AeroVironment Inc [AVAV] Filings

10-Q 1 avav-20220129x10q.htm 10-Q

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended January 29, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-33261

AEROVIRONMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware		95-2705790
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

241 18^th Street, Suite 415
Arlington, Virginia		22202
(Address of principal executive offices)		(Zip Code)

(805) 520-8350

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	AVAV	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒		Accelerated filer ☐

Non-accelerated filer ☐		Smaller reporting company ☐

		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 25, 2022, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 24,914,333.

Table of Contents

AeroVironment, Inc.

Table of Contents

Item 1.	Financial Statements :
	Consolidated Balance Sheets as of January 29, 2022 (Unaudited) and April 30, 2021	3
	Consolidated Statements of Operations for the three and nine months ended January 29, 2022 (Unaudited) and January 30, 2021 (Unaudited)	4
	Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended January 29, 2022 (Unaudited) and January 30, 2021 (Unaudited)	5
	Consolidated Statements of Stockholders’ Equity for the three and nine months ended January 29, 2022 (Unaudited) and January 30, 2021 (Unaudited)	7
	Consolidated Statements of Cash Flows for the nine months ended January 29, 2022 (Unaudited) and January 30, 2021 (Unaudited)	8
	Notes to Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
Signatures		56

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AeroVironment, Inc.

Consolidated Balance Sheets

(In thousands except share and per share data)


	January 29,		April 30,
	2022		2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	82,528	$	148,741
Short-term investments		3,969		31,971
Accounts receivable, net of allowance for doubtful accounts of $577 at January 29, 2022 and $595 at April 30, 2021		41,739		62,647
Unbilled receivables and retentions (inclusive of related party unbilled receivables of $5,944 at January 29, 2022 and $544 at April 30, 2021)		97,993		71,632
Inventories		89,616		71,646
Income taxes receivable		26,578		—
Prepaid expenses and other current assets		12,099		15,001
Total current assets		354,522		401,638
Long-term investments		12,388		12,156
Property and equipment, net		65,377		58,896
Operating lease right-of-use assets		24,848		22,902
Deferred income taxes		3,258		2,061
Intangibles, net		103,825		106,268
Goodwill		335,164		314,205
Other assets		5,881		10,440
Total assets	$	905,263	$	928,566
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	15,118	$	24,841
Wages and related accruals		21,207		28,068
Customer advances		6,864		7,183
Current portion of long-term debt		10,000		10,000
Current operating lease liabilities		6,150		6,154
Income taxes payable		247		861
Other current liabilities		27,897		19,078
Total current liabilities		87,483		96,185
Long-term debt, net of current portion		180,398		187,512
Non-current operating lease liabilities		20,678		19,103
Other non-current liabilities		5,273		10,141
Liability for uncertain tax positions		3,518		3,518
Deferred income taxes		5,198		—
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares—10,000,000; none issued or outstanding at January 29, 2022 and April 30, 2021		—		—
Common stock, $0.0001 par value:
Authorized shares—100,000,000
Issued and outstanding shares—24,915,105 shares at January 29, 2022 and 24,777,295 shares at April 30, 2021		2		2
Additional paid-in capital		265,885		260,327
Accumulated other comprehensive (loss) income		(3,434)		343
Retained earnings		339,975		351,421
Total AeroVironment, Inc. stockholders’ equity		602,428		612,093
Noncontrolling interest		287		14
Total equity		602,715		612,107
Total liabilities and stockholders’ equity	$	905,263	$	928,566

See accompanying notes to consolidated financial statements (unaudited).

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AeroVironment, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)


	Three Months Ended				Nine Months Ended
	January 29,		January 30,		January 29,		January 30,
	2022		2021		2022		2021
Revenue:
Product sales	$	42,599	$	58,348	$	166,713	$	182,233
Contract services (inclusive of related party revenue of $9,543 and $7,480 for the three months ended January 29, 2022 and January 30, 2021, respectively; and $30,237 and $35,318 for the nine months ended January 29, 2022 and January 30, 2021, respectively)		47,494		20,434		146,397		76,664
		90,093		78,782		313,110		258,897
Cost of sales:
Product sales		29,294		35,746		100,821		102,039
Contract services		39,363		14,395		119,675		51,955
		68,657		50,141		220,496		153,994
Gross margin:
Product sales		13,305		22,602		65,892		80,194
Contract services		8,131		6,039		26,722		24,709
		21,436		28,641		92,614		104,903
Selling, general and administrative		22,549		15,652		74,496		42,640
Research and development		13,013		13,631		41,018		36,710
(Loss) income from operations		(14,126)		(642)		(22,900)		25,553
Other (loss) income:
Interest (expense) income, net		(1,510)		94		(4,164)		417
Other income (expense), net		34		(37)		(10,360)		68
(Loss) income before income taxes		(15,602)		(585)		(37,424)		26,038
(Benefit from) provision for income taxes		(15,396)		(924)		(25,864)		2,774
Equity method investment income (loss), net of tax		171		(81)		163		(10,891)
Net (loss) income		(35)		258		(11,397)		12,373
Net loss (income) attributable to noncontrolling interest		45		(47)		(49)		12
Net income (loss) attributable to AeroVironment, Inc.	$	10	$	211	$	(11,446)	$	12,385
Net income (loss) per share attributable to AeroVironment, Inc.
Basic	$	—	$	0.01	$	(0.46)	$	0.52
Diluted	$	—	$	0.01	$	(0.46)	$	0.51
Weighted-average shares outstanding:
Basic		24,710,991		23,942,782		24,657,846		23,924,017
Diluted		24,879,643		24,260,874		24,657,846		24,216,371

See accompanying notes to consolidated financial statements (unaudited).

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AeroVironment, Inc.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(In thousands)


	Three Months Ended				Nine Months Ended
	January 29,		January 30,		January 29,		January 30,
	2022		2021		2022		2021
Net (loss) income	$	(35)	$	258	$	(11,397)	$	12,373
Other comprehensive (loss) income:
Unrealized (loss) gain on available-for-sale investments, net of deferred tax benefit of $1 and $2 for the three months ended January 29, 2022 and January 30, 2021, respectively; and $1 and $2 for the nine months ended January 29, 2022 and January 30, 2021, respectively		(3)		5		(6)		(56)
Change in foreign currency translation adjustments		(1,754)		—		(3,771)		75
Total comprehensive (loss) income		(1,792)		263		(15,174)		12,392
Net loss (income) attributable to noncontrolling interest		45		(47)		(49)		12
Comprehensive (loss) income attributable to AeroVironment, Inc.	$	(1,747)	$	216	$	(15,223)	$	12,404

See accompanying notes to consolidated financial statements (unaudited).

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AeroVironment, Inc.

Consolidated Statements of Stockholders’ Equity

For the nine months ended January 29, 2022 and January 30, 2021 (Unaudited)

(In thousands except share data)


								Accumulated
				Additional				Other		Total		Non-
	Common Stock			Paid-In		Retained		Comprehensive		AeroVironment, Inc.		Controlling
	Shares	Amount		Capital		Earnings		Income (Loss)		Equity		Interest		Total
Balance at April 30, 2021	24,777,295	$	2	$	260,327	$	351,421	$	343	$	612,093	$	14	$	612,107
Net (loss) income	—		—		—		(11,446)		—		(11,446)		49		(11,397)
Unrealized loss on investments	—		—		—		—		(6)		(6)		—		(6)
Foreign currency translation	—		—		—		—		(3,771)		(3,771)		—		(3,771)
Stock options exercised	114,362		—		2,777		—		—		2,777		—		2,777
Restricted stock awards	55,592		—		—		—		—		—		—		—
Restricted stock awards forfeited	(20,203)		—		—		—		—		—		—		—
Tax withholding payment related to net share settlement of equity awards	(11,941)		—		(1,176)		—		—		(1,176)		—		(1,176)
Change in non-controlling interest	—		—		—		—		—		—		224		224
Stock based compensation	—		—		3,957		—		—		3,957		—		3,957
Balance at January 29, 2022	24,915,105	$	2	$	265,885	$	339,975	$	(3,434)	$	602,428	$	287	$	602,715

								Accumulated
				Additional				Other		Total		Non-
	Common Stock			Paid-In		Retained		Comprehensive		AeroVironment, Inc.		Controlling
	Shares	Amount		Capital		Earnings		Income (Loss)		Equity		Interest		Total
Balance at April 30, 2020	24,063,639	$	2	$	181,481	$	328,090	$	328	$	509,901	$	—	$	509,901
Net income (loss)	—		—		—		12,385		—		12,385		(12)		12,373
Unrealized loss on investments	—		—		—		—		(56)		(56)		—		(56)
Foreign currency translation	—		—		—		—		75		75		—		75
Stock options exercised	3,500		—		86		—		—		86		—		86
Restricted stock awards	62,675		—		—		—		—		—		—		—
Restricted stock awards forfeited	(1,833)		—		—		—		—		—		—		—
Tax withholding payment related to net share settlement of equity awards	(25,290)		—		(1,955)		—		—		(1,955)		—		(1,955)
Stock based compensation	—		—		4,754		—		—		4,754		—		4,754
Balance at January 30, 2021	24,102,691	$	2	$	184,366	$	340,475	$	347	$	525,190	$	(12)	$	525,178

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Stockholders’ Equity

For the three months ended January 29, 2022 and January 30, 2021 (Unaudited)

(In thousands except share data)


								Accumulated
				Additional				Other		Total		Non-
	Common Stock			Paid-In		Retained		Comprehensive		AeroVironment, Inc.		Controlling
	Shares	Amount		Capital		Earnings		(Loss) Income		Equity		Interest		Total
Balance at October 30, 2021	24,805,829	$	2	$	261,612	$	339,965	$	(1,677)	$	599,902	$	332	$	600,234
Net income (loss)	—		—		—		10		—		10		(45)		(35)
Unrealized loss on investments	—		—		—		—		(3)		(3)		—		(3)
Foreign currency translation	—		—		—		—		(1,754)		(1,754)		—		(1,754)
Stock options exercised	110,362		—		2,657		—		—		2,657		—		2,657
Restricted stock awards	3,366		—		—		—		—		—		—		—
Restricted stock awards forfeited	(4,452)		—		—		—		—		—		—		—
Stock based compensation	—		—		1,616		—		—		1,616		—		1,616
Balance at January 29, 2022	24,915,105	$	2	$	265,885	$	339,975	$	(3,434)	$	602,428	$	287	$	602,715

								Accumulated
				Additional				Other		Total		Non-
	Common Stock			Paid-In		Retained		Comprehensive		AeroVironment, Inc.		Controlling
	Shares	Amount		Capital		Earnings		Income (Loss)		Equity		Interest		Total
Balance at October 31, 2020	24,103,980		2		183,298		340,264		342		523,906		(59)		523,847
Net income	—		—		—		211		—		211		47		258
Unrealized gain on investments	—		—		—		—		5		5		—		5
Restricted stock awards	2,083		—		—		—		—		—		—		—
Restricted stock awards forfeited	(1,318)		—		—		—		—		—		—		—
Tax withholding payment related to net share settlement of equity awards	(2,054)		—		(177)		—		—		(177)		—		(177)
Stock based compensation	—		—		1,245		—		—		1,245		—		1,245
Balance at January 30, 2021	24,102,691	$	2	$	184,366	$	340,475	$	347	$	525,190	$	(12)	$	525,178

See accompanying notes to consolidated financial statements (unaudited).

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

AeroVironment Inc [AVAV] Filings
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10-Q	[2021-12-08]
10-Q	[2021-09-09]
10-K	[2021-06-29]
10-Q	[2021-03-10]
10-Q	[2020-12-09]
10-Q	[2020-09-10]
10-K	[2020-06-24]
10-Q	[2020-03-04]
10-Q	[2019-12-04]
10-Q	[2019-09-05]
10-K	[2019-06-26]
10-Q	[2019-03-06]
10-Q	[2018-11-30]
10-Q	[2018-09-06]
10-K	[2018-06-27]
10-Q	[2018-03-07]
10-Q	[2017-12-06]
10-Q	[2017-08-30]
10-K	[2017-06-28]
10-Q	[2017-03-08]
10-Q	[2016-12-07]
10-Q	[2016-08-31]
10-K	[2016-06-29]
10-Q	[2016-03-09]
10-Q	[2015-12-09]
10-Q	[2015-09-02]
10-K	[2015-07-01]
10-Q	[2015-03-04]
10-Q	[2014-11-26]
10-Q	[2014-09-04]
10-K	[2014-07-09]
10-Q	[2014-03-05]
10-Q	[2013-11-27]
10-Q	[2013-08-28]
10-K	[2013-06-26]
10-Q	[2013-03-06]
10-Q	[2012-12-05]
10-Q	[2012-09-06]
10-K	[2012-06-27]
10-Q	[2012-03-07]