AeroVironment, Inc. Announces Fourth Quarter and Full Fiscal

AeroVironment, Inc. Announces Fourth Quarter and Full Fiscal 2021 Year Results

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,
	2021			2020			2021			2020
	(Unaudited)
Revenue:
Product sales	$	96,655		$	97,101		$	278,888		$	256,758
Contract services		39,360			38,122			116,024			110,538
		136,015			135,223			394,912			367,296
Cost of sales:
Product sales		47,675			56,887			149,714			139,131
Contract services		28,685			25,168			80,640			75,063
		76,360			82,055			230,354			214,194
Gross margin:
Product sales		48,980			40,214			129,174			117,627
Contract services		10,675			12,954			35,384			35,475
		59,655			53,168			164,558			153,102
Selling, general and administrative		24,841			16,344			67,481			59,490
Research and development		17,054			15,529			53,764			46,477
Income from continuing operations		17,760			21,295			43,313			47,135
Other income:
Interest (expense) income, net		(1,035	)		1,111			(618	)		4,828
Other (expense) income, net		(8,398	)		75			(8,330	)		707
Income before income taxes		8,327			22,481			34,365			52,670
(Benefit from) provision for income taxes		(2,235	)		2,645			539			5,848
Equity method investment income (loss), net of tax		410			(2,077	)		(10,481	)		(5,487	)
Net income from continuing operations		10,972			17,759			23,345			41,335
Discontinued operations:
Loss on sale of business, net of tax benefit of $76		—			(265	)		—			(265	)
Net loss from discontinued operations		—			(265	)		—			(265	)
Net income		10,972			17,494			23,345			41,070
Net (income) loss attributable to noncontrolling interest		(26	)		(23	)		(14	)		4
Net income attributable to AeroVironment, Inc.	$	10,946		$	17,471		$	23,331		$	41,074
Net income (loss) per share attributable to AeroVironment, Inc.—Basic
Continuing operations	$	0.45		$	0.74		$	0.97		$	1.74
Discontinued operations		—			(0.01	)		—			(0.01	)
Net income per share attributable to AeroVironment, Inc.—Basic	$	0.45		$	0.73		$	0.97		$	1.73
Net income (loss) per share attributable to AeroVironment, Inc.—Diluted
Continuing operations	$	0.44		$	0.73		$	0.96		$	1.72
Discontinued operations		—			(0.01	)		—			(0.01	)
Net income per share attributable to AeroVironment, Inc.—Diluted	$	0.44		$	0.72		$	0.96		$	1.71
Weighted-average shares outstanding:
Basic		24,434,344			23,849,575			24,049,851			23,806,208
Diluted		24,779,877			24,133,809			24,362,656			24,088,167

AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share data)

	April 30,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	148,741	$	255,142
Short-term investments		31,971		47,507
Accounts receivable, net of allowance for doubtful accounts of $595 at April 30, 2021 and $1,190 at April 30, 2020		62,647		73,660
Unbilled receivables and retentions		71,632		75,837
Inventories		71,646		45,535
Prepaid expenses and other current assets		15,001		6,246
Total current assets		401,638		503,927
Long-term investments		12,156		15,030
Property and equipment, net		58,896		21,694
Operating lease right-of-use assets		22,902		8,793
Deferred income taxes		2,061		4,928
Intangibles, net		106,268		13,637
Goodwill		314,205		6,340
Other assets		10,440		10,605
Total assets	$	928,566	$	584,954
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	24,841	$	19,859
Wages and related accruals		28,068		23,972
Customer advances		7,183		7,899
Current portion of long-term debt		10,000		—
Current operating lease liabilities		6,154		3,380
Income taxes payable		861		1,065
Other current liabilities		19,078		10,778
Total current liabilities		96,185		66,953
Long-term debt, net of current portion		187,512		—
Non-current operating lease liabilities		19,103		6,833
Other non-current liabilities		10,141		250
Liability for uncertain tax positions		3,518		1,017
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares—10,000,000; none issued or outstanding at April 30, 2021 and April 30, 2020		—		—
Common stock, $0.0001 par value:
Authorized shares—100,000,000
Issued and outstanding shares—24,777,295 shares at April 30, 2021 and 24,063,639 shares at April 30, 2020		2		2
Additional paid-in capital		260,327		181,481
Accumulated other comprehensive income		343		328
Retained earnings		351,421		328,090
Total AeroVironment, Inc. stockholders’ equity		612,093		509,901
Noncontrolling interest		14		—
Total equity		612,107		509,901
Total liabilities and stockholders’ equity	$	928,566	$	584,954

AeroVironment, Inc.
Consolidated Statements of Cash Flows
(In thousands)

	Year Ended April 30,
	2021			2020			2019
Operating activities
Net income	$	23,345		$	41,070		$	47,419
Loss (gain) on sale of business, net of tax		—			265			(8,490	)
Loss from discontinued operations, net of tax		—			—			2,964
Net income from continuing operations		23,345			41,335			41,893
Adjustments to reconcile net income from continuing operations to cash provided by operating activities from continuing operations:
Depreciation and amortization		19,262			9,888			7,669
Losses from equity method investments, net		10,481			5,487			3,944
Amortization of debt issuance costs		145			—			—
Realized gain from sale of available-for-sale investments		(11	)		(180	)		—
Impairment of long-lived assets		—			—			4,398
Provision for doubtful accounts		(114	)		388			(39	)
Other non-cash gain, net		(449	)		(703	)		—
Non-cash lease expense		5,150			4,574			—
Loss on foreign currency transactions		1			1			38
Deferred income taxes		(1,694	)		3,419			4,792
Stock-based compensation		6,932			6,227			6,985
Loss (gain) on sale of property and equipment		123			(71	)		76
Amortization of debt securities		309			(1,423	)		(1,506	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		17,177			(42,869	)		25,821
Unbilled receivables and retentions		8,381			(22,790	)		(36,175	)
Inventories		(5,179	)		8,855			(16,631	)
Income tax receivable		—			821			(821	)
Prepaid expenses and other assets		(6,104	)		831			(2,401	)
Accounts payable		2,565			3,127			(7,054	)
Other liabilities		6,212			8,180			(4,043	)
Net cash provided by operating activities		86,532			25,097			26,946
Investing activities
Acquisition of property and equipment		(11,263	)		(11,220	)		(8,896	)
Equity method investments		(2,675	)		(14,498	)		(7,598	)
Business acquisitions, net of cash acquired		(385,614	)		(18,641	)		—
Proceeds from sale of business		—			—			31,994
Proceeds from sale of property and equipment		—			81			—
Redemptions of held-to-maturity investments		—			185,917			260,918
Purchases of held-to-maturity investments		—			(176,757	)		(267,122	)
Redemptions of available-for-sale investments		146,425			200,892			2,250
Purchases of available-for-sale investments		(125,644	)		(106,607	)		—
Net cash (used in) provided by investing activities		(378,771	)		59,167			11,546
Financing activities
Principal payments of capital lease obligations		—			—			(161	)
Payment of contingent consideration		—			(868	)		—
Tax withholding payment related to net settlement of equity awards		(1,992	)		(1,062	)		(1,094	)
Holdback and retention payments for business acquisition		(1,492	)		—			—
Exercise of stock options		1,522			100			71
Payment of debt issuance costs		(3,878	)		—			—
Proceeds from long-term debt		200,000			—			—
Net cash provided by (used in) financing activities		194,160			(1,830	)		(1,184	)
Discontinued operations
Operating activities of discontinued operations		—			—			(7,686	)
Investing activities of discontinued operations		—			—			(431	)
Net cash used in discontinued operations		—			—			(8,117	)
Net (decrease) increase in cash, cash equivalents, and restricted cash		(98,079	)		82,434			29,191
Cash, cash equivalents and restricted cash at beginning of period		255,142			172,708			143,517
Cash, cash equivalents and restricted cash at end of period	$	157,063		$	255,142		$	172,708
Supplemental disclosures of cash flow information
Cash paid, net during the period for:
Income taxes	$	2,405		$	532		$	6,780
Non-cash activities
Unrealized (loss) gain on investments, net of deferred tax expense of $1, $14 and $51 for the fiscal years ended 2021, 2020 and 2019, respectively	$	(60	)	$	50		$	57
Issuance of common stock for business acquisition	$	72,384		$	—		$	—
Change in foreign currency translation adjustments	$	75		$	276		$	(34	)
Issuances of inventory to property and equipment, ISR in-service assets	$	769		$	—		$	—
Acquisitions of property and equipment included in accounts payable	$	756		$	1,425		$	810

AeroVironment, Inc.
Reportable Segment Results
(In thousands)

	Three Months Ended					Twelve Months Ended
	April 30,			April 30,		April 30,			April 30,
	2021			2020		2021			2020
	(Unaudited)
Revenue:
UAS	$	120,178		$	135,223	$	379,075		$	367,296
MUAS		15,837			—		15,837			—
Total		136,015			135,223		394,912			367,296
Gross margin:
UAS		56,690			53,168		161,593			153,102
MUAS		2,965			—		2,965			—
Total		59,655			53,168		164,558			153,102
Income (loss) from operations:
UAS		19,629			21,295		45,182			47,135
MUAS		(1,869	)		—		(1,869	)		—
Total		17,760			21,295		43,313			47,135


AeroVironment, Inc.
Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)

	Three Months Ended		Three Months Ended		Year Ended		Year Ended
	April 30, 2021		April 30, 2020		April 30, 2021		April 30, 2020

Earnings per diluted share	$	0.44	$	0.73	$	0.96	$	1.72
Acquisition-related expenses		0.12		—		0.26		0.04
Amortization of acquired intangible assets and other purchase accounting adjustments		0.18		0.02		0.24		0.08
Legal accrual related to our former EES business		0.30		—		0.30		—
HAPSMobile Inc. JV impairment of investment in Loon LLC		—		—		0.34		—
Earnings per diluted share as adjusted (Non-GAAP)	$	1.04		0.75	$	2.10	$	1.84

Reconciliation of Forecast Earnings per Diluted Share (Unaudited)

	Fiscal year ending
	April 30, 2022
Forecast earnings per diluted share	$	1.31 - 1.51
Acquisition-related expenses		0.13
Amortization of acquired intangible assets		1.06
Forecast earnings per diluted share as adjusted (Non-GAAP)	$	2.50 - 2.70

Reconciliation of Fiscal Year 2021 Actual and 2022 Forecast Non-GAAP adjusted EBITDA (Unaudited)

	Fiscal year ending		Fiscal year ending
(in millions)	April 30, 2021		April 30, 2022
Net income from continuing operations	$	23	$	32 - 37
Interest expense, net		1		5
Provision for income taxes		1		3
Depreciation and amortization		19		61
EBITDA (Non-GAAP)		44		101 - 106
HAPSMobile Inc. JV impairment of investment in Loon LLC		10		—
Legal accrual related to our former EES business		9		—
Acquisition-related expenses		9		4
Adjusted EBITDA (Non-GAAP)	$	72	$	105 - 110

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