AeroVironment Inc [AVAV] Filings

10-Q 1 avav-20230128x10q.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 28, 2023

☐

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 South, 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 March 1, 2023, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 25,264,025.

Table of Contents

AeroVironment, Inc.

Table of Contents

Item 1.	Financial Statements :
	Condensed Consolidated Balance Sheets as of January 28, 2023 (Unaudited) and April 30, 2022	3
	Condensed Consolidated Statements of Operations for the three and nine months ended January 28, 2023 (Unaudited) and January 29, 2022 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended January 28, 2023 (Unaudited) and January 29, 2022 (Unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended January 28, 2023 (Unaudited) and January 29, 2022 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended January 28, 2023 (Unaudited) and January 29, 2022 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	51
Signatures		51

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AeroVironment, Inc.

Condensed Consolidated Balance Sheets

(In thousands except share and per share data)


	January 28,		April 30,
	2023		2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	78,276	$	77,231
Short-term investments		—		24,716
Accounts receivable, net of allowance for doubtful accounts of $61 at January 28, 2023 and $592 at April 30, 2022		52,871		60,170
Unbilled receivables and retentions (inclusive of related party unbilled receivables of $2,229 at April 30, 2022)		109,289		104,194
Inventories, net		125,942		90,629
Income taxes receivable		9,180		442
Prepaid expenses and other current assets		15,323		11,527
Total current assets		390,881		368,909
Long-term investments		19,319		15,433
Property and equipment, net		45,388		62,296
Operating lease right-of-use assets		28,336		26,769
Deferred income taxes		8,540		7,290
Intangibles, net		83,442		97,224
Goodwill		336,555		334,347
Other assets		8,741		1,932
Total assets	$	921,202	$	914,200
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	26,420	$	19,244
Wages and related accruals		27,135		25,398
Customer advances		22,553		8,968
Current portion of long-term debt		10,000		10,000
Current operating lease liabilities		7,794		6,819
Income taxes payable		26		759
Other current liabilities		22,469		30,203
Total current liabilities		116,397		101,391
Long-term debt, net of current portion		155,763		177,840
Non-current operating lease liabilities		22,630		21,915
Other non-current liabilities		742		768
Liability for uncertain tax positions		1,450		1,450
Deferred income taxes		2,707		2,626
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares—10,000,000; none issued or outstanding at January 28, 2023 and April 30, 2022		—		—
Common stock, $0.0001 par value:
Authorized shares—100,000,000
Issued and outstanding shares—25,264,025 shares at January 28, 2023 and 24,951,287 shares at April 30, 2022		4		2
Additional paid-in capital		295,070		267,248
Accumulated other comprehensive loss		(5,055)		(6,514)
Retained earnings		331,494		347,233
Total AeroVironment, Inc. stockholders’ equity		621,513		607,969
Noncontrolling interest		—		241
Total equity		621,513		608,210
Total liabilities and stockholders’ equity	$	921,202	$	914,200

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

AeroVironment, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)


	Three Months Ended				Nine Months Ended
	January 28,		January 29,		January 28,		January 29,
	2023		2022		2023		2022
Revenue:
Product sales	$	91,216	$	42,599	$	211,533	$	166,713
Contract services (inclusive of related party revenue of $9,543 and $30,237 for the three and nine months ended January 29, 2022, respectively)		43,179		47,494		142,962		146,397
		134,395		90,093		354,495		313,110
Cost of sales:
Product sales		54,866		29,294		127,210		100,821
Contract services		34,019		39,363		122,171		119,675
		88,885		68,657		249,381		220,496
Gross margin:
Product sales		36,350		13,305		84,323		65,892
Contract services		9,160		8,131		20,791		26,722
		45,510		21,436		105,114		92,614
Selling, general and administrative		24,746		22,549		70,302		74,496
Research and development		16,157		13,013		47,793		41,018
Income (loss) from operations		4,607		(14,126)		(12,981)		(22,900)
Other (loss) income:
Interest expense, net		(2,810)		(1,510)		(6,722)		(4,164)
Other (expense) income, net		(2,587)		34		(2,183)		(10,360)
Loss before income taxes		(790)		(15,602)		(21,886)		(37,424)
Benefit from income taxes		(531)		(15,396)		(8,382)		(25,864)
Equity method investment (loss) income, net of tax		(417)		171		(2,190)		163
Net loss		(676)		(35)		(15,694)		(11,397)
Net loss (income) attributable to noncontrolling interest		—		45		(45)		(49)
Net (loss) income attributable to AeroVironment, Inc.	$	(676)	$	10	$	(15,739)	$	(11,446)
Net loss per share attributable to AeroVironment, Inc.
Basic	$	(0.03)	$	—	$	(0.63)	$	(0.46)
Diluted		(0.03)		—	$	(0.63)	$	(0.46)
Weighted-average shares outstanding:
Basic		25,012,412		24,710,991		24,906,977		24,657,846
Diluted		25,012,412		24,879,643		24,906,977		24,657,846

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

AeroVironment, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In thousands)


	Three Months Ended				Nine Months Ended
	January 28,		January 29,		January 28,		January 29,
	2023		2022		2023		2022
Net loss	$	(676)	$	(35)	$	(15,694)	$	(11,397)
Other comprehensive income (loss):
Unrealized (loss) gain on available-for-sale investments, net of deferred tax expense of $0 and $1 for the three months ended January 28, 2023 and January 29, 2022, respectively; and $0 and $1 for the nine months ended January 28, 2023 and January 29, 2022, respectively		—		(3)		26		(6)
Change in foreign currency translation adjustments		3,425		(1,754)		1,433		(3,771)
Total comprehensive income (loss)		2,749		(1,792)		(14,235)		(15,174)
Net loss (income) attributable to noncontrolling interest		—		45		(45)		(49)
Comprehensive income (loss) attributable to AeroVironment, Inc.	$	2,749	$	(1,747)	$	(14,280)	$	(15,223)

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the nine months ended January 28, 2023 and January 29, 2022 (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 April 30, 2022	24,951,287	$	2	$	267,248	$	347,233	$	(6,514)	$	607,969	$	241	$	608,210
Net (loss) income	—		—		—		(15,739)		—		(15,739)		45		(15,694)
Unrealized gain on investments	—		—		—		—		26		26		—		26
Foreign currency translation	—		—		—		—		1,433		1,433		—		1,433
Stock options exercised	35,000		—		868		—		—		868		—		868
Restricted stock awards	77,169		—		—		—		—		—		—		—
Restricted stock awards forfeited	(10,679)		—		—		—		—		—		—		—
Tax withholding payment related to net share settlement of equity awards	(10,723)		—		(853)		—		—		(853)		—		(853)
Shares issued, net of issuance costs	221,971		2		20,699		—		—		20,701		—		20,701
Deconsolidation of previously controlled subsidiary	—		—		—		—		—		—		(286)		(286)
Stock based compensation	—		—		7,108		—		—		7,108		—		7,108
Balance at January 28, 2023	25,264,025	$	4	$	295,070	$	331,494	$	(5,055)	$	621,513	$	—	$	621,513

								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

Table of Contents

AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended January 28, 2023 and January 29, 2022 (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 29, 2022	25,157,618	$	4	$	283,789	$	332,170	$	(8,480)	$	607,483	$	—	$	607,483
Net loss	—		—		—		(676)		—		(676)		—		(676)
Foreign currency translation	—		—		—		—		3,425		3,425		—		3,425
Stock options exercised	10,000		—		186		—		—		186		—		186
Restricted stock awards	1,812		—		—		—		—		—		—		—
Restricted stock awards forfeited	(1,935)		—		—		—		—		—		—		—
Shares issued, net of issuance costs	96,530		—		8,389		—		—		8,389		—		8,389
Stock based compensation	—		—		2,706		—		—		2,706		—		2,706
Balance at January 28, 2023	25,264,025	$	4	$	295,070	$	331,494	$	(5,055)	$	621,513	$	—	$	621,513

								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)

AeroVironment Inc [AVAV] Filings
10-Q	[2023-03-06]
10-Q	[2022-12-07]
10-Q	[2022-09-08]
10-K	[2022-06-29]
10-Q	[2022-03-04]
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]