Revenue during the quarter dropped 18.81 percent to $52.66 million from $64.87 million in the previous year period. Gross margin for the quarter contracted 288 basis points over the previous year period to 33.93 percent. Operating margin for the quarter stood at negative 7.84 percent as compared to a positive 6.06 percent for the previous year period.

Operating loss for the quarter was $4.13 million, compared with an operating income of $3.93 million in the previous year period.

"Strong second quarter order flow in our small UAS business increased funded backlog by 50 percent sequentially to $125 million, contributing to 97% visibility and confidence in achieving the midpoint of our expected revenue guidance range for the year," said Tim Conver, AeroVironment chairman and chief executive officer.

"We secured important new awards during the quarter, including a $22 million Marine Corps contract for their next generation family of small UAS and a $19 million contract for the DARPA Tern program to continue developing a large new unmanned aircraft system for the Navy. As planned, we also increased investments in three opportunity areas with long-term growth potential, namely, Tactical Missile Systems, Global Observer and Commercial UAS solutions. We remain well positioned for the year and for the long-term."

Cash Flow

Aerovironment has generated cash of $9.96 million from operating activities during the first half as against cash outgo of $9.67 million in the last year period.

The company has spent $11.62 million cash to meet investing activities during the first half as against cash inflow of $0.31 million in the last year period

Cash flow from financing activities was $1.03 million for the first six months, up 562.58 percent or $0.87 million, when compared with the last year period. It has raised net of $0.68 million by selling common stocks.

Cash and cash equivalents stood at $126.34 million as on Nov. 01, 2014, up 91.06 percent or $60.21 million from $66.13 million on Oct. 26, 2013.

Working Capital

Aerovironment has recorded an increase in the working capital over the last year. It stood at $268.33 million as at Nov. 01, 2014, up 15.43 percent or $35.87 million from $232.45 million on Oct. 26, 2013. Current ratio was at 7.21 as on Nov. 01, 2014, down from 7.98 on Oct. 26, 2013.

Cash conversion cycle (CCC) has decreased to 153 days for the quarter from 183 days for the last year period. Days sales outstanding were almost stable at 67 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 128 days for the quarter compared with 144 days for the previous year period. At the same time, days payable outstanding went up to 42 days for the quarter from 28 for the same period last year.