Leadership Shake-Up at AeroVironment: Meet the New CEO

AeroVironment is known for its drones -- like this RQ-11B Raven, immortalized in pseudo-WWII propaganda poster form. Image source: AeroVironment.

For nearly a quarter-century, Tim Conver has helmed drones and battery chargers conglomerate AeroVironment , but no more. On May 1, Conver will cede the CEO spot to current company Chief Operating Officer Wahid Nawabi.

What will this mean for the company and its investors?

We're huge in small airplanesWhile it's still the biggest name in small drones, AeroVironment's stock has come upon hard times lately. Last year, revenue at the company grew less than 3%, and profits plunged precipitously, falling nearly 80% to less than $3 million. Sales for the past 12 months remain 18% below their full-year peak, reached in 2012.

While you might assume that owes primarily to the decreased tempo of combat operations in Afghanistan (and consequent decreased demand for military drones), in fact, both sides of AeroVironment's business are experiencing a slowdown. According to data from S&P Global Market Intelligence, revenues from AeroVironment's flagship unmanned aircraft systems (UAS) division are down 19%. Revenue from the company's less-known efficient energy systems division (EES), though, are down 25% from the 2012 peak.

What's next?Speaking of EES, new AeroVironment CEO Wahid Nawabi hails from the "efficient energy" side of AeroVironment, having joined the company as senior VP for that division after being hired away from privately held fuel cell manufacturer Altergy Systems in 2011. In its press release describing the transition, AV head Conver (who will remain chairman even after vacating the CEO's chair) called Nawabi "an outstanding and proven leader" and one ready "to lead the next phase of AeroVironment's growth."

Nawabi says he sees growth opportunities in at least four areas, including unmanned aircraft systems for the military, tactical missile systems (kamikaze UAVs), UAVs for the civilian industry, and also in his own original department -- electric vehicle charging.

Will this growth materialize? While AeroVironment's EES division continues to struggle, UAS has shown at least some signs of life, growing sales year over year in each of the final quarters of last year. Work ongoing at the Federal Aviation Administration to expand the areas in which commercial drones can operate in the U.S. offers the prospect of further growth there. Meanwhile, Nawabi inherits a company amply supplied with cash (more than $200 million in the bank), free of debt, and at least marginally profitable.

In short, he's got all the tools that "an outstanding leader" should require to make a success of the venture. All that remains is to make use of them.

The article Leadership Shake-Up at AeroVironment: Meet the New CEO originally appeared on Fool.com.

Rich Smithdoes not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he's currently ranked No. 315 out of more than 75,000 rated members.The Motley Fool recommends AeroVironment. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.