SEC Filing | AeroVironment, Inc.

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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 27, 2024

☐

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 February 28, 2024, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 28,135,734.

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AeroVironment, Inc.

Table of Contents

Item 1.	Financial Statements :
	Condensed Consolidated Balance Sheets as of January 27, 2024 (Unaudited) and April 30, 2023	3
	Condensed Consolidated Statements of Operations for the three and nine months ended January 27, 2024 (Unaudited) and January 28, 2023 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended January 27, 2024 (Unaudited) and January 28, 2023 (Unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended January 27, 2024 (Unaudited) and January 28, 2023 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended January 27, 2024 (Unaudited) and January 28, 2023 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
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	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51
Signatures		52

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 27,		April 30,
	2024		2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	107,694	$	132,859
Accounts receivable, net of allowance for doubtful accounts of $88 at January 27, 2024 and $156 at April 30, 2023		53,236		87,633
Unbilled receivables and retentions		148,588		105,653
Inventories, net		161,384		138,814
Income taxes receivable		8,081		—
Prepaid expenses and other current assets		21,708		12,043
Total current assets		500,691		477,002
Long-term investments		21,282		23,613
Property and equipment, net		45,053		39,795
Operating lease right-of-use assets		28,904		27,363
Deferred income taxes		21,378		27,206
Intangibles, net		77,597		43,577
Goodwill		275,189		180,801
Other assets		10,205		5,220
Total assets	$	980,299	$	824,577
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	26,969	$	31,355
Wages and related accruals		28,443		35,637
Customer advances		17,536		16,645
Current portion of long-term debt		7,500		7,500
Current operating lease liabilities		8,934		8,229
Income taxes payable		797		2,342
Other current liabilities		17,352		19,626
Total current liabilities		107,531		121,334
Long-term debt, net of current portion		31,292		125,904
Non-current operating lease liabilities		21,978		21,189
Other non-current liabilities		2,105		746
Liability for uncertain tax positions		2,705		2,705
Deferred income taxes		1,703		1,729
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares—10,000,000; none issued or outstanding at January 27, 2024 and April 30, 2023		—		—
Common stock, $0.0001 par value:
Authorized shares—100,000,000
Issued and outstanding shares—28,136,735 shares at January 27, 2024 and 26,216,897 shares at April 30, 2023		4		4
Additional paid-in capital		593,228		384,397
Accumulated other comprehensive loss		(4,888)		(4,452)
Retained earnings		224,641		171,021
Total stockholders' equity		812,985		550,970
Total liabilities and stockholders’ equity	$	980,299	$	824,577

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

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AeroVironment, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)


	Three Months Ended				Nine Months Ended
	January 27,		January 28,		January 27,		January 28,
	2024		2023		2024		2023
Revenue:
Product sales	$	155,923	$	91,216	$	421,173	$	211,533
Contract services		30,655		43,179		98,568		142,962
		186,578		134,395		519,741		354,495
Cost of sales:
Product sales		99,486		54,866		240,126		127,210
Contract services		19,805		34,019		71,318		122,171
		119,291		88,885		311,444		249,381
Gross margin:
Product sales		56,437		36,350		181,047		84,323
Contract services		10,850		9,160		27,250		20,791
		67,287		45,510		208,297		105,114
Selling, general and administrative		27,826		24,746		79,800		70,302
Research and development		25,127		16,157		62,618		47,793
Income (loss) from operations		14,334		4,607		65,879		(12,981)
Other income (loss):
Interest expense, net		(114)		(2,810)		(4,072)		(6,722)
Other income (expense), net		1,004		(2,587)		(2,983)		(2,183)
Income (loss) before income taxes		15,224		(790)		58,824		(21,886)
Provision for (benefit from) income taxes		1,259		(531)		3,710		(8,382)
Equity method investment loss, net of tax		(80)		(417)		(1,494)		(2,190)
Net income (loss)		13,885		(676)		53,620		(15,694)
Net income attributable to noncontrolling interest		—		—		—		(45)
Net income (loss) attributable to AeroVironment, Inc.	$	13,885	$	(676)	$	53,620	$	(15,739)
Net income (loss) per share attributable to AeroVironment, Inc.
Basic	$	0.50	$	(0.03)	$	1.99	$	(0.63)
Diluted	$	0.50	$	(0.03)	$	1.98	$	(0.63)
Weighted-average shares outstanding:
Basic		27,907,568		25,012,412		26,957,061		24,906,977
Diluted		28,044,127		25,012,412		27,061,409		24,906,977

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

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AeroVironment, Inc.

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

(In thousands)


	Three Months Ended				Nine Months Ended
	January 27,		January 28,		January 27,		January 28,
	2024		2023		2024		2023
Net income (loss)	$	13,885	$	(676)	$	53,620	$	(15,694)
Other comprehensive income (loss):
Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 for the three and nine months ended January 28, 2023, respectively		—		—		—		26
Change in foreign currency translation adjustments		1,189		3,425		(436)		1,433
Total comprehensive income (loss)		15,074		2,749		53,184		(14,235)
Net income attributable to noncontrolling interest		—		—		—		(45)
Comprehensive income (loss) attributable to AeroVironment, Inc.	$	15,074	$	2,749	$	53,184	$	(14,280)

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

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AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended January 27, 2024 and January 28, 2023 (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		Equity		Interest		Total
Balance at October 28, 2023	28,135,539	$	4	$	589,047	$	210,756	$	(6,077)	$	793,730	$	—	$	793,730
Net income	—		—		—		13,885		—		13,885		—		13,885
Foreign currency translation	—		—		—		—		1,189		1,189		—		1,189
Restricted stock awards	4,622		—		—		—		—		—		—		—
Restricted stock awards forfeited	(3,426)		—		—		—		—		—		—		—
Stock based compensation	—		—		4,181		—		—		4,181		—		4,181
Balance at January 27, 2024	28,136,735	$	4	$	593,228	$	224,641	$	(4,888)	$	812,985	$	—	$	812,985

								Accumulated
				Additional				Other		Total		Non-
	Common Stock			Paid-In		Retained		Comprehensive		AeroVironment, Inc.		Controlling
	Shares	Amount		Capital		Earnings		Loss		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

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AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the nine months ended January 27, 2024 and January 28, 2023 (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		Equity		Interest		Total
Balance at April 30, 2023	26,216,897	$	4	$	384,397	$	171,021	$	(4,452)	$	550,970	$	—	$	550,970
Net income	—		—		—		53,620		—		53,620		—		53,620
Foreign currency translation	—		—		—		—		(436)		(436)		—		(436)
Restricted stock awards	149,990		—		—		—		—		—		—		—
Restricted stock awards forfeited	(9,602)		—		—		—		—		—		—		—
Tax withholding payment related to net share settlement of equity awards	(13,919)		—		(1,370)		—		—		(1,370)		—		(1,370)
Shares issued, net of issuance costs	807,370		—		87,956		—		—		87,956		—		87,956
Issuance of common stock for business acquisition	985,999		—		109,820		—		—		109,820		—		109,820
Stock based compensation	—		—		12,425		—		—		12,425		—		12,425
Balance at January 27, 2024	28,136,735	$	4	$	593,228	$	224,641	$	(4,888)	$	812,985	$	—	$	812,985

								Accumulated
				Additional				Other		Total		Non-
	Common Stock			Paid-In		Retained		Comprehensive		AeroVironment, Inc.		Controlling
	Shares	Amount		Capital		Earnings		Loss		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

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AeroVironment, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Nine Months Ended
	January 27,		January 28,
	2024		2023
Operating activities
Net income (loss)	$	53,620	$	(15,694)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization		24,969		48,109
Loss from equity method investments		1,494		2,190
Loss on deconsolidation of previously controlled subsidiary		—		189
Amortization of debt issuance costs		638		634
Provision for doubtful accounts		(67)		5
Reserve for inventory excess and obsolescence		11,668