TO-DATE RESULTS

Revenue for the first six months of fiscal 2013 was $139.0 million, down 2% from the first six months of fiscal 2012 revenue of $142.4 million. The decrease in revenue resulted from lower sales in our UAS segment of $4.9 million, offset by increased sales in our EES segment of $1.5 million.

Income from operations for the first six months of fiscal 2013 was $10.8 million, an increase of 8% from the first six months of fiscal 2012 income from operations of $10.0 million. The increase in income from operations resulted from higher gross margin of $2.8 million, offset by higher R&D expense of $1.1 million and SG&A expense of $0.9 million.

Net income for the first six months of fiscal 2013 was $7.4 million, an increase of $0.5 million from net income for the first six months of fiscal 2012 of $6.9 million.

Earnings per diluted share for the first six months of fiscal 2013 were $0.33, an increase of $0.02 from the first six months of fiscal 2012 income per share of $0.31.

BACKLOG

As of October 27, 2012, funded backlog (unfilled firm orders for which funding is currently appropriated to us under a customer contract) was $90.2 million compared to $93.2 million as of April 30, 2012.

FISCAL 2013 — OUTLOOK FOR THE FULL YEAR

For fiscal year 2013, the Company expects to generate revenue of $348 million to $370 million, and earnings per share of $1.41 to $1.51 on a fully diluted basis.

The foregoing estimates are forward looking and reflect management’s view of current and future market conditions, including certain assumptions with respect to our ability to obtain and retain government contracts, changes in the demand for our products and services, activities of competitors and changes in the regulatory environment, and general economic and business conditions in the United States and elsewhere in the world. Investors are reminded that actual results may differ materially from these estimates.

CONFERENCE CALL

In conjunction with this release, AeroVironment, Inc. will host a conference call today, Tuesday, December 4, 2012, at 1:30 pm Pacific Time that will be broadcast live over the Internet. Timothy E. Conver, chairman and chief executive officer, Jikun Kim, chief financial officer, Tom Herring, chief operating officer and Steven A. Gitlin, vice president of investor relations, will host the call.

4:30 PM ET
3:30 PM CT
2:30 PM MT
1:30 PM PT

Investors may dial into the call at (877) 561-2749 (U.S.) or (678) 809-1029 (international) five to ten minutes prior to the start time to allow for registration.

Investors with Internet access may listen to the live audio webcast via the Investor Relations page of the AeroVironment, Inc. website, http://investor.avinc.com. Please allow 15 minutes prior to the call to download and install any necessary audio software.

Audio Replay Options

An audio replay of the event will be archived on the Investor Relations page of the Company's website, at http://investor.avinc.com. The audio replay will also be available via telephone from Tuesday, December 4, 2012, at approximately 4:30 p.m. Pacific Time through Tuesday, December 11, at 9:00 p.m. Pacific Time. Dial (855) 859-2056 and enter the passcode 60176611. International callers should dial (404) 537-3406 and enter the same passcode number to access the audio replay.

ABOUT AEROVIRONMENT, INC.

AeroVironment is a technology solutions provider that designs, develops, produces, supports and operates an advanced portfolio of Unmanned Aircraft Systems (UAS) and electric transportation solutions. Agencies of the U.S. Department of Defense and allied military services use AeroVironment’s electric-powered, hand-launched unmanned aircraft systems extensively to provide situational awareness to tactical operating units through real-time, airborne reconnaissance, surveillance and communication. AeroVironment’s electric transportation solutions include a comprehensive suite of electric vehicle (EV) charging systems, installation and network services for consumers, automakers, utilities and government agencies, power cycling and test systems for EV developers and industrial electric vehicle charging systems for commercial fleets. More information about AeroVironment is available at www.avinc.com.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, reliance on sales to the U.S. government; changes in the supply and/or demand and/or prices for our products; the activities of competitors; failure of the markets in which we operate to grow; failure to expand into new markets; changes in significant operating expenses, including components and raw materials; failure to develop new products; changes in the regulatory environment; and general economic and business conditions in the United States and elsewhere in the world. For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

- Financial Tables Follow -

 

AeroVironment, Inc.

Consolidated Statements of Income (Unaudited)

(In thousands except share and per share data)

 
           
             
      Three Months Ended     Six Months Ended
      October 27,     October 29,     October 27,     October 29,
      2012     2011     2012     2011
                         
Revenue:                        
Product sales     $ 52,415     $ 47,858     $ 81,105     $ 77,157
Contract services     27,863     32,514     57,850     65,212
      80,278     80,372     138,955     142,369
Cost of sales:                        
Product sales     28,215     28,499     48,774     46,371
Contract services     16,427     21,243     35,040     43,653
      44,642     49,742     83,814     90,024
Gross margin     35,636     30,630     55,141     52,345
Selling, general and administrative     13,176     12,240     26,797     25,940
Research and development     9,386     8,816     17,522     16,402
Income from operations     13,074     9,574     10,822     10,003
Other income:                        
Interest income     162     106     334     184
Income before income taxes     13,236     9,680     11,156     10,187
Provision for income taxes     4,498     3,093     3,804     3,274
Net income     $ 8,738     $ 6,587     $ 7,352     $ 6,913
Earnings per share data:                        
Basic     $ 0.40     $ 0.30     $ 0.33     $ 0.32
Diluted     $ 0.39     $ 0.30     $ 0.33     $ 0.31
Weighted average shares outstanding:                        
Basic     22,030,330     21,763,927     21,980,453     21,743,990
Diluted     22,383,791     22,255,943     22,353,434     22,244,697
                         

AeroVironment, Inc.

Consolidated Balance Sheets

(In thousands except share and per share data)

               
      October 27,
2012
    April 30,
2012
 
      (Unaudited)        
Assets              
Current assets:              
Cash and cash equivalents     $ 70,770     $ 64,220  
Short-term investments     64,694     77,152  
Accounts receivable, net of allowance for doubtful accounts of $1,185 at October 27, 2012 and $921 at April 30, 2012     48,330     56,417  
Unbilled receivables and retentions     21,064     27,034  
Inventories, net     44,747     43,539  
Deferred income taxes     9,508     9,377  
Prepaid expenses and other current assets     4,837     4,030  
Total current assets     263,950     281,769  
Long-term investments     64,798     58,457  
Property and equipment, net     22,137     23,515  
Deferred income taxes     5,191     5,209  
Other assets     230     201  
Total assets     $ 356,306     $ 369,151  
Liabilities and Stockholders’ Equity              
Current liabilities:              
Accounts payable     $ 15,430     $ 20,213  
Wages and related accruals     13,405     19,076  
Income taxes payable     1,485     8,788  
Customer advances     4,079     5,124  
Other current liabilities     6,129     9,898  
Liability for uncertain tax positions     606     606  
Total current liabilities     41,134     63,705  
Wages and other accruals         1,203  
Deferred rent     909     1,019  
Liability for uncertain tax positions     4,026     4,026  
Commitments and contingencies              
Stockholders’ equity:              
Preferred stock, $0.0001 par value:              
Authorized shares — 10,000,000; none issued or outstanding          
Common stock, $0.0001 par value:              
Authorized shares — 100,000,000              
Issued and outstanding shares — 22,417,977 at October 27, 2012 and 22,243,903 at April 30, 2012     2     2  
Additional paid-in capital     128,614     124,954  
Accumulated other comprehensive loss     (667
)
 
(694 )
Retained earnings     182,288     174,936  
Total stockholders’ equity     310,237     299,198  
Total liabilities and stockholders’ equity     $ 356,306     $ 369,151  
                   

AeroVironment, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

         
      Six Months Ended  
     
October 27,
2012
   
October 29,
2011
 
Operating activities              
Net income     $ 7,352     $ 6,913  
Adjustments to reconcile net income to cash provided by operating activities:              
Depreciation and amortization     5,937     4,141  
Provision for doubtful accounts     566     246  
Deferred income taxes     (130 )   (296 )
Stock-based compensation     1,642     1,535  
Tax benefit from exercise of stock options     1,529     376  
Excess tax benefit from stock-based compensation         (90 )
Changes in operating assets and liabilities:              
Accounts receivable     7,521     18,559  
Unbilled receivables and retentions     5,970     290  
Inventories     (1,208 )   (3,298 )
Other assets     (836 )   (607 )
Accounts payable     (4,783 )   (11,517 )
Other liabilities     (18,772 )   (6,481 )
Net cash provided by operating activities     4,788     9,771  
Investing activities              
Acquisitions of property and equipment     (4,559 )   (5,484 )
Net sales of held-to-maturity investments     5,911     31,623  
Net sales of available-for-sale investments     250     225  
Net cash provided by investing activities     1,602     26,364  
Financing activities              
Excess tax benefit from stock-based compensation         90  
Exercise of stock options     160     323  
Net cash provided by financing activities     160     413  
Net increase in cash and cash equivalents     6,550     36,548  
Cash and cash equivalents at beginning of period     64,220     62,041  
Cash and cash equivalents at end of period     $ 70,770     $ 98,589  
               
Supplemental disclosure:              
Unrealized gains on long-term investments recorded in other comprehensive (loss) income, net of deferred taxes of $17 and $30, respectively     $ 27     $ 43  
Reclassification from share-based liability compensation to equity     $ 401     $  
                   

Reportable Segment Results are as Follows (Unaudited):

(In thousands)

             
      Three Months Ended     Six Months Ended
      October 27,     October 29,     October 27,     October 29,
      2012     2011     2012     2011
Revenue:                        
UAS     $ 65,433     $ 66,931     $ 114,239     $ 119,136
EES     14,845     13,441     24,716     23,233
Total     80,278     80,372     138,955     142,369
Cost of sales:                        
UAS     35,279     39,707     68,035     71,707
EES     9,363     10,035     15,779     18,317
Total     44,642     49,742     83,814     90,024
Gross margin:                        
UAS     30,154     27,224     46,204     47,429
EES     5,482     3,406     8,937     4,916
Total     35,636     30,630     55,141     52,345
Selling, general and administrative     13,176     12,240     26,797     25,940
Research and development     9,386     8,816     17,522     16,402
Income from operations     13,074     9,574     10,822     10,003
Interest income     162     106     334     184
Income before income taxes     $ 13,236     $ 9,680     $ 11,156     $ 10,187
                                 

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Contact:
AeroVironment, Inc.
Steven Gitlin
+1 (626) 357-9983
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