Aerovironment Inc (AVAV) 10-Q Quarterly Report March 2019

Increased full year expectations for diluted earnings per share from continuing operations to between $1.60 and $1.80, including a one-time gain of $0.26 from a litigation settlement

“Our team delivered outstanding financial results in our third fiscal quarter, including $75.3 million in revenue and $0.35 in diluted earnings per share from continuing operations, representing year-over-year increases of 38 percent and $0.37, respectively,” said Wahid Nawabi, AeroVironment president and chief executive officer. “We continue to make strong progress against our financial and operational objectives and have established a strong foundation for fiscal year 2020.”

Mr. Nawabi continued, “We also continue to advance our growth portfolio, including exercising the one-time option to increase our ownership of the HAPSMobile, Inc. joint venture from 5 percent to 10 percent. AeroVironment has a strong track record of transforming high-potential innovations and technologies into significant value, and we are excited about realizing the full potential of HAPSMobile and our other growth initiatives.”

FISCAL 2019 THIRD QUARTER RESULTS

Revenue for the third quarter of fiscal 2019 was $75.3 million, an increase of 38% from third quarter fiscal 2018 revenue of $54.6 million. The increase in revenue was due to an increase in product sales of $10.6 million and an increase in service revenue of $10.1 million.

Gross margin for the third quarter of fiscal 2019 was $30.4 million, an increase of 67% from third quarter fiscal 2018 gross margin of $18.3 million. The increase in gross margin was primarily due to an increase in product margin of $8.7 million and an increase in service margin of $3.5 million. As a percentage of revenue, gross margin increased to 40% from 33%. The increase in gross margin percentage was primarily due to the increase in sales volume.

Income from continuing operations for the third quarter of fiscal 2019 was $7.8 million, an increase from third quarter fiscal 2018 of $0.2 million. The increase in income from continuing operations was primarily a result of an increase in gross margin of $12.1 million, partially offset by an increase in selling, general and administrative (“SG&A”) expense of $3.0 million and an increase in research and development (“R&D”) expense of $1.5 million.

Other income, net, for the third quarter of fiscal 2019 was $2.2 million compared to other income, net of $0.4 million for the third quarter of fiscal 2018. The increase in other income, net was primarily due to an increase

The following information was filed by Aerovironment Inc (AVAV) on Tuesday, March 5, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Aerovironment Inc's 10-Q Quarterly Report:

Financial - Earnings Highlight
The increase in service margin was primarily due to an increase in service revenue.

Financial - Earnings Highlight
The increase in product margin was primarily due to an increase in product deliveries and favorable product mix, partially offset by an increase in reserves for excess and obsolescence inventory.
Revenue - Product Highlight
Adjustments to original estimates for a contracts revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change, or if contract modifications occur.
Revenue - Product Highlight
The new standard accelerates the timing of when the revenue is recognized, however, it does not change the total amount of revenue recognized on these contracts.
Revenue - Product Highlight
For the three months ended January 26, 2019 and January 27, 2018, favorable and unfavorable cumulative catch-up adjustments included in revenue were as follows (in thousands): For the three months ended January 26, 2019, favorable cumulative catch-up adjustments of $0.9 million were primarily due to final cost adjustments on five contracts, which individually were not material.
Other - Other
Please refer to Note 1...Read more
Financial - Cash Flow
The following table provides our...Read more
Revenue - Product
Topic 606 requires revenue to...Read more
Financial - Expense
For the nine months ended...Read more
Financial - Shares
On February 9, 2019, we...Read more
Other - Other
Unfunded backlog does not include...Read more
Financial - Expense
On cost-plus-fee programs, we typically...Read more
Other - Other
Our primary liquidity needs are...Read more
Other - Other
In some cases, forward-looking statements...Read more
Financial - Expense
For the three months ended...Read more
Financial - Expense
For the nine months ended...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Aerovironment Inc provided additional information to their SEC Filing as exhibits

Exhibit 10.1: Material Contract

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Ticker: AVAV
CIK: 1368622
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-19-001518
Submitted to the SEC: Tue Mar 05 2019 1:21:42 PM EST
Accepted by the SEC: Wed Mar 06 2019
Period: Saturday, January 26, 2019
Industry: Aircraft