AeroVironment(US:AVAV)2021-03-10 03:52Financial Performance - The company reported third quarter revenue of $78.8 million, a 27% increase year-over-year from $61.9 million [6][17] - Earnings per diluted share were $0.01, up from a loss of $0.04 in the prior year, with non-GAAP earnings per diluted share at $0.14, an increase of $0.15 compared to the prior year [6][23] - Gross margin for the third quarter was $28.6 million or 36% of revenue, down from 38% in the prior year due to an unfavorable product mix [19] - For the first three quarters of fiscal 2021, revenue was $258.9 million, a 12% increase from $232.1 million in the same period last year [18] Business Line Performance - Small unmanned aircraft systems (UAS) represented 64% of total revenue, with a 37% increase year-over-year [12][17] - Tactical missile systems (TMS) accounted for 25% of revenue, showing a significant 148% increase from the previous year [17] - High-altitude pseudo-satellites (HAPS) represented 9% of revenue, with ongoing development and testing [15] Market Data - The international market for small UAS remains strong, contributing to a healthy pipeline despite travel restrictions due to COVID-19 [12] - The company has seen increased demand for ISR solutions from allied nations, particularly in regions where the U.S. military has reduced its presence [30] Company Strategy and Industry Competition - The company is executing a long-term growth strategy through transformative acquisitions, including Telerob, Arcturus UAV, and Progeny Systems Corporation's Intelligent Systems Group [7][9][10] - The acquisitions are expected to enhance the company's capabilities in unmanned systems and artificial intelligence, positioning it for future growth [11][33] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal year 2021 objectives, anticipating revenue between $400 million and $410 million [30][31] - The company expects adjusted EBITDA of $64 million to $69 million and earnings per diluted share of $0.76 to $0.96 for the fiscal year [31] - Preliminary expectations for fiscal year 2022 include revenue of $560 million to $580 million, reflecting strong growth potential [34] Other Important Information - The company reported a strong cash position of $384.3 million at the end of the third quarter, an increase of $66.6 million from the end of fiscal 2020 [25] - Funded backlog at the end of Q3 was $103.9 million, a decrease from the previous year, primarily due to delays caused by the pandemic [28] Q&A Session Summary Question: Insights on fiscal 2022 guidance and operations - Management indicated that the guidance for fiscal 2022 reflects strong demand and the positive impact of recent acquisitions, with a healthy pipeline of opportunities [39][40] Question: Impact of COVID-19 on international small UAS - Management acknowledged delays in contract timing due to COVID-19 but noted a robust pipeline of international opportunities for small UAS [45][46] Question: Competitive landscape for HAPS and patents - Management expressed confidence in the competitive position of the Sunglider and highlighted numerous patents that protect their technology [58][60] Question: Organic revenue growth in fiscal 2022 - Management stated that organic revenue growth would be quantified in future calls, emphasizing a healthy pipeline and strong positioning for long-term growth [66][70]