Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Oct. 29, 2022 | Nov. 30, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | AEROVIRONMENT, INC. | |
Entity File Number | 001-33261 | |
Entity Central Index Key | 0001368622 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 29, 2022 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-2705790 | |
Amendment Flag | false | |
Trading Symbol | AVAV | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --04-30 | |
Entity Address, Address Line One | 241 18th Street South, Suite 415 | |
Entity Address, City or Town | Arlington | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22202 | |
City Area Code | 805 | |
Local Phone Number | 520-8350 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,157,316 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 101,417 | $ 77,231 |
Short-term investments | 24,716 | |
Accounts receivable, net of allowance for doubtful accounts of $74 at October 29, 2022 and $592 at April 30, 2022 | 31,664 | 60,170 |
Unbilled receivables and retentions (inclusive of related party unbilled receivables of $2,229 at April 30, 2022) | 92,457 | 104,194 |
Inventories, net | 109,810 | 90,629 |
Income taxes receivable | 8,940 | 442 |
Prepaid expenses and other current assets | 13,244 | 11,527 |
Total current assets | 357,532 | 368,909 |
Long-term investments | 22,462 | 15,433 |
Property and equipment, net | 52,415 | 62,296 |
Operating lease right-of-use assets | 25,580 | 26,769 |
Deferred income taxes | 8,098 | 7,290 |
Intangibles, net | 88,660 | 97,224 |
Goodwill | 334,963 | 334,347 |
Other assets | 1,972 | 1,932 |
Total assets | 891,682 | 914,200 |
Current liabilities: | ||
Accounts payable | 26,317 | 19,244 |
Wages and related accruals | 25,049 | 25,398 |
Customer advances | 7,074 | 8,968 |
Current portion of long-term debt | 10,000 | 10,000 |
Current operating lease liabilities | 7,564 | 6,819 |
Income taxes payable | 26 | 759 |
Other current liabilities | 27,824 | 30,203 |
Total current liabilities | 103,854 | 101,391 |
Long-term debt, net of current portion | 155,622 | 177,840 |
Non-current operating lease liabilities | 20,043 | 21,915 |
Other non-current liabilities | 748 | 768 |
Liability for uncertain tax positions | 1,450 | 1,450 |
Deferred income taxes | 2,482 | 2,626 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Authorized shares-10,000,000; none issued or outstanding at October 29, 2022 and April 30, 2022 | ||
Issued and outstanding shares-25,157,618 shares at October 29, 2022 and 24,951,287 shares at April 30, 2022 | 4 | 2 |
Additional paid-in capital | 283,789 | 267,248 |
Accumulated other comprehensive loss | (8,480) | (6,514) |
Retained earnings | 332,170 | 347,233 |
Total AeroVironment, Inc. stockholders' equity | 607,483 | 607,969 |
Noncontrolling interest | 241 | |
Total equity | 607,483 | 608,210 |
Total liabilities and stockholders' equity | $ 891,682 | $ 914,200 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 74 | $ 592 |
Due from Related Parties | $ 2,229 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, Authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, Authorized shares | 100,000,000 | 100,000,000 |
Common stock, Issued shares | 25,157,618 | 24,951,287 |
Common stock, outstanding shares | 25,157,618 | 24,951,287 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Revenue: | ||||
Revenue | $ 111,584 | $ 122,008 | $ 220,100 | $ 223,017 |
Cost of sales: | ||||
Cost of sales | 85,694 | 79,553 | 160,496 | 151,839 |
Gross margin: | ||||
Total gross margin | 25,890 | 42,455 | 59,604 | 71,178 |
Selling, general and administrative | 23,613 | 24,819 | 45,556 | 51,947 |
Research and development | 16,591 | 14,297 | 31,636 | 28,005 |
(Loss) income from operations | (14,314) | 3,339 | (17,588) | (8,774) |
Other (loss) income: | ||||
Interest expense, net | (2,309) | (1,379) | (3,912) | (2,654) |
Other income (expense), net | 810 | (10,048) | 404 | (10,394) |
Loss before income taxes | (15,813) | (8,088) | (21,096) | (21,822) |
Benefit from income taxes | (10,457) | (9,511) | (7,851) | (10,468) |
Equity method investment (loss) income, net of tax | (1,273) | 1,133 | (1,773) | (8) |
Net (loss) income | (6,629) | 2,556 | (15,018) | (11,362) |
Net income attributable to noncontrolling interest | 39 | 31 | 45 | 94 |
Net (loss) income attributable to AeroVironment, Inc. | $ (6,668) | $ 2,525 | $ (15,063) | $ (11,456) |
Net income (loss) per share attributable to AeroVironment | ||||
Net (loss) income per share attributable to AeroVironment, Inc.-Basic | $ (0.27) | $ 0.10 | $ (0.61) | $ (0.47) |
Net (loss) income per share attributable to AeroVironment, Inc.-Diluted | $ (0.27) | $ 0.10 | $ (0.61) | $ (0.47) |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 24,900,873 | 24,641,614 | 24,852,219 | 24,630,838 |
Diluted (in shares) | 24,900,873 | 24,885,870 | 24,852,219 | 24,630,838 |
Product sales | ||||
Revenue: | ||||
Revenue | $ 62,343 | $ 70,998 | $ 120,317 | $ 124,114 |
Cost of sales: | ||||
Cost of sales | 39,445 | 38,937 | 72,344 | 71,527 |
Gross margin: | ||||
Total gross margin | 22,898 | 32,061 | 47,973 | 52,587 |
Contract services | ||||
Revenue: | ||||
Revenue | 49,241 | 51,010 | 99,783 | 98,903 |
Cost of sales: | ||||
Cost of sales | 46,249 | 40,616 | 88,152 | 80,312 |
Gross margin: | ||||
Total gross margin | $ 2,992 | $ 10,394 | $ 11,631 | $ 18,591 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Oct. 30, 2021 | Oct. 30, 2021 | |
Condensed Consolidated Statements of (Loss) Income | ||
Related party revenue | $ 10,342 | $ 20,694 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||
Net (loss) income | $ (6,629) | $ 2,556 | $ (15,018) | $ (11,362) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $0 for the three and six months ended October 29, 2022 and October 30, 2021, respectively | 6 | 1 | 26 | (3) |
Change in foreign currency translation adjustments | (928) | (1,284) | (1,992) | (2,017) |
Total comprehensive (loss) income | (7,551) | 1,273 | (16,984) | (13,382) |
Net income attributable to noncontrolling interest | (39) | (31) | (45) | (94) |
Comprehensive (loss) income attributable to AeroVironment, Inc. | $ (7,590) | $ 1,242 | $ (17,029) | $ (13,476) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||
Unrealized (gain) loss on available-for-sale investments, deferred tax benefit | $ 0 | $ 0 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total AeroVironment, Inc. Equity | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interest | Total |
Balance at Apr. 30, 2021 | $ 612,093 | $ 2 | $ 260,327 | $ 351,421 | $ 343 | $ 14 | |
Balance, Beginning at Apr. 30, 2021 | $ 612,107 | ||||||
Balance (in shares) at Apr. 30, 2021 | 24,777,295 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (11,456) | (11,456) | (11,456) | ||||
Net income (loss) attributable to noncontrolling interest | 94 | (94) | |||||
Net Income (loss) including non-controlling interest | (11,362) | ||||||
Unrealized (loss) gain on investments | (3) | (3) | (3) | ||||
Foreign currency translation | (2,017) | (2,017) | (2,017) | ||||
Stock options exercised | 119 | 119 | 119 | ||||
Stock options exercised (in shares) | 4,000 | ||||||
Restricted stock awards (in shares) | 52,226 | ||||||
Restricted stock awards forfeited (in shares) | 15,751 | ||||||
Tax withholding payment related to net share settlement of equity awards | (1,176) | (1,176) | (1,176) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (11,941) | ||||||
Change in non-controlling interest | 224 | 224 | |||||
Stock-based compensation | 2,342 | 2,342 | 2,342 | ||||
Balance at Oct. 30, 2021 | 599,902 | $ 2 | 261,612 | 339,965 | (1,677) | 332 | |
Balance, Ending at Oct. 30, 2021 | 600,234 | ||||||
Balance (in shares) at Oct. 30, 2021 | 24,805,829 | ||||||
Balance at Jul. 31, 2021 | 598,240 | $ 2 | 261,192 | 337,440 | (394) | 77 | |
Balance, Beginning at Jul. 31, 2021 | 598,317 | ||||||
Balance (in shares) at Jul. 31, 2021 | 24,811,802 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | 2,525 | 2,525 | 31 | 2,525 | |||
Net income (loss) attributable to noncontrolling interest | (31) | ||||||
Net Income (loss) including non-controlling interest | 2,556 | ||||||
Unrealized (loss) gain on investments | 1 | 1 | 1 | ||||
Foreign currency translation | (1,284) | (1,284) | (1,284) | ||||
Restricted stock awards (in shares) | 3,638 | ||||||
Restricted stock awards forfeited (in shares) | (9,611) | ||||||
Change in non-controlling interest | 224 | 224 | |||||
Stock-based compensation | 420 | 420 | 420 | ||||
Balance at Oct. 30, 2021 | 599,902 | $ 2 | 261,612 | 339,965 | (1,677) | 332 | |
Balance, Ending at Oct. 30, 2021 | 600,234 | ||||||
Balance (in shares) at Oct. 30, 2021 | 24,805,829 | ||||||
Balance at Apr. 30, 2022 | 607,969 | $ 2 | 267,248 | 347,233 | (6,514) | 241 | 607,969 |
Balance, Beginning at Apr. 30, 2022 | 608,210 | ||||||
Balance (in shares) at Apr. 30, 2022 | 24,951,287 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (15,063) | (15,063) | (15,063) | ||||
Net income (loss) attributable to noncontrolling interest | 45 | (45) | |||||
Net Income (loss) including non-controlling interest | (15,018) | ||||||
Unrealized (loss) gain on investments | 26 | 26 | 26 | ||||
Foreign currency translation | (1,992) | (1,992) | (1,992) | ||||
Stock options exercised | 682 | 682 | 682 | ||||
Stock options exercised (in shares) | 25,000 | ||||||
Restricted stock awards (in shares) | 75,357 | ||||||
Restricted stock awards forfeited (in shares) | 8,744 | ||||||
Tax withholding payment related to net share settlement of equity awards | (853) | (853) | (853) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (10,723) | ||||||
Shares issued, net of issuance costs | 12,312 | $ 2 | 12,310 | 12,312 | |||
Shares issued, net of issuance costs (in shares) | 125,441 | ||||||
Deconsolidation of previously controlled subsidiary | (286) | (286) | |||||
Stock-based compensation | 4,402 | 4,402 | 4,402 | ||||
Balance at Oct. 29, 2022 | 607,483 | $ 4 | 283,789 | 332,170 | (8,480) | 607,483 | |
Balance, Ending at Oct. 29, 2022 | 607,483 | ||||||
Balance (in shares) at Oct. 29, 2022 | 25,157,618 | ||||||
Balance at Jul. 30, 2022 | 599,923 | $ 2 | 268,641 | 338,838 | (7,558) | 247 | |
Balance, Beginning at Jul. 30, 2022 | 600,170 | ||||||
Balance (in shares) at Jul. 30, 2022 | 24,990,590 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (6,668) | (6,668) | 39 | (6,668) | |||
Net income (loss) attributable to noncontrolling interest | (39) | ||||||
Net Income (loss) including non-controlling interest | (6,629) | ||||||
Unrealized (loss) gain on investments | 6 | 6 | 6 | ||||
Foreign currency translation | (928) | (928) | (928) | ||||
Stock options exercised | 682 | 682 | 682 | ||||
Stock options exercised (in shares) | 25,000 | ||||||
Restricted stock awards (in shares) | 19,540 | ||||||
Restricted stock awards forfeited (in shares) | (2,606) | ||||||
Tax withholding payment related to net share settlement of equity awards | (29) | (29) | (29) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (347) | ||||||
Shares issued, net of issuance costs | 12,312 | $ 2 | 12,310 | 12,312 | |||
Shares issued, net of issuance costs (in shares) | 125,441 | ||||||
Deconsolidation of previously controlled subsidiary | $ (286) | (286) | |||||
Stock-based compensation | 2,185 | 2,185 | 2,185 | ||||
Balance at Oct. 29, 2022 | $ 607,483 | $ 4 | $ 283,789 | $ 332,170 | $ (8,480) | 607,483 | |
Balance, Ending at Oct. 29, 2022 | $ 607,483 | ||||||
Balance (in shares) at Oct. 29, 2022 | 25,157,618 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Operating activities | ||
Net loss | $ (15,018) | $ (11,362) |
Adjustments to reconcile net loss from operations to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 32,275 | 30,019 |
Loss (income) from equity method investments | 1,773 | (520) |
Loss on deconsolidation of previously controlled subsidiary | 189 | |
Amortization of debt issuance costs | 422 | 258 |
Provision for doubtful accounts | 19 | (35) |
Other non-cash expense, net | 565 | 157 |
Non-cash lease expense | 3,775 | 3,358 |
(Gain) loss on foreign currency transactions | (59) | 30 |
Unrealized gain on available-for-sale equity securities, net | (928) | |
Deferred income taxes | (808) | (840) |
Stock-based compensation | 4,402 | 2,342 |
Loss on disposal of property and equipment | 825 | 3,036 |
Amortization of debt securities | 125 | 113 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 28,012 | 37,134 |
Unbilled receivables and retentions | 11,696 | (46,619) |
Inventories | (23,836) | (10,075) |
Income taxes receivable | (8,539) | (10,667) |
Prepaid expenses and other assets | (1,117) | 272 |
Accounts payable | 6,823 | (3,587) |
Other liabilities | (8,664) | 3,642 |
Net cash provided by (used in) operating activities | 31,932 | (3,344) |
Investing activities | ||
Acquisition of property and equipment | (7,587) | (13,147) |
Equity method investments | (2,774) | (6,245) |
Equity security investments | (5,100) | |
Business acquisitions, net of cash acquired | (5,105) | (46,150) |
Proceeds from deconsolidation of previously controlled subsidiary, net of cash deconsolidated | (635) | |
Redemptions of available-for-sale investments | 25,945 | 30,531 |
Purchases of available-for-sale investments | (1,326) | |
Net cash provided by (used in) investing activities | 3,418 | (34,787) |
Financing activities | ||
Principal payments of term loan | (22,500) | (5,000) |
Holdback and retention payments for business acquisition | (5,991) | |
Proceeds from shares issued, net of issuance costs | 11,778 | |
Tax withholding payment related to net settlement of equity awards | (853) | (1,176) |
Exercise of stock options | 682 | 119 |
Other | (14) | (16) |
Net cash used in financing activities | (10,907) | (12,064) |
Effects of currency translation on cash and cash equivalents | (257) | (275) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 24,186 | (50,470) |
Cash, cash equivalents and restricted cash at beginning of period | 77,231 | 157,063 |
Cash, cash equivalents and restricted cash at end of period | 101,417 | 106,593 |
Cash paid, net during the period for: | ||
Income taxes | 718 | 1,923 |
Interest | 3,398 | 2,283 |
Non-cash activities | ||
Unrealized (gain) loss on available-for-sale investments, net of deferred tax expense of $0 for the six months ended October 29, 2022 and October 30, 2021, respectively | (26) | 3 |
Change in foreign currency translation adjustments | (1,992) | (2,017) |
Issuances of inventory to property and equipment, ISR in-service assets | 4,085 | 12,472 |
Acquisitions of property and equipment included in accounts payable | $ 810 | $ 415 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Condensed Consolidated Statements of Cash Flows | ||
Unrealized (gain) loss on available-for-sale investments, deferred tax benefit | $ 0 | $ 0 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Oct. 29, 2022 | |
Organization and Significant Accounting Policies | |
Organization and Significant Accounting Policies | AeroVironment, Inc. Notes to Condensed Consolidated Financia l Statements (Unaudited) 1. Organization and Significant Accounting Policies Organization AeroVironment, Inc., a Delaware corporation (the “Company”), is engaged in the design, development, production, delivery and support of a technologically advanced portfolio of intelligent, multi-domain robotic systems and related services for government agencies and businesses. AeroVironment, Inc. supplies unmanned aircraft systems (“UAS”), tactical missile systems (“TMS”), unmanned ground vehicles (“UGV”) and related services primarily to organizations within the U.S. Department of Defense (“DoD”) and to international allied governments. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements have been included. The results of operations for the six months ended October 29, 2022 are not necessarily indicative of the results for the full year ending April 30, 2023. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2022, included in the Company’s Annual Report on Form 10-K. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, including estimates of anticipated contract costs and revenue utilized in the revenue recognition process, that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s unaudited condensed consolidated financial statements include the assets, liabilities and operating results of wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. On May 3, 2021, the Company closed its acquisition of Telerob Gesellschaft für Fernhantierungstechnik mbH, a German company based in Ostfildern (near Stuttgart), Germany (“Telerob GmbH”), including Telerob GmbH’s wholly-owned subsidiary, Telerob USA, Inc. (“Telerob USA,” and collectively with Telerob GmbH, “Telerob”) pursuant to its previously announced Share Purchase Agreement (the “Telerob Purchase Agreement”) with Unmanned Systems Investments GmbH, a German limited liability company incorporated under the laws of Germany (the “Telerob Seller”), and each of the unit holders of the Seller, to purchase 100% of the issued and outstanding shares of Telerob Seller’s wholly-owned subsidiary Telerob GmbH (the “Telerob Acquisition”). The assets, liabilities and operating results of Telerob GmbH have been included in the Company’s unaudited condensed consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun Savunma Sanayi ve Havacilik Anonim Sirketi (“Toygun”) whereby the Company sold 35% of the common shares of the Company’s Turkish joint venture, Altoy Savunma Sanayi ve Havacilik Anonim Sirketi (“Altoy”), to Toygun. On October 14, 2022, the Company sold an additional 35% of the common shares of Altoy to Toygun. As a result of the share sales, the Company decreased its interest in Altoy from 85% to 15% and has determined that it no longer controls Altoy. Therefore, the Company no longer consolidates Altoy in the Company’s unaudited condensed consolidated financial statements. As the Company has the ability to exercise significant influence over the operating and financial policies of Altoy, the Company’s investment will now be accounted for as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investments, net of tax. Refer to Note 6—Equity Method Investments for further details. On August 17, 2022, the Company closed its acquisition of Planck Aerosystems, Inc. (“Planck”) pursuant to the purchase agreement, and post-acquisition, Planck is incorporated into the medium UAS (“MUAS”) segment. The assets, liabilities and operating results of Planck have been included in the Company’s unaudited condensed consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. Recently Adopted Accounting Standards In October 2021, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers Revenue Recognition The Company’s revenue is generated pursuant to written contractual arrangements to design, develop, manufacture and/or modify complex products and to provide related engineering, technical and other services according to the specifications of the customers. These contracts may be firm fixed price (“FFP”), cost plus fixed fee (“CPFF”), or time and materials (“T&M”). The Company considers all such contracts to be within the scope of ASC 606. Performance Obligations A performance obligation is a promise in a contract to transfer distinct goods or services to a customer, and it is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when each performance obligation under the terms of a contract is satisfied. Revenue is measured at the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its observable standalone selling price for products and services. When the standalone selling price is not directly observable, the Company uses its best estimate of the standalone selling price of each distinct good or service in the contract using the cost plus margin approach. This approach estimates the Company’s expected costs of satisfying the performance obligation and then adds an appropriate margin for that distinct good or service. Contract modifications are routine in the performance of the Company’s contracts. In most instances, contract modifications are for additional goods and/or services that are distinct and, therefore, accounted for as new contracts. The Company’s performance obligations are satisfied over time or at a point in time. Performance obligations are satisfied over time if the customer receives the benefits as the Company performs, if the customer controls the asset as it is being developed or produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment for the Company’s costs incurred to date plus a reasonable margin. The contractual right to payment is generally supported by termination for convenience clauses that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit, and take control of any work in process. Revenue for TMS product deliveries and Customer-Funded Research and Development contracts is recognized over time as costs are incurred. Contract services revenue is composed of revenue recognized on contracts for the provision of services, including repairs and maintenance, training, engineering design, development and prototyping activities, and technical support services. Contract services revenue is recognized over time as services are rendered. Typically, revenue is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract services revenue, including revenue from intelligence, surveillance, and reconnaissance (“ISR”) services, is recognized over time as services are rendered. In accordance with ASC 606, the Company elected the right to invoice practical expedient in which if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, such as flight hours for ISR services, the entity may recognize revenue in the amount to which the entity has a right to invoice. Training services are recognized over time using an output method based on days of training completed. For performance obligations satisfied over time, revenue is generally recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with, and thereby best depict, transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. For performance obligations which are not satisfied over time per the aforementioned criteria above, revenue is recognized at the point in time in which each performance obligation is fully satisfied. The Company’s small UAS, MUAS and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS, MUAS and UGV systems and spare parts, respectively. Revenue is recognized at the point in time when control transfers to the customer, which generally occurs when title and risk of loss have passed to the customer. Performance obligations satisfied over time accounted for 65% and 63% of revenue during the three and six months ended October 29, 2022, respectively. Performance obligations satisfied over time accounted for 51% and 55% of revenue during the three and six months ended October 30, 2021, respectively. Performance obligations satisfied at a point in time accounted for 35% and 37% of revenue during the three and six months ended October 29, 2022, respectively. Performance obligations satisfied at a point in time accounted for 49% and 45% of revenue during the three and six months ended October 30, 2021, respectively. On October 29, 2022, the Company had approximately $293,147,000 of remaining performance obligations under fully funded contracts with its customers, which the Company also refers to as funded backlog. The Company currently expects to recognize approximately 58% of the remaining performance obligations as revenue in fiscal 2023 2024 The Company collects sales, value added, and other taxes concurrent with revenue producing activities, which are excluded from revenue when they are both imposed on a specific transaction and collected from a customer. Contract Estimates Accounting for contracts and programs primarily with a duration of less than six months involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, the Company estimates the total expected costs to complete the contract and recognizes revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. The nature of the Company’s contracts gives rise to several types of variable consideration, including penalty fees and incentive awards generally for late delivery and early delivery, respectively. The Company generally estimates such variable consideration as the most likely amount. In addition, the Company includes the estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the related uncertainty is resolved. These estimates are based on historical award experience, anticipated performance and the Company’s best judgment at the time. Based on experience in estimating these amounts, they are included in the transaction price of the Company’s contracts and the associated remaining performance obligations. As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company regularly reviews and updates its contract-related estimates. Changes in cumulative revenue estimates, due to changes in the estimated transaction price or cost estimates, are recorded using a cumulative catch-up adjustment in the period identified for contracts with performance obligations recognized over time. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the quarter it is identified, and it is recorded in other current liabilities. During the three months ended October 29, 2022, the Company recognized forward loss reserves on two MUAS ISR contracts totaling $1,952,000 related to unfavorable changes in the estimated costs to complete the contracts. The company recorded the forward loss reserves as the total estimated costs to complete the contracts are in excess of the total remaining consideration of the contracts. The aggregate impact of the change in estimate decreased net income by $1,500,000 and diluted loss per share by $0.06. The impact of adjustments in contract estimates on the Company’s operating earnings can be reflected in either operating costs and expenses, or revenue. The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was not significant for the three or six month periods ended October 29, 2022 nor the three or six month period ended October 30, 2021. During the three months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete a TMS variant contract. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of approximately $1,332,000. During the six months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete two TMS variant contracts. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $2,560,000. No adjustment on any one contract was material to the Company’s unaudited condensed consolidated financial statements for the three or six month periods ended October 30, 2021. Revenue by Category The following tables present the Company’s revenue disaggregated by major product line, contract type, customer category and geographic location (in thousands): Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by segment 2022 2021 2022 2021 Small UAS $ 26,681 $ 54,714 $ 69,937 $ 94,638 TMS 31,101 18,418 54,113 37,594 MUAS 27,281 26,525 46,542 48,904 HAPS 9,066 10,342 19,281 20,694 All Other 17,455 12,009 30,227 21,187 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by contract type 2022 2021 2022 2021 FFP $ 85,236 $ 98,393 $ 166,065 $ 179,159 CPFF 25,013 21,594 51,468 40,711 T&M 1,335 2,021 2,567 3,147 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with FFP contracts. However, these types of contracts generally offer additional profits when the Company completes the work for less than originally estimated. CPFF contracts generally subject the Company to lower risk. Accordingly, the associated base fees are usually lower than fees on FFP contracts. Under T&M contracts, the Company’s profit may vary if actual labor hour rates vary significantly from the negotiated rates. Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by customer category 2022 2021 2022 2021 U.S. government $ 84,165 $ 72,076 $ 151,880 $ 143,151 Non-U.S. government 27,419 49,932 68,220 79,866 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by geographic location 2022 2021 2022 2021 Domestic $ 67,657 $ 68,663 $ 117,760 $ 137,051 International 43,927 53,345 102,340 85,966 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Contract Balances The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits on the condensed consolidated balance sheet. In the Company’s services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in unbilled receivables and retentions on the condensed consolidated balance sheet. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities recorded in customer advances on the condensed consolidated balance sheet. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the condensed consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. For the Company’s product revenue, the Company generally receives cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. Changes in the contract asset and liability balances during the six month period ended October 29, 2022 were not materially impacted by any other factors. For the Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration. Revenue recognized for the three and six month periods ended October 29, 2022 that was included in contract liability balances as of April 30, 2022 was $1,080,000 and $3,004,000, respectively, and revenue recognized for the three and six month periods ended October 30, 2021 that was included in contract liability balances as of April 30, 2021 was $580,000 and $889,000, respectively. Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. As of October 29, 2022, the Company’s CODM, the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the allocation for research and development (“R&D”). Accordingly, the Company identifies four reportable segments. Refer to Note 20—Segments for further details. Investments The Company’s investments are accounted for as available-for-sale and are reported at fair value. Unrealized gains and losses for debt securities are excluded from earnings and reported as a separate component of stockholders’ equity, net of deferred income taxes for available-for-sale investments. Gains and losses realized on the disposition of investment securities are determined on the specific identification basis and credited or charged to income. Investments in equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income, net. Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. Fair Values of Financial Instruments Fair values of cash and cash equivalents, accounts receivable, unbilled receivables and retentions, and accounts payable approximate cost due to the short period of time to maturity. Government Contracts Payments to the Company on government CPFF or T&M contracts are based on provisional, or estimated indirect rates, which are subject to an annual audit by the Defense Contract Audit Agency (“DCAA”). The cost audits result in the negotiation and determination of the final indirect cost rates that the Company may use for the period(s) audited. The final rates, if different from the provisional rates, may create an additional receivable or liability for the Company for CPFF and T&M contracts. For example, during the course of its audits, the DCAA may question the Company’s incurred costs, and if the DCAA believes the Company has accounted for such costs in a manner inconsistent with the requirements under Federal Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs. Historically, the Company has not experienced material disallowed costs as a result of government audits. However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future. The Company’s revenue recognition policy calls for revenue recognized on all cost reimbursable government contracts to be recorded at actual rates unless collectability is not reasonably assured. At October 29, 2022 and April 30, 2022, the Company had no reserve for incurred cost claim audits. (Loss) Earnings Per Share Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding, excluding shares of unvested restricted stock. The reconciliation of basic to diluted shares is as follows (in thousands except share data): Three Months Ended Six Months Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Net (loss) income attributable to AeroVironment, Inc. $ (6,668) $ 2,525 $ (15,063) $ (11,456) Denominator for basic (loss) earnings per share: Weighted average common shares 24,900,873 24,641,614 24,852,219 24,630,838 Dilutive effect of employee stock options, restricted stock and restricted stock units — 244,256 — — Denominator for diluted (loss) earnings per share 24,900,873 24,885,870 24,852,219 24,630,838 Due to the net loss for the three and six months ended October 29, 2022 and for the six months ended October 30, 2021, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive. Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 148,196 and 156,625 for the three months and six months ended October 29, 2022, respectively. Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 4,742 and 266,077 for the three and six months ended October 30, 2021, respectively. Recently Issued Accounting Standards No recently issued accounting standards expected to impact the Company. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Oct. 29, 2022 | |
Discontinued Operations. | |
Discontinued Operations | 2. Discontinued Operations On June 29, 2018, the Company completed the sale of substantially all of the assets and related liabilities of its efficient energy systems business segment (the “EES Business”) to Webasto Charging Systems, Inc. (“Webasto”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) between Webasto and the Company. On February 22, 2019, Webasto filed a lawsuit, which was amended in April 2019, alleging several claims against the Company for breach of contract, indemnity, and bad faith, including allegations regarding inaccuracy of certain diligence disclosures and failure to provide certain consents to contract assignments, and related to a previously announced product recall. Webasto sought to recover the costs of the recall and other damages totaling a minimum of $6,500,000 in addition to attorneys’ fees, costs, and punitive damages. On August 16, 2019, the Company filed a counterclaim against Webasto seeking payment of $6,500,000 in additional cash consideration due under the Purchase Agreement (the “Holdback”) and declaratory relief regarding Webasto’s cancellation of an assigned contract. Webasto again amended the complaint in May 2021 to include additional claims. On June 2, 2021, the Company filed an answer to Webasto’s second amended complaint filed in May 2021. In order to avoid the future cost, expense, and distraction of continued litigation, the Company engaged in settlement negotiations with Webasto in May 2021. While the negotiations did not result in a settlement of any of the Company’s or Webasto’s claims at such time, as a result of the settlement negotiations, the Company established a litigation reserve, which reflected the scope of a rejected offer intended to communicate the Company’s serious and good faith intention to attempt to reach a settlement for the stated purposes. The offer did not reflect the Company’s view of the merits of the claims made; however, as a result of the preparation of the good faith offer and the Company’s willingness to pursue settlement for that amount, the Company recorded litigation reserve expenses in the amount of $9,300,000 during the year ended April 30, 2021 recorded in other expense on the condensed consolidated statements of operations and in other current liabilities on the condensed consolidated balance sheet. On December 2, 2021, the Company agreed in principle, subject to formal documentation with Webasto, to settle all existing claims related to the sale of its former EES business for $20,000,000 and Webasto keeping the Holdback. As a result of the agreement in principle to settle the litigation, the Company recorded additional litigation reserve expenses in the amount of $10,000,000 during the three months ended October 30, 2021 in other expense on the condensed consolidated statements of operations and in other current liabilities on the condensed consolidated balance sheet. The Company executed a written settlement agreement with Webasto effective December 16, 2021 to officially and fully settle all claims in the lawsuit. Under the terms of the written settlement agreement, the Company’s payment of the settlement amount of $20,000,000 will occur over a 24 month period from the effective date of the settlement agreement and Webasto will retain the Holdback. As of October 29, 2022, $10,000,000 of the settlement has been paid. |
Investments
Investments | 6 Months Ended |
Oct. 29, 2022 | |
Investments | |
Investments | 3. Investments Investments consist of the following (in thousands): October 29, April 30, 2022 2022 Short-term investments: Available-for-sale securities: Municipal securities — 19,725 U.S. government securities — 4,991 Total short-term investments $ — $ 24,716 Long-term investments: Available-for-sale securities: Equity securities 6,028 — Total long-term available-for-sale securities investments 6,028 — Equity method investments Investments in limited partnership funds 16,434 15,433 Total equity method investments 16,434 15,433 Total long-term investments $ 22,462 $ 15,433 Available-For-Sale Securities Debt Securities As of April 30, 2022, the balance of available-for-sale debt securities consisted of state and local government municipal securities, U.S. government securities and U.S. government agency securities. Interest earned from these investments is recorded in interest expense, net. Realized gains on sales of these investments on the basis of specific identification are recorded in interest expense, net. As of October 29, 2022, the Company held no available-for-sale debt securities. The following table is a summary of the activity related to the available-for-sale debt securities recorded in short-term investments as of April 30, 2022, respectively (in thousands): April 30, 2022 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Municipal securities $ 19,756 $ — $ (31) $ 19,725 U.S. government securities 4,995 — (4) 4,991 Total available-for-sale debt securities $ 24,751 $ — $ (35) $ 24,716 Equity Securities Equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income (expense), net. Three Months Six Months Ended Ended October 29, October 29, 2022 2022 Net gains recognized during the period on equity securities $ 928 $ 928 Less: Net gains recognized during the period on equity securities sold during the period — — Unrealized gains recognized during the period on equity securities still held at the reporting date $ 928 $ 928 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Oct. 29, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows: ● ● ● The Company’s financial assets measured at fair value on a recurring basis at October 29, 2022, were as follows (in thousands): Fair Value Measurement Using Significant Quoted prices in other Significant active markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Total Available-for-sale securities $ — $ — $ — $ — Equity securities 5,728 — — 5,728 Warrants — 300 — 300 Contingently returnable consideration — — 23 23 Total $ 5,728 $ 300 $ 23 $ 6,051 The Company’s financial liabilities measured at fair value on a recurring basis at October 29, 2022, were as follows (in thousands): Fair Value Measurement Using Significant Quoted prices in other Significant active markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Total Contingent consideration $ — $ — $ 1,485 $ 1,485 Total $ — $ — $ 1,485 $ 1,485 The Company’s financial assets measured at fair value on a recurring basis at April 30, 2022, were as follows (in thousands): Fair Value Measurement Using Significant Quoted prices in other Significant active markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Total Available-for-sale securities $ — $ 24,716 $ — $ 24,716 Contingently returnable consideration — — 143 143 Total $ — $ 24,716 $ 143 $ 24,859 The Company’s financial liabilities measured at fair value on a recurring basis at April 30, 2022, were as follows (in thousands): Fair Value Measurement Using Significant Quoted prices in other Significant active markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Total Contingent consideration $ — $ — $ 1,084 $ 1,084 Total $ — $ — $ 1,084 $ 1,084 The following table provides a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Fair Value Fair Value Measurements Using Measurements Using Significant Significant Unobservable Inputs Unobservable Inputs Assets Liabilities Description (Level 3) (Level 3) Balance at May 1, 2022 $ 143 $ 1,084 Business acquisition — — Transfers to Level 3 — — Total fair value measurement adjustments (realized or unrealized) Included in selling, general and administrative (120) 401 Settlements — — Balance at October 29, 2022 $ 23 $ 1,485 The amount of total (gains) or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held at October 29, 2022 $ — $ — Pursuant to the Intelligent Systems Group business segment (“ISG”) Purchase Agreement with Progeny Systems Corporation (the “ISG Seller”), the ISG Sellers may receive up to a maximum of $6,000,000 in additional cash consideration (“contingent consideration”), if certain revenue targets are achieved during the three years following closing. The contingent consideration was valued using a Black-Scholes option-pricing model. The analysis considered, among other items, contractual terms of the ISG Purchase Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue targets required for payment of the contingent consideration will be achieved. During the fiscal year ended April 30, 2022, the targets for the first and second year were achieved, and the related consideration of $2,000,000 for the first target was released from an escrow account that is not controlled by the Company and therefore not recorded on the condensed consolidated balance sheet. During the three months ended July 30, 2022, the related consideration of $2,000,000 for the second target was released from an escrow account that is not controlled by the Company and therefore not recorded on the condensed consolidated balance sheet. The fair value of the contingently returnable consideration is equal to the difference between the maximum value of the contingent consideration and the fair value of the contingent consideration and is recorded in other assets on the condensed consolidated balance sheet. Pursuant to the Telerob Purchase Agreement, the Telerob Sellers may receive up to a maximum of €6,000,000 (approximately $7,272,000) in additional cash consideration if specific revenue and contract award targets for Telerob are achieved during the 36 month period after closing. The contingent consideration was valued using a Black-Scholes option-pricing model. The analysis considered, among other items, contractual terms of the Telerob Purchase Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue and contract award targets required for payment of the contingent consideration will be achieved. The fair value of the contingent consideration is recorded in other current liabilities on the condensed consolidated balance sheet. The first year earnout of €2,000,000 (approximately $2,424,000) was not achieved. On September 12, 2022, the Company invested $5,000,000 and acquired 500,000 shares and 500,000 privately placed, redeemable warrants of Amprius Technologies, Inc. The privately placed, redeemable warrants have an exercise price of $12.50 and redemption price of $20.00. The Company measures the fair value of the privately placed, redeemable warrants using the quoted market price of the public warrants which have an exercise price of $11.50 and a redemption price of $18.00 and classifies the warrants as a level 2 fair value measurement. On September 9, 2022, the Company acquired 10,000 shares of Nauticus Robotics, Inc. for $100,000. |
Inventories, net
Inventories, net | 6 Months Ended |
Oct. 29, 2022 | |
Inventories, net | |
Inventories, net | 5. Inventories, net Inventories consist of the following (in thousands): October 29, April 30, 2022 2022 Raw materials $ 50,848 $ 42,310 Work in process 30,738 28,034 Finished goods 43,062 32,619 Inventories, gross 124,648 102,963 Reserve for inventory excess and obsolescence (14,838) (12,334) Inventories, net $ 109,810 $ 90,629 |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Oct. 29, 2022 | |
Investments in Companies Accounted for Using the Equity Method | |
Equity Method Investments | 6. Equity Method Investments Investments in Limited Partnership Funds In July 2019, the Company made its initial capital contribution to a limited partnership fund focusing on highly relevant technologies and start-up companies serving defense and industrial markets. Under the terms of the limited partnership agreement, the Company contributed $10,000,000 during the fiscal years ended April 30, 2021 and 2022, and there were no further contribution commitments to this fund as of April 30, 2022. In March 2022, the Company entered into a limited partnership agreement with a second limited partnership fund also focusing on highly relevant technologies and start-up companies serving defense and industrial markets. Under the terms of the limited partnership agreement, the Company is committed to contributions totaling $20,000,000 over an expected five year period. During the three months ended July 30, 2022, the Company made its initial contribution of $2,774,000. Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $17,226,000 to the fund. The Company accounts for investments in limited partnerships as equity method investments as the Company is deemed to have influence when it holds more than a minor interest. For the three and six months ended October 29, 2022, the Company recorded its ownership percentage of the net loss of the limited partnership, or $(1,273,000) and $(1,773,000), respectively, in equity method investment loss, net of $0 tax in the unaudited condensed consolidated statements of operations, respectively. For the three and six months ended October 30, 2021, the Company recorded its ownership percentage of the net gain of the limited partnership, or $1,852,000 and $2,365,000, respectively, net of $529,000 of tax expense, respectively, in equity method investment loss, net of tax in the unaudited condensed consolidated statements of operations. At October 29, 2022 and April 30, 2022, the carrying value of the investment in the limited partnership of $16,434,000 and $15,433,000, respectively, was recorded in long-term investments on the unaudited condensed consolidated balance sheet. Investment in Altoy On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun whereby the Company sold 35% of the common shares of Altoy to Toygun. On October 14, 2022, the company sold an additional 35% of the common shares of Altoy to Toygun. As a result of the sales, the Company decreased its interest in Altoy from 85% to 15%. The Company no longer controls Altoy, and therefore, has deconsolidated Altoy in the Company’s condensed consolidated financial statements. The Company maintains significant influence, accounts for its investment in Altoy as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investments, net of tax. For the three and six months ended October 29, 2022, the Company recorded $0 for its ownership percentage of the net loss of the limited partnership in equity method investment loss in the unaudited condensed consolidated statements of operations. At October 29, 2022, the carrying value of the investment in Altoy of $96,000 was recorded in other assets on the unaudited condensed consolidated balance sheet. Investment in HAPSMobile Inc. In December 2017, the Company and SoftBank Corp. (“Softbank”) formed a joint venture, HAPSMobile Inc. (“HAPSMobile”), which is a Japanese corporation. Concurrent with the formation of HAPSMobile, the Company executed a Design and Development Agreement (the “DDA”) with HAPSMobile. In connection with the formation of the joint venture on December 27, 2017, the Company initially purchased shares of HAPSMobile representing a 5% ownership. On December 4, 2019, the Company purchased additional shares of HAPSMobile to increase its ownership stake to approximately 7%. In March 2022, the Company sold its 7% equity interest in HAPSMobile to SoftBank, for 808,008,000 yen ($6,497,000) and a gain was recorded in sale of ownership in HAPSMobile Inc. joint venture. Following the sale, SoftBank owns 100% of HAPSMobile, and, therefore, the Company no longer applies the equity method of accounting. On May 29, 2021, the Company entered into an amendment to the DDA with HAPSMobile. The parties agreed to the amendment in anticipation of the Company and SoftBank entering into a Master Design and Development Agreement (“MDDA”) with each other to continue the design and development of the Solar High Altitude Pseudo-Satellite (“Solar HAPS”) aircraft developed under the DDA. On May 29, 2021, the Company and SoftBank entered into a MDDA to continue the development of Solar HAPS. Pursuant to the MDDA, which has a five-year term, SoftBank will issue orders to the Company for the Company to perform design and development services and produce deliverables as specified in the applicable order(s). Upon the execution of the MDDA, SoftBank issued to the Company, and the Company accepted, the first order under the MDDA which has a maximum value of approximately $51,200,000. Concurrent with the execution of the MDDA, each of SoftBank and the Company agreed to lend HAPSMobile loans which are convertible into shares of HAPSMobile under certain conditions, and to cooperate with each other to explore restructuring and financing options for HAPSMobile to continue the development of Solar HAPS. The Company committed to lend 500,000,000 yen. On June 7, 2021 the Company funded 130,000,000 yen ($1,195,000) of the loan agreement. On August 13, 2021, the Company made the second payment of the loan agreement in the amount of 180,000,000 yen ($1,638,000). On October 29, 2021, the Company made the final payment under the loan agreement in the amount of 190,000,000 yen ($1,674,000). On March 1, 2022, HAPSMobile repaid the Company the loan in full plus accrued interest in the amount of 503,832,000 yen ($4,345,000). The repayment resulted in equity method income during the fiscal year ended April 30, 2022 up to the extent of the previously recognized equity method losses associate with the loan. Prior to the sale of the equity interest, the Company had the ability to exercise significant influence over the operating and financial policies of HAPSMobile pursuant to the applicable joint venture agreement and related organizational documents, and therefore, the Company’s investment was accounted for as an equity method investment. For the three and six months ended October 30, 2021, the Company recorded its proportionate net loss of HAPSMobile, or $190,000 and $1,845,000, respectively, in equity method investment loss, net of tax in the unaudited consolidated statement of operations. |
Warranty Reserves
Warranty Reserves | 6 Months Ended |
Oct. 29, 2022 | |
Warranty Reserves | |
Warranty Reserves | 7. Warranty Reserves The Company accrues an estimate of its exposure to warranty claims based upon both current and historical product sales data and warranty costs incurred. The warranty reserve is included in other current liabilities on the unaudited condensed consolidated balance sheet. The related expense is included in cost of sales. Warranty reserve activity is summarized as follows for the three and six months ended October 29, 2022 and October 30, 2021, respectively (in thousands): Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 Beginning balance $ 2,988 $ 2,754 $ 2,190 $ 2,341 Balance acquired from acquisition — — — 256 Warranty expense 134 440 1,373 896 Warranty costs settled (105) (544) (546) (843) Ending balance $ 3,017 $ 2,650 $ 3,017 $ 2,650 |
Intangibles, net
Intangibles, net | 6 Months Ended |
Oct. 29, 2022 | |
Intangibles, net | |
Intangibles, net | 8. Intangibles, net The components of intangibles are as follows (in thousands): October 29, April 30, 2022 2022 Technology $ 59,563 $ 56,913 Licenses 1,008 1,008 Customer relationships 72,209 72,448 Backlog 2,685 2,100 In-process research and development 550 550 Non-compete agreements 320 320 Trademarks and tradenames 68 68 Other 136 144 Intangibles, gross 136,539 133,551 Less accumulated amortization (47,879) (36,327) Intangibles, net $ 88,660 $ 97,224 The weighted average amortization period at October 29, 2022 and April 30, 2022 was four years. Amortization expense for the three and six months ended October 29, 2022 was $5,983,000 and $11,852,000, respectively. Amortization expense for the three and six months ended October 30, 2021 was $6,843,000 and $13,816,000, respectively. Technology and backlog intangible assets were recognized in conjunction with the Company’s acquisition of Planck on August 17, 2022. Technology, backlog and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of Telerob on May 3, 2021. The intangibles recognized in conjunction with the acquisition of Telerob are recorded in Euros, and the balances change in accordance with the foreign currency translation at reporting date. Refer to Note 18—Business Acquisitions for further details. Estimated amortization expense for the next five years is as follows (in thousands): Year ending April 30, 2023 $ 12,009 2024 23,770 2025 21,568 2026 16,360 2027 5,663 $ 79,370 |
Goodwill
Goodwill | 6 Months Ended |
Oct. 29, 2022 | |
Goodwill. | |
Goodwill | 9. Goodwill The following table presents the changes in the Company’s goodwill balance (in thousands): Small UAS TMS MUAS HAPS All other Total Balance at April 30, 2022 $ 6,340 $ — $ 290,157 $ — $ 37,850 $ 334,347 Additions to goodwill — — 1,633 — (1,017) 616 Balance at October 29, 2022 $ 6,340 $ — $ 291,790 $ — $ 36,833 $ 334,963 The goodwill addition to MUAS is attributable to the Planck acquisition. The goodwill additions to the column entitled “All other” is attributable to the Telerob acquisition recorded in Euros and translated to dollars at each reporting date. Refer to Note 18—Business Acquisitions for further details. |
Debt
Debt | 6 Months Ended |
Oct. 29, 2022 | |
Debt | |
Debt | 10. Debt In connection with the consummation of the acquisition of Arcturus UAV, Inc. (“Arcturus”), a California corporation pursuant to a Stock Purchase Agreement with Arcturus and each of the shareholders and other equity interest holders of Arcturus, to purchase 100% of the issued and outstanding equity of Arcturus (the “Arcturus Acquisition”) on February 19, 2021, the Company, as borrower, and Arcturus, as guarantor, entered into a Credit Agreement with certain lenders, letter of credit issuers, Bank of America, N.A., as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association, as joint lead arrangers and joint bookrunners (the “Credit Agreement”). The Credit Agreement and its associated Security and Pledge Agreement set forth the terms and conditions for (i) a five-year $100 million revolving credit facility, which includes a $10 million sublimit for the issuance of standby and commercial letters of credit (the “Revolving Facility”), and (ii) a five-year amortized $200 million term A loan (the “Term Loan Facility”, and together with the Revolving Facility, the “Credit Facilities”). Certain existing letters of credit issued by JPMorgan Chase Bank were reserved for under the Revolving Facility at closing and remain outstanding under the terms thereof. Upon execution of the Credit Agreement, the Company drew the full principal of the Term Loan Facility for use in the acquisition of Arcturus. The Term Loan Facility requires payment of 5% of the outstanding obligations in each of the first four Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid under the Revolving Facility may be reborrowed. Mandatory prepayments are required under the revolving loans when borrowings and letter of credit usage exceed the aggregate revolving commitments of all lenders. Mandatory prepayments are also required in connection with the disposition of assets to the extent not reinvested and unpermitted debt transactions. In support of its obligations pursuant to the Credit Facilities, the Company has granted security interests in substantially all of the personal property of the Company and its domestic subsidiaries, including a pledge of the equity interests in its subsidiaries (limited to 65% of outstanding equity interests in the case of foreign subsidiaries), and the proceeds thereof, with customary exclusions and exceptions. The Company’s existing and future domestic subsidiaries, including Arcturus, are guarantors for the Credit Facilities. The Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants, including certain restrictions on the ability of the Company and its subsidiaries (as defined in the Credit Agreement) to incur any additional indebtedness or guarantee indebtedness of others, to create liens on properties or assets, or to enter into certain asset and stock-based transactions. In addition, the Credit Agreement includes certain financial maintenance covenants, requiring that (x) the Consolidated Leverage Ratio (as defined in the Credit Agreement) shall not be more than 3.00 to 1.00 as of the end of any fiscal quarter and (y) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) shall not be less than 1.25 to 1.00 as of the end of any fiscal quarter. On February 4, 2022, the Company entered into a First Amendment to Credit Agreement and Waiver relating to its existing Credit Agreement (the “First Amendment to Credit Agreement”). The First Amendment to Credit Agreement waives any event of default that may have occurred as a result of the potential failure by the Company to comply with the consolidated leverage ratio covenant set forth in the Credit Agreement for the fiscal quarter ended January 29, 2022. In addition, the parties amended the maximum permitted Consolidated Leverage Ratio, such that such ratio may not exceed 4.00 to 1.00 for the Company’s fiscal quarters ended January 29, 2022 and April 30, 2022; 3.50 to 1.00 for any of the Company’s fiscal quarters ending during the period from May 1, 2022 to October 31, 2022; and 3.00 to 1.00 for any fiscal quarter ending thereafter. The Credit Agreement, as amended by the First Amendment to Credit Agreement, contains certain customary events of default, which include failure to make payments when due thereunder, the material inaccuracy of representations or warranties, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events, invalidity of loan documents, or a Change of Control (as defined in the Credit Agreement). Upon the occurrence and continuation of an event of default, the Lenders may cease making future loans under the Credit Agreement and may declare all amounts owing under the Credit Agreement to be immediately due and payable. The First Amendment to Credit Agreement also implemented certain secured overnight financing rate (“SOFR”) interest rate mechanics and interest rate reference benchmark replacement provisions in order to effectuate the transition from LIBOR as a reference interest rate. Following the First Amendment to Credit Agreement, the Company has a choice of interest rates between (a) Term SOFR (with a 0% floor) plus the Applicable Margin; or (b) Base Rate (defined as the highest of (a) the Federal Funds Rate plus one-half percent (0.50%), (b) the Bank of America prime rate, and (c) the one (1) month SOFR plus one percent (1.00%)) plus the Applicable Margin. The Applicable Margin is based upon the Consolidated Leverage Ratio (as defined in the Credit Agreement) and whether the Company elects SOFR (ranging from 1.50 - 2.50%) or Base Rate (ranging from 0.50 - 1.50%). The Company may choose interest periods of one, three or six months with respect to Term SOFR and all such rates will include a 0.10% SOFR adjustment. The Company also remains responsible for certain commitment fees from 0.20-0.35% depending on the Consolidated Leverage Ratio, and administrative agent expenses incurred in relation to the Credit Facilities. In the event of a default, an additional 2% default interest rate in addition to the applicable rate if specified or the Base Rate plus Applicable Margin if an applicable rate is not specified. As of October 29, 2022, the Company is in compliance with all amended covenants. Long-term debt and the current period interest rates were as follows: October 29, April 30, 2022 2022 (In thousands) (In thousands) Term loans $ 167,500 $ 190,000 Revolving credit facility — — Total debt 167,500 190,000 Less current portion 10,000 10,000 Total long-term debt, less current portion 157,500 180,000 Less unamortized debt issuance costs - term loans 1,878 2,160 Total long-term debt, net of unamortized debt issuance costs - term loans $ 155,622 $ 177,840 Unamortized debt issuance costs - revolving credit facility $ 934 $ 1,076 Current period interest rate 5.0% 2.6% Future long-term debt principal payments at October 29, 2022 were as follows: (In thousands) 2023 $ 2,500 2024 10,000 2025 10,000 2026 145,000 2027 — $ 167,500 |
Leases
Leases | 6 Months Ended |
Oct. 29, 2022 | |
Leases | |
Leases | 11. Leases The Company leases certain buildings, land and equipment. At contract inception the Company determines whether the contract is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are recorded in operating lease right-of-use assets, current operating lease liabilities and non-current operating lease liabilities on the unaudited condensed consolidated balance sheet. The Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses its incremental borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification. The Company defines the initial lease term to include renewal options determined to be reasonably certain. The Company’s leases have remaining lease terms of less than one year to six years, some of which may include options to extend options to terminate Many of the Company’s real estate lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For tenant improvement incentives, if the incentive is determined to be a leasehold improvement owned by the lessee, the Company generally records incentive as a reduction to fixed lease payments thereby reducing rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records rental expense on a straight-line basis over the term of the lease. For these lease incentives, the Company uses the date of initial possession as the commencement date, which is generally when the Company is given the right of access to the space and begins to make improvements in preparation for intended use. The Company does not have any material restrictions or covenants in its lease agreements, sale-leaseback transactions, land easements or residual value guarantees. In determining the inputs to the incremental borrowing rate calculation, the Company makes judgments about the value of the leased asset, its credit rating and the lease term including the probability of its exercising options to extend or terminate the underlying lease. Additionally, the Company makes judgments around contractual asset substitution rights in determining whether a contract contains a lease. The components of lease costs recorded in cost of sales and selling, general and administrative (“SG&A”) expense were as follows (in thousands): Six Months Ended Six Months Ended October 29, October 30, 2022 2021 Operating lease cost $ 3,775 $ 3,358 Short term lease cost 479 419 Variable lease cost 430 368 Sublease income — (88) Total lease costs, net $ 4,684 $ 4,057 Supplemental lease information were as follows: Six Months Ended Six Months Ended October 29, October 30, 2022 2021 (In thousands) (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 3,705 $ 3,503 Right-of-use assets obtained in exchange for new lease liabilities $ 2,134 $ 6,310 Weighted average remaining lease term 58 months 69 months Weighted average discount rate 3.5% 3.4% Maturities of operating lease liabilities as of October 29, 2022 were as follows (in thousands): 2023 $ 3,617 2024 7,776 2025 6,679 2026 3,530 2027 3,061 Thereafter 5,484 Total lease payments 30,147 Less: imputed interest (2,540) Total present value of operating lease liabilities $ 27,607 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments | 6 Months Ended |
Oct. 29, 2022 | |
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments | |
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments | 12. Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments The components of accumulated other comprehensive income (loss) and adjustments are as follows (in thousands): Six Months Ended Six Months Ended October 29, October 30, 2022 2021 Balance, net of $8 and $1 deferred taxes, as of April 30, 2022 and April 30, 2021, respectively $ (6,514) $ 343 Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $0 for the six months ended October 29, 2022 and October 30, 2021 26 (3) Change in foreign currency translation adjustments (1,992) (2,017) Balance, net of $0 and $1 deferred taxes, as of October 29, 2022 and October 30, 2021, respectively $ (8,480) $ (1,677) |
Customer-Funded Research & Deve
Customer-Funded Research & Development | 6 Months Ended |
Oct. 29, 2022 | |
Customer-Funded Research & Development | |
Customer-Funded Research & Development | 13. Customer-Funded Research & Development Customer-funded R&D costs are incurred pursuant to contracts (revenue arrangements) to perform R&D activities according to customer specifications. These costs are direct contract costs and are expensed to cost of sales as costs are incurred. Revenue from customer-funded R&D contracts is recognized in accordance with ASC 606 over time as costs are incurred. Revenue from customer-funded R&D was approximately $24,937,000 and $47,936,000 for the three and six months ended October 29, 2022, respectively. Revenue from customer-funded R&D was approximately $19,175,000 and $36,086,000 for the three and six months ended October 30, 2021, respectively. |
Long-Term Incentive Awards
Long-Term Incentive Awards | 6 Months Ended |
Oct. 29, 2022 | |
Long-Term Incentive Awards. | |
Long-Term Incentive Awards | 14. Long-Term Incentive Awards During the three months ended July 30, 2022, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (the “Restated 2006 Plan”) to key employees (“Fiscal 2023 LTIP”). Awards under the Fiscal 2023 LTIP consist of: (i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2023, July 2024 and July 2025, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP operating income targets for the three-year period ending April 30, 2025. At the award date, target achievement levels for each of the financial performance metrics were established for the PRSUs, at which levels the PRSUs would vest at 100% for each such metric. Threshold achievement levels for which the PRSUs would vest at 50% for each such metric and maximum achievement levels for which such awards would vest at 250% for each such metric were also established. The actual payout for the PRSUs at the end of the performance period will be calculated based upon the Company’s achievement of the established revenue and non-GAAP operating income targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock. For the three and six months ended October 29, 2022, the Company recorded $664,000 and $1,061,000 of compensation expense related to the Fiscal 2023 LTIP. The Company recorded no compensation expense related to the Fiscal 2023 LTIP for the three and six months ended October 30, 2021. At October 29, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2023 LTIP is $12,829,000. During the three months ended July 31, 2021, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2022 LTIP”). Awards under the Fiscal 2022 LTIP consist of: (i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2022, July 2023 and July 2024, and (ii) PRSUs, which vest based on the Company’s achievement of revenue and non-GAAP operating income targets for the three-year period ending April 30, 2024. At the award date, target achievement levels for each of the financial performance metrics were established for the PRSUs, at which levels the PRSUs would vest at 100% for each such metric. Threshold achievement levels for which the PRSUs would vest at 50% for each such metric and maximum achievement levels for which such awards would vest at 250% for each such metric were also established. The actual payout for the PRSUs at the end of the performance period will be calculated based upon the Company’s achievement of the established revenue and non-GAAP operating income targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock. For the three and six months ended October 29, 2022, the Company recorded a reversal of $(311,000) and $(116,000) of compensation expense related to the Fiscal 2022 LTIP, respectively. For the three and six months ended October 30, 2021, the Company recorded $201,000 and $509,000 of compensation expense related to the Fiscal 2022 LTIP. At October 29, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2022 LTIP is $10,148,000. During the three months ended August 1, 2020, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2021 LTIP”). Awards under the Fiscal 2021 LTIP consist of: (i) time-based restricted stock awards, which vest in equal tranches in July 2021, July 2022 and July 2023, and (ii) PRSUs, which vest based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2023. At the award date, target achievement levels for each of the financial performance metrics were established for the PRSUs, at which levels the PRSUs would vest at 100% for each such metric. Threshold achievement levels for which the PRSUs would vest at 50% for each such metric and maximum achievement levels for which such awards would vest at 250% for each such metric were also established. The actual payout for the PRSUs at the end of the performance period will be calculated based upon the Company’s achievement of the established revenue and operating income targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock. For the three and six months ended October 29, 2022, the Company recorded $116,000 and $192,000 of compensation expense related to the Fiscal 2021 LTIP, respectively. For the three and six months ended October 30, 2021, the Company recorded a reversal of $(572,000) and $(507,000) of compensation expense related to the Fiscal 2021 LTIP, respectively, due to a change in estimate resulting from a decrease in the estimated achievement. At October 29, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2021 LTIP is $5,858,000. During the three months ended July 27, 2019, the Company also granted awards under the Restated 2006 Plan to key employees (“Fiscal 2020 LTIP”). Awards under the Fiscal 2020 LTIP consist of: (i) time-based restricted stock awards, which vest in equal tranches in July 2020, July 2021 and July 2022, and (ii) PRSUs, which vest based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2022. During the three months ended July 31, 2022, the Company issued a total of 5,678 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2020 LTIP. For the three and six months ended October 29, 2022, the Company recorded no compensation expense related to the Fiscal 2020 LTIP, respectively. For the three and six months ended October 30, 2021, the Company recorded a reversal of $(617,000) and $(619,000) of compensation expense related to the Fiscal 2020 LTIP, respectively, due to a change in estimate resulting from a decrease in the estimated achievement. At each reporting period, the Company reassesses the probability of achieving the performance targets for the PRSUs. The estimation of whether the performance targets will be achieved requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. |
Income Taxes
Income Taxes | 6 Months Ended |
Oct. 29, 2022 | |
Income Taxes | |
Income Taxes | 15. Income Taxes For the three and six months ended October 29, 2022, the Company recorded a benefit from income taxes of $(10,457,000) and $(7,851,000) yielding an effective tax rate of 66.1% and 37.2%, respectively. For the three and six months ended October 30, 2021, the Company recorded a benefit from income taxes of $(9,511,000) and $(10,468,000) yielding an effective tax rate of 117.6% and 48.0%, respectively. Historically, the Company calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate (“AETR”) for the full fiscal year to the pretax income or loss for the interim reporting period. For the three and six months ended October 29, 2022, the Company calculated the provision for income taxes using a discrete effective tax rate (“ETR”) method. The Company determined that due to the fact small changes in the Company’s estimated pretax income or loss would result in significant changes in the estimated AETR, the historical method would not provide a reliable estimate for the three and six months ended October 29, 2022. The variance from statutory rates for the three and six months ended October 29, 2022 was primarily due to a combination of federal R&D credits and the foreign-derived intangible income deduction. The variance from statutory rates for the three months ended October 30, 2021 was primarily due to a change in estimate of full year projected income (loss) before income taxes, federal R&D credits and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options. The variance from statutory rates for the six months ended October 30, 2021 was primarily due to federal R&D credits and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options. |
Share Repurchase
Share Repurchase | 6 Months Ended |
Oct. 29, 2022 | |
Share Repurchase | |
Share Repurchase | 16. Share Repurchase Plan and Issuances In September 2015, the Company’s Board of Directors authorized a program to repurchase up to $25,000,000 of the Company’s common stock. No shares were repurchased under the program during the six months ended October 29, 2022 or October 30, 2021. As of April 30, 2022, approximately $21,200,000 remained authorized for future repurchases under this program. In September 2022, the Company’s Board of Directors terminated the repurchase program effective immediately. On September 8, 2022 the Company filed an S-3 shelf registration statement to offer and sell shares of the Company’s common stock, including a prospectus supplement in relation to an Open Market Sale Agreement SM |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Oct. 29, 2022 | |
Related Party Transactions | |
Related Party Transactions | 17. Related Party Transactions Related party transactions are defined as transactions between the Company and entities either controlled by the Company or that the Company can significantly influence. Prior to the Company’s sale of all of its equity interest in HAPSMobile in March 2022, the Company determined that it had the ability to exercise significant influence over HAPSMobile. As such, HAPSMobile and SoftBank were considered related parties of the Company prior to the sale. Subsequent to the sale, the Company had no ownership stake in HAPSMobile and SoftBank and HAPSMobile are no longer considered related parties. Under the DDA and related efforts with HAPSMobile, the Company designed and built prototype solar powered high altitude aircraft and ground control stations for HAPSMobile and conducted low altitude and high altitude flight tests of the prototype aircraft on a best efforts basis. The Company will continue the development of Solar HAPS with Softbank under the MDDA. Upon the execution of the MDDA, SoftBank issued the first order under the MDDA, which has a maximum value of approximately $51,200,000. The Company recorded revenue under both the MDDA and DDA of $10,342,000 and $20,694,000 for the three and six months ended October 30, 2021. |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Oct. 29, 2022 | |
Business Acquisitions | |
Business Acquisitions | 18. Business Acquisitions Planck Acquisition On August 17, 2022 the Company closed its acquisition of Planck Aerosystems, Inc. (“Planck”), a leading provider of advanced unmanned aircraft navigation solutions based in San Diego, California. Pursuant to the purchase agreement, the Company paid a total purchase price of $5,105,000 from cash-on-hand plus a $500,000 holdback for certain assets of Planck. Planck is a small technology company and post-acquisition will be incorporated into AeroVironment’s MUAS segment to focus on integrating its flight autonomy solutions, such as ACE™, or Autonomous Control Engine, into the Company’s offerings to enable safe, autonomous takeoff and landing from moving platforms on land or at sea in GPS-denied environments. Other solutions include AVEM™, a fully integrated mobile tethered sensor platform designed for persistent autonomous operation from moving vehicles and vessels in any environment, and a suite of machine-learning object detection and tracking systems that are customized for specific end-user needs. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. The following table summarizes the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck (in thousands): August 17, 2022 Fair value of assets acquired: Technology $ 3,200 Backlog 700 Inventories 109 Other assets 19 Property and equipment, net 13 Goodwill 1,633 Total identifiable net assets $ 5,674 Fair value of liabilities assumed: Customer advances 69 Total liabilities assumed 69 Total identifiable net assets $ 5,605 Fair value of consideration transferred: Cash $ 5,105 Holdback 500 Total consideration $ 5,605 Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangibles assets was determined using a discounted cash flow analysis, which were based on the Company’s preliminary estimates of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results. The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of Planck and expected future customers in the MUAS market. For tax purposes the acquisition was treated as an asset acquisition and the goodwill is deductible. Planck Supplemental Pro Forma Information (unaudited) The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2021 (in thousands): Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 Revenue $ 111,584 $ 122,667 $ 223,016 $ 224,335 Net (loss) income attributable to AeroVironment, Inc. $ (6,131) $ 2,375 $ (13,450) $ (12,325) Planck revenue since acquisition on August 17, 2022 was $68,000. The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings. These pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the three months ended July 31, 2021, reflecting the additional amortization that would have been charged and including the results of Planck prior to acquisition. The Company incurred approximately $569,000 of acquisition-related expenses for the three months ended October 29, 2022. These expenses are included in selling, general and administrative on the Company’s unaudited condensed consolidated statement of operations. The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2021, nor are they indicative of results of operations that may occur in the future. Telerob Acquisition On May 3, 2021, the Company closed its acquisition of Telerob pursuant to the terms of the Telerob Purchase Agreement. Telerob develops, manufactures, sells, and services remote-controlled unmanned ground robots and transport vehicles for civil and defense applications. Pursuant to the Telerob Purchase Agreement at closing, the Company paid €37,455,000 (approximately $45,400,000) in cash to the Telerob Seller (subject to certain purchase price adjustments as set forth in the Telerob Purchase Agreement), less (a) €3,000,000 (approximately $3,636,000) to be held in escrow for breaches of the Telerob Seller’s fundamental warranties or any other of Telerob Seller’s warranties to the extent not covered by a representation and warranty insurance policy (the “RWI Policy”) obtained by the Company in support of certain indemnifications provided by the Telerob Seller; (b) transaction-related fees and costs incurred by the Telerob Seller, including change in control payments triggered by the transaction; and (c) 50% of the cost of obtaining the RWI Policy. In addition, at closing the Company paid off approximately €7,811,000 (approximately $9,468,000), of certain indebtedness of Telerob, which amount was paid in combination to the Telerob Seller and the lender under an agreement between Telerob GmbH and the lender providing for a reduced payoff amount. This indebtedness was offset by cash on hand at Telerob at closing. The escrow amount is to be released to the Telerob Seller, less any amounts paid or reserved, 30 months following the closing date. In addition to the consideration paid at closing, the Telerob Seller may receive €2,000,000 (approximately $2,424,000) in additional cash consideration if specific revenue targets for Telerob are achieved during the 12 month period after closing beginning on the first day of the calendar month following the closing (the “First Earnout Year”) and an additional €2,000,000 (approximately $2,424,000) in cash consideration if specific revenue targets for Telerob are achieved in the 12 month period following the First Earnout Year. The Telerob Seller may also receive up to €2,000,000 (approximately $2,424,000) in additional cash consideration if specific awards and/or orders from the U.S. military are achieved prior to the end of a 36-month post-closing period. The first year earnout of €2,000,000 (approximately $2,424,000) was not achieved. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. During the fiscal year ended April 30, 2022, the Company finalized its determination of the fair value of the assets and liabilities assumed as of the acquisition date, which is summarized in the following table (in thousands): May 3, 2021 Fair value of assets acquired: Accounts receivable $ 1,045 Unbilled receivable 829 Inventories, net 15,074 Prepaid and other current assets 314 Property and equipment, net 1,571 Operating lease assets 1,508 Other assets 494 Technology 11,500 Backlog 2,400 Customer relationships 5,000 Other intangible assets 102 Goodwill 20,800 Total assets acquired $ 60,637 Fair value of liabilities assumed: Accounts payable $ 1,136 Wages and related accruals 560 Customer advances 1,243 Current operating lease liabilities 361 Other current liabilities 3,310 Non-current operating lease liabilities 1,147 Other non-current liabilities 224 Deferred income taxes 5,617 Total liabilities assumed 13,598 Total identifiable net assets $ 47,039 Fair value of consideration: Cash consideration, net of cash acquired $ 46,150 Contingent consideration 889 Total $ 47,039 Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangibles assets was determined using a discounted cash flow analysis, which were based on the Company’s best estimate of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results. The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of Telerob and expected future customers in the UGV market. For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible. Telerob Supplemental Pro Forma Information (unaudited) The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2020 (in thousands): Three Months Ended Six Months Ended October 30, October 30, 2021 2021 Revenue $ 122,008 $ 223,017 Net loss attributable to AeroVironment, Inc. $ 4,454 $ (7,844) The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings. These pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the three months ended August 1, 2020, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2020 with the consequential tax effects and including the results of Telerob prior to acquisition. The Company incurred approximately $411,000 of acquisition-related expenses for the three months ended July 31, 2021. These expenses are included in selling, general and administrative on the Company’s unaudited condensed consolidated statement of operations. The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2020, nor are they indicative of results of operations that may occur in the future. |
Pension
Pension | 6 Months Ended |
Oct. 29, 2022 | |
Pension | |
Pension | 19. Pension As part of the Telerob acquisition, the Company acquired a small foreign-based defined benefit pension plan. The Rheinmetall-Zusatzversorgung service plan covers three former employees based on individual contracts issued to the employees. No other employees are eligible to participate. The Company has reinsurance policies that were taken out for participating former employees, which were pledged to the employees. The measurement date for the Company’s pension plan was April 30, 2022. The table below includes the projected benefit obligation and fair value of plan assets as of April 30, 2022. The net projected benefit obligation (in thousands) is recorded in other assets on the unaudited condensed consolidated balance sheet. Projected benefit obligation $ (3,120) Fair value of plan assets 3,138 Funded status of the plan $ 18 The projected benefit obligation includes assumptions of a discount rate of 1.7% and pension increase for in-payment benefits of 1.5% for October 29, 2022 and April 30, 2022. The accumulated benefit obligation is approximately equal to the Company’s projected benefit obligation. The plan assets consist of reinsurance policies for each of the three pension commitments. The reinsurance policies are fixed-income investments considered a level 2 fair value hierarchy based on observable inputs of the policy. The Company does not expect to make any contributions to the plan in the fiscal year ending April 30, 2023. The Company assumed expected return on plan assets of 2.9% for October 29, 2022 and April 30, 2022. Expected benefits payments as of April 30, 2022 (in thousands): 2023 $ 161 2024 164 2025 165 2026 165 2027 166 2028-2032 828 Total expected benefit payments $ 1,649 Net periodic benefit cost (in thousands) is recorded in interest expense, net. Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 (In thousands) (In thousands) (In thousands) (In thousands) Expected return on plan assets $ — $ 31 $ — $ 63 Interest cost — (15) (17) (30) Actuarial gain — 72 241 6 Net periodic benefit cost $ — $ 88 $ 224 $ 39 |
Segments
Segments | 6 Months Ended |
Oct. 29, 2022 | |
Segments | |
Segments | 20. Segments The Company’s reportable segments are as follows: Small Unmanned Aircraft Systems Tactical Missile Systems Medium Unmanned Aircraft Systems High Altitude Pseudo-Satellite Unmanned Aircraft Systems All other The accounting policies of the segments are the same as those described in Note 1, “Organization and Significant Accounting Policies.” The operating segments do not make sales to each other. The following table (in thousands) sets forth segment revenue, gross margin, income (loss) from operations and adjusted income (loss) from operations for the periods indicated. Adjusted income (loss) from operations is defined as income (loss) from operations before intangible amortization, amortization of purchase accounting adjustment related to increasing the carrying value of certain assets to fair value, and acquisition related expenses. Three Months Ended October 29, 2022 Small UAS TMS MUAS HAPS All other Total Revenue $ 26,681 $ 31,101 $ 27,281 $ 9,066 $ 17,455 $ 111,584 Gross margin 12,319 12,636 (6,884) 3,001 4,818 25,890 Income (loss) from operations (2,079) 2,004 (15,242) 1,564 (561) (14,314) Acquisition-related expenses - - 119 - 450 569 Amortization of acquired intangible assets and other purchase accounting adjustments 669 - 5,897 - 1,276 7,842 Adjusted income (loss) from operations $ (1,410) $ 2,004 $ (9,226) $ 1,564 $ 1,165 $ (5,903) Three Months Ended October 30, 2021 Small UAS TMS MUAS HAPS All other Total Revenue $ 54,714 $ 18,418 $ 26,525 $ 10,342 $ 12,009 $ 122,008 Gross margin 27,754 6,222 2,223 3,944 2,312 42,455 Income (loss) from operations 13,377 47 (7,000) 2,073 (5,158) 3,339 Acquisition-related expenses 297 163 108 58 222 848 Amortization of acquired intangible assets and other purchase accounting adjustments 707 - 6,358 - 3,257 10,322 Adjusted income (loss) from operations $ 14,381 $ 210 $ (534) $ 2,131 $ (1,679) $ 14,509 Six Months Ended October 29, 2022 Small UAS TMS MUAS HAPS All other Total Revenue $ 69,937 $ 54,113 $ 46,542 $ 19,281 $ 30,227 $ 220,100 Gross margin 33,615 20,383 (7,957) 6,325 7,238 59,604 Income (loss) from operations 5,946 973 (24,826) 4,103 (3,784) (17,588) Acquisition-related expenses - - 340 - 564 904 Amortization of acquired intangible assets and other purchase accounting adjustments 1,350 - 10,842 - 2,611 14,803 Adjusted income (loss) from operations $ 7,296 $ 973 $ (13,644) $ 4,103 $ (609) $ (1,881) Six Months Ended October 30, 2021 Small UAS TMS MUAS HAPS All other Total Revenue $ 94,638 $ 37,594 $ 48,904 $ 20,694 $ 21,187 $ 223,017 Gross margin 44,674 12,211 5,404 7,118 1,771 71,178 Income (loss) from operations 15,335 (416) (13,381) 3,176 (13,488) (8,774) Acquisition-related expenses 721 414 1,492 162 1,313 4,102 Amortization of acquired intangible assets and other purchase accounting adjustments 1,414 - 11,549 - 6,483 19,446 Adjusted income (loss) from operations $ 17,470 $ (2) $ (340) $ 3,338 $ (5,692) $ 14,774 Segment assets are summarized in the table below. Corporate assets primarily consist of cash and cash equivalents, short-term investments, prepaid expenses and other current assets, long-term investments, property and equipment, net, operating lease right-of-use assets, deferred income taxes and other assets managed centrally on behalf of the business segments. October 29, 2022 Small UAS TMS MUAS HAPS All other Corporate Total Identifiable assets $ 103,277 $ 77,334 $ 394,872 $ 7,200 $ 72,098 $ 236,901 $ 891,682 April 30, 2022 Small UAS TMS MUAS HAPS All other Corporate Total Identifiable assets $ 110,286 $ 91,862 $ 388,058 $ 8,148 $ 86,617 $ 229,229 $ 914,200 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Oct. 29, 2022 | |
Organization and Significant Accounting Policies | |
Segments | Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. As of October 29, 2022, the Company’s CODM, the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the allocation for research and development (“R&D”). Accordingly, the Company identifies four reportable segments. Refer to Note 20—Segments for further details. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements have been included. The results of operations for the six months ended October 29, 2022 are not necessarily indicative of the results for the full year ending April 30, 2023. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2022, included in the Company’s Annual Report on Form 10-K. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, including estimates of anticipated contract costs and revenue utilized in the revenue recognition process, that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s unaudited condensed consolidated financial statements include the assets, liabilities and operating results of wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. On May 3, 2021, the Company closed its acquisition of Telerob Gesellschaft für Fernhantierungstechnik mbH, a German company based in Ostfildern (near Stuttgart), Germany (“Telerob GmbH”), including Telerob GmbH’s wholly-owned subsidiary, Telerob USA, Inc. (“Telerob USA,” and collectively with Telerob GmbH, “Telerob”) pursuant to its previously announced Share Purchase Agreement (the “Telerob Purchase Agreement”) with Unmanned Systems Investments GmbH, a German limited liability company incorporated under the laws of Germany (the “Telerob Seller”), and each of the unit holders of the Seller, to purchase 100% of the issued and outstanding shares of Telerob Seller’s wholly-owned subsidiary Telerob GmbH (the “Telerob Acquisition”). The assets, liabilities and operating results of Telerob GmbH have been included in the Company’s unaudited condensed consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun Savunma Sanayi ve Havacilik Anonim Sirketi (“Toygun”) whereby the Company sold 35% of the common shares of the Company’s Turkish joint venture, Altoy Savunma Sanayi ve Havacilik Anonim Sirketi (“Altoy”), to Toygun. On October 14, 2022, the Company sold an additional 35% of the common shares of Altoy to Toygun. As a result of the share sales, the Company decreased its interest in Altoy from 85% to 15% and has determined that it no longer controls Altoy. Therefore, the Company no longer consolidates Altoy in the Company’s unaudited condensed consolidated financial statements. As the Company has the ability to exercise significant influence over the operating and financial policies of Altoy, the Company’s investment will now be accounted for as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investments, net of tax. Refer to Note 6—Equity Method Investments for further details. On August 17, 2022, the Company closed its acquisition of Planck Aerosystems, Inc. (“Planck”) pursuant to the purchase agreement, and post-acquisition, Planck is incorporated into the medium UAS (“MUAS”) segment. The assets, liabilities and operating results of Planck have been included in the Company’s unaudited condensed consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In October 2021, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers |
Investments | Investments The Company’s investments are accounted for as available-for-sale and are reported at fair value. Unrealized gains and losses for debt securities are excluded from earnings and reported as a separate component of stockholders’ equity, net of deferred income taxes for available-for-sale investments. Gains and losses realized on the disposition of investment securities are determined on the specific identification basis and credited or charged to income. Investments in equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income, net. Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments Fair values of cash and cash equivalents, accounts receivable, unbilled receivables and retentions, and accounts payable approximate cost due to the short period of time to maturity. |
Revenue Recognition | Revenue Recognition The Company’s revenue is generated pursuant to written contractual arrangements to design, develop, manufacture and/or modify complex products and to provide related engineering, technical and other services according to the specifications of the customers. These contracts may be firm fixed price (“FFP”), cost plus fixed fee (“CPFF”), or time and materials (“T&M”). The Company considers all such contracts to be within the scope of ASC 606. Performance Obligations A performance obligation is a promise in a contract to transfer distinct goods or services to a customer, and it is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when each performance obligation under the terms of a contract is satisfied. Revenue is measured at the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its observable standalone selling price for products and services. When the standalone selling price is not directly observable, the Company uses its best estimate of the standalone selling price of each distinct good or service in the contract using the cost plus margin approach. This approach estimates the Company’s expected costs of satisfying the performance obligation and then adds an appropriate margin for that distinct good or service. Contract modifications are routine in the performance of the Company’s contracts. In most instances, contract modifications are for additional goods and/or services that are distinct and, therefore, accounted for as new contracts. The Company’s performance obligations are satisfied over time or at a point in time. Performance obligations are satisfied over time if the customer receives the benefits as the Company performs, if the customer controls the asset as it is being developed or produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment for the Company’s costs incurred to date plus a reasonable margin. The contractual right to payment is generally supported by termination for convenience clauses that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit, and take control of any work in process. Revenue for TMS product deliveries and Customer-Funded Research and Development contracts is recognized over time as costs are incurred. Contract services revenue is composed of revenue recognized on contracts for the provision of services, including repairs and maintenance, training, engineering design, development and prototyping activities, and technical support services. Contract services revenue is recognized over time as services are rendered. Typically, revenue is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract services revenue, including revenue from intelligence, surveillance, and reconnaissance (“ISR”) services, is recognized over time as services are rendered. In accordance with ASC 606, the Company elected the right to invoice practical expedient in which if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, such as flight hours for ISR services, the entity may recognize revenue in the amount to which the entity has a right to invoice. Training services are recognized over time using an output method based on days of training completed. For performance obligations satisfied over time, revenue is generally recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with, and thereby best depict, transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. For performance obligations which are not satisfied over time per the aforementioned criteria above, revenue is recognized at the point in time in which each performance obligation is fully satisfied. The Company’s small UAS, MUAS and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS, MUAS and UGV systems and spare parts, respectively. Revenue is recognized at the point in time when control transfers to the customer, which generally occurs when title and risk of loss have passed to the customer. Performance obligations satisfied over time accounted for 65% and 63% of revenue during the three and six months ended October 29, 2022, respectively. Performance obligations satisfied over time accounted for 51% and 55% of revenue during the three and six months ended October 30, 2021, respectively. Performance obligations satisfied at a point in time accounted for 35% and 37% of revenue during the three and six months ended October 29, 2022, respectively. Performance obligations satisfied at a point in time accounted for 49% and 45% of revenue during the three and six months ended October 30, 2021, respectively. On October 29, 2022, the Company had approximately $293,147,000 of remaining performance obligations under fully funded contracts with its customers, which the Company also refers to as funded backlog. The Company currently expects to recognize approximately 58% of the remaining performance obligations as revenue in fiscal 2023 2024 The Company collects sales, value added, and other taxes concurrent with revenue producing activities, which are excluded from revenue when they are both imposed on a specific transaction and collected from a customer. Contract Estimates Accounting for contracts and programs primarily with a duration of less than six months involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, the Company estimates the total expected costs to complete the contract and recognizes revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. The nature of the Company’s contracts gives rise to several types of variable consideration, including penalty fees and incentive awards generally for late delivery and early delivery, respectively. The Company generally estimates such variable consideration as the most likely amount. In addition, the Company includes the estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the related uncertainty is resolved. These estimates are based on historical award experience, anticipated performance and the Company’s best judgment at the time. Based on experience in estimating these amounts, they are included in the transaction price of the Company’s contracts and the associated remaining performance obligations. As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company regularly reviews and updates its contract-related estimates. Changes in cumulative revenue estimates, due to changes in the estimated transaction price or cost estimates, are recorded using a cumulative catch-up adjustment in the period identified for contracts with performance obligations recognized over time. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the quarter it is identified, and it is recorded in other current liabilities. During the three months ended October 29, 2022, the Company recognized forward loss reserves on two MUAS ISR contracts totaling $1,952,000 related to unfavorable changes in the estimated costs to complete the contracts. The company recorded the forward loss reserves as the total estimated costs to complete the contracts are in excess of the total remaining consideration of the contracts. The aggregate impact of the change in estimate decreased net income by $1,500,000 and diluted loss per share by $0.06. The impact of adjustments in contract estimates on the Company’s operating earnings can be reflected in either operating costs and expenses, or revenue. The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was not significant for the three or six month periods ended October 29, 2022 nor the three or six month period ended October 30, 2021. During the three months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete a TMS variant contract. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of approximately $1,332,000. During the six months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete two TMS variant contracts. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $2,560,000. No adjustment on any one contract was material to the Company’s unaudited condensed consolidated financial statements for the three or six month periods ended October 30, 2021. Revenue by Category The following tables present the Company’s revenue disaggregated by major product line, contract type, customer category and geographic location (in thousands): Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by segment 2022 2021 2022 2021 Small UAS $ 26,681 $ 54,714 $ 69,937 $ 94,638 TMS 31,101 18,418 54,113 37,594 MUAS 27,281 26,525 46,542 48,904 HAPS 9,066 10,342 19,281 20,694 All Other 17,455 12,009 30,227 21,187 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by contract type 2022 2021 2022 2021 FFP $ 85,236 $ 98,393 $ 166,065 $ 179,159 CPFF 25,013 21,594 51,468 40,711 T&M 1,335 2,021 2,567 3,147 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with FFP contracts. However, these types of contracts generally offer additional profits when the Company completes the work for less than originally estimated. CPFF contracts generally subject the Company to lower risk. Accordingly, the associated base fees are usually lower than fees on FFP contracts. Under T&M contracts, the Company’s profit may vary if actual labor hour rates vary significantly from the negotiated rates. Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by customer category 2022 2021 2022 2021 U.S. government $ 84,165 $ 72,076 $ 151,880 $ 143,151 Non-U.S. government 27,419 49,932 68,220 79,866 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by geographic location 2022 2021 2022 2021 Domestic $ 67,657 $ 68,663 $ 117,760 $ 137,051 International 43,927 53,345 102,340 85,966 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Contract Balances The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits on the condensed consolidated balance sheet. In the Company’s services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in unbilled receivables and retentions on the condensed consolidated balance sheet. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities recorded in customer advances on the condensed consolidated balance sheet. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the condensed consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. For the Company’s product revenue, the Company generally receives cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. Changes in the contract asset and liability balances during the six month period ended October 29, 2022 were not materially impacted by any other factors. For the Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration. Revenue recognized for the three and six month periods ended October 29, 2022 that was included in contract liability balances as of April 30, 2022 was $1,080,000 and $3,004,000, respectively, and revenue recognized for the three and six month periods ended October 30, 2021 that was included in contract liability balances as of April 30, 2021 was $580,000 and $889,000, respectively. |
Government Contracts | Government Contracts Payments to the Company on government CPFF or T&M contracts are based on provisional, or estimated indirect rates, which are subject to an annual audit by the Defense Contract Audit Agency (“DCAA”). The cost audits result in the negotiation and determination of the final indirect cost rates that the Company may use for the period(s) audited. The final rates, if different from the provisional rates, may create an additional receivable or liability for the Company for CPFF and T&M contracts. For example, during the course of its audits, the DCAA may question the Company’s incurred costs, and if the DCAA believes the Company has accounted for such costs in a manner inconsistent with the requirements under Federal Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs. Historically, the Company has not experienced material disallowed costs as a result of government audits. However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future. The Company’s revenue recognition policy calls for revenue recognized on all cost reimbursable government contracts to be recorded at actual rates unless collectability is not reasonably assured. At October 29, 2022 and April 30, 2022, the Company had no reserve for incurred cost claim audits. |
(Loss) Earnings Per Share | (Loss) Earnings Per Share Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding, excluding shares of unvested restricted stock. The reconciliation of basic to diluted shares is as follows (in thousands except share data): Three Months Ended Six Months Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Net (loss) income attributable to AeroVironment, Inc. $ (6,668) $ 2,525 $ (15,063) $ (11,456) Denominator for basic (loss) earnings per share: Weighted average common shares 24,900,873 24,641,614 24,852,219 24,630,838 Dilutive effect of employee stock options, restricted stock and restricted stock units — 244,256 — — Denominator for diluted (loss) earnings per share 24,900,873 24,885,870 24,852,219 24,630,838 Due to the net loss for the three and six months ended October 29, 2022 and for the six months ended October 30, 2021, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive. Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 148,196 and 156,625 for the three months and six months ended October 29, 2022, respectively. Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 4,742 and 266,077 for the three and six months ended October 30, 2021, respectively. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards No recently issued accounting standards expected to impact the Company. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Organization and Significant Accounting Policies | |
Schedule of revenue by category | The following tables present the Company’s revenue disaggregated by major product line, contract type, customer category and geographic location (in thousands): Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by segment 2022 2021 2022 2021 Small UAS $ 26,681 $ 54,714 $ 69,937 $ 94,638 TMS 31,101 18,418 54,113 37,594 MUAS 27,281 26,525 46,542 48,904 HAPS 9,066 10,342 19,281 20,694 All Other 17,455 12,009 30,227 21,187 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by contract type 2022 2021 2022 2021 FFP $ 85,236 $ 98,393 $ 166,065 $ 179,159 CPFF 25,013 21,594 51,468 40,711 T&M 1,335 2,021 2,567 3,147 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with FFP contracts. However, these types of contracts generally offer additional profits when the Company completes the work for less than originally estimated. CPFF contracts generally subject the Company to lower risk. Accordingly, the associated base fees are usually lower than fees on FFP contracts. Under T&M contracts, the Company’s profit may vary if actual labor hour rates vary significantly from the negotiated rates. Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by customer category 2022 2021 2022 2021 U.S. government $ 84,165 $ 72,076 $ 151,880 $ 143,151 Non-U.S. government 27,419 49,932 68,220 79,866 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, Revenue by geographic location 2022 2021 2022 2021 Domestic $ 67,657 $ 68,663 $ 117,760 $ 137,051 International 43,927 53,345 102,340 85,966 Total revenue $ 111,584 $ 122,008 $ 220,100 $ 223,017 |
Schedule of reconciliation of basic to diluted shares | The reconciliation of basic to diluted shares is as follows (in thousands except share data): Three Months Ended Six Months Ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Net (loss) income attributable to AeroVironment, Inc. $ (6,668) $ 2,525 $ (15,063) $ (11,456) Denominator for basic (loss) earnings per share: Weighted average common shares 24,900,873 24,641,614 24,852,219 24,630,838 Dilutive effect of employee stock options, restricted stock and restricted stock units — 244,256 — — Denominator for diluted (loss) earnings per share 24,900,873 24,885,870 24,852,219 24,630,838 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Investments | |
Schedule of investments | Investments consist of the following (in thousands): October 29, April 30, 2022 2022 Short-term investments: Available-for-sale securities: Municipal securities — 19,725 U.S. government securities — 4,991 Total short-term investments $ — $ 24,716 Long-term investments: Available-for-sale securities: Equity securities 6,028 — Total long-term available-for-sale securities investments 6,028 — Equity method investments Investments in limited partnership funds 16,434 15,433 Total equity method investments 16,434 15,433 Total long-term investments $ 22,462 $ 15,433 |
Schedule of activity related to available-for-sale investments recorded in short-term | The following table is a summary of the activity related to the available-for-sale debt securities recorded in short-term investments as of April 30, 2022, respectively (in thousands): April 30, 2022 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Municipal securities $ 19,756 $ — $ (31) $ 19,725 U.S. government securities 4,995 — (4) 4,991 Total available-for-sale debt securities $ 24,751 $ — $ (35) $ 24,716 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Fair Value Measurements | |
Schedule of financial assets measured at fair value on a recurring basis | The Company’s financial assets measured at fair value on a recurring basis at October 29, 2022, were as follows (in thousands): Fair Value Measurement Using Significant Quoted prices in other Significant active markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Total Available-for-sale securities $ — $ — $ — $ — Equity securities 5,728 — — 5,728 Warrants — 300 — 300 Contingently returnable consideration — — 23 23 Total $ 5,728 $ 300 $ 23 $ 6,051 |
Schedule of financial liabilities measured at fair value on recurring basis | The Company’s financial liabilities measured at fair value on a recurring basis at April 30, 2022, were as follows (in thousands): Fair Value Measurement Using Significant Quoted prices in other Significant active markets for observable unobservable identical assets inputs inputs Description (Level 1) (Level 2) (Level 3) Total Contingent consideration $ — $ — $ 1,084 $ 1,084 Total $ — $ — $ 1,084 $ 1,084 |
Schedule of reconciliation between beginning and ending balances of items measured at fair value on recurring basis that used significant unobservable inputs (Level 3) | The following table provides a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Fair Value Fair Value Measurements Using Measurements Using Significant Significant Unobservable Inputs Unobservable Inputs Assets Liabilities Description (Level 3) (Level 3) Balance at May 1, 2022 $ 143 $ 1,084 Business acquisition — — Transfers to Level 3 — — Total fair value measurement adjustments (realized or unrealized) Included in selling, general and administrative (120) 401 Settlements — — Balance at October 29, 2022 $ 23 $ 1,485 The amount of total (gains) or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held at October 29, 2022 $ — $ — |
Inventories, net (Tables)
Inventories, net (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Inventories, net | |
Schedule of inventories, net | Inventories consist of the following (in thousands): October 29, April 30, 2022 2022 Raw materials $ 50,848 $ 42,310 Work in process 30,738 28,034 Finished goods 43,062 32,619 Inventories, gross 124,648 102,963 Reserve for inventory excess and obsolescence (14,838) (12,334) Inventories, net $ 109,810 $ 90,629 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Warranty Reserves | |
Summary of warranty reserve activity | Warranty reserve activity is summarized as follows for the three and six months ended October 29, 2022 and October 30, 2021, respectively (in thousands): Three Months Ended Six Months Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 Beginning balance $ 2,988 $ 2,754 $ 2,190 $ 2,341 Balance acquired from acquisition — — — 256 Warranty expense 134 440 1,373 896 Warranty costs settled (105) (544) (546) (843) Ending balance $ 3,017 $ 2,650 $ 3,017 $ 2,650 |
Intangibles (Tables)
Intangibles (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Intangibles, net | |
Schedule of components of intangibles | The components of intangibles are as follows (in thousands): October 29, April 30, 2022 2022 Technology $ 59,563 $ 56,913 Licenses 1,008 1,008 Customer relationships 72,209 72,448 Backlog 2,685 2,100 In-process research and development 550 550 Non-compete agreements 320 320 Trademarks and tradenames 68 68 Other 136 144 Intangibles, gross 136,539 133,551 Less accumulated amortization (47,879) (36,327) Intangibles, net $ 88,660 $ 97,224 |
Schedule of estimated amortization expense for the next five years | Estimated amortization expense for the next five years is as follows (in thousands): Year ending April 30, 2023 $ 12,009 2024 23,770 2025 21,568 2026 16,360 2027 5,663 $ 79,370 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Goodwill. | |
Schedule of the changes in goodwill balances | The following table presents the changes in the Company’s goodwill balance (in thousands): Small UAS TMS MUAS HAPS All other Total Balance at April 30, 2022 $ 6,340 $ — $ 290,157 $ — $ 37,850 $ 334,347 Additions to goodwill — — 1,633 — (1,017) 616 Balance at October 29, 2022 $ 6,340 $ — $ 291,790 $ — $ 36,833 $ 334,963 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Debt | |
Schedule of long-term debt and the current period interest rates | Long-term debt and the current period interest rates were as follows: October 29, April 30, 2022 2022 (In thousands) (In thousands) Term loans $ 167,500 $ 190,000 Revolving credit facility — — Total debt 167,500 190,000 Less current portion 10,000 10,000 Total long-term debt, less current portion 157,500 180,000 Less unamortized debt issuance costs - term loans 1,878 2,160 Total long-term debt, net of unamortized debt issuance costs - term loans $ 155,622 $ 177,840 Unamortized debt issuance costs - revolving credit facility $ 934 $ 1,076 Current period interest rate 5.0% 2.6% |
Schedule of Future long-term debt principle payments | Future long-term debt principal payments at October 29, 2022 were as follows: (In thousands) 2023 $ 2,500 2024 10,000 2025 10,000 2026 145,000 2027 — $ 167,500 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Leases | |
Schedule of components of lease costs | Six Months Ended Six Months Ended October 29, October 30, 2022 2021 Operating lease cost $ 3,775 $ 3,358 Short term lease cost 479 419 Variable lease cost 430 368 Sublease income — (88) Total lease costs, net $ 4,684 $ 4,057 |
Schedule of supplemental lease information | Six Months Ended Six Months Ended October 29, October 30, 2022 2021 (In thousands) (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 3,705 $ 3,503 Right-of-use assets obtained in exchange for new lease liabilities $ 2,134 $ 6,310 Weighted average remaining lease term 58 months 69 months Weighted average discount rate 3.5% 3.4% |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities as of October 29, 2022 were as follows (in thousands): 2023 $ 3,617 2024 7,776 2025 6,679 2026 3,530 2027 3,061 Thereafter 5,484 Total lease payments 30,147 Less: imputed interest (2,540) Total present value of operating lease liabilities $ 27,607 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments | |
Schedule of components of accumulated other comprehensive income (loss) and adjustments | The components of accumulated other comprehensive income (loss) and adjustments are as follows (in thousands): Six Months Ended Six Months Ended October 29, October 30, 2022 2021 Balance, net of $8 and $1 deferred taxes, as of April 30, 2022 and April 30, 2021, respectively $ (6,514) $ 343 Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $0 for the six months ended October 29, 2022 and October 30, 2021 26 (3) Change in foreign currency translation adjustments (1,992) (2,017) Balance, net of $0 and $1 deferred taxes, as of October 29, 2022 and October 30, 2021, respectively $ (8,480) $ (1,677) |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Planck Aerosystems, Inc. ("Planck") | |
Schedule of the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition | The following table summarizes the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck (in thousands): August 17, 2022 Fair value of assets acquired: Technology $ 3,200 Backlog 700 Inventories 109 Other assets 19 Property and equipment, net 13 Goodwill 1,633 Total identifiable net assets $ 5,674 Fair value of liabilities assumed: Customer advances 69 Total liabilities assumed 69 Total identifiable net assets $ 5,605 Fair value of consideration transferred: Cash $ 5,105 Holdback 500 Total consideration $ 5,605 |
Schedule of unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred | The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2021 (in thousands): Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 Revenue $ 111,584 $ 122,667 $ 223,016 $ 224,335 Net (loss) income attributable to AeroVironment, Inc. $ (6,131) $ 2,375 $ (13,450) $ (12,325) |
Telerob. | |
Schedule of the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition | During the fiscal year ended April 30, 2022, the Company finalized its determination of the fair value of the assets and liabilities assumed as of the acquisition date, which is summarized in the following table (in thousands): May 3, 2021 Fair value of assets acquired: Accounts receivable $ 1,045 Unbilled receivable 829 Inventories, net 15,074 Prepaid and other current assets 314 Property and equipment, net 1,571 Operating lease assets 1,508 Other assets 494 Technology 11,500 Backlog 2,400 Customer relationships 5,000 Other intangible assets 102 Goodwill 20,800 Total assets acquired $ 60,637 Fair value of liabilities assumed: Accounts payable $ 1,136 Wages and related accruals 560 Customer advances 1,243 Current operating lease liabilities 361 Other current liabilities 3,310 Non-current operating lease liabilities 1,147 Other non-current liabilities 224 Deferred income taxes 5,617 Total liabilities assumed 13,598 Total identifiable net assets $ 47,039 Fair value of consideration: Cash consideration, net of cash acquired $ 46,150 Contingent consideration 889 Total $ 47,039 |
Schedule of unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred | The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2020 (in thousands): Three Months Ended Six Months Ended October 30, October 30, 2021 2021 Revenue $ 122,008 $ 223,017 Net loss attributable to AeroVironment, Inc. $ 4,454 $ (7,844) |
Pension (Tables)
Pension (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Pension | |
Schedule of projected benefit obligation and fair value of plan assets | Projected benefit obligation $ (3,120) Fair value of plan assets 3,138 Funded status of the plan $ 18 |
Schedule of expected benefits payments | Expected benefits payments as of April 30, 2022 (in thousands): 2023 $ 161 2024 164 2025 165 2026 165 2027 166 2028-2032 828 Total expected benefit payments $ 1,649 |
Schedule net periodic benefit cost (in thousands) is recorded in interest (expense) income, net | Net periodic benefit cost (in thousands) is recorded in interest expense, net. Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 29, October 30, October 29, October 30, 2022 2021 2022 2021 (In thousands) (In thousands) (In thousands) (In thousands) Expected return on plan assets $ — $ 31 $ — $ 63 Interest cost — (15) (17) (30) Actuarial gain — 72 241 6 Net periodic benefit cost $ — $ 88 $ 224 $ 39 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Oct. 29, 2022 | |
Segments | |
Schedule of segment results | Three Months Ended October 29, 2022 Small UAS TMS MUAS HAPS All other Total Revenue $ 26,681 $ 31,101 $ 27,281 $ 9,066 $ 17,455 $ 111,584 Gross margin 12,319 12,636 (6,884) 3,001 4,818 25,890 Income (loss) from operations (2,079) 2,004 (15,242) 1,564 (561) (14,314) Acquisition-related expenses - - 119 - 450 569 Amortization of acquired intangible assets and other purchase accounting adjustments 669 - 5,897 - 1,276 7,842 Adjusted income (loss) from operations $ (1,410) $ 2,004 $ (9,226) $ 1,564 $ 1,165 $ (5,903) Three Months Ended October 30, 2021 Small UAS TMS MUAS HAPS All other Total Revenue $ 54,714 $ 18,418 $ 26,525 $ 10,342 $ 12,009 $ 122,008 Gross margin 27,754 6,222 2,223 3,944 2,312 42,455 Income (loss) from operations 13,377 47 (7,000) 2,073 (5,158) 3,339 Acquisition-related expenses 297 163 108 58 222 848 Amortization of acquired intangible assets and other purchase accounting adjustments 707 - 6,358 - 3,257 10,322 Adjusted income (loss) from operations $ 14,381 $ 210 $ (534) $ 2,131 $ (1,679) $ 14,509 Six Months Ended October 29, 2022 Small UAS TMS MUAS HAPS All other Total Revenue $ 69,937 $ 54,113 $ 46,542 $ 19,281 $ 30,227 $ 220,100 Gross margin 33,615 20,383 (7,957) 6,325 7,238 59,604 Income (loss) from operations 5,946 973 (24,826) 4,103 (3,784) (17,588) Acquisition-related expenses - - 340 - 564 904 Amortization of acquired intangible assets and other purchase accounting adjustments 1,350 - 10,842 - 2,611 14,803 Adjusted income (loss) from operations $ 7,296 $ 973 $ (13,644) $ 4,103 $ (609) $ (1,881) Six Months Ended October 30, 2021 Small UAS TMS MUAS HAPS All other Total Revenue $ 94,638 $ 37,594 $ 48,904 $ 20,694 $ 21,187 $ 223,017 Gross margin 44,674 12,211 5,404 7,118 1,771 71,178 Income (loss) from operations 15,335 (416) (13,381) 3,176 (13,488) (8,774) Acquisition-related expenses 721 414 1,492 162 1,313 4,102 Amortization of acquired intangible assets and other purchase accounting adjustments 1,414 - 11,549 - 6,483 19,446 Adjusted income (loss) from operations $ 17,470 $ (2) $ (340) $ 3,338 $ (5,692) $ 14,774 |
Schedule of identifiable assets by segment | October 29, 2022 Small UAS TMS MUAS HAPS All other Corporate Total Identifiable assets $ 103,277 $ 77,334 $ 394,872 $ 7,200 $ 72,098 $ 236,901 $ 891,682 April 30, 2022 Small UAS TMS MUAS HAPS All other Corporate Total Identifiable assets $ 110,286 $ 91,862 $ 388,058 $ 8,148 $ 86,617 $ 229,229 $ 914,200 |
Organization and Significant _4
Organization and Significant Accounting Policies - (Details) | Oct. 14, 2022 | Sep. 15, 2021 | May 03, 2021 |
Altoy | |||
Ownership interest | 15% | 85% | |
Percentage of ownership interest sold | 35% | 35% | |
Telerob | |||
Ownership interest acquired | 100% |
Organization and Significant _5
Organization and Significant Accounting Policies - Performance Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Organization and Significant Accounting Policies | ||||
Remaining performance obligations satisfied over time (as a percentage) | 65% | 51% | 63% | 55% |
Remaining performance obligations at a point in time (as a percentage) | 35% | 49% | 37% | 45% |
Performance Obligations | ||||
Remaining performance obligations | $ 293,147 | $ 293,147 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-30 | ||||
Organization and Significant Accounting Policies | ||||
Remaining performance obligations (as a percentage) | 58% | 58% | ||
Performance Obligations | ||||
Year of performance obligations | 1 year | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-30 | ||||
Organization and Significant Accounting Policies | ||||
Remaining performance obligations (as a percentage) | 42% | 42% | ||
Performance Obligations | ||||
Year of performance obligations | 2 years | 2 years |
Organization and Significant _6
Organization and Significant Accounting Policies - Contract Estimates (Details) | 3 Months Ended | 6 Months Ended | |
Oct. 29, 2022 USD ($) contract | Oct. 29, 2022 USD ($) contract | Oct. 30, 2021 USD ($) | |
Material adjustment to any one contract | $ 0 | ||
Number of active contracts | contract | 1 | 1 | |
TMS contract | |||
Amount of aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods | $ 1,332,000 | ||
Amount of revised aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods | $ 2,560,000 | ||
Number of active contracts | contract | 2 | 2 |
Organization and Significant _7
Organization and Significant Accounting Policies - Revenue by Category (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Oct. 29, 2022 USD ($) | Oct. 30, 2021 USD ($) | Oct. 29, 2022 USD ($) segment | Oct. 30, 2021 USD ($) | Apr. 30, 2022 USD ($) | |
Disaggregation of revenue | |||||
Revenue | $ 111,584 | $ 122,008 | $ 220,100 | $ 223,017 | |
Number of Reportable Segments | segment | 4 | ||||
Reserves for Incurred Cost Claim Audits | 0 | $ 0 | $ 0 | ||
Contract Liability | |||||
Disaggregation of revenue | |||||
Revenue | 1,080,000 | 580,000 | 3,004,000 | 889,000 | |
Domestic | |||||
Disaggregation of revenue | |||||
Revenue | 67,657 | 68,663 | 117,760 | 137,051 | |
International | |||||
Disaggregation of revenue | |||||
Revenue | 43,927 | 53,345 | 102,340 | 85,966 | |
U.S. government | |||||
Disaggregation of revenue | |||||
Revenue | 84,165 | 72,076 | 151,880 | 143,151 | |
Non-U.S. government | |||||
Disaggregation of revenue | |||||
Revenue | 27,419 | 49,932 | 68,220 | 79,866 | |
FFP | |||||
Disaggregation of revenue | |||||
Revenue | 85,236 | 98,393 | 166,065 | 179,159 | |
CPFF | |||||
Disaggregation of revenue | |||||
Revenue | 25,013 | 21,594 | 51,468 | 40,711 | |
T&M | |||||
Disaggregation of revenue | |||||
Revenue | 1,335 | 2,021 | 2,567 | 3,147 | |
Small UAS | |||||
Disaggregation of revenue | |||||
Revenue | 26,681 | 54,714 | 69,937 | 94,638 | |
TMS | |||||
Disaggregation of revenue | |||||
Revenue | 31,101 | 18,418 | 54,113 | 37,594 | |
MUAS. | |||||
Disaggregation of revenue | |||||
Revenue | 27,281 | 26,525 | 46,542 | 48,904 | |
HAPS | |||||
Disaggregation of revenue | |||||
Revenue | 9,066 | 10,342 | 19,281 | 20,694 | |
Other. | |||||
Disaggregation of revenue | |||||
Revenue | $ 17,455 | $ 12,009 | $ 30,227 | $ 21,187 |
Organization and Significant _8
Organization and Significant Accounting Policies - (Loss) earnings per share (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Numerator for basic earnings per share: | ||||
Net (loss) income attributable to AeroVironment, Inc. | $ (6,668) | $ 2,525 | $ (15,063) | $ (11,456) |
Denominator for basic (loss) earnings per share: | ||||
Weighted average common shares | 24,900,873 | 24,641,614 | 24,852,219 | 24,630,838 |
Dilutive effect of employee stock options, restricted stock and restricted stock units | 244,256 | |||
Denominator for diluted (loss) earbubgs per share | 24,900,873 | 24,885,870 | 24,852,219 | 24,630,838 |
Number of shares reserved for issuance | 0 | 0 | 0 | 0 |
Number of anti-dilutive shares | 148,196 | 4,742 | 156,625 | 266,077 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Dec. 16, 2021 | Dec. 02, 2021 | Aug. 16, 2019 | Feb. 22, 2019 | Oct. 30, 2021 | Oct. 29, 2022 | Apr. 30, 2021 | |
Other expense | |||||||
Discontinued operations | |||||||
Litigation reserve expense | $ 9,300,000 | ||||||
Discontinued Operations | |||||||
Discontinued operations | |||||||
Amount of alleged damages | $ 6,500,000 | ||||||
EES Business | |||||||
Discontinued operations | |||||||
Litigation reserve expense | $ 10,000,000 | ||||||
Amount of existing claims settled | $ 20,000,000 | $ 20,000,000 | |||||
Settlement paid | $ 10,000,000 | ||||||
Payment period | 24 months | ||||||
Holdback | Discontinued Operations | |||||||
Discontinued operations | |||||||
Amount of alleged damages | $ 6,500,000 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Short-term investments: | ||
Total short-term investments | $ 24,716 | |
Long-term investments: | ||
Equity Method Investments. | $ 16,434 | 15,433 |
Total long-term investments | 22,462 | 15,433 |
Investment in limited partnership fund | ||
Long-term investments: | ||
Equity Method Investments. | 16,434 | 15,433 |
Available-for-sale securities. | ||
Short-term investments: | ||
Total short-term investments | 24,716 | |
Long-term investments: | ||
Total long-term investments | 6,028 | |
Available-for-sale securities. | Municipal securities | ||
Short-term investments: | ||
Total short-term investments | 19,725 | |
Available-for-sale securities. | U.S. government securities | ||
Short-term investments: | ||
Total short-term investments | $ 4,991 | |
Available-for-sale securities. | Equity securities | ||
Long-term investments: | ||
Total long-term investments | $ 6,028 |
Investments - Available For Sal
Investments - Available For Sale Securities (Details) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Available-For-Sale Securities | ||
Amortized Cost | $ 24,751 | |
Gross Unrealized Losses | (35) | |
Total | $ 0 | 24,716 |
Municipal securities | ||
Available-For-Sale Securities | ||
Amortized Cost | 19,756 | |
Gross Unrealized Losses | (31) | |
Total | 19,725 | |
U.S. government securities | ||
Available-For-Sale Securities | ||
Amortized Cost | 4,995 | |
Gross Unrealized Losses | (4) | |
Total | $ 4,991 |
Investments - Equity Securities
Investments - Equity Securities (Details) - Available-for-sale securities. - Equity securities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Oct. 29, 2022 | Oct. 29, 2022 | |
Investments | ||
Net gains recognized during the period on equity securities | $ 928 | $ 928 |
Unrealized gains recognized during the period on equity securities still held at the reporting date | $ 928 | $ 928 |
Fair Value Measurements - (Deta
Fair Value Measurements - (Details) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 0 | $ 24,716 |
Contingent consideration | (1,084) | |
Total | 1,084 | |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | (1,084) | |
Total | 1,084 | |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,716 | |
Contingently returnable consideration | 23 | 143 |
Total | 6,051 | 24,859 |
Contingent consideration | (1,485) | |
Total | 1,485 | |
Recurring basis | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 5,728 | |
Recurring basis | Warrant | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 300 | |
Recurring basis | Quoted prices in active market for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 5,728 | |
Recurring basis | Quoted prices in active market for identical assets (Level 1) | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 5,728 | |
Recurring basis | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,716 | |
Total | 300 | 24,716 |
Recurring basis | Significant other observable inputs (Level 2) | Warrant | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 300 | |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingently returnable consideration | 23 | 143 |
Total | 23 | $ 143 |
Contingent consideration | (1,485) | |
Total | $ 1,485 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation (Details) - Significant unobservable inputs (Level 3) $ in Thousands | 6 Months Ended |
Oct. 29, 2022 USD ($) | |
Reconciliation between beginning and ending balances of items measured at fair value on recurring basis | |
Balance at the beginning of the period | $ 143 |
Total fair value measurement adjustments (realized or unrealized) | $ (120) |
Included in selling, general and administrative | Selling, general and administrative |
Balance at the end of the period | $ 23 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of the period | 1,084 |
Total (gains) losses (realized or unrealized) | $ 401 |
Included in selling, general and administrative | Selling, general and administrative |
Settlements | $ 1,485 |
Fair Value Measurements - Acqui
Fair Value Measurements - Acquisitions (Details) € in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Oct. 29, 2022 USD ($) | Oct. 29, 2022 EUR (€) | Apr. 30, 2022 USD ($) | Oct. 29, 2022 EUR (€) | Jul. 30, 2022 USD ($) | |
Fair Value Measurement | |||||
Fair value of contingent consideration | $ 1,084 | ||||
Business Combination, Specific Revenue Targets Achieved In Second Earnout Year | |||||
Fair Value Measurement | |||||
Released from escrow | $ 2,000 | ||||
Intelligent Systems Group | |||||
Fair Value Measurement | |||||
Released from escrow | $ 2,000 | ||||
Period to obtain target | 3 years | ||||
Intelligent Systems Group | Maximum | |||||
Fair Value Measurement | |||||
Total | $ 6,000 | ||||
Telerob | |||||
Fair Value Measurement | |||||
Amount of earnout amount not achieved | $ 2,424 | € 2,000 | |||
Telerob | Maximum | |||||
Fair Value Measurement | |||||
Additional cash consideration | $ 7,272 | € 6,000 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Inventories, net | ||
Raw materials | $ 50,848 | $ 42,310 |
Work in process | 30,738 | 28,034 |
Finished goods | 43,062 | 32,619 |
Inventories, gross | 124,648 | 102,963 |
Reserve for inventory excess and obsolescence | (14,838) | (12,334) |
Inventories, net | $ 109,810 | $ 90,629 |
Equity Method Investments - Inv
Equity Method Investments - Investment in Limited Partnership Fund (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2022 | Jul. 31, 2019 | Oct. 29, 2022 | Jul. 30, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Apr. 30, 2022 | Apr. 30, 2021 | Apr. 30, 2020 | |
Equity Method Investments | ||||||||||
Equity method investment (loss) income, net of tax | $ (1,273) | $ 1,133 | $ (1,773) | $ (8) | ||||||
Carrying value of investment | 16,434 | 16,434 | $ 15,433 | |||||||
Limited Partnership Fund | ||||||||||
Equity Method Investments | ||||||||||
Capital contributions | 0 | $ 10,000 | $ 10,000 | |||||||
Limited Partnership Fund | Equity method investment loss, net of tax | ||||||||||
Equity Method Investments | ||||||||||
Equity method investment (loss) income, net of tax | (1,273) | 1,852 | (1,773) | 2,365 | ||||||
Income tax expense from equity method investments | 0 | 529 | 0 | 529 | ||||||
Limited Partnership Fund | Long term investments | ||||||||||
Equity Method Investments | ||||||||||
Carrying value of investment | $ 16,434 | $ 16,434 | $ 15,433 | |||||||
Limited Partnership Fund, Technologies and Start-Up | ||||||||||
Equity Method Investments | ||||||||||
Capital contributions | $ 20,000 | $ 2,774 | ||||||||
Expected years contributions will be made | 5 years | |||||||||
Additional capital contributions | $ 17,226 | |||||||||
HAPSMobile | ||||||||||
Equity Method Investments | ||||||||||
Equity method investment (loss) income, net of tax | $ 190 | $ 1,845 |
Equity Method Investments (Deta
Equity Method Investments (Details) ¥ in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||||||||||||
Mar. 01, 2022 USD ($) | Mar. 01, 2022 JPY (¥) | Oct. 29, 2021 USD ($) | Oct. 29, 2021 JPY (¥) | Aug. 13, 2021 USD ($) | Aug. 13, 2021 JPY (¥) | Jun. 07, 2021 USD ($) | Jun. 07, 2021 JPY (¥) | May 29, 2021 USD ($) | Oct. 29, 2022 USD ($) | Oct. 30, 2021 USD ($) | Oct. 29, 2022 USD ($) | Oct. 30, 2021 USD ($) | Apr. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2022 JPY (¥) | May 29, 2021 JPY (¥) | Dec. 04, 2019 | Dec. 27, 2017 | |
Equity Method Investments | |||||||||||||||||||
Equity method investment (loss) income, net of tax | $ (1,273) | $ 1,133 | $ (1,773) | $ (8) | |||||||||||||||
Carrying value of investment | $ 16,434 | $ 16,434 | $ 15,433 | ||||||||||||||||
HAPSMobile | |||||||||||||||||||
Equity Method Investments | |||||||||||||||||||
Ownership percentage | 7% | 5% | |||||||||||||||||
Equity method investment (loss) income, net of tax | $ 190 | $ 1,845 | |||||||||||||||||
HAPSMobile | SoftBank | |||||||||||||||||||
Equity Method Investments | |||||||||||||||||||
Ownership percentage | 100% | 100% | 7% | 7% | |||||||||||||||
Payments for purchase of interest | $ 6,497 | ¥ 808,008 | |||||||||||||||||
Execution of MDDA | ¥ | ¥ 500,000 | ||||||||||||||||||
Altoy | Other assets, long term | |||||||||||||||||||
Equity Method Investments | |||||||||||||||||||
Carrying value of investment | $ 96 | $ 96 | |||||||||||||||||
MDDA | |||||||||||||||||||
Equity Method Investments | |||||||||||||||||||
Term of MDDA | 5 years | ||||||||||||||||||
MDDA | SoftBank | |||||||||||||||||||
Equity Method Investments | |||||||||||||||||||
Maximum value under MDDA | $ 51,200 | ||||||||||||||||||
MDDA | HAPSMobile | |||||||||||||||||||
Equity Method Investments | |||||||||||||||||||
Amount funded | $ 4,345 | ¥ 503,832 | $ 1,674 | ¥ 190,000 | $ 1,638 | ¥ 180,000 | $ 1,195 | ¥ 130,000 |
Warranty Reserves (Details)
Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Warranty Reserves | ||||
Beginning balance | $ 2,988 | $ 2,754 | $ 2,190 | $ 2,341 |
Balance acquired from acquisition | 256 | |||
Warranty expense | 134 | 440 | 1,373 | 896 |
Warranty costs settled | (105) | (544) | (546) | (843) |
Ending balance | $ 3,017 | $ 2,650 | $ 3,017 | $ 2,650 |
Intangibles, net - Intangibles
Intangibles, net - Intangibles included in other assets on the balance sheet (Details) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 |
Intangibles, net | ||
Intangibles, gross | $ 136,539 | $ 133,551 |
Less accumulated amortization | (47,879) | (36,327) |
Intangibles, net | 88,660 | 97,224 |
Technology | ||
Intangibles, net | ||
Intangibles, gross | 59,563 | 56,913 |
Licenses | ||
Intangibles, net | ||
Intangibles, gross | 1,008 | 1,008 |
Backlog. | ||
Intangibles, net | ||
Intangibles, gross | 2,685 | 2,100 |
Customer relationships | ||
Intangibles, net | ||
Intangibles, gross | 72,209 | 72,448 |
In-process research and development | ||
Intangibles, net | ||
Intangibles, gross | 550 | 550 |
Non-compete agreements | ||
Intangibles, net | ||
Intangibles, gross | 320 | 320 |
Trademarks and tradenames | ||
Intangibles, net | ||
Intangibles, gross | 68 | 68 |
Other | ||
Intangibles, net | ||
Intangibles, gross | $ 136 | $ 144 |
Intangibles, net (Details)
Intangibles, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Oct. 29, 2022 | Jul. 30, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Apr. 30, 2022 | |
Intangibles, net | ||||||
Weighted average amortization period | 4 years | 4 years | ||||
Amortization expense | $ 5,983 | $ 6,843 | $ 11,852 | $ 13,816 | ||
Weighted average | ||||||
Intangibles, net | ||||||
Weighted average amortization period | 4 years |
Intangibles, net - Estimated Am
Intangibles, net - Estimated Amortization Expense (Details) $ in Thousands | Apr. 30, 2022 USD ($) |
Estimated amortization expense | |
2023 | $ 12,009 |
2024 | 23,770 |
2025 | 21,568 |
2026 | 16,360 |
2027 | 5,663 |
Total | $ 79,370 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 6 Months Ended |
Oct. 29, 2022 USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 334,347 |
Additions to goodwill | 616 |
Goodwill, Ending Balance | 334,963 |
Small UAS | |
Goodwill | |
Goodwill, Beginning Balance | 6,340 |
Goodwill, Ending Balance | 6,340 |
MUAS | |
Goodwill | |
Goodwill, Beginning Balance | 290,157 |
Additions to goodwill | 1,633 |
Goodwill, Ending Balance | 291,790 |
All other | |
Goodwill | |
Goodwill, Beginning Balance | 37,850 |
Additions to goodwill | (1,017) |
Goodwill, Ending Balance | $ 36,833 |
Debt - (Details)
Debt - (Details) | 6 Months Ended | ||
Feb. 04, 2022 | Feb. 19, 2021 USD ($) payment | Oct. 29, 2022 | |
Arcturus UAV Inc. | Aerovironment | |||
Debt | |||
Ownership interest | 100% | ||
Revolving credit facility | |||
Debt | |||
Additional interest rate if default occurs (as a percentage) | 2% | ||
Revolving credit facility | Arcturus UAV Inc. | |||
Debt | |||
Term of loan | 5 years | ||
Amount of loan | $ 100,000,000 | ||
Revolving credit facility | Minimum | Fiscal quarter ended January 29, 2022 and April, 2022 | |||
Debt | |||
Consolidated leverage ratio | 4% | ||
Revolving credit facility | Minimum | Fiscal quarters ending during the period from May 1, 2022 to October 31, 2022 | |||
Debt | |||
Consolidated leverage ratio | 3.50% | ||
Revolving credit facility | Minimum | Fiscal quarter ending thereafter which is after October 31, 2022 | |||
Debt | |||
Consolidated leverage ratio | 3% | ||
Revolving credit facility | Maximum | Fiscal quarter ended January 29, 2022 and April, 2022 | |||
Debt | |||
Consolidated leverage ratio | 1% | ||
Revolving credit facility | Maximum | Fiscal quarters ending during the period from May 1, 2022 to October 31, 2022 | |||
Debt | |||
Consolidated leverage ratio | 1% | ||
Revolving credit facility | Maximum | Fiscal quarter ending thereafter which is after October 31, 2022 | |||
Debt | |||
Consolidated leverage ratio | 1% | ||
Revolving credit facility | Maximum | Arcturus UAV Inc. | |||
Debt | |||
Percentage of outstanding equity interests in foreign subsidiaries | 65% | ||
Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Interest rate | 0% | ||
Revolving credit facility | Base Rate | |||
Debt | |||
Interest rate | 0.50% | ||
Revolving credit facility | Base Rate | Minimum | |||
Debt | |||
Interest rate | 0.50% | ||
Revolving credit facility | Base Rate | Maximum | |||
Debt | |||
Interest rate | 1.50% | ||
Revolving credit facility | SOFR | |||
Debt | |||
Interest rate | 1% | ||
SOFR adjustment | 0.10% | ||
Revolving credit facility | SOFR | Minimum | |||
Debt | |||
Interest rate | 1.50% | ||
Revolving credit facility | SOFR | Maximum | |||
Debt | |||
Interest rate | 2.50% | ||
Revolving credit facility | Consolidated Leverage Ratio | Minimum | |||
Debt | |||
Interest rate | 3% | ||
Commitment fees (as a percentage) | 0.20% | ||
Revolving credit facility | Consolidated Leverage Ratio | Maximum | |||
Debt | |||
Interest rate | 1% | ||
Commitment fees (as a percentage) | 0.35% | ||
Revolving credit facility | Consolidated Fixed Charge Coverage Ratio | Minimum | |||
Debt | |||
Interest rate | 1.25% | ||
Revolving credit facility | Consolidated Fixed Charge Coverage Ratio | Maximum | |||
Debt | |||
Interest rate | 1% | ||
Standby Letters of Credit | Arcturus UAV Inc. | |||
Debt | |||
Amount of sublimit | $ 10,000,000 | ||
Term loans | Arcturus UAV Inc. | |||
Debt | |||
Term of loan | 4 years | ||
Amount of loan | $ 200,000,000 | ||
Term of amortization | 5 years | ||
Term loans | Period One Through Four | Arcturus UAV Inc. | |||
Debt | |||
Amount of annual required payment expressed as a percent of the outstanding obligation | 5% | ||
Term loans | Period Five | Arcturus UAV Inc. | |||
Debt | |||
Amount of annual required payment expressed as a percent of the outstanding obligation | 80% | ||
Number of quarterly payments | payment | 3 | ||
Amount of quarterly required payment expressed as a percentage of outstanding obligation | 1.25% |
Debt - Long-term debt (Details)
Debt - Long-term debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Oct. 29, 2022 | Apr. 30, 2022 | |
Long-term debt | ||
Total debt | $ 167,500 | $ 190,000 |
Less current portion | 10,000 | 10,000 |
Total long-term debt, less current portion | 157,500 | 180,000 |
Less unamortized debt issuance costs - term loans | 1,878 | 2,160 |
Total long-term debt, net of unamortized debt issuance costs - term loans | 155,622 | 177,840 |
Unamortized debt issuance costs - revolving credit facility | 934 | 1,076 |
Term loans | ||
Long-term debt | ||
Total debt | $ 167,500 | $ 190,000 |
Revolving credit facility | ||
Long-term debt | ||
Current period interest rate | 5% | 2.60% |
Debt - Future principle payment
Debt - Future principle payments (Details) $ in Thousands | Oct. 29, 2022 USD ($) |
Future principle payments | |
2023 | $ 2,500 |
2024 | 10,000 |
2025 | 10,000 |
2026 | 145,000 |
Total | $ 167,500 |
Leases (Details)
Leases (Details) | 6 Months Ended |
Oct. 29, 2022 | |
Leases | |
Option to extend | true |
Option to terminate | true |
Option to terminate period (in years) | 2 years |
Minimum | |
Leases | |
Remaining lease terms (in years) | 1 year |
Maximum | |
Leases | |
Remaining lease terms (in years) | 6 years |
Option to extend period (in years) | 10 years |
Leases - Components of lease co
Leases - Components of lease costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Components of lease costs | ||
Operating lease cost | $ 3,775 | $ 3,358 |
Short term lease cost | 479 | 419 |
Variable lease cost | 430 | 368 |
Sublease income | (88) | |
Total lease costs, net | $ 4,684 | $ 4,057 |
Leases - Supplemental lease inf
Leases - Supplemental lease information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Leases | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 3,705 | $ 3,503 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 2,134 | $ 6,310 |
Weighted average remaining lease term | 58 months | 69 months |
Weighted average discount rate | 3.50% | 3.40% |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) $ in Thousands | Oct. 29, 2022 USD ($) |
Maturities of operating lease liabilities: | |
2022 | $ 3,617 |
2023 | 7,776 |
2024 | 6,679 |
2025 | 3,530 |
2026 | 3,061 |
Thereafter | 5,484 |
Total lease payments | 30,147 |
Less: imputed interest | (2,540) |
Total present value of operating lease liabilities | $ 27,607 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Accumulated other comprehensive income | ||||
Balance, net of $8 and $1 deferred taxes, as of April 30, 2022 and April 30, 2021, respectively | $ (6,514) | |||
Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $0 for the three and six months ended October 29, 2022 and October 30, 2021, respectively | $ 6 | $ 1 | 26 | $ (3) |
Change in foreign currency translation adjustments | (928) | (1,284) | (1,992) | (2,017) |
Balance, net of $2 and $1 deferred taxes, as of July 30, 2022 and July 31, 2021, respectively | (8,480) | (8,480) | ||
Accumulated Other Comprehensive (Loss) Income | ||||
Accumulated other comprehensive income | ||||
Balance, net of $8 and $1 deferred taxes, as of April 30, 2022 and April 30, 2021, respectively | (6,514) | 343 | ||
Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $0 for the three and six months ended October 29, 2022 and October 30, 2021, respectively | 6 | 1 | 26 | (3) |
Change in foreign currency translation adjustments | (1,992) | (2,017) | ||
Balance, net of $2 and $1 deferred taxes, as of July 30, 2022 and July 31, 2021, respectively | $ (8,480) | $ (1,677) | $ (8,480) | $ (1,677) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) and Reclassifications Adjustments - Taxes (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Apr. 30, 2022 | Apr. 30, 2021 | |
Accumulated other comprehensive income | ||||
Unrealized losses, tax portion | $ 0 | $ 0 | ||
Accumulated Other Comprehensive (Loss) Income | ||||
Accumulated other comprehensive income | ||||
Other Comprehensive Income (Loss), Tax | $ 0 | $ 1 | $ 8 | $ 1 |
Customer-Funded Research & De_2
Customer-Funded Research & Development (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Customer-Funded Research & Development | ||||
Revenue from customer funded research and development | $ 24,937 | $ 19,175 | $ 47,936 | $ 36,086 |
Long-Term Incentive Awards (Det
Long-Term Incentive Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Oct. 29, 2022 | Oct. 30, 2021 | Jul. 31, 2021 | Aug. 01, 2020 | Jul. 27, 2019 | Oct. 29, 2022 | Oct. 30, 2021 | |
Fiscal 2023 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 664,000 | $ 1,061,000 | $ 0 | ||||
Fiscal 2023 LTIP | 100% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 100% | ||||||
Fiscal 2023 LTIP | 50% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 50% | ||||||
Fiscal 2023 LTIP | 250% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 250% | ||||||
Fiscal 2023 LTIP | Performance based restricted stock units | Maximum | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | 12,829,000 | ||||||
Fiscal 2022 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ (311) | $ 201 | (116,000) | 509 | |||
Fiscal 2022 LTIP | Performance based restricted stock units | |||||||
Stock Based Compensation | |||||||
Exercisable period from grant date | 3 years | ||||||
Fiscal 2022 LTIP | Performance based restricted stock units | 100% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 100% | ||||||
Fiscal 2022 LTIP | Performance based restricted stock units | 50% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 50% | ||||||
Fiscal 2022 LTIP | Performance based restricted stock units | 250% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 250% | ||||||
Fiscal 2022 LTIP | Performance based restricted stock units | Maximum | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | 10,148 | ||||||
Fiscal 2021 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | 116,000 | (572,000) | 192,000 | (507,000) | |||
Fiscal 2021 LTIP | Performance based restricted stock units | |||||||
Stock Based Compensation | |||||||
Exercisable period from grant date | 3 years | ||||||
Fiscal 2021 LTIP | Performance based restricted stock units | 100% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 100% | ||||||
Fiscal 2021 LTIP | Performance based restricted stock units | 50% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 50% | ||||||
Fiscal 2021 LTIP | Performance based restricted stock units | 250% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 250% | ||||||
Fiscal 2021 LTIP | Performance based restricted stock units | Maximum | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | 5,858 | ||||||
Fiscal 2020 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 0 | $ (617,000) | $ 0 | $ (619,000) | |||
Fiscal 2020 LTIP | Performance based restricted stock units | |||||||
Stock Based Compensation | |||||||
Exercisable period from grant date | 3 years | ||||||
Issue of fully-vested shares of common stock to settle | 5,678 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Income taxes | ||||
Benefit from income taxes | $ (10,457) | $ (9,511) | $ (7,851) | $ (10,468) |
Effective tax benefit rate (as a percent) | 66.10% | 117.60% | 37.20% | 48% |
Share Repurchase Plan and Issua
Share Repurchase Plan and Issuances (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Oct. 29, 2022 | Oct. 30, 2021 | Jul. 30, 2022 | Apr. 30, 2022 | Sep. 30, 2015 | |
Share Repurchase | |||||
Stock Repurchase Program, Authorized Amount | $ 25,000 | ||||
Shares repurchased and retired | 0 | 0 | |||
Share authorized for future repurchases | $ 21,200 | $ 21,200 |
Share Repurchase Plan and Iss_2
Share Repurchase Plan and Issuances - Shelf Registration (Details) - S-3 - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 08, 2022 | Oct. 29, 2022 | |
Share Repurchase Plan and Issuances | ||
Number of share sold | 125,441 | |
Total gross proceeds | $ 12,700 | |
Amount of aggregate offering price remaining. | $ 187,300 | |
Maximum | ||
Share Repurchase Plan and Issuances | ||
Aggregate offering price | $ 200,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 30, 2021 | Oct. 30, 2021 | Oct. 29, 2022 | Apr. 30, 2022 | |
Long-Term Incentive Awards | ||||
Revenue | $ 10,342 | $ 20,694 | ||
Unbilled related party receivables | $ 2,229 | |||
HAPSMobile | Design and Development Agreement | ||||
Long-Term Incentive Awards | ||||
Revenue | $ 20,694,000 | |||
HAPSMobile | Design and Development Agreement | ||||
Long-Term Incentive Awards | ||||
Revenue | $ 10,342,000 | |||
SoftBank | Design and Development Agreement | ||||
Long-Term Incentive Awards | ||||
Maximum net value | $ 51,200 |
Business Acquisitions - Planck
Business Acquisitions - Planck (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Aug. 17, 2022 | Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Apr. 30, 2022 | |
Fair value of assets acquired: | ||||||
Goodwill | $ 334,963,000 | $ 334,963,000 | $ 334,347,000 | |||
Planck Aerosystems, Inc. ("Planck") | ||||||
Business Acquisitions | ||||||
Cash | $ 5,105,000 | |||||
Amount of holdback | 500,000 | |||||
Revenue | 68,000 | 111,584,000 | $ 122,667,000 | 223,016,000 | $ 224,335,000 | |
Fair value of assets acquired: | ||||||
Inventories | 109,000 | |||||
Other assets | 19,000 | |||||
Property and equipment, net | 13,000 | |||||
Goodwill | 1,633,000 | |||||
Total assets acquired | 5,674,000 | |||||
Fair value of liabilities assumed: | ||||||
Customer advances | 69,000 | |||||
Total liabilities assumed | 69,000 | |||||
Total identifiable net assets | 5,605,000 | |||||
Fair value of consideration transferred: | ||||||
Cash | 5,105,000 | |||||
Holdback | 500,000 | |||||
Total consideration | 5,605,000 | |||||
Supplemental Pro Forma Information (unaudited) | ||||||
Revenue | 68,000 | 111,584,000 | 122,667,000 | 223,016,000 | 224,335,000 | |
Net (loss) income attributable to AeroVironment, Inc. | (6,131,000) | $ 2,375,000 | $ (13,450,000) | $ (12,325,000) | ||
Planck Aerosystems, Inc. ("Planck") | SG&A | ||||||
Business Acquisitions | ||||||
Acquisition-related costs | $ 569,000 | |||||
Planck Aerosystems, Inc. ("Planck") | Technology | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | 3,200,000 | |||||
Planck Aerosystems, Inc. ("Planck") | Backlog. | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | $ 700,000 |
Business Acquisitions - Telerob
Business Acquisitions - Telerob (Details) | 3 Months Ended | 6 Months Ended | ||||||||
May 03, 2021 USD ($) | May 03, 2021 EUR (€) | Oct. 30, 2021 USD ($) | Jul. 31, 2021 USD ($) | Oct. 29, 2022 USD ($) | Oct. 29, 2022 EUR (€) | Oct. 30, 2021 USD ($) | Jul. 30, 2022 USD ($) | Apr. 30, 2022 USD ($) | May 03, 2021 EUR (€) | |
Business Acquisitions | ||||||||||
Number of months until escrow will be release | 30 months | 30 months | ||||||||
Fair value of assets acquired: | ||||||||||
Goodwill | $ 334,963,000 | $ 334,347,000 | ||||||||
Telerob. | ||||||||||
Business Acquisitions | ||||||||||
Cash consideration | $ 45,400,000 | € 37,455,000 | ||||||||
Amount held in escrow | 3,636,000 | € 3,000,000 | ||||||||
Amount of indebtedness paid | 9,468,000 | 7,811,000 | ||||||||
Period to obtain target | 36 months | 36 months | ||||||||
Fair value of assets acquired: | ||||||||||
Accounts receivable | 1,045,000 | |||||||||
Unbilled receivable | 829,000 | |||||||||
Inventories, net | 15,074,000 | |||||||||
Prepaid and other current assets | 314,000 | |||||||||
Property and equipment, net | 1,571,000 | |||||||||
Operating lease assets | 1,508,000 | |||||||||
Other assets | 494,000 | |||||||||
Other intangible assets | 102,000 | |||||||||
Goodwill | 20,800,000 | |||||||||
Total assets acquired | 60,637,000 | |||||||||
Fair value of liabilities assumed: | ||||||||||
Accounts payable | 1,136,000 | |||||||||
Wages and related accruals | 560,000 | |||||||||
Customer advances | 1,243,000 | |||||||||
Current operating lease liabilities | 361,000 | |||||||||
Other current liabilities | 3,310,000 | |||||||||
Non-current operating lease liabilities | 1,147,000 | |||||||||
Other non-current liabilities | 224,000 | |||||||||
Deferred income taxes | 5,617,000 | |||||||||
Total liabilities assumed | 13,598,000 | |||||||||
Total identifiable net assets | 47,039,000 | |||||||||
Fair value of consideration transferred: | ||||||||||
Cash consideration, net of cash acquired | 46,150,000 | |||||||||
Contingent consideration | 889,000 | |||||||||
Total | 47,039,000 | |||||||||
Supplemental Pro Forma Information (unaudited) | ||||||||||
Revenue | $ 122,008,000 | $ 223,017,000 | ||||||||
Net loss attributable to AeroVironment, Inc. | $ 4,454,000 | $ (7,844,000) | ||||||||
SG&A | Telerob. | ||||||||||
Business Acquisitions | ||||||||||
Acquisition-related costs | $ 411,000,000 | |||||||||
Technology | Telerob. | ||||||||||
Fair value of assets acquired: | ||||||||||
Intangible assets | 11,500,000 | |||||||||
Backlog. | Telerob. | ||||||||||
Fair value of assets acquired: | ||||||||||
Intangible assets | 2,400,000 | |||||||||
Customer relationships | Telerob. | ||||||||||
Fair value of assets acquired: | ||||||||||
Intangible assets | 5,000,000 | |||||||||
Business Combination, Specific Revenue Targets Achieved In First Earnout Year | Telerob. | ||||||||||
Business Acquisitions | ||||||||||
Contingent consideration paid | $ 2,424,000 | € 2,000,000 | ||||||||
Period to obtain target | 12 months | 12 months | ||||||||
Amount of earnout that was not achieved | $ 2,424,000 | € 2,000,000 | ||||||||
Business Combination, Specific Revenue Targets Achieved In Second Earnout Year | ||||||||||
Business Acquisitions | ||||||||||
Amount held in escrow | $ 2,000,000 | |||||||||
Business Combination, Specific Revenue Targets Achieved In Second Earnout Year | Telerob. | ||||||||||
Business Acquisitions | ||||||||||
Contingent consideration paid | $ 2,424,000 | € 2,000,000 | ||||||||
Period to obtain target | 12 months | 12 months | ||||||||
Business Combination, Specific Awards Or Orders From US Military Are Achieved Prior To 36 Month Post Closing Period [Member] | Telerob. | ||||||||||
Business Acquisitions | ||||||||||
Contingent consideration paid | $ 2,424,000 | € 2,000,000 | ||||||||
Period to obtain target | 36 months | 36 months |
Pension (Details)
Pension (Details) - Pension Plan | 3 Months Ended | 12 Months Ended | |
Jul. 30, 2022 | Apr. 30, 2022 | Oct. 29, 2022 | |
Pension | |||
Discount rate assumption | 1.70% | ||
Percentage of expected return on plan assets | 2.90% | 2.90% | |
Pension increase for in-payment benefits | 1.50% |
Pension - Projected benefit obl
Pension - Projected benefit obligation and fair value of plan assets (Details) - USD ($) $ in Thousands | May 03, 2021 | Apr. 30, 2022 |
Pension | ||
Defined Benefit Plan, Funding Status [Extensible List] | us-gaap:UnfundedPlanMember | |
Pension Plan | ||
Pension | ||
Projected benefit obligation | $ (3,120) | |
Fair value of plan assets | 3,138 | |
Funded status of the plan | $ 18 |
Pension - Expected benefits pai
Pension - Expected benefits paid (Details) $ in Thousands | Apr. 30, 2022 USD ($) |
Pension | |
2023 | $ 161 |
2024 | 164 |
2025 | 165 |
2026 | 165 |
2027 | 166 |
2028-2032 | 828 |
Total expected benefit payments | $ 1,649 |
Pension - Net benefit income (D
Pension - Net benefit income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 31, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Pension | |||
Expected return on plan assets | $ 31 | $ 63 | |
Interest cost | (15) | $ (17) | (30) |
Actuarial gain | 72 | 241 | 6 |
Net periodic benefit cost | $ 88 | $ 224 | $ 39 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Apr. 30, 2022 | |
Segment Reporting Information [Line Items] | |||||
Gross margin | $ 25,890 | $ 42,455 | $ 59,604 | $ 71,178 | |
Income (loss) from continuing operations | (14,314) | 3,339 | (17,588) | (8,774) | |
Total assets | 891,682 | 891,682 | $ 914,200 | ||
Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 111,584 | 122,008 | 220,100 | 223,017 | |
Gross margin | 25,890 | 42,455 | 59,604 | 71,178 | |
Income (loss) from continuing operations | (14,314) | 3,339 | (17,588) | (8,774) | |
Acquisition-related expenses | 569 | 848 | 904 | 4,102 | |
Amortization of acquired intangible assets and other purchase accounting adjustments | 7,842 | 10,322 | 14,803 | 19,446 | |
Adjusted income (loss) from operations | (5,903) | 14,509 | (1,881) | 14,774 | |
Total assets | 891,682 | 891,682 | 914,200 | ||
Small UAS | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 26,681 | 54,714 | 69,937 | 94,638 | |
Gross margin | 12,319 | 27,754 | 33,615 | 44,674 | |
Income (loss) from continuing operations | (2,079) | 13,377 | 5,946 | 15,335 | |
Acquisition-related expenses | 297 | 721 | |||
Amortization of acquired intangible assets and other purchase accounting adjustments | 669 | 707 | 1,350 | 1,414 | |
Adjusted income (loss) from operations | (1,410) | 14,381 | 7,296 | 17,470 | |
Total assets | 103,277 | 103,277 | 110,286 | ||
TMS | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 31,101 | 18,418 | 54,113 | 37,594 | |
Gross margin | 12,636 | 6,222 | 20,383 | 12,211 | |
Income (loss) from continuing operations | 2,004 | 47 | 973 | (416) | |
Acquisition-related expenses | 163 | 414 | |||
Adjusted income (loss) from operations | 2,004 | 210 | 973 | (2) | |
Total assets | 77,334 | 77,334 | 91,862 | ||
MUAS | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 27,281 | 26,525 | 46,542 | 48,904 | |
Gross margin | (6,884) | 2,223 | (7,957) | 5,404 | |
Income (loss) from continuing operations | (15,242) | (7,000) | (24,826) | (13,381) | |
Acquisition-related expenses | 119 | 108 | 340 | 1,492 | |
Amortization of acquired intangible assets and other purchase accounting adjustments | 5,897 | 6,358 | 10,842 | 11,549 | |
Adjusted income (loss) from operations | (9,226) | (534) | (13,644) | (340) | |
Total assets | 394,872 | 394,872 | 388,058 | ||
HAPSMobile | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 9,066 | 10,342 | |||
Gross margin | 3,001 | 3,944 | |||
Income (loss) from continuing operations | 1,564 | 2,073 | |||
Acquisition-related expenses | 58 | ||||
Adjusted income (loss) from operations | 1,564 | 2,131 | |||
Total assets | 7,200 | 7,200 | 8,148 | ||
HAPSMobile | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 19,281 | 20,694 | |||
Gross margin | 6,325 | 7,118 | |||
Income (loss) from continuing operations | 4,103 | 3,176 | |||
Acquisition-related expenses | 162 | ||||
Adjusted income (loss) from operations | 4,103 | 3,338 | |||
All other | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 17,455 | 12,009 | 30,227 | 21,187 | |
Gross margin | 4,818 | 2,312 | 7,238 | 1,771 | |
Income (loss) from continuing operations | (561) | (5,158) | (3,784) | (13,488) | |
Acquisition-related expenses | 450 | 222 | 564 | 1,313 | |
Amortization of acquired intangible assets and other purchase accounting adjustments | 1,276 | 3,257 | 2,611 | 6,483 | |
Adjusted income (loss) from operations | 1,165 | $ (1,679) | (609) | $ (5,692) | |
Total assets | 72,098 | 72,098 | 86,617 | ||
Corporate | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | $ 236,901 | $ 236,901 | $ 229,229 |