Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Oct. 28, 2023 | Nov. 29, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 28, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-33261 | |
Entity Registrant Name | AEROVIRONMENT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-2705790 | |
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 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | AVAV | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,135,100 | |
Entity Central Index Key | 0001368622 | |
Current Fiscal Year End Date | --04-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 28, 2023 | Apr. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 100,908 | $ 132,859 |
Accounts receivable, net of allowance for doubtful accounts of $158 at October 28, 2023 and $156 at April 30, 2023 | 73,865 | 87,633 |
Unbilled receivables and retentions | 141,812 | 105,653 |
Inventories, net | 181,767 | 138,814 |
Income taxes receivable | 5,735 | |
Prepaid expenses and other current assets | 19,958 | 12,043 |
Total current assets | 524,045 | 477,002 |
Long-term investments | 20,611 | 23,613 |
Property and equipment, net | 43,772 | 39,795 |
Operating lease right-of-use assets | 30,632 | 27,363 |
Deferred income taxes | 20,780 | 27,206 |
Intangibles, net | 82,848 | 43,577 |
Goodwill | 274,781 | 180,801 |
Other assets | 9,231 | 5,220 |
Total assets | 1,006,700 | 824,577 |
Current liabilities: | ||
Accounts payable | 28,834 | 31,355 |
Wages and related accruals | 26,671 | 35,637 |
Customer advances | 20,440 | 16,645 |
Current portion of long-term debt | 5,000 | 7,500 |
Current operating lease liabilities | 8,818 | 8,229 |
Income taxes payable | 595 | 2,342 |
Other current liabilities | 18,946 | 19,626 |
Total current liabilities | 109,304 | 121,334 |
Long-term debt, net of current portion | 73,678 | 125,904 |
Non-current operating lease liabilities | 23,727 | 21,189 |
Other non-current liabilities | 1,898 | 746 |
Liability for uncertain tax positions | 2,705 | 2,705 |
Deferred income taxes | 1,658 | 1,729 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value: Authorized shares-10,000,000; none issued or outstanding at October 28, 2023 and April 30, 2023 | ||
Common stock, $0.0001 par value: Authorized shares-10,000,000; none issued or outstanding at October 28, 2023 and April 30, 2023 | 4 | 4 |
Additional paid-in capital | 589,047 | 384,397 |
Accumulated other comprehensive loss | (6,077) | (4,452) |
Retained earnings | 210,756 | 171,021 |
Total equity | 793,730 | 550,970 |
Total liabilities and stockholders' equity | $ 1,006,700 | $ 824,577 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 28, 2023 | Apr. 30, 2023 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 158 | $ 156 |
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 | 28,135,539 | 26,216,897 |
Common stock, outstanding shares | 28,135,539 | 26,216,897 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Revenue: | ||||
Revenue | $ 180,816,000 | $ 111,584,000 | $ 333,163,000 | $ 220,100,000 |
Cost of sales: | ||||
Cost of sales | 105,466,000 | 85,694,000 | 192,153,000 | 160,496,000 |
Gross margin: | ||||
Total gross margin | 75,350,000 | 25,890,000 | 141,010,000 | 59,604,000 |
Selling, general and administrative | 28,147,000 | 23,613,000 | 51,974,000 | 45,556,000 |
Research and development | 22,025,000 | 16,591,000 | 37,491,000 | 31,636,000 |
Income (loss) from operations | 25,178,000 | (14,314,000) | 51,545,000 | (17,588,000) |
Other (loss) income: | ||||
Interest expense, net | (1,950,000) | (2,309,000) | (3,958,000) | (3,912,000) |
Other (expense) income, net | (2,858,000) | 810,000 | (3,987,000) | 404,000 |
Income (loss) before income taxes | 20,370,000 | (15,813,000) | 43,600,000 | (21,096,000) |
Provision for (benefit from) income taxes | 1,137,000 | (10,457,000) | 2,451,000 | (7,851,000) |
Equity method investment loss, net of tax | (1,393,000) | (1,273,000) | (1,414,000) | (1,773,000) |
Net income (loss) | 17,840,000 | (6,629,000) | 39,735,000 | (15,018,000) |
Net income attributable to noncontrolling interest | (39,000) | (45,000) | ||
Net income (loss) attributable to AeroVironment, Inc. | $ 17,840,000 | $ (6,668,000) | $ 39,735,000 | $ (15,063,000) |
Net income (loss) per share attributable to AeroVironment, Inc. | ||||
Basic (in dollars per share) | $ 0.66 | $ (0.27) | $ 1.50 | $ (0.61) |
Diluted (in dollars per share) | $ 0.66 | $ (0.27) | $ 1.50 | $ (0.61) |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 26,865,763 | 24,900,873 | 26,479,168 | 24,852,219 |
Diluted (in shares) | 26,956,806 | 24,900,873 | 26,569,267 | 24,852,219 |
Product sales | ||||
Revenue: | ||||
Revenue | $ 145,779,000 | $ 62,343,000 | $ 265,250,000 | $ 120,317,000 |
Cost of sales: | ||||
Cost of sales | 79,032,000 | 39,445,000 | 140,640,000 | 72,344,000 |
Gross margin: | ||||
Total gross margin | 66,747,000 | 22,898,000 | 124,610,000 | 47,973,000 |
Contract services | ||||
Revenue: | ||||
Revenue | 35,037,000 | 49,241,000 | 67,913,000 | 99,783,000 |
Cost of sales: | ||||
Cost of sales | 26,434,000 | 46,249,000 | 51,513,000 | 88,152,000 |
Gross margin: | ||||
Total gross margin | $ 8,603,000 | $ 2,992,000 | $ 16,400,000 | $ 11,631,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | ||||
Net income (loss) | $ 17,840 | $ (6,629) | $ 39,735 | $ (15,018) |
Other comprehensive income (loss): | ||||
Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 for the three and six months ended October 29, 2022, respectively | 6 | 26 | ||
Change in foreign currency translation adjustments | (1,562) | (928) | (1,625) | (1,992) |
Total comprehensive income (loss) | 16,278 | (7,551) | 38,110 | (16,984) |
Net income attributable to noncontrolling interest | (39) | (45) | ||
Comprehensive income (loss) attributable to AeroVironment, Inc. | $ 16,278 | $ (7,590) | $ 38,110 | $ (17,029) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | |||
Unrealized gain on available-for-sale investments, net of deferred tax expense | $ 0 | $ 0 | $ 3 |
Condensed Consolidated Statem_4
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 |
Beginning Balance at Apr. 30, 2022 | $ 607,969 | $ 2 | $ 267,248 | $ 347,233 | $ (6,514) | $ 241 | $ 608,210 |
Beginning Balance (in shares) at Apr. 30, 2022 | 24,951,287 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (15,063) | (15,063) | 45 | (15,018) | |||
Unrealized loss 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 | ||||
Ending Balance at Oct. 29, 2022 | 607,483 | $ 4 | 283,789 | 332,170 | (8,480) | 607,483 | |
Ending Balance (in shares) at Oct. 29, 2022 | 25,157,618 | ||||||
Beginning Balance at Jul. 30, 2022 | 599,923 | $ 2 | 268,641 | 338,838 | (7,558) | 247 | 600,170 |
Beginning Balance (in shares) at Jul. 30, 2022 | 24,990,590 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (6,668) | (6,668) | 39 | (6,629) | |||
Unrealized loss 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 | ||||
Ending Balance at Oct. 29, 2022 | 607,483 | $ 4 | 283,789 | 332,170 | (8,480) | 607,483 | |
Ending Balance (in shares) at Oct. 29, 2022 | 25,157,618 | ||||||
Beginning Balance at Apr. 30, 2023 | 550,970 | $ 4 | 384,397 | 171,021 | (4,452) | 550,970 | |
Beginning Balance (in shares) at Apr. 30, 2023 | 26,216,897 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | 39,735 | 39,735 | 39,735 | ||||
Foreign currency translation | (1,625) | (1,625) | (1,625) | ||||
Restricted stock awards (in shares) | 145,368 | ||||||
Restricted stock awards forfeited (in shares) | (6,176) | ||||||
Business acquisition | 109,820 | 109,820 | 109,820 | ||||
Business acquisition (in shares) | 985,999 | ||||||
Tax withholding payment related to net share settlement of equity awards | (1,370) | (1,370) | (1,370) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (13,919) | ||||||
Shares issued, net of issuance costs | 87,956 | 87,956 | 87,956 | ||||
Shares issued, net of issuance costs (in shares) | 807,370 | ||||||
Stock-based compensation | 8,244 | 8,244 | 8,244 | ||||
Ending Balance at Oct. 28, 2023 | 793,730 | $ 4 | 589,047 | 210,756 | (6,077) | 793,730 | |
Ending Balance (in shares) at Oct. 28, 2023 | 28,135,539 | ||||||
Beginning Balance at Jul. 29, 2023 | 574,545 | $ 4 | 386,140 | 192,916 | (4,515) | 574,545 | |
Beginning Balance (in shares) at Jul. 29, 2023 | 26,292,130 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | 17,840 | 17,840 | 17,840 | ||||
Foreign currency translation | (1,562) | (1,562) | (1,562) | ||||
Restricted stock awards (in shares) | 53,455 | ||||||
Restricted stock awards forfeited (in shares) | (2,738) | ||||||
Business acquisition | 109,820 | 109,820 | 109,820 | ||||
Business acquisition (in shares) | 985,999 | ||||||
Tax withholding payment related to net share settlement of equity awards | (72) | (72) | (72) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (677) | ||||||
Shares issued, net of issuance costs | 88,119 | 88,119 | 88,119 | ||||
Shares issued, net of issuance costs (in shares) | 807,370 | ||||||
Stock-based compensation | 5,040 | 5,040 | 5,040 | ||||
Ending Balance at Oct. 28, 2023 | $ 793,730 | $ 4 | $ 589,047 | $ 210,756 | $ (6,077) | $ 793,730 | |
Ending Balance (in shares) at Oct. 28, 2023 | 28,135,539 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 28, 2023 | Oct. 29, 2022 | |
Operating activities | ||
Net income (loss) | $ 39,735 | $ (15,018) |
Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: | ||
Depreciation and amortization | 15,387 | 32,275 |
Loss from equity method investments | 1,414 | 1,773 |
Loss on deconsolidation of previously controlled subsidiary | 189 | |
Amortization of debt issuance costs | 424 | 422 |
Provision for doubtful accounts | 4 | 19 |
Reserve for inventory excess and obsolescence | 8,338 | 2,859 |
Other non-cash expense, net | 331 | 565 |
Non-cash lease expense | 4,486 | 3,775 |
Gain on foreign currency transactions | (184) | (59) |
Unrealized loss (gain) on available-for-sale equity securities, net | 3,463 | (928) |
Deferred income taxes | (1,006) | (808) |
Stock-based compensation | 8,244 | 4,402 |
Loss on disposal of property and equipment | 136 | 825 |
Amortization of debt securities discount | 125 | |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 15,553 | 28,012 |
Unbilled receivables and retentions | (35,175) | 11,696 |
Inventories | (49,329) | (26,695) |
Income taxes receivable | (5,735) | (8,539) |
Prepaid expenses and other assets | (12,720) | (1,117) |
Accounts payable | (6,105) | 6,823 |
Other liabilities | (12,851) | (8,664) |
Net cash (used in) provided by operating activities | (25,590) | 31,932 |
Investing activities | ||
Acquisition of property and equipment | (10,104) | (7,587) |
Equity method investments | (1,875) | (2,774) |
Equity security investments | (5,100) | |
Acquisitions of intangible assets | (1,500) | |
Business acquisitions, net of cash acquired | (24,156) | (5,105) |
Proceeds from deconsolidation of previously controlled subsidiary, net of cash deconsolidated | (635) | |
Redemptions of available-for-sale investments | 25,945 | |
Purchases of available-for-sale investments | (1,326) | |
Net cash (used in) provided by investing activities | (37,635) | 3,418 |
Financing activities | ||
Principal payments of term loan | (55,000) | (22,500) |
Holdback and retention payments for business acquisition | (500) | |
Proceeds from shares issued, net of issuance costs | 88,437 | 11,778 |
Payment of debt issuance costs | (8) | |
Tax withholding payment related to net settlement of equity awards | (1,370) | (853) |
Exercise of stock options | 682 | |
Other | (15) | (14) |
Net cash provided by (used in) financing activities | 31,544 | (10,907) |
Effects of currency translation on cash and cash equivalents | (270) | (257) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (31,951) | 24,186 |
Cash, cash equivalents and restricted cash at beginning of period | 132,859 | 77,231 |
Cash, cash equivalents and restricted cash at end of period | 100,908 | 101,417 |
Cash paid, net during the period for: | ||
Income taxes | 11,054 | 718 |
Interest | 4,818 | 3,398 |
Non-cash activities | ||
Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 for the six months ended October 28, 2023 and October 29, 2022, respectively | (26) | |
Issuance of common stock for business acquisition | 109,820 | |
Change in foreign currency translation adjustments | (1,625) | (1,992) |
Issuances of inventory to property and equipment, ISR in-service assets | 4,085 | |
Acquisitions of property and equipment included in accounts payable | $ 915 | $ 810 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
Unrealized gain on available-for-sale investments, net of deferred tax expense | $ 0 | $ 0 | $ 3 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Oct. 28, 2023 | |
Organization and Significant Accounting Policies | |
Organization and Significant Accounting Policies | 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 systems (“UMS”), loitering munitions systems (“LMS”) and related services primarily to organizations within the U.S. Government 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 three and six months ended October 28, 2023 are not necessarily indicative of the results for the full year ending April 30, 2024. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2023, 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 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 accounts for the investment 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 5—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 has been incorporated into the UMS segment. The assets, liabilities and operating results of Planck have been included in the Company’s unaudited condensed consolidated financial statements. Refer to Note 16—Business Acquisitions for further details. On September 15, 2023, the Company closed its acquisition of Tomahawk Robotics, Inc. (“Tomahawk”) pursuant to a merger agreement, and post-acquisition, Tomahawk has been incorporated into the UMS segment. The assets, liabilities and operating results of Tomahawk have been included in the Company’s unaudited condensed consolidated financial statements. Refer to Note 16—Business Acquisitions for further details. Recently Adopted Accounting Standards The Company did not adopt any accounting standards during the six months ended October 28, 2023. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Specifically, the Company’s reserves for inventory excess and obsolescence have been reclassified from changes in inventories to non-cash adjustments within operating activities on the consolidated statements of cash flows for all periods presented. Reportable segment presentation for the three and six months ended October 29, 2022 has been reclassified to conform to the current year reportable segments: UMS, LMS and MacCready Works (“MW”) resulting from the Company’s reorganization, which was effective May 1, 2023. Refer to Note 18—Segments for further details. 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 its 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 ASU 2014-09, Revenue from Contracts with Customers 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 LMS product deliveries, certain Tomahawk 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, which historically included 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. In the past, the Company operated its medium unmanned aircraft systems (“MUAS”) in overseas locations to support U.S. military operations under ISR services contracts under a contractor-owned, contractor-operated (“COCO”) arrangement. During the year ended April 30, 2023, all COCO sites were closed. 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 (“SUAS”), MUAS, unmanned ground vehicles (“UGV”) product sales revenue is composed of revenue recognized on contracts for the delivery of SUAS, 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 39% of revenue during each of the three and six months ended October 28, 2023. 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 at a point in time accounted for 61% of revenue during each of the three and six months ended October 28, 2023. 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. On October 28, 2023, the Company had approximately $487,030,000 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 59% of the remaining performance obligations as revenue in fiscal 2024 2025 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 undefinitized contract actions which are within the scope of ASC 606 with final contract values to be negotiated, 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. Changes in cumulative revenue estimates due to changes in the estimated transaction price are recorded using a cumulative catch-up adjustment in the period identified for contracts with performance obligations at a point in time, including undefinitized contract actions. In the period undefinitized contract actions become definitized, a cumulative catch-up adjustment is recorded to reflect the final consideration, which could have a material positive or negative impact. 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. The balance of forward loss reserves as of October 28, 2023 and April 30, 2023 was $1,792,000 and $1,878,000, respectively. 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. No adjustment on the forward loss reserve for any one contract was material to the Company’s unaudited condensed consolidated financial statements for the three and six months ended October 28, 2023, respectively. 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. No adjustment on the forward loss reserve for any one contract was material to the Company’s unaudited condensed consolidated financial statements for the six months ended October 29, 2022, respectively. 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 28, 2023 or October 29, 2022. During the three and six months ended October 28, 2023, the Company revised its estimates of the total expected costs to complete an LMS 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 $1,716,000 and $1,439,000, respectively. During the three months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete an LMS 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 LMS 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. Revenue by Category The following tables present the Company’s revenue disaggregated by segment, contract type, customer category and geographic location (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by segment 2023 2022 2023 2022 UMS $ 132,773 $ 61,634 $ 230,980 $ 129,408 LMS 30,249 31,101 61,166 54,113 MW 17,794 18,849 41,017 36,579 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by contract type 2023 2022 2023 2022 FFP $ 159,879 $ 85,236 $ 289,821 $ 166,065 CPFF 19,802 25,013 41,095 51,468 T&M 1,135 1,335 2,247 2,567 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 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 28, October 29, October 28, October 29, Revenue by customer category 2023 2022 2023 2022 U.S. government $ 149,959 $ 84,165 $ 251,307 $ 151,880 Non-U.S. government 30,857 27,419 81,856 68,220 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by geographic location 2023 2022 2023 2022 Domestic $ 69,975 $ 67,657 $ 128,101 $ 117,760 International 110,841 43,927 205,062 102,340 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 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 three and six month period ended October 28, 2023 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 28, 2023 that was included in customer advances balances as of April 30, 2023 was $696,000 and $2,416,000, and revenue recognized for the three and six month periods ended October 29, 2022 that was included in customer advances balances as of April 30, 2022 was $1,080,000 and $3,004,000, 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 28, 2023, 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 three reportable segments. Refer to Note 18—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 expense, 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 28, 2023 and April 30, 2023, the Company had no reserve for incurred cost claim audits. Earnings (Loss) Per Share Basic earnings (loss) 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 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Net income (loss) attributable to AeroVironment, Inc. $ 17,840 $ (6,668) $ 39,735 $ (15,063) Denominator for basic earnings (loss) per share: Weighted average common shares 26,865,763 24,900,873 26,479,168 24,852,219 Dilutive effect of employee stock options, restricted stock and restricted stock units 91,043 — 90,099 — Denominator for diluted earnings (loss) per share 26,956,806 24,900,873 26,569,267 24,852,219 Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 1,284 and 1,082 for the three and six months ended October 28, 2023. Due to the net loss for the three and six months ended October 29, 2022, 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 and six months ended October 29, 2022, respectively. Recently Issued Accounting Standards No recently issued accounting standards are expected to impact the Company. |
Investments
Investments | 6 Months Ended |
Oct. 28, 2023 | |
Investments | |
Investments | 2. Investments Investments consist of the following (in thousands): October 28, April 30, 2023 2023 Long-term investments: Available-for-sale securities: Equity securities and warrants 1,505 4,969 Total long-term available-for-sale securities investments 1,505 4,969 Equity method investments Investments in limited partnership funds 19,106 18,644 Total equity method investments 19,106 18,644 Total long-term investments $ 20,611 $ 23,613 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 expense, net. Unrealized loss recorded (in thousands): Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Net (losses) gains recognized during the period on equity securities $ (2,450) $ 928 $ (3,463) $ 928 Less: Net loss recognized during the period on equity securities sold during the period — — — — Unrealized loss recognized during the period on equity securities still held at the reporting date $ (2,450) $ 928 $ (3,463) $ 928 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Oct. 28, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 3. 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 28, 2023, 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 Equity securities $ 1,415 $ — $ — $ 1,415 Warrants — 90 — 90 Total $ 1,415 $ 90 $ — $ 1,505 The Company’s financial liabilities measured at fair value on a recurring basis at October 28, 2023, 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 $ — $ — $ 2,116 $ 2,116 Total $ — $ — $ 2,116 $ 2,116 The Company’s financial assets measured at fair value on a recurring basis at April 30, 2023, 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 Equity securities $ 4,714 $ — $ — $ 4,714 Warrants — 255 — 255 Total $ 4,714 $ 255 $ — $ 4,969 The Company’s financial liabilities measured at fair value on a recurring basis at April 30, 2023, 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 $ — $ — $ 2,109 $ 2,109 Total $ — $ — $ 2,109 $ 2,109 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 Measurements Using Significant Unobservable Inputs Liabilities Description (Level 3) Balance at May 1, 2023 $ 2,109 Business acquisition — Transfers to Level 3 — Total fair value measurement adjustments (realized or unrealized) Included in selling, general and administrative 7 Settlements — Balance at October 28, 2023 $ 2,116 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 28, 2023 $ — On May 3, 2021, the Company closed its acquisition of Telerob Gesellschaft für Fernhantierungstechnik mbH (“Telerob GmbH”), including Telerob GmbH’s wholly-owned subsidiary, Telerob USA, Inc. (“Telerob USA,” and collectively with Telerob GmbH, “Telerob”) pursuant to its Share Purchase Agreement (the “Telerob Purchase Agreement”) with Unmanned Systems Investments GmbH (the “Telerob Seller”). Pursuant to the Telerob Purchase Agreement, the Telerob Sellers may receive up to a maximum of €6,000,000 (approximately $6,339,000) 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 $2,116,000) was not achieved. During the fiscal year ended April 30, 2023, the second year earnout of €2,000,000 (approximately $2,116,000) was achieved and was paid in November 2023. The third earnout of €2,000,000 (approximately $2,116,000) is not expected to be 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. 28, 2023 | |
Inventories, net | |
Inventories, net | 4. Inventories, net Inventories consist of the following (in thousands): October 28, April 30, 2023 2023 Raw materials $ 71,273 $ 67,775 Work in process 71,459 43,276 Finished goods 60,415 42,968 Inventories, gross 203,147 154,019 Reserve for inventory excess and obsolescence (21,380) (15,205) Inventories, net $ 181,767 $ 138,814 |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Oct. 28, 2023 | |
Equity Method Investments | |
Equity Method Investments | 5. 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 a total of $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 second limited partnership agreement, the Company is committed to contributions totaling $20,000,000 over an expected five year period. During the fiscal year ended April 30, 2023, the Company made total contributions of $5,778,000. The Company made a capital contribution of $1,875,000 during the three months ended October 28, 2023. Under the terms of the second limited partnership agreement, the Company has committed to make additional capital contributions of $12,347,000 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 28, 2023, the Company recorded its ownership percentage of the net losses of the limited partnerships, or $(1,393,000) and $(1,414,000), 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 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. At October 28, 2023 and April 30, 2023, the carrying value of the investments in the limited partnership funds of $19,106,000 and $18,644,000, 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 unaudited 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 investment loss, net of tax. For the three and six months ended October 28, 2023 and October 29, 2022, the Company recorded $0 for its ownership percentage of the net loss of Altoy in equity method investment loss, net of tax in the unaudited condensed consolidated statements of operations. At October 28, 2023 and April 30, 2023, the carrying value of the investment in Altoy of $71,000 and $114,000, respectively, was recorded in other assets on the unaudited condensed consolidated balance sheet. |
Warranty Reserves
Warranty Reserves | 6 Months Ended |
Oct. 28, 2023 | |
Warranty Reserves | |
Warranty Reserves | 6. 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 28, 2023 and October 29, 2022, respectively (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, 2023 2022 2023 2022 Beginning balance $ 4,627 $ 2,988 $ 3,642 $ 2,190 Balance acquired from acquisition 40 — 40 — Warranty expense 1,037 134 2,787 1,373 Warranty costs settled (462) (105) (1,227) (546) Ending balance $ 5,242 $ 3,017 $ 5,242 $ 3,017 |
Intangibles, net
Intangibles, net | 6 Months Ended |
Oct. 28, 2023 | |
Intangibles, net | |
Intangibles, net | 7. Intangibles, net The components of intangibles are as follows (in thousands): October 28, April 30, 2023 2023 Technology $ 100,885 $ 60,817 Licenses 1,008 1,008 Customer relationships 77,258 72,645 Backlog 2,805 2,895 In-process research and development 550 550 Non-compete agreements 320 320 Trademarks and tradenames 1,668 68 Other 144 150 Intangibles, gross 184,638 138,453 Less accumulated amortization (101,790) (94,876) Intangibles, net $ 82,848 $ 43,577 Additions to technology, customer relationships, and trademark and tradenames primarily relate to the Tomahawk acquisition. Refer to Note 16—Business Acquisitions for further details. In addition, during the three months ended October 28, 2023, AeroVironment acquired technology intellectual property of $1,500,000 through an asset purchase agreement with Windward Performance, Ltd. Under the asset purchase agreement AeroVironment acquired intellectual property related to unmanned aircraft for $3,000,000 consisting of $1,500,000 paid at close plus two The weighted average amortization period at each of October 28, 2023 and April 30, 2023 was four years. Amortization expense for the three and six months ended October 28, 2023 was $4,262,000 and $7,276,000, respectively. Amortization expense for the three and six months ended October 29, 2022 was $5,983,000 and $11,852,000, respectively. Estimated amortization expense for the next five years is as follows (in thousands): Year ending April 30, 2024 $ 10,635 2025 19,119 2026 14,983 2027 12,615 2028 11,901 $ 69,253 |
Goodwill
Goodwill | 6 Months Ended |
Oct. 28, 2023 | |
Goodwill. | |
Goodwill | 8. Goodwill The following table presents the changes in the Company’s goodwill balance by segment (in thousands): UMS LMS MW Total Balance at April 30, 2023 $ 161,547 $ — $ 19,254 $ 180,801 Additions to goodwill 94,776 — — 94,776 Change to goodwill (796) — — (796) Balance at October 28, 2023 $ 255,527 $ — $ 19,254 $ 274,781 Effective May 1, 2023, the reporting segments for goodwill are UMS, LMS and MW. The UMS segment includes goodwill from the acquisitions of Pulse Aerospace, LLC (“Pulse”), Arcturus UAV, Inc. (“Arcturus”), Telerob, Planck and Tomahawk acquisitions. The Tomahawk acquisition is included in the additions to goodwill. Refer to Note 16—Business Acquisitions for further details. The goodwill change to UMS is attributable to the Telerob acquisition recorded in Euros and translated to dollars at each reporting date. The MW segment includes goodwill from the purchase of certain assets of Intelligent Systems Group business segment (“ISG”) of Progeny Systems Corporation. The MUAS reporting unit, included in the UMS reportable segment, is considered at an increased risk of failing future quantitative goodwill impairment tests as an impairment was recorded during the most recent annual goodwill impairment test performed during the fourth quarter ended April 30, 2023. As of October 28, 2023, the company has not identified any events or circumstances that could trigger an impairment review prior to the Company’s annual impairment test. The annual impairment test for the fiscal year ending April 30, 2024 will be performed during the fourth quarter. The intangibles included in the MUAS reporting unit of $15,668,000 as of October 28, 2023 will also be evaluated for potential impairment during the fourth quarter. |
Debt
Debt | 6 Months Ended |
Oct. 28, 2023 | |
Debt | |
Debt | 9. Debt In connection with the consummation of the acquisition of 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 $100,000,000 revolving credit facility, which includes a $25,000,000 sublimit for the issuance of standby and commercial letters of credit (the “Revolving Facility”), and (ii) a five-year amortized $200,000,000 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. On June 6, 2023, the Company entered into a Second Amendment to Credit Agreement relating to its existing credit Agreement which increased the sublimit from $10,000,000 to $25,000,000. The Credit Agreement, as amended by the First Amendment to Credit Agreement and Second Amendment to the 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 28, 2023, the Company is in compliance with all amended covenants. Long-term debt and the current period interest rates were as follows: October 28, April 30, 2023 2023 (In thousands) (In thousands) Term loan $ 80,000 $ 135,000 Revolving credit facility — — Total debt 80,000 135,000 Less current portion 5,000 7,500 Total long-term debt, less current portion 75,000 127,500 Less unamortized debt issuance costs - term loans 1,322 1,596 Total long-term debt, net of unamortized debt issuance costs - term loans $ 73,678 $ 125,904 Unamortized debt issuance costs - revolving credit facility $ 653 $ 795 Current period interest rate 7.2% 7.1% Future long-term debt principal payments at October 28, 2023 were as follows: (In thousands) 2024 $ — 2025 10,000 2026 70,000 2027 — 2028 — $ 80,000 |
Leases
Leases | 6 Months Ended |
Oct. 28, 2023 | |
Leases | |
Leases | 10. 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 seven years, some of which may include options to extend the lease for up to nine years, and some of which may include options to terminate the lease after three years. If the Company determines the option to extend or terminate is reasonably certain, it is included in the determination of lease assets and liabilities. For operating leases, the Company recognizes lease expense for these leases on a straight-line basis over the lease term. 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 28, October 29, 2023 2022 Operating lease cost $ 4,486 $ 3,775 Short term lease cost 733 479 Variable lease cost 833 430 Sublease income — — Total lease costs, net $ 6,052 $ 4,684 Supplemental lease information was as follows: Six Months Ended Six Months Ended October 28, October 29, 2023 2022 (In thousands) (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 4,588 $ 3,705 Right-of-use assets obtained in exchange for new lease liabilities $ 7,120 $ 2,134 Weighted average remaining lease term 54 months 58 months Weighted average discount rate 5.2% 3.5% Maturities of operating lease liabilities as of October 28, 2023 were as follows (in thousands): 2024 $ 4,900 2025 9,390 2026 7,164 2027 6,547 2028 4,520 Thereafter 5,106 Total lease payments 37,627 Less: imputed interest (5,082) Total present value of operating lease liabilities $ 32,545 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments | 6 Months Ended |
Oct. 28, 2023 | |
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments | |
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments | 11. Accumulated Other Comprehensive Loss and Reclassifications Adjustments The components of accumulated other comprehensive loss and adjustments are as follows (in thousands): Six Months Ended Six Months Ended October 28, October 29, 2023 2022 Balance, net of $0 and $8 deferred taxes, as of April 30, 2023 and April 30, 2022, respectively $ (4,452) $ (6,514) Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 for the six months ended October 28, 2023 and October 29, 2022, respectively — 26 Change in foreign currency translation adjustments (1,625) (1,992) Balance, net of $0 deferred taxes, as of October 28, 2023 $ (6,077) $ (8,480) |
Customer-Funded Research & Deve
Customer-Funded Research & Development | 6 Months Ended |
Oct. 28, 2023 | |
Customer-Funded Research & Development | |
Customer-Funded Research & Development | 12. 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 $19,078,000 and $43,461,000 for the three and six months ended October 28, 2023. 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. |
Long-Term Incentive Awards
Long-Term Incentive Awards | 6 Months Ended |
Oct. 28, 2023 | |
Long-Term Incentive Awards. | |
Long-Term Incentive Awards | 13. Long-Term Incentive Awards During the three months ended July 29, 2023, the Company granted awards under its 2021 Equity Incentive Plan (the “2021 Plan”) to key employees (“Fiscal 2024 LTIP”). Awards under the Fiscal 2024 LTIP consist of: (i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2024, July 2025 and July 2026, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) targets for the three-year period ending April 30, 2026. 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 adjusted EBITDA 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 28, 2023, the Company recorded $1,200,000 and $1,834,000 of compensation expense related to the Fiscal 2024 LTIP, respectively. The Company recorded no compensation expense related to the Fiscal 2024 LTIP for the three and six months ended October 29, 2022. At October 28, 2023, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2024 LTIP is $16,201,000. During the three months ended July 30, 2022, the Company granted awards under the 2021 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) PRSUs, which vest based on the Company’s achievement of revenue and non-GAAP adjusted EBITDA 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 adjusted EBITDA 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 28, 2023, the Company recorded $1,191,000 and $1,852,000 of compensation expense related to the Fiscal 2023 LTIP, respectively. 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. At October 28, 2023, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2023 LTIP is $11,895,000. During the three months ended July 31, 2021, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (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 28, 2023, the Company recorded $356,000 and $488,000 of compensation expense related to the Fiscal 2022 LTIP, respectively. 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. At October 28, 2023, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2022 LTIP is $9,458,000. During the three months ended August 1, 2020, the Company also 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. During the three months ended July 29, 2023, the Company issued a total of 5,772 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2021 LTIP. 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. 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. 28, 2023 | |
Income Taxes | |
Income Taxes | 14. Income Taxes For the three and six months ended October 28, 2023, the Company recorded a provision for income taxes of $1,137,000 and $2,451,000, respectively, yielding an effective tax rate of 5.6% for both periods. 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. The variance from statutory rates for the three and six months ended October 28, 2023 was primarily due to foreign derived intangible income deductions and to federal R&D credits. 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. |
Share Repurchase Plan and Issua
Share Repurchase Plan and Issuances | 6 Months Ended |
Oct. 28, 2023 | |
Share Repurchase Plan and Issuances | |
Share Repurchase Plan and Issuances | 15. Share Repurchase Plan and Issuances The Company’s share repurchase program announced September 2015 was terminated by the Company’s Board of Directors in September 2022. There were no repurchases of the Company’s common stock during the six months ended October 29, 2022. 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 SM |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Oct. 28, 2023 | |
Business Acquisitions | |
Business Acquisitions | 16. Business Acquisitions Tomahawk Acquisition On September 15, 2023, the Company closed its acquisition of Tomahawk Robotics, Inc., a leader in AI-enabled robotic control systems. Pursuant to the merger agreement, the Company paid a total purchase price of $134,467,000 consisting of 985,999 in restricted common stock of the Company valued at $109,820,000 and $27,205,000 cash-on-hand, net of $3,048,000 cash acquired, plus a $490,000 holdback for 100% of Tomahawk equity. The fair value of the shares issued was the closing price on September 15, 2023, the close of the Tomahawk purchase agreement. Tomahawk is incorporated into AeroVironment’s UMS segment. The acquisition will enable deeper integration of both companies’ technology, leading to enhanced interoperability and interconnectivity of unmanned systems through a singular platform with similar control features. 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 Tomahawk. The purchase price allocation is expected to be finalized as soon as practicable within the measurement period, but not later than one year following the acquisition date (in thousands): September 15, 2023 Fair value of assets acquired: Accounts receivable $ 2,314 Unbilled receivable 993 Inventories, net 2,882 Prepaid and other current assets 148 Property and equipment, net 1,789 Operating lease assets 1,337 Other assets 71 Technology 39,000 Customer relationship 4,800 Trademarks 1,600 Deferred tax asset 3,603 Goodwill 94,776 Total identifiable net assets $ 153,313 Fair value of liabilities assumed: Accounts payable 3,788 Wages and related accruals 620 Customer advances 1,648 Current operating lease liabilities 482 Other current liabilities 411 Non-current operating lease liabilities 855 Other non-current liabilities 7 Deferred income taxes 11,035 Total liabilities assumed 18,846 Total identifiable net assets $ 134,467 Fair value of consideration transferred: Equity consideration $ 109,820 Cash consideration, net of cash acquired 24,157 Holdback 490 Total consideration $ 134,467 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 Tomahawk and expected future customers in the UMS market. For income tax purposes the acquisition is treated as a stock acquisition, and none of the goodwill is expected to be deductible. Tomahawk Supplemental Pro Forma Information (unaudited) Tomahawk revenue and loss from operations for the three months ended October 28, 2023 since acquisition on September 15, 2023 was $3,342,000 and $(2,045,000), respectively. The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2022 (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, 2023 2022 2023 2022 Revenue $ 184,323 $ 114,411 $ 343,684 $ 225,755 Net income (loss) attributable to AeroVironment, Inc. $ 17,420 $ (10,812) $ 37,007 $ (22,899) 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 30, 2022, reflecting the additional amortization that would have been charged and including the results of Tomahawk prior to acquisition. 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, 2022, nor are they indicative of results of operations that may occur in the future. Planck Acquisition On August 17, 2022 the Company closed its acquisition of 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, which was paid during the three months ended October 28, 2023. Planck is a small technology company incorporated into AeroVironment’s UMS segment for the MUAS product line 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 final allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck. During the three months ended July 29, 2023, the Company finalized its determination of the fair value of the assets and liabilities assumed in the acquisition of Planck and no significant changes were recorded from the original estimation (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 Six Months Ended October 29, October 29, 2022 2022 Revenue $ 111,584 $ 223,016 Net loss attributable to AeroVironment, Inc. $ (6,131) $ (13,450) Planck revenue for the three months ended October 29, 2022 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 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. |
Pension
Pension | 6 Months Ended |
Oct. 28, 2023 | |
Pension | |
Pension | 17. 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, 2023. The table below includes the projected benefit obligation and fair value of plan assets as of April 30, 2023. The net fair value of plan assets (in thousands) is recorded in other assets on the unaudited condensed consolidated balance sheet. April 30, 2023 (In thousands) Projected benefit obligation $ (3,192) Fair value of plan assets 3,870 Funded status of the plan $ 678 The projected benefit obligation includes assumptions of a discount rate of 2.4% and pension increase for in-payment benefits of 1.5% for October 28, 2023 and April 30, 2023. 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, 2024. The Company assumed expected return on plan assets of 2.9% for October 28, 2023 and April 30, 2023. Expected benefits payments as of April 30, 2023 (in thousands): 2024 $ 177 2025 190 2026 192 2027 195 2028 197 2029-2033 1,008 Total expected benefit payments $ 1,959 Net periodic benefit cost (in thousands) is recorded in interest expense, net. Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, 2023 2022 2023 2022 (In thousands) (In thousands) (In thousands) (In thousands) Expected return on plan assets $ — $ — $ — $ — Interest cost 29 — 59 (17) Actuarial gain — — — 241 Net periodic benefit cost $ 29 $ — $ 59 $ 224 |
Segments
Segments | 6 Months Ended |
Oct. 28, 2023 | |
Segments | |
Segments | 18. Segments Effective May 1, 2023, the Company reorganized its segments. Due to the Company’s growth as an organization, the reorganization was implemented to drive additional operational improvements, foster synergies and provide leaders with greater autonomy over their product lines. The Company’s reportable segments are as follows: Unmanned Systems Loitering Munitions Systems MacCready Works 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 28, 2023 UMS LMS MW Total Revenue $ 132,773 $ 30,249 $ 17,794 $ 180,816 Gross margin 62,742 9,343 3,265 75,350 Income (loss) from operations 33,859 (1,189) (7,492) 25,178 Acquisition-related expenses 1,000 67 26 1,093 Amortization of acquired intangible assets and other purchase accounting adjustments 3,744 — 669 4,413 Adjusted income (loss) from operations $ 38,603 $ (1,122) $ (6,797) $ 30,684 Three Months Ended October 29, 2022 UMS LMS MW Total Revenue $ 61,634 $ 31,101 $ 18,849 $ 111,584 Gross margin 7,903 12,636 5,351 25,890 (Loss) income from operations (17,347) 2,004 1,029 (14,314) Acquisition-related expenses 569 — — 569 Amortization of acquired intangible assets and other purchase accounting adjustments 7,250 — 592 7,842 Adjusted (loss) income from operations $ (9,528) $ 2,004 $ 1,621 $ (5,903) Six Months Ended October 28, 2023 UMS LMS MW Total Revenue $ 230,980 $ 61,166 $ 41,017 $ 333,163 Gross margin 111,111 21,666 8,233 141,010 Income (loss) from operations 55,608 3,721 (7,784) 51,545 Acquisition-related expenses 1,674 67 26 1,767 Amortization of acquired intangible assets and other purchase accounting adjustments 6,345 — 1,233 7,578 Adjusted income (loss) from operations $ 63,627 $ 3,788 $ (6,525) $ 60,890 Six Months Ended October 29, 2022 UMS LMS MW Total Revenue $ 129,408 $ 54,113 $ 36,579 $ 220,100 Gross margin 29,406 20,383 9,815 59,604 (Loss) income from operations (21,045) 973 2,484 (17,588) Acquisition-related expenses 873 — 31 904 Amortization of acquired intangible assets and other purchase accounting adjustments 13,595 — 1,208 14,803 Adjusted (loss) income from operations $ (6,577) $ 973 $ 3,723 $ (1,881) Segment assets are summarized in the table below. Corporate assets primarily consist of cash and cash equivalents, 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 28, 2023 UMS LMS MW Corporate Total Identifiable assets $ 571,786 $ 138,596 $ 47,693 $ 248,625 $ 1,006,700 April 30, 2023 UMS LMS MW Corporate Total Identifiable assets $ 474,417 $ 103,375 $ 39,650 $ 207,135 $ 824,577 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Oct. 28, 2023 | |
Organization and Significant Accounting Policies | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards The Company did not adopt any accounting standards during the six months ended October 28, 2023. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Specifically, the Company’s reserves for inventory excess and obsolescence have been reclassified from changes in inventories to non-cash adjustments within operating activities on the consolidated statements of cash flows for all periods presented. Reportable segment presentation for the three and six months ended October 29, 2022 has been reclassified to conform to the current year reportable segments: UMS, LMS and MacCready Works (“MW”) resulting from the Company’s reorganization, which was effective May 1, 2023. Refer to Note 18—Segments for further details. |
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 its 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 ASU 2014-09, Revenue from Contracts with Customers 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 LMS product deliveries, certain Tomahawk 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, which historically included 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. In the past, the Company operated its medium unmanned aircraft systems (“MUAS”) in overseas locations to support U.S. military operations under ISR services contracts under a contractor-owned, contractor-operated (“COCO”) arrangement. During the year ended April 30, 2023, all COCO sites were closed. 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 (“SUAS”), MUAS, unmanned ground vehicles (“UGV”) product sales revenue is composed of revenue recognized on contracts for the delivery of SUAS, 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 39% of revenue during each of the three and six months ended October 28, 2023. 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 at a point in time accounted for 61% of revenue during each of the three and six months ended October 28, 2023. 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. On October 28, 2023, the Company had approximately $487,030,000 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 59% of the remaining performance obligations as revenue in fiscal 2024 2025 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 undefinitized contract actions which are within the scope of ASC 606 with final contract values to be negotiated, 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. Changes in cumulative revenue estimates due to changes in the estimated transaction price are recorded using a cumulative catch-up adjustment in the period identified for contracts with performance obligations at a point in time, including undefinitized contract actions. In the period undefinitized contract actions become definitized, a cumulative catch-up adjustment is recorded to reflect the final consideration, which could have a material positive or negative impact. 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. The balance of forward loss reserves as of October 28, 2023 and April 30, 2023 was $1,792,000 and $1,878,000, respectively. 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. No adjustment on the forward loss reserve for any one contract was material to the Company’s unaudited condensed consolidated financial statements for the three and six months ended October 28, 2023, respectively. 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. No adjustment on the forward loss reserve for any one contract was material to the Company’s unaudited condensed consolidated financial statements for the six months ended October 29, 2022, respectively. 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 28, 2023 or October 29, 2022. During the three and six months ended October 28, 2023, the Company revised its estimates of the total expected costs to complete an LMS 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 $1,716,000 and $1,439,000, respectively. During the three months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete an LMS 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 LMS 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. Revenue by Category The following tables present the Company’s revenue disaggregated by segment, contract type, customer category and geographic location (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by segment 2023 2022 2023 2022 UMS $ 132,773 $ 61,634 $ 230,980 $ 129,408 LMS 30,249 31,101 61,166 54,113 MW 17,794 18,849 41,017 36,579 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by contract type 2023 2022 2023 2022 FFP $ 159,879 $ 85,236 $ 289,821 $ 166,065 CPFF 19,802 25,013 41,095 51,468 T&M 1,135 1,335 2,247 2,567 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 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 28, October 29, October 28, October 29, Revenue by customer category 2023 2022 2023 2022 U.S. government $ 149,959 $ 84,165 $ 251,307 $ 151,880 Non-U.S. government 30,857 27,419 81,856 68,220 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by geographic location 2023 2022 2023 2022 Domestic $ 69,975 $ 67,657 $ 128,101 $ 117,760 International 110,841 43,927 205,062 102,340 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 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 three and six month period ended October 28, 2023 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 28, 2023 that was included in customer advances balances as of April 30, 2023 was $696,000 and $2,416,000, and revenue recognized for the three and six month periods ended October 29, 2022 that was included in customer advances balances as of April 30, 2022 was $1,080,000 and $3,004,000, respectively. |
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 28, 2023, 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 three reportable segments. Refer to Note 18—Segments for further details. |
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 expense, 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. |
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 28, 2023 and April 30, 2023, the Company had no reserve for incurred cost claim audits. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) 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 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Net income (loss) attributable to AeroVironment, Inc. $ 17,840 $ (6,668) $ 39,735 $ (15,063) Denominator for basic earnings (loss) per share: Weighted average common shares 26,865,763 24,900,873 26,479,168 24,852,219 Dilutive effect of employee stock options, restricted stock and restricted stock units 91,043 — 90,099 — Denominator for diluted earnings (loss) per share 26,956,806 24,900,873 26,569,267 24,852,219 Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 1,284 and 1,082 for the three and six months ended October 28, 2023. Due to the net loss for the three and six months ended October 29, 2022, 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 and six months ended October 29, 2022, respectively. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards No recently issued accounting standards are expected to impact the Company. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Organization and Significant Accounting Policies | |
Schedule of revenue by category | The following tables present the Company’s revenue disaggregated by segment, contract type, customer category and geographic location (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by segment 2023 2022 2023 2022 UMS $ 132,773 $ 61,634 $ 230,980 $ 129,408 LMS 30,249 31,101 61,166 54,113 MW 17,794 18,849 41,017 36,579 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by contract type 2023 2022 2023 2022 FFP $ 159,879 $ 85,236 $ 289,821 $ 166,065 CPFF 19,802 25,013 41,095 51,468 T&M 1,135 1,335 2,247 2,567 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 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 28, October 29, October 28, October 29, Revenue by customer category 2023 2022 2023 2022 U.S. government $ 149,959 $ 84,165 $ 251,307 $ 151,880 Non-U.S. government 30,857 27,419 81,856 68,220 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, Revenue by geographic location 2023 2022 2023 2022 Domestic $ 69,975 $ 67,657 $ 128,101 $ 117,760 International 110,841 43,927 205,062 102,340 Total revenue $ 180,816 $ 111,584 $ 333,163 $ 220,100 |
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 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Net income (loss) attributable to AeroVironment, Inc. $ 17,840 $ (6,668) $ 39,735 $ (15,063) Denominator for basic earnings (loss) per share: Weighted average common shares 26,865,763 24,900,873 26,479,168 24,852,219 Dilutive effect of employee stock options, restricted stock and restricted stock units 91,043 — 90,099 — Denominator for diluted earnings (loss) per share 26,956,806 24,900,873 26,569,267 24,852,219 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Investments | |
Schedule of investments | Investments consist of the following (in thousands): October 28, April 30, 2023 2023 Long-term investments: Available-for-sale securities: Equity securities and warrants 1,505 4,969 Total long-term available-for-sale securities investments 1,505 4,969 Equity method investments Investments in limited partnership funds 19,106 18,644 Total equity method investments 19,106 18,644 Total long-term investments $ 20,611 $ 23,613 |
Schedule of 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 | Equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other expense, net. Unrealized loss recorded (in thousands): Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Net (losses) gains recognized during the period on equity securities $ (2,450) $ 928 $ (3,463) $ 928 Less: Net loss recognized during the period on equity securities sold during the period — — — — Unrealized loss recognized during the period on equity securities still held at the reporting date $ (2,450) $ 928 $ (3,463) $ 928 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
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 28, 2023, 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 Equity securities $ 1,415 $ — $ — $ 1,415 Warrants — 90 — 90 Total $ 1,415 $ 90 $ — $ 1,505 The Company’s financial assets measured at fair value on a recurring basis at April 30, 2023, 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 Equity securities $ 4,714 $ — $ — $ 4,714 Warrants — 255 — 255 Total $ 4,714 $ 255 $ — $ 4,969 |
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 October 28, 2023, 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 $ — $ — $ 2,116 $ 2,116 Total $ — $ — $ 2,116 $ 2,116 The Company’s financial liabilities measured at fair value on a recurring basis at April 30, 2023, 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 $ — $ — $ 2,109 $ 2,109 Total $ — $ — $ 2,109 $ 2,109 |
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 Measurements Using Significant Unobservable Inputs Liabilities Description (Level 3) Balance at May 1, 2023 $ 2,109 Business acquisition — Transfers to Level 3 — Total fair value measurement adjustments (realized or unrealized) Included in selling, general and administrative 7 Settlements — Balance at October 28, 2023 $ 2,116 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 28, 2023 $ — |
Inventories, net (Tables)
Inventories, net (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Inventories, net | |
Schedule of inventories, net | Inventories consist of the following (in thousands): October 28, April 30, 2023 2023 Raw materials $ 71,273 $ 67,775 Work in process 71,459 43,276 Finished goods 60,415 42,968 Inventories, gross 203,147 154,019 Reserve for inventory excess and obsolescence (21,380) (15,205) Inventories, net $ 181,767 $ 138,814 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Warranty Reserves | |
Summary of warranty reserve activity | Warranty reserve activity is summarized as follows for the three and six months ended October 28, 2023 and October 29, 2022, respectively (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, 2023 2022 2023 2022 Beginning balance $ 4,627 $ 2,988 $ 3,642 $ 2,190 Balance acquired from acquisition 40 — 40 — Warranty expense 1,037 134 2,787 1,373 Warranty costs settled (462) (105) (1,227) (546) Ending balance $ 5,242 $ 3,017 $ 5,242 $ 3,017 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Intangibles, net | |
Schedule of components of intangibles | The components of intangibles are as follows (in thousands): October 28, April 30, 2023 2023 Technology $ 100,885 $ 60,817 Licenses 1,008 1,008 Customer relationships 77,258 72,645 Backlog 2,805 2,895 In-process research and development 550 550 Non-compete agreements 320 320 Trademarks and tradenames 1,668 68 Other 144 150 Intangibles, gross 184,638 138,453 Less accumulated amortization (101,790) (94,876) Intangibles, net $ 82,848 $ 43,577 |
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, 2024 $ 10,635 2025 19,119 2026 14,983 2027 12,615 2028 11,901 $ 69,253 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Goodwill. | |
Schedule of the changes in goodwill balances | The following table presents the changes in the Company’s goodwill balance by segment (in thousands): UMS LMS MW Total Balance at April 30, 2023 $ 161,547 $ — $ 19,254 $ 180,801 Additions to goodwill 94,776 — — 94,776 Change to goodwill (796) — — (796) Balance at October 28, 2023 $ 255,527 $ — $ 19,254 $ 274,781 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Debt | |
Schedule of long-term debt and the current period interest rates | October 28, April 30, 2023 2023 (In thousands) (In thousands) Term loan $ 80,000 $ 135,000 Revolving credit facility — — Total debt 80,000 135,000 Less current portion 5,000 7,500 Total long-term debt, less current portion 75,000 127,500 Less unamortized debt issuance costs - term loans 1,322 1,596 Total long-term debt, net of unamortized debt issuance costs - term loans $ 73,678 $ 125,904 Unamortized debt issuance costs - revolving credit facility $ 653 $ 795 Current period interest rate 7.2% 7.1% |
Schedule of Future long-term debt principle payments | (In thousands) 2024 $ — 2025 10,000 2026 70,000 2027 — 2028 — $ 80,000 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Leases | |
Schedule of components of lease costs | 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 28, October 29, 2023 2022 Operating lease cost $ 4,486 $ 3,775 Short term lease cost 733 479 Variable lease cost 833 430 Sublease income — — Total lease costs, net $ 6,052 $ 4,684 |
Schedule of supplemental lease information | Supplemental lease information was as follows: Six Months Ended Six Months Ended October 28, October 29, 2023 2022 (In thousands) (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 4,588 $ 3,705 Right-of-use assets obtained in exchange for new lease liabilities $ 7,120 $ 2,134 Weighted average remaining lease term 54 months 58 months Weighted average discount rate 5.2% 3.5% |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities as of October 28, 2023 were as follows (in thousands): 2024 $ 4,900 2025 9,390 2026 7,164 2027 6,547 2028 4,520 Thereafter 5,106 Total lease payments 37,627 Less: imputed interest (5,082) Total present value of operating lease liabilities $ 32,545 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments | |
Schedule of components of accumulated other comprehensive (loss) income and adjustments | The components of accumulated other comprehensive loss and adjustments are as follows (in thousands): Six Months Ended Six Months Ended October 28, October 29, 2023 2022 Balance, net of $0 and $8 deferred taxes, as of April 30, 2023 and April 30, 2022, respectively $ (4,452) $ (6,514) Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 for the six months ended October 28, 2023 and October 29, 2022, respectively — 26 Change in foreign currency translation adjustments (1,625) (1,992) Balance, net of $0 deferred taxes, as of October 28, 2023 $ (6,077) $ (8,480) |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Planck Aerosystems, Inc. ("Planck") | |
Summary 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 final allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck. During the three months ended July 29, 2023, the Company finalized its determination of the fair value of the assets and liabilities assumed in the acquisition of Planck and no significant changes were recorded from the original estimation (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 |
Summary of unaudited pro forma summary presents condensed 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 Six Months Ended October 29, October 29, 2022 2022 Revenue $ 111,584 $ 223,016 Net loss attributable to AeroVironment, Inc. $ (6,131) $ (13,450) |
Tomahawk Robotics, Inc | |
Summary 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 Tomahawk. The purchase price allocation is expected to be finalized as soon as practicable within the measurement period, but not later than one year following the acquisition date (in thousands): September 15, 2023 Fair value of assets acquired: Accounts receivable $ 2,314 Unbilled receivable 993 Inventories, net 2,882 Prepaid and other current assets 148 Property and equipment, net 1,789 Operating lease assets 1,337 Other assets 71 Technology 39,000 Customer relationship 4,800 Trademarks 1,600 Deferred tax asset 3,603 Goodwill 94,776 Total identifiable net assets $ 153,313 Fair value of liabilities assumed: Accounts payable 3,788 Wages and related accruals 620 Customer advances 1,648 Current operating lease liabilities 482 Other current liabilities 411 Non-current operating lease liabilities 855 Other non-current liabilities 7 Deferred income taxes 11,035 Total liabilities assumed 18,846 Total identifiable net assets $ 134,467 Fair value of consideration transferred: Equity consideration $ 109,820 Cash consideration, net of cash acquired 24,157 Holdback 490 Total consideration $ 134,467 |
Summary of unaudited pro forma summary presents condensed 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, 2022 (in thousands): Three Months Ended Six Months Ended October 28, October 29, October 28, October 29, 2023 2022 2023 2022 Revenue $ 184,323 $ 114,411 $ 343,684 $ 225,755 Net income (loss) attributable to AeroVironment, Inc. $ 17,420 $ (10,812) $ 37,007 $ (22,899) |
Pension (Tables)
Pension (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Pension | |
Schedule of projected benefit obligation and fair value of plan assets | April 30, 2023 (In thousands) Projected benefit obligation $ (3,192) Fair value of plan assets 3,870 Funded status of the plan $ 678 |
Schedule of expected benefits payments | Expected benefits payments as of April 30, 2023 (in thousands): 2024 $ 177 2025 190 2026 192 2027 195 2028 197 2029-2033 1,008 Total expected benefit payments $ 1,959 |
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 Six Months Ended October 28, October 29, October 28, October 29, 2023 2022 2023 2022 (In thousands) (In thousands) (In thousands) (In thousands) Expected return on plan assets $ — $ — $ — $ — Interest cost 29 — 59 (17) Actuarial gain — — — 241 Net periodic benefit cost $ 29 $ — $ 59 $ 224 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Oct. 28, 2023 | |
Segments | |
Schedule of segment results | Three Months Ended October 28, 2023 UMS LMS MW Total Revenue $ 132,773 $ 30,249 $ 17,794 $ 180,816 Gross margin 62,742 9,343 3,265 75,350 Income (loss) from operations 33,859 (1,189) (7,492) 25,178 Acquisition-related expenses 1,000 67 26 1,093 Amortization of acquired intangible assets and other purchase accounting adjustments 3,744 — 669 4,413 Adjusted income (loss) from operations $ 38,603 $ (1,122) $ (6,797) $ 30,684 Three Months Ended October 29, 2022 UMS LMS MW Total Revenue $ 61,634 $ 31,101 $ 18,849 $ 111,584 Gross margin 7,903 12,636 5,351 25,890 (Loss) income from operations (17,347) 2,004 1,029 (14,314) Acquisition-related expenses 569 — — 569 Amortization of acquired intangible assets and other purchase accounting adjustments 7,250 — 592 7,842 Adjusted (loss) income from operations $ (9,528) $ 2,004 $ 1,621 $ (5,903) Six Months Ended October 28, 2023 UMS LMS MW Total Revenue $ 230,980 $ 61,166 $ 41,017 $ 333,163 Gross margin 111,111 21,666 8,233 141,010 Income (loss) from operations 55,608 3,721 (7,784) 51,545 Acquisition-related expenses 1,674 67 26 1,767 Amortization of acquired intangible assets and other purchase accounting adjustments 6,345 — 1,233 7,578 Adjusted income (loss) from operations $ 63,627 $ 3,788 $ (6,525) $ 60,890 Six Months Ended October 29, 2022 UMS LMS MW Total Revenue $ 129,408 $ 54,113 $ 36,579 $ 220,100 Gross margin 29,406 20,383 9,815 59,604 (Loss) income from operations (21,045) 973 2,484 (17,588) Acquisition-related expenses 873 — 31 904 Amortization of acquired intangible assets and other purchase accounting adjustments 13,595 — 1,208 14,803 Adjusted (loss) income from operations $ (6,577) $ 973 $ 3,723 $ (1,881) |
Schedule of identifiable assets by segment | October 28, 2023 UMS LMS MW Corporate Total Identifiable assets $ 571,786 $ 138,596 $ 47,693 $ 248,625 $ 1,006,700 April 30, 2023 UMS LMS MW Corporate Total Identifiable assets $ 474,417 $ 103,375 $ 39,650 $ 207,135 $ 824,577 |
Organization and Significant _4
Organization and Significant Accounting Policies - (Details) $ in Thousands | 6 Months Ended | |||
Oct. 14, 2022 | Sep. 15, 2021 | Oct. 28, 2023 USD ($) segment | Apr. 30, 2023 USD ($) | |
Number of Reportable Segments | segment | 3 | |||
Reserves for Incurred Cost Claim Audits | $ | $ 0 | $ 0 | ||
Altoy | ||||
Ownership interest | 15% | 85% | ||
Percentage of ownership interest sold | 35% | 35% |
Organization and Significant _5
Organization and Significant Accounting Policies - Performance Obligations (Details) $ in Thousands | 3 Months Ended |
Oct. 28, 2023 USD ($) | |
Performance Obligations | |
Remaining performance obligations | $ 487,030 |
Remaining performance obligations satisfied over time (as a percentage) | 39% |
Remaining performance obligations at a point in time (as a percentage) | 61% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-30 | |
Performance Obligations | |
Year of performance obligations | 1 year |
Remaining performance obligations (as a percentage) | 59% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-30 | |
Performance Obligations | |
Year of performance obligations | 1 year |
Remaining performance obligations (as a percentage) | 41% |
Organization and Significant _6
Organization and Significant Accounting Policies - Contract Estimates (Details) | 3 Months Ended | 6 Months Ended | |||
Oct. 28, 2023 USD ($) contract $ / shares | Oct. 29, 2022 USD ($) contract $ / shares | Oct. 28, 2023 USD ($) contract $ / shares | Oct. 29, 2022 USD ($) contract $ / shares | Apr. 30, 2023 USD ($) | |
Material adjustment to any one contract | $ 0 | $ 0 | $ 0 | ||
Number of active contracts | contract | 1 | 1 | 1 | 1 | |
Forward Loss Reserve | $ 1,792,000 | $ 1,792,000 | $ 1,878,000 | ||
Diluted (in dollars per share) | $ / shares | $ 0.66 | $ (0.27) | $ 1.50 | $ (0.61) | |
MUAS ISR Contract | |||||
Number of active contracts | contract | 2 | 2 | |||
Forward Loss Reserve | $ 1,952,000 | $ 1,952,000 | |||
Net Income (Loss) | $ (1,500,000) | ||||
Diluted (in dollars per share) | $ / shares | $ (0.06) | ||||
LMS | |||||
Amount of revised aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods | $ 1,716,000 | $ 1,332,000 | $ 1,439,000 | $ 2,560,000 | |
Number of active contracts | contract | 2 | 2 |
Organization and Significant _7
Organization and Significant Accounting Policies - Revenue by Category (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Disaggregation of revenue | ||||
Revenue | $ 180,816,000 | $ 111,584,000 | $ 333,163,000 | $ 220,100,000 |
Contract Liability | ||||
Disaggregation of revenue | ||||
Revenue | 696,000 | 1,080,000 | 2,416,000 | 3,004,000 |
Domestic | ||||
Disaggregation of revenue | ||||
Revenue | 69,975,000 | 67,657,000 | 128,101,000 | 117,760,000 |
International | ||||
Disaggregation of revenue | ||||
Revenue | 110,841,000 | 43,927,000 | 205,062,000 | 102,340,000 |
U.S. government | ||||
Disaggregation of revenue | ||||
Revenue | 149,959,000 | 84,165,000 | 251,307,000 | 151,880,000 |
Non-U.S. government | ||||
Disaggregation of revenue | ||||
Revenue | 30,857,000 | 27,419,000 | 81,856,000 | 68,220,000 |
FFP | ||||
Disaggregation of revenue | ||||
Revenue | 159,879,000 | 85,236,000 | 289,821,000 | 166,065,000 |
CPFF | ||||
Disaggregation of revenue | ||||
Revenue | 19,802,000 | 25,013,000 | 41,095,000 | 51,468,000 |
T&M | ||||
Disaggregation of revenue | ||||
Revenue | 1,135,000 | 1,335,000 | 2,247,000 | 2,567,000 |
UMS | ||||
Disaggregation of revenue | ||||
Revenue | 132,773,000 | 61,634,000 | 230,980,000 | 129,408,000 |
LMS | ||||
Disaggregation of revenue | ||||
Revenue | 30,249,000 | 31,101,000 | 61,166,000 | 54,113,000 |
MW | ||||
Disaggregation of revenue | ||||
Revenue | $ 17,794,000 | $ 18,849,000 | $ 41,017,000 | $ 36,579,000 |
Organization and Significant _8
Organization and Significant Accounting Policies - Earnings (Loss) Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Numerator for basic earnings per share: | ||||
Net income (loss) attributable to AeroVironment, Inc. | $ 17,840 | $ (6,668) | $ 39,735 | $ (15,063) |
Denominator for basic earnings (loss) per share: | ||||
Weighted average common shares | 26,865,763 | 24,900,873 | 26,479,168 | 24,852,219 |
Dilutive effect of employee stock options, restricted stock and restricted stock units | 91,043 | 90,099 | ||
Denominator for diluted earnings (loss) per share | 26,956,806 | 24,900,873 | 26,569,267 | 24,852,219 |
Number of anti-dilutive shares | 1,284 | 148,196 | 1,082 | 156,625 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Oct. 28, 2023 | Apr. 30, 2023 |
Long-term investments: | ||
Total long-term available-for-sale securities investments | $ 1,505 | $ 4,969 |
Equity Method Investments. | 19,106 | 18,644 |
Total long-term investments | 20,611 | 23,613 |
Equity securities and warrants | ||
Long-term investments: | ||
Total long-term investments | $ 1,505 | $ 4,969 |
Investment, Type [Extensible Enumeration] | us-gaap:DebtSecuritiesMember | us-gaap:DebtSecuritiesMember |
Investment in limited partnership fund | ||
Long-term investments: | ||
Equity Method Investments. | $ 19,106 | $ 18,644 |
Investments - Equity Securities
Investments - Equity Securities (Details) - Equity securities and warrants - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Debt Securities, Available-for-Sale [Line Items] | ||||
Net loss recognized during the period on equity securities | $ (2,450) | $ 928 | $ (3,463) | $ 928 |
Unrealized loss recognized during the period on equity securities still held at the reporting date | $ (2,450) | $ 928 | $ (3,463) | $ 928 |
Fair Value Measurements - (Deta
Fair Value Measurements - (Details) - Recurring basis - USD ($) $ in Thousands | Oct. 28, 2023 | Apr. 30, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | $ 1,415 | $ 4,714 |
Warrants | 90 | 255 |
Total | 1,505 | 4,969 |
Contingent consideration | 2,116 | 2,109 |
Total | 2,116 | 2,109 |
Quoted prices in active market for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 1,415 | 4,714 |
Total | 1,415 | 4,714 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants | 90 | 255 |
Total | 90 | 255 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 2,116 | 2,109 |
Total | $ 2,116 | $ 2,109 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation (Details) - Significant unobservable inputs (Level 3) $ in Thousands | 6 Months Ended |
Oct. 28, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of the period | $ 2,109 |
Total fair value measurement adjustments (realized or unrealized) | $ 7 |
Included in selling, general and administrative | Selling, general and administrative |
Balance at the end of the period | $ 2,116 |
Fair Value Measurements - Acqui
Fair Value Measurements - Acquisitions (Details) | Sep. 12, 2022 USD ($) $ / shares shares | Sep. 09, 2022 USD ($) shares | May 03, 2021 USD ($) | May 03, 2021 EUR (€) | Oct. 28, 2023 USD ($) | Oct. 28, 2023 EUR (€) | Apr. 30, 2023 USD ($) | Apr. 30, 2023 EUR (€) |
Amprius Technologies, Inc. | ||||||||
Fair Value Measurement | ||||||||
Company Invested amount | $ 5,000,000 | |||||||
Amprius Technologies, Inc. | Equity securities | ||||||||
Fair Value Measurement | ||||||||
Number of shares purchased | shares | 500,000 | |||||||
Amprius Technologies, Inc. | Redeemable warrant | ||||||||
Fair Value Measurement | ||||||||
Number of warrants acquired | shares | 500,000 | |||||||
Exercise Price of warrants | $ / shares | $ 12.50 | |||||||
Redemption price | $ / shares | $ 20 | |||||||
Amprius Technologies, Inc. | Redeemable warrant | Measurement Input, Exercise Price | ||||||||
Fair Value Measurement | ||||||||
Investment in warrants | 11.50 | |||||||
Amprius Technologies, Inc. | Redeemable warrant | Measurement Input, Redemption Price | ||||||||
Fair Value Measurement | ||||||||
Investment in warrants | 18 | |||||||
Nauticus Robotics, Inc. | Equity securities | ||||||||
Fair Value Measurement | ||||||||
Company Invested amount | $ 100,000 | |||||||
Number of shares purchased | shares | 10,000 | |||||||
Telerob | ||||||||
Fair Value Measurement | ||||||||
Period to obtain target | 36 months | 36 months | ||||||
Amount of earnout amount not achieved | $ 2,116,000 | $ 2,116,000 | € 2,000,000 | |||||
Amount of second year earnout amount achieved | $ 2,116,000 | € 2,000,000 | ||||||
Telerob | Maximum | ||||||||
Fair Value Measurement | ||||||||
Additional cash consideration | $ 6,339,000 | € 6,000,000 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Apr. 30, 2023 | |
Inventories, net | |||
Raw materials | $ 71,273 | $ 67,775 | |
Work in process | 71,459 | 43,276 | |
Finished goods | 60,415 | 42,968 | |
Inventories, gross | 203,147 | 154,019 | |
Reserve for inventory excess and obsolescence | (21,380) | (15,205) | |
Inventories, net | 181,767 | $ 138,814 | |
Inventory reserve charge | $ 8,338 | $ 2,859 |
Equity Method Investments - Inv
Equity Method Investments - Investment in Limited Partnership Fund (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Mar. 31, 2022 | Jul. 31, 2019 | Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2021 | |
Equity Method Investments | |||||||||
Equity method investment loss, net of tax | $ (1,393,000) | $ (1,273,000) | $ (1,414,000) | $ (1,773,000) | |||||
Carrying value of investment | 19,106,000 | 19,106,000 | $ 18,644,000 | ||||||
Limited Partnership Fund | |||||||||
Equity Method Investments | |||||||||
Capital contributions | $ 10,000,000 | $ 10,000,000 | |||||||
Contribution commitments | $ 0 | ||||||||
Limited Partnership Fund | Equity method investment loss, net of tax | |||||||||
Equity Method Investments | |||||||||
Equity method investment loss, net of tax | (1,393,000) | (1,273,000) | (1,414,000) | (1,773,000) | |||||
Income tax expense from equity method investments | 0 | 0 | |||||||
Limited Partnership Fund | Long term investments | |||||||||
Equity Method Investments | |||||||||
Carrying value of investment | 19,106,000 | $ 19,106,000 | 18,644,000 | ||||||
Limited Partnership Fund, Technologies and Start-Up | |||||||||
Equity Method Investments | |||||||||
Capital contributions | $ 20,000,000 | $ 1,875,000 | $ 5,778,000 | ||||||
Expected years contributions will be made | 5 years | ||||||||
Additional capital contributions | $ 12,347,000 | ||||||||
Limited Partnership Fund, Technologies and Start-Up | Equity method investment loss, net of tax | |||||||||
Equity Method Investments | |||||||||
Income tax expense from equity method investments | $ 0 | $ 0 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) | 6 Months Ended | |||
Oct. 14, 2022 | Sep. 15, 2021 | Oct. 28, 2023 | Apr. 30, 2023 | |
Equity Method Investments | ||||
Carrying value of investment | $ 19,106,000 | $ 18,644,000 | ||
Altoy | ||||
Equity Method Investments | ||||
Equity method investment (loss) income | 0 | |||
Percentage of ownership interest sold | 35% | 35% | ||
Ownership interest | 15% | 85% | ||
Altoy | Other assets, long term | ||||
Equity Method Investments | ||||
Carrying value of investment | $ 71,000 | $ 114,000 |
Warranty Reserves (Details)
Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Warranty Reserves | ||||
Beginning balance | $ 4,627 | $ 2,988 | $ 3,642 | $ 2,190 |
Balance acquired from acquisition | 40 | 40 | ||
Warranty expense | 1,037 | 134 | 2,787 | 1,373 |
Warranty costs settled | (462) | (105) | (1,227) | (546) |
Ending balance | $ 5,242 | $ 3,017 | $ 5,242 | $ 3,017 |
Intangibles, net - Intangibles
Intangibles, net - Intangibles included in other assets on the balance sheet (Details) - USD ($) $ in Thousands | Oct. 28, 2023 | Apr. 30, 2023 |
Intangibles, net | ||
Intangibles, gross | $ 184,638 | $ 138,453 |
Less accumulated amortization | (101,790) | (94,876) |
Intangibles, net | 82,848 | 43,577 |
Technology | ||
Intangibles, net | ||
Intangibles, gross | 100,885 | 60,817 |
Licenses | ||
Intangibles, net | ||
Intangibles, gross | 1,008 | 1,008 |
Customer relationships | ||
Intangibles, net | ||
Intangibles, gross | 77,258 | 72,645 |
Backlog. | ||
Intangibles, net | ||
Intangibles, gross | 2,805 | 2,895 |
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 | 1,668 | 68 |
Other | ||
Intangibles, net | ||
Intangibles, gross | $ 144 | $ 150 |
Intangibles, net (Details)
Intangibles, net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Intangibles, net | ||||
Amortization expense | $ 4,262,000 | $ 5,983,000 | $ 7,276,000 | $ 11,852,000 |
Windward Performance, Ltd. | ||||
Intangibles, net | ||||
Remaining term to be expensed | 2 years | 2 years | ||
Windward Performance, Ltd. | Paid at Close | ||||
Intangibles, net | ||||
Amount paid | $ 1,500,000 | |||
Windward Performance, Ltd. | First Anniversary | ||||
Intangibles, net | ||||
Amount paid | 750,000 | |||
Windward Performance, Ltd. | Second Anniversary | ||||
Intangibles, net | ||||
Amount paid | 750,000 | |||
Windward Performance, Ltd. | Technology | ||||
Intangibles, net | ||||
Amount of acquired intellectual property | 1,500,000 | |||
Windward Performance, Ltd. | Unmanned Aircraft | ||||
Intangibles, net | ||||
Amount of acquired intellectual property | $ 3,000,000 | |||
Weighted average | ||||
Intangibles, net | ||||
Weighted average amortization period | 4 years | 4 years |
Intangibles, net - Estimated Am
Intangibles, net - Estimated Amortization Expense (Details) $ in Thousands | Apr. 30, 2023 USD ($) |
Estimated amortization expense | |
2024 | $ 10,635 |
2025 | 19,119 |
2026 | 14,983 |
2027 | 12,615 |
2028 | 11,901 |
Total | $ 69,253 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 6 Months Ended |
Oct. 28, 2023 USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 180,801 |
Additions to goodwill | 94,776 |
Change to goodwill | (796) |
Goodwill, Ending Balance | 274,781 |
UMS | |
Goodwill | |
Goodwill, Beginning Balance | 161,547 |
Additions to goodwill | 94,776 |
Change to goodwill | (796) |
Goodwill, Ending Balance | 255,527 |
MW | |
Goodwill | |
Goodwill, Beginning Balance | 19,254 |
Goodwill, Ending Balance | 19,254 |
MUAS | |
Goodwill | |
Intangible assets | $ 15,668 |
Debt - (Details)
Debt - (Details) | 6 Months Ended | ||||
Feb. 04, 2022 | Feb. 19, 2021 USD ($) payment | Oct. 28, 2023 | Jun. 06, 2023 USD ($) | Jun. 05, 2023 USD ($) | |
Arcturus UAV Inc. | Aerovironment | |||||
Debt | |||||
Ownership interest | 100% | ||||
Revolving credit facility | |||||
Debt | |||||
Amount of sublimit of line of credit borrowing capacity | $ 25,000,000 | $ 10,000,000 | |||
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 | 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 | London Interbank Offered Rate (LIBOR) | |||||
Debt | |||||
Interest rate | 0% | ||||
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 | $ 25,000,000 | ||||
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. 28, 2023 | Apr. 30, 2023 | |
Long-term debt | ||
Total debt | $ 80,000 | $ 135,000 |
Less current portion | 5,000 | 7,500 |
Total long-term debt, less current portion | 75,000 | 127,500 |
Less unamortized debt issuance costs - term loans | 1,322 | 1,596 |
Total long-term debt, net of unamortized debt issuance costs - term loans | 73,678 | 125,904 |
Unamortized debt issuance costs - revolving credit facility | 653 | 795 |
Term loan | ||
Long-term debt | ||
Total debt | $ 80,000 | $ 135,000 |
Revolving credit facility | ||
Long-term debt | ||
Current period interest rate | 7.20% | 7.10% |
Debt - Future principle payment
Debt - Future principle payments (Details) $ in Thousands | Oct. 28, 2023 USD ($) |
Future principle payments | |
2025 | $ 10,000 |
2026 | 70,000 |
Total | $ 80,000 |
Leases (Details)
Leases (Details) | 6 Months Ended |
Oct. 28, 2023 | |
Leases | |
Option to extend | true |
Option to terminate | true |
Option to terminate period (in years) | 3 years |
Minimum | |
Leases | |
Remaining lease terms (in years) | 1 year |
Maximum | |
Leases | |
Remaining lease terms (in years) | 7 years |
Option to extend period (in years) | 9 years |
Leases - Components of lease co
Leases - Components of lease costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 28, 2023 | Oct. 29, 2022 | |
Components of lease costs | ||
Operating lease cost | $ 4,486 | $ 3,775 |
Short term lease cost | 733 | 479 |
Variable lease cost | 833 | 430 |
Total lease costs, net | $ 6,052 | $ 4,684 |
Leases - Supplemental lease inf
Leases - Supplemental lease information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 28, 2023 | Oct. 29, 2022 | |
Leases | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 4,588 | $ 3,705 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 7,120 | $ 2,134 |
Weighted average remaining lease term | 54 months | 58 months |
Weighted average discount rate | 5.20% | 3.50% |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) $ in Thousands | Oct. 28, 2023 USD ($) |
Maturities of operating lease liabilities: | |
2024 | $ 4,900 |
2025 | 9,390 |
2026 | 7,164 |
2027 | 6,547 |
2028 | 4,520 |
Thereafter | 5,106 |
Total lease payments | 37,627 |
Less: imputed interest | (5,082) |
Total present value of operating lease liabilities | $ 32,545 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Accumulated other comprehensive income | ||||
Balance, net of $0 and $8 deferred taxes, as of April 30, 2023 and April 30, 2022, respectively | $ (4,452) | |||
Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 and $6 for the three months ended July 29, 2023 and July 30, 2022, respectively | $ 6 | $ 26 | ||
Change in foreign currency translation adjustments | $ (1,562) | (928) | (1,625) | (1,992) |
Balance, net of $0 and $2 deferred taxes, as of July 29, 2023 and July 30, 2022, respectively | (6,077) | (6,077) | ||
Accumulated Other Comprehensive Income | ||||
Accumulated other comprehensive income | ||||
Balance, net of $0 and $8 deferred taxes, as of April 30, 2023 and April 30, 2022, respectively | (4,452) | (6,514) | ||
Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 and $6 for the three months ended July 29, 2023 and July 30, 2022, respectively | 6 | 26 | ||
Change in foreign currency translation adjustments | (1,625) | (1,992) | ||
Balance, net of $0 and $2 deferred taxes, as of July 29, 2023 and July 30, 2022, respectively | $ (6,077) | $ (8,480) | $ (6,077) | $ (8,480) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments - Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Accumulated other comprehensive income | |||||
Unrealized gain, tax portion | $ 0 | $ 0 | $ 3 | ||
Accumulated Other Comprehensive (Loss) Income | |||||
Accumulated other comprehensive income | |||||
Other Comprehensive Income (Loss), Tax | $ 0 | $ 0 | $ 0 | $ 8 |
Customer-Funded Research & De_2
Customer-Funded Research & Development (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Jan. 28, 2023 | |
Customer-Funded Research & Development | ||||
Revenue from customer funded research and development | $ 19,078,000 | $ 24,937,000 | $ 43,461,000 | $ 47,936,000 |
Long-Term Incentive Awards (Det
Long-Term Incentive Awards (Details) - Performance based restricted stock units - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Oct. 28, 2023 | Oct. 29, 2022 | Jul. 30, 2022 | Jul. 31, 2021 | Aug. 01, 2020 | Oct. 28, 2023 | Oct. 29, 2022 | |
Fiscal 2024 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 1,200,000 | $ 1,834,000 | $ 0 | ||||
Exercisable period from grant date | 3 years | ||||||
Fiscal 2024 LTIP | 100% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 100% | ||||||
Fiscal 2024 LTIP | 50% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 50% | ||||||
Fiscal 2024 LTIP | 250% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 250% | ||||||
Fiscal 2024 LTIP | Maximum | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 16,201,000 | ||||||
Fiscal 2023 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | 1,191,000 | $ 664,000 | 1,852,000 | 1,061,000 | |||
Exercisable period from grant date | 3 years | ||||||
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 | Maximum | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | 11,895,000 | ||||||
Fiscal 2022 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 356,000 | (311,000) | 488,000 | (116,000) | |||
Exercisable period from grant date | 3 years | ||||||
Fiscal 2022 LTIP | 100% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 100% | ||||||
Fiscal 2022 LTIP | 50% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 50% | ||||||
Fiscal 2022 LTIP | 250% Vested | |||||||
Stock Based Compensation | |||||||
Vesting (as a percentage) | 250% | ||||||
Fiscal 2022 LTIP | Maximum | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 9,458,000 | ||||||
Fiscal 2021 LTIP | |||||||
Stock Based Compensation | |||||||
Stock based compensation expense | $ 116,000 | $ 192,000 | |||||
Exercisable period from grant date | 3 years | ||||||
Issue of fully-vested shares of common stock to settle | 5,772 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Income taxes | ||||
Provision for (benefit from) income taxes | $ 1,137,000 | $ (10,457,000) | $ 2,451,000 | $ (7,851,000) |
Effective tax benefit rate (as a percent) | 66.10% | 5.60% | 37.20% |
Share Repurchase Plan and Iss_2
Share Repurchase Plan and Issuances (Details) | Oct. 29, 2022 USD ($) |
Share Repurchase Plan and Issuances | |
Stock Repurchase Program, Authorized Amount | $ 0 |
Share Repurchase Plan and Iss_3
Share Repurchase Plan and Issuances - Shelf Registration (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jul. 29, 2023 | Sep. 08, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | |
Share Repurchase Plan and Issuances | ||||||
Number of share sold | 125,441 | 125,441 | ||||
Total gross proceeds | $ 12,700,000 | |||||
Amount of cash inflow from sale of stock | 12,347,000 | |||||
Commission expense | $ 11,778,000 | |||||
S-3 | ||||||
Share Repurchase Plan and Issuances | ||||||
Number of share sold | 807,370 | 807,370 | ||||
Total gross proceeds | $ 91,313,000 | |||||
Amount of cash inflow from sale of stock | 88,574,000 | |||||
Commission expense | 88,437,000 | |||||
S-3 | Maximum | ||||||
Share Repurchase Plan and Issuances | ||||||
Aggregate offering price | $ 200,000,000 | |||||
Open Market Sale Agreement | ||||||
Share Repurchase Plan and Issuances | ||||||
Number of share sold | 1,917,100 | |||||
Total gross proceeds | 200,000,000 | |||||
Amount of cash inflow from sale of stock | 193,999,000 | |||||
Commission expense | $ 193,086,000 |
Business Acquisitions - Tomahaw
Business Acquisitions - Tomahawk (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Sep. 15, 2023 | Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | Apr. 30, 2023 | |
Fair value of assets acquired: | ||||||
Goodwill | $ 274,781,000 | $ 274,781,000 | $ 180,801,000 | |||
Tomahawk Robotics, Inc | ||||||
Business Acquisitions | ||||||
Cash consideration, net of cash acquired | $ 24,157,000 | |||||
Cash-on-hand | 27,205,000 | |||||
Business aquisition, net of cash acquired | 3,048,000 | |||||
Amount of holdback | $ 490,000 | |||||
Ownership interest acquired | 100% | |||||
Revenue from operation in business acquisition | 3,342,000 | |||||
(Loss) from operation in business acquisition | (2,045,000) | |||||
Fair value of assets acquired: | ||||||
Accounts receivable | $ 2,314,000 | |||||
Unbilled receivable | 993,000 | |||||
Inventories, net | 2,882,000 | |||||
Prepaid and other current assets | 148,000 | |||||
Property and equipment, net | 1,789,000 | |||||
Operating lease assets | 1,337,000 | |||||
Other assets | 71,000 | |||||
Deferred tax asset | 3,603,000 | |||||
Goodwill | 94,776,000 | |||||
Total identifiable net assets | 153,313,000 | |||||
Fair value of liabilities assumed: | ||||||
Accounts payable | 3,788,000 | |||||
Wages and related accruals | 620,000 | |||||
Customer advances | 1,648,000 | |||||
Current operating lease liabilities | 482,000 | |||||
Other current liabilities | 411,000 | |||||
Non-current operating lease liabilities | 855,000 | |||||
Other non-current liabilities | 7,000 | |||||
Deferred income taxes | 11,035,000 | |||||
Total liabilities assumed | 18,846,000 | |||||
Total identifiable net assets | 134,467,000 | |||||
Fair value of consideration transferred: | ||||||
Equity consideration | 109,820,000 | |||||
Cash consideration, net of cash acquired | 24,157,000 | |||||
Holdback | 490,000 | |||||
Total consideration | 134,467,000 | |||||
Supplemental Pro Forma Information (unaudited) | ||||||
Revenue | 184,323,000 | $ 114,411,000 | 343,684,000 | $ 225,755,000 | ||
Net income (loss) attributable to AeroVironment, Inc. | $ 17,420,000 | $ (10,812,000) | $ 37,007,000 | $ (22,899,000) | ||
Tomahawk Robotics, Inc | Technology | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | 39,000,000 | |||||
Tomahawk Robotics, Inc | Customer relationship | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | 4,800,000 | |||||
Tomahawk Robotics, Inc | Trademarks | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | $ 1,600,000 | |||||
Tomahawk Robotics, Inc | Restricted common stock | ||||||
Business Acquisitions | ||||||
Shares issued for business acquisition | 985,999 | |||||
Shares value issued for business acquisition | $ 109,820,000 |
Business Acquisitions - Planck
Business Acquisitions - Planck (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 17, 2022 | Oct. 29, 2022 | Oct. 29, 2022 | Oct. 28, 2023 | Apr. 30, 2023 | |
Fair value of assets acquired: | |||||
Goodwill | $ 274,781,000 | $ 180,801,000 | |||
Planck Aerosystems, Inc. ("Planck") | |||||
Business Acquisitions | |||||
Cash consideration, net of cash acquired | $ 5,105,000 | ||||
Amount of holdback | 500,000 | ||||
Revenue from operation in business acquisition | $ 68,000 | ||||
Fair value of assets acquired: | |||||
Inventories | 109,000 | ||||
Other assets | 19,000 | ||||
Property and equipment, net | 13,000 | ||||
Goodwill | 1,633,000 | ||||
Total identifiable net assets | 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 consideration, net of cash acquired | 5,105,000 | ||||
Holdback | 500,000 | ||||
Total consideration | 5,605,000 | ||||
Supplemental Pro Forma Information (unaudited) | |||||
Revenue | 111,584,000 | $ 223,016,000 | |||
Net loss attributable to AeroVironment, Inc. | $ (6,131,000) | $ (13,450,000) | |||
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 |
Pension - Projected benefit obl
Pension - Projected benefit obligation and projected fair value (Details) | 3 Months Ended | 12 Months Ended | |
Jul. 29, 2023 | Apr. 30, 2023 | Oct. 28, 2023 item employee | |
Pension | |||
Number of former employees | employee | 3 | ||
Number of pension commitments | item | 3 | ||
Pension Plan | |||
Pension | |||
Discount rate | 2.40% | 2.40% | |
In-payment benefits | 1.50% | 1.50% | |
Expected return on plan assets | 2.90% | 2.90% |
Pension - Projected benefit o_2
Pension - Projected benefit obligation and fair value of plan assets (Details) $ in Thousands | 12 Months Ended |
Apr. 30, 2023 USD ($) | |
Pension | |
Defined Benefit Plan, Funding Status [Extensible List] | us-gaap:UnfundedPlanMember |
Pension Plan | |
Pension | |
Projected benefit obligation | $ (3,192) |
Fair value of plan assets | 3,870 |
Funded status of the plan | $ 678 |
Pension - Expected benefits pai
Pension - Expected benefits paid (Details) $ in Thousands | Apr. 30, 2023 USD ($) |
Pension | |
2024 | $ 177 |
2025 | 190 |
2026 | 192 |
2027 | 195 |
2028 | 197 |
2029-2033 | 1,008 |
Total expected benefit payments | $ 1,959 |
Pension - Net benefit income (D
Pension - Net benefit income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Oct. 28, 2023 | Oct. 28, 2023 | Oct. 29, 2022 | |
Pension | |||
Interest cost | $ 29 | $ 59 | $ (17) |
Actuarial gain | 241 | ||
Net periodic benefit cost | $ 29 | $ 59 | $ 224 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Oct. 28, 2023 | Oct. 29, 2022 | Oct. 28, 2023 | Oct. 29, 2022 | Apr. 30, 2023 | |
Segment Reporting Information [Line Items] | |||||
Gross margin | $ 75,350 | $ 25,890 | $ 141,010 | $ 59,604 | |
Income (loss) from operations | 25,178 | (14,314) | 51,545 | (17,588) | |
Total assets | 1,006,700 | 1,006,700 | $ 824,577 | ||
Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 180,816 | 111,584 | 333,163 | 220,100 | |
Gross margin | 75,350 | 25,890 | 141,010 | 59,604 | |
Income (loss) from operations | 25,178 | (14,314) | 51,545 | (17,588) | |
Acquisition-related expenses | 1,093 | 569 | 1,767 | 904 | |
Amortization of acquired intangible assets and other purchase accounting adjustments | 4,413 | 7,842 | 7,578 | 14,803 | |
Adjusted income (loss) from operations | 30,684 | (5,903) | 60,890 | (1,881) | |
Total assets | 1,006,700 | 1,006,700 | 824,577 | ||
UMS | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 132,773 | 61,634 | 230,980 | 129,408 | |
Gross margin | 62,742 | 7,903 | 111,111 | 29,406 | |
Income (loss) from operations | 33,859 | (17,347) | 55,608 | (21,045) | |
Acquisition-related expenses | 1,000 | 569 | 1,674 | 873 | |
Amortization of acquired intangible assets and other purchase accounting adjustments | 3,744 | 7,250 | 6,345 | 13,595 | |
Adjusted income (loss) from operations | 38,603 | (9,528) | 63,627 | (6,577) | |
Total assets | 571,786 | 571,786 | 474,417 | ||
LMS | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 30,249 | 31,101 | 61,166 | 54,113 | |
Gross margin | 9,343 | 12,636 | 21,666 | 20,383 | |
Income (loss) from operations | (1,189) | 2,004 | 3,721 | 973 | |
Acquisition-related expenses | 67 | 67 | |||
Adjusted income (loss) from operations | (1,122) | 2,004 | 3,788 | 973 | |
Total assets | 138,596 | 138,596 | 103,375 | ||
MW | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 17,794 | 18,849 | 41,017 | 36,579 | |
Gross margin | 3,265 | 5,351 | 8,233 | 9,815 | |
Income (loss) from operations | (7,492) | 1,029 | (7,784) | 2,484 | |
Acquisition-related expenses | 26 | 26 | 31 | ||
Amortization of acquired intangible assets and other purchase accounting adjustments | 669 | 592 | 1,233 | 1,208 | |
Adjusted income (loss) from operations | (6,797) | $ 1,621 | (6,525) | $ 3,723 | |
Total assets | 47,693 | 47,693 | 39,650 | ||
Corporate | Product segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | $ 248,625 | $ 248,625 | $ 207,135 |
Subsequent Events (Details)
Subsequent Events (Details) | May 03, 2021 |
Telerob | |
Subsequent Events | |
Period to obtain target | 36 months |
Insider Trading Arrangements
Insider Trading Arrangements | 6 Months Ended |
Oct. 28, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |