R
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
|
|
£
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
95-2705790
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
181
W. Huntington Drive, Suite 202
|
|
Monrovia,
California
|
91016
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer £
|
Accelerated
filer £
|
Non-accelerated
filer R
|
PART
I. FINANCIAL INFORMATION
|
|
|
|
1
|
|
2
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|
3
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|
4
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|
9
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|
13
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13
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|
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PART
II. OTHER INFORMATION
|
|
15
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|
15
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|
15
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15
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15
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15
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16
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17
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Exhibit
Index
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Exhibit
10.1
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|
Exhibit
31.1
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|
Exhibit
31.2
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|
Exhibit
32
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|
|
July
28,
2007
|
|
|
April
30,
2007
|
|
||
|
|
(Unaudited)
|
|
|
|
|
||
Assets
|
|
|
|
|
|
|
||
Current
assets:
|
|
|
|
|
|
|
||
Cash
and cash equivalents
|
|
$
|
29,622
|
$
|
20,920
|
|
||
Restricted
cash
|
|
|
406
|
389
|
|
|||
Short-term
investments
|
|
|
71,400
|
88,325
|
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $184 at July
28,
2007 and $149 at April
30, 2007
|
|
|
23,855
|
7,691
|
|
|||
Unbilled
receivables and retentions
|
|
|
14,789
|
26,494
|
|
|||
Inventories,
net
|
|
|
16,415
|
14,015
|
|
|||
Deferred
income taxes
|
|
|
1,738
|
1,730
|
|
|||
Prepaid
expenses and other current assets
|
|
|
1,355
|
1,504
|
|
|||
Total
current assets
|
|
|
159,580
|
161,068
|
|
|||
Property
and equipment, net
|
|
|
7,594
|
6,229
|
|
|||
Deferred
income taxes
|
|
|
761
|
761
|
|
|||
Other
assets
|
|
|
119
|
119
|
|
|||
Total
assets
|
|
$
|
168,054
|
$
|
168,177
|
|
||
Liabilities
and Stockholders’ Equity
|
|
|
|
|||||
Current
liabilities:
|
|
|
|
|||||
Accounts
payable
|
|
$
|
11,517
|
$
|
16,024
|
|
||
Wages
and related accruals
|
|
|
9,157
|
8,942
|
|
|||
Customer
advances
|
|
|
257
|
139
|
|
|||
Income
taxes payable
|
|
|
1,640
|
4,564
|
|
|||
Other
current liabilities
|
|
|
1,580
|
1,544
|
|
|||
Total
current liabilities
|
|
|
24,151
|
31,213
|
|
|||
Deferred
rent
|
|
|
640
|
541
|
|
|||
Commitments
and contingencies
|
|
|
|
|||||
Stockholders’
equity:
|
|
|
|
|||||
Preferred
stock, $0.0001 par value:
|
|
|
|
|||||
Authorized
shares — 10,000,000
|
|
|
|
|||||
None
issued or outstanding
|
|
|
|
|||||
Common
stock, $0.0001 par value:
|
|
|
|
|||||
Authorized
shares — 100,000,000
|
|
|
|
|||||
Issued
and outstanding shares — 19,279,809 at July 28, 2007 and 18,875,957 at
April 30, 2007
|
|
|
2
|
2
|
|
|||
Additional
paid-in capital
|
|
|
87,188
|
83,611
|
|
|||
Retained
earnings
|
|
|
56,073
|
52,810
|
|
|||
Total
stockholders’ equity
|
|
|
143,263
|
136,423
|
|
|||
Total
liabilities and stockholders’ equity
|
|
$
|
168,054
|
$
|
168,177
|
|
|
Three
months ended
|
|
||||||
|
July
28,
2007
|
July
29,
2006
|
|
|||||
Revenue:
|
|
|
|
|
|
|
||
Product
sales
|
$
|
29,684
|
$
|
23,844
|
|
|||
Contract
services
|
19,520
|
7,713
|
|
|||||
49,204
|
31,557
|
|
||||||
Cost
of sales:
|
|
|||||||
Product
sales
|
18,291
|
14,301
|
|
|||||
Contract
services
|
14,076
|
5,270
|
|
|||||
32,367
|
19,571
|
|
||||||
Gross
margin
|
16,837
|
11,986
|
|
|||||
Research
and development
|
4,300
|
3,841
|
|
|||||
Selling,
general and administrative
|
7,726
|
6,132
|
|
|||||
Income
from operations
|
4,811
|
2,013
|
|
|||||
Other
income
|
|
|||||||
Interest
income
|
979
|
206
|
|
|||||
Income
before income taxes
|
5,790
|
2,219
|
|
|||||
Provision
for income taxes
|
1,946
|
854
|
|
|||||
Net
income
|
$
|
3,844
|
$
|
1,365
|
|
|||
Earnings
per share data (a):
|
|
|||||||
Basic
|
$
|
0.20
|
$
|
0.10
|
|
|||
Diluted
|
$
|
0.18
|
$
|
0.09
|
|
|||
Weighted
average shares outstanding (a):
|
|
|||||||
Basic
|
18,897,711
|
13,508,079
|
|
|||||
Diluted
|
21,077,055
|
15,165,685
|
|
|
Three
months ended
|
|
||||||
|
July
28,
2007
|
July
29,
2006
|
|
|||||
Operating
activities
|
|
|
|
|
|
|
||
Net
income
|
|
$
|
3,844
|
|
|
$
|
1,365
|
|
Adjustments
to reconcile net income to net cash and cash equivalents used in
operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
805
|
|
|
|
667
|
|
Provision
for doubtful accounts
|
|
|
35
|
|
|
—
|
|
|
Deferred
income taxes
|
|
|
(8
|
)
|
|
|
—
|
|
Stock-based
compensation
|
|
|
68
|
|
|
|
—
|
|
Tax
benefit from exercise of stock options
|
|
|
3,252
|
|
|
|
213
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(16,199
|
)
|
|
|
7,269
|
|
Unbilled
receivables and retentions
|
|
|
11,705
|
|
|
|
(468
|
)
|
Inventories
|
|
|
(2,400
|
)
|
|
|
416
|
|
Other
assets
|
|
|
149
|
|
|
|
(88
|
)
|
Accounts
payable
|
|
|
(4,507
|
)
|
|
|
(3,209
|
)
|
Customer
advances
|
|
|
118
|
|
|
(4,719
|
)
|
|
Other
liabilities
|
|
|
(3,155
|
)
|
|
|
(2,869
|
)
|
Net
cash and cash equivalents used in operating activities
|
|
|
(6,293
|
)
|
|
|
(1,423
|
)
|
Investing
activities
|
|
|
|
|
|
|
|
|
Acquisitions
of property and equipment
|
|
|
(2,170
|
)
|
|
|
(681
|
)
|
Purchases
of short-term investments
|
|
|
(242,360
|
)
|
|
|
—
|
|
Sales
of short-term investments
|
|
|
259,285
|
|
|
|
—
|
|
Net
cash and cash equivalents provided by (used in) investing
activities
|
|
|
14,755
|
|
|
|
(681
|
)
|
Financing
activities
|
|
|
|
|
|
|
|
|
Transfers
to restricted cash
|
|
|
(17
|
)
|
|
|
(23
|
)
|
Repayments
of long-term debt
|
|
|
—
|
|
|
|
(6,232
|
)
|
Proceeds
from long-term debt
|
|
|
—
|
|
|
|
6,232
|
|
Exercise
of stock options
|
|
|
257
|
|
|
|
217
|
|
Net
cash and cash equivalents provided by financing
activities
|
|
|
240
|
|
|
|
194
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
8,702
|
|
|
|
(1,910
|
)
|
Cash
and cash equivalents at beginning of period
|
|
|
20,920
|
|
|
|
15,388
|
|
Cash
and cash equivalents at end of period
|
|
$
|
29,622
|
|
|
$
|
13,478
|
|
|
|
Three
Months Ended
|
|
|||||
|
|
July
28,
2007
|
July
29,
2006
|
|
||||
Denominator
for basic earnings per share:
|
|
|
|
|
|
|
||
Weighted
average common shares outstanding
|
|
|
18,897,711
|
|
|
|
13,508,079
|
|
Dilutive
effect of employee stock options
|
|
|
2,179,344
|
|
|
|
1,657,606
|
|
Denominator
for diluted earnings per share
|
|
|
21,077,055
|
|
|
|
15,165,685
|
|
|
|
July
28,
2007
|
April
30,
2007
|
|
||||
|
|
(In
thousands)
|
|
|||||
Raw
materials
|
|
$
|
11,600
|
|
|
$
|
5,418
|
|
Work
in process
|
|
|
3,064
|
|
|
|
3,514
|
|
Finished
goods
|
|
|
2,862
|
|
|
|
6,221
|
|
Inventories,
gross
|
|
|
17,526
|
|
|
|
15,153
|
|
Reserve
for inventory obsolescence
|
|
|
(1,111
|
)
|
|
|
(1,138
|
)
|
Inventories,
net
|
|
$
|
16,415
|
|
|
$
|
14,015
|
|
|
July
28,
2007
|
July
29,
2006
|
|
|||||
|
(In
thousands)
|
|
||||||
Beginning
balance
|
|
$
|
263
|
|
|
$
|
344
|
|
Warranty
expense
|
|
|
208
|
|
|
|
152
|
|
Warranty
costs incurred
|
|
|
(228
|
)
|
|
|
(141
|
)
|
Ending
balance
|
|
$
|
243
|
|
|
$
|
355
|
|
Three
Months Ended
July
28, 2007
|
||||
Expected
term (in years)
|
6.5
|
|||
Expected
volatility
|
19.49 | % | ||
Risk-free
interest rate
|
5.12 | % | ||
Expected
dividend
|
—
|
|||
Weighted
average fair value at grant date
|
$ |
7.93
|
2006
Plan
|
2002
Plan
|
1994
Directors’ Plan
|
1992
Plan
|
|||||||||||||||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted-
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||||||||
Outstanding
at April 30, 2007
|
—
|
—
|
1,532,423
|
1.95
|
35,189
|
.59
|
1,941,706
|
.55
|
||||||||||||||||||||||||
Options
granted
|
243,310
|
21.48
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Options
exercised
|
—
|
—
|
(102,325 | ) |
.76
|
—
|
—
|
(301,527 | ) |
.59
|
||||||||||||||||||||||
Options
canceled
|
—
|
—
|
(5,630
|
) |
.64
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Outstanding
at July 28, 2007
|
243,310
|
21.48
|
1,424,468
|
2.04
|
35,189
|
.59
|
1,640,179
|
.55
|
||||||||||||||||||||||||
Options
exercisable at July 28, 2007
|
—
|
—
|
633,068
|
.91
|
35,189
|
.59
|
1,640,179
|
.55
|
|
•
|
Unmanned
Aircraft Systems (“UAS”) — engages primarily in the design, manufacture,
sale and support of small unmanned aircraft
systems.
|
|
•
|
PosiCharge
Systems (“PosiCharge”) — engages primarily in the design, manufacture,
sale and support of fast charge systems and related services for
users of
electrical industrial vehicles.
|
|
•
|
Energy
Technology Center — provides contract engineering for electric
energy-related projects, and engages in the design, manufacture,
sale and
support of power processing test
systems.
|
|
|
Three
Months Ended
|
|
|||||
|
|
July
28,
2007
|
July
29,
2006
|
|
||||
|
|
|
|
|
|
|
||
Revenue:
|
|
|
|
|
|
|
||
UAS
|
|
$
|
41,873
|
|
|
$
|
24,983
|
|
PosiCharge
|
|
|
5,358
|
|
|
|
4,943
|
|
Energy Technology Center
|
|
|
1,973
|
|
|
|
1,631
|
|
Total
|
|
|
49,204
|
|
|
$
|
31,557
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
UAS
|
|
|
14,091
|
|
|
$
|
9,271
|
|
PosiCharge
|
|
|
1,945
|
|
|
|
1,940
|
|
Energy Technology Center
|
|
|
801
|
|
|
|
775
|
|
Total
|
|
|
16,837
|
|
|
$
|
11,986
|
|
Research
and development
|
|
|
4,300
|
|
|
|
3,841
|
|
Selling,
general and administrative
|
|
|
7,726
|
|
|
|
6,132
|
|
Income
from operations
|
|
|
4,811
|
|
|
|
2,013
|
|
Interest
income
|
|
|
979
|
|
|
|
206
|
|
Income
before income taxes
|
|
$
|
5,790
|
|
|
$
|
2,219
|
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS
|
|
|
Three
Months Ended
|
|
|||||
|
|
July
28,
2007
|
July
29,
2006
|
|
||||
|
|
(Unaudited)
|
|
|||||
Revenue:
|
|
|
|
|
|
|
||
UAS
|
|
$
|
41,873
|
|
|
$
|
24,983
|
|
PosiCharge
|
|
|
5,358
|
|
|
|
4,943
|
|
Energy Technology Center
|
|
|
1,973
|
|
|
|
1,631
|
|
Total
|
|
|
49,204
|
|
|
$
|
31,557
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
UAS
|
|
$
|
14,091
|
|
|
$
|
9,271
|
|
PosiCharge
|
|
|
1,945
|
|
|
|
1,940
|
|
Energy Technology Center
|
|
|
801
|
|
|
|
775
|
|
Total
|
|
$
|
16,837
|
|
|
$
|
11,986
|
|
|
|
Three
Months Ended
|
|
|||||
|
|
July
28,
2007
|
July
29,
2006
|
|
||||
|
|
(Unaudited)
|
|
|||||
Net
cash used in operating activities
|
|
$
|
(6,293
|
)
|
|
$
|
(1,423
|
)
|
Net
cash provided by (used in) investing activities
|
|
$
|
14,755
|
|
|
$
|
(681
|
)
|
Net
cash provided by financing activities
|
|
$
|
240
|
|
|
$
|
194
|
|
Exhibit Number
|
Description
|
|
Amended
and Restated Business Loan Agreement, dated August 31, 2007, between
AeroVironment, Inc. and California Bank &
Trust.
|
||
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) of the Securities Exchange Act of 1934, as
amended.
|
||
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) of the Securities Exchange Act of 1934, as
amended.
|
||
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
Date:
September 6, 2007
|
AEROVIRONMENT,
INC.
|
|
By:
|
/s/
Timothy
E. Conver
|
|
Timothy
E. Conver
|
||
Chief
Executive Officer and President
|
||
(Principal
Executive Officer)
|
||
/s/
Stephen
C. Wright
|
||
Stephen
C. Wright
|
||
Chief
Financial Officer (Principal
|
||
Financial
and Accounting Officer)
|