Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 31, 2021 | Sep. 01, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | AEROVIRONMENT, INC. | |
Entity File Number | 001-33261 | |
Entity Central Index Key | 0001368622 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jul. 31, 2021 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-2705790 | |
Amendment Flag | false | |
Trading Symbol | AVAV | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --04-30 | |
Entity Address, Address Line One | 241 18th Street, Suite 415 | |
Entity Address, City or Town | Arlington | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22202 | |
City Area Code | 805 | |
Local Phone Number | 520-8350 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,811,444 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 93,924 | $ 148,741 |
Short-term investments | 17,953 | 31,971 |
Accounts receivable, net of allowance for doubtful accounts of $579 at July 31, 2021 and $595 at April 30, 2021 | 45,764 | 62,647 |
Unbilled receivables and retentions (inclusive of related party unbilled receivables of $5,568 at July 31, 2021 and $544 at April 30, 2021) | 87,131 | 71,632 |
Inventories | 84,852 | 71,646 |
Income taxes receivable | 322 | |
Prepaid expenses and other current assets | 14,972 | 15,001 |
Total current assets | 344,918 | 401,638 |
Long-term investments | 10,165 | 12,156 |
Property and equipment, net | 66,563 | 58,896 |
Operating lease right-of-use assets | 27,649 | 22,902 |
Deferred income taxes | 2,534 | 2,061 |
Intangibles, net | 117,855 | 106,268 |
Goodwill | 335,029 | 314,205 |
Other assets | 3,840 | 10,440 |
Total assets | 908,553 | 928,566 |
Current liabilities: | ||
Accounts payable | 18,046 | 24,841 |
Wages and related accruals | 20,067 | 28,068 |
Customer advances | 9,117 | 7,183 |
Current portion of long-term debt | 10,000 | 10,000 |
Current operating lease liabilities | 6,747 | 6,154 |
Income taxes payable | 549 | 861 |
Other current liabilities | 18,134 | 19,078 |
Total current liabilities | 82,660 | 96,185 |
Long-term debt, net of current portion | 185,141 | 187,512 |
Non-current operating lease liabilities | 23,048 | 19,103 |
Other non-current liabilities | 10,336 | 10,141 |
Liability for uncertain tax positions | 3,518 | 3,518 |
Deferred income taxes | 5,533 | |
Commitments and contingencies | ||
Stockholders' equity: | ||
Authorized shares-10,000,000; none issued or outstanding at July 31, 2021 and April 30, 2021 | ||
Issued and outstanding shares-24,811,802 shares at July 31, 2021 and 24,777,295 shares at April 30, 2021 | 2 | 2 |
Additional paid-in capital | 261,192 | 260,327 |
Accumulated other comprehensive (loss) income | (394) | 343 |
Retained earnings | 337,440 | 351,421 |
Total AeroVironment, Inc. stockholders' equity | 598,240 | 612,093 |
Noncontrolling interest | 77 | 14 |
Total equity | 598,317 | 612,107 |
Total liabilities and stockholders' equity | $ 908,553 | $ 928,566 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 579 | $ 595 |
Due from Related Parties | $ 5,568 | $ 544 |
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 | 24,811,802 | 24,777,295 |
Common stock, outstanding shares | 24,811,802 | 24,777,295 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Revenue: | ||
Revenue | $ 101,009 | $ 87,450 |
Cost of sales: | ||
Cost of sales | 72,286 | 52,039 |
Gross margin: | ||
Total gross margin | 28,723 | 35,411 |
Selling, general and administrative | 27,128 | 12,011 |
Research and development | 13,708 | 11,103 |
(Loss) income from operations | (12,113) | 12,297 |
Other (loss) income: | ||
Interest (expense) income, net | (1,275) | 208 |
Other (expense) income, net | (346) | 33 |
(Loss) income before income taxes | (13,734) | 12,538 |
(Benefit from) provision for income taxes | (957) | 1,207 |
Equity method investment loss, net of tax | (1,141) | (1,288) |
Net (loss) income | (13,918) | 10,043 |
Net income | (13,918) | 10,043 |
Net (income) loss attributable to noncontrolling interest | (63) | 37 |
Net (loss) income per share attributable to AeroVironment, Inc. | $ (13,981) | $ 10,080 |
Net income (loss) per share attributable to AeroVironment-Basic | ||
Net (loss) income per share attributable to AeroVironment-basic | $ (0.57) | $ 0.42 |
Net (loss) income per share attributable to AeroVironment-diluted | (0.57) | 0.42 |
Net income (loss) per share attributable to AeroVironment-Diluted | ||
Net income per share attributable to AeroVironment, Inc.-Diluted | $ (0.57) | $ 0.42 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 24,620,180 | 23,893,001 |
Diluted (in shares) | 24,620,180 | 24,186,228 |
Product sales | ||
Revenue: | ||
Revenue | $ 53,116 | $ 58,357 |
Cost of sales: | ||
Cost of sales | 32,590 | 32,084 |
Gross margin: | ||
Total gross margin | 20,526 | 26,273 |
Contract services | ||
Revenue: | ||
Revenue | 47,893 | 29,093 |
Cost of sales: | ||
Cost of sales | 39,696 | 19,955 |
Gross margin: | ||
Total gross margin | $ 8,197 | $ 9,138 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Consolidated Statements of Operations | ||
Related party revenue | $ 10,352 | $ 16,386 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Consolidated Statements of Comprehensive Income | ||
Net (loss) income | $ (13,918) | $ 10,043 |
Other comprehensive income: | ||
Unrealized loss on available-for-sale investments, net of deferred tax benefit of $0 and $4 for the three months ended July 31, 2021 and August 1, 2020, respectively | (4) | (52) |
Change in foreign currency translation adjustments | (733) | 75 |
Total comprehensive (loss) income | (14,655) | 10,066 |
Net (income) loss attributable to noncontrolling interest | (63) | 37 |
Comprehensive (loss) income attributable to AeroVironment, Inc. | $ (14,718) | $ 10,103 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Consolidated Statements of Comprehensive Income | ||
Unrealized loss on available-for-sale investments, deferred tax benefit | $ 0 | $ 4 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Parent | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non-controlling Interest | Total |
Increase (Decrease) in Stockholders' Equity | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 509,901 | ||||||
Balance at Apr. 30, 2020 | $ 509,901 | $ 2 | $ 181,481 | $ 328,090 | $ 328 | ||
Balance (in shares) at Apr. 30, 2020 | 24,063,639 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 10,080 | 10,043 | |||||
Net (income) loss attributable to noncontrolling interest | $ (37) | 37 | |||||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | 10,080 | ||||||
Unrealized loss on investments | (52) | (52) | (52) | ||||
Foreign currency translation | 75 | 75 | 75 | ||||
Stock options exercised | 86 | 86 | 86 | ||||
Stock options exercised (in shares) | 3,500 | ||||||
Restricted stock awards (in shares) | 60,592 | ||||||
Restricted stock awards forfeited (in shares) | 270 | ||||||
Restricted stock awards forfeited (in shares) | (270) | ||||||
Tax withholding payment related to net share settlement of equity awards | (1,756) | (1,756) | (1,756) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (22,897) | ||||||
Stock-based compensation | 1,595 | 1,595 | 1,595 | ||||
Balance at Aug. 01, 2020 | 519,929 | $ 2 | 181,406 | 338,170 | 351 | (37) | |
Balance (in shares) at Aug. 01, 2020 | 24,104,564 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 519,892 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 612,107 | ||||||
Balance at Apr. 30, 2021 | 612,093 | $ 2 | 260,327 | 351,421 | 343 | 14 | 612,093 |
Balance (in shares) at Apr. 30, 2021 | 24,777,295 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (13,981) | (13,918) | |||||
Net (income) loss attributable to noncontrolling interest | 63 | (63) | |||||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | (13,981) | ||||||
Unrealized loss on investments | (4) | (4) | (4) | ||||
Foreign currency translation | (733) | (733) | (733) | ||||
Stock options exercised | 119 | 119 | 119 | ||||
Stock options exercised (in shares) | 4,000 | ||||||
Restricted stock awards (in shares) | 48,588 | ||||||
Restricted stock awards forfeited (in shares) | (6,140) | ||||||
Restricted stock awards forfeited (in shares) | 6,140 | ||||||
Tax withholding payment related to net share settlement of equity awards | (1,176) | (1,176) | (1,176) | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (11,941) | ||||||
Stock-based compensation | 1,922 | 1,922 | 1,922 | ||||
Balance at Jul. 31, 2021 | $ 598,240 | $ 2 | $ 261,192 | $ 337,440 | $ (394) | $ 77 | 598,240 |
Balance (in shares) at Jul. 31, 2021 | 24,811,802 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 598,317 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Operating activities | ||
Net (loss) income | $ (13,918) | $ 10,043 |
Net (loss) income | (13,918) | 10,043 |
Adjustments to reconcile net (loss) income to cash provided by operating activities: | ||
Depreciation and amortization | 13,654 | 2,779 |
Losses from equity method investments, net | 1,141 | 1,288 |
Amortization of debt issuance costs | 129 | |
Realized gain from sale of available-for-sale investments | (11) | |
Provision for doubtful accounts | (20) | (136) |
Other non-cash expense | 48 | |
Non-cash lease expense | 1,677 | 1,190 |
(Gain) loss on foreign currency transactions | 19 | 1 |
Deferred income taxes | (472) | (339) |
Stock-based compensation | 1,922 | 1,595 |
Loss on sale of property and equipment | 379 | 2 |
Amortization of debt securities | 90 | (43) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 17,914 | 30,439 |
Unbilled receivables and retentions | (14,684) | 2,046 |
Inventories | (6,058) | 5 |
Income taxes receivable | (326) | |
Prepaid expenses and other assets | 481 | 324 |
Accounts payable | (7,997) | (7,338) |
Other liabilities | (9,283) | (15,004) |
Net cash (used in) provided by operating activities | (15,304) | 26,841 |
Investing activities | ||
Acquisition of property and equipment | (5,428) | (4,067) |
Equity method investments | (2,692) | (1,173) |
Business acquisitions, net of cash acquired | (46,150) | |
Redemptions of available-for-sale investments | 17,925 | 41,727 |
Purchases of available-for-sale investments | (69,961) | |
Net cash used in investing activities | (36,345) | (33,474) |
Financing activities | ||
Principle payment of loan | (2,500) | |
Holdback and retention payments for business acquisition | (5,991) | |
Tax withholding payment related to net settlement of equity awards | (1,176) | (1,756) |
Exercise of stock options | 119 | 86 |
Other | (8) | |
Net cash used in financing activities | (9,556) | (1,670) |
Effects of currency translation on cash and cash equivalents | (111) | |
Net decrease in cash, cash equivalents, and restricted cash | (61,316) | (8,303) |
Cash, cash equivalents, and restricted cash at beginning of period | 157,063 | 255,142 |
Cash, cash equivalents, and restricted cash at end of period | 95,747 | 246,839 |
Cash paid, net during the period for: | ||
Income taxes | 10 | |
Non-cash activities | ||
Unrealized loss on available-for-sale investments, net of deferred tax benefit of $0 and $4 for the three months ended July 31, 2021 and August 1, 2020, respectively | 4 | 52 |
Change in foreign currency translation adjustments | (733) | 75 |
Issuances of inventory to property and equipment, ISR in-service assets | 6,881 | |
Acquisitions of property and equipment included in accounts payable | $ 821 | $ 643 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Consolidated Statements of Cash Flows | ||
Unrealized loss on available-for-sale investments, deferred tax benefit | $ 0 | $ 4 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2021 | |
Organization and Significant Accounting Policies | |
Organization and Significant Accounting Policies | AeroVironment, Inc. Notes to Consolidated Financia l Statements (Unaudited) 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 aircraft systems (“UAS”), tactical missile systems (“TMS”), unmanned ground vehicles (“UGV”) and related services primarily to organizations within the U.S. Department of Defense (“DoD”) and to international allied governments. Basis of Presentation The accompanying unaudited 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 months ended July 31, 2021 are not necessarily indicative of the results for the full year ending April 30, 2022. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2021, 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 consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s unaudited consolidated financial statements include the assets, liabilities and operating results of wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. On February 19, 2021, the Company closed its acquisition of Arcturus UAV, Inc. (“Arcturus”), a California corporation, pursuant to a Stock Purchase Agreement (the “Arcturus Purchase Agreement”) with Arcturus and each of the shareholders and other equity interest holders of Arcturus (collectively, the “Arcturus Sellers”), to purchase 100% of the issued and outstanding equity interests of Arcturus (the “Arcturus Acquisition”). The assets, liabilities and operating results of Arcturus have been included in the Company’s unaudited consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. On February 23, 2021, the Company purchased certain assets of, and assumed certain liabilities of, the Intelligent Systems Group business segment (“ISG”) of Progeny Systems Corporation, a Virginia corporation (the “ISG Seller”), pursuant to the terms of an Asset Purchase Agreement (the “ISG Purchase Agreement”) of the same date, by and among the Company, ISG Seller and the sole shareholder of ISG Seller (the “Beneficial Owner,” and such acquisition of ISG, the “ISG Acquisition”). The assets, liabilities and operating results of ISG have been included in the Company’s unaudited consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. On May 3, 2021, the Company closed its acquisition of Telerob Gesellschaft für Fernhantierungstechnik mbH, a German company based in Ostfildern (near Stuttgart), Germany (“Telerob GmbH”), including Telerob GmbH’s wholly-owned subsidiary, Telerob USA, Inc. (“Telerob USA,” and collectively with Telerob GmbH, “Telerob”) pursuant to its previously announced Share Purchase Agreement (the “Telerob Purchase Agreement”) with Unmanned Systems Investments GmbH, a German limited liability company incorporated under the laws of Germany (the “Telerob Seller”), and each of the unit holders of the Seller (collectively, the “Telerob Shareholders”), to purchase 100% of the issued and outstanding shares of Telerob Seller’s wholly-owned subsidiary Telerob GmbH (the “Telerob Acquisition”). The assets, liabilities and operating results of Telerob GmbH have been included in the Company’s unaudited consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. Recently Adopted Accounting Standards The Company did not adopt any accounting standards during the three months ended July 31, 2021. 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 the 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 ASC Topic 606. 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 Topic 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 TMS 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, including revenue from intelligence, surveillance, and reconnaissance (“ISR”) services, is recognized over time as services are rendered. In accordance with ASC Topic 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. 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, medium UAS (“MUAS) and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS, MUAS and UGV systems and spare parts. 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 61% and 38% of revenue during the three months ended July 31, 2021 and August 1, 2020, respectively. Performance obligations satisfied at a point in time accounted for 39% and 62% of revenue during the three months ended July 31, 2021 and August 1, 2020, respectively. On July 31, 2021, the Company had approximately $257,685,000 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 84% of the remaining performance obligations as revenue in fiscal 2022 and an additional 16% in fiscal 2023 . 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 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. 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 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 month period ended July 31, 2021 or the three month period ended August 1, 2020. No adjustment on any one contract was material to the Company’s unaudited consolidated financial statements for the three month period ended July 31, 2021 or the three month period ended August 1, 2020. Revenue by Category The following tables present the Company’s revenue disaggregated by major product line, contract type, customer category and geographic location (in thousands): Three Months Ended July 31, August 1, Revenue by major product line/program 2021 2020 Small UAS $ 39,924 $ 56,202 TMS 19,176 9,534 MUAS 22,379 — Other 19,530 21,714 Total revenue $ 101,009 $ 87,450 Three Months Ended July 31, August 1, Revenue by contract type 2021 2020 FFP $ 80,766 $ 60,875 CPFF 19,117 26,569 T&M 1,126 6 Total revenue $ 101,009 $ 87,450 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 July 31, August 1, Revenue by customer category 2021 2020 U.S. government $ 71,075 $ 53,796 Non-U.S. government 29,934 33,654 Total revenue $ 101,009 $ 87,450 Three Months Ended July 31, August 1, Revenue by geographic location 2021 2020 Domestic $ 68,388 $ 53,430 International 32,621 34,020 Total revenue $ 101,009 $ 87,450 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 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 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 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 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 month period ended July 31, 2021 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 month periods ended July 31, 2021 that was included in contract liability balances at the beginning of April 30, 2021 was $309,000; and revenue recognized for the three month periods ended August 1, 2020 that was included in contract liability balances at the beginning of April 30, 2020 was $1,973,000. 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. The Company’s CODM, collectively the Chief Executive Officer and Chief Operations Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the allocation of research and development (“R&D”). Accordingly, the Company identifies three reportable segments. Refer to Note 20—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 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. 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 July 31, 2021 and April 30, 2021, the Company had no reserve for incurred cost claim audits. (Loss) Earnings Per Share Basic (loss) earnings 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: Three Months Ended July 31, 2021 August 1, 2020 Net income attributable to AeroVironment, Inc. $ (13,981) $ 10,080 Denominator for basic earnings (loss) per share: Weighted average common shares 24,620,180 23,893,001 Dilutive effect of employee stock options, restricted stock and restricted stock units — 293,227 Denominator for diluted earnings (loss) per share 24,620,180 24,186,228 Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 3,871 and 844 for the three months ended July 31, 2021 and August 1, 2020, respectively. Due to the net loss for the three months ended July 31, 2021, 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 276,107 for the three months ended July 31, 2021. Recently Issued Accounting Standards Accounting pronouncements issued but not effective until after July 31, 2021 are not expected to be applicable to the Company. |
Investments
Investments | 3 Months Ended |
Jul. 31, 2021 | |
Investments | |
Investments | 3. Investments Investments consist of the following (in thousands): July 31, April 30, 2021 2021 Short-term investments: Available-for-sale securities: Municipal securities 12,264 22,245 U.S. government securities — 4,009 Corporate bonds 5,689 5,717 Total short-term investments $ 17,953 $ 31,971 Long-term investments: Available-for-sale securities: Municipal securities 987 988 U.S. government securities — 4,000 Total long-term available-for-sale investments 987 4,988 Equity method investments Investment in limited partnership fund 9,178 7,168 Total equity method investments 9,178 7,168 Total long-term investments $ 10,165 $ 12,156 Available-For-Sale Securities As of July 31, 2021 and April 30, 2021, the balance of available-for-sale securities consisted of state and local government municipal securities, U.S. government securities, U.S. government agency securities, and investment grade corporate bonds. Interest earned from these investments is recorded in interest income. Realized gains on sales of these investments on the basis of specific identification are recorded in (expense) interest income. The following table is a summary of the activity related to the available-for-sale investments recorded in short-term and long-term investments as of July 31, 2021 and April 30, 2021, respectively (in thousands): July 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Municipal securities $ 13,249 $ 3 $ (1) $ 13,251 Corporate bonds 5,689 — — 5,689 Total available-for-sale investments $ 18,938 $ 3 $ (1) $ 18,940 April 30, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Municipal securities $ 23,227 $ 8 $ (2) $ 23,233 U.S. government securities 8,008 1 — 8,009 Corporate bonds 5,718 — (1) 5,717 Total available-for-sale investments $ 36,953 $ 9 $ (3) $ 36,959 The amortized cost and fair value of the available-for-sale debt securities by contractual maturity at July 31, 2021 were as follows (in thousands): Cost Fair Value Due within one year $ 17,953 $ 17,953 Due after one year through five years 985 987 Total $ 18,938 $ 18,940 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jul. 31, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | 4. 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 July 31, 2021, 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 Available-for-sale securities $ — $ 18,940 $ — $ 18,940 Contingent consideration — — 6,475 6,475 Total $ — $ 18,940 $ 6,475 $ 25,415 The Company’s financial assets measured at fair value on a recurring basis at April 30, 2021, 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 Available-for-sale securities $ — $ 36,959 $ — $ 36,959 Contingent consideration — — 5,521 5,521 Total $ — $ 36,959 $ 5,521 $ 42,480 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 Description (Level 3) Balance at May 1, 2021 $ 5,521 Business acquisition 889 Transfers to Level 3 — Total losses (realized or unrealized) Included in selling, general and administrative 65 Settlements — Balance at July 31, 2021 $ 6,475 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 July 31, 2021 $ — Pursuant to the ISG Purchase Agreement, the sellers may receive up to a maximum of $6,000,000 in additional cash consideration (“contingent consideration”), if certain revenue targets are achieved during the 3 years following closing. The contingent consideration was valued using a Black-Scholes option-pricing model. The analysis considered, among other items, contractual terms of the ISG Purchase Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue targets required for payment of the contingent consideration will be achieved. Pursuant to the Telerob Purchase Agreement, the Telerob Seller may receive up to a maximum of €6,000,000 (approximately $7,272,000) 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. Refer to Note 18—Business Acquisitions. |
Inventories, net
Inventories, net | 3 Months Ended |
Jul. 31, 2021 | |
Inventories, net | |
Inventories, net | 5. Inventories, net Inventories consist of the following (in thousands): July 31, April 30, 2021 2021 Raw materials $ 29,537 $ 23,997 Work in process 20,178 13,825 Finished goods 46,809 44,113 Inventories, gross 96,524 81,935 Reserve for inventory excess and obsolescence (11,672) (10,289) Inventories, net $ 84,852 $ 71,646 |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Jul. 31, 2021 | |
Equity Method Investments | |
Equity Method Investments | 6. Equity Method Investments In December 2017, the Company and SoftBank Corp. (“Softbank”) formed a joint venture, HAPSMobile Inc. (“HAPSMobile”), which is a Japanese corporation. Concurrent with the formation of HAPSMobile, the Company executed a Design and Development Agreement (the “DDA”) with HAPSMobile. As of July 31, 2021, the Company’s ownership stake in HAPSMobile was approximately 7%, with the remaining 93% held by SoftBank. In connection with the formation of the joint venture on December 27, 2017, the Company initially purchased shares of HAPSMobile representing a 5% ownership interest in exchange for an investment of 210,000,000 yen ($1,860,000). The Company subsequently purchased additional shares of HAPSMobile in order to maintain a 5% ownership stake in the joint venture. The first such purchase occurred on April 17, 2018, at which time the Company invested 150,000,000 yen ($1,407,000) for the purchase of additional shares of HAPSMobile. On January 29, 2019, the Company invested an additional 209,500,000 yen ($1,926,000) to maintain its 5% ownership stake. On February 9, 2019, the Company elected to purchase 632,800,000 yen ($5,671,000) of additional shares of HAPSMobile to increase the Company’s ownership in the joint venture from 5% to 10%, and on May 10, 2019, the Company purchased 500,000,000 yen ($4,569,000) of additional shares of HAPSMobile to maintain its 10% ownership stake. The Company’s ownership percentage was subsequently diluted from 10% to approximately 5%. On December 4, 2019, the Company purchased 540,050,000 yen ($4,982,000) of additional shares of HAPSMobile to increase its ownership stake to approximately 7%. On May 29, 2021, the Company entered into an amendment to the DDA with HAPSMobile. The parties agreed to the amendment in anticipation of the Company and SoftBank entering into a Master Design and Development Agreement (“MDDA”) with each other to continue the design and development of the Solar High Altitude Pseudo-Satellite (“Solar HAPS”) aircraft developed under the DDA. On May 29, 2021, the Company and SoftBank entered into a MDDA to continue the development of Solar HAPS. Pursuant to the MDDA, which has a five-year term, SoftBank will issue orders to the Company for the Company to perform design and development services and produce deliverables as specified in the applicable order(s). Upon the execution of the MDDA, SoftBank issued to the Company, and the Company accepted, the first order under the MDDA which has a maximum value of approximately $51,200,000. Concurrent with the execution of the MDDA, each of SoftBank and the Company agreed to lend HAPSMobile loans which are convertible into shares of HAPSMobile under certain conditions, and to cooperate with each other to explore restructuring and financing options for HAPSMobile to continue the development of Solar HAPS. The Company committed to lend 500,000,000 yen ($4,600,000). On June 7, 2021 the Company funded 130,000,000 yen ($1,195,000) of the loan agreement. On August 13, 2021, the Company made the second payment of the loan agreement in the amount of 180,000,000 yen ($1,638,000). As the Company has the ability to exercise significant influence over the operating and financial policies of HAPSMobile pursuant to the applicable Joint Venture Agreement and related organizational documents, the Company’s investment is accounted for as an equity method investment. For the three months ended July 31, 2021 and August 1, 2020, the Company recorded its proportionate net loss of HAPSMobile, or $1,655,000 and $1,008,000, respectively, in equity method investment loss, net of tax in the unaudited consolidated statement of operations. At July 31, 2021 and April 30, 2021, the carrying value of the investment in HAPSMobile was a liability of $415,000 and an asset of $10,455,000, respectively, was recorded in other current liabilities and other assets, respectively. The equity method losses recognized during the three months ended July 31, 2021 exceeded the Company’s loan contributions to date resulting in the recording of an accrued liability in the amount of $415,000 recorded in other current liabilities on the unaudited consolidated balance sheet as of July 31, 2021. Investment in Limited Partnership Fund 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. During the three months ended July 31, 2021 and August 1, 2021, the Company made additional contributions of $1,497,000 and $1,173,000, respectively. Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $880,000 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 months ended July 31, 2021 and August 1, 2020, the Company recorded its ownership percentage of the net gain (loss) of the limited partnership, or $514,000 and $(280,000), respectively, in equity method investment loss in the unaudited consolidated statements of operations. At July 31, 2021 and April 30, 2021, the carrying value of the investment in the limited partnership of $9,178,000 and $7,168,000, respectively, was recorded in long-term investments. |
Warranty Reserves
Warranty Reserves | 3 Months Ended |
Jul. 31, 2021 | |
Warranty Reserves | |
Warranty Reserves | 7. 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. The related expense is included in cost of sales. Warranty reserve activity is summarized as follows for the three months ended July 31, 2021 and August 1, 2020, respectively (in thousands): Three Months Ended July 31, August 1, 2021 2020 Beginning balance $ 2,341 $ 2,015 Balance acquired from acquisition 256 — Warranty expense 456 451 Warranty costs settled (299) (435) Ending balance $ 2,754 $ 2,031 |
Intangibles, net
Intangibles, net | 3 Months Ended |
Jul. 31, 2021 | |
Intangibles, net | |
Intangibles, net | 8. Intangibles, net The components of intangibles are as follows (in thousands): July 31, April 30, 2021 2021 Technology $ 58,178 $ 46,850 Licenses 1,008 1,008 Customer relationships 72,998 68,073 Backlog 2,325 — In-process research and development 550 550 Non-compete agreements 320 320 Trademarks and tradenames 68 68 Other 105 3 Intangibles, gross 135,552 116,872 Less accumulated amortization (17,697) (10,604) Intangibles, net $ 117,855 $ 106,268 The weighted average amortization period at July 31, 2021 and April 30, 2021 was five years, respectively. Amortization expense for the three months ended July 31, 2021 and August 1, 2020 was $6,973,000 and $709,000, respectively. Technology, backlog and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of Telerob on May 3, 2021. Technology and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of Arcturus on February 19, 2021. Technology and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of ISG on February 23, 2021. Refer to Note 18—Business Acquisitions for further details. Estimated amortization expense for the next five years is as follows (in thousands): Year ending April 30, 2022 $ 22,697 2023 27,719 2024 26,870 2025 18,156 2026 13,114 $ 108,556 |
Goodwill
Goodwill | 3 Months Ended |
Jul. 31, 2021 | |
Goodwill. | |
Goodwill | 9. Goodwill The following table presents the changes in the Company’s goodwill balance (in thousands): Small UAS TMS MUAS All other Total Balance at April 30, 2021 $ 6,340 $ — $ 288,611 $ 19,254 $ 314,205 Additions to goodwill — — — 20,824 20,824 Impairment of goodwill — — — — — Balance at July 31, 2021 $ 6,340 $ - $ 288,611 $ 40,078 $ 335,029 The goodwill balance at April 30, 2021 is attributable to the acquisitions of Pulse, ISG, and Arcturus acquisitions. The All other goodwill addition is attributable to the Telerob acquisition. Refer to Note 18—Business Acquisitions for further details. |
Debt
Debt | 3 Months Ended |
Jul. 31, 2021 | |
Debt | |
Debt | 10. Debt In connection with the consummation of 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 million revolving credit facility, which includes a $10 million sublimit for the issuance of standby and commercial letters of credit (the “Revolving Facility”), and (ii) a five-year amortized $200 million 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 loan years, with the remaining 80% payable in loan year five, consisting of three quarterly payments of 1.25% each, with the remaining outstanding principal amount of the Term Loan Facility due and payable on the final maturity date. Proceeds from the Term Loan Facility were used in part to finance a portion of the cash consideration for the Arcturus Acquisition. Borrowings under the Revolving Facility may be used for working capital and other general corporate purposes. The Credit Facilities provide the Company with a choice of interest rates between (a) LIBOR (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 LIBOR 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 LIBOR (ranging from 1.50 - 2.25%) or Base Rate (ranging from 0.50 - 1.25%). The Company is also 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. 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. As of July 31, 2021, the Company is in compliance with all covenants. 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. Long-term debt and the current period interest rates were as follows: Three Months Ended July 31, 2021 (In thousands) Term loans $ 197,500 Revolving credit facility — Total debt 197,500 Less current portion 10,000 Total long-term debt, less current portion 187,500 Less unamortized debt issuance costs - term loans 2,359 Total long-term debt, net of unamortized debt issuance costs - term loans $ 185,141 Unamortized debt issuance costs - revolving credit facility $ 1,175 Current period interest rate 2.2% Future long-term debt principal payments at July 31, 2021 were as follows: (In thousands) 2022 $ 7,500 2023 10,000 2024 10,000 2025 10,000 2026 160,000 $ 197,500 |
Leases
Leases | 3 Months Ended |
Jul. 31, 2021 | |
Leases | |
Leases | 11. 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. 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 six years, some of which may include options to extend options to terminate 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): Three Months Ended Three Months Ended July 31, August 1, 2021 2020 Operating lease cost $ 1,677 $ 1,190 Short term lease cost 252 110 Variable lease cost 102 1 Sublease income (44) (38) Total lease costs, net $ 1,987 $ 1,263 Supplemental lease information were as follows: Three Months Ended Three Months Ended July 31, August 1, 2021 2020 (In thousands) (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 1,763 $ 1,400 Right-of-use assets obtained in exchange for new lease liabilities $ 6,310 $ 5,883 Weighted average remaining lease term 70 months 46 months Weighted average discount rate 3.4% 3.4% Maturities of operating lease liabilities as of July 31, 2021 were as follows (in thousands): 2022 $ 4,939 2023 6,312 2024 5,610 2025 4,659 2026 3,394 Thereafter 8,025 Total lease payments 32,939 Less: imputed interest (3,144) Total present value of operating lease liabilities $ 29,795 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 3 Months Ended |
Jul. 31, 2021 | |
Accumulated Other Comprehensive (Loss) Income. | |
Accumulated Other Comprehensive (Loss) Income | 12. Accumulated Other Comprehensive (Loss) Income and Reclassifications Adjustments The components of accumulated other comprehensive (loss) income and adjustments are as follows (in thousands): Three Months Ended Three Months Ended July 31, August 1, 2021 2020 Balance, net of $1 and $0 deferred taxes, as of April 30, 2021 and April 30, 2020, respectively $ 343 $ 328 Unrealized loss on available-for-sale investments, net of deferred tax benefit of $0 and $4 for the three months ended July 31, 2021 and August 1, 2020, respectively (4) (52) Change in foreign currency translation adjustments (733) 75 Balance, net of $1 and $4 deferred taxes, as of July 31, 2021 and August 1, 2020, respectively $ (394) $ 351 |
Customer-Funded Research & Deve
Customer-Funded Research & Development | 3 Months Ended |
Jul. 31, 2021 | |
Customer-Funded Research & Development | |
Customer-Funded Research & Development | 13. 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 are recognized in accordance with Topic 606 over time as costs are incurred. Revenue from customer-funded R&D was approximately $16,911,000 and $23,426,000 for the three months ended July 31, 2021 and August 1, 2020, respectively. |
Long-Term Incentive Awards
Long-Term Incentive Awards | 3 Months Ended |
Jul. 31, 2021 | |
Long-Term Incentive Awards. | |
Long-Term Incentive Awards | 14. Long-Term Incentive Awards 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) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and 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 operating income targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of common stock. For the three months ended July 31, 2021, the Company recorded $308,000 of compensation expense related to the Fiscal 2022 LTIP. The Company recorded no compensation expense related to the Fiscal 2022 LTIP for the three months ended August 1, 2020. At July 31, 2021, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2022 LTIP is $13,314,000. During the three months ended August 1, 2020, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (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) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2023. 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 operating income targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of common stock. For the three months ended July 31, 2021 and August 1, 2020, the Company recorded $65,000 and $91,000 of compensation expense related to the Fiscal 2021 LTIP, respectively. At July 31, 2021, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2021 LTIP is $7,337,000. During the three months ended July 27, 2019, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2020 LTIP”). Awards under the Fiscal 2020 LTIP consist of: (i) time-based restricted stock awards, which vest in equal tranches in July 2020, July 2021 and July 2022, 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, 2022. 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 200% 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 operating income targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of common stock. For the three months ended July 31, 2021 and August 1, 2020, the Company recorded $(1,000) and $80,000 of compensation expense related to the Fiscal 2020 LTIP, respectively. At July 31, 2021, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2020 LTIP is $3,983,000. During the three months ended July 28, 2018, the Company also granted awards under the Restated 2006 Plan to key employees (“Fiscal 2019 LTIP”). Awards under the Fiscal 2019 LTIP consist of: (i) time-based restricted stock awards, which vest in equal tranches in July 2019, July 2020 and July 2021, 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, 2021. During the three months ended July 31, 2021, the Company issued a total of 12,101 fully-vested shares of common stock to settle the PRSUs in the Fiscal 2019 LTIP. For the three months ended July 31, 2021 and August 1, 2020, the Company recorded $0 and $75,000 of compensation expense related to the Fiscal 2019 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 | 3 Months Ended |
Jul. 31, 2021 | |
Income Taxes | |
Income Taxes | 15. Income Taxes For the three months ended July 31, 2021 and August 1, 2020, the Company recorded a (benefit from) and provision for income taxes of $(957,000) and $1,207,000, respectively, yielding effective tax rates of 7.0% and 9.6%, respectively. The variance from statutory rates for the three months ended July 31, 2021 was primarily due to federal R&D credits, foreign derived intangible income deductions and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options. The variance from statutory rates for the three months ended August 1, 2020 was primarily due to federal R&D credits, foreign derived intangible income deductions and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options. |
Share Repurchase
Share Repurchase | 3 Months Ended |
Jul. 31, 2021 | |
Share Repurchase | |
Share Repurchase | 16. Share Repurchase In September 2015, the Company’s Board of Directors authorized a program to repurchase up to $25,000,000 of the Company’s common stock with no specified termination date for the program. No shares were repurchased under the program during the three months ended July 31, 2021 or August 1, 2020. As of July 31, 2021 and April 30, 2021, approximately $21,200,000 remained authorized for future repurchases under this program. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jul. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 17. Related Party Transactions Related party transactions are defined as transactions between the Company and entities either controlled by the Company or that the Company can significantly influence. Although SoftBank has a controlling interest in HAPSMobile, the Company determined that it has the ability to exercise significant influence over HAPSMobile. As such, HAPSMobile and SoftBank are considered related parties of the Company. Under the DDA and related efforts with HAPSMobile, the Company will use its best efforts, up to a maximum net value of $185,202,000, to design and build prototype solar powered high altitude aircraft and ground control stations for HAPSMobile and conduct low altitude and high altitude flight tests of the prototype aircraft. The Company will continue the development of Solar HAPS with Softbank under the MDDA. Upon the execution of the MDDA, SoftBank issued the first order under the MDDA which has a maximum value of approximately $51,200,000. The Company recorded revenue under both the MDDA and DDA of $10,352,000 and $16,386,000 for the three months ended July 31, 2021 and August 1, 2020, respectively. At July 31, 2021 and April 30, 2021, the Company had unbilled related party receivables from HAPSMobile of $5,568,000 and $544,000 recorded in unbilled receivables and retentions on the consolidated balance sheets, respectively. Refer to Note 6—Equity Method Investments for further details. |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Jul. 31, 2021 | |
Business Acquisitions | |
Business Acquisitions | 18. Business Acquisitions Telerob Acquisition On May 3, 2021, the Company closed its acquisition of Telerob pursuant to the terms of the Telerob Purchase Agreement. Telerob develops, manufactures, sells, and services remote-controlled unmanned ground robots and transport vehicles for civil and defense applications. Pursuant to the Telerob Purchase Agreement at closing, the Company paid €37,455,000 (approximately $45,400,000) in cash to the Telerob Seller (subject to certain purchase price adjustments as set forth in the Telerob Purchase Agreement), less (a) €3,000,000 (approximately $3,636,000) to be held in escrow for breaches of the Telerob Seller’s fundamental warranties or any other of Telerob Seller’s warranties to the extent not covered by a representation and warranty insurance policy (the “RWI Policy”) obtained by the Company in support of certain indemnifications provided by the Telerob Seller; (b) transaction-related fees and costs incurred by the Telerob Seller, including change in control payments triggered by the transaction; and (c) 50% of the cost of obtaining the RWI Policy. In addition, at closing the Company paid off approximately €7,811,000 (approximately $9,468,000), of certain indebtedness of Telerob, which amount was paid in combination to the Telerob Seller and the lender under an agreement between Telerob GmbH and the lender providing for a reduced payoff amount. This indebtedness was offset by cash on hand at Telerob at closing. The escrow amount is to be released to the Telerob Seller, less any amounts paid or reserved, 30 months following the closing date. In addition to the consideration paid at closing, the Telerob Seller may receive €2,000,000 (approximately $2,424,000) in additional cash consideration if specific revenue targets for Telerob are achieved during the 12 month period after closing beginning on the first day of the calendar month following the closing (the “First Earnout Year”) and an additional €2,000,000 (approximately $2,424,000) in cash consideration if specific revenue targets for Telerob are achieved in the 12 month period following the First Earnout Year. The Telerob Seller may also receive up to €2,000,000 (approximately $2,424,000) in additional cash consideration if specific awards and/or orders from the U.S. military are achieved prior to the end of a 36-month post-closing period. 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 Telerob (in thousands): May 3, 2021 Fair value of assets acquired: Accounts receivable $ 1,045 Unbilled receivable 829 Inventories, net 15,074 Prepaid and other current assets 314 Property and equipment, net 1,571 Operating lease assets 1,508 Other assets 154 Technology 11,500 Backlog 2,400 Customer relationships 5,000 Other intangible assets 102 Goodwill 21,140 Total assets acquired $ 60,637 Fair value of liabilities assumed: Accounts payable $ 1,136 Wages and related accruals 560 Customer advances 1,243 Current operating lease liabilities 361 Other current liabilities 3,310 Non-current operating lease liabilities 1,147 Other non-current liabilities 224 Deferred income taxes 5,617 Total liabilities assumed 13,598 Total identifiable net assets $ 47,039 Fair value of consideration: Cash consideration, net of cash acquired $ 46,150 Contingent consideration 889 Total $ 47,039 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 best estimate 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 Telerob and expected future customers in the UGV market. For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible. Supplemental Pro Forma Information (unaudited) The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2020 (in thousands): Three Months Ended July 31, August 1, 2021 2020 Revenue $ 101,009 $ 95,143 Net (loss) income attributable to AeroVironment, Inc. $ (12,298) $ 8,856 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 August 1, 2020, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2020 with the consequential tax effects and including the results of Telerob prior to acquisition. The Company incurred approximately $411,000 of acquisition-related expenses for the three months ended July 31, 2021. These expenses are included in selling, general and administrative on the Company’s unaudited consolidated statement of operations. 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 acquisitions been consolidated in the tables above as of May 1, 2020, nor are they indicative of results of operations that may occur in the future. Arcturus Acquisition On February 19, 2021, the Company closed its acquisition of Arcturus pursuant to the terms of the Arcturus Purchase Agreement. Arcturus, headquartered in Petaluma, California, designs, engineers, tools, and manufactures unmanned aerial and aircraft systems including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related generally to unmanned aircraft systems. Pursuant to the Arcturus Purchase Agreement at the closing of the Arcturus Acquisition, the Company paid approximately $422,602,000, net of cash acquired (subject to certain customary adjustments and escrow arrangements set forth in the Arcturus Purchase Agreement), financed with a combination of approximately $150,218,000 of cash-on-hand, $200,000,000 of financing pursuant to the Term Loan Facility and the issuance of approximately $72,384,000 of unregistered, restricted shares of common stock. As specified in the Arcturus Purchase agreement, the number of shares issued was determined based on a value of $50,000,000 and a calculated average price as of the last business day prior to execution of the Arcturus Purchase Agreement. The final cash consideration is subject to certain customary adjustments, including for net working capital, cash, debt and unpaid transaction expenses (including change in control related payments triggered by the transaction) of Arcturus at the Arcturus closing, less $6,500,000 to be held in escrow to address final purchase price adjustments post-Arcturus closing, if any (the “Adjustment Escrow”), and $1,822,500 to be held in escrow to address Arcturus’s and/or the Sellers’ indemnification obligations (the “Indemnification Escrow”). During the three months ended July 31, 2021, the Adjustment Escrow of $6,500,000, less $509,000 of post-closing adjustments, was released to the Arcturus Sellers. To further address potential breaches of Arcturus’s and the Sellers’ representations and warranties beyond the application of the Indemnification Escrow, the Company also obtained representation and warranty insurance policies providing $40,000,000 in coverage, subject to customary terms, exclusions and retention amounts. The following table summarizes the allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Arcturus (in thousands): February 19, 2021 Fair value of assets acquired: Accounts receivable $ 6,050 Unbilled receivable 4,176 Inventories, net 21,701 Prepaid and other current assets 3,076 Property and equipment, net 38,739 Operating lease assets 11,429 Other assets 136 Technology 20,500 Customer relationships 62,700 Goodwill 288,611 Total assets acquired $ 457,118 Fair value of liabilities assumed: Accounts payable $ 3,085 Wages and related accruals 1,698 Customer advances 1,818 Other current liabilities 8,534 Operating lease liabilities 12,297 Other non-current liabilities 1,190 Deferred income taxes, net 5,869 Total liabilities assumed 34,491 Total identifiable net assets $ 422,627 Fair value of consideration transferred: Cash consideration, net of cash acquired $ 350,243 Equity consideration 72,384 Total consideration $ 422,627 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 Arcturus and expected future customers in the MUAS market. For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible. Supplemental Pro Forma Information (unaudited) The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2019 (in thousands): Three Months Ended August 1, 2020 Revenue $ 112,567 Net income attributable to AeroVironment, Inc. $ 16,859 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 27, 2019, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2019 with the consequential tax effects, and including the results of Arcturus prior to acquisition. The Company incurred approximately $1,384,000 and $0 acquisition-related expenses for the three months ended July 31, 2021 and August 1, 2020, respectively. These expenses are included in selling, general and administrative expense on the Company’s unaudited consolidated statement of operations. 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 acquisitions been consolidated in the tables above as of May 1, 2019, nor are they indicative of results of operations that may occur in the future. ISG Acquisition On February 23, 2021, the Company purchased certain assets of, and assumed certain liabilities of, ISG pursuant to the terms of the ISG Purchase Agreement. ISG is engaged in development of artificial intelligence-enabled computer vision, machine learning and perceptive autonomy technologies and provides related services to United States government customers. In connection with the ISG Acquisition, the Company (i) paid a base purchase price of $29,700,000 in cash at closing and (ii) may pay additional cash consideration of up to $6,000,000, which is held in escrow account not controlled by the Company, based on the achievement of certain revenue targets by ISG during the 3 years following closing, in each case, subject to the terms and conditions of the ISG Purchase Agreement, including certain customary adjustments. As a condition to closing pursuant to the ISG Purchase Agreement, the Company and the ISG Seller entered into certain ancillary agreements, including a transition services agreement and two subleases pursuant to which the ISG Seller will provide the Company certain services and facilities space to accommodate the transition of ISG to the Company. The parties to the ISG Purchase Agreement have made representations, warranties, and covenants that are customary for a transaction of this type, including, among other things, restrictions on the ISG Seller and the Beneficial Owner from engaging in certain competitive activities, as well as mutual indemnification obligations between the Company and the ISG Seller. To supplement certain indemnifications provided by the ISG Seller, the Company obtained a representation and warranty insurance policy. The following table summarizes the allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the ISG Acquisition (in thousands): February 23, 2021 Fair value of assets acquired: Technology $ 11,400 Customer relationships 4,500 Other assets 217 Goodwill 19,254 Total identifiable net assets $ 35,371 Fair value of consideration transferred: Cash $ 29,700 Holdback 150 Contingent consideration 5,521 Total consideration $ 35,371 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. For tax purposes the acquisition was treated as an asset purchase and the goodwill is deductible ratably over a period of fifteen years. Supplemental Pro Forma Information (unaudited) The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2019 (in thousands): Three Months Ended August 1, 2020 Revenue $ 90,333 Net income attributable to AeroVironment, Inc. $ 10,386 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 27, 2019, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2019 with the consequential tax effects, and including the results of ISG prior to acquisition. The Company incurred approximately $651,000 and $0 acquisition-related expenses for the three months ended July 31, 2021 and August 1, 2020, respectively. These expenses are included in selling, general and administrative expenses on the Company’s unaudited consolidated statement of operations. 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 acquisitions been consolidated in the tables above as of May 1, 2019, nor are they indicative of results of operations that may occur in the future. |
Pension
Pension | 3 Months Ended |
Jul. 31, 2021 | |
Pension | |
Pension | 19. Pension As part of the Telerob acquisition, the Company acquired a small foreign-based defined benefit pension plan. The Rheinmetall-Zusatzversorgung (“RZV”) service plan covers three employees based on individual contracts issued to the employees. No other employees are eligible to participate. In January 2011, reinsurance policies were taken out, which were pledged to the employees. The measurement date for the Company’s pension plan was May 3, 2021 in conjunction with the acquisition. The table below includes the projected benefit obligation and fair value of plan assets as of May 3, 2021. The net projected benefit obligation (in thousands) is recorded in other non-current liabilities. Projected benefit obligation $ (4,126) Fair value of plan assets 3,951 Unfunded status of the plan $ (175) The projected benefit obligation includes assumptions of a discount rate of 1% and pension increase for in-payment benefits of 1.5% for May 3, 2021 and July 31, 2021. The accumulated benefit obligation is approximately equal to our 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, 2022. The Company assumed expected return on plan assets of 2.15% for May 3, 2021 and July 31, 2021. Expected benefits paid as of May 3, 2021 (in thousands): 2022 $ 182 2023 183 2024 183 2025 184 2026 184 2027-2031 920 Total expected benefit payments $ 1,836 Net benefit income (in thousands) is recorded in interest (expense) income, net. Three Months Ended July 31, 2021 (In thousands) Expected return on plan assets $ 32 Interest cost (15) Foreign currency exchange rate changes (66) Net benefit income $ (49) |
Segments
Segments | 3 Months Ended |
Jul. 31, 2021 | |
Segments | |
Segments | 20. Segments The Company’s product segments are as follows: Small Unmanned Aircraft Systems —The Small UAS segment focuses primarily on products designed to operate reliably at very low altitudes in a wide range of environmental conditions, providing a vantage point from which to collect and deliver valuable information as well as related support services including training, spare parts, product repair, product replacement, and the customer contracted operation. Tactical Missile Systems – The TMS segment focuses primarily on TMS products, which are tube-launched aircraft that deploy with the push of a button, fly at higher speeds than small UAS products, and perform either effects delivery or reconnaissance missions, and related support services including training, spare parts, product repair, and product replacement. The TMS segment also includes customer funded research and development programs. Medium Unmanned Aircraft Systems—The MUAS segment, which originates with the acquisition of Arcturus, focuses on designs, engineers, tools, and manufactures unmanned aerial and aircraft systems including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related generally to unmanned aircraft systems including ISR services. All other—All other segments include HAPS, MacCready Works and the recently acquired ISG and Telerob businesses. 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, operating (loss) income and adjusted operating (loss) income from operations for the periods indicated. Adjusted operating (loss) income is defined as operating (loss) income 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 July 31, 2021 Small UAS TMS MUAS All other Total Revenue $ 39,924 $ 19,176 $ 22,379 $ 19,530 $ 101,009 Gross margin 16,920 5,989 3,181 2,633 28,723 Income (loss) from operations 1,958 (463) (6,381) (7,227) (12,113) Acquisition-related expenses 424 251 1,384 1,195 3,254 Amortization of acquired intangible assets and other purchase accounting adjustments 707 — 5,191 3,226 9,124 Adjusted income (loss) from operations $ 3,089 $ (212) $ 194 $ (2,806) $ 265 Three Months Ended August 1, 2020 Small UAS TMS MUAS All other Total Revenue $ 56,202 $ 9,534 $ — $ 21,714 $ 87,450 Gross margin 27,483 1,920 — 6,008 35,411 Income (loss) from operations 15,197 (4,145) — 1,245 12,297 Acquisition-related expenses — — — — — Amortization of acquired intangible assets and other purchase accounting adjustments 661 — — — 661 Adjusted income (loss) from operations $ 15,858 $ (4,145) $ — $ 1,245 $ 12,958 Segment assets are summarized in the table below. Corporate assets primarily consist of cash and cash equivalents, short-term investments, 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. July 31, 2021 Small UAS TMS MUAS All other Corporate Total Identifiable assets $ 94,332 $ 75,837 $ 398,686 $ 101,775 $ 237,923 $ 908,553 April 30, 2021 Small UAS TMS MUAS All other Corporate Total Identifiable assets $ 113,072 $ 71,707 $ 402,037 $ 39,581 $ 302,169 $ 928,566 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 3 Months Ended |
Jul. 31, 2021 | |
Organization and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited 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 months ended July 31, 2021 are not necessarily indicative of the results for the full year ending April 30, 2022. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2021, 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 consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s unaudited consolidated financial statements include the assets, liabilities and operating results of wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. On February 19, 2021, the Company closed its acquisition of Arcturus UAV, Inc. (“Arcturus”), a California corporation, pursuant to a Stock Purchase Agreement (the “Arcturus Purchase Agreement”) with Arcturus and each of the shareholders and other equity interest holders of Arcturus (collectively, the “Arcturus Sellers”), to purchase 100% of the issued and outstanding equity interests of Arcturus (the “Arcturus Acquisition”). The assets, liabilities and operating results of Arcturus have been included in the Company’s unaudited consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. On February 23, 2021, the Company purchased certain assets of, and assumed certain liabilities of, the Intelligent Systems Group business segment (“ISG”) of Progeny Systems Corporation, a Virginia corporation (the “ISG Seller”), pursuant to the terms of an Asset Purchase Agreement (the “ISG Purchase Agreement”) of the same date, by and among the Company, ISG Seller and the sole shareholder of ISG Seller (the “Beneficial Owner,” and such acquisition of ISG, the “ISG Acquisition”). The assets, liabilities and operating results of ISG have been included in the Company’s unaudited consolidated financial statements. Refer to Note 18—Business Acquisitions for further details. On May 3, 2021, the Company closed its acquisition of Telerob Gesellschaft für Fernhantierungstechnik mbH, a German company based in Ostfildern (near Stuttgart), Germany (“Telerob GmbH”), including Telerob GmbH’s wholly-owned subsidiary, Telerob USA, Inc. (“Telerob USA,” and collectively with Telerob GmbH, “Telerob”) pursuant to its previously announced Share Purchase Agreement (the “Telerob Purchase Agreement”) with Unmanned Systems Investments GmbH, a German limited liability company incorporated under the laws of Germany (the “Telerob Seller”), and each of the unit holders of the Seller (collectively, the “Telerob Shareholders”), to purchase 100% of the issued and outstanding shares of Telerob Seller’s wholly-owned subsidiary Telerob GmbH (the “Telerob Acquisition”). The assets, liabilities and operating results of Telerob GmbH have been included in the Company’s unaudited consolidated financial statements. Refer to Note 18—Business Acquisitions 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 the 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 ASC Topic 606. 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 Topic 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 TMS 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, including revenue from intelligence, surveillance, and reconnaissance (“ISR”) services, is recognized over time as services are rendered. In accordance with ASC Topic 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. 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, medium UAS (“MUAS) and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS, MUAS and UGV systems and spare parts. 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 61% and 38% of revenue during the three months ended July 31, 2021 and August 1, 2020, respectively. Performance obligations satisfied at a point in time accounted for 39% and 62% of revenue during the three months ended July 31, 2021 and August 1, 2020, respectively. On July 31, 2021, the Company had approximately $257,685,000 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 84% of the remaining performance obligations as revenue in fiscal 2022 and an additional 16% in fiscal 2023 . 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 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. 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 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 month period ended July 31, 2021 or the three month period ended August 1, 2020. No adjustment on any one contract was material to the Company’s unaudited consolidated financial statements for the three month period ended July 31, 2021 or the three month period ended August 1, 2020. Revenue by Category The following tables present the Company’s revenue disaggregated by major product line, contract type, customer category and geographic location (in thousands): Three Months Ended July 31, August 1, Revenue by major product line/program 2021 2020 Small UAS $ 39,924 $ 56,202 TMS 19,176 9,534 MUAS 22,379 — Other 19,530 21,714 Total revenue $ 101,009 $ 87,450 Three Months Ended July 31, August 1, Revenue by contract type 2021 2020 FFP $ 80,766 $ 60,875 CPFF 19,117 26,569 T&M 1,126 6 Total revenue $ 101,009 $ 87,450 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 July 31, August 1, Revenue by customer category 2021 2020 U.S. government $ 71,075 $ 53,796 Non-U.S. government 29,934 33,654 Total revenue $ 101,009 $ 87,450 Three Months Ended July 31, August 1, Revenue by geographic location 2021 2020 Domestic $ 68,388 $ 53,430 International 32,621 34,020 Total revenue $ 101,009 $ 87,450 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 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 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 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 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 month period ended July 31, 2021 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 month periods ended July 31, 2021 that was included in contract liability balances at the beginning of April 30, 2021 was $309,000; and revenue recognized for the three month periods ended August 1, 2020 that was included in contract liability balances at the beginning of April 30, 2020 was $1,973,000. |
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. The Company’s CODM, collectively the Chief Executive Officer and Chief Operations Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the allocation of research and development (“R&D”). Accordingly, the Company identifies three reportable segments. Refer to Note 20—Segments for further details. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards The Company did not adopt any accounting standards during the three months ended July 31, 2021. |
Investments | Investments The Company’s investments are accounted for as available-for-sale and are reported at fair value. Unrealized gains and losses 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. 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 July 31, 2021 and April 30, 2021, the Company had no reserve for incurred cost claim audits. |
(Loss) Earnings Per Share | (Loss) Earnings Per Share Basic (loss) earnings 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: Three Months Ended July 31, 2021 August 1, 2020 Net income attributable to AeroVironment, Inc. $ (13,981) $ 10,080 Denominator for basic earnings (loss) per share: Weighted average common shares 24,620,180 23,893,001 Dilutive effect of employee stock options, restricted stock and restricted stock units — 293,227 Denominator for diluted earnings (loss) per share 24,620,180 24,186,228 Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 3,871 and 844 for the three months ended July 31, 2021 and August 1, 2020, respectively. Due to the net loss for the three months ended July 31, 2021, 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 276,107 for the three months ended July 31, 2021. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting pronouncements issued but not effective until after July 31, 2021 are not expected to be applicable to the Company. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Organization and Significant Accounting Policies | |
Schedule of revenue by category | Three Months Ended July 31, August 1, Revenue by major product line/program 2021 2020 Small UAS $ 39,924 $ 56,202 TMS 19,176 9,534 MUAS 22,379 — Other 19,530 21,714 Total revenue $ 101,009 $ 87,450 Three Months Ended July 31, August 1, Revenue by contract type 2021 2020 FFP $ 80,766 $ 60,875 CPFF 19,117 26,569 T&M 1,126 6 Total revenue $ 101,009 $ 87,450 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 July 31, August 1, Revenue by customer category 2021 2020 U.S. government $ 71,075 $ 53,796 Non-U.S. government 29,934 33,654 Total revenue $ 101,009 $ 87,450 Three Months Ended July 31, August 1, Revenue by geographic location 2021 2020 Domestic $ 68,388 $ 53,430 International 32,621 34,020 Total revenue $ 101,009 $ 87,450 |
Schedule of reconciliation of basic to diluted shares | Three Months Ended July 31, 2021 August 1, 2020 Net income attributable to AeroVironment, Inc. $ (13,981) $ 10,080 Denominator for basic earnings (loss) per share: Weighted average common shares 24,620,180 23,893,001 Dilutive effect of employee stock options, restricted stock and restricted stock units — 293,227 Denominator for diluted earnings (loss) per share 24,620,180 24,186,228 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Investments | |
Schedule of investments | July 31, April 30, 2021 2021 Short-term investments: Available-for-sale securities: Municipal securities 12,264 22,245 U.S. government securities — 4,009 Corporate bonds 5,689 5,717 Total short-term investments $ 17,953 $ 31,971 Long-term investments: Available-for-sale securities: Municipal securities 987 988 U.S. government securities — 4,000 Total long-term available-for-sale investments 987 4,988 Equity method investments Investment in limited partnership fund 9,178 7,168 Total equity method investments 9,178 7,168 Total long-term investments $ 10,165 $ 12,156 |
Schedule of activity related to available-for-sale investments recorded in short-term and long-term investments | The following table is a summary of the activity related to the available-for-sale investments recorded in short-term and long-term investments as of July 31, 2021 and April 30, 2021, respectively (in thousands): July 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Municipal securities $ 13,249 $ 3 $ (1) $ 13,251 Corporate bonds 5,689 — — 5,689 Total available-for-sale investments $ 18,938 $ 3 $ (1) $ 18,940 April 30, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Municipal securities $ 23,227 $ 8 $ (2) $ 23,233 U.S. government securities 8,008 1 — 8,009 Corporate bonds 5,718 — (1) 5,717 Total available-for-sale investments $ 36,953 $ 9 $ (3) $ 36,959 |
Schedule of amortized cost and fair value of the available-for-sale debt securities by contractual maturity | The amortized cost and fair value of the available-for-sale debt securities by contractual maturity at July 31, 2021 were as follows (in thousands): Cost Fair Value Due within one year $ 17,953 $ 17,953 Due after one year through five years 985 987 Total $ 18,938 $ 18,940 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
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 July 31, 2021, 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 Available-for-sale securities $ — $ 18,940 $ — $ 18,940 Contingent consideration — — 6,475 6,475 Total $ — $ 18,940 $ 6,475 $ 25,415 The Company’s financial assets measured at fair value on a recurring basis at April 30, 2021, 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 Available-for-sale securities $ — $ 36,959 $ — $ 36,959 Contingent consideration — — 5,521 5,521 Total $ — $ 36,959 $ 5,521 $ 42,480 |
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): |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Inventories, net | |
Schedule of inventories, net | July 31, April 30, 2021 2021 Raw materials $ 29,537 $ 23,997 Work in process 20,178 13,825 Finished goods 46,809 44,113 Inventories, gross 96,524 81,935 Reserve for inventory excess and obsolescence (11,672) (10,289) Inventories, net $ 84,852 $ 71,646 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Warranty Reserves | |
Summary of warranty reserve activity | Three Months Ended July 31, August 1, 2021 2020 Beginning balance $ 2,341 $ 2,015 Balance acquired from acquisition 256 — Warranty expense 456 451 Warranty costs settled (299) (435) Ending balance $ 2,754 $ 2,031 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Intangibles, net | |
Schedule of components of intangibles | The components of intangibles are as follows (in thousands): July 31, April 30, 2021 2021 Technology $ 58,178 $ 46,850 Licenses 1,008 1,008 Customer relationships 72,998 68,073 Backlog 2,325 — In-process research and development 550 550 Non-compete agreements 320 320 Trademarks and tradenames 68 68 Other 105 3 Intangibles, gross 135,552 116,872 Less accumulated amortization (17,697) (10,604) Intangibles, net $ 117,855 $ 106,268 |
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, 2022 $ 22,697 2023 27,719 2024 26,870 2025 18,156 2026 13,114 $ 108,556 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Goodwill. | |
Schedule of the changes in goodwill balances | The following table presents the changes in the Company’s goodwill balance (in thousands): Small UAS TMS MUAS All other Total Balance at April 30, 2021 $ 6,340 $ — $ 288,611 $ 19,254 $ 314,205 Additions to goodwill — — — 20,824 20,824 Impairment of goodwill — — — — — Balance at July 31, 2021 $ 6,340 $ - $ 288,611 $ 40,078 $ 335,029 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Debt | |
Schedule of long-term debt and the current period interest rates | Long-term debt and the current period interest rates were as follows: Three Months Ended July 31, 2021 (In thousands) Term loans $ 197,500 Revolving credit facility — Total debt 197,500 Less current portion 10,000 Total long-term debt, less current portion 187,500 Less unamortized debt issuance costs - term loans 2,359 Total long-term debt, net of unamortized debt issuance costs - term loans $ 185,141 Unamortized debt issuance costs - revolving credit facility $ 1,175 Current period interest rate 2.2% |
Schedule of Future long-term debt principle payments | Future long-term debt principal payments at July 31, 2021 were as follows: |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Leases | |
Schedule of components of lease costs | Three Months Ended Three Months Ended July 31, August 1, 2021 2020 Operating lease cost $ 1,677 $ 1,190 Short term lease cost 252 110 Variable lease cost 102 1 Sublease income (44) (38) Total lease costs, net $ 1,987 $ 1,263 |
Schedule of supplemental lease information | Three Months Ended Three Months Ended July 31, August 1, 2021 2020 (In thousands) (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 1,763 $ 1,400 Right-of-use assets obtained in exchange for new lease liabilities $ 6,310 $ 5,883 Weighted average remaining lease term 70 months 46 months Weighted average discount rate 3.4% 3.4% |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities as of July 31, 2021 were as follows (in thousands): 2022 $ 4,939 2023 6,312 2024 5,610 2025 4,659 2026 3,394 Thereafter 8,025 Total lease payments 32,939 Less: imputed interest (3,144) Total present value of operating lease liabilities $ 29,795 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Accumulated Other Comprehensive (Loss) Income. | |
Schedule of components of accumulated other comprehensive income | The components of accumulated other comprehensive (loss) income and adjustments are as follows (in thousands): Three Months Ended Three Months Ended July 31, August 1, 2021 2020 Balance, net of $1 and $0 deferred taxes, as of April 30, 2021 and April 30, 2020, respectively $ 343 $ 328 Unrealized loss on available-for-sale investments, net of deferred tax benefit of $0 and $4 for the three months ended July 31, 2021 and August 1, 2020, respectively (4) (52) Change in foreign currency translation adjustments (733) 75 Balance, net of $1 and $4 deferred taxes, as of July 31, 2021 and August 1, 2020, respectively $ (394) $ 351 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Schedule of the fair value of the assets acquired and liabilities assumed at the acquisition date | 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 Telerob (in thousands): May 3, 2021 Fair value of assets acquired: Accounts receivable $ 1,045 Unbilled receivable 829 Inventories, net 15,074 Prepaid and other current assets 314 Property and equipment, net 1,571 Operating lease assets 1,508 Other assets 154 Technology 11,500 Backlog 2,400 Customer relationships 5,000 Other intangible assets 102 Goodwill 21,140 Total assets acquired $ 60,637 Fair value of liabilities assumed: Accounts payable $ 1,136 Wages and related accruals 560 Customer advances 1,243 Current operating lease liabilities 361 Other current liabilities 3,310 Non-current operating lease liabilities 1,147 Other non-current liabilities 224 Deferred income taxes 5,617 Total liabilities assumed 13,598 Total identifiable net assets $ 47,039 Fair value of consideration: Cash consideration, net of cash acquired $ 46,150 Contingent consideration 889 Total $ 47,039 |
Schedule of unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred | The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2020 (in thousands): Three Months Ended July 31, August 1, 2021 2020 Revenue $ 101,009 $ 95,143 Net (loss) income attributable to AeroVironment, Inc. $ (12,298) $ 8,856 |
Arcturus UAV Inc. | |
Schedule of the fair value of the assets acquired and liabilities assumed at the acquisition date | The following table summarizes the allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Arcturus (in thousands): February 19, 2021 Fair value of assets acquired: Accounts receivable $ 6,050 Unbilled receivable 4,176 Inventories, net 21,701 Prepaid and other current assets 3,076 Property and equipment, net 38,739 Operating lease assets 11,429 Other assets 136 Technology 20,500 Customer relationships 62,700 Goodwill 288,611 Total assets acquired $ 457,118 Fair value of liabilities assumed: Accounts payable $ 3,085 Wages and related accruals 1,698 Customer advances 1,818 Other current liabilities 8,534 Operating lease liabilities 12,297 Other non-current liabilities 1,190 Deferred income taxes, net 5,869 Total liabilities assumed 34,491 Total identifiable net assets $ 422,627 Fair value of consideration transferred: Cash consideration, net of cash acquired $ 350,243 Equity consideration 72,384 Total consideration $ 422,627 |
Schedule of unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred | The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2019 (in thousands): Three Months Ended August 1, 2020 Revenue $ 112,567 Net income attributable to AeroVironment, Inc. $ 16,859 |
Intelligent Systems Group | |
Schedule of the fair value of the assets acquired and liabilities assumed at the acquisition date | The following table summarizes the allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the ISG Acquisition (in thousands): February 23, 2021 Fair value of assets acquired: Technology $ 11,400 Customer relationships 4,500 Other assets 217 Goodwill 19,254 Total identifiable net assets $ 35,371 Fair value of consideration transferred: Cash $ 29,700 Holdback 150 Contingent consideration 5,521 Total consideration $ 35,371 |
Schedule of unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred | The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2019 (in thousands): Three Months Ended August 1, 2020 Revenue $ 90,333 Net income attributable to AeroVironment, Inc. $ 10,386 |
Pension (Tables)
Pension (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Pension | |
Schedule of projected benefit obligation and fair value of plan assets | Projected benefit obligation $ (4,126) Fair value of plan assets 3,951 Unfunded status of the plan $ (175) |
Schedule of expected benefits paid | Expected benefits paid as of May 3, 2021 (in thousands): 2022 $ 182 2023 183 2024 183 2025 184 2026 184 2027-2031 920 Total expected benefit payments $ 1,836 |
Schedule of net benefit income (in thousands) is recorded in interest (expense) income, net | Net benefit income (in thousands) is recorded in interest (expense) income, net. Three Months Ended July 31, 2021 (In thousands) Expected return on plan assets $ 32 Interest cost (15) Foreign currency exchange rate changes (66) Net benefit income $ (49) |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Jul. 31, 2021 | |
Segments | |
Schedule of segment results | Three Months Ended July 31, 2021 Small UAS TMS MUAS All other Total Revenue $ 39,924 $ 19,176 $ 22,379 $ 19,530 $ 101,009 Gross margin 16,920 5,989 3,181 2,633 28,723 Income (loss) from operations 1,958 (463) (6,381) (7,227) (12,113) Acquisition-related expenses 424 251 1,384 1,195 3,254 Amortization of acquired intangible assets and other purchase accounting adjustments 707 — 5,191 3,226 9,124 Adjusted income (loss) from operations $ 3,089 $ (212) $ 194 $ (2,806) $ 265 Three Months Ended August 1, 2020 Small UAS TMS MUAS All other Total Revenue $ 56,202 $ 9,534 $ — $ 21,714 $ 87,450 Gross margin 27,483 1,920 — 6,008 35,411 Income (loss) from operations 15,197 (4,145) — 1,245 12,297 Acquisition-related expenses — — — — — Amortization of acquired intangible assets and other purchase accounting adjustments 661 — — — 661 Adjusted income (loss) from operations $ 15,858 $ (4,145) $ — $ 1,245 $ 12,958 |
Schedule of identifiable assets by segment | July 31, 2021 Small UAS TMS MUAS All other Corporate Total Identifiable assets $ 94,332 $ 75,837 $ 398,686 $ 101,775 $ 237,923 $ 908,553 April 30, 2021 Small UAS TMS MUAS All other Corporate Total Identifiable assets $ 113,072 $ 71,707 $ 402,037 $ 39,581 $ 302,169 $ 928,566 |
Organization and Significant _4
Organization and Significant Accounting Policies - (Details) | Feb. 19, 2019 |
Arcturus UAV Inc. | |
Ownership interest acquired | 100.00% |
Organization and Significant _5
Organization and Significant Accounting Policies - Performance Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Organization and Significant Accounting Policies | ||
Remaining performance obligations satisfied over time (as a percentage) | 61.00% | 38.00% |
Remaining performance obligations at a point in time (as a percentage) | 39.00% | 62.00% |
Performance Obligations | ||
Remaining performance obligations | $ 257,685 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-30 | ||
Organization and Significant Accounting Policies | ||
Remaining performance obligations (as a percentage) | 84.00% | |
Performance Obligations | ||
Year of performance obligations | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-30 | ||
Organization and Significant Accounting Policies | ||
Remaining performance obligations (as a percentage) | 16.00% | |
Performance Obligations | ||
Year of performance obligations | 2 years |
Organization and Significant _6
Organization and Significant Accounting Policies - Contract Estimates (Details) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021USD ($)contract | Aug. 01, 2020USD ($)contract | |
Organization and Significant Accounting Policies | ||
Material adjustment to any one contract | $ | $ 0 | $ 0 |
Number of active contracts | contract | 1 | 1 |
Organization and Significant _7
Organization and Significant Accounting Policies - Revenue by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Disaggregation of revenue | ||
Revenue | $ 101,009 | $ 87,450 |
Contract Liability | ||
Disaggregation of revenue | ||
Revenue | 309 | 1,973 |
Domestic | ||
Disaggregation of revenue | ||
Revenue | 68,388 | 53,430 |
International | ||
Disaggregation of revenue | ||
Revenue | 32,621 | 34,020 |
U.S. government | ||
Disaggregation of revenue | ||
Revenue | 71,075 | 53,796 |
Non-U.S. government | ||
Disaggregation of revenue | ||
Revenue | 29,934 | 33,654 |
FFP | ||
Disaggregation of revenue | ||
Revenue | 80,766 | 60,875 |
CPFF | ||
Disaggregation of revenue | ||
Revenue | 19,117 | 26,569 |
T&M | ||
Disaggregation of revenue | ||
Revenue | 1,126 | 6 |
Small UAS | ||
Disaggregation of revenue | ||
Revenue | 39,924 | 56,202 |
TMS | ||
Disaggregation of revenue | ||
Revenue | 19,176 | 9,534 |
MUAS | ||
Disaggregation of revenue | ||
Revenue | 22,379 | |
Other | ||
Disaggregation of revenue | ||
Revenue | $ 19,530 | $ 21,714 |
Organization and Significant _8
Organization and Significant Accounting Policies - Government Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Numerator for basic earnings per share: | ||
Net income attributable to AeroVironment, Inc. | $ (13,981) | $ 10,080 |
Denominator for basic earnings per share: | ||
Weighted average common shares | 24,620,180 | 23,893,001 |
Dilutive effect of employee stock options, restricted stock and restricted stock units | 293,227 | |
Denominator for diluted earnings (loss) per share | 24,620,180 | 24,186,228 |
Number of shares reserved for issuance | 0 | |
Number of anti-dilutive shares | 3,871 | 844 |
Number of anti-dilutive due to loss | 276,107 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Thousands | Feb. 22, 2019USD ($) | Jun. 29, 2018USD ($) | Jul. 31, 2021USD ($)contract | Aug. 01, 2020USD ($) | Apr. 30, 2021USD ($) | Apr. 30, 2020USD ($) | Apr. 30, 2019USD ($) |
Other expense | |||||||
Discontinued operations | |||||||
Litigation reserve expense | $ 9,300 | ||||||
Discontinued Operations | |||||||
Discontinued operations | |||||||
Amount of alleged damages | $ 6,500 | ||||||
EES Business | Disposed of by sale | |||||||
Discontinued operations | |||||||
Cash consideration received | $ 31,994 | ||||||
Gain on sale of business | $ 11,420 | $ (486) | |||||
Working capital dispute | $ 922 | ||||||
Amounts recorded in the consolidated financial statements | $ 341 | ||||||
EES Business | Disposed of by sale | Other income, net | |||||||
Discontinued operations | |||||||
Net Sales | $ 0 | $ 38 | |||||
Holdback | Disposed of by sale | |||||||
Discontinued operations | |||||||
Cash consideration received | $ 6,500 | ||||||
Number of remaining contracts | contract | 2 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Short-term investments: | ||
Total short-term investments | $ 17,953 | $ 31,971 |
Long-term investments: | ||
Equity Method Investments. | 9,178 | 7,168 |
Total long-term investments | 10,165 | 12,156 |
Investment in limited partnership fund | ||
Long-term investments: | ||
Equity Method Investments. | 9,178 | 7,168 |
Available-for-sale securities | ||
Short-term investments: | ||
Total short-term investments | 17,953 | 31,971 |
Long-term investments: | ||
Total long-term investments | 987 | 4,988 |
Available-for-sale securities | Municipal securities | ||
Short-term investments: | ||
Total short-term investments | 12,264 | 22,245 |
Long-term investments: | ||
Total long-term investments | 987 | 988 |
Available-for-sale securities | U.S. government securities | ||
Short-term investments: | ||
Total short-term investments | 4,009 | |
Long-term investments: | ||
Total long-term investments | 4,000 | |
Available-for-sale securities | Corporate bonds | ||
Short-term investments: | ||
Total short-term investments | $ 5,689 | $ 5,717 |
Investments - Available For Sal
Investments - Available For Sale Securities (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Available-For-Sale Securities. | ||
Amortized Cost | $ 18,938 | $ 36,953 |
Gross Unrealized Gains | 3 | 9 |
Gross Unrealized Losses | (1) | (3) |
Total | 18,940 | 36,959 |
Municipal securities | ||
Available-For-Sale Securities. | ||
Amortized Cost | 13,249 | 23,227 |
Gross Unrealized Gains | 3 | 8 |
Gross Unrealized Losses | (1) | (2) |
Total | 13,251 | 23,233 |
U.S. government securities | ||
Available-For-Sale Securities. | ||
Amortized Cost | 8,008 | |
Gross Unrealized Gains | 1 | |
Total | 8,009 | |
Corporate bonds | ||
Available-For-Sale Securities. | ||
Amortized Cost | 5,689 | 5,718 |
Gross Unrealized Losses | (1) | |
Total | $ 5,689 | $ 5,717 |
Investments - Available For S_2
Investments - Available For Sale Securities - Amortized Cost and Fair Value (Details) $ in Thousands | Jul. 31, 2021USD ($) |
Amortized cost of available-for-sale securities by contractual maturity | |
Due within one year | $ 17,953 |
Due after one year through five years | 985 |
Total | 18,938 |
Fair value of available-for-sale securities by contractual maturity | |
Due within one year | 17,953 |
Due after one year through five years | 987 |
Total | $ 18,940 |
Fair Value Measurements - (Deta
Fair Value Measurements - (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Fair Value Measurement | ||
Available for sale securities | $ 18,940 | $ 36,959 |
Recurring basis | ||
Fair Value Measurement | ||
Available for sale securities | 18,940 | 36,959 |
Contingent consideration | 6,475 | 5,521 |
Total | 25,415 | 42,480 |
Recurring basis | Significant other observable inputs (Level 2) | ||
Fair Value Measurement | ||
Available for sale securities | 18,940 | 36,959 |
Total | 18,940 | 36,959 |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Fair Value Measurement | ||
Contingent consideration | 6,475 | 5,521 |
Total | $ 6,475 | $ 5,521 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation (Details) - Significant unobservable inputs (Level 3) $ in Thousands | 3 Months Ended |
Jul. 31, 2021USD ($) | |
Reconciliation between beginning and ending balances of items measured at fair value on recurring basis | |
Balance at the beginning of the period | $ 5,521 |
Business acquisition | $ 889 |
Included in selling, general and administrative | us-gaap:SellingGeneralAndAdministrativeExpenses |
Balance at the end of the period | $ 6,475 |
Fair Value Measurements - Pulse
Fair Value Measurements - Pulse purchase agreement (Details) - 3 months ended Jul. 31, 2021 - Maximum € in Thousands, $ in Thousands | USD ($) | EUR (€) |
Pulse Aerospace, LLC | ||
Fair Value Measurement | ||
Total | $ 6,000,000 | |
Telerob | ||
Fair Value Measurement | ||
Additional cash consideration | $ 7,272,000 | € 6,000,000 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Inventories, net | ||
Raw materials | $ 29,537 | $ 23,997 |
Work in process | 20,178 | 13,825 |
Finished goods | 46,809 | 44,113 |
Inventories, gross | 96,524 | 81,935 |
Reserve for inventory excess and obsolescence | (11,672) | (10,289) |
Inventories, net | $ 84,852 | $ 71,646 |
Equity Method Investments (Deta
Equity Method Investments (Details) ¥ in Thousands, $ in Thousands | Aug. 13, 2021USD ($) | Aug. 13, 2021JPY (¥) | Jul. 02, 2021USD ($) | Jul. 02, 2021JPY (¥) | May 29, 2021USD ($) | Jul. 31, 2021USD ($) | Aug. 01, 2020USD ($) | May 29, 2021JPY (¥) | Apr. 30, 2021USD ($) | Dec. 04, 2019USD ($) | Dec. 04, 2019JPY (¥) | May 10, 2019USD ($) | May 10, 2019JPY (¥) | Feb. 09, 2019USD ($) | Feb. 09, 2019JPY (¥) | Feb. 08, 2019 | Jan. 29, 2019USD ($) | Jan. 29, 2019JPY (¥) | May 09, 2018 | Apr. 17, 2018USD ($) | Apr. 17, 2018JPY (¥) | Dec. 27, 2017USD ($) | Dec. 27, 2017JPY (¥) |
Equity Method Investments | |||||||||||||||||||||||
Equity method investment loss, net of tax | $ (1,141) | $ (1,288) | |||||||||||||||||||||
Carrying value of investment | 9,178 | $ 7,168 | |||||||||||||||||||||
HAPSMobile | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Ownership percentage | 7.00% | 7.00% | 5.00% | 5.00% | 10.00% | 10.00% | 5.00% | 5.00% | 5.00% | 10.00% | 5.00% | 5.00% | |||||||||||
Payments for purchase of interest | $ 4,982 | ¥ 540,050 | $ 4,569 | ¥ 500,000 | $ 5,671 | ¥ 632,800 | $ 1,926 | ¥ 209,500 | $ 1,407 | ¥ 150,000 | $ 1,860 | ¥ 210,000 | |||||||||||
HAPSMobile | Equity method investment loss, net of tax | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Equity method investment loss, net of tax | 415 | ||||||||||||||||||||||
HAPSMobile | Equity method investment activity, net of tax | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Equity method investment loss, net of tax | (1,655) | $ (1,008) | |||||||||||||||||||||
HAPSMobile | Other current liabilities | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Carrying value of investment | $ 415 | ||||||||||||||||||||||
HAPSMobile | Other assets, long term | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Carrying value of investment | $ 10,455 | ||||||||||||||||||||||
HAPSMobile | SoftBank | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Ownership percentage | 93.00% | ||||||||||||||||||||||
HAPSMobile | Aerovironment | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Ownership percentage | 7.00% | ||||||||||||||||||||||
MDDA | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Term of MDDA | 5 years | ||||||||||||||||||||||
MDDA | SoftBank | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Maximum value under MDDA | $ 51,200 | ||||||||||||||||||||||
MDDA | HAPSMobile | |||||||||||||||||||||||
Equity Method Investments | |||||||||||||||||||||||
Execution of MDDA | $ 4,600 | ¥ 500,000 | |||||||||||||||||||||
Amount funded | $ 1,638 | ¥ 180,000 | $ 1,195 | ¥ 130,000 |
Equity Methods Investments - In
Equity Methods Investments - Investment in Limited Partnership Fund (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 | |
Equity Method Investments | |||
Equity method investment loss, net of tax | $ (1,141) | $ (1,288) | |
Carrying value of investment | 9,178 | $ 7,168 | |
Limited Partnership Fund | |||
Equity Method Investments | |||
Capital contributions | 1,497 | 1,173 | |
Additional capital contributions | 880 | ||
Limited Partnership Fund | Equity method investment loss, net of tax | |||
Equity Method Investments | |||
Equity method investment loss, net of tax | 514 | $ (280) | |
Limited Partnership Fund | Long term investments | |||
Equity Method Investments | |||
Carrying value of investment | 9,178 | $ 7,168 | |
HAPSMobile | Equity method investment loss, net of tax | |||
Equity Method Investments | |||
Equity method investment loss, net of tax | $ 415 |
Warranty Reserves (Details)
Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Warranty Reserves | ||
Beginning balance | $ 2,341 | $ 2,015 |
Balance acquired from acquisition | 256 | |
Warranty expense | 456 | 451 |
Warranty costs settled | (299) | (435) |
Ending balance | $ 2,754 | $ 2,031 |
Intangibles, net - Intangibles
Intangibles, net - Intangibles included in other assets on the balance sheet (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Apr. 30, 2021 |
Intangibles, net | ||
Intangibles, gross | $ 135,552 | $ 116,872 |
Less accumulated amortization | (17,697) | (10,604) |
Intangibles, net | 117,855 | 106,268 |
Technology | ||
Intangibles, net | ||
Intangibles, gross | 58,178 | 46,850 |
Licenses | ||
Intangibles, net | ||
Intangibles, gross | 1,008 | 1,008 |
Backlog | ||
Intangibles, net | ||
Intangibles, gross | 2,325 | |
Customer relationships | ||
Intangibles, net | ||
Intangibles, gross | 72,998 | 68,073 |
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 | 68 | 68 |
Other | ||
Intangibles, net | ||
Intangibles, gross | $ 105 | $ 3 |
Intangibles, net (Details)
Intangibles, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Intangibles, net | ||
Amortization expense | $ 6,973 | $ 709 |
Weighted average | ||
Intangibles, net | ||
Weighted average amortization period | 5 years | 5 years |
Intangibles, net - Estimated am
Intangibles, net - Estimated amortization expense (Details) $ in Thousands | Apr. 30, 2021USD ($) |
Estimated amortization expense | |
2022 | $ 22,697 |
2023 | 27,719 |
2024 | 26,870 |
2025 | 18,156 |
2026 | 13,114 |
Total | $ 108,556 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Jul. 31, 2021USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 314,205 |
Additions to goodwill | 20,824 |
Goodwill, Ending Balance | 335,029 |
Small UAS | |
Goodwill | |
Goodwill, Beginning Balance | 6,340 |
Goodwill, Ending Balance | 6,340 |
MUAS | |
Goodwill | |
Goodwill, Beginning Balance | 288,611 |
Goodwill, Ending Balance | 288,611 |
All other | |
Goodwill | |
Goodwill, Beginning Balance | 19,254 |
Additions to goodwill | 20,824 |
Goodwill, Ending Balance | $ 40,078 |
Debt - (Details)
Debt - (Details) | Feb. 19, 2021USD ($)payment | Jul. 31, 2021 |
Revolving credit facility | ||
Debt | ||
Additional interest rate if default occurs (as a percentage) | 2.00% | |
Revolving credit facility | London Interbank Offered Rate (LIBOR) | ||
Debt | ||
Interest rate | 1.00% | |
Revolving credit facility | London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt | ||
Interest rate | 1.50% | |
Revolving credit facility | London Interbank Offered Rate (LIBOR) | Maximum | ||
Debt | ||
Interest rate | 2.25% | |
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 | 1.25% | |
Revolving credit facility | Consolidated Leverage Ratio | Minimum | ||
Debt | ||
Interest rate | 3.00% | |
Commitment fees (as a percentage) | 0.20% | |
Revolving credit facility | Consolidated Leverage Ratio | Maximum | ||
Debt | ||
Interest rate | 1.00% | |
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 | 1.00% | |
Revolving credit facility | Arcturus UAV Inc. | ||
Debt | ||
Term of loan | 5 years | |
Amount of loan | $ 100,000,000 | |
Revolving credit facility | Arcturus UAV Inc. | Maximum | ||
Debt | ||
Percentage of outstanding equity interests in foreign subsidiaries | 65.00% | |
Standby Letters of Credit | Arcturus UAV Inc. | ||
Debt | ||
Amount of sublimit | $ 10,000,000 | |
Term loans | Arcturus UAV Inc. | ||
Debt | ||
Amount of loan | $ 200,000,000 | |
Term of amortization | 5 years | |
Term loans | Arcturus UAV Inc. | Period One Through Four | ||
Debt | ||
Amount of annual required payment expressed as a percent of the outstanding obligation | 5.00% | |
Term loans | Arcturus UAV Inc. | Period Five | ||
Debt | ||
Amount of annual required payment expressed as a percent of the outstanding obligation | 80.00% | |
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 ($) | Jul. 31, 2021 | Apr. 30, 2021 |
Long-term debt | ||
Total debt | $ 197,500,000 | |
Less current portion | 10,000,000 | |
Total long-term debt, less current portion | 187,500,000 | |
Less unamortized debt issuance costs | 2,359,000 | |
Total long-term debt, net of unamortized debt issuance costs - term loans | 185,141,000 | $ 187,512,000 |
Term loans | ||
Long-term debt | ||
Total debt | 197,500,000 | |
Revolving credit facility | ||
Long-term debt | ||
Unamortized debt issuance costs - revolving credit facility | $ 2.2 |
Debt - Future principle payment
Debt - Future principle payments (Details) $ in Thousands | Jul. 31, 2021USD ($) |
Future principle payments | |
2022 | $ 7,500 |
2023 | 10,000 |
2024 | 10,000 |
2025 | 10,000 |
2026 | 160,000 |
Total | $ 197,500 |
Leases (Details)
Leases (Details) | 3 Months Ended |
Jul. 31, 2021 | |
Leases | |
Option to extend | true |
Option to terminate | true |
Option to terminate period (in years) | 2 years |
Minimum | |
Leases | |
Remaining lease terms (in years) | 1 year |
Maximum | |
Leases | |
Remaining lease terms (in years) | 6 years |
Option to extend period (in years) | 10 years |
Leases - Components of lease co
Leases - Components of lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Components of lease costs | ||
Operating lease cost | $ 1,677 | $ 1,190 |
Short term lease cost | 252 | 110 |
Variable lease cost | 102 | 1 |
Sublease income | (44) | (38) |
Total lease costs, net | $ 1,987 | $ 1,263 |
Leases - Supplemental lease inf
Leases - Supplemental lease information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Leases | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,763 | $ 1,400 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 6,310 | $ 5,883 |
Weighted average remaining lease term | 70 months | 46 months |
Weighted average discount rate | 3.40% | 3.40% |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) $ in Thousands | Jul. 31, 2021USD ($) |
Maturities of operating lease liabilities: | |
2022 | $ 4,939 |
2023 | 6,312 |
2024 | 5,610 |
2025 | 4,659 |
2026 | 3,394 |
Thereafter | 8,025 |
Total lease payments | 32,939 |
Less: imputed interest | (3,144) |
Total present value of operating lease liabilities | $ 29,795 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income and Reclassifications Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Accumulated other comprehensive loss | ||
Beginning Balance | $ 343 | |
Unrealized loss on available-for-sale investments, net of deferred tax benefit of $0 and $4 for the three months ended July 31, 2021 and August 1, 2020, respectively | (4) | $ (52) |
Change in foreign currency translation adjustments | (733) | 75 |
Ending Balance | (394) | |
Accumulated Other Comprehensive Income | ||
Accumulated other comprehensive loss | ||
Beginning Balance | 343 | 328 |
Unrealized loss on available-for-sale investments, net of deferred tax benefit of $0 and $4 for the three months ended July 31, 2021 and August 1, 2020, respectively | (4) | (52) |
Change in foreign currency translation adjustments | (733) | 75 |
Ending Balance | $ (394) | $ 351 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income and Reclassifications Adjustments - Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 | Apr. 30, 2020 | |
Accumulated other comprehensive loss | ||||
Unrealized losses, tax portion | $ 0 | $ 4 | ||
Accumulated Other Comprehensive Income | ||||
Accumulated other comprehensive loss | ||||
Other comprehensive income, tax | $ 1 | $ 4 | $ 1 | $ 0 |
Customer-Funded Research & De_2
Customer-Funded Research & Development (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Customer-Funded Research & Development | ||
Revenue from customer funded research and development | $ 16,911 | $ 23,426 |
Long-Term Incentive Awards (Det
Long-Term Incentive Awards (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 | |
Fiscal 2022 LTIP | |||
Stock Based Compensation | |||
Stock based compensation expense | $ 308,000 | $ 0 | |
Fiscal 2022 LTIP | Performance based restricted stock units | |||
Stock Based Compensation | |||
Stock based compensation expense | $ 13,314,000 | ||
Fiscal 2022 LTIP | Performance based restricted stock units | 100% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 100.00% | ||
Fiscal 2022 LTIP | Performance based restricted stock units | 50% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 50.00% | ||
Fiscal 2022 LTIP | Performance based restricted stock units | 250% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 250.00% | ||
Fiscal 2021 LTIP | Performance based restricted stock units | |||
Stock Based Compensation | |||
Stock based compensation expense | $ 65,000 | $ 91,000 | |
Exercisable period from grant date | 3 years | ||
Fiscal 2021 LTIP | Performance based restricted stock units | 100% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 100.00% | ||
Fiscal 2021 LTIP | Performance based restricted stock units | 50% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 50.00% | ||
Fiscal 2021 LTIP | Performance based restricted stock units | 250% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 250.00% | ||
Fiscal 2021 LTIP | Performance based restricted stock units | Maximum | |||
Stock Based Compensation | |||
Stock based compensation expense | 7,337,000 | ||
Fiscal 2020 LTIP | Performance based restricted stock units | |||
Stock Based Compensation | |||
Exercisable period from grant date | 3 years | ||
Fiscal 2020 LTIP | Performance based restricted stock units | 100% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 100.00% | ||
Fiscal 2020 LTIP | Performance based restricted stock units | 50% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 50.00% | ||
Fiscal 2020 LTIP | Performance based restricted stock units | 200% Vested | |||
Stock Based Compensation | |||
Vesting (as a percentage) | 200.00% | ||
Fiscal 2020 LTIP | Performance based restricted stock units | Maximum | |||
Stock Based Compensation | |||
Stock based compensation expense | 3,983,000 | ||
Fiscal 2019 LTIP | Performance based restricted stock units | |||
Stock Based Compensation | |||
Exercisable period from grant date | 3 years | ||
Fiscal 2018 LTIP | Performance based restricted stock units | |||
Stock Based Compensation | |||
Stock based compensation expense | $ 0 | $ 75,000 | |
Issue of fully-vested shares of common stock to settle | 12,101 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Income taxes | ||
(Benefit from) provision for income taxes | $ (957) | $ 1,207 |
Effective tax benefit rate (as a percent) | 7.00% | 9.60% |
Share Repurchase (Details)
Share Repurchase (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 | Sep. 30, 2015 | |
Share Repurchase | ||||
Stock Repurchase Program, Authorized Amount | $ 25,000 | |||
Shares repurchased and retired | 0 | 0 | ||
Share authorized for future repurchases | $ 21,200 | $ 21,200 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 | |
Long-Term Incentive Awards | |||
Revenue | $ 10,352 | $ 16,386 | |
Unbilled related party receivables | 5,568 | $ 544 | |
HAPSMobile | Design and Development Agreement | |||
Long-Term Incentive Awards | |||
Maximum net value | 185,202 | ||
Revenue | 10,352 | $ 16,386 | |
Unbilled related party receivables | 5,568 | $ 544 | |
SoftBank | Design and Development Agreement | |||
Long-Term Incentive Awards | |||
Maximum net value | $ 51,200 |
Business Acquisitions - Telerob
Business Acquisitions - Telerob (Details) € in Thousands, $ in Thousands | May 03, 2021USD ($) | May 03, 2021EUR (€) | Jul. 31, 2021USD ($) | Aug. 01, 2020USD ($) | Apr. 30, 2021USD ($) | May 03, 2021EUR (€) |
Business Acquisitions | ||||||
Number of months until escrow will be release | 30 months | 30 months | ||||
Fair value of assets acquired: | ||||||
Goodwill | $ 335,029 | $ 314,205 | ||||
Telerob [Member] | ||||||
Business Acquisitions | ||||||
Total paid | $ 45,400 | € 37,455 | ||||
Amount held in escrow | 3,636 | € 3,000 | ||||
Amount of indebtedness paid | 9,468 | 7,811 | ||||
Fair value of assets acquired: | ||||||
Unbilled receivable | 829 | |||||
Prepaid and other current assets | 314 | |||||
Operating lease assets | (1,508) | |||||
Other assets | 154 | |||||
Other intangible asset | 102 | |||||
Goodwill | 21,140 | |||||
Total assets acquired | 60,637 | |||||
Fair value of liabilities assumed: | ||||||
Accounts payable | 1,136 | |||||
Wages and related accruals | 560 | |||||
Current operating lease liabilities | 361 | |||||
Customer advances | 1,243 | |||||
Other current liabilities | 3,310 | |||||
Non-current operating lease liabilities | 1,147 | |||||
Other non-current liabilities | 224 | |||||
Deferred income taxes, net | 5,617 | |||||
Total liabilities assumed | 13,598 | |||||
Total identifiable net assets | 47,039 | |||||
Fair value of consideration transferred: | ||||||
Cash consideration, net of cash acquired | 46,150 | |||||
Equity consideration | 889 | |||||
Total | 47,039 | |||||
Supplemental Pro Forma Information (unaudited) | ||||||
Revenue | $ 95,143 | 101,009 | ||||
Net income (loss) | $ 8,856 | $ (12,298) | ||||
SG&A | Telerob [Member] | ||||||
Business Acquisitions | ||||||
Acquisition-related costs | $ 411 | |||||
Technology | Telerob [Member] | ||||||
Fair value of assets acquired: | ||||||
Accounts receivable | 1,045 | |||||
Intangible assets | 11,500 | |||||
Backlog | Telerob [Member] | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | 2,400 | |||||
Customer relationships | Telerob [Member] | ||||||
Fair value of assets acquired: | ||||||
Intangible assets | 5,000 | |||||
In-process research and development | Telerob [Member] | ||||||
Fair value of assets acquired: | ||||||
Inventories, net | 15,074 | |||||
Non-compete agreements | Telerob [Member] | ||||||
Fair value of assets acquired: | ||||||
Property and equipment, net | 1,571 | |||||
Business Combination, Specific Revenue Targets Achieved In First Earnout Year [Member] | Telerob [Member] | ||||||
Business Acquisitions | ||||||
Contingent consideration paid | $ 2,424 | € 2,000 | ||||
Period to obtain target | 12 months | 12 months | ||||
Business Combination, Specific Revenue Targets Achieved Following The First Earnout Year [Member] | Telerob [Member] | ||||||
Business Acquisitions | ||||||
Contingent consideration paid | $ 2,424 | € 2,000 | ||||
Period to obtain target | 12 months | 12 months | ||||
Business Combination, Specific Awards Or Orders From US Military Are Achieved Prior To 36 Month Post Closing Period [Member] | Telerob [Member] | ||||||
Business Acquisitions | ||||||
Contingent consideration paid | $ 2,424 | € 2,000 | ||||
Period to obtain target | 36 months | 36 months |
Business Acquisitions - Arcturu
Business Acquisitions - Arcturus (Details) - USD ($) | Feb. 19, 2021 | Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 |
Fair value of assets acquired: | ||||
Goodwill | $ 335,029,000 | $ 314,205,000 | ||
Arcturus UAV Inc. | ||||
Business Acquisitions | ||||
Total | $ 422,602,000 | |||
Cash on hand | 150,218,000 | |||
Value of shares issued | $ 72,384,000 | |||
Fair market value of shares issued | $50,000,000 | |||
Amount of representation and warranty insurance coverage | $ 40,000,000 | |||
Acquisition-related costs | 1,384,000 | $ 0 | ||
Fair value of assets acquired: | ||||
Accounts receivable | 6,050,000 | |||
Unbilled receivable | 4,176,000 | |||
Inventories, net | 21,701,000 | |||
Prepaid and other current assets | 3,076,000 | |||
Property and equipment, net | 38,739,000 | |||
Operating lease assets | 11,429,000 | |||
Other assets | 136,000 | |||
Goodwill | 288,611,000 | |||
Total assets acquired | 457,118,000 | |||
Fair value of liabilities assumed: | ||||
Accounts payable | 3,085,000 | |||
Wages and related accruals | 1,698,000 | |||
Customer advances | 1,818,000 | |||
Other current liabilities | 8,534,000 | |||
Operating lease liabilities | 12,297,000 | |||
Other non-current liabilities | 1,190,000 | |||
Deferred income taxes, net | 5,869,000 | |||
Total liabilities assumed | 34,491,000 | |||
Total identifiable net assets | 422,627,000 | |||
Fair value of consideration transferred: | ||||
Cash consideration, net of cash acquired | 350,243,000 | |||
Equity consideration | 72,384,000 | |||
Total paid | 422,627,000 | |||
Supplemental Pro Forma Information (unaudited) | ||||
Revenue | 112,567,000 | |||
Net income (loss) | $ 16,859,000 | |||
Arcturus UAV Inc. | Technology | ||||
Fair value of assets acquired: | ||||
Intangible assets | 20,500,000 | |||
Arcturus UAV Inc. | Customer relationships | ||||
Fair value of assets acquired: | ||||
Intangible assets | 62,700,000 | |||
Arcturus UAV Inc. | Adjustment Escrow | ||||
Business Acquisitions | ||||
Amount held in escrow | 6,500,000 | 6,500,000 | ||
Amount of post-closing adjustments | $ 509,000 | |||
Arcturus UAV Inc. | Indemnification Escrow | ||||
Business Acquisitions | ||||
Amount held in escrow | 1,822,500 | |||
Term loans | Arcturus UAV Inc. | ||||
Business Acquisitions | ||||
Amount of loan | $ 200,000,000 |
Business Acquisitions - ISG (De
Business Acquisitions - ISG (Details) - USD ($) $ in Thousands | Feb. 23, 2021 | Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 |
Business Acquisitions | ||||
Goodwill | $ 335,029 | $ 314,205 | ||
Intelligent Systems Group | ||||
Business Acquisitions | ||||
Total | $ 29,700 | |||
Contingent consideration paid | 6,000 | |||
Acquisition-related costs | $ 651 | $ 0 | ||
Other assets | 217 | |||
Goodwill | 19,254 | |||
Total assets acquired | 35,371 | |||
Fair value of consideration transferred: | ||||
Cash | 29,700 | |||
Holdback | 150 | |||
Contingent consideration | 5,521 | |||
Total paid | 35,371 | |||
Supplemental Pro Forma Information (unaudited) | ||||
Revenue | 90,333 | |||
Net income (loss) | $ 10,386 | |||
Intelligent Systems Group | Technology | ||||
Business Acquisitions | ||||
Intangible assets | 11,400 | |||
Intelligent Systems Group | Customer relationships | ||||
Business Acquisitions | ||||
Intangible assets | $ 4,500 |
Business Acquisitions - Pulse (
Business Acquisitions - Pulse (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Apr. 30, 2021 | |
Business Acquisitions | |||
Holdback and retention payments | $ 5,991 | ||
Business Combinations, Assets Acquired and Liabilities Assumed at Acquisition Date | |||
Goodwill | 335,029 | $ 314,205 | |
Supplemental Pro forma Information | |||
Amortization of Intangible Assets | 6,973 | $ 709 | |
Pulse Aerospace, LLC | Maximum | |||
Fair value of consideration transferred: | |||
Cash | $ 6,000,000 |
Pension (Details)
Pension (Details) - Pension Plan | Jul. 31, 2021 | May 03, 2021 |
Pension | ||
Discount rate assumption | 1.00% | 1.00% |
Pension increasefor in-payment benefits | 1.50% | 1.50% |
Pension - Projected benefit obl
Pension - Projected benefit obligation and fair value of plan assets (Details) $ in Thousands | May 03, 2021USD ($) |
Pension | |
Defined Benefit Plan, Funding Status [Extensible List] | us-gaap:UnfundedPlanMember |
Pension Plan | |
Pension | |
Projected benefit obligation | $ (4,126) |
Fair value of plan assets | 3,951 |
Unfunded status of plan | $ (175) |
Pension - Expected benefits pai
Pension - Expected benefits paid (Details) $ in Thousands | May 03, 2021USD ($) |
Pension | |
2022 | $ 182 |
2023 | 183 |
2024 | 183 |
2025 | 184 |
2026 | 184 |
2027-2031 | 920 |
Total expected benfit payments | $ 1,836 |
Pension - Net benefit income (D
Pension - Net benefit income (Details) $ in Thousands | 3 Months Ended |
Jul. 30, 2021USD ($) | |
Pension | |
Expected return on plan assets | $ 32 |
Interest cost | (15) |
Net benefit income | $ (49) |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 30, 2021 | Apr. 30, 2021 | |
Segments | ||||
Gross margin | $ 28,723 | $ 35,411 | ||
Income (loss) from operations | (12,113) | 12,297 | ||
Total assets | 908,553 | $ 928,566 | ||
Product segments | ||||
Segments | ||||
Revenue | 101,009 | 87,450 | ||
Gross margin | 28,723 | 35,411 | ||
Income (loss) from operations | (12,113) | 12,297 | ||
Acquisition-related costs | 3,254 | |||
Amortization of acquired intangible assets and other purchase accounting adjustments | 9,124 | 661 | ||
Adjusted income (loss) from operations | 265 | 12,958 | ||
Total assets | $ 908,553 | 928,566 | ||
Small UAS | Product segments | ||||
Segments | ||||
Revenue | 39,924 | 56,202 | ||
Gross margin | 16,920 | 27,483 | ||
Income (loss) from operations | 1,958 | 15,197 | ||
Acquisition-related costs | 424 | |||
Amortization of acquired intangible assets and other purchase accounting adjustments | 707 | 661 | ||
Adjusted income (loss) from operations | 3,089 | 15,858 | ||
Total assets | 94,332 | 113,072 | ||
TMS | Product segments | ||||
Segments | ||||
Revenue | 19,176 | 9,534 | ||
Gross margin | 5,989 | 1,920 | ||
Income (loss) from operations | (463) | (4,145) | ||
Acquisition-related costs | 251 | |||
Adjusted income (loss) from operations | (212) | (4,145) | ||
Total assets | 75,837 | 71,707 | ||
MUAS | Product segments | ||||
Segments | ||||
Revenue | 22,379 | |||
Gross margin | 3,181 | |||
Income (loss) from operations | (6,381) | |||
Acquisition-related costs | 1,384 | |||
Amortization of acquired intangible assets and other purchase accounting adjustments | 5,191 | |||
Adjusted income (loss) from operations | 194 | |||
Total assets | 398,686 | 402,037 | ||
All other | Product segments | ||||
Segments | ||||
Revenue | 19,530 | 21,714 | ||
Gross margin | 2,633 | 6,008 | ||
Income (loss) from operations | (7,227) | 1,245 | ||
Acquisition-related costs | 1,195 | |||
Amortization of acquired intangible assets and other purchase accounting adjustments | 3,226 | |||
Adjusted income (loss) from operations | $ (2,806) | $ 1,245 | ||
Total assets | 101,775 | 39,581 | ||
Corporate | Product segments | ||||
Segments | ||||
Total assets | $ 237,923 | $ 302,169 |