AeroVironment, Inc. (NASDAQ: AVAV) today reported financial
results for its fourth quarter ended April 30, 2015.
“Fourth quarter revenue of $86 million increased by 18 percent
and gross profit increased by 50 percent year-over-year. During the
quarter, we strengthened our market positions, moved key programs
forward to generate value, and focused on innovation,” said Tim
Conver, AeroVironment chairman and chief executive officer.
“Throughout fiscal year 2015, our strategic investments helped
expand our growth portfolio and position AeroVironment for new
market opportunities. In our core business, our team delivered
revenue in-line with our expectations and exceeded targeted
profitability.
“We continue to deliver certainty and reliability to our
customers and remain the leader in electric vehicle testing and
charging systems and small unmanned aircraft systems, where we
operate with the largest installed base in the global defense
industry. We are entering fiscal year 2016 with strong momentum and
look forward to driving the business forward and enhancing
stockholder value.”
FISCAL 2015 FOURTH QUARTER RESULTS
Revenue for the fourth quarter of fiscal 2015 was
$86.5 million, up 18% from fourth quarter fiscal 2014 revenue
of $73.5 million. The increase in revenue resulted from
increased sales in our Unmanned Aircraft Systems (UAS) segment of
$18.7 million offset by a decrease in sales in our Efficient Energy
Systems (EES) segment of $5.7 million.
Gross margin for the fourth quarter of fiscal 2015 was
$45.4 million, up 50% from fourth quarter fiscal 2014 gross
margin of $30.1 million. The increase in gross margin was due
to an increase in product margin of $9.7 million and service
margin of $5.5 million. As a percentage of revenue, gross
margin increased to 52% from 41%.
Income from operations for the fourth quarter of fiscal 2015 was
$7.5 million compared to income from operations for the fourth
quarter of fiscal 2014 of $6.9 million. The increase in income from
operations was a result of an increase in gross margin of $15.2
million and a decrease in selling, general & administrative
(SG&A) expense of $1.3 million, offset by an increase in
research and development (R&D) of $16.0 million.
Other expense, net, for the fourth quarter of fiscal 2015 was
$0.5 million compared to other income, net, for the fourth quarter
of fiscal 2014 of $2.9 million. The decrease was primarily due to
the fourth quarter of fiscal 2014 including a $2.8 million increase
in fair value of the embedded conversion feature of our convertible
bond investment. During the fourth quarter of fiscal 2015, we did
not have any convertible bond investments.
Net income for the fourth quarter of fiscal 2015 was
$7.1 million compared to net income for the fourth quarter of
fiscal 2014 of $8.1 million.
Earnings per diluted share for the fourth quarter of fiscal 2015
were $0.31 compared to earnings per diluted share for the fourth
quarter of fiscal 2014 of $0.35. Earnings per diluted share for the
fourth quarter of fiscal 2015 included a loss of $0.01 per share
due to losses on our equity investment. Earnings per diluted share
for the fourth quarter of fiscal 2014 included an increase of $0.08
per share due to the increase in fair value of the conversion
option of our convertible bond investment.
FISCAL 2015 FULL-YEAR RESULTS
Revenue for fiscal 2015 was $259.4 million, up 3% from
fiscal 2014 revenue of $251.7 million. The increase in revenue
resulted from increased sales in our UAS segment of
$12.1 million offset by a decrease in sales in our EES segment
of $4.4 million.
Gross margin for fiscal 2015 was $104.3 million, up 11%
from fiscal 2014 gross margin of $93.6 million. The increase
in gross margin was due to an increase in product margin of
$10.3 million and service margin of $0.3 million. As a
percentage of revenue, gross margin increased to 40% from 37%.
Income from operations for fiscal 2015 was $2.0 million
compared to income from operations for fiscal 2014 of $12.4
million. The decrease in income from operations was a result of an
increase in R&D of $21.0 million and SG&A of $0.1 million,
offset by an increase in gross margin of $10.7 million.
Other expense, net, for fiscal 2015 was $0.1 million compared to
other income, net, for fiscal 2014 of $2.5 million. Fiscal 2014
included a $1.8 million increase in fair value of the embedded
conversion feature of our convertible bond investment.
Net income for fiscal 2015 was $2.9 million compared to net
income for fiscal 2014 of $13.7 million.
Earnings per diluted share for fiscal 2015 were $0.13 compared
to earnings per diluted share for fiscal 2014 of $0.60. Earnings
per diluted share for fiscal 2014 included an increase of $0.04 per
diluted share, due to the increase in fair value of the conversion
option of our convertible bond investment. Earnings per diluted
share for fiscal 2015 were not impacted by our convertible bond and
related equity investment.
BACKLOG
As of April 30, 2015, funded backlog (unfilled firm orders for
which funding is currently appropriated to us under a customer
contract) was $64.7 million compared to $65.9 million as of
April 30, 2014.
FISCAL 2016 — OUTLOOK FOR THE FULL YEAR
For fiscal 2016, the company expects to generate revenue of
between $260 million and $280 million, and a gross profit margin of
between 36 percent and 37.5 percent. Planned increases in strategic
R&D and SG&A investments for Commercial UAS in fiscal
2016 may largely offset operating profit in the current fiscal
year.
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 30, 2015, at 1:30 pm Pacific
Time that will be broadcast live over the Internet. Timothy E.
Conver, chairman and chief executive officer, Teresa Covington,
interim chief financial officer and Steven A. Gitlin, vice
president of investor relations, will host the call.
4:30 PM ET3:30 PM CT2:30 PM MT1:30 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 30, 2015, at approximately 4:30
p.m. Pacific Time through Tuesday, July 7, 2015, at 9:00 p.m.
Pacific Time. Dial (855) 859-2056 and enter the passcode 51447512.
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. The company's electric-powered, hand-launched UASs
generate and process data to deliver powerful insight, on-demand,
to people engaged in military, public safety and commercial
activities around the world. 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 EV
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.
AeroVironment, Inc.
Consolidated Statements of
Income
(In thousands except share and per
share data)
Three Months Ended Twelve Months Ended
April 30, April 30, April 30,
April 30, 2015 2014 2015
2014 (Unaudited) Revenue: Product sales $ 63,034 $
59,244 $ 205,027 $ 194,996 Contract services 23,437 14,254
54,371 56,707 86,471 73,498 259,398 251,703 Cost of sales:
Product sales 27,357 33,246 118,834 119,137 Contract services
13,764 10,114 36,296 38,953 41,121 43,360
155,130 158,090 Gross margin: Product gross margin 35,677
25,998 86,193 75,859 Contract gross margin 9,673 4,140
18,074 17,754 45,350 30,138 104,268 93,613 Selling, general
and administrative 15,622 16,968 55,763 55,679 Research and
development 22,259 6,223 46,491 25,515 Income from
operations 7,469 6,947 2,014 12,419 Other income (expense):
Interest income 253 258 882 855 Other (expense) income (727 ) 2,648
(1,003 ) 1,622 Income before income taxes 6,995 9,853 1,893 14,896
(Benefit) provision for income taxes (85 ) 1,796 (1,002 ) 1,178 Net
income $ 7,080 $ 8,057 $ 2,895 $ 13,718 Earnings per
share data: Basic $ 0.31 $ 0.36 $ 0.13 $ 0.61 Diluted $ 0.31 $ 0.35
$ 0.13 $ 0.60 Weighted average shares outstanding: Basic 22,905,235
22,571,067 22,868,733 22,354,444 Diluted 23,148,256 22,986,167
23,145,997 22,719,218
AeroVironment, Inc.
Reconciliation of Earnings per Share
(Unaudited)
Three Months Ended Twelve Months Ended
April 30, April 30, April 30,
April 30, 2015 2014 2015
2014 Earnings per diluted share as adjusted $ 0.32 $ 0.27 $
0.13 $ 0.56 (Decrease) increase of convertible bond and related
equity investment (0.01 ) 0.08 — 0.04
Earnings per diluted share as reported $ 0.31 $ 0.35 $ 0.13
$ 0.60
AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share
data)
April 30, 2015
2014 Assets Current assets: Cash and cash
equivalents $ 143,410 $ 126,969 Short-term investments 85,381
70,639 Accounts receivable, net of allowance for doubtful accounts
of $606 at April 30, 2015 and $791 at April 30, 2014 33,607 31,739
Unbilled receivables and retentions 17,356 10,929 Inventories, net
39,414 50,699 Income tax receivable — 6,584 Deferred income taxes
5,265 5,038 Prepaid expenses and other current assets 4,599
4,260 Total current assets 329,032 306,857
Long-term investments 46,769 50,505 Property and equipment, net
13,499 19,997 Deferred income taxes 7,426 6,721 Other assets
741 874 Total assets $ 397,467 $
384,954
Liabilities and stockholders’ equity Current
liabilities: Accounts payable $ 19,243 $ 13,906 Wages and related
accruals 13,395 14,083 Income taxes payable 692 — Customer advances
4,235 2,984 Other current liabilities 9,170
6,762 Total current liabilities 46,735 37,735 Deferred rent
1,381 1,239 Liability for uncertain tax positions 439 3,513
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—23,314,640 shares
at April 30, 2015 and 23,176,576 at April 30, 2014 2 2 Additional
paid-in capital 148,293 143,648 Accumulated other comprehensive
loss (1,358 ) (263 ) Retained earnings 201,975
199,080 Total stockholders’ equity 348,912
342,467 Total liabilities and stockholders’ equity $
397,467 $ 384,954
AEROVIRONMENT, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In thousands)
Year ended April 30, 2015 2014
2013 (Restated)(1) (Restated)(1) Operating
activities Net income $ 2,895 $ 13,718 $ 10,426 Adjustments to
reconcile net income to cash provided by operating activities:
Depreciation and amortization 8,366 9,155 10,937 Loss from equity
method investments 240 30 — Impairment of long-lived assets 438
3,317 — Provision for doubtful accounts (106 ) (6 ) 462 Losses on
foreign currency transactions 580 21 — Loss (gain) on sale of
equity securities 209 (4 ) — Deferred income taxes (3,382 ) (3,110
) 3,851 Change in fair value of conversion feature of convertible
bonds (73 ) (1,773 ) (6,173 ) Stock-based compensation 3,768 3,622
3,470 Tax benefit from exercise of stock options 52 2,305 1,606
Excess tax benefit from stock-based compensation (162 ) (648 ) —
Loss on disposition of property and equipment 3,661 — 18
Amortization of held-to-maturity investments 4,532 5,037 5,237
Changes in operating assets and liabilities: Accounts receivable
(1,762 ) (11,963 ) 36,185 Unbilled receivables and retentions
(6,427 ) 375 15,730 Inventories 11,285 11,862 (19,022 ) Income tax
receivable 6,584 5,193 (11,777 ) Prepaid expenses and other assets
(339 ) 157 (317 ) Accounts payable 5,337 (2,238 ) (4,069 ) Other
liabilities 3,717 (1,045 ) (17,320 )
Net cash provided by operating activities 39,413
34,005 29,244
Investing activities Acquisition of property
and equipment (5,279 ) (7,143 ) (11,834 ) Equity method investment
(395 ) (105 ) — Redemptions of held-to-maturity investments 69,387
75,022 84,071 Purchases of held-to-maturity investments (97,464 )
(56,946 ) (87,294 ) Acquisition of intangible assets (150 ) (750 )
(850 ) Purchases of available-for-sale investments — — (3,037 )
Sales of available-for-sale investments 10,081 360 600
Net cash (used in) provided by
investing activities (23,820 ) 10,438 (18,344 )
Financing
activities Excess tax benefit from stock-based compensation 162
648 — Tax withholding payment related to net settlement of equity
awards (36 ) (163 ) (77 ) Exercise of stock options 722 6,709 289
Net cash provided by
financing activities 848 7,194 212
Net increase in cash and cash equivalents 16,441
51,637 11,112 Cash and cash equivalents at beginning of year
126,969 75,332 64,220
Cash and cash equivalents at end of year $ 143,410 $ 126,969 $
75,332
Supplemental disclosures of
cash flow information Cash paid during the year for: Income
taxes $ 700 $ 2,556 $ 15,262
Non-cash activities Unrealized
change in fair value on long-term investments recorded in
accumulated other comprehensive loss, net of deferred taxes $ 1,095
$ 442 $ 11 Reclassification from share-based liability compensation
to equity $ — $ — $ 401 Forfeiture of vested stock-based
compensation $ 23 $ — $ — Accrued acquisition of intangible assets
$ 250 $ — $ —
(1) We identified a presentation error in our
classification of $5.0 million and $5.2 million of
amortization/accretion of premiums/discounts related to
held-to-maturity investments within the consolidated statement of
cash flows for the years ended April 30, 2014 and 2013,
respectively. These amounts were previously included in the
investing section of the statement of cash flows within the
purchases of held-to-maturity investments rather than being
properly presented as a reconciling item to net income within the
operating section of the statement of cash flows. For the years
ended April 30, 2014 and 2013, we presented the change in
held-to-maturity investments as net purchases which was not in
accordance with GAAP. To conform to the appropriate GAAP
presentation for the change in held-to-maturity investments, we
have corrected the error by adjusting the amortization of
held-to-maturity investments between the investing and operating
sections of our consolidated statement of cash flows as well as
presenting the gross purchases and gross redemptions in the
investing section in our prior year financial statements for the
years ended April 30, 2014 and 2013.
These presentation errors did not impact our
consolidated balance sheets, consolidated statements of income or
the overall change in cash and cash equivalents in our consolidated
statements of cash flows for these years. Please see our Annual
Report on Form 10-K for the year ended April 30, 2015 for further
details.
Reportable Segment Results are as
Follows:
(In thousands)
Three Months Ended Twelve Months Ended
April 30, April 30, April 30,
April 30, 2015 2014 2015
2014 (Unaudited) Revenue: UAS $ 78,693 $ 60,029 $
220,950 $ 208,810 EES 7,778 13,469 38,448 42,893
Total 86,471 73,498 259,398 251,703 Cost of sales:
UAS 36,384 34,548 128,233 127,992 EES 4,737 8,812 26,897
30,098 Total 41,121 43,360 155,130 158,090
Gross margin: UAS 42,309 25,481 92,717 80,818 EES 3,041
4,657 11,551 12,795 Total 45,350 30,138 104,268
93,613 Selling, general and administrative 15,622 16,968
55,763 55,679 Research and development 22,259 6,223 46,491
25,515 Income from operations 7,469 6,947 2,014 12,419 Other
income (expense): Interest income 253 258 882 855 Other (expense)
income (727 ) 2,648 (1,003 ) 1,622 Income before income taxes $
6,995 $ 9,853 $ 1,893 $ 14,896
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AeroVironment, Inc.Steven Gitlin, +1 (626)
357-9983ir@avinc.com
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