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



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

Business Wire

MONROVIA, Calif. -- June 25, 2013

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           18,898             44,940           100,339          145,471
services
                   54,110             110,675          240,152          325,008
Cost of sales:
Product sales      22,588             34,389           85,643           104,347
Contract           13,800             26,731           61,973           91,328
services
                   36,388             61,120           147,616          195,675
Gross margin       17,722             49,555           92,536           129,333
Selling,
general and        14,290             16,474           51,520           55,280
administrative
Research and       9,386              7,337            37,214           30,977
development
(Loss) income
from               (5,954     )       25,744           3,802            43,076
operations
Other income:
Interest           228                149              726              462
income
Other income       6,196              —                6,245            —
Income before      470                25,893           10,773           43,538
income taxes
Provision for      1,265              8,099            347              13,087
income taxes
Net (loss)       $ (795       )     $ 17,794         $ 10,426         $ 30,451
income
(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         19,770        56,417
April 30, 2012
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     2             2
April 30, 2013 and 22,243,903 at April 30, 2012
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       (6,173  )     —             —
feature of convertible bonds
Stock-based compensation                 3,470         3,196         2,306
Tax benefit from exercise of stock       1,606         1,239         1,034
options
Excess tax benefit from stock-based      —             (189    )     (204    )
compensation
Loss (gain) on disposition of            18            (11     )     (51     )
property and equipment
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           24,007        18,754        33,486
activities
Investing activities
Acquisition of property and              (11,834 )     (14,992 )     (10,173 )
equipment
Net redemptions (purchases) of           2,014         (2,575  )     8,931
held-to-maturity investments
Acquisition of intangible assets         (850    )     —             —
Purchases of available-for-sale          (3,037  )     —             —
investments
Sales of available-for-sale              600           225           200
investments
Proceeds from sale of property and       —             13            109      
equipment
Net cash used in investing               (13,107 )     (17,329 )     (933    )
activities
Financing activities
Excess tax benefit from stock-based      —             189           204
compensation
Exercise of stock options                212           565           619      
Net cash provided by financing           212           754           823      
activities
Net increase in cash and cash            11,112        2,179         33,376
equivalents
Cash and cash equivalents at             64,220        62,041        28,665   
beginning of year
Cash and cash equivalents at end of    $ 75,332      $ 64,220      $ 62,041   
year
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       $ (11     )   $ 90          $ (24     )
deferred taxes of $37, $56 and $16,
respectively
Reclassification from share-based      $ 401         $ —           $ —
liability compensation to equity
                                                                              
                                                                              

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        14,290         16,474        51,520        55,280
administrative
Research and                9,386          7,337         37,214        30,977
development
(Loss) income from          (5,954 )       25,744        3,802         43,076
operations
Interest income             228            149           726           462
Other income                6,196          —             6,245         —
Income before income      $ 470          $ 25,893      $ 10,773      $ 43,538
taxes
                                                                        
                                                                        

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

Contact:

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