UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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incorporation or organization) |
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(Address of Principal Executive Offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |
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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):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On December 3, 2019, AeroVironment, Inc. (the “Company”) issued a press release announcing second quarter financial results for the period ended October 26, 2019, a copy of which is attached hereto as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
The information under Item 2.02 above is incorporated herein by reference.
Attached as Exhibit 99.2 hereto is a presentation containing additional information regarding the Company’s second quarter financial results for the period ended October 26, 2019. A copy of the presentation is also available on the investor relations section of the Company’s website at https://investor.avinc.com/events-and-presentations. The information contained on the Company’s website is not incorporated by reference into, and does not form a part of, this Current Report on Form 8-K.
In addition to historic information, this report, including the exhibits, 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 exhibits, and in our periodic reports filed with the Securities and Exchange Commission.
The information in this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Items 2.02 and 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), 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, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit |
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Number |
| Description |
99.1 |
| Press release issued by AeroVironment, Inc., dated December 3, 2019. |
99.2 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
2
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.
| AEROVIRONMENT, INC. | |
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Date: December 3, 2019 | By: | /s/ Wahid Nawabi |
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| Wahid Nawabi |
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| President and Chief Executive Officer |
3
Exhibit 99.1
AeroVironment, Inc. Announces Fiscal 2020 Second Quarter Results
SIMI VALLEY, Calif., December 3, 2019 — AeroVironment, Inc. (NASDAQ: AVAV) today reported financial results for its second quarter ended October 26, 2019.
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Revenue of $83.3 million, up 14 percent year-over-year |
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Earnings per diluted share of $0.31 up $0.02 year-over-year; non-GAAP earnings per diluted share of $0.34, up $0.05 year-over-year |
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Funded backlog of $146.7 million |
“AeroVironment delivered strong results for the second fiscal quarter of 2020 with $83.3 million in revenue and $0.34 of non-GAAP earnings per diluted share, representing year-over-year increases of 14 and 17 percent, respectively," said Wahid Nawabi, AeroVironment president and chief executive officer. "We made significant progress across our portfolio during the quarter through launching our new Puma LE system, winning international orders worth more than $20 million, and achieving successful first and second flights of the solar-powered HAWK30 HAPS unmanned aircraft system. Our business remains strong, our growth portfolio continues to advance and our team remains committed to executing our proven value creation strategy.”
FISCAL 2020 SECOND QUARTER RESULTS
Revenue for the second quarter of fiscal 2020 was $83.3 million, an increase of 14% from second quarter fiscal 2019 revenue of $73.0 million. The increase in revenue was due to an increase in product sales of $10.3 million.
Gross margin for the second quarter of fiscal 2020 was $35.2 million, an increase of 24% from second quarter fiscal 2019 gross margin of $28.4 million. The increase in gross margin was primarily due to an increase in product margin of $6.1 million and an increase in service margin of $0.7 million. As a percentage of revenue, gross margin increased to 42% from 39%. The increase in gross margin percentage was primarily due to an increase in the proportion of product revenue to total revenue and a favorable product mix, partially offset by an increase in inventory reserve charges.
Income from continuing operations for the second quarter of fiscal 2020 was $8.1 million, an increase of 21% from second quarter fiscal 2019 income from continuing operations of $6.6 million. The increase in income from continuing operations was primarily a result of an increase in gross margin of $6.8 million, partially offset by an increase in research and development expense (“R&D”) of $2.7 million and an increase in selling, general and administrative (“SG&A”) expense of $2.6 million.
Other income, net for the second quarter of fiscal 2020 was $1.4 million compared to other income, net of $2.4 million for the second quarter of fiscal 2019. The decrease in other income, net was primarily due to a decrease in transition services performed on behalf of the buyer of the discontinued Efficient Energy Systems (“EES”) business.
Provision for income taxes for the second quarter of fiscal 2020 was $1.1 million compared to $1.2 million for the second quarter of fiscal 2019.
1
Equity method investment loss, net of tax for the second quarter of fiscal 2020 was $0.9 million compared to $0.8 million for the second quarter of fiscal 2019. The equity method loss is associated with our investment in the HAPSMobile Inc. joint venture formed in December 2017.
Net income attributable to AeroVironment for the second quarter of fiscal 2020 was $7.5 million, an increase from second quarter fiscal 2019 net income attributable to AeroVironment of $6.1 million.
Earnings per diluted share from continuing operations attributable to AeroVironment for the second quarter of fiscal 2020 was $0.31 compared to earnings per diluted share from continuing operations attributable to AeroVironment for the second quarter fiscal 2019 of $0.29.
Non-GAAP earnings per diluted share from continuing operations was $0.34 for the second quarter of fiscal 2020 compared to Non-GAAP earnings per diluted share from continuing operations for the second quarter of fiscal 2019 of $0.29.
FISCAL 2020 YEAR-TO-DATE RESULTS
Revenue for the first six months of fiscal 2020 was $170.2 million, an increase of 13% from the first six months of fiscal 2019 revenue of $151.0 million. The increase in revenue was due to an increase in product sales of $20.9 million, partially offset by a decrease in service revenue of $1.7 million.
Gross margin for the first six months of fiscal 2020 was $76.4 million, an increase of 25% from the first six months of fiscal 2019 gross margin of $61.0 million. The increase in gross margin was primarily due to an increase in product margin of $16.0 million, partially offset by a decrease in service margin of $0.6 million. As a percentage of revenue, gross margin increased to 45% from 40%. The increase in gross margin percentage was primarily due to an increase in the proportion of product revenue to total revenue and a favorable product mix, partially offset by an increase in inventory reserve charges.
Income from continuing operations for the first six months of fiscal 2020 was $26.9 million, an increase from the first six months of fiscal 2019 income from continuing operations of $20.8 million. The increase in income from continuing operations was primarily a result of an increase in gross margin of $15.5 million, partially offset by an increase in R&D expense of $5.0 million and an increase in SG&A expense of $4.3 million.
Other income, net, for the first six months of fiscal 2020 was $3.1 million compared to other income, net of $11.7 million for the first six months of fiscal 2019. The decrease in other income, net was primarily due to a one-time gain from a litigation settlement of $0.26 in fiscal 2019 and a decrease in income from transition services performed on behalf of the buyer of the discontinued EES business.
Provision for income taxes for the first six months of fiscal 2020 was $3.2 million compared to provision for income taxes of $3.8 million for the first six months of fiscal 2019. The decrease in provision for income taxes was primarily due to the decrease in income before income taxes.
Equity method investment loss, net of tax, for the first six months of fiscal 2020 was $2.2 million compared to $1.4 million for the first six months of fiscal 2019 associated with our investment in HAPSMobile, Inc. joint venture formed in December 2017.
Net income attributable to AeroVironment for the first six months of fiscal 2020 was $24.6 million, a decrease from the first six months of fiscal 2019 net income attributable to AeroVironment of $33.4 million. The first six months of fiscal 2019 included a one-time gain from a litigation settlement of $0.26.
Earnings per diluted share from continuing operations attributable to AeroVironment for the first six months of fiscal 2020 was $1.02 compared to earnings per diluted share from continuing operations attributable to AeroVironment for the first six months of fiscal 2019 of $1.14. The first six months of fiscal 2019 included a one-time gain from a litigation settlement of $0.26.
2
Non-GAAP earnings per diluted share from continuing operations was $1.08 for the first six months of fiscal 2020 compared to Non-GAAP earnings per diluted share from continuing operations for the first six months of fiscal 2019 of $0.88.
BACKLOG
As of October 26, 2019, funded backlog (remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $146.7 million compared to $163.9 million as of October 27, 2018.
FISCAL 2020 — OUTLOOK FOR THE FULL YEAR
For fiscal 2020, the Company continues to expect to generate between $350 million and $370 million in revenue and between $1.35 and $1.55 in earnings per diluted share. This financial guidance assumes approximately 5% ownership of the HAPSMobile joint venture and includes the expected losses of Pulse Aerospace, which the Company acquired on June 10, 2019. The Company continues to expect non-GAAP earnings per diluted share, which excludes acquisition related expenses and amortization of acquired intangible assets to be between $1.47 and $1.67.
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 AND PRESENTATION
In conjunction with this release, AeroVironment, Inc. will host a conference call today, Tuesday December 3, 2019, at 1:30 pm Pacific Time that will be broadcast live over the Internet. Wahid Nawabi, president and chief executive officer, Brian C. Shackley, interim 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 (800) 708-4540 (U.S.) and enter the passcode 49180075 or (847) 619-6397 (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.
A supplementary investor presentation for the second fiscal quarter 2020, can be accessed at https://investor.avinc.com/events-and-presentations.
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 December 3, 2019, at approximately 4:00 p.m. Pacific Time through December 10, 2019, at 11:59 p.m. Pacific Time. Dial (888) 843-7419 and enter the passcode 49180075#. International callers should dial (630) 652-3042 and enter the same passcode number to access the audio replay.
3
ABOUT AEROVIRONMENT, INC.
AeroVironment (NASDAQ: AVAV) provides customers with more actionable intelligence so they can proceed with certainty. Based in California, AeroVironment is a global leader in unmanned aircraft systems and tactical missile systems, and serves defense, government and commercial customers. For more information visit 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; availability of U.S. government funding for defense procurement and R&D programs; changes in the timing and/or amount of government spending; our ability to perform under existing contracts and obtain new contracts; risks related to our international business, including compliance with export control laws; potential need for changes in our long-term strategy in response to future developments; the extensive regulatory requirements governing our contracts with the U.S. government and international customers; the consequences to our financial position, business and reputation that could result from failing to comply with such regulatory requirements; unexpected technical and marketing difficulties inherent in major research and product development efforts; the impact of potential security and cyber threats; changes in the supply and/or demand and/or prices for our products and services; the activities of competitors and increased competition; failure of the markets in which we operate to grow; uncertainty in the customer adoption rate of commercial use unmanned aircraft systems; failure to remain a market innovator and create new market opportunities; changes in significant operating expenses, including components and raw materials; failure to develop new products; the extensive regulatory requirements governing our contracts with the U.S. government; risk of litigation, including but not limited to pending litigation arising from the sale of our EES business; the impact of our recent acquisition of Pulse Aerospace, LLC and our ability to successfully integrate it into our operations; product liability, infringement and other claims; 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.
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains a non-GAAP financial measure. See in the financial tables below the calculation of this measure, the reasons why we believe this measure provides useful information to investors, and a reconciliation of this measure to the most directly comparable GAAP.
- Financial Tables Follow –
4
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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Six Months Ended |
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October 26, |
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October 27, |
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October 26, |
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October 27, |
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2019 |
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2018 |
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2019 |
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2018 |
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(Unaudited) |
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Revenue: |
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Product sales |
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$ |
57,386 |
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$ |
47,056 |
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$ |
123,225 |
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$ |
102,369 |
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Contract services (inclusive of related party revenue of $13,393 and $12,832 for the three months ended October 26, 2019 and October 27, 2018, respectively; and $25,728 and $24,395 for the six months ended October 26, 2019 and October 27, 2018, respectively) |
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25,885 |
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25,923 |
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46,957 |
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48,653 |
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|
|
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83,271 |
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72,979 |
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170,182 |
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151,022 |
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Cost of sales: |
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Product sales |
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30,802 |
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26,567 |
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|
61,210 |
|
|
56,378 |
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Contract services |
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17,303 |
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|
18,013 |
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|
32,534 |
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33,656 |
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48,105 |
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44,580 |
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93,744 |
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90,034 |
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Gross margin: |
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|
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Product sales |
|
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26,584 |
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|
20,489 |
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|
62,015 |
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|
45,991 |
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Contract services |
|
|
8,582 |
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|
7,910 |
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|
14,423 |
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|
14,997 |
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|
|
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35,166 |
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28,399 |
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76,438 |
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|
60,988 |
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Selling, general and administrative |
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16,255 |
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13,646 |
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29,923 |
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25,602 |
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Research and development |
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10,858 |
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8,109 |
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19,567 |
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14,544 |
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Income from continuing operations |
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8,053 |
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6,644 |
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26,948 |
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20,842 |
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Other income: |
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Interest income, net |
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1,266 |
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1,068 |
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2,595 |
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1,974 |
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Other income, net |
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157 |
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1,291 |
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|
512 |
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9,679 |
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Income from continuing operations before income taxes |
|
|
9,476 |
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|
9,003 |
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30,055 |
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32,495 |
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Provision for income taxes |
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|
1,108 |
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|
1,211 |
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|
3,241 |
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|
3,778 |
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Equity method investment loss, net of tax |
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(863) |
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(752) |
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|
(2,210) |
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|
(1,354) |
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Net income from continuing operations |
|
|
7,505 |
|
|
7,040 |
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|
24,604 |
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27,363 |
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Discontinued operations: |
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|
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|
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|
|
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(Loss) gain on sale of business, net of tax (benefit) expense of $(114) and $2,463 for the three and six months ended October 27, 2018, respectively |
|
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— |
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(391) |
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|
— |
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8,452 |
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Loss from discontinued operations, net of tax |
|
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— |
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(599) |
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— |
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|
(2,449) |
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Net (loss) income from discontinued operations |
|
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— |
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(990) |
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|
— |
|
|
6,003 |
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Net income |
|
|
7,505 |
|
|
6,050 |
|
|
24,604 |
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|
33,366 |
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Net (income) loss attributable to noncontrolling interest |
|
|
(4) |
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|
7 |
|
|
7 |
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21 |
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Net income attributable to AeroVironment |
|
$ |
7,501 |
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$ |
6,057 |
|
$ |
24,611 |
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$ |
33,387 |
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Net income per share attributable to AeroVironment—Basic |
|
|
|
|
|
|
|
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|
|
|
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|
|
Continuing operations |
|
$ |
0.32 |
|
$ |
0.30 |
|
$ |
1.04 |
|
$ |
1.16 |
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|
Discontinued operations |
|
|
— |
|
|
(0.04) |
|
|
— |
|
|
0.25 |
|
|
Net income per share attributable to AeroVironment—Basic |
|
$ |
0.32 |
|
$ |
0.26 |
|
$ |
1.04 |
|
$ |
1.41 |
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|
Net income per share attributable to AeroVironment—Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.31 |
|
$ |
0.29 |
|
$ |
1.02 |
|
$ |
1.14 |
|
|
Discontinued operations |
|
|
— |
|
|
(0.04) |
|
|
— |
|
|
0.25 |
|
|
Net income per share attributable to AeroVironment—Diluted |
|
$ |
0.31 |
|
$ |
0.25 |
|
$ |
1.02 |
|
$ |
1.39 |
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|
Weighted-average shares outstanding: |
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|
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|
|
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|
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|
Basic |
|
|
23,804,364 |
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|
23,667,400 |
|
|
23,775,355 |
|
|
23,621,720 |
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Diluted |
|
|
24,061,810 |
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|
24,098,833 |
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|
24,063,775 |
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|
24,059,394 |
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5
AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share data)
|
|
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October 26, |
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April 30, |
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||
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2019 |
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2019 |
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(Unaudited) |
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Assets |
|
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Current assets: |
|
|
|
|
|
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Cash and cash equivalents |
|
$ |
130,742 |
|
$ |
172,708 |
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Short-term investments |
|
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161,635 |
|
|
150,487 |
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Accounts receivable, net of allowance for doubtful accounts of $1,055 at October 26, 2019 and $1,041 at April 30, 2019 |
|
|
40,564 |
|
|
31,051 |
|
|
Unbilled receivables and retentions (inclusive of related party unbilled receivables of $21,717 at October 26, 2019 and $9,028 at April 30, 2019) |
|
|
62,397 |
|
|
53,047 |
|
|
Inventories |
|
|
52,769 |
|
|
54,056 |
|
|
Prepaid expenses and other current assets |
|
|
8,045 |
|
|
7,418 |
|
|
Income taxes receivable |
|
|
— |
|
|
821 |
|
|
Total current assets |
|
|
456,152 |
|
|
469,588 |
|
|
Long-term investments |
|
|
13,478 |
|
|
9,386 |
|
|
Property and equipment, net |
|
|
20,571 |
|
|
16,905 |
|
|
Operating lease right-of-use assets |
|
|
8,902 |
|
|
— |
|
|
Deferred income taxes |
|
|
8,019 |
|
|
6,685 |
|
|
Intangibles, net |
|
|
15,952 |
|
|
459 |
|
|
Goodwill |
|
|
8,080 |
|
|
— |
|
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Other assets |
|
|
13,339 |
|
|
5,821 |
|
|
Total assets |
|
$ |
544,493 |
|
$ |
508,844 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
11,022 |
|
$ |
15,972 |
|
|
Wages and related accruals |
|
|
13,218 |
|
|
18,507 |
|
|
Customer advances |
|
|
2,550 |
|
|
2,962 |
|
|
Current operating lease liabilities |
|
|
2,290 |
|
|
— |
|
|
Income taxes payable |
|
|
2,570 |
|
|
— |
|
|
Other current liabilities |
|
|
13,141 |
|
|
7,425 |
|
|
Total current liabilities |
|
|
44,791 |
|
|
44,866 |
|
|
Deferred rent |
|
|
— |
|
|
1,173 |
|
|
Non-current operating lease liabilities |
|
|
6,843 |
|
|
— |
|
|
Other non-current liabilities |
|
|
2,422 |
|
|
150 |
|
|
Deferred tax liability |
|
|
29 |
|
|
29 |
|
|
Liability for uncertain tax positions |
|
|
51 |
|
|
51 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value: |
|
|
|
|
|
|
|
|
Authorized shares—10,000,000; none issued or outstanding at October 26, 2019 and April 30, 2019 |
|
|
— |
|
|
— |
|
|
Common stock, $0.0001 par value: |
|
|
|
|
|
|
|
|
Authorized shares—100,000,000 |
|
|
|
|
|
|
|
|
Issued and outstanding shares—23,990,616 shares at October 26, 2019 and 23,946,293 shares at April 30, 2019 |
|
|
2 |
|
|
2 |
|
|
Additional paid-in capital |
|
|
178,550 |
|
|
176,216 |
|
|
Accumulated other comprehensive loss |
|
|
181 |
|
|
2 |
|
|
Retained earnings |
|
|
311,627 |
|
|
286,351 |
|
|
Total AeroVironment stockholders’ equity |
|
|
490,360 |
|
|
462,571 |
|
|
Noncontrolling interest |
|
|
(3) |
|
|
4 |
|
|
Total equity |
|
|
490,357 |
|
|
462,575 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
544,493 |
|
$ |
508,844 |
|
6
AeroVironment, Inc.
Consolidated Statements of Cash Flows
(In thousands)
|
|
|
Six Months Ended |
|
||||
|
|
|
October 26, |
|
October 27, |
|
||
|
|
|
2019 |
|
2018 |
|
||
|
Operating activities |
|
|
|
|
|
|
|
|
Net income |
|
$ |
24,604 |
|
$ |
33,366 |
|
|
Gain on sale of business, net of tax |
|
|
— |
|
|
(8,452) |
|
|
Loss from discontinued operations, net of tax |
|
|
— |
|
|
2,449 |
|
|
Net income from continuing operations |
|
|
24,604 |
|
|
27,363 |
|
|
Adjustments to reconcile net income from continuing operations to cash provided by operating activities from continuing operations: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
4,486 |
|
|
3,584 |
|
|
Loss from equity method investment |
|
|
2,210 |
|
|
1,354 |
|
|
Provision for doubtful accounts |
|
|
14 |
|
|
(27) |
|
|
Other non-cash expense |
|
|
81 |
|
|
— |
|
|
Non-cash lease expense |
|
|
2,255 |
|
|
— |
|
|
Losses (gains) on foreign currency transactions |
|
|
1 |
|
|
(13) |
|
|
Deferred income taxes |
|
|
(669) |
|
|
(614) |
|
|
Stock-based compensation |
|
|
2,984 |
|
|
2,517 |
|
|
Gain on sale of property and equipment |
|
|
(75) |
|
|
— |
|
|
Amortization of held-to-maturity investments |
|
|
(984) |
|
|
(459) |
|
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(9,400) |
|
|
22,261 |
|
|
Unbilled receivables and retentions |
|
|
(9,350) |
|
|
(28,782) |
|
|
Inventories |
|
|
1,621 |
|
|
(8,671) |
|
|
Income tax receivable |
|
|
821 |
|
|
— |
|
|
Prepaid expenses and other assets |
|
|
(1,051) |
|
|
(831) |
|
|
Accounts payable |
|
|
(5,046) |
|
|
(8,841) |
|
|
Other liabilities |
|
|
(4,583) |
|
|
(6,184) |
|
|
Net cash provided by operating activities of continuing operations |
|
|
7,919 |
|
|
2,657 |
|
|
Investing activities |
|
|
|
|
|
|
|
|
Acquisition of property and equipment |
|
|
(6,850) |
|
|
(4,135) |
|
|
Equity method investments |
|
|
(4,569) |
|
|
— |
|
|
Business acquisition, net of cash acquired |
|
|
(18,641) |
|
|
— |
|
|
Proceeds from sale of business |
|
|
— |
|
|
31,994 |
|
|
Proceeds from sale of property and equipment |
|
|
81 |
|
|
— |
|
|
Redemptions of held-to-maturity investments |
|
|
159,839 |
|
|
153,029 |
|
|
Purchases of held-to-maturity investments |
|
|
(169,148) |
|
|
(169,402) |
|
|
Redemptions of available-for-sale investments |
|
|
— |
|
|
2,250 |
|
|
Purchases of available-for-sale investments |
|
|
(4,947) |
|
|
— |
|
|
Net cash (used in) provided by investing activities from continuing operations |
|
|
(44,235) |
|
|
13,736 |
|
|
Financing activities |
|
|
|
|
|
|
|
|
Principal payments of capital lease obligations |
|
|
— |
|
|
(111) |
|
|
Tax withholding payment related to net settlement of equity awards |
|
|
(743) |
|
|
(975) |
|
|
Exercise of stock options |
|
|
93 |
|
|
71 |
|
|
Net cash used in financing activities from continuing operations |
|
|
(650) |
|
|
(1,015) |
|
|
Discontinued operations |
|
|
|
|
|
|
|
|
Operating activities of discontinued operations |
|
|
— |
|
|
(7,188) |
|
|
Investing activities of discontinued operations |
|
|
— |
|
|
(452) |
|
|
Financing activities of discontinued operations |
|
|
— |
|
|
— |
|
|
Net cash used in discontinued operations |
|
|
— |
|
|
(7,640) |
|
|
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(36,966) |
|
|
7,738 |
|
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
172,708 |
|
|
143,517 |
|
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
135,742 |
|
$ |
151,255 |
|
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
|
|
Cash paid, net during the period for: |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
518 |
|
$ |
5,270 |
|
|
Non-cash activities |
|
|
|
|
|
|
|
|
Unrealized gain on investments, net of deferred tax expense of $51 for the six months ended October 27, 2018 |
|
$ |
— |
|
$ |
57 |
|
|
Change in foreign currency translation adjustments |
|
$ |
179 |
|
$ |
(31) |
|
|
Acquisitions of property and equipment included in accounts payable |
|
$ |
761 |
|
$ |
753 |
|
7
AeroVironment, Inc.
Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Six Months Ended |
|
Six Months Ended |
||||
|
|
|
October 26, 2019 |
|
October 27, 2018 |
|
October 26, 2019 |
|
October 27, 2018 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted share from continuing operations |
|
$ |
0.31 |
|
$ |
0.29 |
|
$ |
1.02 |
|
$ |
1.14 |
|
Acquisition related expenses |
|
|
0.01 |
|
|
- |
|
|
0.02 |
|
|
- |
|
Amortization of acquired intangible assets |
|
|
0.02 |
|
|
- |
|
|
0.04 |
|
|
- |
|
One-time gain from a litigation settlement |
|
|
- |
|
|
- |
|
|
- |
|
|
(0.26) |
|
Earnings per diluted share from continuing operations as adjusted (Non-GAAP) |
|
$ |
0.34 |
|
|
0.29 |
|
$ |
1.08 |
|
$ |
0.88 |
Reconciliation of Forecasted Earnings per Diluted Share (Unaudited)
|
|
|
|
|
|
|
|
Fiscal year ending |
|
|
|
|
April 30, 2020 |
|
|
Forecasted earnings per diluted share |
|
$ |
1.35 - 1.55 |
|
Acquisition related expenses |
|
|
0.03 |
|
Amortization of acquired intangible assets |
|
|
0.08 |
|
Forecasted earnings per diluted share as adjusted (Non-GAAP) |
|
$ |
1.47 - 1.67 |
Statement Regarding Non-GAAP Measures
The non-GAAP measure set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. Management believes that this measure provides useful information to investors by offering additional ways of viewing our results that, when reconciled to the corresponding GAAP measure, help our investors to understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. In addition, management uses this non-GAAP measure to measure our operating and financial performance.
We exclude the acquisition-related expenses and amortization of acquisition-related intangible assets in fiscal 2020 and the one-time gain from a litigation settlement in fiscal 2019 because we believe this facilitates more consistent comparisons of operating results over time between our newly acquired and existing businesses, and with our peer companies. We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation and that intangible asset amortization will recur in future periods until such intangible assets have been fully amortized.
8
##
For additional media and information, please follow us at:
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Twitter: http://www.twitter.com/aerovironment
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Instagram: https://www.instagram.com/aerovironmentinc/
Contact:
AeroVironment, Inc.
Steven Gitlin
+1 (805) 520-8350
ir@avinc.com
9
Exhibit 99.2
|
|
1 Second Quarter Fiscal Year 2020 Earnings Presentation December 3, 2019 |
|
|
2 Safe Harbor Statement Certain statements in this presentation may constitute "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; availability of U.S. government funding for defense procurement and R&D programs; changes in the timing and/or amount of government spending; our ability to perform under existing contracts and obtain new contracts; risks related to our international business, including compliance with export control laws; potential need for changes in our long-term strategy in response to future developments; the extensive regulatory requirements governing our contracts with the U.S. Government and international customers; the consequences to our financial position, business and reputation that could result from failing to comply with such regulatory requirements; unexpected technical and marketing difficulties inherent in major research and product development efforts; the impact of potential security and cyber threats; changes in the supply and/or demand and/or prices for our products and services; the activities of competitors and increased competition; failure of the markets in which we operate to grow; uncertainty in the customer adoption rate of commercial use unmanned aircraft systems; failure to remain a market innovator and create new market opportunities; changes in significant operating expenses, including components and raw materials; failure to develop new products; the extensive regulatory requirements governing our contracts with the U.S. government; risk of litigation, including but not limited to pending litigation arising from the sale of our EES business; the impact of our recent acquisition of Pulse Aerospace, LLC and our ability to successfully integrate it into our operations; product liability, infringement and other claims; 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. For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available at www.sec.gov or on our website at www.investor.avinc.com/financial-information. 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. |
|
|
3 Second Quarter Fiscal Year 2020 Key Messages Our team’s track record of delivering excellent quarterly results continues We are successfully executing our plan and remain on-track to achieve our fiscal year 2020 objectives We continue to make great progress on our strategic growth initiatives, particularly in HAPS On-track to achieve Fiscal Year 2020 objectives & deliver Third consecutive year of profitable, double-digit topline growth |
|
|
4 Outstanding Second Quarter Fiscal Year 2020 Results Metric 2nd Qtr. Fiscal Year 2020 Year-Over-Year Change Highlights Revenue $83.3 million +14% Strong small UAS sales Gross profit $35.2 million +24% Favorable revenue mix GAAP EPS (diluted) $0.31 +$0.02 No one-time items in second quarter fiscal year 2019 Non-GAAP EPS* (diluted) $0.34 +$0.05 No one-time items in second quarter fiscal year 2019 Funded Backlog $147 million -10% Maintaining historically high level of funded backlog * 2nd qtr. Fiscal Year 2020 excludes $0.02 in amortization of intangible assets and $0.01 in acquisition-related expenses |
|
|
5 Favorable Revenue Mix and Higher Volume Driving Strong Results * Excludes Q2 Fiscal Year 2020 amortization of intangible assets & acquisition-related expenses of $0.03 0.29 0.34 * $0.26 $0.27 $0.28 $0.29 $0.30 $0.31 $0.32 $0.33 $0.34 $0.35 Q2 FY19 Q2 FY20 NON - GAAP Diluted EPS 64% 66% 68% 76% 69% 36% 34% 32% 24% 31% 0% 25% 50% 75% 100% Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 PERCENTAGE OF QUARTERLY REVENUE Product Revenue Service Revenue |
|
|
6 December 3, 2019 AeroVironment, Inc Second Quarter Fiscal Year 2020 Business Highlights Won U.S. Army FCS contract worth up to $55 million Won more than $20 million in international small UAS awards Launched Puma LE: Group 2 capabilities in a Group 1 footprint Successfully completed first two HAWK30 test flights Increased total project contract value to $148.9 million Submitted proposal for potential three-year LMAMS program worth up to $160 million Making progress on larger Switchblade variant
|
|
|
7 Government Fiscal Year 2019 Procurement Appropriations Conversion to AeroVironment Contract Awards *Submitted Proposal For Switchblade – Anticipate up to $160M contract award for Army/Marines LMAMS by fiscal fourth qtr.; funds can extend into subsequent fiscal years * $46.0 $45.2 $13.5 $12.4 $110.0 $- $45.0 $90.0 $135.0 $180.0 Government FY 2019 Procurement Appropriations Government FY 2019 Procurement Contracts Awarded to AeroVironment as of 12/3/19 Value of Appropriations/ Awards (millions) Army SFAB Raven Air Force Puma Army/Marines LMAMS |
|
|
8 Making Significant Progress on HAPS Program– Currently In Flight Test Phase SoftBank Corp. owns approximately 95% of HAPSMobile Inc. & AeroVironment owns approximately 5% Flight test underway - HAWK30 solar HAPS unmanned aircraft system to deliver next generation connectivity (i.e., 5G mobile, IoT) Total contract value of HAPS project to AeroVironment now $148.9 million AeroVironment has the potential to manufacture and supply HAWK30 systems to HAPSMobile on exclusive basis AeroVironment retains exclusive rights to market HAWK30 to defense customers worldwide, except in Japan Design Develop Test/ Demonstrate Certify Launch & Grow Business Q2 FY20 Earnings 12/3/19 HAPS Notional Program Plan World’s first 3 Gand HDTV connectivity from stratosphere World’s highest flying air craft in level flight World’s first solar-powered high altitude UAS Pathfinder 71,504 feet / (1997) Pathfinder Plus 80,201 feet / (1998) Helios 96,863 feet / (2001) |
|
|
9 Strong Funded Backlog and High Visibility Support Expected Fiscal Year 2020 Year-Over-Year Revenue Growth 55% visibility 75% visibility Continued strong funded backlog supports high visibility Revenue Guidance Range as of 12/3/19: $350 million to $370 million 89% visibility $86.9 $170.2 $151.7 $150.4 $125.5 $29 $18 $22 $15.7 $14.5 $1.8 $- $100 $200 $300 $400 Q4 FY19 (6/25/19) Q1 FY20 (9/3/19) Q2 FY20 (12/3/19) Revenue (millions) Revenue Anticipated This FY from Unfunded Backlog Revenue Anticipated This FY from Qtr-To-Date Bookings Revenue Anticipated This FY from Funded Backlog Revenue Year-To-Date |
|
|
10 Fiscal Year 2020 Expectations Fiscal Year 2019 Actuals Current Expectations (12/3/19) Revenue $314 million $350 million to $370 million Earnings Per Share (diluted) $1.74 $1.35 to $1.55 Non-GAAP Earnings Per Share (diluted) $1.481 $1.47 to $1.672 First half revenue as a percentage of full year revenue 48% 47% (actual) Internal Research & Development Investment 11% of revenue 11% of revenue Tax Rate ~9% ~11% Capital Expenditures 3% 5% to 6% On-track to achieve Fiscal Year 2020 objectives & deliver Third consecutive year of profitable, double-digit topline growth 1 Excludes Q1 Fiscal Year 2019 one-time gain of $0.26 from litigation settlement 2 Excludes acquisition-related expenses and amortization of intangible assets |
|
|
11 For more information: Steven Gitlin Vice President Investor Relations ir@avinc.com +1 (805) 520-8350 |
|
|
12 Appendix – Reconciliation of Non-GAAP Diluted Earnings Per Share (Unaudited) Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 26, 2019 October 27, 2018 October 26, 2019 October 27, 2018 Earnings per diluted share from continuing operations $ 0.31 $ 0.29 $ 1.02 $ 1.14 Acquisition related expenses 0.01 - 0.02 - Amortization of acquired intangible assets 0.02 - 0.04 - One-time gain from a litigation settlement - - - (0.26) Earnings per diluted share from continuing operations as adjusted (Non-GAAP) $ 0.34 0.29 $ 1.08 $ 0.88 |
|
|
13 Appendix – Reconciliation of Fiscal Year 2020 Non-GAAP Diluted Earnings Per Share Expectations (Unaudited) d s Fiscal year ending April 30, 2020 Expected earnings per diluted share (GAAP) $ 1.35 – 1.55 Acquisition related expenses 0.03 Amortization of acquired intangible assets 0.08 Expected earnings per diluted share as adjusted (Non-GAAP) $ 1.47 – 1.67 |
