AeroVironment Announces Fiscal 2022 Fourth Quarter and Fiscal Year Results

Rhea-AI Summary

AeroVironment, Inc. (NASDAQ: AVAV) reported financial results for Q4 and fiscal year 2022. Q4 revenue totaled $132.6 million, marking a 2% decline year-over-year. Full-year revenue reached a record $445.7 million, driven by service revenue and acquisitions. Q4 net income was $7.3 million ($0.29 per diluted share), while the annual net loss was $4.2 million ($(0.17) per share). The company anticipates fiscal 2023 revenue between $490 million and $520 million, with earnings guidance of $0.42 to $0.72 per share.

Positive

• Record fiscal year 2022 revenue of $445.7 million.
• Expected revenue growth for fiscal 2023 between $490 million and $520 million.
• Improved demand outlook supported by federal appropriations and geopolitical factors.

Negative

• Q4 revenue decline of 2% compared to Q4 fiscal 2021.
• Net loss of $4.2 million for fiscal year 2022.
• Decreased gross margin to 37% from 44% due to lower product margin.

ARLINGTON, Va.--(BUSINESS WIRE)-- AeroVironment, Inc. (NASDAQ: AVAV), a global leader in intelligent, multi-domain robotic systems, today reported financial results for the fourth quarter and fiscal year ended April 30, 2022.

Fourth Quarter and Fiscal Year Highlights

• Fourth quarter revenue of $132.6 million and record fiscal year 2022 revenues of $445.7 million, primarily due to higher service revenue and recent acquisitions, which more than offset sales declines in some product segments

• Fourth quarter gross margin of $48.6 million and $141.2 million for fiscal 2022

• Fourth quarter net income attributable to AeroVironment of $7.3 million, or $0.29 per diluted share

• Net loss attributable to AeroVironment for fiscal year 2022 of $4.2 million, or $(0.17) per diluted share

“Our team executed well in the fourth quarter enabling the Company to meet our guidance for fiscal 2022, despite ongoing macroeconomic challenges,” said Wahid Nawabi, AeroVironment president and chief executive officer. “We are confident that fiscal 2023 will be a solid organic growth year for the business.

“During the quarter, the Company continued to face supply chain constraints and a tight labor market, but several factors point to strengthening demand and an overall improving outlook. First, the federal government passed its fiscal 2022 omnibus appropriations bill in March, and contract decision-making has begun to accelerate – which, we believe, will continue through the end of September. At the same time, the war in Ukraine has brought increased awareness of our portfolio of innovative solutions, including the highly relevant Switchblade tactical missile system, and we anticipate benefiting from higher order volume going forward.

“We’re proud of our accomplishments in this difficult year and of the assistance we’ve provided to Ukraine and our allies. We still face continuing macroeconomic challenges in operating the business but opportunities abound for our broad portfolio of unmanned robotic solutions. Our products and services enjoy strong bipartisan support in Congress, and we anticipate orders accelerating heading into calendar 2023. An improving mix of hardware sales should also lead to improved bottom line results. Overall, the future looks bright and I’d like to thank our employees, customers and shareholders for their dedication and continued support.”

FISCAL 2022 FOURTH QUARTER RESULTS

Revenue for the fourth quarter of fiscal 2022 was $132.6 million, a decrease of 2% from the fourth quarter of fiscal 2021 revenue of $136.0 million. The decrease in revenue reflects a decrease in product sales of $22.7 million, partially offset by higher service revenue of $19.3 million. The decrease in revenue was primarily due to a decrease in revenue in the Tactical Missile Systems (“TMS”) segment of $19.0 million and the Small Unmanned Aircraft Systems (“Small UAS”) segment of $11.7 million. These decreases were partially offset by an increase in revenue from the Unmanned Ground Vehicles product line of $8.5 million and the Medium Unmanned Aircraft Systems (“MUAS”) segment of $7.2 million, as a result of our acquisitions of Arcturus UAV (“Arcturus”) and Telerob GmbH (“Telerob”) in February and May 2021, respectively, and an increase in the High Altitude Pseudo-Satellite (“HAPS”) segment of $6.0 million and an increase in customer-funded research and development revenue of $5.5 million.

Gross margin for the fourth quarter of fiscal 2022 was $48.6 million, a decrease of 18% from the fourth quarter of fiscal 2021 gross margin of $59.7 million. The decrease in gross margin reflects lower product margin of $14.8 million, partially offset by higher service margin of $3.8 million. As a percentage of revenue, gross margin decreased to 37% from 44%. Gross margin was negatively impacted by $3.9 million of intangible amortization expense and other related non-cash purchase accounting expenses in the fourth quarter of fiscal 2022 as compared to $2.6 million in the fourth quarter of fiscal 2021. With the acquisitions of Arcturus and the Intelligent Systems Group of Progeny Systems Corp. (“ISG”), we experienced a higher proportion of service revenue, which generally has lower gross margins than product sales.

Income from operations for the fourth quarter of fiscal 2022 was $13.0 million, a decrease of $4.8 million from the fourth quarter of fiscal 2021 income from operations of $17.8 million. The decrease in income from operations was primarily the result of a decrease in gross margin of $11.0 million, partially offset by a decrease in research and development (“R&D”) expense of $3.4 million and a decrease in selling, general and administrative (“SG&A”) expense of $2.9 million. SG&A expense included acquisition-related expenses and intangible amortization expense of $4.3 million in the fourth quarter of fiscal 2022 as compared to $6.7 million in the fourth quarter of fiscal 2021. SG&A expense in the fourth quarter of fiscal 2022 also included additional headcount and support costs associated with the acquisition of Telerob.

Other income, net, for the fourth quarter of fiscal 2022 was $5.3 million, as compared to other expense, net of $9.4 million for the fourth quarter of fiscal 2021. The increase in other income, net was primarily due to a legal accrual related to our former EES business recorded in the fourth quarter of fiscal 2021, as compared to a $6.5 million gain related to the sale of the Company’s interest in the HAPSMobile joint venture in the fourth quarter of fiscal 2022.

Provision for income taxes for the fourth quarter of fiscal 2022 was $15.5 million, as compared to a benefit from income taxes of $2.2 million for the fourth quarter of fiscal 2021. The increase in provision for income taxes was primarily due to the increase in income before income taxes.

Equity method investment income, net of tax, for the fourth quarter of fiscal 2022 was $4.4 million, as compared to equity method investment income, net of tax of $0.4 million for the fourth quarter of fiscal 2021.

Net income attributable to AeroVironment for the fourth quarter of fiscal 2022 was $7.3 million, or $0.29 per diluted share, as compared to $10.9 million, or $0.44 per diluted share, for the fourth quarter of fiscal 2021.

Non-GAAP earnings per diluted share was $0.30 for the fourth quarter of fiscal 2022, as compared to $1.04 for the fourth quarter of fiscal 2021.

BACKLOG

As of April 30, 2022, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $210.8 million, as compared to $211.8 million as of April 30, 2021.

FISCAL 2023 — OUTLOOK FOR THE FULL YEAR

For the fiscal year 2023, the Company expects revenue of between $490 million and $520 million, net income of between $11 million and $18 million, Non-GAAP adjusted EBITDA of between $82 million and $92 million, earnings per diluted share of between $0.42 and $0.72 and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, of between $1.35 and $1.65.

The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, subject to certain risks and uncertainties, and including certain assumptions with respect to our ability to efficiently and on a timely basis integrate our acquisitions, 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.

CONFERENCE CALL AND PRESENTATION

In conjunction with this release, AeroVironment, Inc. will host a conference call today, Tuesday, June 28, 2022, 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 dial into the call by using the following telephone numbers, (877) 561-2749 (U.S.) or (678) 809-1029 (international) and providing the conference ID 1238926 five to ten minutes prior to the start time to allow for registration.

Investors with Internet access may 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 and full fiscal year 2022 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 recent acquisitions of Arcturus UAV, Telerob and ISG and our ability to successfully integrate them into our operations; the risk that disruptions will occur from the transactions that will harm our business; 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 and related to our development of HAPS UAS; availability of U.S. government funding for defense procurement and R&D programs; changes in the timing and/or amount of government spending; 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 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 ongoing COVID-19 pandemic, such as supply chain disruptions, vaccine mandates, the threat of future variants and potential governmentally-mandated shutdowns, quarantine policies, travel restrictions and social distancing, curtailment of trade, 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 (Unaudited)
(In thousands except share and per share data)
		Three Months Ended								Year Ended
		April 30,				April 30,				April 30,				April 30,
		2022				2021				2022				2021
Revenue:
Product sales		$	73,970			$	96,655			$	240,683			$	278,888
Contract services			58,652				39,360				205,049				116,024
			132,622				136,015				445,732				394,912
Cost of sales:
Product sales			39,775				47,675				140,596				149,714
Contract services			44,225				28,685				163,900				80,640
			84,000				76,360				304,496				230,354
Gross margin:
Product sales			34,195				48,980				100,087				129,174
Contract services			14,427				10,675				41,149				35,384
			48,622				59,655				141,236				164,558
Selling, general and administrative			21,938				24,841				96,434				67,481
Research and development			13,671				17,054				54,689				53,764
Income (loss) from continuing operations			13,013				17,760				(9,887	)			43,313
Other (loss) income:
Interest expense, net			(1,276	)			(1,035	)			(5,440	)			(618	)
Other income (expense), net			47				(8,398	)			(10,313	)			(8,330	)
Sale of ownership in HAPSMobile Inc. joint venture			6,497				—				6,497				-
Income (loss) continuing operations before income taxes			18,281				8,327				(19,143	)			34,365
Provision for (benefit from) income taxes			15,495				(2,235	)			(10,369	)			539
Equity method investment income (loss), net of tax			4,426				410				4,589				(10,481	)
Net income (loss)			7,212				10,972				(4,185	)			23,345
Net income attributable to noncontrolling interest			46				(26	)			(3	)			(14	)
Net income (loss) attributable to AeroVironment, Inc.		$	7,258			$	10,946			$	(4,188	)		$	23,331
Net income (loss) per share attributable to AeroVironment, Inc.
Basic		$	0.29			$	0.45			$	(0.17	)		$	0.97
Diluted		$	0.29			$	0.44			$	(0.17	)		$	0.96
Weighted-average shares outstanding:
Basic			24,768,901				24,434,344				24,685,534				24,049,851
Diluted			24,936,176				24,779,877				24,685,534				24,362,656

AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share data)
		April 30,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	77,231			$	148,741
Short-term investments			24,716				31,971
Accounts receivable, net of allowance for doubtful accounts of $592 at April 30, 2022 and $595 at April 30, 2021			60,170				62,647
Unbilled receivables and retentions			104,194				71,632
Inventories			90,629				71,646
Income taxes receivable			442				—
Prepaid expenses and other current assets			11,527				15,001
Total current assets			368,909				401,638
Long-term investments			15,433				12,156
Property and equipment, net			62,296				58,896
Operating lease right-of-use assets			26,769				22,902
Deferred income taxes			7,290				2,061
Intangibles, net			97,224				106,268
Goodwill			334,347				314,205
Other assets			1,932				10,440
Total assets		$	914,200			$	928,566
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	19,244			$	24,841
Wages and related accruals			25,398				28,068
Customer advances			8,968				7,183
Current portion of long-term debt			10,000				10,000
Current operating lease liabilities			6,819				6,154
Income taxes payable			759				861
Other current liabilities			30,203				19,078
Total current liabilities			101,391				96,185
Long-term debt, net of current portion			177,840				187,512
Non-current operating lease liabilities			21,915				19,103
Other non-current liabilities			768				10,141
Liability for uncertain tax positions			1,450				3,518
Deferred income taxes			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, 2022 and April 30, 2021			—				—
Common stock, $0.0001 par value:
Authorized shares—100,000,000
Issued and outstanding shares—24,951,287 shares at April 30, 2022 and 24,777,295 shares at April 30, 2021			2				2
Additional paid-in capital			267,248				260,327
Accumulated other comprehensive (loss) income			(6,514	)			343
Retained earnings			347,233				351,421
Total AeroVironment, Inc. stockholders’ equity			607,969				612,093
Noncontrolling interest			241				14
Total equity			608,210				612,107
Total liabilities and stockholders’ equity		$	914,200			$	928,566

AeroVironment, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
		Year Ended April 30,
		2022				2021				2020
Operating activities
Net (loss) income		$	(4,185	)		$	23,345			$	41,070
Loss on sale of business, net of tax			—				—				265
Net (loss) income from continuing operations			(4,185	)			23,345				41,335
Adjustments to reconcile net (loss) income from continuing operations to cash (used in) provided by operating activities:
Depreciation and amortization			60,825				19,262				9,888
(Income) loss from equity method investments, net			(5,889	)			10,481				5,487
Amortization of debt issuance costs			789				145				—
Realized gain from sale of available-for-sale investments			—				(11	)			(180	)
Provision for doubtful accounts			(6	)			(114	)			388
Other non-cash expense (income)			649				(449	)			(703	)
Non-cash lease expense			6,814				5,150				4,574
Loss on foreign currency transactions			233				1				1
Deferred income taxes			(7,282	)			(1,694	)			3,419
Stock-based compensation			5,390				6,932				6,227
Loss (gain) on disposal of property and equipment			8,277				123				(71	)
Amortization of debt securities			242				309				(1,423	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable			3,084				17,177				(42,869	)
Unbilled receivables and retentions			(31,883	)			8,381				(22,790	)
Inventories			(27,160	)			(5,179	)			8,855
Income taxes receivable			(442	)			—				821
Prepaid expenses and other assets			(4,534	)			(6,104	)			831
Accounts payable			(7,044	)			2,565				3,127
Other liabilities			(7,496	)			6,212				8,180
Net cash (used in) provided by operating activities			(9,618	)			86,532				25,097
Investing activities
Acquisition of property and equipment			(22,289	)			(11,263	)			(11,220	)
Equity method investments			(6,884	)			(2,675	)			(14,498	)
Business acquisitions, net of cash acquired			(46,150	)			(385,614	)			(18,641	)
Proceeds from sale of ownership in equity method investment			6,497				—				—
Proceeds from loan repayment			4,345				—				—
Proceeds from sale of property and equipment			—				—				81
Redemptions of held-to-maturity investments			—				—				185,917
Purchases of held-to-maturity investments			—				—				(176,757	)
Redemptions of available-for-sale investments			35,851				146,425				200,892
Purchases of available-for-sale investments			(23,882	)			(125,644	)			(106,607	)
Other			224				—				—
Net cash (used in) provided by investing activities			(52,288	)			(378,771	)			59,167
Financing activities
Principal payments of term loan			(10,000	)			—				—
Payment of contingent consideration			—				—				(868	)
Tax withholding payment related to net settlement of equity awards			(1,245	)			(1,992	)			(1,062	)
Holdback and retention payments for business acquisition			(7,814	)			(1,492	)			—
Exercise of stock options			2,776				1,522				100
Payment of debt issuance costs			(293	)			(3,878	)			—
Proceeds from long-term debt			—				200,000				—
Other			(31	)			—				—
Net cash (used in) provided by financing activities			(16,607	)			194,160				(1,830	)
Effects of currency translation on cash and cash equivalents			(1,319	)			—				—
Net (decrease) increase in cash, cash equivalents, and restricted cash			(79,832	)			(98,079	)			82,434
Cash, cash equivalents and restricted cash at beginning of period			157,063				255,142				172,708
Cash, cash equivalents and restricted cash at end of period		$	77,231			$	157,063			$	255,142
Supplemental disclosures of cash flow information
Cash paid, net during the period for:
Income taxes		$	1,879			$	2,405			$	532
Interest		$	5,025			$	—			$	—
Non-cash activities
Unrealized (loss) gain on investments, net of deferred tax expense of $8, $1 and $14 for the fiscal years ended 2021, 2020 and 2019, respectively		$	(43	)		$	(60	)		$	50
Issuance of common stock for business acquisition		$	—			$	72,384			$	—
Change in foreign currency translation adjustments		$	(6,814	)		$	75			$	276
Issuances of inventory to property and equipment, ISR in-service assets		$	17,481			$	769			$	—
Acquisitions of property and equipment included in accounts payable		$	1,117			$	756			$	1,425

AeroVironment, Inc.
Reportable Segment Results (Unaudited)
(In thousands)
		Three Months Ended April 30, 2022
		Small UAS			TMS				MUAS				HAPS			All other				Total
Revenue		$	59,198		$	20,217			$	23,083			$	13,087		$	17,037			$	132,622
Gross margin			30,429			7,065				416				5,242			5,470				48,622
Income (loss) from continuing operations			17,251			(1,414	)			(5,710	)			3,306			(420	)			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	)		$	3,306		$	1,939			$	21,286

		Three Months Ended April 30, 2021
		Small UAS			TMS			MUAS				HAPS				All other				Total
Revenue		$	70,851		$	39,175		$	15,837			$	7,108			$	3,044			$	136,015
Gross margin			39,867			13,924			2,965				3,461				(562	)			59,655
Income (loss) from continuing operations			20,908			4,323			(1,869	)			(711	)			(4,891	)			17,760
Acquisition-related expenses			1,289			708			1,094				253				434				3,778
Amortization of acquired intangible assets and other purchase accounting adjustments			661			-			4,356				-				453				5,470
Adjusted income (loss) from operations		$	22,858		$	5,031		$	3,581			$	(458	)		$	(4,004	)		$	27,008

		Year Ended April 30, 2022
		Small UAS			TMS				MUAS				HAPS			All other				Total
Revenue		$	178,201		$	76,415			$	93,156			$	43,325		$	54,635			$	445,732
Gross margin			83,759			24,486				6,155				15,533			11,303				141,236
Income (loss) from continuing operations			28,980			(3,120	)			(27,715	)			8,056			(16,088	)			(9,887	)
Acquisition-related expenses			502			297				1,994				123			1,938				4,854
Amortization of acquired intangible assets and other purchase accounting adjustments			2,828			-				22,170				-			11,709				36,707
Adjusted income (loss) from operations		$	32,310		$	(2,823	)		$	(3,551	)		$	8,179		$	(2,441	)		$	31,674

		Year Ended April 30, 2021
		Small UAS			TMS				MUAS				HAPS			All other				Total
Revenue		$	235,854		$	87,268			$	15,837			$	42,426		$	13,527			$	394,912
Gross margin			119,062			26,675				2,965				13,038			2,818				164,558
Income (loss) from continuing operations			58,194			(3,131	)			(1,869	)			268			(10,149	)			43,313
Acquisition-related expenses			3,026			1,661				1,682				593			1,019				7,981
Amortization of acquired intangible assets and other purchase accounting adjustments			2,649			-				4,356				-			453				7,458
Adjusted income (loss) from operations		$	63,869		$	(1,470	)		$	4,169			$	861		$	(8,677	)		$	58,752

AeroVironment, Inc. Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)
		Three Months Ended				Three Months Ended			Year Ended				Year Ended
		April 30, 2022				April 30, 2021			April 30, 2022				April 30, 2021
Earnings (loss) per diluted share		$	0.29			$	0.44		$	(0.17	)		$	0.96
Acquisition-related expenses			0.02				0.12			0.18				0.26
Amortization of acquired intangible assets and other purchase accounting adjustments			0.25				0.18			1.17				0.24
Sale of ownership in HAPSMobile Inc. joint venture			(0.26	)			—			(0.25	)			—
HAPSMobile Inc. JV impairment of investment in Loon LLC			—				—			—				0.34
Legal accrual related to our former EES business			—				0.30			0.32				0.30
Earnings per diluted share as adjusted (Non-GAAP)		$	0.30				1.04		$	1.25			$	2.10

Reconciliation of non-GAAP adjusted EBITDA (Unaudited)
		Year Ended				Year Ended
(in millions)		April 30, 2022				April 30, 2021
Net (loss) income		$	(4	)		$	23
Interest expense, net			5				1
(Benefit from) provision for income taxes			(10	)			1
Depreciation and amortization			61				19
EBITDA (Non-GAAP)			52				44
Amortization of purchase accounting adjustment included in loss on disposal of property and equipment			1				—
Stock-based compensation			5				7
HAPSMobile Inc. joint venture impairment of investment in Loon LLC			—				10
Sale of ownership in HAPSMobile Inc. joint venture			(6	)			—
Equity method investment gain			(5	)			—
Legal accrual related to our former EES business			10				9
Acquisition-related expenses			5				8
Adjusted EBITDA (Non-GAAP)		$	62			$	78

Reconciliation of Forecast Earnings per Diluted Share (Unaudited)
		Fiscal year ending
		April 30, 2023
Forecast earnings per diluted share		$	0.42 - 0.72
Acquisition-related expenses			0.01
Amortization of acquired intangible assets and other purchase accounting adjustments			0.92
Forecast earnings per diluted share as adjusted (Non-GAAP)		$	1.35 - 1.65

Reconciliation of 2023 Forecast and Fiscal Year 2022 Actual Non-GAAP adjusted EBITDA (Unaudited)
		Fiscal year ending				Fiscal year ended
(in millions)		April 30, 2023				April 30, 2022
Net income (loss)		$	11 - 18			$	(4	)
Interest expense, net			8				5
Benefit from income taxes			(5) - (2	)			(10	)
Depreciation and amortization			60				61
EBITDA (Non-GAAP)			74 - 84				52
Amortization of purchase accounting adjustment included in loss on disposal of property and equipment			—				1
Stock-based compensation			7				5
Sale of ownership in HAPSMobile Inc. joint venture			—				(6	)
Equity method investment gain			—				(5	)
Legal accrual related to our former EES business			—				10
Acquisition-related expenses			1				5
Adjusted EBITDA (Non-GAAP)		$	82 - 92			$	62

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, and acquisition related expenses.

Non-GAAP Earnings per Diluted Share

We exclude the acquisition-related expenses, amortization of acquisition-related intangible assets 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 items, including stock-based compensation, acquisition related expenses, equity method investment gains or losses, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220628006042/en/

Jonah Teeter-Balin

+1 (805) 520-8350 x4278

https://investor.avinc.com/contact-us

Source: AeroVironment, Inc.

FAQ

What were AeroVironment's earnings for Q4 of fiscal 2022?

AeroVironment reported a net income of $7.3 million, or $0.29 per diluted share for Q4 of fiscal 2022.

What is AeroVironment's revenue for fiscal year 2022?

AeroVironment reported a record revenue of $445.7 million for fiscal year 2022.

What is AeroVironment's guidance for fiscal year 2023?

AeroVironment expects fiscal 2023 revenue to be between $490 million and $520 million.

How did AeroVironment's gross margin change in Q4 fiscal 2022?

Gross margin decreased to 37% in Q4 fiscal 2022, down from 44% in Q4 fiscal 2021.

What challenges did AeroVironment face during fiscal year 2022?

AeroVironment faced supply chain constraints and a tight labor market, impacting operations.