AeroVironment, Inc. Announces Fiscal 2013 Third Quarter Results
AeroVironment, Inc.
(NASDAQ: AVAV) today reported financial results for its third quarter
ending January 26, 2013.
“Third quarter revenue of $47.1 million and earnings per share of $0.17
fell well short of our plans primarily due to delays in government
procurements expected during the quarter,” said Tim Conver,
AeroVironment chairman and chief executive officer. “We believe these
are delays in order timing, and not lost orders. We have recalibrated
our expectations for order and shipment timing in our UAS business based
on the procurement timelines we are currently experiencing, resulting in
a significant reduction in expected revenue and earnings per share for
fiscal 2013.”
“We continue to see multiple opportunities for growth in fiscal 2014 and
beyond based on leading market positions and significant new development
activities for both defense and non-defense solutions,” Conver added.
FISCAL 2013 THIRD QUARTER RESULTS
Revenue for the third quarter of fiscal 2013 was $47.1 million, down
$24.9 million from third quarter fiscal 2012 revenue of $72.0 million.
The decrease in revenue resulted from decreased sales in our Unmanned
Aircraft Systems (UAS) segment of $19.6 million and in our Efficient
Energy Systems (EES) segment of $5.3 million.
Loss from operations for the third quarter of fiscal 2013 was
$1.1 million, a decrease of 115% from income from operations for the
third quarter of fiscal 2012 of $7.3 million. The decrease in income
from operations resulted from lower gross margin of $7.8 million and
higher research and development (R&D) expense of $3.1 million, offset by
lower selling, general and administrative (SG&A) expense of $2.4 million.
Net income for the third quarter of fiscal 2013 was $3.9 million, a
decrease of $1.8 million from net income for the third quarter of fiscal
2012 of $5.7 million.
Earnings per diluted share for the third quarter of fiscal 2013 were
$0.17, a decrease of $0.09 from third quarter fiscal 2012 earnings per
diluted share of $0.26.
FISCAL 2013 YEAR-TO-DATE RESULTS
Revenue for the first nine months of fiscal 2013 was $186.0 million,
down 13% from the first nine months of fiscal 2012 revenue of
$214.3 million. The decrease in revenue resulted from lower sales in our
UAS segment of $24.5 million and EES segment of $3.8 million.
Income from operations for the first nine months of fiscal 2013 was
$9.8 million, a decrease of 44% from the first nine months of fiscal
2012 income from operations of $17.3 million. The decrease in income
from operations resulted from lower gross margin of $5.0 million and
higher R&D expense of $4.2 million, offset by lower SG&A expense of $1.6
million.
Net income for the first nine months of fiscal 2013 was $11.2 million, a
decrease of $1.4 million from net income for the first nine months of
fiscal 2012 of $12.7 million.
Earnings per diluted share for the first nine months of fiscal 2013 were
$0.50, a decrease of $0.07 from the first nine months of fiscal 2012
income per diluted share of $0.57.
BACKLOG
As of January 26, 2013, funded backlog (unfilled firm orders for which
funding is currently appropriated to us under a customer contract) was
$70.5 million compared to $93.2 million as of April 30, 2012.
FISCAL 2013 — OUTLOOK FOR THE FULL YEAR
For fiscal year 2013, the Company is reducing its guidance to reflect
anticipated full year revenue of $230 million to $250 million, and
earnings per share of $0.30 to $0.50 on a fully diluted basis.
"Significant delays in government procurement activities have reduced
our expected revenue sharply from our original guidance of $348 million
to $370 million. Multiple orders for our unmanned aircraft systems
solutions have been delayed, including a funded requirement of the U.S.
government awaiting final contract actions, and the time it takes to
complete them has increased considerably, pushing them into fiscal
2014," said Tim Conver. "Looking forward, we see significant
opportunities to achieve long-term compound growth with Switchblade
Loitering Munitions systems, mission services and international small
UAS sales."
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, delays or changes in government funding, 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, March 5, 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 section 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
section of the Company's website, at http://investor.avinc.com.
The audio replay will also be available via telephone from Tuesday,
March 5, 2013, at approximately 4:30 p.m. Pacific Time through Tuesday,
March 12, 2013 at 9:00 p.m. Pacific Time. Dial (855) 859-2056 and enter
the passcode 99341363. 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; delays or changes in government funding; 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.
AeroVironment, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
January 26,
|
|
|
January 28,
|
|
|
January 26,
|
|
|
January 28,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales
|
|
|
$
|
23,496
|
|
|
$
|
36,645
|
|
|
$
|
104,601
|
|
|
|
$
|
113,802
|
Contract services
|
|
|
23,591
|
|
|
35,319
|
|
|
81,441
|
|
|
|
100,531
|
|
|
|
47,087
|
|
|
71,964
|
|
|
186,042
|
|
|
|
214,333
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales
|
|
|
14,281
|
|
|
23,587
|
|
|
63,055
|
|
|
|
69,958
|
Contract services
|
|
|
13,133
|
|
|
20,944
|
|
|
48,173
|
|
|
|
64,597
|
|
|
|
27,414
|
|
|
44,531
|
|
|
111,228
|
|
|
|
134,555
|
Gross margin
|
|
|
19,673
|
|
|
27,433
|
|
|
74,814
|
|
|
|
79,778
|
Selling, general and administrative
|
|
|
10,433
|
|
|
12,866
|
|
|
37,230
|
|
|
|
38,806
|
Research and development
|
|
|
10,306
|
|
|
7,238
|
|
|
27,828
|
|
|
|
23,640
|
(Loss) income from operations
|
|
|
(1,066
|
)
|
|
7,329
|
|
|
9,756
|
|
|
|
17,332
|
Other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
164
|
|
|
129
|
|
|
498
|
|
|
|
313
|
Other income
|
|
|
49
|
|
|
—
|
|
|
49
|
|
|
|
—
|
(Loss) income before income taxes
|
|
|
(853
|
)
|
|
7,458
|
|
|
10,303
|
|
|
|
17,645
|
(Benefit) provision for income taxes
|
|
|
(4,722
|
)
|
|
1,714
|
|
|
(918
|
)
|
|
|
4,988
|
Net income
|
|
|
$
|
3,869
|
|
|
$
|
5,744
|
|
|
$
|
11,221
|
|
|
|
$
|
12,657
|
Earnings per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.17
|
|
|
$
|
0.26
|
|
|
$
|
0.51
|
|
|
|
$
|
0.58
|
Diluted
|
|
|
$
|
0.17
|
|
|
$
|
0.26
|
|
|
$
|
0.50
|
|
|
|
$
|
0.57
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
22,142,917
|
|
|
21,797,802
|
|
|
22,035,007
|
|
|
|
21,761,927
|
Diluted
|
|
|
22,408,377
|
|
|
22,317,015
|
|
|
22,375,126
|
|
|
|
22,269,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
January 26, 2013
|
|
|
|
April 30, 2012
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
63,975
|
|
|
|
$
|
64,220
|
|
Short-term investments
|
|
|
69,811
|
|
|
|
77,152
|
|
Accounts receivable, net of allowance for doubtful accounts of $815
at January 26, 2013 and $921 at April 30, 2012
|
|
|
31,600
|
|
|
|
56,417
|
|
Unbilled receivables and retentions
|
|
|
15,409
|
|
|
|
27,034
|
|
Inventories, net
|
|
|
63,597
|
|
|
|
43,539
|
|
Income tax receivable
|
|
|
8,349
|
|
|
|
—
|
|
Deferred income taxes
|
|
|
9,785
|
|
|
|
9,377
|
|
Prepaid expenses and other current assets
|
|
|
4,283
|
|
|
|
4,030
|
|
Total current assets
|
|
|
266,809
|
|
|
|
281,769
|
|
Long-term investments
|
|
|
60,928
|
|
|
|
58,457
|
|
Property and equipment, net
|
|
|
21,714
|
|
|
|
23,515
|
|
Deferred income taxes
|
|
|
5,180
|
|
|
|
5,209
|
|
Other assets
|
|
|
4,159
|
|
|
|
201
|
|
Total assets
|
|
|
$
|
358,790
|
|
|
|
$
|
369,151
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
15,777
|
|
|
|
$
|
20,213
|
|
Wages and related accruals
|
|
|
9,652
|
|
|
|
19,076
|
|
Income taxes payable
|
|
|
—
|
|
|
|
8,788
|
|
Customer advances
|
|
|
5,915
|
|
|
|
5,124
|
|
Other current liabilities
|
|
|
6,877
|
|
|
|
9,898
|
|
Liability for uncertain tax positions
|
|
|
606
|
|
|
|
606
|
|
Total current liabilities
|
|
|
38,827
|
|
|
|
63,705
|
|
Wages and other accruals
|
|
|
—
|
|
|
|
1,203
|
|
Deferred rent
|
|
|
842
|
|
|
|
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 — 22,417,427 at January 26, 2013 and
22,243,903 at April 30, 2012
|
|
|
2
|
|
|
|
2
|
|
Additional paid-in capital
|
|
|
129,588
|
|
|
|
124,954
|
|
Accumulated other comprehensive loss
|
|
|
(652
|
)
|
|
|
(694
|
)
|
Retained earnings
|
|
|
186,157
|
|
|
|
174,936
|
|
Total stockholders’ equity
|
|
|
315,095
|
|
|
|
299,198
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
358,790
|
|
|
|
$
|
369,151
|
|
|
|
|
|
|
|
|
|
|
|
|
AeroVironment, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
January 26, 2013
|
|
|
January 28, 2012
|
Operating activities
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
11,221
|
|
|
|
$
|
12,657
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
8,340
|
|
|
|
6,418
|
|
Provision for doubtful accounts
|
|
|
338
|
|
|
|
354
|
|
Deferred income taxes
|
|
|
(407
|
)
|
|
|
(510
|
)
|
Unrealized foreign currency gain
|
|
|
(53
|
)
|
|
|
—
|
|
Stock-based compensation
|
|
|
2,629
|
|
|
|
2,319
|
|
Tax benefit from exercise of stock options
|
|
|
1,536
|
|
|
|
664
|
|
Excess tax benefit from stock-based compensation
|
|
|
—
|
|
|
|
(115
|
)
|
Gain on sale of property and equipment
|
|
|
—
|
|
|
|
(13
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
24,479
|
|
|
|
19,809
|
|
Unbilled receivables and retentions
|
|
|
11,625
|
|
|
|
(2,541
|
)
|
Inventories
|
|
|
(20,058
|
)
|
|
|
(10,310
|
)
|
Income tax receivable
|
|
|
(8,349
|
)
|
|
|
—
|
|
Other assets
|
|
|
(282
|
)
|
|
|
(441
|
)
|
Accounts payable
|
|
|
(4,436
|
)
|
|
|
(17,759
|
)
|
Other liabilities
|
|
|
(21,518
|
)
|
|
|
(5,678
|
)
|
Net cash provided by operating activities
|
|
|
5,065
|
|
|
|
4,854
|
|
Investing activities
|
|
|
|
|
|
|
|
Acquisitions of property and equipment
|
|
|
(6,528
|
)
|
|
|
(9,856
|
)
|
Proceeds from the sale of property and equipment
|
|
|
—
|
|
|
|
13
|
|
Acquisition of intangible assets
|
|
|
(850
|
)
|
|
|
—
|
|
Investment in CybAero AB convertible notes
|
|
|
(3,037
|
)
|
|
|
—
|
|
Net redemptions of held-to-maturity investments
|
|
|
4,690
|
|
|
|
7,965
|
|
Net sales of available-for-sale investments
|
|
|
250
|
|
|
|
225
|
|
Net cash used in investing activities
|
|
|
(5,475
|
)
|
|
|
(1,653
|
)
|
Financing activities
|
|
|
|
|
|
|
|
Excess tax benefit from stock-based compensation
|
|
|
—
|
|
|
|
115
|
|
Exercise of stock options
|
|
|
165
|
|
|
|
508
|
|
Net cash provided by financing activities
|
|
|
165
|
|
|
|
623
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(245
|
)
|
|
|
3,824
|
|
Cash and cash equivalents at beginning of period
|
|
|
64,220
|
|
|
|
62,041
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
63,975
|
|
|
|
$
|
65,865
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure:
|
|
|
|
|
|
|
|
Unrealized gains on long-term investments recorded in other
comprehensive income, net of deferred taxes of $28 and $59,
respectively
|
|
|
$
|
42
|
|
|
|
$
|
87
|
|
Reclassification from share-based liability compensation to equity
|
|
|
$
|
401
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable Segment Results are as Follows (Unaudited):
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
January 26,
|
|
|
January 28,
|
|
|
January 26,
|
|
|
January 28,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
UAS
|
|
|
$
|
37,665
|
|
|
$
|
57,247
|
|
|
$
|
151,904
|
|
|
$
|
176,383
|
EES
|
|
|
9,422
|
|
|
14,717
|
|
|
34,138
|
|
|
37,950
|
Total
|
|
|
47,087
|
|
|
71,964
|
|
|
186,042
|
|
|
214,333
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
UAS
|
|
|
20,585
|
|
|
34,096
|
|
|
88,620
|
|
|
105,803
|
EES
|
|
|
6,829
|
|
|
10,435
|
|
|
22,608
|
|
|
28,752
|
Total
|
|
|
27,414
|
|
|
44,531
|
|
|
111,228
|
|
|
134,555
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
UAS
|
|
|
17,080
|
|
|
23,151
|
|
|
63,284
|
|
|
70,580
|
EES
|
|
|
2,593
|
|
|
4,282
|
|
|
11,530
|
|
|
9,198
|
Total
|
|
|
19,673
|
|
|
27,433
|
|
|
74,814
|
|
|
79,778
|
Selling, general and administrative
|
|
|
10,433
|
|
|
12,866
|
|
|
37,230
|
|
|
38,806
|
Research and development
|
|
|
10,306
|
|
|
7,238
|
|
|
27,828
|
|
|
23,640
|
(Loss) income from operations
|
|
|
(1,066
|
)
|
|
7,329
|
|
|
9,756
|
|
|
17,332
|
Interest income
|
|
|
164
|
|
|
129
|
|
|
498
|
|
|
313
|
Other income
|
|
|
49
|
|
|
—
|
|
|
49
|
|
|
—
|
(Loss) income before income taxes
|
|
|
$
|
(853
|
)
|
|
$
|
7,458
|
|
|
$
|
10,303
|
|
|
$
|
17,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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