AeroVironment, Inc.
Dec 7, 2010

AeroVironment, Inc. Announces Fiscal 2011 Second Quarter Results

MONROVIA, Calif.--(BUSINESS WIRE)-- AeroVironment, Inc. (AV) (NASDAQ: AVAV) today reported financial results for its second quarter ended October 30, 2010.

"Strong execution produced second quarter performance that exceeded our forecast, keeping us on track for our fiscal year 2011 plan. Key development programs also hit important milestones in the quarter that move them closer to market adoption," said Tim Conver, AV chairman and chief executive officer. "We received significant orders for digital Puma small unmanned aircraft systems and made deliveries earlier than expected. We also began the rollout of electric vehicle charging infrastructure, demonstrating progress in two key growth areas for fiscal 2011. Additionally, we made great progress on the Global Observer Joint Capability Technology Demonstration program with the successful completion of initial flight testing. I believe that we are well on our way to achieving our annual performance targets and positioning AV for long-term growth."

FISCAL 2011 SECOND QUARTER RESULTS

Revenue for the second quarter of fiscal 2011 was $63.8 million, up 24% from second quarter fiscal 2010 revenue of $51.4 million. The increase in revenue resulted from higher sales in our Unmanned Aircraft Systems (UAS) segment of $9.9 million and Efficient Energy Systems (EES) segment of $2.5 million.

Income from operations for the second quarter of fiscal 2011 was $0.4 million, down 88% from second quarter fiscal 2010 income from operations of $3.4 million. The decrease in income from operations was caused by higher selling, general and administrative (SG&A) expense of $2.2 million and higher research and development (R&D) expense of $2.9 million, partially offset by higher gross margin of $2.1 million.

Net income for the second quarter of fiscal 2011 was $0.3 million, down 88% from second quarter fiscal 2010 net income of $2.2 million.

Earnings per diluted share for the second quarter of fiscal 2011 was $0.01, down 90% from second quarter fiscal 2010 earnings per diluted share of $0.10.

FISCAL 2011 YEAR-TO-DATE RESULTS

Revenue for the first six months of fiscal 2011 was $102.0 million, up 14% from the first six months of fiscal 2010 revenue of $89.3 million. The increase in revenue resulted from higher sales in our UAS segment of $10.1 million and EES segment of $2.6 million.

Loss from operations for the first six months of fiscal 2011 was $6.9 million, up 232% from the first six months of fiscal 2010 loss from operations of $2.1 million. The increase in loss from operations was caused by higher SG&A expense of $3.1 million and higher R&D expense of $5.2 million, partially offset by higher gross margin of $3.4 million.

Net loss for the first six months of fiscal 2011 was $3.2 million, up 132% from the first six months of fiscal 2010 net loss of $1.4 million.

Loss per share for the first six months of fiscal 2011 was $0.15, up 150% from the first six months of fiscal 2010 loss per share of $0.06.

BACKLOG

As of October 30, 2010, funded backlog (unfilled firm orders for which funding is currently appropriated to us under a customer contract) was $103.8 million compared to $72.3 million as of April 30, 2010.

FISCAL 2011 — OUTLOOK FOR THE FULL YEAR

For fiscal year 2011, the Company reaffirms its expectation to achieve revenue growth of 10% to 15% over fiscal year 2010, with an operating income margin between 10% and 12%.

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 7, 2010, 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 access to the Internet may access the conference call live over the Internet at the Investor Relations section of the AeroVironment, Inc. website, http://investor.avinc.com. Please allow fifteen minutes prior to the call to download and install any necessary audio software. An audio replay of the event will be archived on the Investor Relations page of the company's web site, at http://investor.avinc.com.

A digital replay of the call will be available on Tuesday, December 7, at approximately 4:30 p.m. Pacific Time through Tuesday, December 14, at 9:00 p.m. Pacific Time. Dial (800) 642-1687 and enter the passcode 22328461. International callers should dial (706) 645-9291 and enter the same passcode number to access the digital replay.

ABOUT AEROVIRONMENT, INC. (AV)

AV 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 battery-powered, hand-launched unmanned aircraft systems extensively to provide situational awareness to tactical operating units through real-time, airborne reconnaissance, surveillance and communication. AV's electric transportation solutions include a comprehensive suite of electric vehicle (EV) charging systems and installation 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 AV 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.

 
AeroVironment, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except share and per share data)
     
Three Months Ended Six Months Ended
October 30,     October 31, October 30,   October 31,
2010 2009 2010 2009
 
Revenue:
Product sales $ 32,494 $ 19,134 $ 44,714 $ 27,363
Contract services 31,287 32,233 57,295 61,944
63,781 51,367 102,009 89,307
Cost of sales:
Product sales 20,646 11,083 29,332 16,640
Contract services 21,360 20,635 38,866 42,303
42,006 31,718 68,198 58,943
Gross margin 21,775 19,649 33,811 30,364
Selling, general and administrative 12,685 10,500 24,056 20,995
Research and development 8,689 5,776 16,661 11,449
Income (loss) from operations 401 3,373 (6,906 ) (2,080 )
Other income:
Interest income 45 50 166 109
Income (loss) before income taxes 446 3,423 (6,740 ) (1,971 )
Provision (benefit) for income taxes 184 1,207 (3,559 ) (600 )
Net income (loss) $ 262 $ 2,216 $ (3,181 ) $ (1,371 )
Earnings (loss) per share data:
Basic $ 0.01 $ 0.10 $ (0.15 ) $ (0.06 )
Diluted $ 0.01 $ 0.10 $ (0.15 ) $ (0.06 )
Weighted average shares outstanding:
Basic 21,565,969 21,348,325 21,555,864 21,332,379
Diluted 22,027,155 21,937,784 21,555,864 21,332,379
 
AeroVironment, Inc.
Selected Consolidated Balance Sheet Information
(In thousands except share data)
   
October 30,

2010

April 30,

2010

(Unaudited)
Cash and cash equivalents $ 76,664 $ 28,665
Investments 86,967 142,285
Accounts receivable, net 33,299 38,645
Unbilled receivables and retentions 16,577 18,710
Inventories, net 28,929 20,928
Total assets 276,207 281,971
Stockholders' equity 231,560 233,420
Shares issued and outstanding 21,822,632 21,732,413
 
Reportable Segment Results are as Follows (Unaudited):
(In thousands)
     
Three Months Ended Six Months Ended
October 30,     October 31, October 30,   October 31,
2010 2009 2010 2009
Revenue:
UAS $ 53,616 $ 43,690 $ 87,063 $ 77,000
EES 10,165 7,677 14,946 12,307
Total 63,781 51,367 102,009 89,307
Gross margin:
UAS 17,434 15,822 27,804 24,801
EES 4,341 3,827 6,007 5,563
Total 21,775 19,649 33,811 30,364
Selling, general and administrative 12,685 10,500 24,056 20,995
Research and development 8,689 5,776 16,661 11,449
Income (loss) from operations 401 3,373 (6,906 ) (2,080 )
Interest income 45 50 166 109
Income (loss) before income taxes $ 446 $ 3,423 $ (6,740 ) $ (1,971 )
 

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

Source: AeroVironment, Inc.

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