AeroVironment Inc 10-K

Item 8. Financial Statements and Supplementary Dat a. ​ AeroVironment, Inc. Audited Consolidated Financial Statements Index to Consolidated Financial Statements and Supplementary Data ​ ​ Page Reports of Independent Registered Public Accounting Firms ​ 70 ​ Consolidated Balance Sheets at April 30, 2021 and 2020 ​ 74 ​ Consolidated Statements of Income for the Years Ended April 30, 2021, 2020 and 2019 ​ 75 ​ Consolidated Statements of Comprehensive Income for the Years Ended April 30, 2021, 2020 and 2019 ​ 76 ​ Consolidated Statements of Stockholders’ Equity for the Years Ended April 30, 2021, 2020 and 2019 ​ 77 ​ Consolidated Statements of Cash Flows for the Years Ended April 30, 2021, 2020 and 2019 ​ 78 ​ Notes to Consolidated Financial Statements ​ 79 ​ Quarterly Results of Operations (Unaudited) ​ 117 ​ Supplementary Data ​ ​ ​ Financial Statement Schedule : Schedule II—Valuation and Qualifying Accounts ​ 118 ​ ​ All other schedules are omitted because they are not applicable, not required or the information required is included in the Consolidated Financial Statements, including the notes thereto. ​ ​ 69 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ ​ To the Stockholders and the Board of Directors of AeroVironment, Inc. ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of AeroVironment, Inc. (the "Company") as of April 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the two years in the period ended April 30, 2021, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2021, in conformity with accounting principles generally accepted in the United States of America. ​ We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 29, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting. ​ Change in Accounting Principle ​ As discussed in Note 1 to the financial statements, the Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842), and all related amendments to Accounting Standard Codification 842, Leases, on May 1, 2019. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters ​ The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. ​ 70 Table of Contents Revenue Recognition - Refer to Note 1 to the financial statements ​ Critical Audit Matter Description ​ 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. The Company’s performance obligations under these contractual agreements 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. 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 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 reasonable margin approach. As of April 30, 2021, revenue was $394.9 million, of which 43% relates to revenue recognized over time. ​ We identified the assumptions related to estimating total costs and profit to be a critical audit matter given the inherent judgement involved in estimating the total costs including labor, materials, subcontractors’ costs, other direct costs and indirect costs. Auditing such estimates of total costs and profit required extensive audit effort and a high degree of auditor judgment. ​ How the Critical Audit Matter Was Addressed in the Audit ​ Our audit procedures related to management’s estimates of total costs and profit for the performance obligations used to recognize revenue for certain performance obligations accounted for over time included the following, among others: ​ ● We tested the effectiveness of controls for over time revenue, including management’s controls over the estimates of total costs and profit for performance obligations. ​ ● We tested the amount of over time revenue recorded by developing an expectation for the amount based on historical profit as a percentage of costs incurred and comparing our expectation to the amount recorded by management. ​ ● We selected a sample of contracts with customers and performed the following: ​ o Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers. ​ o Tested the accuracy and completeness of the costs incurred to date for the performance obligation. ​ o Evaluated the estimates of total cost and profit for the performance obligation by: ​ ◾ Observing the work sites and inspecting the progress to completion. ​ ◾ Evaluating management’s ability to achieve the estimates of total costs and profit by performing corroborating inquiries with the Company’s project managers and engineers, and comparing the estimates to management’s work plans, engineering specifications, and supplier contracts. ​ ◾ Comparing management’s estimates for the selected contracts to costs and profits of similar performance obligations, when applicable. ​ ● We evaluated management’s ability to estimate total costs and profits accurately by comparing actual costs and profits to management’s historical estimates for performance obligations that have been fulfilled. ​ 71 Table of Contents Business Acquisitions – Refer to Note 21 to the financial statements ​ Critical Audit Matter Description ​ On February 19, 2021, the Company closed its acquisition of Arcturus for total consideration of approximately $422.6 million, net of cash acquired. Additionally, on February 23, 2021 the Company purchased certain assets of, and assumed certain liabilities of, ISG for total consideration of approximately $35.4 million, which includes the Company’s estimate of contingent consideration of $5.5 million based on the achievement of certain revenue targets by ISG during the 3 years following closing. The Company accounted for the acquisitions under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, resulting in technology of $31.9 million, customer relationships of $67.2 million and goodwill of $307.9 million. Management estimated the fair value of the intangible assets using discounted cash flow analyses, which were based on the Company’s best 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. Determining the fair value of the intangible assets acquired required significant judgment, including the amount and timing of expected future cash flows and the selected discount rates. ​ We identified the assumptions related to estimating the amount and timing of expected future cash flows and discount rates to be a critical audit matter given the inherent judgment involved in estimating these amounts. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. ​ How the Critical Audit Matter Was Addressed in the Audit ​ Our audit procedures applied to the amount and timing of expected future cash flows and the selection of the discount rates for intangibles included the following, among others: ​ ● We tested the effectiveness of controls over the valuation of intangibles, including management’s controls over the amount and timing of expected future cash flows and the selection of discount rates. ​ ● We assessed the reasonableness of management’s forecasts of future cash flows by performing inquiries of appropriate individuals outside of the finance organization, comparing the projections to historical results, contractual agreements, certain peer companies, third-party industry forecasts, and internal communications to management and board of directors. ​ ● With the assistance of our fair value specialists, we evaluated the reasonableness of (1) the valuation methodology and (2) the discount rates utilized, including testing the source information underlying the determination of the discount rates, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rates selected by management. ​ ● We evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit. ​ /s/ Deloitte & Touche LLP ​ Los Angeles, California June 29, 2021 ​ We have served as the Company’s auditor since fiscal 2020. ​ 72 Table of Contents Report of Independent Registered Public Accounting Firm ​ ​ To the Stockholders and the Board of Directors of AeroVironment, Inc. and subsidiaries ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows of AeroVironment, Inc. and subsidiaries (the Company) for the year ended April 30, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended April 30, 2019, in conformity with U.S. generally accepted accounting principles. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ​ ​ ​ /s/ Ernst & Young LLP ​ We served as the Company’s auditor from 1999 to 2019. Los Angeles, California June 25, 2019 ​ ​ 73 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED BALANCE SHEET S (In thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ 2021 ​ 2020 ​ Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 148,741 ​ $ 255,142 ​ Short-term investments ​ ​ 31,971 ​ ​ 47,507 ​ Accounts receivable, net of allowance for doubtful accounts of $ 595 at April 30, 2021 and $ 1,190 at April 30, 2020 ​ 62,647 ​ 73,660 ​ Unbilled receivables and retentions (inclusive of related party unbilled receivables of $ 544 at April 30, 2021 and $ 15,779 at April 30, 2020) ​ 71,632 ​ 75,837 ​ Inventories ​ 71,646 ​ 45,535 ​ Prepaid expenses and other current assets ​ 15,001 ​ 6,246 ​ Total current assets ​ 401,638 ​ 503,927 ​ Long-term investments ​ ​ 12,156 ​ ​ 15,030 ​ Property and equipment, net ​ 58,896 ​ 21,694 ​ Operating lease right-of-use assets ​ ​ 22,902 ​ ​ 8,793 ​ Deferred income taxes ​ 2,061 ​ 4,928 ​ Intangibles, net ​ ​ 106,268 ​ ​ 13,637 ​ Goodwill ​ ​ 314,205 ​ ​ 6,340 ​ Other assets ​ 10,440 ​ 10,605 ​ Total assets ​ $ 928,566 ​ $ 584,954 ​ Liabilities and stockholders’ equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 24,841 ​ $ 19,859 ​ Wages and related accruals ​ 28,068 ​ 23,972 ​ Customer advances ​ 7,183 ​ 7,899 ​ Current portion of long-term debt ​ ​ 10,000 ​ ​ — ​ Current operating lease liabilities ​ ​ 6,154 ​ ​ 3,380 ​ Income taxes payable ​ ​ 861 ​ ​ 1,065 ​ Other current liabilities ​ 19,078 ​ 10,778 ​ Total current liabilities ​ 96,185 ​ 66,953 ​ Long-term debt, net of current portion ​ ​ 187,512 ​ ​ — ​ Non-current operating lease liabilities ​ ​ 19,103 ​ ​ 6,833 ​ Other non-current liabilities ​ ​ 10,141 ​ ​ 250 ​ Liability for uncertain tax positions ​ 3,518 ​ 1,017 ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.0001 par value: ​ ​ ​ ​ ​ ​ ​ Authorized shares— 10,000,000 ; none issued or outstanding at April 30, 2021 and April 30, 2020 ​ — ​ — ​ Common stock, $ 0.0001 par value: ​ ​ ​ ​ ​ ​ ​ Authorized shares— 100,000,000 ​ ​ ​ ​ ​ ​ ​ Issued and outstanding shares— 24,777,295 shares at April 30, 2021 and 24,063,639 shares at April 30, 2020 ​ 2 ​ 2 ​ Additional paid-in capital ​ 260,327 ​ 181,481 ​ Accumulated other comprehensive income ​ 343 ​ 328 ​ Retained earnings ​ 351,421 ​ 328,090 ​ Total AeroVironment, Inc. stockholders’ equity ​ 612,093 ​ 509,901 ​ Noncontrolling interest ​ ​ 14 ​ ​ — ​ Total equity ​ ​ 612,107 ​ ​ 509,901 ​ Total liabilities and stockholders’ equity ​ $ 928,566 ​ $ 584,954 ​ ​ See accompanying notes to consolidated financial statements. 74 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF INCOM E (In thousands except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2021 2020 2019 ​ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 278,888 ​ $ 256,758 ​ $ 212,089 ​ Contract services (inclusive of related party revenue of $ 42,426 , $ 60,864 and $ 55,407 for the years ended April 30, 2021, 2020, and 2019, respectively) ​ 116,024 ​ 110,538 ​ 102,185 ​ ​ ​ 394,912 ​ 367,296 ​ 314,274 ​ Cost of sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ 149,714 ​ 139,131 ​ 113,489 ​ Contract services ​ 80,640 ​ 75,063 ​ 72,382 ​ ​ ​ 230,354 ​ 214,194 ​ 185,871 ​ Gross margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ ​ 129,174 ​ ​ 117,627 ​ ​ 98,600 ​ Contract services ​ ​ 35,384 ​ ​ 35,475 ​ ​ 29,803 ​ ​ ​ 164,558 ​ 153,102 ​ 128,403 ​ Selling, general and administrative ​ 67,481 ​ 59,490 ​ 60,343 ​ Research and development ​ 53,764 ​ 46,477 ​ 34,234 ​ Income from continuing operations ​ 43,313 ​ 47,135 ​ 33,826 ​ Other income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest (expense) income, net ​ ( 618 ) ​ 4,828 ​ 4,672 ​ Other (expense) income, net ​ ( 8,330 ) ​ 707 ​ 11,980 ​ Income before income taxes ​ 34,365 ​ 52,670 ​ 50,478 ​ Provision for income taxes ​ ​ 539 ​ 5,848 ​ 4,641 ​ Equity method investment loss, net of tax ​ ( 10,481 ) ​ ( 5,487 ) ​ ( 3,944 ) ​ Net income from continuing operations ​ ​ 23,345 ​ ​ 41,335 ​ ​ 41,893 ​ Discontinued operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) gain on sale of business, net of tax (benefit) expense of $( 76 ) and $ 2,444 for the year ended April 30, 2020 and April 30, 2019, respectively ​ ​ — ​ ​ ( 265 ) ​ ​ 8,490 ​ Loss from discontinued operations, net of tax ​ ​ — ​ ​ — ​ ​ ( 2,964 ) ​ Net (loss) income from discontinued operations ​ ​ — ​ ​ ( 265 ) ​ 5,526 ​ Net income ​ ​ 23,345 ​ ​ 41,070 ​ ​ 47,419 ​ Net (income) loss attributable to noncontrolling interest ​ ​ ( 14 ) ​ ​ 4 ​ ​ 19 ​ Net income attributable to AeroVironment, Inc. ​ $ 23,331 ​ $ 41,074 ​ $ 47,438 ​ Net income (loss) per share attributable to AeroVironment, Inc.—Basic ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations ​ $ 0.97 ​ $ 1.74 ​ $ 1.77 ​ Discontinued operations ​ ​ — ​ ​ ( 0.01 ) ​ ​ 0.23 ​ Net income per share attributable to AeroVironment, Inc.—Basic ​ $ 0.97 ​ $ 1.73 ​ $ 2.00 ​ Net income (loss) per share attributable to AeroVironment, Inc.—Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations ​ $ 0.96 ​ $ 1.72 ​ $ 1.74 ​ Discontinued operations ​ ​ — ​ ​ ( 0.01 ) ​ ​ 0.23 ​ Net income per share attributable to AeroVironment, Inc.—Diluted ​ $ 0.96 ​ $ 1.71 ​ $ 1.97 ​ Weighted-average shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 24,049,851 ​ 23,806,208 ​ 23,663,410 ​ Diluted ​ 24,362,656 ​ 24,088,167 ​ 24,071,713 ​ ​ See accompanying notes to consolidated financial statements. ​ 75 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOM E (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2021 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 23,345 ​ $ 41,070 ​ $ 47,419 ​ Other comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized (loss) gain on investments, net of deferred tax expense of $ 1 , $ 14 and $ 51 for the fiscal years ended 2021, 2020 and 2019, respectively ​ ( 60 ) ​ 50 ​ 57 ​ Change in foreign currency translation adjustments ​ ​ 75 ​ ​ 276 ​ ​ ( 34 ) ​ Total comprehensive income ​ ​ 23,360 ​ ​ 41,396 ​ ​ 47,442 ​ Net (income) loss attributable to noncontrolling interest ​ ​ ( 14 ) ​ ​ 4 ​ ​ 19 ​ Comprehensive income attributable to AeroVironment, Inc. ​ $ 23,346 ​ $ 41,400 ​ $ 47,461 ​ ​ See accompanying notes to consolidated financial statements. ​ 76 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUIT Y (In thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ Non- ​ ​ ​ ​ ​ Common Stock ​ Paid-In ​ Retained ​ Comprehensive ​ AeroVironment, Inc. ​ Controlling ​ ​ ​ ​ Shares Amount Capital Earnings (Loss) Income Equity Interest Total Balance at April 30, 2018 23,908,736 ​ 2 ​ 170,139 ​ 238,913 ​ ( 21 ) ​ ​ 409,033 ​ ​ 23 ​ 409,056 ​ Net income (loss) — ​ — ​ — ​ 47,438 ​ — ​ ​ 47,438 ​ ​ ( 19 ) ​ 47,419 ​ Unrealized gain on investments — ​ — ​ — ​ — ​ 57 ​ ​ 57 ​ ​ — ​ 57 ​ Foreign currency translation ​ — ​ — ​ — ​ — ​ ( 34 ) ​ ​ ( 34 ) ​ ​ — ​ ( 34 ) ​ Stock options exercised 12,725 ​ — ​ 71 ​ — ​ ​ — ​ ​ 71 ​ ​ — ​ 71 ​ Restricted stock awards 57,476 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Restricted stock awards forfeited ( 18,023 ) ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Tax withholding payment related to net share settlement of equity awards ​ ( 14,621 ) ​ — ​ ( 1,094 ) ​ — ​ ​ — ​ ​ ( 1,094 ) ​ ​ — ​ ( 1,094 ) ​ Stock-based compensation — ​ — ​ 7,100 ​ — ​ ​ — ​ ​ 7,100 ​ ​ — ​ 7,100 ​ Balance at April 30, 2019 23,946,293 ​ 2 ​ 176,216 ​ 286,351 ​ 2 ​ ​ 462,571 ​ ​ 4 ​ 462,575 ​ Adoption of ASU 2018-09 ​ — ​ — ​ — ​ 665 ​ — ​ ​ 665 ​ ​ — ​ 665 ​ Net income (loss) — ​ — ​ — ​ 41,074 ​ — ​ ​ 41,074 ​ ​ ( 4 ) ​ 41,070 ​ Unrealized gain on investments — ​ — ​ — ​ — ​ 50 ​ ​ 50 ​ ​ — ​ 50 ​ Foreign currency translation ​ — ​ — ​ — ​ — ​ 276 ​ ​ 276 ​ ​ — ​ 276 ​ Stock options exercised 16,189 ​ — ​ 100 ​ — ​ ​ — ​ ​ 100 ​ ​ — ​ 100 ​ Restricted stock awards 131,991 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Restricted stock awards forfeited ( 12,541 ) ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Tax withholding payment related to net share settlement of equity awards ( 18,293 ) ​ — ​ ( 1,062 ) ​ — ​ ​ — ​ ​ ( 1,062 ) ​ ​ — ​ ( 1,062 ) ​ Stock-based compensation — ​ — ​ 6,227 ​ — ​ ​ — ​ ​ 6,227 ​ ​ — ​ 6,227 ​ Balance at April 30, 2020 24,063,639 ​ ​ 2 ​ ​ 181,481 ​ ​ 328,090 ​ ​ 328 ​ ​ 509,901 ​ ​ — ​ ​ 509,901 ​ Net income — ​ — ​ — ​ 23,331 ​ — ​ ​ 23,331 ​ ​ 14 ​ 23,345 ​ Unrealized loss on investments — ​ — ​ — ​ — ​ ( 60 ) ​ ​ ( 60 ) ​ ​ — ​ ( 60 ) ​ Foreign currency translation ​ — ​ — ​ — ​ — ​ 75 ​ ​ 75 ​ ​ — ​ 75 ​ Stock options exercised 53,500 ​ — ​ 1,522 ​ — ​ ​ — ​ ​ 1,522 ​ ​ — ​ 1,522 ​ Restricted stock awards 117,468 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Restricted stock awards forfeited ( 5,509 ) ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Business acquisition ​ 573,794 ​ ​ — ​ ​ 72,384 ​ ​ — ​ ​ — ​ ​ 72,384 ​ ​ — ​ ​ 72,384 ​ Tax withholding payment related to net share settlement of equity awards ( 25,597 ) ​ — ​ ( 1,992 ) ​ — ​ ​ — ​ ​ ( 1,992 ) ​ ​ — ​ ( 1,992 ) ​ Stock based compensation — ​ — ​ 6,932 ​ — ​ ​ — ​ ​ 6,932 ​ ​ — ​ 6,932 ​ Balance at April 30, 2021 24,777,295 ​ $ 2 ​ $ 260,327 ​ $ 351,421 ​ $ 343 ​ $ 612,093 ​ $ 14 ​ $ 612,107 ​ ​ See accompanying notes to consolidated financial statements. ​ 77 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOW S (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2021 2020 2019 Operating activities ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 23,345 ​ $ 41,070 ​ $ 47,419 ​ Loss (gain) on sale of business, net of tax ​ ​ — ​ ​ 265 ​ ​ ( 8,490 ) ​ Loss from discontinued operations, net of tax ​ ​ — ​ ​ — ​ ​ 2,964 ​ Net income from continuing operations ​ ​ 23,345 ​ ​ 41,335 ​ ​ 41,893 ​ Adjustments to reconcile net income from continuing operations to cash provided by operating activities from continuing operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 19,262 ​ ​ 9,888 ​ ​ 7,669 ​ Losses from equity method investments, net ​ ​ 10,481 ​ ​ 5,487 ​ ​ 3,944 ​ Amortization of debt issuance costs ​ ​ 145 ​ ​ — ​ ​ — ​ Realized gain from sale of available-for-sale investments ​ ​ ( 11 ) ​ ​ ( 180 ) ​ ​ — ​ Impairment of long-lived assets ​ ​ — ​ ​ — ​ ​ 4,398 ​ Provision for doubtful accounts ​ ​ ( 114 ) ​ ​ 388 ​ ​ ( 39 ) ​ Other non-cash gain, net ​ ​ ( 449 ) ​ ​ ( 703 ) ​ ​ — ​ Non-cash lease expense ​ ​ 5,150 ​ ​ 4,574 ​ ​ — ​ Loss on foreign currency transactions ​ ​ 1 ​ ​ 1 ​ ​ 38 ​ Deferred income taxes ​ ​ ( 1,694 ) ​ ​ 3,419 ​ ​ 4,792 ​ Stock-based compensation ​ ​ 6,932 ​ ​ 6,227 ​ ​ 6,985 ​ Loss (gain) on sale of property and equipment ​ ​ 123 ​ ​ ( 71 ) ​ ​ 76 ​ Amortization of debt securities ​ ​ 309 ​ ​ ( 1,423 ) ​ ​ ( 1,506 ) ​ Changes in operating assets and liabilities, net of acquisitions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 17,177 ​ ​ ( 42,869 ) ​ ​ 25,821 ​ Unbilled receivables and retentions ​ ​ 8,381 ​ ​ ( 22,790 ) ​ ​ ( 36,175 ) ​ Inventories ​ ​ ( 5,179 ) ​ ​ 8,855 ​ ​ ( 16,631 ) ​ Income tax receivable ​ ​ — ​ ​ 821 ​ ​ ( 821 ) ​ Prepaid expenses and other assets ​ ​ ( 6,104 ) ​ ​ 831 ​ ​ ( 2,401 ) ​ Accounts payable ​ ​ 2,565 ​ ​ 3,127 ​ ​ ( 7,054 ) ​ Other liabilities ​ ​ 6,212 ​ ​ 8,180 ​ ​ ( 4,043 ) ​ Net cash provided by operating activities ​ ​ 86,532 ​ ​ 25,097 ​ ​ 26,946 ​ Investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ​ ( 11,263 ) ​ ​ ( 11,220 ) ​ ( 8,896 ) ​ Equity method investments ​ ​ ( 2,675 ) ​ ​ ( 14,498 ) ​ ​ ( 7,598 ) ​ Business acquisitions, net of cash acquired ​ ​ ( 385,614 ) ​ ​ ( 18,641 ) ​ ​ — ​ Proceeds from sale of business ​ ​ — ​ ​ — ​ ​ 31,994 ​ Proceeds from sale of property and equipment ​ ​ — ​ ​ 81 ​ ​ — ​ Redemptions of held-to-maturity investments ​ ​ — ​ ​ 185,917 ​ 260,918 ​ Purchases of held-to-maturity investments ​ ​ — ​ ​ ( 176,757 ) ​ ​ ( 267,122 ) ​ Redemptions of available-for-sale investments ​ ​ 146,425 ​ ​ 200,892 ​ 2,250 ​ Purchases of available-for-sale investments ​ ​ ( 125,644 ) ​ ​ ( 106,607 ) ​ ​ — ​ Net cash (used in) provided by investing activities ​ ​ ( 378,771 ) ​ ​ 59,167 ​ ​ 11,546 ​ Financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal payments of capital lease obligations ​ ​ — ​ ​ — ​ ​ ( 161 ) ​ Payment of contingent consideration ​ ​ — ​ ​ ( 868 ) ​ ​ — ​ Tax withholding payment related to net settlement of equity awards ​ ​ ( 1,992 ) ​ ​ ( 1,062 ) ​ ​ ( 1,094 ) ​ Holdback and retention payments for business acquisition ​ ​ ( 1,492 ) ​ ​ — ​ ​ — ​ Exercise of stock options ​ ​ 1,522 ​ ​ 100 ​ ​ 71 ​ Payment of debt issuance costs ​ ​ ( 3,878 ) ​ ​ — ​ ​ — ​ Proceeds from long-term debt ​ ​ 200,000 ​ ​ — ​ ​ — ​ Net cash provided by (used in) financing activities ​ ​ 194,160 ​ ​ ( 1,830 ) ​ ​ ( 1,184 ) ​ Discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities of discontinued operations ​ ​ — ​ ​ — ​ ​ ( 7,686 ) ​ Investing activities of discontinued operations ​ ​ — ​ ​ — ​ ​ ( 431 ) ​ Net cash used in discontinued operations ​ ​ — ​ ​ — ​ ​ ( 8,117 ) ​ Net (decrease) increase in cash, cash equivalents, and restricted cash ​ ( 98,079 ) ​ 82,434 ​ 29,191 ​ Cash, cash equivalents and restricted cash at beginning of period ​ ​ 255,142 ​ ​ 172,708 ​ ​ 143,517 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 157,063 ​ $ 255,142 ​ $ 172,708 ​ Supplemental disclosures of cash flow information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid, net during the period for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income taxes ​ $ 2,405 ​ $ 532 ​ $ 6,780 ​ Non-cash activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized (loss) gain on investments, net of deferred tax expense of $ 1 , $ 14 and $ 51 for the fiscal years ended 2021, 2020 and 2019, respectively ​ $ ( 60 ) ​ $ 50 ​ $ 57 ​ Issuance of common stock for business acquisition ​ $ 72,384 ​ $ — ​ $ — ​ Change in foreign currency translation adjustments ​ $ 75 ​ $ 276 ​ $ ( 34 ) ​ Issuances of inventory to property and equipment, ISR in-service assets ​ $ 769 ​ $ — ​ $ — ​ Acquisitions of property and equipment included in accounts payable ​ $ 756 ​ $ 1,425 ​ $ 810 ​ ​ See accompanying notes to consolidated financial statements. ​ 78 Table of Contents AEROVIRONMENT, INC. ​ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ​ 1. Organization and Significant Accounting Policies ​ Organization ​ AeroVironment, Inc., a Delaware corporation, 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”) and related services primarily to organizations within the U.S. Department of Defense (“DoD”) and to international allied governments. ​ Significant Accounting Policies ​ Principles of Consolidation ​ The accompanying consolidated financial statements include the accounts of AeroVironment, Inc. and its wholly-owned subsidiaries: Arcturus UAV, Inc. (“Arcturus”) and AeroVironment, Inc. (Afghanistan), as well as the Company’s Turkish joint venture, Altoy Savunma Sanayi ve Havacilik Anonim Sirketi (“Altoy”) (collectively referred to herein as the “Company”). ​ In February 2019, the Company dissolved AeroVironment International PTE. LTD., the results of which were not material to the consolidated financial statements. In October 2019, the Company dissolved its wholly-owned subsidiary, Skytower, Inc., the results of which were not material to the consolidated financial statements. ​ On June 29, 2018, the Company completed the sale of substantially all of the assets and related liabilities of its efficient energy systems business segment (the “EES Business”) to Webasto Charging Systems, Inc. (“Webasto”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) between Webasto and the Company. The Company determined that the EES Business met the criteria for classification as an asset held for sale at April 30, 2018 and represented a strategic shift in the Company’s operations. Therefore, the assets and liabilities and the results of operations of the EES Business are reported as discontinued operations for all periods presented. Refer to Note 2—Discontinued Operations for further details. ​ On June 10, 2019, the Company purchased 100 % of the issued and outstanding member units of Pulse Aerospace, LLC (“Pulse”) pursuant to the terms of a Unit Purchase Agreement (the “Pulse Purchase Agreement”). The assets, liabilities and operating results of Pulse have been included in the Company’s consolidated financial statements. In February 2021, the Company dissolved its wholly-owned subsidiary, Pulse Aerospace, LLC, the results of which were not material to the consolidated financial statements. Refer to Note 21—Business Acquisitions for further details. ​ On February 19, 2021, the Company closed its acquisition of 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 of Arcturus (the “Arcturus Acquisition”). The assets, liabilities and operating results of Arcturus have been included in the Company’s consolidated financial statements. Refer to Note 21—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 consolidated financial statements. Refer to Note 21—Business Acquisitions for further details. ​ 79 Table of Contents Investments in Companies Accounted for Using the Equity or Cost Method ​ Investments in other non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for as the Company is not obligated to provide additional capital. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. ​ When an investment accounted for using the equity method issues its own shares, the subsequent reduction in the Company’s proportionate interest in the investee is reflected in equity as an adjustment to paid-in-capital. The Company evaluates its investments in companies accounted for by the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary. ​ In December of 2017, the Company and SoftBank Corp. (“SoftBank”) formed a joint venture, HAPSMobile Inc. (“HAPSMobile”). As the Company has the ability to exercise significant influence over the operating and financial policies of HAPSMobile, the Company’s investment is accounted as an equity method investment. The Company has presented its proportion of HAPSMobile’s net loss in equity method investment loss, net of tax in the consolidated statement of operations. The carrying value of the investment in HAPSMobile was recorded in other assets. Refer to Note 9 – Equity Method Investments for further details. ​ 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. 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. Refer to Note 9 – Equity Method Investments for further details. ​ 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 in assessing performance. The Company’s CODM, who is the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the focus of research and development (“R&D”), based on UAS and MUAS operating units. Accordingly, the Company operates its business as two reportable segments, UAS and MUAS. ​ Use of Estimates ​ The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates made by management include, but are not limited to, valuation of: inventory, available-for-sale securities, acquired intangibles, goodwill, deferred tax assets and liabilities, useful lives of property, plant and equipment, medical and dental liabilities, warranty liabilities, long-term incentive plan liabilities and estimates of anticipated contract costs and transaction price utilized in the revenue recognition process. Actual results could differ from those estimates. ​ 80 Table of Contents Reclassifications ​ Certain prior year amounts have been reclassified to conform to the current year presentation. Specifically, the Company’s existing intangible assets have been reclassified from other assets to intangibles, net on the consolidated balance sheet for all periods presented. ​ Cash Equivalents ​ The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company’s cash equivalents are comprised of money market funds, certificates of deposit of major financial institutions, and U.S. Treasury bills. ​ Restricted Cash ​ The Company classifies cash accounts which are not available for general use as restricted cash. Pursuant to the terms of the Arcturus Purchase Agreement, the Company maintains escrow accounts to address final purchase price adjustments post-Arcturus Closing, if any and to address Arcturus UAV’s and/or the Sellers’ indemnification obligations. The restricted funds in the escrow account are recorded in other assets on the consolidated balance sheet. As of April 30, 2021 restricted cash was $ 8,322,000 . The Company had no restricted cash as of April 30, 2020. ​ Investments ​ The Company’s investments are accounted for as held-to-maturity reported at amortized cost and available-for-sale 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. Premium and discount on investments are amortized and accreted using the interest method and charged or credited to investment income. ​ Management determines the appropriate classification of securities at the time of purchase and re-evaluates such designation as of each balance sheet date. ​ Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. On a quarterly basis, the Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and its intent and ability to hold the investment to maturity. The Company also considers potential adverse conditions related to the financial health of the issuer based on rating agency actions. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in earnings and a new cost basis in the investment is established. ​ Fair Values of Financial Instruments ​ Fair values of cash and cash equivalents, accounts receivable, unbilled receivables, retentions and accounts payable approximate cost due to the short period of time to maturity. ​ Concentration of Credit Risk ​ Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, municipal bonds, U.S. government securities, U.S. government-guaranteed agency securities, U.S. government sponsored agency debt securities, highly rated commercial paper, highly rated corporate bonds, and accounts receivable. The Company currently invests the majority of its cash in municipal bonds, U.S. government 81 Table of Contents securities, U.S. government-guaranteed agency securities, U.S. government sponsored agency debt securities and highly rated corporate bonds. The Company’s revenue and accounts receivable are with a limited number of corporations and governmental entities. In the aggregate, 69 %, 61 % and 58 % of the Company’s revenue came from agencies of the U.S. government for the years ended April 30, 2021, 2020 and 2019, respectively. These agencies accounted for 64 % and 62 % of the accounts receivable balances at April 30, 2021 and 2020, respectively. One such agency, the U.S. Army, accounted for 34 %, 32 % and 28 % of the Company’s consolidated revenue for the years ended April 30, 2021, 2020 and 2019, respectively. The Company performs ongoing credit evaluations of its commercial customers and maintains an allowance for potential losses. ​ Accounts Receivable, Unbilled Receivables and Retentions ​ Accounts receivable represents primarily U.S. government and allied foreign governments, and to a lesser extent commercial receivables, net of allowances for doubtful accounts. Unbilled receivables represent costs in excess of billings on incomplete contracts and, where applicable, accrued profit related to government long-term contracts on which revenue has been recognized, but for which the customer has not yet been billed. Unbilled receivables are considered contract assets. ​ Retentions represent amounts withheld by customers until contract completion. At April 30, 2021 and 2020, the retention balances were $ 700,000 and $ 717,000 , respectively. The Company determines the allowance for doubtful accounts based on historical customer experience, age of receivable and other currently available evidence. When a specific account is deemed uncollectible, the account is written off against the allowance. The allowance for doubtful accounts reflects the Company’s best estimate of expected credit losses over the life of the receivable; such losses have historically been within management’s expectations. An account is deemed past due based on contractual terms rather than on how recently payments have been received. ​ Inventories ​ Inventories are stated at the lower of cost (using the weighted average costing method) or net realizable value. Inventory write-offs and write-down provisions are provided to cover risks arising from slow-moving items or technological obsolescence and for market prices lower than cost. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on this evaluation, provisions are made to write inventory down to its net realizable value. ​ Long-Lived Assets ​ Property and equipment are carried at cost. Depreciation of property and equipment, including amortization of leasehold improvements, are provided using the straight-line method over the following estimated useful lives: ​ ​ ​ ​ ​ Machinery and equipment 2 - 7 years Computer equipment and software 2 - 5 years ​ In-service ISR assets ​ 3 years ​ Furniture and fixtures 3 - 7 years ​ Leasehold improvements Lesser of useful life or term of lease ​ ​ Maintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and betterments to property and equipment are capitalized at cost. When the Company disposes of assets, the applicable costs and accumulated depreciation and amortization thereon are removed from the accounts and any resulting gain or loss is included in selling, general and administrative (“SG&A”) expense in the period incurred. ​ The Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ from actual cash flows. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made. During the fiscal 82 Table of Contents year ended April 30, 2019, the Company recorded an impairment loss of $ 4,398,000 related to the long-lived assets of its commercial UAS Quantix solution. Refer to Note 8 – Property and equipment, net. ​ Intangibles Assets — Acquired in Business Combinations ​ The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of the acquired business to the respective net tangible and intangible assets. Acquired intangible assets include technology, in-process research and development, customer relationships, trademarks and tradenames, and non-compete agreements. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern in which the economic benefits are consumed. The estimated useful life for the Company’s intangible assets are as follows: ​ ​ ​ ​ ​ Technology 3 - 12 years Licenses 3 years ​ Customer relationships 3 - 5 years ​ In-process research and development ​ 3 years ​ Trademarks and tradenames 6 years ​ Non-compete agreements ​ Contractual term ​ ​ The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment. No impairment was recorded for the fiscal years ended April 30, 2021, 2020 or 2019. ​ Goodwill ​ Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. Goodwill is tested for impairment annually during the fourth quarter of the Company’s fiscal year or when events or circumstances change in a manner that indicates goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business or political climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends or significant underperformance relative to projected future results of operations. No impairment was recorded for the fiscal years ended April 30, 2021, 2020 or 2019. ​ Product Warranty ​ The Company accrues an estimate of its exposure to warranty claims based upon both current and historical product sales data and warranty costs incurred. Product warranty reserves are recorded in other current liabilities. ​ Accrued Sales Commissions ​ As of April 30, 2021 and 2020, the Company accrued sales commissions in other current liabilities of $ 2,716,000 and $ 2,842,000 , respectively. ​ Self-Insurance Liability ​ The Company is self-insured for employee medical claims, subject to individual and aggregate stop loss policies. The Company estimates a liability for claims filed and incurred but not reported based upon recent claims experience and an analysis of the average period of time between the occurrence of a claim and the time it is reported to 83 Table of Contents and paid by the Company. As of April 30, 2021 and 2020, the Company estimated and recorded a self-insurance liability in wages and related accruals of approximately $ 1,181,000 and $ 753,000 , respectively. ​ Income Taxes ​ Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. The provision for income taxes reflects the taxes to be paid for the period and the change during the period in the deferred income tax assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. For uncertain tax positions, the Company determines whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. ​ Customer Advances and Amounts in Excess of Cost Incurred ​ The Company receives advances, performance-based payments and progress payments from customers that may exceed costs incurred on certain contracts, including contracts with agencies of the U.S. government resulting in contract liabilities. These advances are classified as customer advances and will be offset against billings. ​ 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, Revenue from Contracts with Customers (“ASC 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 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 reasonable 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, which accounted for 43 % of revenue during our fiscal year ended April 30, 2021, or at a point in time, 57 %. 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 R&D 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 84 Table of Contents 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 ISR services, is recognized over time as services are rendered. 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 and medium UAS product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS 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. ​ On April 30, 2021, the Company had approximately $ 211,796,000 of remaining performance obligations under contracts with its customers, which the Company also refers to as backlog. The Company currently expects to recognize approximately 94 % of the remaining performance obligations as revenue in fiscal 2022 and an additional 6 % in fiscal 2023 . ​ The Company collects sales, value add, 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. Because of the certainty in estimating these amounts, they are included in the transaction price of the Company’s contracts and the associated remaining performance obligations. ​ 85 Table of Contents 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. ​ 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 years ended April 30, 2021, 2020 or 2019. During the year ended April 30, 2021, the Company revised its estimates of the total expected costs to complete a TMS contract. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $ 1,041,000 . During the year ended April 30, 2020, the Company revised its estimates of the total expected costs to complete a TMS contract and a contract associated with a design and development agreement. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease of approximately $ 1,403,000 and an increase of approximately $ 1,099,000 , respectively. No adjustment on any one contract was material to the Company’s consolidated financial statements for the years ended April 30, 2019. ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by major product line/program ​ 2021 2020 ​ 2019 Small UAS ​ $ 235,854 ​ $ 225,888 ​ $ 183,157 MUAS ​ ​ 15,837 ​ ​ — ​ ​ — TMS ​ ​ 87,268 ​ ​ 63,781 ​ ​ 65,087 HAPS ​ ​ 42,426 ​ ​ 60,864 ​ ​ 55,407 Other ​ 13,527 ​ 16,763 ​ 10,623 Total revenue ​ $ 394,912 ​ $ 367,296 ​ $ 314,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by contract type ​ 2021 2020 ​ 2019 FFP ​ $ 307,413 ​ $ 269,917 ​ $ 224,090 CPFF ​ ​ 86,719 ​ ​ 94,176 ​ ​ 89,485 T&M ​ 780 ​ 3,203 ​ 699 Total revenue ​ $ 394,912 ​ $ 367,296 ​ $ 314,274 ​ 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, 86 Table of Contents 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by customer category ​ 2021 2020 ​ 2019 U.S. government ​ $ 271,273 ​ $ 225,341 ​ $ 182,586 Non-U.S. government ​ ​ 123,639 ​ ​ 141,955 ​ ​ 131,688 Total revenue ​ $ 394,912 ​ $ 367,296 ​ $ 314,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by geographic location ​ 2021 2020 ​ 2019 Domestic ​ $ 241,898 ​ $ 201,046 ​ $ 151,124 International ​ ​ 153,014 ​ ​ 166,250 ​ ​ 163,150 Total revenue ​ $ 394,912 ​ $ 367,296 ​ $ 314,274 ​ 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 years ended April 30, 2021 or 2020 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 years ended April 30, 2021, 2020, and 2019 that was included in contract liability balances at the beginning of each year were $ 5,468,000 , $ 1,670,000 and $ 1,587,000 , respectively. ​ Cost to Fulfill a Contract with a Customer ​ The Company recognizes assets for the costs to fulfill a contract with a customer if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered in accordance with ASC 340-40 Other Assets and Deferred Costs: Contracts with Customers . The assets related to costs to fulfill contracts with customers are capitalized and amortized over the period the related performance obligations are satisfied. As of April 30, 2021 and 2020, the Company had $ 1,729,000 and $ 0 of costs to fulfill future performance obligations on contracts considered to be probable of occurrence. Costs to fulfill a contract are recorded in prepaid expenses and other current assets on the consolidated balance sheets. ​ Stock-Based Compensation ​ Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. ​ 87 Table of Contents Long-Term Incentive Awards ​ For long-term incentive awards outstanding as of April 30, 2021, the awards include time-based awards which vest equally over three years and performance-based awards which vest based on the achievement of a target payout established at the beginning of each performance period. The actual payout at the end of the performance period is calculated based upon the Company’s achievement of such targets. Payouts are made in shares of restricted stock which become immediately vested upon issuance. ​ At each reporting period, the Company reassesses the probability of achieving the performance targets. 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. ​ Research and Development ​ Internally funded research and development costs (“IRAD”), sponsored by the Company relate to both U.S. government products and services and those for commercial and foreign customers. IRAD costs for the Company are recoverable and allocable under government contracts in accordance with U.S. government procurement regulations. ​ Customer-funded research and development costs are incurred pursuant to contracts (revenue arrangements) to perform research and development activities according to customer specifications. These costs are direct contract costs and are expensed to cost of sales when the corresponding revenue is recognized, which is generally as the research and development services are performed. Revenue from customer-funded research and development was approximately $ 74,218,000 , $ 80,934,000 and $ 76,407,000 for the years ended April 30, 2021, 2020 and 2019, respectively. The related cost of sales for customer-funded research and development totaled approximately $ 51,395,000 , $ 56,440,000 and $ 54,824,000 for the years ended April 30, 2021, 2020 and 2019, respectively. ​ In January 2017, the Company executed a cost sharing Other Transaction Agreement type contract funded by the US Federal Government to perform certain system design, development and functional testing activities specific to a new prototype UAS on a best-efforts basis. The term of the agreement was completed as of December 2020. Costs of $ 21,833,000 have been reimbursed to the Company as the activities were performed, while the Company was responsible for funding a minimum of $ 11,225,000 . The Company has determined that the contract meets the criteria of ASC 912-730-05 Contractors – Federal Government and, therefore, all reimbursements are recorded as an offset to research and development expense in the consolidated statements of income. Reimbursements under the contract were $ 3,424,000 , $ 8,102,000 and $ 5,936,000 for the fiscal years ended April 30, 2021, 2020 and 2019, respectively. ​ Lease Accounting ​ The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), along with several additional clarification ASU’s issued during 2018 (“New Lease Standard”) effective May 1, 2019. The New Lease Standard requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases. 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 the lease for up to 10 years , and some of which may include options to terminate the lease after two years . None of the Company’s options to extend or terminate are reasonably certain of being exercised, and are therefore not included in the Company’s determination of lease assets and liabilities. For operating leases, the Company recognizes lease expense for these leases on a straight-line basis over the lease term. ​ 88 Table of Contents 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 finance leases. 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. ​ Advertising Costs ​ Advertising costs are expensed as incurred. Advertising expenses included in SG&A expenses were approximately $ 675,000 , $ 934,000 and $ 897,000 for the years ended April 30, 2021, 2020 and 2019, respectively. ​ Foreign Currency Transactions ​ Foreign currency transaction gains and losses are charged or credited to earnings as incurred. For the fiscal years ended April 30, 2021, 2020 and 2019, foreign currency transaction losses that are included in other (expense) income, net in the accompanying statements of income were $ 1,000 , $ 1,000 , and $ 38,000 , respectively. ​ Earnings Per Share ​ Basic earnings per share are computed using the weighted-average number of common shares outstanding and excludes any anti-dilutive effects of options, restricted stock and restricted stock units. The dilutive effect of potential common shares outstanding is included in diluted earnings per share. ​ The reconciliation of diluted to basic shares is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2021 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations attributable to AeroVironment, Inc. ​ $ 23,331,000 ​ $ 41,339,000 ​ $ 41,912,000 ​ Discontinued operations, net of tax ​ ​ — ​ ​ ( 265,000 ) ​ ​ 5,526,000 ​ Net income attributable to AeroVironment, Inc. ​ $ 23,331,000 ​ $ 41,074,000 ​ $ 47,438,000 ​ Denominator for basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares ​ 24,049,851 ​ 23,806,208 ​ 23,663,410 ​ Dilutive effect of employee stock options, restricted stock and restricted stock units ​ 312,805 ​ 281,959 ​ 408,303 ​ Denominator for diluted earnings per share ​ 24,362,656 ​ 24,088,167 ​ 24,071,713 ​ ​ During the years ended April 30, 2021, 2020 and 2019, certain options, shares of restricted stock and restricted stock units were not included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive. The number of options, restricted stock and restricted stock units which met this anti-dilutive criterion was approximately 3,000 , 3,000 and 18,000 for the years ended April 30, 2021, 2020 and 2019, respectively. ​ 89 Table of Contents Recently Adopted Accounting Standards ​ Effective May 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , along with several additional clarification ASU’s issued during 2018 and 2019, collectively “CECL”. CECL requires the reporting entity to estimate expected credit losses over the life of a financial asset. CECL requires the credit loss to be recognized upon initial recognition of the financial asset. ASU 2016-13 requires the entity to adopt CECL using the modified retrospective transition approach through a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As part of the assessment of the adequacy of the Company’s allowances for credit losses, the Company considered a number of factors including, but not limited to, customer credit ratings, age of receivables, and expected loss rates. However, the adoption of CECL did not have a material impact to retained earnings for the Company. ​ Effective May 1, 2020, the Company adopted ASU 2018-15, “ Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ” (“ASU 2018-15”). ASU 2018-15 provides guidance on the treatment of accounting for fees paid by a customer in a cloud computing arrangement. This guidance includes the requirements for capitalizing implementation costs incurred in a hosting arrangement. The Company adopted ASU 2018-15 using the prospective method, applying the new guidance to all implementation costs incurred after adoption. The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements. ​ Recently Issued Accounting Standards ​ In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein, with early adoption permitted. The adoption method is dependent on the specific amendment included in this update as certain amendments require retrospective adoption, modified retrospective adoption, an option of retrospective or modified retrospective, and prospective adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. ​ In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (Topic 321, Topic 323, and Topic 815). This ASU clarifies accounting certain topics impacted by Topic 321 Investments—Equity Securities. These topics include measuring equity securities using the measurement alternative, how the measurement alternative should be applied to equity method accounting, and certain forward contracts and purchased options which would be accounted for under the equity method of accounting upon settlement or exercise. The guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein, with early adoption permitted. The amendments should be adopted prospectively. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. ​ 2. Discontinued Operations ​ On June 29, 2018, the Company completed the sale of substantially all of the assets and related liabilities of its efficient energy systems business segment (the “EES Business”) to Webasto Charging Systems, Inc. (“Webasto”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) between Webasto and the Company. In accordance with the terms of the Purchase Agreement, as amended by a side letter agreement executed at the closing, the Company received cash consideration of $ 31,994,000 upon closing, which resulted in a gain of $ 11,420,000 and has been recorded in gain on sale of business, net of tax in the consolidated statements of income. During the year ended April 30, 2019, the Company recorded a reduction to the gain resulting from a working capital adjustment of $ 486,000 . During the year ended April 30, 2020, the Company and Webasto engaged an independent accounting firm to resolve a working capital dispute with a maximum exposure of $ 922,000 pursuant to the terms of the Purchase Agreement. In June 2020, the independent accounting firm determined the final adjustment to the working capital dispute to be $ 341,000 which has been recorded net of tax as a loss of discontinued operations in the consolidated statements of income for the year ended April 30, 2020. ​ 90 Table of Contents The Company is entitled to receive additional cash consideration of $ 6,500,000 (the “Holdback”) upon tendering consents to assignment of two remaining customer contracts to Webasto. The Holdback was not recorded in the Company’s consolidated financial statements as the amount was not realized or realizable as of April 30, 2021. The Company’s satisfaction of the requirements for the payment of the Holdback is currently in dispute. ​ On February 22, 2019, Webasto filed a lawsuit, which was amended in April 2019, alleging several claims against the Company for breach of contract, indemnity, and bad faith, including allegations regarding inaccuracy of certain diligence disclosures, failure to provide certain consents to contract assignments and related to a previously announced product recall. Webasto seeks to recover the costs of the recall and other damages totaling a minimum of $ 6,500,000 in addition to attorneys’ fees, costs, and punitive damages. On August 16, 2019, the Company filed a counterclaim against Webasto seeking payment of the Holdback and declaratory relief regarding Webasto’s cancellation of an assigned contract. Webasto again amended the complaint in May 2021 to include additional claims. The Company has not filed an answer to Webasto’s amended complaint filed in May 2021. The Company believes that the allegations are generally meritless and is mounting a vigorous defense. In order to avoid the future cost, expense, and distraction of continued litigation, the Company engaged in settlement negotiations with Webasto, however, the negotiations did not result in a settlement of any of the Company’s or Webasto’s claims. As a result of the settlement negotiations, the Company established a litigation reserve, which reserve reflects the scope of a rejected offer intended to communicate the Company’s serious and good faith intention to attempt to reach a settlement for the stated purposes. The offer did not reflect the Company’s view of the merits of the claims made, and the Company continues to vigorously defend all claims. However, as a result of the preparation of the good faith offer and the Company’s willingness to pursue settlement for that amount, the Company recorded litigation reserve expenses in the amount of $ 9,300,000 during the year ended April 30, 2021 recorded in other expense on the consolidated statements of operations. ​ During the three months ended October 27, 2018, Webasto filed a recall report with the National Highway Traffic Safety Administration that named certain of the Company’s EES products as subject to the recall. The Company is continuing to assess the facts giving rise to the recall. Under the terms of the Purchase Agreement, the Company may be responsible for certain costs of such recall of named products the Company manufactured, sold or serviced prior to the closing of the sale of the EES Business. On August 14, 2019, Benchmark Electronics, Inc. (“Benchmark”), the company that assembled the products subject to the recall, served a demand for arbitration to the Company and Webasto, and a third-party part supplier pursuant to its contracts with the Company and Webasto, respectively. The Company filed a responsive pleading in the Benchmark arbitration on October 29, 2019, consisting of a general denial, affirmative defenses, and a reservation of the right to file counter-claims at a later date. Webasto challenged the validity of the Benchmark arbitration by filing an action in New York Superior Court. In December 2019, Webasto and Benchmark reached a settlement of their disputed claims. Benchmark withdrew its Notice of Arbitration against Webasto and the Company, but reserved its right to pursue indemnity claims against suppliers. The recall remains a significant part of the Webasto lawsuit. ​ Concurrent with the execution of the Purchase Agreement, the Company entered into a transition services agreement (the “TSA”) to provide certain general and administrative services to Webasto for a defined period. Income from performing services under the TSA was $ 38,000 , $ 551,000 and $ 2,758,000 and has been recorded in other income, net in the consolidated statements of income for the fiscal years ended April 30, 2021, 2020 and 2019, respectively. ​ 91 Table of Contents The Company determined that the EES Business met the criteria for classification as an asset held for sale as of April 30, 2018 and represents a strategic shift in the Company’s operations. Therefore, the results of operations of the EES Business are reported as discontinued operations for all periods presented. The table below presents the statements of income data for the EES Business (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ — ​ $ — ​ $ 4,256 Cost of sales ​ — ​ — ​ 5,097 Gross margin ​ — ​ — ​ ( 841 ) Selling, general and administrative ​ — ​ — ​ 1,515 Research and development ​ — ​ — ​ 1,072 Other income, net ​ ​ — ​ ​ — ​ ​ 1 Loss from discontinued operations before income taxes ​ — ​ — ​ ( 3,427 ) Benefit for income taxes ​ ​ — ​ ​ - ​ ​ ( 463 ) Net loss from discontinued operations ​ $ — ​ $ — ​ $ ( 2,964 ) (Loss) gain on sale of business, net of tax (benefit) expense of $( 76 ) and $ 2,444 for the year ended April 30, 2020 and April 30, 2019, respectively ​ ​ — ​ ​ ( 265 ) ​ ​ 8,490 Net (loss) income from discontinued operations ​ $ — ​ $ ( 265 ) ​ $ 5,526 ​ ​ 3. Investments ​ Investments consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2021 2020 Short-term investments: ​ ​ ​ ​ ​ ​ Available-for-sale securities: ​ ​ ​ ​ ​ ​ Municipal securities ​ ​ 22,245 ​ ​ 5,244 U.S. government securities ​ ​ 4,009 ​ ​ 33,771 Corporate bonds ​ ​ 5,717 ​ ​ 8,492 Total short-term investments ​ $ 31,971 ​ $ 47,507 Long-term investments: ​ ​ ​ ​ ​ ​ Available-for-sale securities: ​ ​ ​ ​ ​ ​ Municipal securities ​ ​ 988 ​ ​ 1,592 U.S. government securities ​ ​ 4,000 ​ ​ 8,996 Total available-for-sale investments ​ 4,988 ​ 10,588 Equity method investments ​ ​ ​ ​ ​ ​ Investment in limited partnership fund ​ 7,168 ​ 4,442 Total equity method investments ​ 7,168 ​ 4,442 Total long-term investments ​ $ 12,156 ​ $ 15,030 ​ Available-For-Sale Securities ​ As of April 30, 2021 and 2020, 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 is recorded in interest income. ​ 92 Table of Contents 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 April 30, (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, 2021 ​ April 30, 2020 ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ ​ ​ Cost ​ Gains ​ Losses ​ Value ​ Cost Gains ​ Losses Value ​ Municipal securities ​ $ 23,227 ​ $ 8 ​ $ ( 2 ) ​ $ 23,233 ​ $ 6,807 ​ $ 29 ​ $ — ​ $ 6,836 ​ U.S. government securities ​ ​ 8,008 ​ ​ 1 ​ ​ — ​ ​ 8,009 ​ 42,730 ​ ​ 41 ​ ​ ( 4 ) ​ ​ 42,767 ​ Corporate bonds ​ ​ 5,718 ​ ​ — ​ ​ ( 1 ) ​ ​ 5,717 ​ 8,495 ​ ​ — ​ ​ ( 3 ) ​ ​ 8,492 ​ Total available-for-sale investments ​ $ 36,953 ​ $ 9 ​ $ ( 3 ) ​ $ 36,959 ​ $ 58,032 $ 70 ​ $ ( 7 ) $ 58,095 ​ ​ The amortized cost and fair value of the Company’s available-for-sale securities by contractual maturity at April 30, 2021, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost Fair Value Due within one year ​ $ 31,968 ​ $ 31,971 ​ Due after one year through five years ​ 4,985 ​ 4,988 ​ Total ​ $ 36,953 ​ $ 36,959 ​ ​ ​ ​ 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: ​ ● Level 1—Inputs to the valuation based upon quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date. ​ ● Level 2—Inputs to the valuation include quoted prices in either markets that are not active, or in active markets for similar assets or liabilities, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data. ​ ● Level 3—Inputs to the valuation that are unobservable inputs for the asset or liability. ​ 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 ​ ​ 93 Table of Contents 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, 2020 ​ $ — ​ Business acquisition ​ ​ 5,521 ​ Transfers to Level 3 ​ — ​ Total (gains) losses (realized or unrealized) ​ ​ — ​ Settlements ​ — ​ Balance at April 30, 2021 ​ $ 5,521 ​ 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 April 30, 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. See Note 21—Business Acquisitions. ​ 5. Inventories, net ​ Inventories consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ 2021 2020 Raw materials ​ $ 23,997 ​ $ 15,988 ​ Work in process ​ 13,825 ​ 10,340 ​ Finished goods ​ 44,113 ​ 29,439 ​ Inventories, gross ​ 81,935 ​ 55,767 ​ Reserve for inventory excess and obsolescence ​ ( 10,289 ) ​ ( 10,232 ) ​ Inventories, net ​ $ 71,646 ​ $ 45,535 ​ ​ For the fiscal years ended April 30, 2021, 2020 and 2019, the Company recorded inventory reserve charges of $ 1,178,000 , $ 5,377,000 and $ 5,054,000 , respectively. Of the $ 5,377,000 inventory reserve recorded during fiscal year ended April 30, 2020, approximately $ 2,600,000 related to an impairment of the remaining net book value of the Company’s Quantix commercial UAS solution. ​ 94 Table of Contents 6. Intangibles, net ​ Intangibles are included in other assets on the balance sheet. The components of intangibles are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ April 30, ​ ​ 2021 2020 ​ Technology ​ $ 46,850 ​ $ 14,950 ​ Licenses ​ ​ 1,008 ​ ​ 1,006 ​ Customer relationships ​ ​ 68,073 ​ ​ 873 ​ In-process research and development ​ ​ 550 ​ ​ 550 ​ Non-compete agreements ​ ​ 320 ​ ​ 320 ​ Trademarks and tradenames ​ ​ 68 ​ ​ 68 ​ Other ​ ​ 3 ​ ​ 3 ​ Intangibles, gross ​ ​ 116,872 ​ ​ 17,770 ​ Less accumulated amortization ​ ( 10,604 ) ​ ( 4,133 ) ​ Intangibles, net ​ $ 106,268 ​ $ 13,637 ​ ​ The Company tests identifiable intangible assets and goodwill for impairment in the fourth quarter of each fiscal year unless there are interim indicators that suggest that it is more likely than not that either the identifiable intangible assets or goodwill may be impaired. The weighted average amortization period at April 30, 2021 and 2020 was five years and four years , respectively. Amortization expense for the years ended April 30, 2021, 2020 and 2019 was $ 6,469,000 , $ 2,822,000 and $ 357,000 , respectively. ​ 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. Technology, in-process research and development, customer relationships, trademarks and tradenames, and non-compete agreements were recognized in conjunction with the Company’s acquisition of Pulse on June 10, 2019. Refer to Note 21 - Business Combinations for further details. ​ Estimated amortization expense for the next five years is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Year ending ​ ​ April 30, 2022 ​ $ 24,553 ​ 2023 ​ 24,409 ​ 2024 ​ 23,560 ​ 2025 ​ 16,513 ​ 2026 ​ 11,471 ​ ​ ​ $ 100,506 ​ ​ ​ 7. Goodwill ​ The following table presents the changes in the Company’s goodwill balance (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UAS ​ MUAS ​ Total Balance at April 30, 2020 ​ $ 6,340 ​ $ — ​ $ 6,340 Additions to goodwill ​ ​ 19,254 ​ ​ 288,611 ​ ​ 307,865 Impairment of goodwill ​ ​ — ​ ​ — ​ ​ — Balance at April 30, 2021 ​ $ 25,594 ​ $ 288,611 ​ $ 314,205 ​ 95 Table of Contents The goodwill balance at April 30, 2020 is attributable to the acquisition of Pulse. The UAS segment goodwill addition is attributable to the ISG acquisition. The MUAS goodwill addition is attributable to the Arcturus acquisition. Refer to Note 21—Business Acquisitions for further details. ​ 8. Property and Equipment, net ​ Property and equipment, net consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ 2021 2020 ​ ​ ​ (In thousands) ​ In-service ISR assets ​ $ 36,047 ​ $ — ​ Leasehold improvements ​ ​ 18,703 ​ ​ 16,387 ​ Machinery and equipment ​ 53,943 ​ 46,519 ​ Furniture and fixtures ​ 3,698 ​ 3,031 ​ Computer equipment and software ​ 36,618 ​ 33,242 ​ Construction in process ​ 2,689 ​ 2,508 ​ Property and equipment, gross ​ 151,698 ​ 101,687 ​ Less accumulated depreciation and amortization ​ ( 92,802 ) ​ ( 79,993 ) ​ Property and equipment, net ​ $ 58,896 ​ $ 21,694 ​ ​ During the three months ended April 30, 2019, the Company determined that the continued less than forecasted sales of its Quantix commercial UAS solution, which launched during the fourth quarter of fiscal year 2018, was an indicator that the long-lived assets of this asset group may not be recoverable. As a result, the company performed an analysis and concluded that the projected undiscounted cash flows were less than the carrying value of the asset group (Step 1). As a result, the Company performed additional analysis to determine the amount of the impairment loss (Step 2) and recorded an impairment loss totaling $ 4,398,000 related to the long-lived assets of the commercial UAS Quantix solution, which is included in selling, general and administrative expense on the consolidated statements of income. The fair value of the asset group was determined based on a discounted cash flow model reflective of the Company’s revised cash flow estimates. ​ Depreciation expense for the years ended April 30, 2021, 2020 and 2019 was $ 12,793,000 , $ 7,066,000 and $ 7,311,000 , respectively. ​ 9. Investments in Companies Accounted for Using the Equity Method ​ In December of 2017, the Company and SoftBank formed a joint venture, HAPSMobile, which is a Japanese corporation. As of April 30, 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 %. ​ 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. At April 30, 2021, 2020 and 2019, the Company recorded 96 Table of Contents its ownership percentage of the net loss of HAPSMobile, or $ 10,530,000 , $ 4,982,000 and $ 3,944,000 , respectively, in equity method investment loss, net of tax in the consolidated statements of income. During the fiscal year ended April 30, 2021, the Company recorded its proportion of a loss for HAPSMobile’s impairment of its investment in Loon LLC in the amount of $ 8,363,000 . HAPSMobile initially made its investment in Loon LLC in April 2019. The impairment recorded by HAPSMobile is included in realized and unrealized losses on investments in the summarized financial information shown below. At April 30, 2021 and 2020, the carrying value of the investment in HAPSMobile of $ 0 and $ 10,455,000 , respectively, was recorded in other assets, long-term. ​ 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. The Company made additional contributions of $ 1,173,000 , $ 977,000 and $ 525,000 on July 15, 2020, January 4, 2021 and March 24, 2021, respectively. Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 2,377,000 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. At April 30, 2021 and 2020, the Company recorded its ownership percentage of the net (gain) loss of the limited partnership, or $( 49,000 ) and $ 394,000 , respectively, in equity method investment loss, net of deferred taxes of $ 11 and $ 111,000 , respectively, in the consolidated statements of income. At April 30, 2021 and 2020, the carrying value of the investment in the limited partnership of $ 7,168,000 and $ 4,442,000 , respectively, was recorded in available-for-sale long-term investments. ​ Summarized financial information of the equity method investments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ ​ ​ ​ 2021 2020 ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ Current assets ​ ​ $ 9,106 ​ $ 67,387 ​ ​ ​ Noncurrent assets ​ ​ 65,717 ​ 170,602 ​ ​ ​ Current liabilities ​ ​ 76,492 ​ 72,505 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ ​ 2021 2020 2019 ​ ​ ​ (In thousands) Revenues ​ ​ $ 159 ​ $ 25 ​ $ — Gross loss ​ ​ ​ ( 1,241 ) ​ ​ ( 1,331 ) ​ ​ — Realized and unrealized losses on investments ​ ​ ​ ( 131,971 ) ​ ​ ( 7,028 ) ​ ​ — Net loss ​ ​ ​ ( 190,454 ) ​ ​ ( 85,818 ) ​ ​ ( 63,107 ) ​ ​ 10. Warranty Reserves ​ Warranty reserve activity is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ ​ 2021 2020 ​ ​ (In thousands) Beginning balance ​ $ 2,015 ​ $ 1,704 ​ Warranty expense ​ 1,650 ​ 2,258 ​ Changes in estimates related to pre-existing warranties ​ ​ — ​ ​ ( 189 ) ​ Warranty costs settled ​ ( 1,324 ) ​ ( 1,758 ) ​ Ending balance ​ $ 2,341 ​ $ 2,015 ​ ​ ​ 97 Table of Contents During the fiscal year ended April 30, 2019, the Company revised its estimates based on the results of additional engineering studies and recorded incremental warranty reserve charges totaling $ 491,000 related to the estimated costs to repair a component of certain small UAS that were delivered in prior periods. During the fiscal year ended April 30, 2020, the Company revised its estimates based on the results of additional engineering studies to $ 302,000 . As of April 30, 2020 and 2019, the Company had no remaining warranty reserve related to the estimated costs to repair the impacted UAS and $ 251,000 , respectively. During the fiscal year ended April 30, 2020, the Company incurred total costs related to this warranty of $ 288,000 . ​ ​ 11. Employee Savings Plan ​ The Company has an employee 401(k) savings plan covering all eligible employees. The Company expensed approximately $ 5,764,000 , $ 4,744,000 and $ 3,961,000 in contributions to the plan for the years ended April 30, 2021, 2020 and 2019, respectively. ​ 12. 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 98 Table of Contents proceeds thereof, with customary exclusions and exceptions. The Company’s existing and future domestic subsidiaries, including Arcturus (as of the closing of its acquisition by the Company), will be 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 April 30, 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: ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ ​ 2021 ​ ​ (In thousands) Term loans ​ $ 200,000 Revolving credit facility ​ ​ — Total debt ​ ​ 200,000 Less current portion ​ ​ 10,000 Total long-term debt, less current portion ​ ​ 190,000 Less unamortized debt issuance costs - term loans ​ ​ 2,488 Total long-term debt, net of unamortized debt issuance costs - term loans ​ $ 187,512 Unamortized debt issuance costs - revolving credit facility ​ $ 1,244 ​ Future long-term debt principle payments at April 30, 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ (In thousands) 2022 ​ $ 10,000 2023 ​ 10,000 2024 ​ 10,000 2025 ​ 10,000 2026 ​ 160,000 ​ ​ $ 200,000 ​ 13. 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 99 Table of Contents options determined to be reasonably certain. The Company’s leases have remaining lease terms of less than one year to nine years , some of which may include options to extend the lease for up to 10 years , and some of which may include options to terminate the lease after two years . If the Company determines it is reasonably certain of exercising an option to extend or terminate, the option is included in the Company’s determination of lease assets and liabilities. For operating leases, the Company recognizes lease expense for these leases on a straight-line basis over the lease term. ​ 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 finance leases. 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 for product sales and contract services and selling, general and administrative (“SG&A”) expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2021 ​ 2020 Operating lease cost ​ $ 5,150 ​ $ 4,574 Short term lease cost ​ ​ 602 ​ ​ 500 Variable lease cost ​ ​ 23 ​ ​ 987 Sublease income ​ ​ ( 91 ) ​ ​ ( 287 ) Total lease costs, net ​ $ 5,684 ​ $ 5,774 ​ Supplemental lease information was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2021 ​ 2020 ​ ​ (In thousands) ​ (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities ​ $ 5,070 ​ $ 3,897 Right-of-use assets obtained in exchange for new lease liabilities ​ $ 18,729 ​ $ 13,022 ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ ​ 71 months ​ ​ 34 months Weighted average discount rate ​ ​ 3.6 % ​ ​ 3.7 % ​ 100 Table of Contents Maturities of operating lease liabilities as of April 30, 2021 were as follows (in thousands): ​ ​ ​ ​ ​ 2022 ​ $ 6,711 2023 ​ 5,185 2024 ​ 4,496 2025 ​ 3,530 2026 ​ 2,329 Thereafter ​ ​ 6,572 Total lease payments ​ ​ 28,823 Less: imputed interest ​ ​ ( 3,566 ) Total present value of operating lease liabilities ​ $ 25,257 ​ Rental expense under operating leases was approximately $ 4,609,000 for the year ended April 30, 2019. ​ 14. Stock-Based Compensation ​ For the years ended April 30, 2021, 2020 and 2019, the Company recorded stock-based compensation expense of approximately $ 6,932,000 , $ 6,227,000 and $ 6,985,000 , respectively. ​ On January 14, 2007, the stockholders of the Company approved the 2006 Equity Incentive Plan (“2006 Plan”) effective January 21, 2007, for officers, directors, key employees and consultants. On September 29, 2011, the stockholders of the Company approved an amendment and restatement of the 2006 Plan (“Restated 2006 Plan”). Under the Restated 2006 Plan, incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation right awards, performance share awards, performance stock unit awards, dividend equivalents awards, stock payment awards, deferred stock awards, restricted stock unit awards, other stock-based awards, performance bonus awards or performance-based awards may be granted at the discretion of the compensation committee, which consists of outside directors. A maximum of 4,884,157 shares of stock may be issued pursuant to awards under the Restated 2006 Plan. The maximum number of shares of common stock with respect to one or more awards that may be granted to any one participant during any twelve month period is 2,000,000 . A maximum of $ 5,000,000 may be paid in cash to any one participant as a performance-based award during any twelve month period. The exercise price for any incentive stock option shall not be less than 100 % of the fair market value on the date of grant. Vesting of awards is established at the time of grant. ​ The Company had an equity incentive plan (“2002 Plan”) for officers, directors and key employees. Under the 2002 Plan, incentive stock options or nonqualified stock options were granted, as determined by the administrator at the time of grant. Stock purchase rights were also granted under the 2002 Plan. Options under the 2002 Plan were granted at their fair market value (as determined by the board of directors). The options became exercisable at various times over a five-year period from the grant date. The 2002 Plan was terminated on the effective date of the 2006 Plan. Awards outstanding under the 2002 Plan remain outstanding and exercisable; no additional awards may be made under the 2002 Plan. ​ The Company had a 1992 nonqualified stock option plan (“1992 Plan”) for certain officers and key employees. Options under the 1992 Plan were granted at their fair market value (as determined by the board of directors) at the date of grant and became exercisable at various times over a five-year period from the grant date. The 1992 Plan expired in August 2002. ​ No options were granted during the fiscal years ended April 30, 2021, 2020 and 2019. The fair value of stock options granted previously was estimated at the grant date using the Black-Scholes option pricing model. Assumptions included in the Black-Scholes option pricing model included the expected term of stock options, the expected volatility, the risk free interest rate, and the expected dividend yield. The expected term of stock options represents the weighted average period the Company expects the stock options to remain outstanding, based on the Company’s historical exercise and post-vesting cancellation experience and the remaining contractual life of its outstanding options. The expected volatility is based on historical volatility for the Company’s stock. The risk free interest rate is based on the implied yield on a U.S. Treasury zero-coupon bond with a remaining term that approximates the expected term of the 101 Table of Contents option. The expected dividend yield of zero reflects that the Company has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future. ​ Information related to the stock option plans at April 30, 2021, 2020 and 2019, and for the years then ended is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restated 2006 Plan ​ 2002 Plan ​ 1992 Plan ​ ​ Weighted ​ Weighted ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Exercise ​ ​ ​ Exercise ​ ​ ​ Exercise ​ ​ Shares ​ Price ​ Shares ​ Price ​ Shares ​ Price Outstanding at April 30, 2018 339,026 ​ 25.29 — ​ — 18,302 ​ 0.59 ​ Options granted — ​ — — ​ — — ​ — ​ Options exercised ( 2,000 ) ​ 32.19 — ​ — ( 4,000 ) ​ 0.59 ​ Options canceled — ​ — — ​ — — ​ — ​ Outstanding at April 30, 2019 337,026 ​ 25.25 — ​ — 14,302 ​ 0.59 ​ Options granted — ​ — — ​ — — ​ — ​ Options exercised ( 3,000 ) ​ 31.15 — ​ — ( 13,189 ) ​ 0.59 ​ Options canceled — ​ — — ​ — — ​ — ​ Outstanding at April 30, 2020 334,026 ​ 25.19 — ​ — 1,113 ​ 0.59 ​ Options granted — ​ — — ​ — — ​ — ​ Options exercised ( 53,500 ) ​ 28.45 — ​ — ( 1,113 ) ​ 0.59 ​ Options canceled — ​ — — ​ — — ​ — ​ Outstanding at April 30, 2021 280,526 ​ 24.57 — ​ — — ​ — ​ Options exercisable at April 30, 2021 280,526 ​ $ 24.57 — ​ $ — — ​ $ — ​ ​ The total intrinsic value of all options exercised during the years ended April 30, 2021, 2020 and 2019 was approximately $ 4,828,000 , $ 833,000 , and $ 371,000 , respectively. The intrinsic value of all options outstanding at April 30, 2021 and 2020 was $ 24,068,000 and $ 11,779,000 , respectively. The intrinsic value of all exercisable options at April 30, 2021 and 2020 was $ 24,068,000 and $ 11,242,000 , respectively. ​ A summary of the status of the Company’s non-vested stock options as of April 30, 2021 and the year then ended is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date Non-vested Options ​ Options ​ Fair Value Non-vested at April 30, 2020 16,000 ​ $ 10.16 ​ Granted — ​ — ​ Expired — ​ — ​ Canceled — ​ — ​ Vested ( 16,000 ) ​ 10.16 ​ Non-vested at April 30, 2021 — ​ $ — ​ ​ As of April 30, 2021, there was approximately $ 11,737,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under the equity plans. That cost is expected to be recognized over an approximately two-year period or a weighted average period of approximately 2.4 years. ​ No options were granted during the fiscal years ended April 30, 2021, 2020 and 2019. The total fair value of shares vesting during the years ended April 30, 2021, 2020 and 2019 was $ 5,312,000 , $ 4,900,000 and $ 4,756,000 , respectively. ​ 102 Table of Contents Proceeds from all option exercises under all stock option plans for the years ended April 30, 2021, 2020 and 2019 were approximately $ 1,522,000 , $ 101,000 and $ 67,000 , respectively. The tax benefit realized from stock-based compensation was $ 0 during the years ended April 30, 2021, 2020 and 2019, respectively. ​ The following tabulation summarizes certain information concerning outstanding and exercisable options at April 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Options Exercisable ​ ​ ​ ​ Remaining Weighted ​ Weighted ​ ​ ​ ​ ​ As of ​ Contractual ​ Average ​ As of ​ Average ​ ​ ​ ​ ​ April 30, ​ Life In ​ Exercise ​ April 30, ​ Exercise Range of Exercise Prices ​ 2021 ​ Years ​ Price ​ 2021 ​ Price $ 18.07 - 19.16 54,000 1.98 ​ $ 18.26 54,000 ​ $ 18.26 ​ ​ 19.17 - 26.24 55,000 2.04 ​ 20.29 55,000 ​ 20.29 ​ ​ 26.25 - 26.99 80,000 4.15 ​ 26.70 80,000 ​ 26.70 ​ ​ 27.00 - 28.53 ​ 50,000 ​ 2.56 ​ ​ 27.27 ​ 50,000 ​ ​ 27.27 ​ ​ 28.54 - 31.27 41,526 2.94 ​ 31.13 41,526 ​ 31.13 ​ $ 18.07 - 31.27 280,526 2.86 ​ $ 24.57 280,526 ​ $ 24.57 ​ ​ The remaining weighted average contractual life of exercisable options at April 30, 2021 was 2.86 years. ​ Information related to the Company’s restricted stock awards at April 30, 2021 and for the year then ended is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restated 2006 Plan ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value Unvested stock at April 30, 2020 201,647 ​ $ 55.84 ​ Stock granted 117,468 ​ 79.96 ​ Stock vested ( 133,578 ) ​ 39.77 ​ Stock canceled ( 5,509 ) ​ 72.03 ​ Unvested stock at April 30, 2021 180,028 ​ $ 83.02 ​ ​ ​ 15. Long-Term Incentive Awards ​ 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. During the fiscal year ended April 30, 2021, the Company recorded $ 1,072,000 of compensation expense related to the Fiscal 2021 LTIP. At April 30, 2021, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2021 LTIP is $ 7,784,000 . ​ During the three months ended July 27, 2019, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (the “Restated 2006 Plan”) to key employees (“Fiscal 2020 LTIP”). Awards under the Fiscal 103 Table of Contents 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) 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, 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. During the fiscal years ended April 30, 2021 and 2020, the Company recorded $ 620,000 and $ 649,000 of compensation expense related to the Fiscal 2020 LTIP. At April 30, 2021, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2020 LTIP is $ 4,188,000 . ​ During the three months ended July 28, 2018, the Company 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. 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. During the fiscal years ended April 30, 2021, 2020 and 2019, the Company recorded $ 368,000 , $ 386,000 and $ 572,000 of compensation expense related to the Fiscal 2019 LTIP, respectively. During the first quarter of fiscal 2022, the Company expects to issue a total of 18,541 fully-vested shares of common stock to settle the Fiscal 2019 LTIP. ​ During the three months ended July 29, 2017, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2018 LTIP”). Awards under the Fiscal 2018 LTIP consist of: (i) time-based restricted stock awards which vest in equal tranches in July 2018, July 2019 and July 2020, 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, 2020. 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. During the three months ended August 1, 2020, the Company issued a total of 16,228 fully-vested shares of common stock to settle the PRSUs in the Fiscal 2018 LTIP. No compensation expense was recorded during fiscal year ended April 30, 2021 for the Fiscal 2018 LTIP. ​ During the three months ended July 29, 2017, the Company also granted awards under the Restated 2006 Plan to key employees (“Fiscal 2017 LTIP”). Awards under the Fiscal 2017 LTIP consist of: (i) time-based restricted stock awards, which vested in equal tranches in July 2017, July 2018 and July 2019, and (ii) PRSUs, which vested based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2019. During the three months ended July 27, 2019, the Company issued a total of 14,814 fully-vested shares of common stock to settle the PRSUs in the Fiscal 2017 LTIP. No compensation expense was recorded during fiscal year ended April 30, 2021 for the Fiscal 2017 LTIP. ​ At April 30, 2021 and 2020, the Company recorded cumulative stock-based compensation expense from these long-term incentive awards of $ 3,667,000 and $ 2,657,000 , respectively. At each reporting period, the Company reassesses the probability of achieving the performance targets. 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 104 Table of Contents estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised. ​ 16. Income Taxes ​ The components of income before income taxes are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2021 ​ 2020 ​ 2019 Domestic ​ $ 34,274 ​ $ 52,730 ​ $ 50,644 ​ Foreign ​ ​ 91 ​ ( 60 ) ​ ( 166 ) ​ Income from continuing operations before income taxes ​ ​ 34,365 ​ ​ 52,670 ​ ​ 50,478 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity method investment loss ​ ​ ( 10,481 ) ​ ​ ( 5,487 ) ​ ​ ( 3,944 ) ​ Total income from continuing operations before income taxes ​ $ 23,884 ​ $ 47,183 ​ $ 46,534 ​ ​ The Company expects any foreign earnings to be reinvested in such foreign jurisdictions and, therefore, no deferred tax liabilities for U.S. income taxes on undistributed earnings are recorded. The foreign subsidiaries do not have any undistributed earnings. ​ A reconciliation of income tax expense computed using the U.S. federal statutory rates to actual income tax expense is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2021 ​ 2020 2019 ​ U.S. federal statutory income tax rate 21.0 % ​ 21.0 % ​ 21.0 % State and local income taxes, net of federal benefit ( 1.4 ) ​ ​ ( 2.1 ) ​ ​ ( 2.2 ) ​ R&D and other tax credits ( 11.5 ) ​ ​ ( 6.8 ) ​ ​ ( 8.1 ) ​ Valuation allowance 3.2 ​ ​ 3.4 ​ ​ 3.7 ​ Return to provision adjustments ​ ( 0.3 ) ​ ​ 0.1 ​ ​ ( 0.3 ) ​ Permanent items ​ 3.6 ​ ​ 0.7 ​ ​ 0.8 ​ Foreign derived intangible income ​ ( 7.6 ) ​ ​ ( 3.9 ) ​ ​ ( 3.7 ) ​ Excess benefit of equity awards ​ ( 5.7 ) ​ ​ ( 1.5 ) ​ ​ ( 3.1 ) ​ Other 0.3 ​ ​ 0.2 ​ ​ 1.1 ​ Effective income tax rate 1.6 % ​ 11.1 % ​ 9.2 % ​ The components of the provision for income taxes are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2021 2020 2019 Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 3,094 ​ $ 3,005 ​ $ 1,953 ​ State ​ 448 ​ 390 ​ 228 ​ Foreign ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ 3,542 ​ 3,395 ​ 2,181 ​ Deferred: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ( 3,247 ) ​ 2,063 ​ 1,945 ​ State ​ 244 ​ 421 ​ 551 ​ Foreign ​ ​ — ​ ​ ( 31 ) ​ ​ ( 36 ) ​ ​ ​ ( 3,003 ) ​ 2,453 ​ 2,460 ​ Total income tax expense ​ $ 539 ​ $ 5,848 ​ $ 4,641 ​ ​ 105 Table of Contents Significant components of the Company’s deferred income tax assets and liabilities are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2021 2020 Deferred income tax assets: ​ ​ ​ ​ ​ ​ ​ Accrued expenses ​ $ 4,422 ​ $ 3,337 ​ Stock based compensation ​ ​ 2,492 ​ ​ 2,259 ​ Allowances, reserves, and other ​ 1,482 ​ 1,784 ​ Outside basis difference ​ ​ 4,617 ​ ​ 2,264 ​ Unrealized loss on securities ​ 110 ​ 9 ​ Net operating loss and credit carry-forwards ​ 33,155 ​ 12,832 ​ Intangibles basis ​ — ​ 605 ​ Lease liability ​ ​ 5,645 ​ ​ 2,282 ​ Total deferred income tax assets ​ 51,923 ​ 25,372 ​ Deferred income tax liabilities: ​ ​ ​ ​ ​ ​ ​ Fixed asset basis ​ ( 10,286 ) ​ ( 1,218 ) ​ Revenue recognition ​ ​ — ​ ​ ( 3,112 ) ​ Right-of-use asset ​ ​ ( 5,119 ) ​ ​ ( 1,965 ) ​ Intangibles basis ​ ​ ( 17,004 ) ​ ​ — ​ Total deferred income tax liabilities ​ ( 32,409 ) ​ ( 6,295 ) ​ Valuation allowance ​ ( 17,453 ) ​ ( 14,149 ) ​ Net deferred tax assets ​ $ 2,061 ​ $ 4,928 ​ ​ At April 30, 2021 and 2020 the Company recorded a valuation allowance of $ 17,453,000 and $ 14,149,000 , respectively, against state R&D credits as the Company is currently generating more tax credits than it will utilize in future years and against the outside basis difference in an equity method investee. The valuation allowance increased by $ 3,304,000 and $ 2,871,000 for April 30, 2021 and April 30, 2020, respectively. ​ At April 30, 2021 the Company had state credit carryforwards of $ 28,530,000 that do not expire and federal tax credit carryforwards of $ 2,260,000 that expire in 2041. ​ At April 30, 2021, the Company had federal, state and foreign net operating loss carryforwards of approximately $ 88,719,000 , $ 24,685,000 and $ 341,000 , respectively. The federal and $ 8,754,000 of the state net operating losses carry forward indefinitely. $ 15,931,000 of state net operating losses will begin expiring in fiscal year 2028, and the foreign loss carryforward will begin expiring in fiscal year 2022. Utilization of federal and state net operating loss carryforwards may be subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code, as amended and similar state provisions. ​ At April 30, 2021 and 2020, the Company had approximately $ 17,556,000 and $ 14,347,000 , respectively, of unrecognized tax benefits all of which would impact the Company’s effective tax rate if recognized. The Company estimates that $ 1,324,000 of its unrecognized tax benefits will decrease in the next twelve months due to statute of limitation expiration. ​ 106 Table of Contents The following table summarizes the activity related to the Company’s gross unrecognized tax benefits for the years ended April 30, 2021 and 2020 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2021 2020 Balance as of May 1 ​ $ 14,347 ​ $ 12,593 ​ Increases related to prior year tax positions ​ 1,305 ​ 62 ​ Decreases related to prior year tax positions ​ ( 116 ) ​ — ​ Increases related to current year tax positions ​ 2,074 ​ 1,971 ​ Decreases related to lapsing of statute of limitations ​ ( 54 ) ​ ( 279 ) ​ Balance as of April 30 ​ $ 17,556 ​ $ 14,347 ​ ​ The Company records interest and penalties on uncertain tax positions to income tax expense. As of April 30, 2021 and 2020, the Company had accrued approximately $ 23,000 and $ 21,000 , respectively, of interest and penalties related to uncertain tax positions. The Company is currently under audit by various state jurisdictions. The 2017 to 2020 tax years remain open to examination by the IRS for federal income taxes. The tax years 2010 to 2012 and 2016 to 2020 remain open for major state taxing jurisdictions. ​ On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, a $2 trillion relief package comprising a combination of tax provisions and other stimulus measures. The CARES Act broadly provides entities tax payment relief and significant business incentives and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act, or the Tax Act. The tax relief measures for entities include a five-year net operating loss carry back, increases interest expense deduction limits, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property. The Act also provides other non-income tax benefits, including federal funding for a range of stabilization measures and emergency funding to assist those impacted by the COVID-19 pandemic. Similar legislation is being enacted in other jurisdictions in which the Company operates. ASC Topic 740, Income Taxes, requires the effect of changes in tax rates and laws on deferred tax balances to be recognized in the period in which new legislation is enacted. The enactment of the CARES Act and similar legislation in other jurisdictions in which the Company operates was not material to the Company’s income tax benefit for the year ended April 30, 2021. ​ 17. Accumulated Other Comprehensive Income ​ The components of accumulated other comprehensive income are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ Available-for-Sale ​ Foreign Currency ​ Comprehensive ​ ​ Securities Translation Adjustments Income ​ Total accumulated other comprehensive income balance as of April 30, 2020 ​ $ 50 ​ $ 278 ​ $ 328 ​ Changes in foreign currency translation adjustments ​ ​ — ​ ​ 75 ​ ​ 75 ​ Unrealized losses, net of $ 1 of taxes ​ ​ ( 60 ) ​ ​ — ​ ​ ( 60 ) ​ Total accumulated other comprehensive income balance as of April 30, 2021 ​ $ ( 10 ) ​ $ 353 ​ $ 343 ​ ​ ​ 18. Changes in Accounting Estimates ​ During the years ended April 30, 2021, 2020 and 2019, the Company revised its estimates at completion of various contracts recognized using the over time method, which resulted in cumulative catch up adjustments during the year in which the change in estimate occurred. The change in estimate was a result of the Company changing the total costs required to complete the contracts due to having more accurate cost information as work progressed in subsequent periods on the various contracts. During the year ended April 30, 2021, the Company revised its estimates of the total expected costs to complete a TMS variant contract. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $ 1,041,000 . During the year ended April 30, 2020, the Company revised its estimates of the total 107 Table of Contents expected costs to complete a TMS contract and a contract associated with a design and development agreement. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease of approximately $ 1,403,000 and an increase of approximately $ 1,099,000 , respectively. The changes in estimates resulted in cumulative catch-up adjustments to revenue for the years ended April 30, 2019 were not material. ​ 19. Related Party Transactions ​ Pursuant to a consulting agreement, the Company paid a board member approximately $ 29,000 , $ 59,000 and $ 55,000 for fiscal years ended April 30, 2021, 2020 and 2019, respectively, for consulting services independent of his board service. ​ Concurrent with the formation of HAPSMobile, the Company executed a Design and Development Agreement (the “DDA”) with HAPSMobile. Under the DDA and related efforts, the Company will use its best efforts, up to a maximum value of $ 180,806,000 , 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 recorded revenue under the DDA and preliminary design agreements between the Company and SoftBank of $ 42,426,000 , $ 60,864,000 and $ 55,407,000 for the fiscal years ended April 30, 2021, 2020 and 2019, respectively. At April 30, 2021 and 2020, the Company had unbilled related party receivables from HAPSMobile of $ 544,000 and $ 15,779,000 recorded in unbilled receivables and retentions on the consolidated balance sheet, respectively. As of April 30, 2021, the Company owned approximately a 7 % stake. Refer to Note 9 – Equity Method Investments for further details. ​ 20. Commitments and Contingencies ​ Commitments ​ The Company’s operations are conducted in leased facilities. Refer to Note 13—Leases for additional information. ​ Contingencies ​ The Company is subject to legal proceedings and claims which arise out of the ordinary course of its business. Although adverse decisions or settlements may occur, the Company, in consultation with legal counsel, believes that the final disposition of such matters will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. The Company has recorded a litigation reserve related to the settlement offer made to Webasto. Refer to Note 2—Discontinued Operations for further details. ​ At April 30, 2021 and 2020, the Company had outstanding letters of credit totaling $ 5,029,000 and $ 2,716,000 , respectively. ​ Contract Cost Audits ​ Payments to the Company on government cost reimbursable 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 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 108 Table of Contents 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. During the fiscal year ended April 30, 2019, the Company settled rates for its incurred cost claims with the DCAA for fiscal years 2016 and 2017 without payment of any consideration. During the fiscal year ended April 30, 2020, the Company settled rates for its incurred cost claims with the DCAA for fiscal year 2015 for an amount not significant. At April 30, 2021 and 2020, the Company had no reserve for open incurred cost claim audits. ​ 21. Business Acquisitions ​ 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”). The Adjustment Escrow, less any negative post-closing adjustment to the cash consideration paid at closing, is to be released to the Arcturus Sellers upon completion of the post-Arcturus closing purchase price adjustment process; the Indemnification Escrow, less any amounts paid or reserved, is to be released to the Arcturus Sellers 12 months following the Arcturus closing. 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. ​ 109 Table of Contents 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 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. ​ 110 Table of Contents Supplemental Pro Forma Information (unaudited) ​ Arcturus revenue and loss from operations for the year ended April 30, 2021 since acquisition on February 19, 2021 was $ 15,837,000 and $ 1,869,000 , respectively. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2021 2020 Revenue ​ $ 478,579 ​ $ 454,769 Net income attributable to AeroVironment, Inc. ​ $ 27,572 ​ $ 31,264 ​ 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 $ 6,015,000 acquisition-related expenses for the year ended April 30, 2021. These expenses are included in selling, general and administrative expense on the Company’s 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. ​ 111 Table of Contents The following table summarizes the provisional 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 ​ Technology $ 11,400 ​ Customer relationships ​ ​ 4,500 ​ Other assets ​ ​ 217 ​ Goodwill ​ ​ 19,254 ​ Total net identified assets acquired ​ $ 35,371 ​ ​ ​ ​ ​ ​ Fair value of consideration: ​ ​ ​ ​ Cash ​ $ 29,700 ​ Holdback ​ ​ 150 ​ Contingent consideration ​ ​ 5,521 ​ Total ​ $ 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) ​ ISG revenue for the year ended April 30, 2021 since acquisition on February 23, 2021 was $ 1,724,000 . Other than the aforementioned revenue and intangible asset amortization expense of $ 474,000 for the year ended April 30, 2021 since the acquisition on February 23, 2021, the ISG financial results were not significant. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2021 2020 Revenue ​ $ 406,444 ​ $ 379,627 Net income attributable to AeroVironment, Inc. ​ $ 23,787 ​ $ 39,025 ​ 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 $ 954,000 acquisition-related expenses for the year ended April 30, 2021. These expenses are included in selling, general and administrative expenses on the Company’s consolidated statement of operations. ​ 112 Table of Contents 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. ​ Pulse Acquisition ​ On June 10, 2019, the Company purchased 100 % of the issued and outstanding member units of Pulse pursuant to the terms of the Pulse Purchase Agreement. The Company’s acquisition of Pulse’s helicopter UAS product family strengthens AeroVironment’s leading family of fixed-wing small unmanned aircraft systems and increases the mission capabilities of AeroVironment’s family of systems. ​ Pursuant to the Pulse Purchase Agreement, at closing, the Company paid $ 20,650,000 in cash, less closing indebtedness and transaction costs as defined in the Pulse Purchase Agreement, less a $ 250,000 retention to cover any post-closing indemnification claims, and less a $ 1,250,000 holdback amount, with the retention and holdback to be released to the member unit holders of Pulse, less any amounts paid or reserved, 18 months after the closing of the transactions in accordance with the terms of the Pulse Purchase Agreement. The closing cash consideration included the payoff of the outstanding indebtedness of Pulse as of the closing date. The Company financed the acquisition entirely from available cash on hand. During fiscal year ended April 30, 2021, the Company paid a total of $ 1,492,000 in holdback and retention payments. ​ In addition to the consideration paid at closing, the acquisition of Pulse included contingent consideration arrangements that required additional consideration to be paid by the Company to the sellers of Pulse if two specified research and development milestones were achieved by December 10, 2021 and the continued employment of specified employees. Amounts were payable upon the achievement of the milestones. The range of the undiscounted amounts the Company could pay under each of the contingent consideration agreements was zero or $ 2,500,000 ($ 5,000,000 in total if both milestones are achieved and specific key employees continued employment). The fair value of the contingent consideration recognized on the acquisition date of $ 1,703,000 was estimated by applying the income approach. That measure was based on significant Level 3 inputs not observable in the market. Key assumptions include (1) a discount rate of 4.5 % and (2) the probability that each of the milestones would be achieved. ​ During the year ended April 30, 2020, one of the research and development milestones was achieved, and the requirements for the payout of remaining contingent consideration were concluded to not have been met. As a result, the Company recorded a gain of $ 832,000 which was recorded in selling, general, and administrative expense in the consolidated statements of income. On February 26, 2020, $ 2,500,000 of contingent consideration was paid to the sellers for the achieved milestone. ​ 113 Table of Contents During the fiscal year ended April 30, 2020, the Company finalized its determination of the fair value of the assets and liabilities assumed as of the acquisition date, which is summarized in the following table (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ June 10, ​ ​ ​ 2019 ​ Technology $ 14,950 ​ Goodwill ​ ​ 6,340 ​ In-process R&D ​ ​ 550 ​ Inventory ​ ​ 334 ​ Non-compete agreements ​ ​ 320 ​ Other assets, net of liabilities assumed ​ ​ ( 614 ) ​ Total net identified assets acquired ​ $ 21,880 ​ ​ ​ ​ ​ ​ Fair value of consideration: ​ ​ ​ ​ Cash ​ $ 18,677 ​ Holdback ​ ​ 1,250 ​ Retention ​ ​ 250 ​ Contingent consideration ​ ​ 1,703 ​ Total ​ $ 21,880 ​ ​ 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 Pulse and expected future customers in the helicopter UAS market. 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) ​ Pulse revenue for the year ended April 30, 2020 since acquisition on June 10, 2019 was $ 6,607,000 . Other than the aforementioned revenue and intangible asset amortization expense of $ 2,461,000 for the year ended April 30, 2020 since the acquisition on June 10, 2019, the Pulse financial results were not significant. The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2018 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2020 2019 Revenue ​ $ 367,523 ​ $ 316,878 Net income attributable to AeroVironment, Inc. ​ $ 41,481 ​ $ 43,204 ​ 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 28, 2018, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2018 with the consequential tax effects, and including the results of Pulse prior to acquisition. ​ 114 Table of Contents The Company did not incur significant acquisition-related expenses for the year ended April 30, 2020. These expenses are included in selling, general and administrative, research and development, and product cost of sales on the Company’s 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, 2018, nor are they indicative of results of operations that may occur in the future. ​ 22. Segments ​ The Company’s product segments are as follows: ​ Unmanned Aircraft Systems—The UAS segment focuses primarily on 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”) and related services primarily to organizations within the U.S. Department of Defense (“DoD”) and to international allied governments. ​ 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. ​ 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 segment results are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2021 ​ 2020 ​ 2019 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UAS ​ $ 379,075 ​ $ 367,296 ​ $ 314,274 ​ MUAS ​ 15,837 ​ ​ — ​ ​ — ​ Total ​ ​ 394,912 ​ ​ 367,296 ​ ​ 314,274 ​ Gross margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UAS ​ ​ 161,593 ​ ​ 153,102 ​ ​ 128,403 ​ MUAS ​ ​ 2,965 ​ ​ — ​ ​ — ​ Total ​ ​ 164,558 ​ ​ 153,102 ​ ​ 128,403 ​ Income (loss) from continuing operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UAS ​ ​ 45,182 ​ ​ 47,135 ​ ​ 33,826 ​ MUAS ​ ​ ( 1,869 ) ​ ​ — ​ ​ — ​ Total ​ ​ 43,313 ​ ​ 47,135 ​ ​ 33,826 ​ Total assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UAS ​ ​ 439,320 ​ ​ 584,954 ​ ​ 508,844 ​ MUAS ​ ​ 489,246 ​ ​ — ​ ​ — ​ Total ​ ​ 928,566 ​ ​ 584,954 ​ ​ 508,844 ​ ​ 23. Geographic Information ​ Sales to non-U.S. customers, including U.S. government foreign military sales in which an end user is a foreign government, accounted for 39 %, 45 % and 52 % of revenue for each of the fiscal years ended April 30, 2021, 2020 and 2019, respectively. With the acquisition of Arcturus, the Company deploys in-service assets internationally, which as of April 30, 2020 was $ 36,047,000 . ​ 115 Table of Contents 24. Subsequent Events ​ Telerob Acquisition ​ 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”), including Telerob’s wholly owned subsidiary, Telerob USA, Inc. (“Telerob USA,” and collectively with Telerob, the “Telerob Group”) pursuant to its previously announced Share Purchase Agreement (the “Purchase Agreement”) with Unmanned Systems Investments GmbH, a German limited liability company incorporated under the laws of Germany (the “Seller”), and each of the unit holders of the Seller (collectively, the “Shareholders”), to purchase 100 % of the issued and outstanding shares of Seller’s wholly-owned subsidiary Telerob (the “Acquisition”). Upon closing of the transactions contemplated by the Purchase Agreement, Telerob became a wholly-owned subsidiary of the Company. ​ Pursuant to the Purchase Agreement at closing, the Company paid € 37,455,000 (approximately $ 45,400,000 ) in cash to the Seller (subject to certain purchase price adjustments as set forth in the Purchase Agreement), less (a) € 3,000,000 (approximately $ 3,636,000 ) to be held in escrow for breaches of the Seller’s fundamental warranties or any other of 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 Seller; (b) transaction-related fees and costs incurred by the 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 the Telerob Group, which amount was paid in combination to the Seller and the lender under an agreement between Telerob and the lender providing for a reduced payoff amount. This indebtedness was offset by cash on hand at the Telerob Group at closing. The escrow amount is to be released to the Seller, less any amounts paid or reserved, 30 months following the closing date. ​ In addition to the consideration paid at closing, the Seller may receive € 2,000,000 (approximately $ 2,424,000 ) in additional cash consideration if specific revenue targets for the Telerob Group 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 the Telerob Group are achieved in the 12 month period following the First Earnout Year. The 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. ​ SoftBank Agreement ​ 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 with each other to continue the design and development of the Solar HAPS aircraft developed under the DDA. ​ On May 29, 2021, the Company and SoftBank entered into a Master Design and Development Agreement (“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 JPY 500,000,000 ($ 4,600,000 ), which loans 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. ​ 116 Table of Contents 25. Quarterly Results of Operations (Unaudited ) ​ The following tables present selected unaudited consolidated financial data for each of the eight quarters in the two-year period ended April 30, 2021. In the Company’s opinion, this unaudited information has been prepared on the same basis as the audited information and includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of the financial information for the period presented. The Company’s fiscal year ends on April 30. Due to the fixed year end date of April 30, the first and fourth quarters each consist of approximately 13 weeks. The second and third quarters each consist of exactly 13 weeks. The first three quarters end on a Saturday. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ August 1, 2020 ​ October 31, 2020 January 30, 2021 April 30, 2021 ​ ​ (In thousands except per share data) Year ended April 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 87,450 ​ $ 92,665 ​ $ 78,782 ​ $ 136,015 ​ Gross margin ​ $ 35,411 ​ $ 40,851 ​ $ 28,641 ​ $ 59,655 ​ Net income attributable to AeroVironment, Inc. from continuing operations ​ $ 10,080 ​ $ 2,094 (1) $ 211 ​ $ 10,946 (2) Net income per share attributable to AeroVironment, Inc. from continuing operations—basic(3) ​ $ 0.42 ​ $ 0.09 (1) $ 0.01 ​ $ 0.45 (2) Net income per share attributable to AeroVironment, Inc. from continuing operations—diluted(3) ​ $ 0.42 ​ $ 0.09 (1) $ 0.01 ​ $ 0.44 (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ July 27, ​ October 26, January 25, April 30, ​ ​ 2019 ​ 2019 ​ 2020 ​ 2020 ​ ​ (In thousands except per share data) Year ended April 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 86,911 ​ $ 83,271 ​ $ 61,891 ​ $ 135,223 ​ Gross margin ​ $ 41,272 ​ $ 35,166 ​ $ 23,496 ​ $ 53,168 ​ Net (loss) income attributable to AeroVironment, Inc. from continuing operations ​ $ 17,110 ​ $ 7,501 ​ $ ( 1,008 ) ​ $ 17,736 ​ Net (loss) income per share attributable to AeroVironment, Inc. from continuing operations—basic(3) ​ $ 0.72 ​ $ 0.32 ​ $ ( 0.04 ) ​ $ 0.74 ​ Net (loss) income per share attributable to AeroVironment, Inc. from continuing operations—diluted(3) ​ $ 0.71 ​ $ 0.31 ​ $ ( 0.04 ) ​ $ 0.73 ​ (1) Includes a loss of $ 8.4 million for the Company’s proportionate share of the HAPSMobile Inc. joint venture’s impairment of its investment in Loon LLC recorded to “Equity method investment loss, net of tax” in the consolidated statement of operations. (2) Includes a $ 9.3 million legal accrual related to our former EES Business recorded to “Other (expense) income, net” in the consolidated statement of operations. (3) Earnings per share is computed independently for each of the quarters presented. The sum of the quarterly earnings per share may not equal the total earnings per share computed for the year due to rounding. ​ ​ ​ 117 Table of Contents SUPPLEMENTARY DATA ​ SCHEDULE II— VALUATION AND QUALIFYING ACCOUNTS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additions ​ ​ ​ ​ ​ ​ ​ Balance at Balance ​ Charged to Charged to ​ ​ Balance at ​ ​ Beginning ​ Acquired from ​ Costs and ​ Other ​ ​ ​ ​ End of Description ​ of Period ​ Acquisition ​ Expenses ​ Accounts ​ Deductions ​ Period ​ ​ (In thousands) Allowance for doubtful accounts for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 ​ $ 1,080 ​ $ — ​ $ 198 ​ $ — ​ $ ( 237 ) ​ $ 1,041 ​ 2020 ​ $ 1,041 ​ $ — ​ $ 219 ​ $ — ​ $ ( 70 ) ​ $ 1,190 ​ 2021 ​ $ 1,190 ​ $ — ​ $ 82 ​ $ — ​ $ ( 677 ) ​ $ 595 ​ Warranty reserve for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 ​ $ 2,090 ​ $ — ​ $ 702 ​ $ — ​ $ ( 1,088 ) ​ $ 1,704 ​ 2020 ​ $ 1,704 ​ $ — ​ $ 2,069 ​ $ — ​ $ ( 1,758 ) ​ $ 2,015 ​ 2021 ​ $ 2,015 ​ $ — ​ $ 1,650 ​ $ — ​ $ ( 1,324 ) ​ $ 2,341 ​ Reserve for inventory excess and obsolescence for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 ​ $ 3,953 ​ $ — ​ $ 5,054 ​ $ — ​ $ ( 1,183 ) ​ $ 7,824 ​ 2020 ​ $ 7,824 ​ $ — ​ $ 5,377 ​ $ — ​ $ ( 2,969 ) ​ $ 10,232 ​ 2021 ​ $ 10,232 ​ $ 1,415 ​ $ 1,178 ​ $ — ​ $ ( 2,536 ) ​ $ 10,289 ​ Reserve for self-insured medical claims for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 ​ $ 1,003 ​ $ — ​ $ 10,808 ​ $ — ​ $ ( 10,867 ) ​ $ 944 ​ 2020 ​ $ 944 ​ $ — ​ $ 13,031 ​ $ — ​ $ ( 13,222 ) ​ $ 753 ​ 2021 ​ $ 753 ​ $ — ​ $ 11,329 ​ $ — ​ $ ( 10,789 ) ​ $ 1,293 ​ ​ ​ 118 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. ​ Not applicable. ​ Item 9A. Controls and Procedure s. ​ Evaluation of Disclosure Controls and Procedures ​ We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As required by Rule 13a-15(b) under the Exchange Act, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and were operating at a reasonable level. ​ Management’s Report on Internal Control Over Financial Reporting ​ Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ​ ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ​ ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and ​ ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ Under the supervision and with the participation of management, including our principal executive and financial officers, we assessed our internal control over financial reporting as of April 30, 2021, based on criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework , issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“COSO”). Based on this assessment, management concluded that the Company maintained effective internal control over financial reporting as of April 30, 2021 based on the specified criteria. ​ 119 Table of Contents In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. Our management’s evaluation of internal control over financial reporting excluded the internal control activities of Arcturus, which we acquired in February 19, 2021 and ISG, which we acquired in February 23, 2021, as discussed in Note 21 – Business Acquisitions, of the notes to the consolidated financial statements. We have included the financial results of these in the consolidated financial statements from the date of acquisition. Total assets (excluding goodwill and intangible assets) and total revenues subject to Arcturus’ and ISG’s internal control over financial reporting represented approximately 24% and 4% of our consolidated total assets and total revenues as of and for the fiscal year ended April 30, 2021, respectively. ​ The effectiveness of our internal control over financial reporting as of April 30, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein. ​ Changes in Internal Control over Financial Reporting ​ There were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended April 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ​ Item 9B. Other Informatio n. ​ None. ​ ​ 120 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Stockholders and the Board of Directors of AeroVironment, Inc. ​ Opinion on Internal Control over Financial Reporting ​ We have audited the internal control over financial reporting of AeroVironment, Inc. (the “Company”) as of April 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. ​ We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended April 30, 2021, of the Company and our report dated June 29, 2021, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of a new accounting standard. ​ As described in Management’s Report on Internal Controls Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Arcturus, which was acquired on February 19, 2021, and ISG, which was acquired on February 23, 2021. Total assets (excluding goodwill and intangible assets) and total revenues subject to Arcturus’ and ISG’s internal control over financial reporting represented approximately 24% and 4% of consolidated total assets and total revenues as of and for the fiscal year ended April 30, 2021, respectively. Accordingly, our audit did not include the internal control over financial reporting at Arcturus and ISG. ​ Basis for Opinion ​ The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ Definition and Limitations of Internal Control over Financial Reporting ​ A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ​ 121 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ /s/ Deloitte & Touche LLP ​ Los Angeles, California June 29, 2021 ​ ​ 122 Table of Contents PART III ​ Item 10. Directors, Executive Officer s, and Corporate Governance. ​ Certain information required by Item 401 and Item 405 of Regulation S-K will be included in the definitive proxy statement for our 2021 Annual Meeting of Stockholders, which will be filed no later than 120 days after April 30, 2021, and that information is incorporated by reference herein. ​ Codes of Ethics ​ We have adopted a Code of Business Conduct and Ethics (“Code of Conduct”). The Code of Conduct is posted on our website, http://investor.avinc.com. We intend to disclose on our website any amendments to, or waivers of, the Code of Conduct covering our Chief Executive Officer, Chief Financial Officer and/or Controller promptly following the date of such amendments or waivers. A copy of the Code of Conduct may be obtained upon request, without charge, by contacting our Secretary at (805) 520-8350 or by writing to us at AeroVironment, Inc., Attn: Secretary, 900 Innovators Way, Simi Valley, California 93065. The information contained on or connected to our website is not incorporated by reference into this Annual Report and should not be considered part of this or any reported filed with the SEC. ​ No family relationships exist among any of our executive officers or directors. ​ There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors. ​ The information required by Item 407(d)(4) and (5) of Regulation S-K will be included in the definitive proxy statement for our 2021 Annual Meeting of Stockholders, and that information is incorporated by reference herein. ​ Item 11. Executive Compensation. ​ The information required by Item 402 and Item 407(e)(4) and (5) of Regulation S-K will be included in the definitive proxy statement for our 2021 Annual Meeting of Stockholders, and that information is incorporated by reference herein. ​ Item 12. Security Ownership of Certain Beneficial Owner s and Management and Related Stockholder Matters. ​ The information required by Item 201(d) and Item 403 of Regulation S-K will be included in the definitive proxy statement for our 2021 Annual Meeting of Stockholders, and that information is incorporated by reference herein. ​ Item 13. Certain Relationships and Related Transactions, and Director Independence. ​ The information required by Item 404 and Item 407(a) of Regulation S-K will be included in the definitive proxy statement for our 2021 Annual Meeting of Stockholders, and that information is incorporated by reference herein. ​ Item 14. Principal Accounting Fees and Services. ​ The information required by Item 14 of Form 10-K will be included in the definitive proxy statement for our 2021 Annual Meeting of Stockholders, and that information is incorporated by reference herein. ​ ​ 123 Table of Contents PART IV ​ Item 15. Exhibits, Financial Statement Schedules. ​ (a) The following are filed as part of this Annual Report: ​ 1. Financial Statements ​ The following consolidated financial statements are included in Item 8: ​ ● Report of Independent Registered Public Accounting Firm ​ ● Consolidated Balance Sheets at April 30, 2021 and 2020 ​ ● Consolidated Statements of Income for the Years Ended April 30, 2021, 2020 and 2019 ​ ● Consolidated Statements of Comprehensive Income for the Years Ended April 30, 2021, 2020 and 2019 ​ ● Consolidated Statements of Stockholders’ Equity for the Years Ended April 30, 2021, 2020 and 2019 ​ ● Consolidated Statements of Cash Flows for the Years Ended April 30, 2021, 2020 and 2019 ​ ● Notes to Consolidated Financial Statements ​ 2. Financial Statement Schedules ​ The following Schedule is included in Item 8: ​ ● Schedule II—Valuation and Qualifying Accounts ​ All other schedules have been omitted since the required information is not present, or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the Notes thereto. ​ 3. Exhibits ​ See Item 15(b) of this report below. ​ (b) Exhibits ​ Exhibit Number Exhibit 3.1(1) ​ Amended and Restated Certificate of Incorporation of AeroVironment, Inc. 3.3 (2) ​ Third Amended and Restated Bylaws of AeroVironment, Inc. 4.1(3) ​ Form of AeroVironment, Inc.’s Common Stock Certificate 4.2(26) ​ Description of Registrant’s Securities 10.1#(4) ​ Form of Director and Executive Officer Indemnification Agreement 10.2#(3) ​ AeroVironment, Inc. Nonqualified Stock Option Plan 10.3#(3) ​ Form of Nonqualified Stock Option Agreement pursuant to the AeroVironment, Inc. Nonqualified Stock Option Plan 10.4#(3) ​ AeroVironment, Inc. Directors’ Nonqualified Stock Option Plan 10.5#(3) ​ Form of Directors’ Nonqualified Stock Option Agreement pursuant to the AeroVironment, Inc. Directors’ Nonqualified Stock Option Plan 10.6#(3) ​ AeroVironment, Inc. 2002 Equity Incentive Plan 10.7#(3) ​ Form of AeroVironment, Inc. 2002 Equity Incentive Plan Stock Option Agreement ​ ​ ​ ​ 124 Table of Contents Exhibit Number Exhibit 10.8#(3) ​ AeroVironment, Inc. 2006 Equity Incentive Plan 10.9#(5) ​ AeroVironment, Inc. 2006 Equity Incentive Plan, as amended and restated effective September 29, 2011 10.10#(6) ​ AeroVironment, Inc. 2006 Equity Incentive Plan, as amended and restated effective September 30, 2016 10.11#(3) ​ Form of Stock Option Agreement pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.12#(3) ​ Form of Performance Based Bonus Award pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.13#(7) ​ Form of Long-Term Compensation Award Grant Notice and Long-Term Compensation Award Agreement pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.14#(17) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (Severance Plan Participants) pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.15#(17) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (Non-Severance Plan Participants) pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.16#(17) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (Non-Management Directors) pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.17#(17) ​ Form of Performance Restricted Stock Unit Award Grant Notice and Performance Restricted Stock Unit Award Agreement pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.18(8) ​ Standard Industrial/Commercial Single-Tenant Lease, dated February 12, 2007, between AeroVironment, Inc. and OMP Industrial Moreland, LLC, for the property located at 85 Moreland Road, Simi Valley, California, including the addendum thereto 10.19(6) ​ First Amendment to Lease Agreement dated October 10, 2011 and Second Amendment to Lease Agreement dated June 2, 2017 by and between AeroVironment, Inc. and Simi Valley-NCR, LLC for the property located at 85 Moreland Road, Simi Valley, California 10.20(9) ​ Standard Industrial/Commercial Single-Tenant Lease, dated March 3, 2008, between AeroVironment, Inc. and Hillside Associates III, LLC, for the property located at 900 Enchanted Way, Simi Valley, California, including the addendum thereto 10.21(9) ​ Standard Industrial/Commercial Single-Tenant Lease, dated April 21, 2008, between AeroVironment, Inc. and Hillside Associates II, LLC, for the property located at 994 Flower Glen Street, Simi Valley, California, including the addendum thereto 10.22(10) ​ First Amendment to Lease Agreement (900 Enchanted Way, Simi Valley, CA 93065) dated as of December 1, 2013, by and between the Company and Hillside III LLC, and related agreements 10.23(10) ​ First Amendment to Lease Agreement (994 Flower Glen Street, Simi Valley, CA 93065) dated as of December 1, 2013, by and between the Company and Hillside II LLC, and related agreements 10.24(10) ​ Lease Agreement (996 Flower Glen Street, Simi Valley, CA 93065) dated as of December 1, 2013, by and between the Company and Hillside II LLC, and related agreements 10.25(11) ​ Standard Multi-Tenant Office Lease — Gross, dated September 24, 2015, between AeroVironment, Inc. and Monrovia Technology Campus LLC for property at 800 Royal Oaks Dr. Monrovia, California, including addendums thereto 10.26(21) ​ Lease dated March 28, 2018 between AeroVironment, Inc. and Princeton Avenue Holdings, LLC for property located at 14501 Princeton Avenue, Moorpark, California, including addendums thereto 10.27#(3) ​ Retiree Medical Plan 10.28†(12) ​ Award Contract, dated March 1, 2011, between AeroVironment, Inc. and United States Army Contracting Command 10.29†(13) ​ Contract modification P00015 dated September 5, 2013 under the base contract with the US Army Contracting Command—Redstone Arsenal (Missile) dated August 30, 2012 10.30†(14) ​ Contract modification P00074 dated September 27, 2016 under the base contract with the US Army Contracting Command — Redstone Arsenal (Missile) dated August 30, 2012 10.31(15) ​ Form of Director Letter Agreement by and between AeroVironment, Inc. and each non-employee director 10.32(4) ​ Consulting Agreement by and between AeroVironment, Inc. and Charles R. Holland executed as of March 7, 2016 10.33(4) ​ Task Order #FY16-001 to Consulting Agreement by and between AeroVironment, Inc. and Charles R. Holland executed as of March 7, 2016 ​ 125 Table of Contents Exhibit Number Exhibit 10.34 ​ Amendment No. 1 dated November 28, 2016, Amendment No. 2 dated June 7, 2017, Amendment No. 3 dated April 23, 2018, Amendment No. 4 dated April 30, 2019, Amendment No. 5 dated December 2, 2019, Amendment No. 6 dated May 29, 2020, Amendment No. 7 dated June 1, 2021 to Standard Consulting Agreement and corresponding Task Orders by and between AeroVironment, Inc. and Charles R. Holland 10.35†(16) ​ Joint Venture Agreement by and between AeroVironment, Inc. and SoftBank Corp. dated as of December 1, 2017 10.36†(16) ​ Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of December 27, 2017 10.37ǂ(17) ​ Amendment No.1 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of March 30, 2018 10.38ǂ(17) ​ Amendment No.2 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of June 25, 2018 10.39ǂ(17) ​ Amendment No.3 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of August 28, 2018 10.40ǂ(17) ​ Amendment No.4 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of December 5, 2018 10.41ǂ(17) ​ Amendment No.5 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of March 19, 2019 10.42ǂ(17) ​ Amendment No.6 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of March 29, 2019 10.43ǂ(17) ​ Amendment No.7 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of April 24, 2019 10.44ǂ(18) ​ Amendment No. 8 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of June 20, 2019 10.45ǂ(19) ​ Amendment No. 9 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of December 2, 2019 10.46ǂ(26) ​ Amendment No. 10 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of February 25, 2020 10.47ǂ(26) ​ Amendment No. 11 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile, Inc. dated as of April 30, 2020 10.48ǂ(27) ​ Amendment No. 12 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile Inc., dated as of September 18, 2020 10.49ǂ(27) ​ Amendment No. 13 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile Inc., dated as of October 28, 2020 10.50ǂ(28) ​ Amendment No. 14 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile Inc., dated as of January 11, 2021 10.51ǂ ​ Amendment No. 15 to the Design and Development Agreement by and between AeroVironment, Inc. and HAPSMobile Inc., dated as of May 29, 2021 10.52(17) ​ Amendment No. 1 to the Joint Venture Agreement by and between AeroVironment, Inc. and Softbank Corp. dated as of November 29, 2018 10.53(17) ​ Amendment No. 2 to the Joint Venture Agreement by and between AeroVironment, Inc. and Softbank Corp. dated as of February 8, 2019 10.54 ​ Amendment No. 3 to the Joint Venture Agreement by and between AeroVironment, Inc. and Softbank Corp. dated as of June 21, 2019 10.55 ​ Amendment No. 4 to the Joint Venture Agreement by and between AeroVironment, Inc. and Softbank Corp. dated as of October 30, 2019 10.56 ​ Amendment No. 5 to the Joint Venture Agreement by and between AeroVironment, Inc. and Softbank Corp. dated as of March 31, 2021 10.57ǂ ​ Amendment No. 6 to the Joint Venture Agreement by and between AeroVironment, Inc. and Softbank Corp. dated as of May 29, 2021 10.58(20) ​ Asset Purchase Agreement by and between Webasto Charging Systems, Inc. and AeroVironment, Inc. dated as of June 1, 2018 126 Table of Contents 10.59(21) ​ Side Letter Agreement by and between Webasto Charging Systems, Inc. and AeroVironment, Inc. dated as of June 29, 2018 10.60(22) ​ First Amendment to Lease dated October 26, 2018 between AeroVironment, Inc. and Princeton Avenue Holdings, LLC for property located at 14501 Princeton Avenue, Moorpark, California 10.61#(23) ​ AeroVironment, Inc. Executive Severance Plan and Summary Description, effective January 1, 2019 10.62#(24) ​ Special Consulting Agreement by and between AeroVironment, Inc. and Kirk Flittie dated as of July 13, 2019 10.63#(25) ​ Special Consulting Agreement by and between AeroVironment, Inc. and Teresa Covington dated as of October 18, 2019 10.64#(19) ​ Offer Letter to Kevin McDonnell executed January 13, 2020 10.65(26) ​ Second Amendment to Lease Agreement dated as of May 13, 2020, by and between the Company and Hillside III LLC 10.66 ​ Second Amendment to Lease Agreement (994 Innovators Way, Simi Valley, CA 93065) dated as of June 1, 2021, by and between the Company and Hillside Associates II, LLC, and related agreements 10.67 ​ First Amendment to Lease Agreement (996 Innovators Way, Simi Valley, CA 93065) dated as of June 1, 2021, by and between the Company and Hillside Associates II, LLC, and related agreements 10.68*(28) ​ Stock Purchase Agreement, dated January 11, 2021, by and among AeroVironment, Inc., Arcturus UAV, Inc., and the shareholders and other equity interest holders of Arcturus UAV, Inc. 10.69(28) ​ Loan commitment letter, dated January 11, 2021, by and among AeroVironment, Inc., Bank of America, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association. 10.70*(28) ​ Credit Agreement, dated February 19, 2021, by and among AeroVironment, Inc., 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 10.71ǂ(28) ​ Security and Pledge Agreement, dated February 19, 2021, by and among AeroVironment, Inc., certain obligors, and Bank of America, N.A., as the administrative agent 10.72ǂ*(28) ​ Share Purchase Agreement, dated December 3, 2020, by and between AeroVironment, Inc., Unmanned Systems Investments GmbH, and each of the unit holders of Unmanned Systems Investments GmbH 23.1 ​ Consent of Deloitte & Touche LLP, independent registered public accounting firm 23.2 ​ Consent of Ernst & Young LLP, independent registered public accounting firm 24.1 ​ Power of Attorney (incorporated by reference to the signature page of this Annual Report) 31.1 ​ Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 31.2 ​ Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 32.1 ​ Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS ​ XBRL Instance Document 101.SCH ​ XBRL Taxonomy Extension Schema Document 101.CAL ​ XBRL Taxonomy Calculation Linkbase Document 101.DEF ​ XBRL Taxonomy Extension Definition Linkbase Document 101.LAB ​ XBRL Taxonomy Label Linkbase Document 101.PRE ​ XBRL Taxonomy Presentation Linkbase Document 104 ​ Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101 ​ (1) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 9, 2007 (File No. 001-33261). ​ (2) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed July 1, 2015 (File No. 001-33261). ​ (3) Incorporated by reference herein to the exhibits to the Company’s Registration Statement on Form S-1 (File No. 333-137658). ​ 127 Table of Contents (4) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10 K filed on June 29, 2016 (File No. 001 33261). ​ (5) Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed on October 5, 2011 (File No. 001-33261). ​ (6) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed June 28, 2017 (File No. 001-33261). ​ (7) Incorporated by reference herein to the exhibits to the Company’s Current Report on Form 8-K filed July 28, 2010 (File No. 001-33261). ​ (8) Incorporated by reference herein to the exhibits on the Company’s Annual Report on Form 10-K filed June 29, 2007 (File No. 001-33261). ​ (9) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed June 26, 2008 (File No. 001-33261). ​ (10) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 5, 2014 (File No. 001-33261). ​ (11) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed December 9, 2015 (File No. 001-33261). ​ (12) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed on June 21, 2011 (File No. 001-33261). ​ (13) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed November 27, 2013 (File No. 001-33261). ​ (14) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10 Q filed December 7, 2016 (File No. 001 33261). ​ (15) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 9, 2016 (File No. 001-33261). ​ (16) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed March 7, 2018 (File No. 001-33261). ​ (17) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed on June 26, 2019 (File No. 001-33261). ​ (18) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed September 5, 2019 (File No. 001-33261). ​ (19) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed March 4, 2020 (File No. 001-33261). ​ (20) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed September 6, 2018 (File No. 001-33261). The representations and warranties contained in the Asset Purchase Agreement were made for the purposes of allocating contractual risk between the parties and not as a means of establishing facts and are qualified by information in disclosure schedules that the parties exchanged in connection with the signing of the Asset 128 Table of Contents Purchase Agreement. Moreover, the representations and warranties were made only as of the date of execution of the Asset Purchase Agreement and information concerning the subject matter of the representations and warranties may change after the date of the Asset Purchase Agreement. Only parties to the Asset Purchase Agreement have a right to enforce the agreement. Accordingly, security holders should not rely on the representations and warranties in the Asset Purchase Agreement. All schedules (or similar attachments) have been omitted from this filing pursuant to Item 601 of Regulation S-K. The Company will furnish copies of any schedules to the Securities and Exchange Commission upon request. ​ (21) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed September 6, 2018 (File No. 001-33261). ​ (22) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed November 30, 2018 (File No. 001-33261). ​ (23) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 7, 2018 (File No. 001-33261). ​ (24) Incorporated by reference herein to the exhibits to the Company’s Current Report on Form 8-K filed on July 27, 2019 (File No. 001-33261). ​ (25) Incorporated by reference herein to the exhibits to the Company’s Current Report on Form 8-K/A filed October 22, 2019 (File No. 001-33261). ​ (26) Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 24, 2020 (File No. 001-33261). ​ (27) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed December 9, 2020 (File No. 001-33261). ​ (28) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed March 9, 2021 (File No. 001-33261). ​ † Confidential treatment has been granted for portions of this exhibit. ​ ǂ Pursuant to Items 601(b)(2) and/or 601(b)(10) of Regulation S-K, certain immaterial provisions of the agreement that would likely cause competitive harm to the Company if publicly disclosed have been redacted or omitted. ​ # Indicates management contract or compensatory plan. ​ * Schedules (or similar attachments) to this Exhibit have been omitted in accordance with Items 601(a)(5) and/or 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementary a copy of all omitted schedules to the Securities and Exchange Commission on a confidential basis upon request. ​ (c) Financial Statement Schedules and Separate Financial Statements of Subsidiaries Not Consolidated and Fifty Percent or Less Owned Persons HAPSMobile was deemed a significant equity investee under Rule 3-09 of Regulation S-X for the fiscal year ended April 30, 2021. As such, financial statements of HAPSMobile are required to be filed by amendment to this Annual Report on Form 10-K, within six months of HAPSMobile's fiscal year end. Accordingly, HAPSMobile financial statements for its fiscal year ended March 31, 2021 will be filed via an amendment to this Annual Report on Form 10-K on or before September 30, 2021. ​ 129 Table of Contents SIGNATURES ​ Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ AEROVIRONMENT, INC. ​ ​ Date: June 29, 2021 ​ /s/ Wahid Nawabi ​ By: Wahid Nawabi ​ Its: Chief Executive Officer and President ​ ​ (Principal Executive Officer) ​ POWER OF ATTORNEY ​ KNOW ALL PERSONS BY THESE PRESENTS, that each of the persons whose signature appears below hereby constitutes and appoints Wahid Nawabi and Kevin P. McDonnell, each of them acting individually, as his attorney-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys- in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming our signatures as they may be signed by our said attorney-in-fact and any and all amendments to this Annual Report on Form 10-K. ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. ​ Name Title Date ​ ​ ​ ​ ​ /s/ Wahid Nawabi ​ President, Chief ​ June 29, 2021 Wahid Nawabi ​ Executive Officer and Director ​ ​ ​ ​ (Principal Executive Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Kevin P. McDonnell ​ Senior Vice President and ​ June 29, 2021 Kevin P. McDonnell ​ Chief Financial Officer (Principal ​ ​ ​ ​ Financial and Accounting Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Timothy E. Conver ​ Chairman ​ June 29, 2021 Timothy E. Conver ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Edward R. Muller ​ Director ​ June 29, 2021 Edward R. Muller ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Arnold L. Fishman ​ Director ​ June 29, 2021 Arnold L. Fishman ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Stephen F. Page ​ Director ​ June 29, 2021 Stephen F. Page ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Charles R. Holland ​ Director ​ June 29, 2021 Charles R. Holland ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Catharine Merigold ​ Director ​ June 29, 2021 Catharine Merigold ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Charles Thomas Burbage ​ Director ​ June 29, 2021 Charles Thomas Burbage ​ ​ ​ ​ ​ ​ 130