SIMI VALLEY, Calif. — (BUSINESS WIRE) — 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.

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AeroVironment's Portfolio of Unmanned Systems (Graphic: Business Wire)

• 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 an increase in acquisition-related expenses of $3.1 million related to the acquisitions of Arcturus UAV and Progeny Systems Corporation’s Intelligent Systems Group (“ISG”) and the pending acquisition of Telerob GmbH.

Other income, net, for the third quarter of fiscal 2021 was $0.1 million, as compared to $1.2 million for the third quarter of fiscal 2020. The decrease in other income, net was primarily due to a decrease in interest income resulting from a decrease in the average interest rate earned on our investment portfolio.

Benefit from income taxes for the third quarter of fiscal 2021 was $0.9 million, as compared to $38 thousand for the third quarter of fiscal 2020. The increase in benefit from income taxes was primarily due to a decrease in the projected fiscal year 2021 effective tax rate.

Equity method investment loss, net of tax, for the third quarter of fiscal 2021 was $0.1 million, as compared to $1.2 million for the third quarter of fiscal 2020.

Net income attributable to AeroVironment for the third quarter of fiscal 2021 was $0.2 million, as compared to a net loss attributable to AeroVironment of $1.0 million for the third quarter of fiscal 2020.

Earnings per diluted share attributable to AeroVironment for the third quarter of fiscal 2021 was $0.01, as compared to a loss per diluted share attributable to AeroVironment of $0.04 for the third quarter of fiscal 2020.

Non-GAAP earnings per diluted share was $0.14 for the third quarter of fiscal 2021, as compared to a loss of $0.01 for the third quarter of fiscal 2020.

FISCAL 2021 YEAR-TO-DATE RESULTS

Revenue for the first nine months of fiscal 2021 was $258.9 million, an increase of 12% from the first nine months of fiscal 2020 revenue of $232.1 million. The increase in revenue was due to an increase in product sales of $22.6 million and an increase in service revenue of $4.2 million.

Gross margin for the first nine months of fiscal 2021 was $104.9 million, an increase of 5% from the first nine months of fiscal 2020 gross margin of $99.9 million. The increase in gross margin was primarily due to an increase in product margin of $2.8 million and an increase in service margin of $2.2 million. As a percentage of revenue, gross margin decreased to 41% from 43%. The decrease in gross margin percentage was primarily due to an unfavorable product mix.

Income from operations for the first nine months of fiscal 2021 was $25.6 million, a decrease of $0.2 million from the first nine months of fiscal 2020 of $25.8 million. The decrease in income from operations was primarily a result of an increase in R&D expense of $5.8 million, partially offset by an increase in gross margin of $5.0 million and a decrease in SG&A expense of $0.5 million. SG&A expense for the first nine months of fiscal 2021 includes an increase in acquisition-related expenses of $3.1 million related to the acquisitions of Arcturus UAV and ISG and the pending acquisition of Telerob.

Other income, net, for the first nine months of fiscal 2021 was $0.5 million, as compared to $4.3 million for the first nine months of fiscal 2020. The decrease in other income, net was primarily due to a decrease in interest income resulting from a decrease in the average interest rate earned on our investment portfolio.

Provision for income taxes for the first nine months of fiscal 2021 was $2.8 million, as compared to $3.2 million for the first nine months of fiscal 2020. The decrease in provision for income taxes was primarily due to a decrease in income before income taxes.

Equity method investment loss, net of tax, for the first nine months of fiscal 2021 was $10.9 million, as compared to $3.4 million for the first nine months of fiscal 2020. Equity method investment loss, net of tax, for the first nine months of fiscal 2021 included a loss of $8.4 million for our proportionate share of the HAPSMobile Inc. joint venture’s impairment of its investment in Loon LLC.

Net income attributable to AeroVironment for the first nine months of fiscal 2021 was $12.4 million, a decrease from the first nine months of fiscal 2020 net income attributable to AeroVironment of $23.6 million. The first nine months of fiscal 2021 included the impairment loss of $8.4 million related to HAPSMobile Inc.’s investment in Loon LLC.