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Aerovironment Inc (AVAV) SEC Filing 10-Q Quarterly report for the period ending Saturday, January 30, 2021

Aerovironment Inc

CIK: 1368622 Ticker: AVAV

Exhibit 99.1

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AeroVironment, Inc. Announces Fiscal 2021 Third Quarter Results

SIMI VALLEY, Calif., March 9, 2021

— AeroVironment, Inc. (NASDAQ: AVAV), a global leader in unmanned aircraft systems (UAS), today reported financial results for its third quarter ended January 30, 2021.

Revenue of $78.8 million, a year-over-year increase of 27 percent

Gross margin of $28.6 million, a year-over-year increase of 22 percent

Diluted earnings per share of $0.01, a year-over-year increase of $0.05

Diluted non-GAAP earnings per share of $0.14, a year-over-year increase of $0.15

“Our team delivered year-over-year increases in revenue, gross margin, diluted earnings per share and Non-GAAP diluted earnings per share in the third quarter, despite the ongoing challenges presented by the COVID-19 pandemic,” said Wahid Nawabi, AeroVironment president and chief executive officer. "We continue to shape our portfolio with three transformative acquisitions that we are confident will accelerate our success and value creation. Our acquisition of Arcturus UAV extends our reach and expands our solutions portfolio with medium UAS, which addresses a more than $1 billion segment of the UAS market. Our pending acquisition of Telerob will add a suite of unmanned ground vehicles to our portfolio, expanding our offering to the ground domain for defense and non-defense customers, such as law enforcement and first responders. Through our acquisition of Progeny Systems Corporation’s Intelligent Systems Group, we will accelerate AeroVironment’s development and deployment of critical technologies, such as artificial intelligence and perceptive autonomy, which will help our customers operate more effectively in contested airspace against peer and near-peer adversaries and increase our customer-funded research and development revenue.”

“We continue to build on our momentum and recently received United States government approval for our first export of Switchblade 300 to an allied nation. We are delivering on our commitments while working toward achieving our fiscal year 2021 objectives to produce a fourth consecutive year of profitable, double-digit topline growth.”

FISCAL 2021 THIRD QUARTER RESULTS

Revenue for the third quarter of fiscal 2021 was $78.8 million, an increase of 27% from the third quarter of fiscal 2020 revenue of $61.9 million. The increase in revenue was due to an increase in product sales of $21.9 million, partially offset by a decrease in service revenue of $5.0 million.

Gross margin for the third quarter of fiscal 2021 was $28.6 million, an increase of 22% from the third quarter of fiscal 2020 gross margin of $23.5 million. The increase in gross margin was primarily due to an increase in product margin of $7.2 million, partially offset by a decrease in service margin of $2.1 million. As a percentage of revenue, gross margin decreased to 36% from 38%. The decrease in gross margin percentage was primarily due to an unfavorable product mix.

Loss from operations for the third quarter of fiscal 2021 was $0.6 million, a decrease of $0.5 million from the third quarter of fiscal 2020 loss from operations of $1.1 million. The decrease in loss from operations was primarily a result of an increase in gross margin of $5.2 million, partially offset by an increase in selling, general and administrative (“SG&A”) expense of $2.4 million, and an increase in research and development (“R&D”) expense of $2.3 million. The increase in SG&A expense for the third quarter of fiscal 2021 includes

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The following information was filed by Aerovironment Inc (AVAV) on Tuesday, March 9, 2021 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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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended January 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to           

Commission File Number: 001-33261

AEROVIRONMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware

95-2705790

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

900 Innovators Way

Simi Valley, California

93065

(Address of principal executive offices)

(Zip Code)

(805) 520-8350

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

AVAV

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of March 3, 2021, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 24,676,485.

AeroVironment, Inc.

Table of Contents

Item 1.

Financial Statements :

    

Consolidated Balance Sheets as of January 30, 2021 (Unaudited) and April 30, 2020

3

Consolidated Statements of Operations for the three and nine months ended January 30, 2021 (Unaudited) and January 25, 2020 (Unaudited)

4

Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended January 30, 2021 (Unaudited) and January 25, 2020 (Unaudited)

5

Consolidated Statements of Stockholders’ Equity for the three and nine months ended January 30, 2021 (Unaudited) and January 25, 2020 (Unaudited)

7

Consolidated Statements of Cash Flows for the nine months ended January 30, 2021 (Unaudited) and January 25, 2020 (Unaudited)

8

Notes to Consolidated Financial Statements (Unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

Item 4.

Controls and Procedures

36

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

Item 3.

Defaults Upon Senior Securities

42

Item 4.

Mine Safety Disclosures

43

Item 5.

Other Information

43

Item 6.

Exhibits

43

Signatures

45

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AeroVironment, Inc.

Consolidated Balance Sheets

(In thousands except share and per share data)

January 30,

    

April 30,

2021

2020

    

(Unaudited)

 

Assets

Current assets:

Cash and cash equivalents

$

324,543

$

255,142

Short-term investments

48,499

47,507

Accounts receivable, net of allowance for doubtful accounts of $565 at January 30, 2021 and $1,190 at April 30, 2020

 

26,621

 

73,660

Unbilled receivables and retentions (inclusive of related party unbilled receivables of $6,834 at January 30, 2021 and $15,779 at April 30, 2020)

 

61,084

 

75,837

Inventories

 

53,104

 

45,535

Prepaid expenses and other current assets

 

7,693

 

6,246

Total current assets

 

521,544

 

503,927

Long-term investments

11,222

15,030

Property and equipment, net

 

22,920

 

21,694

Operating lease right-of-use assets

11,281

8,793

Deferred income taxes

 

5,821

 

4,928

Intangibles, net

11,552

13,637

Goodwill

6,340

6,340

Other assets

 

312

 

10,605

Total assets

$

590,992

$

584,954

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

15,837

$

19,859

Wages and related accruals

 

20,081

 

23,972

Customer advances

 

4,279

 

7,899

Current operating lease liabilities

4,403

3,380

Income taxes payable

2,370

1,065

Other current liabilities

 

9,158

 

10,778

Total current liabilities

 

56,128

 

66,953

Non-current operating lease liabilities

8,426

6,833

Other non-current liabilities

243

250

Liability for uncertain tax positions

 

1,017

 

1,017

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.0001 par value:

Authorized shares—10,000,000; none issued or outstanding at January 30, 2021 and April 30, 2020

 

 

Common stock, $0.0001 par value:

Authorized shares—100,000,000

Issued and outstanding shares—24,102,691 shares at January 30, 2021 and 24,063,639 shares at April 30, 2020

 

2

 

2

Additional paid-in capital

 

184,366

 

181,481

Accumulated other comprehensive income

 

347

 

328

Retained earnings

 

340,475

 

328,090

Total AeroVironment, Inc. stockholders’ equity

 

525,190

 

509,901

Noncontrolling interest

(12)

Total equity

525,178

509,901

Total liabilities and stockholders’ equity

$

590,992

$

584,954

See accompanying notes to consolidated financial statements (unaudited).

3

AeroVironment, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)

Three Months Ended

Nine Months Ended

January 30,

January 25,

January 30,

January 25,

    

2021

    

2020

    

2021

    

2020

 

Revenue:

Product sales

$

58,348

$

36,432

$

182,233

$

159,657

Contract services (inclusive of related party revenue of $7,480 and $11,762 for the three months ended January 30, 2021 and January 30, 2020, respectively; and $35,318 and $37,491 for the nine months ended January 30, 2021 and January 25, 2020, respectively)

 

20,434

 

25,459

 

76,664

 

72,416

 

78,782

 

61,891

 

258,897

 

232,073

Cost of sales:

Product sales

 

35,746

 

21,034

 

102,039

 

82,244

Contract services

 

14,395

 

17,361

 

51,955

 

49,895

 

50,141

 

38,395

 

153,994

 

132,139

Gross margin:

 

 

Product sales

22,602

15,398

80,194

77,413

Contract services

6,039

8,098

24,709

22,521

28,641

23,496

 

104,903

 

99,934

Selling, general and administrative

 

15,652

 

13,223

 

42,640

 

43,146

Research and development

 

13,631

 

11,381

 

36,710

 

30,948

(Loss) income from operations

 

(642)

 

(1,108)

 

25,553

 

25,840

Other income:

Interest income, net

 

94

 

1,122

 

417

 

3,717

Other (expense) income, net

 

(37)

 

120

 

68

 

632

(Loss) income before income taxes

 

(585)

 

134

 

26,038

 

30,189

(Benefit from) provision for income taxes

(924)

(38)

 

2,774

 

3,203

Equity method investment loss, net of tax

 

(81)

 

(1,200)

 

(10,891)

 

(3,410)

Net income (loss)

258

(1,028)

12,373

23,576

Net (income) loss attributable to noncontrolling interest

(47)

20

12

27

Net income (loss) attributable to AeroVironment, Inc.

$

211

$

(1,008)

$

12,385

$

23,603

Net income (loss) per share attributable to AeroVironment, Inc.

Basic

$

0.01

$

(0.04)

$

0.52

$

0.99

Diluted

$

0.01

$

(0.04)

$

0.51

$

0.98

Weighted-average shares outstanding:

Basic

 

23,942,782

 

23,821,145

 

23,924,017

 

23,790,788

Diluted

 

24,260,874

 

23,821,145

 

24,216,371

 

24,076,195

See accompanying notes to consolidated financial statements (unaudited).

4

AeroVironment, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

January 30,

January 25,

January 30,

January 25,

    

2021

    

2020

    

2021

    

2020

 

Net income (loss)

$

258

$

(1,028)

$

12,373

$

23,576

Other comprehensive income (loss):

Change in foreign currency translation adjustments

(112)

75

67

Unrealized gain (loss) on available-for-sale investments, net of deferred tax benefit of $2 for the three and nine months ended January 30, 2021

 

5

 

 

(56)

 

Total comprehensive income (loss)

263

(1,140)

12,392

23,643

Net loss (income) attributable to noncontrolling interest

(47)

20

12

27

Comprehensive income (loss) attributable to AeroVironment, Inc.

$

216

$

(1,120)

$

12,404

$

23,670

See accompanying notes to consolidated financial statements (unaudited).

5

AeroVironment, Inc.

Consolidated Statements of Stockholders’ Equity

For the nine months ended January 30, 2021 and January 25, 2020 (Unaudited)

(In thousands except share data)

Accumulated

 

Additional

Other

Total

Non-

 

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment, Inc.

Controlling

 

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

Equity

Interest

    

Total

 

Balance at April 30, 2020

 

24,063,639

$

2

$

181,481

$

328,090

$

328

$

509,901

$

$

509,901

Net income (loss)

 

 

 

 

12,385

 

12,385

(12)

 

12,373

Unrealized loss on investments

 

 

 

 

(56)

(56)

 

(56)

Foreign currency translation

 

 

 

 

75

75

 

75

Stock options exercised

 

3,500

 

 

86

 

86

 

86

Restricted stock awards

 

62,675

 

 

 

 

Restricted stock awards forfeited

 

(1,833)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(25,290)

 

 

(1,955)

 

(1,955)

 

(1,955)

Stock based compensation

 

 

 

4,754

 

4,754

 

4,754

Balance at January 30, 2021

 

24,102,691

$

2

$

184,366

$

340,475

$

347

$

525,190

$

(12)

$

525,178

Accumulated

Additional

Other

Total

Non-

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment, Inc.

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

Equity

Interest

    

Total

Balance at April 30, 2019

 

23,946,293

$

2

$

176,216

$

286,351

$

2

$

462,571

$

4

$

462,575

Adoption of ASU 2018-09

665

665

665

Net income (loss)

 

 

 

 

23,603

 

23,603

(27)

 

23,576

Foreign currency translation

 

 

 

 

67

67

 

67

Stock options exercised

 

3,000

 

 

93

 

93

 

93

Restricted stock awards

 

74,892

 

 

 

 

Restricted stock awards forfeited

 

(11,769)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(17,307)

 

 

(1,009)

 

(1,009)

 

(1,009)

Stock based compensation

 

 

4,751

 

4,751

 

4,751

Balance at January 25, 2020

 

23,995,109

$

2

$

180,051

$

310,619

$

69

$

490,741

$

(23)

$

490,718

See accompanying notes to consolidated financial statements (unaudited).

6

AeroVironment, Inc.

Consolidated Statements of Stockholders’ Equity

For the three months ended January 30, 2021 and January 25, 2020 (Unaudited)

(In thousands except share data)

Accumulated

Additional

Other

Total

Non-

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment, Inc.

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Income

Equity

Interest

    

Total

Balance at October 31, 2020

 

24,103,980

$

2

$

183,298

$

340,264

$

342

$

523,906

$

(59)

$

523,847

Net income

 

 

 

 

211

 

211

47

 

258

Unrealized loss on investments

 

 

 

 

 

5

5

 

5

Restricted stock awards

2,083

Restricted stock awards forfeited

 

(1,318)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(2,054)

 

 

(177)

 

(177)

 

(177)

Stock based compensation

 

 

 

1,245

 

1,245

 

1,245

Balance at January 30, 2021

 

24,102,691

$

2

$

184,366

$

340,475

$

347

$

525,190

$

(12)

$

525,178

Accumulated

Additional

Other

Total

Non-

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment, Inc.

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Income

Equity

Interest

    

Total

Balance at October 26, 2019

 

23,990,616

2

178,550

311,627

181

490,360

(3)

490,357

Net loss

 

 

 

 

(1,008)

 

(1,008)

(20)

 

(1,028)

Foreign currency translation

 

 

 

 

(112)

(112)

 

(112)

Restricted stock awards

 

9,200

 

 

 

 

Restricted stock awards forfeited

 

(764)

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(3,943)

 

 

(266)

 

(266)

 

(266)

Stock-based compensation

 

 

1,767

 

1,767

 

1,767

Balance at January 25, 2020

 

23,995,109

$

2

$

180,051

$

310,619

$

69

$

490,741

$

(23)

$

490,718

See accompanying notes to consolidated financial statements (unaudited).

7

AeroVironment, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Nine Months Ended

    

January 30,

    

January 25,

 

2021

2020

Operating activities

Net income