AeroVironment, Inc. Announces Fiscal 2013 Second Quarter Results

  AeroVironment,Inc. Announces Fiscal 2013 Second Quarter Results

Business Wire

MONROVIA, Calif. -- December 04, 2012

AeroVironment,Inc. (NASDAQ: 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 $80.3million, down $0.1
million from second quarter fiscal 2012 revenue of $80.4million. The decrease
in revenue resulted from decreased sales in our Unmanned Aircraft Systems
(UAS)segment of $1.5million 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
$13.1million, an increase of 37% from income from operations for the second
quarter of fiscal 2012 of $9.6million. 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 $8.7million, an increase
of $2.1 million from net income for the second quarter of fiscal 2012 of
$6.6million.

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

Income from operations for the first six months of fiscal 2013 was
$10.8million, an increase of 8% from the first six months of fiscal 2012
income fromoperations of $10.0million. 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 $7.4million, an
increase of $0.5 million from net income for the first six months of fiscal
2012 of $6.9million.

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 $93.2million as of April30, 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            27,863          32,514          57,850          65,212
services
                    80,278          80,372          138,955         142,369
Cost of sales:
Product sales       28,215          28,499          48,774          46,371
Contract            16,427          21,243          35,040          43,653
services
                    44,642          49,742          83,814          90,024
Gross margin        35,636          30,630          55,141          52,345
Selling,
general and         13,176          12,240          26,797          25,940
administrative
Research and        9,386           8,816           17,522          16,402
development
Income from         13,074          9,574           10,822          10,003
operations
Other income:
Interest income     162             106             334             184
Income before       13,236          9,680           11,156          10,187
income taxes
Provision for       4,498           3,093           3,804           3,274
income taxes
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,     April 30,
                                                   2012            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,         48,330          56,417
2012 and $921 at April 30, 2012
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,       2               2
2012
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,    October 29,
                                                 2012            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              —               (90         )
compensation
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              —               90
compensation
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        64,220          62,041
period
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)           $   27          $   43
income, net of deferred taxes of $17 and
$30, respectively
Reclassification from share-based liability      $   401         $   —
compensation to equity
                                                                             

Reportable Segment Results are as Follows (Unaudited):

(In thousands)
                                              
                     Three Months Ended            Six Months Ended
                     October      October        October 27,   October 29,
                     27,            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                  13,176         12,240         26,797          25,940
administrative
Research and         9,386          8,816          17,522          16,402
development
Income from          13,074         9,574          10,822          10,003
operations
Interest income      162            106            334             184
Income before        $  13,236      $  9,680       $  11,156       $  10,187
income taxes
                                                                      

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Contact:

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