Sienna Resources

AeroVironment Announces Fiscal 2023 Fourth Quarter and Fiscal Year Results

27 June 2023

ARLINGTON, Va. / Jun 27, 2023 / Business Wire / AeroVironment, Inc. (“AeroVironment” or the “Company”) reported today financial results for the fiscal fourth quarter and full year ended April 30, 2023.

Fourth Quarter and Fiscal Year Highlights

  • Record full fiscal year and fourth quarter revenue of $540.5 million and $186.0 million, up 21% and 40% over prior period, respectively
  • Record funded backlog of $424.1 million as of April 30, 2023
  • Company on track for nearly 20% top line growth in fiscal year 2024 with expected revenue of between $630 million and $660 million

“I am pleased to report that, as expected, we had a very strong finish to fiscal 2023 to close out the Company’s best year ever,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “With our record setting revenue and backlog, we are well positioned for another strong growth year in Fiscal 2024. Even though AeroVironment was not selected to proceed further with increment 2 of FTUAS, AeroVironment has never been in better shape with regards to its future than it is today. Given our pipeline, record backlog and global tailwinds supporting our broad portfolio of robotic solutions – bolstered by the strong performance of our systems in Ukraine – we are at the beginning of a new phase of growth that will lead to further attractive returns for our shareholders. Last year was really an inflection point in terms of our long-term strategic vision to build the premier unmanned robotic solutions provider in the world. With expanding markets, a newfound appreciation of our solutions by foreign customers, and broad support for our products here at home, the Company is well positioned for great success going forward.”

FISCAL 2023 FOURTH QUARTER RESULTS

Revenue for the fourth quarter of fiscal 2023 was $186.0 million, an increase of 40% as compared to $132.6 million for the fourth quarter of fiscal 2022, reflecting higher product sales of $67.6 million, partially offset by lower service revenue of $14.1 million. From a segment standpoint, the change year-over-year was primarily due to growth in Small UAS (“SUAS”) of $35.4 million and Tactical Missile Systems (“TMS”) of $22.3 million, partially offset by a $14.7 million decline in Medium UAS (“MUAS”) revenue.

Gross margin for the fourth quarter of fiscal 2023 was $68.4 million, an increase of 41% as compared to $48.6 million for the fourth quarter of fiscal 2022, reflecting higher product margin of $31.1 million, partially offset by lower service gross margin of $11.3 million. As a percentage of revenue, gross margin percentage remained consistent at 37%. Gross margin was negatively impacted by $8.0 million of accelerated depreciation and intangible amortization expense and other related non-cash purchase accounting expenses in the fourth quarter of fiscal 2023 as compared to $3.9 million in the fourth quarter of fiscal 2022.

Impairment of goodwill for the fourth quarter of fiscal 2023 was $156.0 million. In May 2023 notification was received that AV was not down selected for a US DoD program of record, which represented a trigger event that indicated that the carrying value of the MUAS reporting unit exceeded its fair value. As a result of the decrease in expected cash flows a goodwill impairment charge of $156.0 million was recorded.

Loss from operations for the fourth quarter of fiscal 2023 was $165.7 million as compared to income from operations of $13.0 million for the fourth quarter of last fiscal year. The decrease year-over-year was primarily due to the goodwill impairment of $156.0 million recorded during the fourth quarter of fiscal 2023 related to MUAS, higher selling, general and administrative (“SG&A”) expense of $39.7 million, inclusive of $34.1 million of accelerated intangible amortization expenses associated with the closure of all of the Company’s MUAS COCO sites, and higher research and development (“R&D”) expense of $2.8 million, partially offset by an increase in gross margin of $19.8 million.

Other loss, net, for the fourth quarter of fiscal 2023 was $(0.8) million, as compared to other income, net, of $5.3 million for the fourth quarter of last fiscal year. The increase in interest expense was primarily due to an increase in interest rates on the Company’s debt facility. Other loss, net for the fourth quarter of fiscal 2023 includes unrealized gains and losses associated with changes in the fair market value of equity security investments. Other income, net for the fourth quarter of fiscal 2022 included a $6.5 million gain related to the sale of ownership in HAPSMobile Inc.

Benefit from income taxes for the fourth quarter of fiscal 2023 was $(6.3) million, as compared to provision for income taxes of $15.5 million for the fourth quarter of last fiscal year. The increase in benefit from income taxes was primarily due to an increase in loss before income taxes partially offset by non-deductible goodwill impairment expenses.

Equity method investment loss, net of tax, for the fourth quarter of fiscal 2023 was $(0.3) million, as compared to equity method investment income $4.4 million for the fourth quarter of last fiscal year. Subsequent to the sale of the equity interest in HAPSMobile during the three months ended April 30, 2022, equity method investment loss, net of tax no longer includes activity from HAPSMobile.

Net loss attributable to AeroVironment for the fourth quarter of fiscal 2023 was $(160.5) million, or $(6.31) per diluted share, as compared to net income attributable to AeroVironment of $7.3 million, or $0.29 per diluted share, in the prior-year period, respectively. Net loss for the fourth quarter of fiscal 2023 included goodwill impairment charges of $156.0 million and accelerated intangible amortization expenses of $34.1 million.

Non-GAAP adjusted EBITDA for the fourth quarter of fiscal 2023 was approximately $46 million and non-GAAP earnings per diluted share were $0.99, as compared to approximately $29 million and $0.12, respectively, for the fourth quarter of fiscal 2022.

BACKLOG

As of April 30, 2023, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $424.1 million, as compared to $210.8 million as of April 30, 2022.

FISCAL 2024 — OUTLOOK FOR THE FULL YEAR

For fiscal year 2024, the Company expects revenue of between $630 million and $660 million, net income of between $50 and $58 million, Non-GAAP adjusted EBITDA of between $110 million and $120 million, earnings per diluted share of between $1.91 and $2.21 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 $2.30 and $2.60.

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, Tuesday, June 27, 2023, 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, senior director 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/BIf8cf27bdf83c46e38f1159f9e5d33d93

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 fourth quarter fiscal year 2023 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 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 disruptions 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; changes in the timing and/or amount of government spending; our reliance on limited relationships to fund our development of HAPS UAS; 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 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 our, our customers’ and/or our suppliers’ information and systems; changes in the supply and/or demand and/or prices for our products and services; increased competition; uncertainty in the customer adoption rate of commercial use unmanned aircraft systems; failure to remain a market innovator, to create new market opportunities or to expand into new markets; unexpected changes in significant operating expenses, including components and raw materials; failure to develop new products or integrate new technology into current products; unfavorable results in legal proceedings; our ability to respond and adapt to unexpected legal, regulatory and government budgetary changes, including those resulting from the COVID-19 pandemic or future pandemics, such as supply chain disruptions and delays, potential governmentally-mandated shutdowns, travel restrictions and site access, diversion of government resources to non-defense priorities, and other business restrictions affecting our ability to manufacture and sell our products and provide our services; 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

 

Year Ended

 

 

 

April 30,

 

April 30,

 

April 30,

 

April 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

141,529

 

 

$

73,970

 

 

$

353,062

 

 

$

240,683

 

 

Contract services

 

 

44,512

 

 

 

58,652

 

 

 

187,474

 

 

 

205,049

 

 

 

 

 

186,041

 

 

 

132,622

 

 

 

540,536

 

 

 

445,732

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

 

76,209

 

 

 

39,775

 

 

 

203,419

 

 

 

140,596

 

 

Contract services

 

 

41,432

 

 

 

44,225

 

 

 

163,603

 

 

 

163,900

 

 

 

 

 

117,641

 

 

 

84,000

 

 

 

367,022

 

 

 

304,496

 

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

 

65,320

 

 

 

34,195

 

 

 

149,643

 

 

 

100,087

 

 

Contract services

 

 

3,080

 

 

 

14,427

 

 

 

23,871

 

 

 

41,149

 

 

 

 

 

68,400

 

 

 

48,622

 

 

 

173,514

 

 

 

141,236

 

 

Selling, general and administrative

 

 

61,603

 

 

 

21,938

 

 

 

131,905

 

 

 

96,434

 

 

Research and development

 

 

16,462

 

 

 

13,671

 

 

 

64,255

 

 

 

54,689

 

 

Impairment of goodwill

 

 

156,017

 

 

 

 

 

 

156,017

 

 

 

 

 

(Loss) income from operations

 

 

(165,682

)

 

 

13,013

 

 

 

(178,663

)

 

 

(9,887

)

 

Other (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(2,646

)

 

 

(1,276

)

 

 

(9,368

)

 

 

(5,440

)

 

Other income (expense), net

 

 

1,837

 

 

 

47

 

 

 

(346

)

 

 

(10,313

)

 

Sale of ownership in HAPSMobile Inc. joint venture

 

 

 

 

 

6,497

 

 

 

 

 

 

6,497

 

 

(Loss) income before income taxes

 

 

(166,491

)

 

 

18,281

 

 

 

(188,377

)

 

 

(19,143

)

 

(Benefit from) provision for income taxes

 

 

(6,281

)

 

 

15,495

 

 

 

(14,663

)

 

 

(10,369

)

 

Equity method investment (loss) income, net of tax

 

 

(263

)

 

 

4,426

 

 

 

(2,453

)

 

 

4,589

 

 

Net (loss) income

 

 

(160,473

)

 

 

7,212

 

 

 

(176,167

)

 

 

(4,185

)

 

Net loss (income) attributable to noncontrolling interest

 

 

 

 

 

46

 

 

 

(45

)

 

 

(3

)

 

Net (loss) income attributable to AeroVironment, Inc.

 

$

(160,473

)

 

$

7,258

 

 

$

(176,212

)

 

$

(4,188

)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(6.31

)

 

$

0.29

 

 

$

(7.04

)

 

$

(0.17

)

 

Diluted

 

$

(6.31

)

 

$

0.29

 

 

$

(7.04

)

 

$

(0.17

)

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

25,451,034

 

 

 

24,768,901

 

 

 

25,044,881

 

 

 

24,685,534

 

 

Diluted

 

 

25,451,034

 

 

 

24,936,176

 

 

 

25,044,881

 

 

 

24,685,534

 

 

AeroVironment, Inc.

Consolidated Balance Sheets

(In thousands except share data)

 

 

 

 

 

 

 

 

 

 

April 30,

 

 

 

2023

 

 

2022

 

 

Assets

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

132,859

 

 

$

77,231

 

 

Short-term investments

 

 

 

 

 

24,716

 

 

Accounts receivable, net of allowance for doubtful accounts of $156 at April 30, 2023 and $592 at April 30, 2022

 

 

87,633

 

 

 

60,170

 

 

Unbilled receivables and retentions

 

 

105,653

 

 

 

104,194

 

 

Inventories, net

 

 

138,814

 

 

 

90,629

 

 

Income taxes receivable

 

 

 

 

 

442

 

 

Prepaid expenses and other current assets

 

 

12,043

 

 

 

11,527

 

 

Total current assets

 

 

477,002

 

 

 

368,909

 

 

Long-term investments

 

 

23,613

 

 

 

15,433

 

 

Property and equipment, net

 

 

39,795

 

 

 

62,296

 

 

Operating lease right-of-use assets

 

 

27,363

 

 

 

26,769

 

 

Deferred income taxes

 

 

27,206

 

 

 

7,290

 

 

Intangibles, net

 

 

43,577

 

 

 

97,224

 

 

Goodwill

 

 

180,801

 

 

 

334,347

 

 

Other assets

 

 

5,220

 

 

 

1,932

 

 

Total assets

 

$

824,577

 

 

$

914,200

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

31,355

 

 

$

19,244

 

 

Wages and related accruals

 

 

35,637

 

 

 

25,398

 

 

Customer advances

 

 

16,645

 

 

 

8,968

 

 

Current portion of long-term debt

 

 

7,500

 

 

 

10,000

 

 

Current operating lease liabilities

 

 

8,229

 

 

 

6,819

 

 

Income taxes payable

 

 

2,342

 

 

 

759

 

 

Other current liabilities

 

 

19,626

 

 

 

30,203

 

 

Total current liabilities

 

 

121,334

 

 

 

101,391

 

 

Long-term debt, net of current portion

 

 

125,904

 

 

 

177,840

 

 

Non-current operating lease liabilities

 

 

21,189

 

 

 

21,915

 

 

Other non-current liabilities

 

 

746

 

 

 

768

 

 

Liability for uncertain tax positions

 

 

2,705

 

 

 

1,450

 

 

Deferred income taxes

 

 

1,729

 

 

 

2,626

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value:

 

 

 

 

 

 

 

Authorized shares—10,000,000; none issued or outstanding at April 30, 2023 and April 30, 2022

 

 

 

 

 

 

 

Common stock, $0.0001 par value:

 

 

 

 

 

 

 

Authorized shares—100,000,000

 

 

 

 

 

 

 

Issued and outstanding shares—26,216,897 shares at April 30, 2023 and 24,951,287 shares at April 30, 2022

 

 

4

 

 

 

2

 

 

Additional paid-in capital

 

 

384,397

 

 

 

267,248

 

 

Accumulated other comprehensive loss

 

 

(4,452

)

 

 

(6,514

)

 

Retained earnings

 

 

171,021

 

 

 

347,233

 

 

Total AeroVironment, Inc. stockholders’ equity

 

 

550,970

 

 

 

607,969

 

 

Noncontrolling interest

 

 

 

 

 

241

 

 

Total equity

 

 

550,970

 

 

 

608,210

 

 

Total liabilities and stockholders’ equity

 

$

824,577

 

 

$

914,200

 

 

AeroVironment, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended April 30,

 

 

2023

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

Operating activities

 

 

 

 

 

 

 

Net (loss) income

 

$

(176,167

)

 

$

(4,185

)

 

$

23,345

 

Adjustments to reconcile net (loss) income from operations to cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

99,999

 

 

 

60,825

 

 

 

19,262

 

Impairment of goodwill

 

 

156,017

 

 

 

 

 

 

 

Loss (income) from equity method investments

 

 

2,453

 

 

 

(5,889

)

 

 

10,481

 

Loss on deconsolidation of previously controlled subsidiary

 

 

189

 

 

 

 

 

 

 

Amortization of debt issuance costs

 

 

845

 

 

 

789

 

 

 

145

 

Realized gain from sale of available-for-sale investments

 

 

 

 

 

 

 

 

(11

)

Provision for doubtful accounts

 

 

99

 

 

 

(6

)

 

 

(114

)

Reserve for inventory excess and obsolescence

 

 

8,136

 

 

 

2,271

 

 

 

1,178

 

Other non-cash expense (income), net

 

 

1,995

 

 

 

649

 

 

 

(449

)

Non-cash lease expense

 

 

8,048

 

 

 

6,814

 

 

 

5,150

 

Loss on foreign currency transactions

 

 

119

 

 

 

233

 

 

 

1

 

Unrealized loss on available-for-sale equity securities, net

 

 

132

 

 

 

 

 

 

 

Deferred income taxes

 

 

(18,661

)

 

 

(7,282

)

 

 

(1,694

)

Stock-based compensation

 

 

10,765

 

 

 

5,390

 

 

 

6,932

 

Loss on disposal of property and equipment

 

 

1,497

 

 

 

8,277

 

 

 

123

 

Amortization of debt securities discount

 

 

125

 

 

 

242

 

 

 

309

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(27,423

)

 

 

3,084

 

 

 

17,177

 

Unbilled receivables and retentions

 

 

(1,446

)

 

 

(31,883

)

 

 

8,381

 

Inventories

 

 

(61,846

)

 

 

(29,431

)

 

 

(6,357

)

Income taxes receivable

 

 

442

 

 

 

(442

)

 

 

 

Prepaid expenses and other assets

 

 

(3,821

)

 

 

(4,534

)

 

 

(6,104

)

Accounts payable

 

 

12,538

 

 

 

(7,044

)

 

 

2,565

 

Other liabilities

 

 

(2,635

)

 

 

(7,496

)

 

 

6,212

 

Net cash provided by (used in) operating activities

 

 

11,400

 

 

 

(9,618

)

 

 

86,532

 

Investing activities

 

 

 

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(14,868

)

 

 

(22,289

)

 

 

(11,263

)

Equity method investments

 

 

(5,778

)

 

 

(6,884

)

 

 

(2,675

)

Equity security investments

 

 

(5,100

)

 

 

 

 

 

 

Business acquisitions, net of cash acquired

 

 

(5,105

)

 

 

(46,150

)

 

 

(385,614

)

Proceeds from sale of ownership in equity method investment

 

 

 

 

 

6,497

 

 

 

 

Proceeds from loan repayment

 

 

 

 

 

4,345

 

 

 

 

Proceeds from deconsolidation of previously controlled subsidiary, net of cash deconsolidated

 

 

(635

)

 

 

 

 

 

 

Redemptions of available-for-sale investments

 

 

26,059

 

 

 

35,851

 

 

 

146,425

 

Purchases of available-for-sale investments

 

 

(1,326

)

 

 

(23,882

)

 

 

(125,644

)

Other

 

 

(250

)

 

 

224

 

 

 

 

Net cash used in investing activities

 

 

(7,003

)

 

 

(52,288

)

 

 

(378,771

)

Financing activities

 

 

 

 

 

 

 

 

 

Principal payments of term loan

 

 

(55,000

)

 

 

(10,000

)

 

 

 

Holdback and retention payments for business acquisition

 

 

 

 

 

(7,814

)

 

 

(1,492

)

Proceeds from shares issued, net of issuance costs

 

 

104,649

 

 

 

 

 

 

 

Tax withholding payment related to net settlement of equity awards

 

 

(1,065

)

 

 

(1,245

)

 

 

(1,992

)

Exercise of stock options

 

 

2,278

 

 

 

2,776

 

 

 

1,522

 

Payment of debt issuance costs

 

 

 

 

 

(293

)

 

 

(3,878

)

Proceeds from long-term debt

 

 

 

 

 

 

 

 

200,000

 

Other

 

 

(28

)

 

 

(31

)

 

 

 

Net cash provided by (used in) financing activities

 

 

50,834

 

 

 

(16,607

)

 

 

194,160

 

Effects of currency translation on cash and cash equivalents

 

 

397

 

 

 

(1,319

)

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

55,628

 

 

 

(79,832

)

 

 

(98,079

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

77,231

 

 

 

157,063

 

 

 

255,142

 

Cash, cash equivalents and restricted cash at end of period

 

$

132,859

 

 

$

77,231

 

 

$

157,063

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

 

Cash paid, net during the period for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

2,911

 

 

$

1,879

 

 

$

2,405

 

Interest

 

$

10,229

 

 

$

5,025

 

 

$

 

Non-cash activities

 

 

 

 

 

 

 

 

 

Unrealized (gain) loss on investments, net of deferred tax expense of $0, $8, and $1 for the fiscal years ended 2023, 2022 and 2021, respectively

 

$

53

 

 

$

(43

)

 

$

(60

)

Issuance of common stock for business acquisition

 

$

 

 

$

 

 

$

72,384

 

Change in foreign currency translation adjustments

 

$

2,009

 

 

$

(6,814

)

 

$

75

 

Issuances of inventory to property and equipment, ISR in-service assets

 

$

6,306

 

 

$

17,481

 

 

$

769

 

Acquisitions of property and equipment included in accounts payable

 

$

721

 

 

$

1,117

 

 

$

756

 

AeroVironment, Inc.

Reportable Segment Results (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended April 30, 2023

 

 

SUAS

 

TMS

 

MUAS

 

All other

 

Total

Revenue

 

$

94,595

 

$

42,497

 

$

8,379

 

 

$

40,570

 

$

186,041

 

Gross margin

 

 

54,819

 

 

14,513

 

 

(14,390

)

 

 

13,458

 

 

68,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

40,219

 

 

7,230

 

 

(215,917

)

 

 

2,786

 

 

(165,682

)

Impairment of goodwill and accelerated amortization

 

 

-

 

 

-

 

 

190,166

 

 

 

-

 

 

190,166

 

Acquisition-related expenses

 

 

-

 

 

-

 

 

135

 

 

 

61

 

 

196

 

Amortization of acquired intangible assets and other purchase accounting adjustments

 

 

669

 

 

-

 

 

5,516

 

 

 

1,284

 

 

7,469

 

Adjusted income (loss) from operations

 

$

40,888

 

$

7,230

 

$

(20,100

)

 

$

4,131

 

$

32,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended April 30, 2022

 

 

SUAS

 

TMS

 

MUAS

 

All other

 

Total

Revenue

 

$

59,198

 

$

20,217

 

 

$

23,083

 

 

$

30,124

 

$

132,622

Gross margin

 

 

30,429

 

 

7,065

 

 

 

416

 

 

 

10,712

 

 

48,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

17,251

 

 

(1,414

)

 

 

(5,710

)

 

 

2,886

 

 

13,013

Acquisition-related expenses

 

 

-

 

 

-

 

 

 

221

 

 

 

148

 

 

369

Amortization of acquired intangible assets and other purchase accounting adjustments

 

 

707

 

 

-

 

 

 

4,986

 

 

 

2,211

 

 

7,904

Adjusted income (loss) from operations

 

$

17,958

 

$

(1,414

)

 

$

(503

)

 

$

5,245

 

$

21,286

AeroVironment, Inc.

Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months
Ended

 

Three Months
Ended

 

Year Ended

 

Year Ended

 

 

April 30, 2023

 

April 30, 2022

 

April 30, 2023

 

April 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per diluted share

 

$

(6.31

)

 

$

0.29

 

 

$

(7.04

)

 

$

(0.17

)

Acquisition-related expenses

 

 

0.01

 

 

 

0.02

 

 

 

0.05

 

 

 

0.18

 

Amortization of acquired intangible assets and other purchase accounting adjustments

 

 

0.23

 

 

 

0.25

 

 

 

0.92

 

 

 

1.17

 

Equity method and equity securities investments activity, net

 

 

(0.06

)

 

 

(0.18

)

 

 

0.10

 

 

 

(0.19

)

Goodwill impairment

 

 

6.10

 

 

 

 

 

 

6.19

 

 

 

 

Accelerated intangible amortization

 

 

1.02

 

 

 

 

 

 

1.04

 

 

 

 

Sale of ownership in HAPSMobile Inc. joint venture

 

 

 

 

 

(0.26

)

 

 

 

 

 

(0.25

)

Legal accrual related to our former EES business

 

 

 

 

 

 

 

 

 

 

 

0.32

 

Earnings per diluted share as adjusted (Non-GAAP)

 

$

0.99

 

 

$

0.12

 

 

$

1.26

 

 

$

1.06

 

Reconciliation of non-GAAP adjusted EBITDA (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months
Ended

 

Three Months
Ended

 

Year Ended

 

Year Ended

(in millions)

 

April 30, 2023

 

April 30, 2022

 

April 30, 2023

 

April 30, 2022

Net (loss) income

 

$

(160

)

 

$

7

 

 

$

(176

)

 

$

(4

)

Interest expense, net

 

 

3

 

 

 

1

 

 

 

9

 

 

 

5

 

Provision for (benefit from) income taxes

 

 

(7

)

 

 

15

 

 

 

(15

)

 

 

(10

)

Depreciation and amortization

 

 

52

 

 

 

14

 

 

 

100

 

 

 

61

 

EBITDA (Non-GAAP)

 

 

(112

)

 

 

37

 

 

 

(82

)

 

 

52

 

Amortization of purchase accounting adjustment included in loss on disposal of property and equipment

 

 

 

 

 

 

 

 

 

 

 

1

 

Amortization of cloud computing arrangement implementation

 

 

 

 

 

 

 

 

1

 

 

 

 

Stock-based compensation

 

 

4

 

 

 

2

 

 

 

11

 

 

 

5

 

Equity method and equity securities investments activity, net

 

 

(2

)

 

 

(4

)

 

 

3

 

 

 

(5

)

Acquisition-related expenses

 

 

 

 

 

 

 

 

1

 

 

 

5

 

Goodwill impairment

 

 

156

 

 

 

 

 

 

156

 

 

 

 

Sale of ownership in HAPSMobile Inc. joint venture

 

 

 

 

 

(6

)

 

 

 

 

 

(6

)

Legal accrual related to our former EES business

 

 

 

 

 

 

 

 

 

 

 

10

 

Adjusted EBITDA (Non-GAAP)

 

$

46

 

 

$

29

 

 

$

90

 

 

$

62

 

Reconciliation of Forecast Earnings per Diluted Share (Unaudited)

 

 

 

 

 

 

Fiscal year ending

 

 

April 30, 2024

Forecast earnings per diluted share

 

$

1.91 - 2.21

Acquisition-related expenses

 

 

0.01

Amortization of acquired intangible assets and other purchase accounting adjustments

 

 

0.34

Equity method and equity securities investments activity, net

 

 

0.04

Forecast earnings per diluted share as adjusted (Non-GAAP)

 

$

2.30 - 2.60

Reconciliation of 2024 Forecast and Fiscal Year 2023 Actual Non-GAAP adjusted EBITDA (Unaudited)

 

 

 

 

 

 

 

 

 

Fiscal year ending

 

Fiscal year ended

(in millions)

 

April 30, 2024

 

April 30, 2023

Net income (loss)

 

$

50 - 58

 

$

(176

)

Interest expense, net

 

 

8

 

 

9

 

Provision for income taxes

 

 

4 - 6

 

 

(15

)

Depreciation and amortization

 

 

35

 

 

100

 

EBITDA (Non-GAAP)

 

 

97 - 107

 

 

(82

)

Amortization of cloud computing arrangement implementation

 

 

 

 

1

 

Stock-based compensation

 

 

12

 

 

11

 

Equity method and equity securities investments activity, net

 

 

1

 

 

3

 

Acquisition-related expenses

 

 

 

 

1

 

Goodwill impairment

 

 

 

 

156

 

Adjusted EBITDA (Non-GAAP)

 

$

110 - 120

 

$

90

 

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 Operating Income

Adjusted operating income is defined as operating income before intangible amortization, amortization of non-cash purchase accounting adjustments, goodwill impairment and acquisition related expenses.

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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