239462930023995109P1YP2Y0001368622--04-302020Q3falsetruetrueP20YP1D0000013686222015-09-300001368622us-gaap:PerformanceSharesMemberavav:Fiscal2017LtipMember2019-05-012019-07-270001368622us-gaap:RetainedEarningsMember2020-01-250001368622us-gaap:ParentMember2020-01-250001368622us-gaap:NoncontrollingInterestMember2020-01-250001368622us-gaap:AdditionalPaidInCapitalMember2020-01-250001368622us-gaap:RetainedEarningsMember2019-10-260001368622us-gaap:ParentMember2019-10-260001368622us-gaap:NoncontrollingInterestMember2019-10-260001368622us-gaap:AdditionalPaidInCapitalMember2019-10-260001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-10-260001368622us-gaap:RetainedEarningsMember2019-04-300001368622us-gaap:ParentMember2019-04-300001368622us-gaap:NoncontrollingInterestMember2019-04-300001368622us-gaap:AdditionalPaidInCapitalMember2019-04-300001368622us-gaap:RetainedEarningsMember2019-01-260001368622us-gaap:ParentMember2019-01-260001368622us-gaap:NoncontrollingInterestMember2019-01-260001368622us-gaap:AdditionalPaidInCapitalMember2019-01-260001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-260001368622us-gaap:RetainedEarningsMember2018-10-270001368622us-gaap:ParentMember2018-10-270001368622us-gaap:NoncontrollingInterestMember2018-10-270001368622us-gaap:AdditionalPaidInCapitalMember2018-10-270001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-10-270001368622us-gaap:RetainedEarningsMember2018-04-300001368622us-gaap:ParentMember2018-04-300001368622us-gaap:NoncontrollingInterestMember2018-04-300001368622us-gaap:AdditionalPaidInCapitalMember2018-04-300001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-04-3000013686222019-10-2600013686222018-10-270001368622us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:HeldtomaturitySecuritiesMember2020-01-250001368622us-gaap:MunicipalBondsMemberus-gaap:HeldtomaturitySecuritiesMember2019-04-300001368622us-gaap:CommonStockMember2019-10-272020-01-250001368622us-gaap:CommonStockMember2019-05-012020-01-250001368622us-gaap:CommonStockMember2018-10-282019-01-260001368622us-gaap:CommonStockMember2018-05-012019-01-260001368622us-gaap:CommonStockMember2020-01-250001368622us-gaap:CommonStockMember2019-10-260001368622us-gaap:CommonStockMember2019-04-300001368622us-gaap:CommonStockMember2019-01-260001368622us-gaap:CommonStockMember2018-10-270001368622us-gaap:CommonStockMember2018-04-300001368622us-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMemberavav:ShareBasedCompensationAwardTwoHundredPercentMember2019-05-012019-07-270001368622us-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMemberavav:ShareBasedCompensationAwardOneHundredPercentMember2019-05-012019-07-270001368622us-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMemberavav:ShareBasedCompensationAwardFiftyPercentMember2019-05-012019-07-270001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMemberavav:ShareBasedCompensationAwardTwoHundredPercentMember2018-05-012018-07-280001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMemberavav:ShareBasedCompensationAwardOneHundredPercentMember2018-05-012018-07-280001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMemberavav:ShareBasedCompensationAwardFiftyPercentMember2018-05-012018-07-280001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMemberavav:ShareBasedCompensationAwardTwoHundredPercentMember2017-05-012017-07-290001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMemberavav:ShareBasedCompensationAwardOneHundredPercentMember2017-05-012017-07-290001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMemberavav:ShareBasedCompensationAwardFiftyPercentMember2017-05-012017-07-290001368622us-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMember2019-05-012019-07-270001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMember2018-05-012018-07-280001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMember2017-05-012017-07-290001368622us-gaap:PerformanceSharesMemberavav:Fiscal2017LtipMember2017-05-012017-07-2900013686222021-04-302020-01-2500013686222020-04-302020-01-250001368622avav:DesignAndDevelopmentAgreementMemberavav:HapsmobileMember2019-10-272020-01-250001368622avav:DesignAndDevelopmentAgreementMemberavav:HapsmobileMember2019-05-012020-01-250001368622avav:DesignAndDevelopmentAgreementMemberavav:HapsmobileMember2018-10-282019-01-260001368622avav:DesignAndDevelopmentAgreementMemberavav:HapsmobileMember2018-05-012019-01-260001368622us-gaap:GeographicDistributionDomesticMember2019-10-272020-01-250001368622avav:USGovernmentMember2019-10-272020-01-250001368622avav:TmsMember2019-10-272020-01-250001368622avav:TMMember2019-10-272020-01-250001368622avav:SmallUasMember2019-10-272020-01-250001368622avav:OtherMember2019-10-272020-01-250001368622avav:NonU.s.GovernmentMember2019-10-272020-01-250001368622avav:HapsMember2019-10-272020-01-250001368622avav:GeographicDistributionInternationalMember2019-10-272020-01-250001368622avav:FfpMember2019-10-272020-01-250001368622avav:CpffMember2019-10-272020-01-250001368622avav:ContractLiabilityMember2019-10-272020-01-250001368622us-gaap:GeographicDistributionDomesticMember2019-05-012020-01-250001368622avav:USGovernmentMember2019-05-012020-01-250001368622avav:TmsMember2019-05-012020-01-250001368622avav:TMMember2019-05-012020-01-250001368622avav:SmallUasMember2019-05-012020-01-250001368622avav:OtherMember2019-05-012020-01-250001368622avav:NonU.s.GovernmentMember2019-05-012020-01-250001368622avav:HapsMember2019-05-012020-01-250001368622avav:GeographicDistributionInternationalMember2019-05-012020-01-250001368622avav:FfpMember2019-05-012020-01-250001368622avav:CpffMember2019-05-012020-01-250001368622avav:ContractLiabilityMember2019-05-012020-01-250001368622us-gaap:GeographicDistributionDomesticMember2018-10-282019-01-260001368622avav:USGovernmentMember2018-10-282019-01-260001368622avav:TmsMember2018-10-282019-01-260001368622avav:TMMember2018-10-282019-01-260001368622avav:SmallUasMember2018-10-282019-01-260001368622avav:OtherMember2018-10-282019-01-260001368622avav:NonU.s.GovernmentMember2018-10-282019-01-260001368622avav:HapsMember2018-10-282019-01-260001368622avav:GeographicDistributionInternationalMember2018-10-282019-01-260001368622avav:FfpMember2018-10-282019-01-260001368622avav:CpffMember2018-10-282019-01-260001368622avav:ContractLiabilityMember2018-10-282019-01-260001368622us-gaap:GeographicDistributionDomesticMember2018-05-012019-01-260001368622avav:USGovernmentMember2018-05-012019-01-260001368622avav:TmsMember2018-05-012019-01-260001368622avav:TMMember2018-05-012019-01-260001368622avav:SmallUasMember2018-05-012019-01-260001368622avav:OtherMember2018-05-012019-01-260001368622avav:NonU.s.GovernmentMember2018-05-012019-01-260001368622avav:HapsMember2018-05-012019-01-260001368622avav:GeographicDistributionInternationalMember2018-05-012019-01-260001368622avav:FfpMember2018-05-012019-01-260001368622avav:CpffMember2018-05-012019-01-260001368622avav:ContractLiabilityMember2018-05-012019-01-260001368622us-gaap:RetainedEarningsMember2019-10-272020-01-250001368622us-gaap:NoncontrollingInterestMember2019-10-272020-01-250001368622us-gaap:RetainedEarningsMember2019-05-012020-01-250001368622us-gaap:NoncontrollingInterestMember2019-05-012020-01-250001368622us-gaap:RetainedEarningsMember2018-10-282019-01-260001368622us-gaap:NoncontrollingInterestMember2018-10-282019-01-260001368622us-gaap:RetainedEarningsMember2018-05-012019-01-260001368622us-gaap:NoncontrollingInterestMember2018-05-012019-01-260001368622srt:MaximumMemberavav:PulseAerospaceLlcMember2019-05-012020-01-250001368622us-gaap:AccumulatedTranslationAdjustmentMember2019-05-012020-01-250001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-302019-04-300001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-10-272020-01-250001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-05-012020-01-250001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-10-282019-01-260001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-05-012019-01-2600013686222019-10-292019-10-2900013686222019-02-222019-02-220001368622us-gaap:MunicipalBondsMemberus-gaap:HeldtomaturitySecuritiesMember2020-01-250001368622us-gaap:CorporateBondSecuritiesMemberus-gaap:HeldtomaturitySecuritiesMember2020-01-250001368622us-gaap:CertificatesOfDepositMemberus-gaap:HeldtomaturitySecuritiesMember2020-01-250001368622us-gaap:HeldtomaturitySecuritiesMember2020-01-250001368622us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:HeldtomaturitySecuritiesMember2019-04-300001368622us-gaap:CorporateBondSecuritiesMemberus-gaap:HeldtomaturitySecuritiesMember2019-04-300001368622us-gaap:HeldtomaturitySecuritiesMember2019-04-300001368622srt:MaximumMember2020-01-250001368622avav:UasQuantixSolutionMember2019-05-012020-01-250001368622avav:HapsmobileMemberus-gaap:EquityMethodInvestmentsMember2019-10-272020-01-250001368622avav:HapsmobileMemberus-gaap:EquityMethodInvestmentsMember2019-05-012020-01-250001368622avav:HapsmobileMemberavav:EquityMethodInvestmentLossNetOfTaxMember2018-10-282019-01-260001368622avav:HapsmobileMemberavav:EquityMethodInvestmentLossNetOfTaxMember2018-05-012019-01-260001368622us-gaap:HeldtomaturitySecuritiesMember2019-05-012020-01-250001368622us-gaap:USGovernmentDebtSecuritiesMember2020-01-250001368622us-gaap:MunicipalBondsMember2020-01-250001368622us-gaap:CorporateBondSecuritiesMember2020-01-250001368622us-gaap:CertificatesOfDepositMember2020-01-250001368622us-gaap:USGovernmentDebtSecuritiesMember2019-04-300001368622us-gaap:MunicipalBondsMember2019-04-300001368622us-gaap:CorporateBondSecuritiesMember2019-04-300001368622us-gaap:TrademarksAndTradeNamesMember2020-01-250001368622us-gaap:TechnologyBasedIntangibleAssetsMember2020-01-250001368622us-gaap:OtherIntangibleAssetsMember2020-01-250001368622us-gaap:NoncompeteAgreementsMember2020-01-250001368622us-gaap:LicensingAgreementsMember2020-01-250001368622us-gaap:InProcessResearchAndDevelopmentMember2020-01-250001368622us-gaap:CustomerRelationshipsMember2020-01-250001368622us-gaap:TrademarksAndTradeNamesMember2019-04-300001368622us-gaap:OtherIntangibleAssetsMember2019-04-300001368622us-gaap:LicensingAgreementsMember2019-04-300001368622us-gaap:CustomerRelationshipsMember2019-04-300001368622us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberavav:ContingentConsiderationMember2020-01-250001368622us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:VariableRateDemandObligationMember2020-01-250001368622us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-01-250001368622us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-01-250001368622us-gaap:VariableRateDemandObligationMember2020-01-250001368622avav:ContingentConsiderationMember2020-01-250001368622us-gaap:FairValueInputsLevel3Member2020-01-250001368622us-gaap:FairValueInputsLevel3Memberus-gaap:SellingGeneralAndAdministrativeExpensesMember2019-05-012020-01-250001368622us-gaap:FairValueInputsLevel3Memberus-gaap:ResearchAndDevelopmentExpenseMember2019-05-012020-01-250001368622us-gaap:FairValueInputsLevel3Memberus-gaap:CostOfSalesMember2019-05-012020-01-250001368622us-gaap:VariableRateDemandObligationMemberus-gaap:AvailableforsaleSecuritiesMember2020-01-250001368622avav:InvestmentInLimitedPartnershipFundMemberus-gaap:AvailableforsaleSecuritiesMember2020-01-250001368622avav:HapsmobileMemberus-gaap:OtherNoncurrentAssetsMember2020-01-250001368622avav:HapsmobileMemberus-gaap:OtherNoncurrentAssetsMember2019-04-300001368622avav:SoftbankMemberavav:HapsmobileMember2020-01-250001368622avav:AerovironmentMemberavav:HapsmobileMember2020-01-250001368622avav:HapsmobileMember2019-07-270001368622avav:HapsmobileMember2019-04-300001368622avav:HapsmobileMember2019-02-080001368622avav:HapsmobileMember2019-12-040001368622avav:HapsmobileMember2019-05-100001368622avav:HapsmobileMember2019-02-090001368622avav:HapsmobileMember2019-01-290001368622avav:HapsmobileMember2018-04-170001368622avav:HapsmobileMember2017-12-270001368622avav:DesignAndDevelopmentAgreementMemberavav:HapsmobileMember2020-01-250001368622avav:DesignAndDevelopmentAgreementMemberavav:HapsmobileMember2019-04-300001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMemberus-gaap:OtherIncomeMember2019-10-272020-01-250001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMemberus-gaap:OtherIncomeMember2019-05-012020-01-250001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMemberus-gaap:OtherIncomeMember2018-10-282019-01-260001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMemberus-gaap:OtherIncomeMember2018-05-012019-01-260001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:HoldbackMember2018-06-290001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMember2018-06-290001368622us-gaap:AuctionRateSecuritiesMember2018-04-300001368622srt:MinimumMemberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:PutOptionMember2020-01-250001368622srt:MaximumMemberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:PutOptionMember2020-01-250001368622srt:MinimumMemberus-gaap:AvailableforsaleSecuritiesMember2020-01-250001368622srt:MaximumMemberus-gaap:AvailableforsaleSecuritiesMember2020-01-250001368622us-gaap:AccountingStandardsUpdate201409Memberus-gaap:RetainedEarningsMember2020-01-250001368622us-gaap:AccountingStandardsUpdate201409Memberus-gaap:ParentMember2020-01-250001368622us-gaap:AccountingStandardsUpdate201409Member2020-01-250001368622us-gaap:ServiceMember2019-10-272020-01-250001368622us-gaap:ProductMember2019-10-272020-01-250001368622us-gaap:ServiceMember2019-05-012020-01-250001368622us-gaap:ProductMember2019-05-012020-01-250001368622us-gaap:ServiceMember2018-10-282019-01-260001368622us-gaap:ProductMember2018-10-282019-01-260001368622us-gaap:ServiceMember2018-05-012019-01-260001368622us-gaap:ProductMember2018-05-012019-01-2600013686222018-04-300001368622avav:PulseAerospaceLlcMemberus-gaap:TechnologyBasedIntangibleAssetsMember2019-06-100001368622avav:PulseAerospaceLlcMemberus-gaap:NoncompeteAgreementsMember2019-06-100001368622avav:PulseAerospaceLlcMemberus-gaap:InProcessResearchAndDevelopmentMember2019-06-100001368622avav:PulseAerospaceLlcMemberus-gaap:MeasurementInputDiscountRateMember2019-06-100001368622avav:PulseAerospaceLlcMember2020-01-250001368622us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-10-272020-01-250001368622us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-05-012020-01-250001368622avav:PulseAerospaceLlcMember2018-10-282019-01-260001368622avav:PulseAerospaceLlcMember2018-05-012019-01-260001368622avav:PulseAerospaceLlcMember2019-06-1000013686222019-06-100001368622avav:PulseAerospaceLlcMember2019-05-012020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMember2019-10-272020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMember2019-10-272020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMember2019-10-272020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2017LtipMember2019-10-272020-01-250001368622srt:MaximumMemberus-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMember2019-05-012020-01-250001368622srt:MaximumMemberus-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMember2019-05-012020-01-250001368622srt:MaximumMemberus-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMember2019-05-012020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2020LtipMember2019-05-012020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMember2019-05-012020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMember2019-05-012020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2017LtipMember2019-05-012020-01-250001368622avav:Fiscal2018And2019And2020LtipMember2019-05-012020-01-250001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMember2018-10-282019-01-260001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMember2018-10-282019-01-260001368622avav:Fiscal2018And2019And2020LtipMember2018-05-012019-04-3000013686222018-05-012019-04-300001368622us-gaap:PerformanceSharesMemberavav:Fiscal2019LtipMember2018-05-012019-01-260001368622us-gaap:PerformanceSharesMemberavav:Fiscal2018LtipMember2018-05-012019-01-260001368622us-gaap:ParentMember2019-10-272020-01-250001368622us-gaap:AdditionalPaidInCapitalMember2019-10-272020-01-250001368622us-gaap:ParentMember2019-05-012020-01-250001368622us-gaap:AdditionalPaidInCapitalMember2019-05-012020-01-250001368622us-gaap:ParentMember2018-10-282019-01-260001368622us-gaap:AdditionalPaidInCapitalMember2018-10-282019-01-260001368622us-gaap:ParentMember2018-05-012019-01-260001368622us-gaap:AdditionalPaidInCapitalMember2018-05-012019-01-260001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-300001368622us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-2500013686222020-02-250001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMember2018-06-292018-06-290001368622us-gaap:ScenarioAdjustmentMemberavav:TmsContractMemberavav:RevisionOfEstimateOfTotalCostsRequiredToCompleteContractsMember2020-01-250001368622us-gaap:ScenarioAdjustmentMemberavav:DesignAndDevelopmentContractMemberavav:RevisionOfEstimateOfTotalCostsRequiredToCompleteContractsMember2020-01-250001368622avav:DesignAndDevelopmentContractMember2019-10-272020-01-250001368622avav:DesignAndDevelopmentContractMember2019-05-012020-01-250001368622avav:TmsContractMember2018-10-282019-01-260001368622us-gaap:AccountingStandardsUpdate201409Memberus-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member2019-05-0100013686222019-04-300001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:HoldbackMember2020-01-2500013686222019-01-260001368622avav:DesignAndDevelopmentAgreementMember2020-01-250001368622srt:MinimumMember2019-05-012020-01-250001368622srt:MaximumMember2019-05-012020-01-2500013686222020-01-250001368622us-gaap:FairValueInputsLevel3Member2019-05-012020-01-250001368622us-gaap:VariableRateDemandObligationMemberus-gaap:AvailableforsaleSecuritiesMember2019-05-012020-01-250001368622avav:InvestmentInLimitedPartnershipFundMemberus-gaap:AvailableforsaleSecuritiesMember2019-05-012020-01-250001368622us-gaap:AvailableforsaleSecuritiesMember2019-05-012020-01-250001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMember2018-10-282019-01-260001368622us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberavav:EesBusinessMember2018-05-012019-01-260001368622us-gaap:AvailableforsaleSecuritiesMember2020-01-250001368622avav:PulseAerospaceLlcMember2019-10-272020-01-250001368622avav:PulseAerospaceLlcMember2019-06-102019-06-100001368622avav:PulseAerospaceLlcMember2020-02-262020-02-260001368622avav:PulseAerospaceLlcMember2020-02-202020-02-200001368622srt:MinimumMemberavav:PulseAerospaceLlcMember2019-06-102019-06-100001368622srt:MaximumMemberavav:PulseAerospaceLlcMember2019-06-102019-06-100001368622srt:MinimumMemberus-gaap:AuctionRateSecuritiesMember2018-04-302018-04-300001368622srt:MaximumMemberus-gaap:AuctionRateSecuritiesMember2018-04-302018-04-3000013686222019-10-272020-01-2500013686222019-05-012020-01-2500013686222018-10-282019-01-2600013686222018-05-012019-01-26iso4217:USDavav:itemavav:contractxbrli:sharesxbrli:pureiso4217:USDxbrli:sharesiso4217:JPY

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 25, 2020

OR

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.)

900 Innovators Way

Simi Valley, California

93065

(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, 2020, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 23,995,109.

Table of Contents

AeroVironment, Inc.

Table of Contents

Item 1.

Financial Statements :

    

Consolidated Balance Sheets as of January 25, 2020 (Unaudited) and April 30, 2019

3

Consolidated Statements of Operations for the three and nine months ended January 25, 2020 (Unaudited) and January 26, 2019 (Unaudited)

4

Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended January 25, 2020 (Unaudited) and January 26, 2019 (Unaudited)

5

Consolidated Statements of Stockholders’ Equity for the three and nine months ended January 25, 2020 (Unaudited) and January 26, 2019 (Unaudited)

6

Consolidated Statements of Cash Flows for the nine months ended January 25, 2020 (Unaudited) and January 26, 2019 (Unaudited)

8

Notes to Consolidated Financial Statements (Unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 3.

Defaults Upon Senior Securities

41

Item 4.

Mine Safety Disclosures

41

Item 5.

Other Information

41

Item 6.

Exhibits

42

Signatures

43

2

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 25,

    

April 30,

2020

2019

    

(Unaudited)

 

Assets

Current assets:

Cash and cash equivalents

$

131,496

$

172,708

Short-term investments

 

148,502

 

150,487

Accounts receivable, net of allowance for doubtful accounts of $1,039 at January 25, 2020 and $1,041 at April 30, 2019

 

27,936

 

31,051

Unbilled receivables and retentions (inclusive of related party unbilled receivables of $28,849 at January 25, 2020 and $9,028 at April 30, 2019)

 

77,411

 

53,047

Inventories

 

65,156

 

54,056

Prepaid expenses and other current assets

 

6,833

 

7,418

Income taxes receivable

821

Total current assets

 

457,334

 

469,588

Long-term investments

 

26,409

 

9,386

Property and equipment, net

 

19,877

 

16,905

Operating lease right-of-use assets

9,472

Deferred income taxes

 

8,296

 

6,685

Intangibles, net

14,357

459

Goodwill

6,340

Other assets

 

16,995

 

5,821

Total assets

$

559,080

$

508,844

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

14,269

$

15,972

Wages and related accruals

 

17,636

 

18,507

Customer advances

 

10,633

 

2,962

Current operating lease liabilities

2,083

Income taxes payable

2,809

Other current liabilities

 

13,046

 

7,425

Total current liabilities

 

60,476

 

44,866

Deferred rent

 

 

1,173

Non-current operating lease liabilities

7,556

Other non-current liabilities

250

150

Deferred tax liability

29

29

Liability for uncertain tax positions

 

51

 

51

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.0001 par value:

Authorized shares—10,000,000; none issued or outstanding at January 25, 2020 and April 30, 2019

 

 

Common stock, $0.0001 par value:

Authorized shares—100,000,000

Issued and outstanding shares—23,995,109 shares at January 25, 2020 and 23,946,293 shares at April 30, 2019

 

2

 

2

Additional paid-in capital

 

180,051

 

176,216

Accumulated other comprehensive loss

 

69

 

2

Retained earnings

 

310,619

 

286,351

Total AeroVironment stockholders’ equity

 

490,741

 

462,571

Noncontrolling interest

(23)

4

Total equity

490,718

462,575

Total liabilities and stockholders’ equity

$

559,080

$

508,844

See accompanying notes to consolidated financial statements (unaudited).

3

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)

Three Months Ended

Nine Months Ended

January 25,

January 26,

January 25,

January 26,

    

2020

    

2019

    

2020

    

2019

 

Revenue:

Product sales

$

36,432

$

50,024

$

159,657

$

152,393

Contract services (inclusive of related party revenue of $11,762 and $13,586 for the three months ended January 25, 2020 and January 26, 2019, respectively; and $37,491 and $37,981 for the nine months ended January 25, 2020 and January 26, 2019, respectively)

 

25,459

 

25,298

 

72,416

 

73,951

 

61,891

 

75,322

 

232,073

 

226,344

Cost of sales:

Product sales

 

21,034

 

26,780

 

82,244

 

83,158

Contract services

 

17,361

 

18,150

 

49,895

 

51,806

 

38,395

 

44,930

 

132,139

 

134,964

Gross margin:

 

 

Product sales

15,398

23,244

77,413

69,235

Contract services

8,098

7,148

22,521

22,145

23,496

30,392

 

99,934

 

91,380

Selling, general and administrative

 

13,223

 

14,464

 

43,146

 

40,066

Research and development

 

11,381

 

8,087

 

30,948

 

22,631

(Loss) income from continuing operations

 

(1,108)

 

7,841

 

25,840

 

28,683

Other income:

Interest income, net

 

1,122

 

1,272

 

3,717

 

3,246

Other income, net

 

120

 

962

 

632

 

10,641

Income from continuing operations before income taxes

 

134

 

10,075

 

30,189

 

42,570

(Benefit from) provision for income taxes

(38)

946

 

3,203

 

4,724

Equity method investment loss, net of tax

 

(1,200)

 

(717)

 

(3,410)

 

(2,071)

Net (loss) income from continuing operations

(1,028)

8,412

23,576

35,775

Discontinued operations:

Gain on sale of business, net of tax expense of $2,463

8,452

Loss from discontinued operations, net of tax

(62)

(2,511)

Net (loss) income from discontinued operations

(62)

 

 

5,941

Net (loss) income

(1,028)

8,350

23,576

41,716

Net loss attributable to noncontrolling interest

20

19

27

40

Net (loss) income attributable to AeroVironment

$

(1,008)

$

8,369

$

23,603

$

41,756

Net (loss) income per share attributable to AeroVironment—Basic

Continuing operations

$

(0.04)

$

0.35

$

0.99

$

1.52

Discontinued operations

0.25

Net (loss) income per share attributable to AeroVironment—Basic

$

(0.04)

$

0.35

$

0.99

$

1.77

Net (loss) income per share attributable to AeroVironment—Diluted

Continuing operations

$

(0.04)

$

0.35

$

0.98

$

1.49

Discontinued operations

0.25

Net (loss) income per share attributable to AeroVironment—Diluted

$

(0.04)

$

0.35

$

0.98

$

1.74

Weighted-average shares outstanding:

Basic

 

23,821,145

 

23,687,672

 

23,790,788

 

23,643,866

Diluted

 

23,821,145

 

24,081,819

 

24,076,195

 

24,064,008

See accompanying notes to consolidated financial statements (unaudited).

4

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

January 25,

January 26,

January 25,

January 26,

    

2020

    

2019

    

2020

    

2019

 

Net (loss) income

$

(1,028)

$

8,350

$

23,576

$

41,716

Other comprehensive (loss) income:

Change in foreign currency translation adjustments

(112)

(1)

67

(32)

Unrealized gain on investments, net of deferred tax expense of $51

 

 

 

 

57

Total comprehensive (loss) income

(1,140)

$

8,349

23,643

41,741

Net loss attributable to noncontrolling interest

20

19

27

40

Comprehensive (loss) income attributable to AeroVironment

$

(1,120)

$

8,368

$

23,670

$

41,781

See accompanying notes to consolidated financial statements (unaudited).

5

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Stockholders’ Equity

For the nine months ended January 25, 2020 and January 26, 2019 (Unaudited)

(In thousands except share data)

Accumulated

 

Additional

Other

Total

Non-

 

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment

Controlling

 

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

Equity

Interest

    

Total

 

Balance at April 30, 2019

 

23,946,293

$

2

$

176,216

$

286,351

$

2

$

462,571

$

4

$

462,575

Adoption of ASU 2018-09

 

 

 

665

 

665

 

665

Net income (loss)

 

 

 

 

23,603

 

23,603

(27)

 

23,576

Foreign currency translation

 

 

 

 

67

67

 

67

Stock options exercised

 

3,000

 

 

93

 

93

 

93

Restricted stock awards

 

74,892

 

 

 

 

Restricted stock awards forfeited

 

(11,769)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(17,307)

 

 

(1,009)

 

(1,009)

 

(1,009)

Stock based compensation

 

 

 

4,751

 

4,751

 

4,751

Balance at January 25, 2020

 

23,995,109

$

2

$

180,051

$

310,619

$

69

$

490,741

$

(23)

$

490,718

Accumulated

Additional

Other

Total

Non-

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

Equity

Interest

    

Total

Balance at April 30, 2018

 

23,908,736

$

2

$

170,139

$

238,913

$

(21)

$

409,033

$

23

$

409,056

Net income (loss)

 

 

 

 

41,756

 

41,756

(40)

 

41,716

Unrealized gain on investments

 

 

 

 

 

57

57

 

57

Foreign currency translation

 

 

 

 

(32)

(32)

 

(32)

Stock options exercised

 

12,725

 

 

71

 

71

 

71

Restricted stock awards

 

39,823

 

 

 

 

Restricted stock awards forfeited

 

(15,100)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(13,724)

 

 

(1,033)

 

(1,033)

 

(1,033)

Stock-based compensation

 

 

5,714

 

5,714

 

5,714

Balance at January 26, 2019

 

23,932,460

$

2

$

174,891

$

280,669

$

4

$

455,566

$

(17)

$

455,549

See accompanying notes to consolidated financial statements (unaudited)

6

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Stockholders’ Equity

For the three months ended January 25, 2020 and January 26, 2019 (Unaudited)

(In thousands except share data)

Accumulated

Additional

Other

Total

Non-

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

Equity

Interest

    

Total

Balance at October 26, 2019

 

23,990,616

$

2

$

178,550

$

311,627

$

181

$

490,360

$

(3)

$

490,357

Net loss

 

 

 

 

(1,008)

 

(1,008)

(20)

 

(1,028)

Foreign currency translation

 

 

 

 

(112)

(112)

 

(112)

Restricted stock awards

 

9,200

 

 

 

 

Restricted stock awards forfeited

 

(764)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(3,943)

 

 

(266)

 

(266)

 

(266)

Stock based compensation

 

 

 

1,767

 

1,767

 

1,767

Balance at January 25, 2020

 

23,995,109

$

2

$

180,051

$

310,619

$

69

$

490,741

$

(23)

$

490,718

Accumulated

Additional

Other

Total

Non-

Common Stock

Paid-In

Retained

Comprehensive

AeroVironment

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

Equity

Interest

    

Total

Balance at October 27, 2018

 

23,928,373

$

2

$

171,867

$

272,300

$

5

$

444,174

$

2

$

444,176

Net income (loss)

 

 

 

 

8,369

 

8,369

(19)

 

8,350

Foreign currency translation

 

 

 

 

(1)

(1)

 

(1)

Restricted stock awards

 

5,377

 

 

 

 

Restricted stock awards forfeited

 

(445)

 

 

 

 

Tax withholding payment related to net share settlement of equity awards

 

(845)

 

 

(58)

 

(58)

 

(58)

Stock-based compensation

 

 

3,082

 

3,082

 

3,082

Balance at January 26, 2019

 

23,932,460

$

2

$

174,891

$

280,669

$

4

$

455,566

$

(17)

$

455,549

See accompanying notes to consolidated financial statements (unaudited).

7

Table of Contents

AeroVironment, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Nine Months Ended

    

January 25,

    

January 26,

 

2020

2019

Operating activities

Net income

$

23,576

$

41,716

Gain on sale of business, net of tax

(8,452)

Loss from discontinued operations, net of tax

2,511

Net income from continuing operations

23,576

35,775

Adjustments to reconcile net income from continuing operations to cash provided by operating activities from continuing operations:

Depreciation and amortization

 

7,107

 

5,530

Loss from equity method investment

3,410

2,071

Provision for doubtful accounts

 

(2)

 

(33)

Other non-cash gain, net

(719)

Non-cash lease expense

3,453

Gains on foreign currency transactions

 

 

(10)

Deferred income taxes

 

(946)

 

(1,214)

Stock-based compensation

 

4,751

 

5,599

(Gain) loss on sale of property and equipment

(71)

51

Amortization of debt securities

(1,291)

(941)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

 

3,245

 

22,817

Unbilled receivables and retentions

 

(24,364)

 

(34,760)

Inventories

 

(10,766)

 

(12,954)

Income tax receivable

821

Prepaid expenses and other assets

 

216

 

(1,791)

Accounts payable

 

(1,301)

 

(10,645)

Other liabilities

7,947

(2,598)

Net cash provided by operating activities of continuing operations

 

15,066

 

6,897

Investing activities

Acquisition of property and equipment

 

(8,504)

 

(6,806)

Equity method investments

(9,551)

Business acquisition, net of cash acquired

(18,641)

Proceeds from sale of business

31,994

Proceeds from sale of property and equipment

81