AeroVironment, Inc. has reported financial results for its third quarter ended January 25, 2014. UAS sales in the third quarter of Fiscal 2014 were up compared to Q3 2013, but overall year-to-date revenue was down 4% for the first three quarters of Fiscal 2014.
“During the third quarter we continued to execute on our strategic priorities successfully, delivering strong results with revenue up nearly 50 percent and a 100 percent increase in adjusted earnings per share on a year over year basis,” said Tim Conver, AeroVironment Chairman and Chief Executive Officer. “We are confident that our strong customer relationships, diverse set of capabilities and well-established positions in high potential growth opportunities will advance our leadership in each of our target markets and enhance value for our shareholders.”
FISCAL 2014 THIRD QUARTER RESULTS
Revenue for the third quarter of fiscal 2014 was $69.2 million, up 47% from third quarter fiscal 2013 revenue of $47.1 million. The increase in revenue resulted from increased sales in our Unmanned Aircraft Systems (UAS) segment of $19.8 million and in our Efficient Energy Systems (EES) segment of $2.3 million.
Income from operations for the third quarter of fiscal 2014 was $8.6 million compared to loss from operations for the third quarter of fiscal 2013 of $1.1 million. The higher income from operations was a result of higher revenue, resulting in $7.4 million higher gross margin, and lower research and development (R&D) expense of $5.1 million, offset by higher selling, general & administrative (SG&A) expense of $2.7 million.
Other income for the third quarter of fiscal 2014 was $4.9 million compared to other income for the third quarter of fiscal 2013 of $0.2 million. The increase in other income was primarily due to the increase in fair value of the conversion option in the amount of $4.7 million of our CybAero convertible bond investment.
Net income for the third quarter of fiscal 2014 was $11.2 million compared to net income for the third quarter of fiscal 2013 of $3.9 million.
Earnings per diluted share for the third quarter of fiscal 2014 was $0.49 compared to earnings per diluted share for the third quarter of fiscal 2013 of $0.17. Earnings per diluted share for the third quarter of fiscal 2014 included an increase of $0.15 per share due to the increase in fair value of the conversion option of our CybAero convertible bond investment. Earnings per diluted share for the third quarter of fiscal 2013 did not include any changes in the fair value of the CybAero convertible bonds as the investment was made during the fourth quarter of fiscal 2013.
FISCAL 2014 YEAR-TO-DATE RESULTS
Revenue for the first nine months of fiscal 2014 was $178.2 million, down 4% from the first nine months of fiscal 2013 revenue of $186.0 million. The decrease in revenue resulted from lower sales in our UAS segment of $3.1 million and in our EES segment of $4.7 million.
Income from operations for the first nine months of fiscal 2014 was $5.5 million compared to income from operations for the first nine months of fiscal 2013 of $9.8 million. The lower income from operations resulted from lower revenue, resulting in $11.3 million lower gross margin and higher SG&A expense of $1.5 million, offset by lower R&D expense of $8.5 million.
Other expense, net, for the first nine months of fiscal 2014 was $0.4 million compared to other income for the first nine months of fiscal 2013 of $0.5 million. The increase in other expense, net, was primarily due to the decrease in fair value of the conversion option in the amount of $1.0 million of our CybAero convertible bond investment.
Net income for the first nine months of fiscal 2014 was $5.7 million compared to net income for the first nine months of fiscal 2013 of $11.2 million.
Earnings per diluted share for the first nine months of fiscal 2014 was $0.25 compared to earnings per diluted share for the first nine months of fiscal 2013 of $0.50. Earnings per diluted share for the first nine months of fiscal 2014 included a reduction of $0.03 per share due to the decrease in fair value of the conversion option of our CybAero convertible bond investment. Earnings per diluted share for the first nine months of fiscal 2013 did not include any changes in the fair value of the CybAero convertible bonds as the investment was made during the fourth quarter of fiscal 2013.
BACKLOG
As of January 25, 2014, funded backlog (unfilled firm orders for which funding is currently appropriated to us under a customer contract) was $95.5 million compared to $59.4 million as of April 30, 2013.
FISCAL 2014 — OUTLOOK FOR THE FULL YEAR
For fiscal 2014, the company continues to expect to generate revenue of between $230 million and $250 million, and earnings per diluted share of between $0.35 and $0.50, excluding any change in value of the Company’s CybAero convertible bond investment.
The foregoing estimates are forward looking and reflect management’s view of current and future market conditions, including certain assumptions with respect to our ability to obtain and retain government contracts, changes in the timing and/or amount of government spending, 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.
Full results published here.
Source: Press Release