UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 2014
AEROVIRONMENT, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-33261 |
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95-2705790 |
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(State or other jurisdiction of |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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incorporation or organization) |
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181 W. Huntington Drive, Suite 202 |
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Monrovia, CA |
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91016 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (626) 357-9983
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On September 3, 2014, AeroVironment, Inc. issued a press release announcing first quarter financial results for the period ended August 2, 2014, a copy of which is attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of AeroVironment, Inc. under the Securities Act of 1933, as amended, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.
In addition to historic information, this report, including the exhibit, contains forward-looking statements regarding events, performance and financial trends. Various factors could affect future results and could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of those factors are identified in the exhibit, and in our periodic reports filed with the Securities and Exchange Commission.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
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Exhibit |
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Number |
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Description |
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99.1 |
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Press release issued by AeroVironment, Inc., dated September 3, 2014. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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AEROVIRONMENT, INC. | |
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Date: September 3, 2014 |
By: |
/s/ Douglas E. Scott |
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Douglas E. Scott |
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Senior Vice President, General Counsel and Corporate Secretary |
Exhibit 99.1
AeroVironment, Inc. Announces Fiscal 2015 First Quarter Results
MONROVIA, Calif., September 3, 2014 — AeroVironment, Inc. (NASDAQ: AVAV) today reported financial results for its first quarter ended August 2, 2014.
“Solid performance in our first quarter produced an 18 percent increase in revenue and 12 percent increase in gross profit on a year-over-year basis. These results, combined with 25 percent growth in funded backlog over the fourth quarter of fiscal 2014 and cash flow from operations of $14 million, demonstrate continued momentum across our businesses,” said Tim Conver, AeroVironment chairman and chief executive officer. “Strong bookings, which continue in the second quarter, provide us with greater visibility into full year revenue and strengthen our confidence in our financial outlook.”
“Responding to increased customer interest, this quarter we began the investments we announced in our first quarter to position AeroVironment for three large growth opportunities. We believe investing now in Commercial UAS, Tactical Missile Systems and Global Observer will position AeroVironment to lead when adoption accelerates and will generate significant value for our stockholders in the near- and long-term” Conver added.
FISCAL 2015 FIRST QUARTER RESULTS
Revenue for the first quarter of fiscal 2015 was $51.9 million, up 18% from first quarter fiscal 2014 revenue of $44.1 million. The increase in revenue resulted from increased sales in our Unmanned Aircraft Systems (UAS) segment of $6.0 million and in our Efficient Energy Systems (EES) segment of $1.8 million.
Gross margin for the first quarter of fiscal 2015 was $14.1 million, up 12% from first quarter fiscal 2014 gross margin of $12.5 million. The increase in gross margin resulted from higher gross margin from EES as a result of higher sales volume and favorable product mix, offset by lower gross margin from UAS due to the inclusion of the termination cost settlement for the Global Observer Joint Capability Technology Demonstration contract in the first quarter of 2014 that was not in the first quarter of 2015 and higher costs on service-related contracts.
Loss from operations for the first quarter of fiscal 2015 was $6.5 million compared to loss from operations for the first quarter of fiscal 2014 of $7.1 million. The lower loss from operations was a result of higher revenue, resulting in $1.5 million higher gross margin, and lower research and development (R&D) expense of $0.1 million, offset by higher selling, general & administrative (SG&A) expense of $1.0 million.
Other income, net, for the first quarter of fiscal 2015 was $0.6 million compared to other expense, net, for the first quarter of fiscal 2014 of $3.4 million. The increase in other income, net, was primarily due to an increase of $0.4 million in the fair value of the conversion option of our convertible bond investment and $0.5 million gain on sales of stock, compared to a decrease of $3.4 million in the fair value of the conversion option for the first quarter of fiscal 2014.
Net loss for the first quarter of fiscal 2015 was $3.6 million compared to net loss for the first quarter of fiscal 2014 of $7.2 million.
Loss per share for the first quarter of fiscal 2015 was $0.16 compared to loss per share for the first quarter of fiscal 2014 of $0.32. Loss per share for the first quarter of fiscal 2015 was reduced by $0.02 per share due to the increase in fair value of the conversion option of our convertible bond investment and related sales of stock. Loss per share for the first quarter of fiscal 2014 was increased by $0.11 per share due to the decrease in fair value of the conversion option of our convertible bond investment.
BACKLOG
As of August 2, 2014, funded backlog (unfilled firm orders for which funding is currently appropriated to us under a customer contract) was $82.0 million compared to $65.9 million as of April 30, 2014.
FISCAL 2015 — OUTLOOK FOR THE FULL YEAR
For fiscal 2015, the company expects to generate revenue of between $250 million and $270 million, and gross profit margins of between 34.5 percent and 37.5 percent, respectively. Planned increases in research and development and business development investments for Tactical Missile Systems, Commercial UAS and Global Observer business areas in fiscal 2015 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, Wednesday, September 3, 2014, 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 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 Wednesday, September 3, 2014, at approximately 4:30 p.m. Pacific Time through Wednesday, September 10, 2014, at 9:00 p.m. Pacific Time. Dial (855) 859-2056 and enter the passcode 87661423. 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 unmanned aircraft systems provide powerful actionable information to military, public safety and commercial personnel around the world through real-time, airborne imaging, sensing 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 (Unaudited)
(In thousands except share and per share data)
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Three Months Ended |
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August 2, |
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July 27, |
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2014 |
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2013 |
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Revenue: |
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Product sales |
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$ |
42,811 |
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$ |
27,174 |
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Contract services |
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9,055 |
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16,943 |
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51,866 |
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44,117 |
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Cost of sales: |
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Product sales |
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30,797 |
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20,555 |
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Contract services |
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7,015 |
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11,017 |
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37,812 |
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31,572 |
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Gross margin: |
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Product sales |
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12,014 |
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6,619 |
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Contract services |
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2,040 |
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5,926 |
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14,054 |
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12,545 |
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Selling, general and administrative |
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13,403 |
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12,459 |
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Research and development |
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7,124 |
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7,190 |
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Loss from operations |
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(6,473 |
) |
(7,104 |
) | ||
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Other income (expense): |
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|
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Interest income |
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212 |
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205 |
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Other income (expense), net |
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591 |
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(3,394 |
) | ||
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Loss before income taxes |
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(5,670 |
) |
(10,293 |
) | ||
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Benefit for income taxes |
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(2,061 |
) |
(3,083 |
) | ||
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Net loss |
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$ |
(3,609 |
) |
$ |
(7,210 |
) |
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Loss per share data: |
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Basic |
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$ |
(0.16 |
) |
$ |
(0.32 |
) |
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Diluted |
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$ |
(0.16 |
) |
$ |
(0.32 |
) |
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Weighted average shares outstanding: |
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Basic |
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22,804,127 |
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22,238,363 |
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Diluted |
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22,804,127 |
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22,238,363 |
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AeroVironment, Inc.
Reconciliation of Loss per Share (Unaudited)
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Three Months Ended |
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August 2, |
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July 27, |
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2014 |
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2013 |
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Loss per share as adjusted |
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$ |
(0.18 |
) |
$ |
(0.21 |
) |
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Decrease (increase) due to convertible bonds and related stock investments |
|
0.02 |
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(0.11 |
) | ||
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Loss per share as reported |
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$ |
(0.16 |
) |
$ |
(0.32 |
) |
AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share data)
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August 2, |
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April 30, |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
148,052 |
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$ |
126,969 |
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Short-term investments |
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76,840 |
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70,639 |
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Accounts receivable, net of allowance for doubtful accounts of $626 at August 2, 2014 and $791 at April 30, 2014 |
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23,213 |
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31,739 |
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Unbilled receivables and retentions |
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7,658 |
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10,929 |
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Inventories, net |
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46,441 |
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50,699 |
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Income tax receivable |
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3,460 |
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6,584 |
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Deferred income taxes |
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4,747 |
|
5,038 |
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Prepaid expenses and other current assets |
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3,320 |
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4,260 |
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Total current assets |
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313,731 |
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306,857 |
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Long-term investments |
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39,315 |
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50,505 |
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Property and equipment, net |
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17,897 |
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19,997 |
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Deferred income taxes |
|
6,689 |
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6,721 |
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Other assets |
|
971 |
|
874 |
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Total assets |
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$ |
378,603 |
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$ |
384,954 |
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Liabilities and Stockholders’ Equity |
|
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Current liabilities: |
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Accounts payable |
|
$ |
13,125 |
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$ |
13,906 |
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Wages and related accruals |
|
9,282 |
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14,083 |
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Customer advances |
|
4,781 |
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2,984 |
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Other current liabilities |
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5,861 |
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6,762 |
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Total current liabilities |
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33,049 |
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37,735 |
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Deferred rent |
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1,286 |
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1,239 |
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Liability for uncertain tax positions |
|
3,513 |
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3,513 |
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Commitments and contingencies |
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Stockholders’ equity: |
|
|
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Preferred stock, $0.0001 par value: |
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Authorized shares — 10,000,000; none issued or outstanding |
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— |
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— |
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Common stock, $0.0001 par value: |
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Authorized shares — 100,000,000 |
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Issued and outstanding shares — 23,356,556 at August 2, 2014 and 23,176,576 at April 30, 2014 |
|
2 |
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2 |
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Additional paid-in capital |
|
145,497 |
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143,648 |
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Accumulated other comprehensive loss |
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(215 |
) |
(263 |
) | ||
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Retained earnings |
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195,471 |
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199,080 |
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Total stockholders’ equity |
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340,755 |
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342,467 |
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Total liabilities and stockholders’ equity |
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$ |
378,603 |
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$ |
384,954 |
|
AeroVironment, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
|
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Three Months Ended |
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|
|
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August 2, |
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July 27, |
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Operating activities |
|
|
|
|
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Net loss |
|
$ |
(3,609 |
) |
$ |
(7,210 |
) |
|
Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
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|
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|
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Depreciation and amortization |
|
2,192 |
|
2,185 |
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Provision for doubtful accounts |
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(141 |
) |
122 |
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Deferred income taxes |
|
291 |
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(23 |
) | ||
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Realized gain on sale of equity securities |
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(473 |
) |
— |
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Stock-based compensation |
|
846 |
|
910 |
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Foreign currency losses |
|
183 |
|
— |
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(Increase) decrease in fair value of conversion feature of convertible bonds |
|
(393 |
) |
3,391 |
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Tax benefit from exercise of stock options |
|
11 |
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28 |
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Excess tax benefit from stock-based compensation |
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(313 |
) |
— |
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Changes in operating assets and liabilities: |
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|
|
|
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Accounts receivable |
|
8,667 |
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44 |
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Unbilled receivables and retentions |
|
3,271 |
|
1,585 |
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Inventories |
|
4,258 |
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(6,102 |
) | ||
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Income tax receivable |
|
3,124 |
|
(3,035 |
) | ||
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Other assets |
|
780 |
|
538 |
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Accounts payable |
|
(781 |
) |
(2,599 |
) | ||
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Other liabilities |
|
(3,545 |
) |
(3,010 |
) | ||
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Net cash provided by (used in) operating activities |
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14,368 |
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(13,176 |
) | ||
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Investing activities |
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|
|
|
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Acquisitions of property and equipment |
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(29 |
) |
(4,457 |
) | ||
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Net (purchases) redemptions of held-to-maturity investments |
|
(2,924 |
) |
6,442 |
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Net sales of available-for-sale investments |
|
8,676 |
|
175 |
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Net cash provided by investing activities |
|
5,723 |
|
2,160 |
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Financing activities |
|
|
|
|
| ||
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Excess tax benefit from exercise of stock options |
|
313 |
|
— |
| ||
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Exercise of stock options |
|
679 |
|
23 |
| ||
|
Net cash provided by financing activities |
|
992 |
|
23 |
| ||
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Net increase (decrease) in cash and cash equivalents |
|
21,083 |
|
(10,993 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
126,969 |
|
75,332 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
148,052 |
|
$ |
64,339 |
|
|
|
|
|
|
|
| ||
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Supplemental disclosure: |
|
|
|
|
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Unrealized (gain) loss on available-for-sale investments recorded in other comprehensive loss, net of deferred taxes of $(32) and $32, respectively |
|
$ |
(48 |
) |
$ |
48 |
|
Reportable Segment Results are as Follows (Unaudited):
(In thousands)
|
|
|
Three Months Ended |
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|
|
|
August 2, |
|
July 27, |
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|
|
|
2014 |
|
2013 |
| ||
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Revenue: |
|
|
|
|
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|
UAS |
|
$ |
41,186 |
|
$ |
35,211 |
|
|
EES |
|
10,680 |
|
8,906 |
| ||
|
Total |
|
51,866 |
|
44,117 |
| ||
|
Cost of sales: |
|
|
|
|
| ||
|
UAS |
|
31,015 |
|
24,599 |
| ||
|
EES |
|
6,797 |
|
6,973 |
| ||
|
Total |
|
37,812 |
|
31,572 |
| ||
|
Gross margin: |
|
|
|
|
| ||
|
UAS |
|
10,171 |
|
10,612 |
| ||
|
EES |
|
3,883 |
|
1,933 |
| ||
|
Total |
|
14,054 |
|
12,545 |
| ||
|
Selling, general and administrative |
|
13,403 |
|
12,459 |
| ||
|
Research and development |
|
7,124 |
|
7,190 |
| ||
|
Loss from operations |
|
(6,473 |
) |
(7,104 |
) | ||
|
Other income (expense): |
|
|
|
|
| ||
|
Interest income |
|
212 |
|
205 |
| ||
|
Other income (expense), net |
|
591 |
|
(3,394 |
) | ||
|
Loss before income taxes |
|
$ |
(5,670 |
) |
$ |
(10,293 |
) |
##
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Contact:
AeroVironment, Inc.
Steven Gitlin
+1 (626) 357-9983
ir@avinc.com