AeroVironment, Inc. (“AeroVironment” or the “Company”) reported
today financial results for the fiscal first quarter ended July 27,
2024.
First Quarter Highlights:
- Record first quarter revenue of $189.5 million up 24%
year-over-year
- First quarter net income of $21.2 million and adjusted EBITDA
of $37.2 million
- In August 2024 awarded U.S. Army Lethal Unmanned Systems
Indefinite Delivery, Indefinite Quantity (“IDIQ”) with a record
contract ceiling value of $990 million and initial funding of $128
million
“AeroVironment has once again delivered excellent results,
including record first-quarter revenue that’s 24% higher than the
same period last fiscal year,” said Wahid Nawabi, AeroVironment
chairman, president and chief executive officer. “Our Loitering
Munition Systems segment continues to be the highest growth driver
for the company posting first-quarter revenue, 68% higher than the
same quarter last year.
“With a growing pipeline and solid operating performance,
AeroVironment is working toward achieving another record fiscal
year, and we are confident that our success will carry forward into
future years.”
FISCAL 2025 FIRST QUARTER RESULTS
Revenue for the first quarter of fiscal 2025 was $189.5 million,
an increase of 24% as compared to $152.3 million for the first
quarter of fiscal 2024, reflecting higher product sales of $40.0
million, partially offset by a decrease in service revenue of $2.9
million. From a segment standpoint, the year-over-year increase was
due to revenue growth in Loitering Munitions Systems (“LMS”) of 68%
and UnCrewed Systems (“UxS”) of 22%, partially offset by a decrease
in MacCready Works (“MW”) of 24%.
Gross margin for the first quarter of fiscal 2025 was $81.5
million, an increase of 24% as compared to $65.7 million for the
first quarter of fiscal 2024, reflecting higher product gross
margin of $16.1 million, partially offset by lower service margin
of $0.3 million. As a percentage of revenue, gross margin remained
consistent at 43%. Gross margin was negatively impacted by an
increase of $1.3 million of intangible amortization expense and
other related non-cash purchase accounting expenses.
Income from operations for the first quarter of fiscal 2025 was
$23.1 million as compared to $26.4 million for the first quarter of
last fiscal year. The decrease year-over-year was due to an
increase in selling, general and administrative (“SG&A”)
expense of $10.0 million and an increase in research and
development (“R&D”) expense of $9.1 million, partially offset
by higher gross margin of $15.8 million.
Other loss, net, for the first quarter of fiscal 2025 was $0.5
million, as compared to $3.1 million for the first quarter of last
fiscal year. The decrease in other loss, net was primarily due to a
decrease in net interest expense and a decrease in net unrealized
losses on investment holdings.
Provision for income taxes for the first quarter of fiscal 2025
was $1.5 million, as compared to $1.3 million for the first quarter
of last fiscal year.
Net income for the first quarter of fiscal 2025 was $21.2
million, or $0.75 per diluted share, as compared to $21.9 million,
or $0.84 per diluted share, in the prior-year period,
respectively.
Non-GAAP adjusted EBITDA for the first quarter of fiscal 2025
was $37.2 million and non-GAAP earnings per diluted share were
$0.89, as compared to $37.3 million and $1.00, respectively, for
the first quarter of fiscal 2024.
BACKLOG
As of July 27, 2024, funded backlog (defined as remaining
performance obligations under firm orders for which funding is
currently appropriated to us under a customer contract) was $372.9
million, as compared to $400.2 million as of April 30, 2024. Funded
backlog as of July 27, 2024 includes only initial funding for
Switchblade 300 and 600s for the recently announced program wins
such as the Low Altitude Stalking and Strike Ordnance or “LASSO”
program, Organic Precision Fires-Light or “OPF-L” program, the
Replicator Initiative, Ukraine Aid Initiative and our first
Lithuanian order. Funded backlog does not include $128 million of
initial funding under the recently announced IDIQ contract to
deliver LMS systems for the U.S. Army’s Directed Requirement for
Lethal Unmanned Systems with a contract ceiling value of $990
million. Additional funding for each of these programs is
anticipated in our full year plan.
FISCAL 2025 — OUTLOOK FOR THE FULL YEAR
For fiscal year 2025, the Company continues to expect revenue of
between $790 million and $820 million, net income of between $74
million and $83 million, Non-GAAP adjusted EBITDA of between $143
million and $153 million, earnings per diluted share of between
$2.61 and $2.92 and non-GAAP earnings per diluted share, which
excludes amortization of intangible assets, other non-cash purchase
accounting expenses and equity securities investments gains or
losses, of between $3.18 and $3.49.
The foregoing estimates are forward-looking and reflect
management’s view of current and future market conditions, subject
to certain risks and uncertainties, including certain assumptions
with respect to our ability to efficiently and on a timely basis
integrate acquisitions, obtain and retain government contracts,
changes in the timing and/or amount of government spending, react
to 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, Wednesday, September 4, 2024, at 4:30 pm
Eastern Time that will be webcast live. Wahid Nawabi, chairman,
president and chief executive officer, Kevin P. McDonnell, chief
financial officer and Jonah Teeter-Balin, vice president corporate
development and investor relations, will host the call.
Investors may access the call by registering via the following
participant registration link up to ten minutes prior to the start
time.
Participant registration URL:
https://register.vevent.com/register/BIabc39fbc6b534eb4aac7d5fda54c1d33
Investors may also 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 first quarter
fiscal year 2025 can be accessed at
https://investor.avinc.com/events-and-presentations.
Audio Replay
An audio replay of the event will be archived on the Investor
Relations section of the Company's website at
http://investor.avinc.com.
ABOUT AEROVIRONMENT, INC.
AeroVironment (NASDAQ: AVAV) provides technology solutions at
the intersection of robotics, sensors, software analytics and
connectivity that deliver more actionable intelligence so you can
Proceed with Certainty. Headquartered in Virginia,
AeroVironment is a global leader in intelligent, multi-domain
robotic 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, the impact of our ability to successfully close and integrate
acquisitions into our operations and avoid disruptions from
acquisition transactions that will harm our business; the recording
of goodwill and other intangible assets as part of acquisitions
that are subject to potential impairments in the future and any
realization of such impairments; any actual or threatened
disruptions to our relationships with our distributors, suppliers,
customers and employees, including shortages in components for our
products; the ability to timely and sufficiently integrate
international operations into our ongoing business and compliance
programs; reliance on sales to the U.S. government, including
uncertainties in classification, pricing or potentially burdensome
imposed terms for certain types of government contracts;
availability of U.S. government funding for defense procurement and
R&D programs; our ability to win U.S. and international
government R&D and procurement programs; changes in the timing
and/or amount of government spending, including due to continuing
resolutions; adverse impacts of a U.S. government shutdown; our
reliance on limited relationships to fund our development of HAPS
UAS; our ability to execute contracts for anticipated sales,
perform under such contracts and other existing contracts and
obtain new contracts; risks related to our international business,
including compliance with export control laws; the extensive and
increasing 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 or the risk of unauthorized access to
and resulting misuse of our, our customers’ and/or our suppliers’
information and systems; failure to remain a market innovator, to
create new market opportunities or to expand into new markets; our
ability to increase production capacity to support anticipated
growth; unexpected changes in significant operating expenses,
including components and raw materials; failure to develop new
products or integrate new technology into current products; any
increase in litigation activity or unfavorable results in legal
proceedings, including pending class actions; our ability to
respond and adapt to legal, regulatory and government budgetary
changes, including those resulting from the impact of pandemics and
similar outbreaks; our ability to comply with the covenants in our
loan documents; our ability to attract and retain skilled
employees; the impact of inflation; and general economic and
business conditions in the United States and elsewhere in the
world; and the failure to establish and maintain effective internal
control over financial reporting. 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 non-GAAP financial measures. See in the
financial tables below the calculation of these measures, the
reasons why we believe these measures provide useful information to
investors, and a reconciliation of these measures to the most
directly comparable GAAP measures.
AeroVironment, Inc.
Consolidated Statements of
Operations
(In thousands except share and
per share data)
Three Months Ended
July 27,
July 29,
2024
2023
(Unaudited)
Revenue:
Product sales
$
159,504
$
119,471
Contract services
29,979
32,876
189,483
152,347
Cost of sales:
Product sales
85,519
61,608
Contract services
22,497
25,079
108,016
86,687
Gross margin:
Product sales
73,985
57,863
Contract services
7,482
7,797
81,467
65,660
Selling, general and administrative
33,795
23,827
Research and development
24,613
15,466
Income from operations
23,059
26,367
Other loss:
Interest expense, net
(239
)
(2,008
)
Other (expense) income, net
(234
)
(1,129
)
Income before income taxes
22,586
23,230
Provision for income taxes
1,485
1,314
Equity method investment loss, net of
tax
65
(21
)
Net income
21,166
21,895
Net income per share
Basic
$
0.76
$
0.84
Diluted
$
0.75
$
0.84
Weighted-average shares outstanding:
Basic
27,959,692
26,088,277
Diluted
28,281,827
26,179,042
AeroVironment, Inc.
Consolidated Balance
Sheets
(In thousands except share
data)
July 27,
April 30,
2024
2024
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
81,162
$
73,301
Accounts receivable, net of allowance for
doubtful accounts of $58 at July 27, 2024 and $159 at April 30,
2024
35,487
70,305
Unbilled receivables and retentions
219,766
199,474
Inventories, net
143,835
150,168
Income taxes receivable
338
—
Prepaid expenses and other current
assets
19,758
22,333
Total current assets
500,346
515,581
Long-term investments
21,887
20,960
Property and equipment, net
48,071
46,602
Operating lease right-of-use assets
28,283
30,033
Deferred income taxes
41,303
41,303
Intangibles, net
67,521
72,224
Goodwill
275,932
275,652
Other assets
15,826
13,505
Total assets
$
999,169
$
1,015,860
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
43,596
$
48,298
Wages and related accruals
20,413
44,312
Customer advances
10,993
11,192
Current portion of long-term debt
10,000
10,000
Current operating lease liabilities
9,428
9,841
Income taxes payable
5,597
4,162
Other current liabilities
17,331
17,074
Total current liabilities
117,358
144,879
Long-term debt, net of current portion
6,788
17,092
Non-current operating lease
liabilities
21,086
22,745
Other non-current liabilities
2,123
2,132
Liability for uncertain tax positions
5,603
5,603
Deferred income taxes
673
664
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares—10,000,000; none issued
or outstanding at July 27, 2024 and April 30, 2024
—
—
Common stock, $0.0001 par value:
Authorized shares—100,000,000
Issued and outstanding shares—28,206,480
shares at July 27, 2024 and 28,134,438 shares at April 30, 2024
4
4
Additional paid-in capital
598,735
597,646
Accumulated other comprehensive loss
(5,054
)
(5,592
)
Retained earnings
251,853
230,687
Total stockholders’ equity
845,538
822,745
Total liabilities and stockholders’
equity
$
999,169
$
1,015,860
AeroVironment, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
Three Months Ended
July 27,
July 29,
2024
2023
Operating activities
Net income
$
21,166
$
21,895
Adjustments to reconcile net income to
cash provided by (used in) operating activities:
Depreciation and amortization
8,852
6,951
(Gain) loss from equity method
investments
(65
)
21
Amortization of debt issuance costs
266
214
Provision for doubtful accounts
(101
)
(15
)
Reserve for inventory excess and
obsolescence
2,667
3,330
Other non-cash expense, net
616
173
Non-cash lease expense
2,430
2,184
Loss on foreign currency transactions
142
132
Unrealized loss on available-for-sale
equity securities, net
321
1,013
Deferred income taxes
(1
)
(427
)
Stock-based compensation
4,536
3,204
Loss on disposal of property and
equipment
143
116
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
34,993
8,207
Unbilled receivables and retentions
(20,274
)
(1,603
)
Inventories
3,867
(40,004
)
Income taxes receivable
(336
)
—
Prepaid expenses and other assets
(814
)
(4,401
)
Accounts payable
(4,976
)
(2,780
)
Other liabilities
(25,081
)
(15,272
)
Net cash provided by (used in) operating
activities
28,351
(17,062
)
Investing activities
Acquisition of property and equipment
(5,430
)
(3,632
)
Contributions in equity method
investments
(1,183
)
—
Net cash used in investing activities
(6,613
)
(3,632
)
Financing activities
Principal payments of term loan
(10,500
)
(5,000
)
Payment of debt issuance costs
—
(9
)
Tax withholding payment related to net
settlement of equity awards
(3,953
)
(1,298
)
Exercise of stock options
506
—
Other
(7
)
(8
)
Net cash used in financing activities
(13,954
)
(6,315
)
Effects of currency translation on cash
and cash equivalents
77
21
Net increase (decrease) in cash and cash
equivalents
7,861
(26,988
)
Cash and cash equivalents at beginning of
period
73,301
132,859
Cash and cash equivalents at end of
period
$
81,162
$
105,871
Supplemental disclosures of cash flow
information
Cash paid (refunded), net during the
period for:
Income taxes
$
(101
)
$
35
Interest
$
370
$
1,782
Non-cash activities
Change in foreign currency translation
adjustments
$
538
$
(63
)
Acquisitions of property and equipment
included in accounts payable
$
1,208
$
969
AeroVironment, Inc.
Reportable Segment Results
(Unaudited)
(In thousands)
Three Months Ended July 27,
2024
UxS
LMS
MW
Total
Revenue:
Product sales
$
112,301
$
47,180
$
23
$
159,504
Contract services
7,675
4,793
17,511
29,979
$
119,976
$
51,973
$
17,534
$
189,483
Segment adjusted gross margin
$
67,252
$
13,272
$
4,657
Three Months Ended July 29,
2023
UxS
LMS
MW
Total
Revenue:
Product sales
$
93,231
$
25,325
$
915
$
119,471
Contract services
4,976
5,592
22,308
32,876
$
98,207
$
30,917
$
23,223
$
152,347
Segment adjusted gross margin
$
50,426
$
12,323
$
5,308
AeroVironment, Inc.
Reconciliation of non-GAAP
Earnings per Diluted Share (Unaudited)
Three Months Ended
Three Months Ended
July 27, 2024
July 29, 2023
Earnings per diluted share
$
0.75
$
0.84
Acquisition-related expenses
—
0.02
Amortization of acquired intangible assets
and other purchase accounting adjustments
0.13
0.10
Equity method and equity securities
investments activity, net
0.01
0.04
Earnings per diluted share as adjusted
(Non-GAAP)
$
0.89
$
1.00
Reconciliation of non-GAAP adjusted EBITDA
(Unaudited)
Three Months Ended
Three Months Ended
(in millions)
July 27, 2024
July 29, 2023
Net income
$
21.2
$
21.9
Interest expense, net
0.2
2.0
Provision for income taxes
1.5
1.3
Depreciation and amortization
8.9
7.0
EBITDA (Non-GAAP)
31.8
32.2
Stock-based compensation
4.5
3.2
Equity method and equity securities
investments activity, net
0.3
1.0
Amortization of cloud computing
arrangement implementation
0.6
0.2
Acquisition-related expenses
—
0.7
Adjusted EBITDA (Non-GAAP)
$
37.2
$
37.3
Reconciliation of Forecast Earnings per
Diluted Share (Unaudited)
Fiscal year ending
April 30, 2025
Forecast earnings per diluted share
$
2.61 - 2.92
Amortization of acquired intangible assets
and other purchase accounting adjustments
0.51
Equity method and equity securities
investments activity, net
0.06
Forecast earnings per diluted share as
adjusted (Non-GAAP)
$
3.18 - 3.49
Reconciliation of 2025 Forecast and Fiscal
Year 2024 Actual Non-GAAP adjusted EBITDA (Unaudited)
Fiscal year ending
Fiscal year ended
(in millions)
April 30, 2025
April 30, 2024
Net income
$
74 - 83
$
60
Interest expense, net
—
4
Provision for income taxes
7 - 8
2
Depreciation and amortization
39
36
EBITDA (Non-GAAP)
120 - 130
102
Stock-based compensation
20
17
Equity method and equity securities
investments activity, net
1
6
Amortization of cloud computing
arrangement implementation
2
2
Acquisition-related expenses
—
2
Adjusted EBITDA (Non-GAAP)
$
143 - 153
$
128
Statement Regarding Non-GAAP Measures
The non-GAAP measures set forth above should be considered in
addition to, and not as a replacement for or superior to, the
comparable GAAP measures, and may not be comparable to similarly
titled measures reported by other companies. Management believes
that these measures provide useful information to investors by
offering additional ways of viewing our results that, when
reconciled to the corresponding GAAP measures, 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 these non-GAAP measures to
evaluate our operating and financial performance.
Non-GAAP Adjusted Gross Margin
Adjusted gross margin is defined as gross margin before
intangible amortization and amortization of non-cash purchase
accounting adjustments.
Non-GAAP Earnings per Diluted Share
We exclude the acquisition-related expenses, amortization of
acquisition-related intangible assets, equity securities
investments gains or losses, goodwill impairment and one-time
non-operating items 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.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA is defined as net income before interest income,
interest expense, income tax expense (benefit) and depreciation and
amortization including amortization of purchase accounting
adjustments, adjusted for the impact of certain other non-cash
items, including amortization of implementation of cloud computing
arrangements, stock-based compensation, acquisition related
expenses, equity method investment gains or losses, equity
securities investments gains or losses, goodwill impairment and
one-time non-operating gains or losses. We present Adjusted EBITDA,
which is not a recognized financial measure under U.S. GAAP,
because we believe it is frequently used by analysts, investors and
other interested parties to evaluate companies in our industry. 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, intangible asset
amortization will recur in future periods until such intangible
assets have been fully amortized and that interest and income tax
expenses will recur in future periods. In addition, Adjusted EBITDA
may not be comparable to similarly titled measures used by other
companies in our industry or across different industries.
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version on businesswire.com: https://www.businesswire.com/news/home/20240904031302/en/
Jonah Teeter-Balin +1 (805) 520-8350 x4278
https://investor.avinc.com/contact-and-faq/contact-us
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