AeroVironment, Inc. Announces Fiscal 2013 Fourth Quarter and Fiscal Year End Results

MONROVIA, Calif.--()--AeroVironment, Inc. (NASDAQ: AVAV) today reported financial results for its fourth quarter and fiscal year ended April 30, 2013.

"Fiscal 2013 performance met our revised guidance, with full year revenue of $240 million and fully diluted EPS of $0.47, including non-operating items,” said Tim Conver, AeroVironment chairman and chief executive officer. “Government contracting delays for unmanned aircraft systems combined with lower than expected electric vehicle adoption rates to reduce annual revenue by 26 percent compared to fiscal 2012. Despite these market headwinds, we maintained market leadership in each business area and strengthened our cash position by $11 million, further enhancing our ability to move quickly and decisively when growth opportunities arise.”

“We reduced recurring costs early in the first quarter of fiscal 2014 to increase operating profit over last year. Significant fiscal 2013 revenue growth on Switchblade and international small UAS, along with an organization better aligned with our customers and end markets, positions us to build on our leading market positions as we develop new pathways to long term growth."

FISCAL 2013 FOURTH QUARTER RESULTS

Revenue for the fourth quarter of fiscal 2013 was $54.1 million, down 51% from fourth quarter fiscal 2012 revenue of $110.7 million. The decrease in revenue resulted from decreased sales in our Unmanned Aircraft Systems (UAS) segment of $55.0 million and in our Efficient Energy Systems (EES) segment of $1.6 million.

Loss from operations for the fourth quarter of fiscal 2013 was $6.0 million compared to income from operations for the fourth quarter of fiscal 2012 of $25.7 million. The loss from operations was a result of lower gross margin of $31.8 million and higher research and development (R&D) expense of $2.0 million, offset by lower selling, general and administrative (SG&A) expense of $2.2 million.

Other income for the fourth quarter of fiscal 2013 was $6.2 million compared to other income for the fourth quarter of fiscal 2012 of $0. The increase was primarily due to the increase in fair value of the conversion option in the amount of $6.2 million of our CybAero convertible bond investment.

Net loss for the fourth quarter of fiscal 2013 was $0.8 million compared to net income for the fourth quarter of fiscal 2012 of $17.8 million.

Loss per share for the fourth quarter of fiscal 2013 was $0.04 compared to earnings per diluted share for the fourth quarter of fiscal 2012 of $0.80.

FISCAL 2013 FULL YEAR RESULTS

Revenue for fiscal 2013 was $240.2 million, down 26% from fiscal 2012 revenue of $325.0 million. The decrease in revenue resulted from decreased sales in our UAS segment of $79.4 million and EES segment of $5.4 million.

Income from operations for fiscal 2013 was $3.8 million, a decrease of $39.3 million from fiscal 2012 income from operations of $43.1 million. The decrease in income from operations was caused by lower gross margin of $36.8 million and higher R&D expense of $6.2 million, offset by lower SG&A expense of $3.8 million.

Other income for fiscal 2013 was $6.2 million compared to other income for fiscal 2012 of $0. The increase was primarily due to the increase in fair value of the conversion option in the amount of $6.2 million of our CybAero convertible bond investment.

Net income for fiscal 2013 was $10.4 million, a decrease of $20.1 million from fiscal 2012 net income of $30.5 million.

Earnings per diluted share for fiscal 2013 were $0.47, a decrease of $0.89 from fiscal 2012 earnings per diluted share of $1.36. Fiscal 2013 earnings per diluted share included $0.13 from operations, $0.17 from the increase in fair value of our CybAero convertible bond investment and $0.17 from a lower tax rate.

BACKLOG

As of April 30, 2013, funded backlog (unfilled firm orders for which funding is currently appropriated to us under a customer contract) was $59.4 million compared to $93.2 million as of April 30, 2012.

FISCAL 2014 — OUTLOOK FOR THE FULL YEAR

For fiscal 2014, the company expects to generate revenue of $230 million to $250 million, and earnings per share from operations of $0.35 to $0.50 on a fully diluted basis, excluding any change in value of our CybAero convertible bond investment.

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 timing and/or amount of government spending, changes in the demand for our products and services, activities of competitors, 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, June 25, 2013, 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, June 25, 2013, at approximately 4:30 p.m. Pacific Time through Tuesday, July 2, at 9:00 p.m. Pacific Time. Dial (855) 859-2056 and enter the passcode 94653686. 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 and supports 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 the company’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 timing and/or amount of government spending; changes in the supply and/or demand and/or prices for our products and services; 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 Operations
(In thousands except share and per share data)
 
Three Months Ended Twelve Months Ended
April 30,     April 30, April 30,     April 30,
2013   2012 2013 2012
(Unaudited)
Revenue:
Product sales $ 35,212 $ 65,735 $ 139,813 $ 179,537
Contract services   18,898     44,940   100,339   145,471
54,110 110,675 240,152 325,008
Cost of sales:
Product sales 22,588 34,389 85,643 104,347
Contract services   13,800     26,731   61,973   91,328
  36,388     61,120   147,616   195,675
Gross margin 17,722 49,555 92,536 129,333
Selling, general and administrative 14,290 16,474 51,520 55,280
Research and development   9,386     7,337   37,214   30,977
(Loss) income from operations (5,954 ) 25,744 3,802 43,076
Other income:
Interest income 228 149 726 462
Other income   6,196       6,245  
Income before income taxes 470 25,893 10,773 43,538
Provision for income taxes   1,265     8,099   347   13,087
Net (loss) income $ (795 ) $ 17,794 $ 10,426 $ 30,451
(Loss) earnings per share data:
Basic $ (0.04 ) $ 0.81 $ 0.47 $ 1.40
Diluted $ (0.04 ) $ 0.80 $ 0.47 $ 1.36
Weighted average shares outstanding:
Basic 22,170,268 21,846,811 22,069,842 21,783,496
Diluted 22,170,268 22,348,454 22,390,420 22,315,474
 
 
AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share data)
 
April 30,
  2013       2012  
Assets
Current assets:
Cash and cash equivalents $ 75,332 $ 64,220
Short-term investments 73,241 77,152

Accounts receivable, net of allowance for doubtful accounts of $936 at April 30, 2013 and $921 at April 30, 2012

19,770 56,417
Unbilled receivables and retentions 11,304 27,034
Inventories, net 62,561 43,539
Income tax receivable 11,777
Deferred income taxes 5,166 7,886
Prepaid expenses and other current assets   4,303     4,030  
Total current assets 263,454 280,278
Long-term investments 68,916 58,457
Property and equipment, net 24,429 23,515
Deferred income taxes 5,606 6,700
Other assets   1,060     201  
Total assets $ 363,465   $ 369,151  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 16,144 $ 20,213
Wages and related accruals 12,116 19,076
Income taxes payable 8,788
Customer advances 7,519 5,124
Other current liabilities   6,408     9,898  
Total current liabilities 42,187 63,099
Wages and related accruals 1,203
Deferred rent 771 1,019
Liability for uncertain tax positions 5,321 4,632
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—22,614,315 shares at April 30, 2013 and 22,243,903 at April 30, 2012

2 2
Additional paid-in capital 130,527 124,954
Accumulated other comprehensive loss (705 ) (694 )
Retained earnings   185,362     174,936  
Total stockholders’ equity   315,186     299,198  
Total liabilities and stockholders’ equity $ 363,465   $ 369,151  
 
 
AeroVironment, Inc.
Consolidated Statements of Cash Flows
(In thousands)
 
Year ended April 30,
  2013       2012       2011  
Operating activities
Net income $ 10,426 $ 30,451 $ 25,909
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization 10,937 8,973 10,599
Impairment of long-lived assets 2,043
Provision for doubtful accounts 462 291 (105 )
Deferred income taxes 3,851 (2,579 ) (1,343 )
Change in fair value of conversion feature of convertible bonds (6,173 )
Stock-based compensation 3,470 3,196 2,306
Tax benefit from exercise of stock options 1,606 1,239 1,034
Excess tax benefit from stock-based compensation (189 ) (204 )
Loss (gain) on disposition of property and equipment 18 (11 ) (51 )
Changes in operating assets and liabilities:
Accounts receivable 36,185 (12,332 ) (5,626 )
Unbilled receivables and retentions 15,730 (5,068 ) (3,256 )
Inventories (19,022 ) (5,402 ) (17,209 )
Income tax receivable (11,777 )
Prepaid expenses and other assets (317 ) (1,678 ) (543 )
Accounts payable (4,069 ) (10,921 ) 10,929
Other liabilities   (17,320 )   12,784     9,003  
Net cash provided by operating activities 24,007 18,754 33,486
Investing activities
Acquisition of property and equipment (11,834 ) (14,992 ) (10,173 )
Net redemptions (purchases) of held-to-maturity investments 2,014 (2,575 ) 8,931
Acquisition of intangible assets (850 )
Purchases of available-for-sale investments (3,037 )
Sales of available-for-sale investments 600 225 200
Proceeds from sale of property and equipment       13     109  
Net cash used in investing activities (13,107 ) (17,329 ) (933 )
Financing activities
Excess tax benefit from stock-based compensation 189 204
Exercise of stock options   212     565     619  
Net cash provided by financing activities   212     754     823  
Net increase in cash and cash equivalents 11,112 2,179 33,376
Cash and cash equivalents at beginning of year   64,220     62,041     28,665  
Cash and cash equivalents at end of year $ 75,332   $ 64,220   $ 62,041  
Supplemental disclosures of cash flow information
Cash paid during the year for:
Income taxes $ 15,262 $ 13,104 $ 9,873
Non-cash activities
Unrealized (loss) gain on long-term investments recorded in accumulated other comprehensive loss, net of deferred taxes of $37, $56 and $16, respectively $ (11 ) $ 90 $ (24 )
Reclassification from share-based liability compensation to equity $ 401 $ $
 
 
Reportable Segment Results are as Follows (Unaudited):
(In thousands)
     
Three Months Ended Twelve Months Ended
April 30,     April 30, April 30,     April 30,
2013   2012 2013 2012
 
Revenue:
UAS $ 42,372 $ 97,345 $ 194,276 $ 273,728
EES   11,738     13,330   45,876   51,280
Total   54,110     110,675   240,152   325,008
Cost of sales
UAS 26,574 51,860 115,194 157,663
EES 9,814     9,260   32,422   38,012
Total 36,388   61,120 147,616 195,675
Gross margin:
UAS 15,798 45,485 79,082 116,065
EES   1,924     4,070   13,454   13,268
Total   17,722     49,555   92,536   129,333
Selling, general and administrative 14,290 16,474 51,520 55,280
Research and development   9,386     7,337   37,214   30,977
(Loss) income from operations (5,954 ) 25,744 3,802 43,076
Interest income 228 149 726 462
Other income   6,196       6,245  
Income before income taxes $ 470   $ 25,893 $ 10,773 $ 43,538
 
 

Additional AV News: http://avinc.com/resources/news/
AV Media Gallery: http://avinc.com/media_gallery/
Follow us: www.twitter.com/aerovironment
Facebook: http://www.facebook.com/#!/pages/AeroVironment-Inc/91762492182

Contacts

AeroVironment, Inc.
Steven Gitlin
+1 (626) 357-9983
ir@avinc.com

Sharing

Contacts

AeroVironment, Inc.
Steven Gitlin
+1 (626) 357-9983
ir@avinc.com