AVAV AeroVironment Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 4, 2024

AEROVIRONMENT, INC.

(Exact name of registrant as specified in its charter)

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Registrant’s telephone number, including area code: (805) 520-8350

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241 18th Street South, Suite 415

Arlington, Virginia

(Former name or former address, if changed since last report.)

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 Securities registered pursuant to Section 12(b) of the Act:

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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Emerging growth company ☐  

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  

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Item 2.02.  Results of Operations and Financial Condition

On September 4, 2024, AeroVironment, Inc. (the “Company”) issued a press release announcing first quarter financial results for the period ended July 27, 2024, a copy of which is attached hereto as Exhibit 99.1.

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Item 7.01. Regulation FD Disclosure

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The information under Item 2.02 above is incorporated herein by reference.

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Attached as Exhibit 99.2 hereto is a presentation containing additional information regarding the Company’s first quarter fiscal 2025 financial results for the period ended July 27, 2024. A copy of the presentation is also available on the investor relations section of the Company’s website at https://investor.avinc.com/events-and-presentations. The information contained on the Company’s website is not incorporated by reference into, and does not form a part of, this Current Report on Form 8-K.

In addition to historic information, this report, including the exhibits, contains forward-looking statements regarding events, performance and financial trends. Various factors could affect future results and could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of those factors are identified in the exhibits, and in our periodic reports filed with the Securities and Exchange Commission.

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The information in this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Items 2.02 and 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of AeroVironment, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.  Financial Statements and Exhibits

(d)  Exhibits.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 99.1

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AeroVironment Announces Fiscal 2025 First Quarter Results

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ARLINGTON, VA, September 4, 2024 — AeroVironment, Inc. (“AeroVironment” or the “Company”) reported today financial results for the fiscal first quarter ended July 27, 2024.

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First Quarter Highlights:

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“AeroVironment has once again delivered excellent results, including record first-quarter revenue that’s 24% higher than the same period last fiscal year,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “Our Loitering Munition Systems segment continues to be the highest growth driver for the company posting first-quarter revenue, 68% higher than the same quarter last year.

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“With a growing pipeline and solid operating performance, AeroVironment is working toward achieving another record fiscal year, and we are confident that our success will carry forward into future years.”

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FISCAL 2025 FIRST QUARTER RESULTS

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Revenue for the first quarter of fiscal 2025 was $189.5 million, an increase of 24% as compared to $152.3 million for the first quarter of fiscal 2024, reflecting higher product sales of $40.0 million, partially offset by a decrease in service revenue of $2.9 million. From a segment standpoint, the year-over-year increase was due to revenue growth in Loitering Munitions Systems (“LMS”) of 68% and UnCrewed Systems (“UxS”) of 22%, partially offset by a decrease in MacCready Works (“MW”) of 24%.

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Gross margin for the first quarter of fiscal 2025 was $81.5 million, an increase of 24% as compared to $65.7 million for the first quarter of fiscal 2024, reflecting higher product gross margin of $16.1 million, partially offset by lower service margin of $0.3 million. As a percentage of revenue, gross margin remained consistent at 43%. Gross margin was negatively impacted by an increase of $1.3 million of intangible amortization expense and other related non-cash purchase accounting expenses.

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Income from operations for the first quarter of fiscal 2025 was $23.1 million as compared to $26.4 million for the first quarter of last fiscal year. The decrease year-over-year was due to an increase in selling, general and administrative (“SG&A”) expense of $10.0 million and an increase in research and development (“R&D”) expense of $9.1 million, partially offset by higher gross margin of $15.8 million.

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Other loss, net, for the first quarter of fiscal 2025 was $0.5 million, as compared to $3.1 million for the first quarter of last fiscal year. The decrease in other loss, net was primarily due to a decrease in net interest expense and a decrease in net unrealized losses on investment holdings.

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Provision for income taxes for the first quarter of fiscal 2025 was $1.5 million, as compared to $1.3 million for the first quarter of last fiscal year.

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Net income for the first quarter of fiscal 2025 was $21.2 million, or $0.75 per diluted share, as compared to $21.9 million, or $0.84 per diluted share, in the prior-year period, respectively.

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Non-GAAP adjusted EBITDA for the first quarter of fiscal 2025 was $37.2 million and non-GAAP earnings per diluted share were $0.89, as compared to $37.3 million and $1.00, respectively, for the first quarter of fiscal 2024.

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BACKLOG

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As of July 27, 2024, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $372.9 million, as compared to $400.2 million as of April 30, 2024. Funded backlog as of July 27, 2024 includes only initial funding for Switchblade 300 and 600s for the recently announced program wins such as the Low Altitude Stalking and Strike Ordnance or “LASSO” program, Organic Precision Fires-Light or “OPF-L” program, the Replicator Initiative, Ukraine Aid Initiative and our first Lithuanian order. Funded backlog does not include $128 million of initial funding under the recently announced IDIQ contract to deliver LMS systems for the U.S. Army’s Directed Requirement for Lethal Unmanned Systems with a contract ceiling value of $990 million. Additional funding for each of these programs is anticipated in our full year plan.

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FISCAL 2025 — OUTLOOK FOR THE FULL YEAR

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For fiscal year 2025, the Company continues to expect revenue of between $790 million and $820 million, net income of between $74 million and $83 million, Non-GAAP adjusted EBITDA of between $143 million and $153 million, earnings per diluted share of between $2.61 and $2.92 and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses and equity securities investments gains or losses, of between $3.18 and $3.49.

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The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, subject to certain risks and uncertainties, including certain assumptions with respect to our ability to efficiently and on a timely basis integrate acquisitions, obtain and retain government contracts, changes in the timing and/or amount of government spending, react to 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.

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CONFERENCE CALL AND PRESENTATION

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In conjunction with this release, AeroVironment, Inc. will host a conference call today, Wednesday, September 4, 2024, 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, vice president corporate development and investor relations, will host the call.

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Investors may access the call by registering via the following participant registration link up to ten minutes prior to the start time.

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Participant registration URL: https://register.vevent.com/register/BIabc39fbc6b534eb4aac7d5fda54c1d33

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Investors may also 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.

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A supplementary investor presentation for the first quarter fiscal year 2025 can be accessed at https://investor.avinc.com/events-and-presentations.

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Audio Replay

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An audio replay of the event will be archived on the Investor Relations section of the Company's website at http://investor.avinc.com.

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ABOUT AEROVIRONMENT, INC.

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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

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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.

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FORWARD-LOOKING STATEMENTS

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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.

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Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the impact of our ability to successfully close and integrate acquisitions into our operations and avoid disruptions from acquisition transactions that will harm our business; the recording of goodwill and other intangible assets as part of acquisitions that are subject to potential impairments in the future and any realization of such impairments; any actual 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, including uncertainties in classification, pricing or potentially burdensome imposed terms for certain types of government contracts; availability of U.S. government funding for defense procurement and R&D programs; our ability to win U.S. and international government R&D and procurement programs; changes in the timing and/or amount of government spending, including due to continuing resolutions; adverse impacts of a U.S. government shutdown; our reliance on limited relationships to fund our development of HAPS UAS; our ability to execute contracts for anticipated sales, perform under such contracts and other existing contracts and obtain new contracts; risks related to our international business, including compliance with export control laws; the extensive and increasing 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 and resulting misuse of our, our customers’ and/or our suppliers’ information and systems; failure to remain a market innovator, to create new market opportunities or to expand into new markets; our ability to increase production capacity to support anticipated growth; unexpected changes in significant operating expenses, including components and raw materials; failure to develop new products or integrate new technology into current products; any increase in litigation activity or unfavorable results in legal proceedings, including pending class actions; our ability to respond and adapt to legal, regulatory and government budgetary changes, including those resulting from the impact of pandemics and similar outbreaks; 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.

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NON-GAAP MEASURES

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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.

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– Financial Tables Follow –

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AeroVironment, Inc.

Consolidated Statements of Operations

(In thousands except share and per share data)

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AeroVironment, Inc.

Consolidated Balance Sheets

(In thousands except share data)

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AeroVironment, Inc.

Consolidated Statements of Cash Flows

(In thousands)

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AeroVironment, Inc.

Reportable Segment Results (Unaudited)

(In thousands)

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AeroVironment, Inc.

Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)

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Reconciliation of non-GAAP adjusted EBITDA (Unaudited)

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Reconciliation of Forecast Earnings per Diluted Share (Unaudited)

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Reconciliation of 2025 Forecast and Fiscal Year 2024 Actual Non-GAAP adjusted EBITDA (Unaudited)

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Statement Regarding Non-GAAP Measures

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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.

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Non-GAAP Adjusted Gross Margin

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Adjusted gross margin is defined as gross margin before intangible amortization and amortization of non-cash purchase accounting adjustments.

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Non-GAAP Earnings per Diluted Share

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We exclude the acquisition-related expenses, amortization of acquisition-related intangible assets, equity securities investments gains or losses, goodwill impairment 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.

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Adjusted EBITDA (Non-GAAP)

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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 non-cash items, including amortization of implementation of cloud computing arrangements, stock-based compensation, acquisition related expenses, equity method investment gains or losses, equity securities investments gains or losses, goodwill impairment 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.

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CONTACT

Jonah Teeter-Balin

+1 (805) 520-8350 x4278

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

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