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

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

MONROVIA, Calif.--(BUSINESS WIRE)-- AeroVironment, Inc. (NAS: 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:

Deprecia