What changed in this filing

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Item 1. Financial Statements

2022-12-07 compared with 2022-09-08 · 286 added, 141 removed, 619 unchanged (41% of the section changed)

6 unchanged sentences

Short-term investments

Accounts receivable, net of allowance for doubtful accounts of $ 615 at July 30, 2022 and $ 592 at April 30, 2022

Accounts receivable, net of allowance for doubtful accounts of $ 74 at October 29, 2022 and $ 592 at April 30, 2022

Unbilled receivables and retentions (inclusive of related party unbilled receivables of $ 2,229 at April 30, 2022)

Inventories, net

Income taxes receivable

25 unchanged sentences

Authorized shares— 10,000,000 ;

none issued or outstanding at July 30, 2022 and April 30, 2022

none issued or outstanding at October 29, 2022 and April 30, 2022

Common stock, $ 0.0001 par value:

Authorized shares— 100,000,000

Issued and outstanding shares— 24,990,590 shares at July 30, 2022 and 24,951,287 shares at April 30, 2022

Issued and outstanding shares— 25,157,618 shares at October 29, 2022 and 24,951,287 shares at April 30, 2022

Additional paid-in capital

10 unchanged sentences

Three Months Ended

Six Months Ended

Product sales

Contract services (inclusive of related party revenue of $ 10,352 for the three months ended July 31, 2021)

Contract services (inclusive of related party revenue of $ 10,342 and $ 20,694 for the three and six months ended October 30, 2021, respectively)

Cost of sales:

6 unchanged sentences

Research and development

Loss from operations

(Loss) income from operations

Other (loss) income:

Interest expense, net

Other expense, net

Other income (expense), net

Loss before income taxes

Provision for (benefit from) income taxes

Equity method investment loss, net of tax

Benefit from income taxes

Equity method investment (loss) income, net of tax

Net (loss) income

Net income attributable to noncontrolling interest

Net loss attributable to AeroVironment, Inc.

Net loss per share attributable to AeroVironment, Inc.

Net (loss) income attributable to AeroVironment, Inc.

Net (loss) income per share attributable to AeroVironment, Inc.

Weighted-average shares outstanding:

1 unchanged sentence

AeroVironment, Inc.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

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

(In thousands)

Three Months Ended

Six Months Ended

Net (loss) income

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $ 6 and $ 0 for the three months ended July 30, 2022 and July 31, 2021, respectively

Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $ 0 for the three and six months ended October 29, 2022 and October 30, 2021, respectively

Change in foreign currency translation adjustments

Total comprehensive loss

Total comprehensive (loss) income

Net income attributable to noncontrolling interest

Comprehensive loss attributable to AeroVironment, Inc.

Comprehensive (loss) income attributable to AeroVironment, Inc.

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

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended July 30, 2022 and July 31, 2021 (Unaudited)

For the six months ended October 29, 2022 and October 30, 2021 (Unaudited)

(In thousands except share data)

6 unchanged sentences

Foreign currency translation

Stock options exercised

Restricted stock awards

1 unchanged sentence

Tax withholding payment related to net share settlement of equity awards

Shares issued, net of issuance costs

Deconsolidation of previously controlled subsidiary

Stock based compensation

Balance at July 30, 2022

Balance at October 29, 2022

Comprehensive

9 unchanged sentences

Tax withholding payment related to net share settlement of equity awards

Change in non-controlling interest

Stock based compensation

Balance at October 30, 2021

AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended October 29, 2022 and October 30, 2021 (Unaudited)

(In thousands except share data)

Comprehensive

AeroVironment, Inc.

(Loss) Income

Balance at July 30, 2022

Net income (loss)

Unrealized gain on investments

Foreign currency translation

Stock options exercised

Restricted stock awards

Restricted stock awards forfeited

Tax withholding payment related to net share settlement of equity awards

Shares issued, net of issuance costs

Deconsolidation of previously controlled subsidiary

Stock based compensation

Balance at October 29, 2022

Comprehensive

AeroVironment, Inc.

Income (Loss)

Balance at July 31, 2021

Unrealized gain on investments

Foreign currency translation

Restricted stock awards

Restricted stock awards forfeited

Change in non-controlling interest

Stock based compensation

Balance at October 30, 2021

AeroVironment, Inc.

Condensed Consolidated Statements of Cash Flow s (Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

Operating activities

1 unchanged sentence

Depreciation and amortization

Loss from equity method investments

Loss (income) from equity method investments

Loss on deconsolidation of previously controlled subsidiary

Amortization of debt issuance costs

3 unchanged sentences

(Gain) loss on foreign currency transactions

Unrealized gain on available-for-sale equity securities, net

Deferred income taxes

13 unchanged sentences

Equity method investments

Equity security investments

Business acquisitions, net of cash acquired

Proceeds from deconsolidation of previously controlled subsidiary, net of cash deconsolidated

Redemptions of available-for-sale investments

3 unchanged sentences

Principal payments of term loan

Tax withholding payment related to net settlement of equity awards

Holdback and retention payments for business acquisition

Proceeds from shares issued, net of issuance costs

Tax withholding payment related to net settlement of equity awards

Exercise of stock options

7 unchanged sentences

Non-cash activities

Unrealized (gain) loss on available-for-sale investments, net of deferred tax expense of $ 6 and $ 0 for the three months ended July 30, 2022 and July 31, 2021, respectively

Unrealized (gain) loss on available-for-sale investments, net of deferred tax expense of $ 0 for the six months ended October 29, 2022 and October 30, 2021, respectively

Change in foreign currency translation adjustments

15 unchanged sentences

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements have been included.

The results of operations for the three months ended July 30, 2022 are not necessarily indicative of the results for the full year ending April 30, 2023.

For further information, refer to the condensed consolidated financial statements and footnotes thereto for the year ended April 30, 2022, included in the Company’s Annual Report on Form 10-K.

The results of operations for the six months ended October 29, 2022 are not necessarily indicative of the results for the full year ending April 30, 2023.

For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2022, included in the Company’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S.

7 unchanged sentences

Refer to Note 18—Business Acquisitions for further details.

As a result of the sale, the Company decreased its interest in Altoy from 85 % to 50 %.

The Company is considered to still have control of Altoy and therefore consolidates Altoy into the condensed consolidated financial statements of the Company as of July 30, 2022.

Under the terms of the Purchase Agreement, the Company is expected to sell additional shares to Toygun during the fiscal year ending April 30, 2023 at which point the Company is expected to no longer control, and therefore, expected to no longer consolidate Altoy in the Company’s condensed consolidated financial

At that time, the Company is expected to account for its investment in Altoy as an equity method investment and record its proportion of any gains or losses of Altoy in equity method investments, net of tax.

On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun Savunma Sanayi ve Havacilik Anonim Sirketi (“Toygun”) whereby the Company sold 35 % of the common shares of the Company’s Turkish joint venture, Altoy Savunma Sanayi ve Havacilik Anonim Sirketi (“Altoy”), to Toygun.

On October 14, 2022, the Company sold an additional 35 % of the common shares of Altoy to Toygun.

As a result of the share sales, the Company decreased its interest in Altoy from 85 % to 15 % and has determined that it no longer controls Altoy.

Therefore, the Company no longer consolidates Altoy in the Company’s unaudited condensed consolidated financial statements.

As the Company has the ability to exercise significant influence over the operating and financial policies of Altoy, the Company’s investment will now be accounted for as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investments, net of tax.

Refer to Note 6—Equity Method Investments for further details.

On August 17, 2022, the Company closed its acquisition of Planck Aerosystems, Inc.

(“Planck”) pursuant to the purchase agreement, and post-acquisition, Planck is incorporated into the medium UAS (“MUAS”) segment.

The assets, liabilities and operating results of Planck have been included in the Company’s unaudited condensed consolidated financial statements.

Refer to Note 18—Business Acquisitions for further details.

Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

In October 2021, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”).

ASU 2021-08 requires an acquirer to apply the guidance in ASC 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities in a business combination, rather than using fair value.

ASU 2021-08 requires an acquirer to apply the guidance in Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), to recognize and measure contract assets and contract liabilities in a business combination, rather than using fair value.

On May 1, 2022, the Company early adopted ASU 2021-08.

ASU 2021-08 is adopted prospectively and could impact future acquisitions.

ASU 2021-08 is adopted prospectively and did not have a material impact on our unaudited condensed consolidated financial statements.

Revenue Recognition

1 unchanged sentence

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”).

The Company considers all such contracts to be within the scope of ASC 606.

Performance Obligations

17 unchanged sentences

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.

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.

1 unchanged sentence

For performance obligations which are not satisfied over time per the aforementioned criteria above, revenue is recognized at the point in time in which each performance obligation is fully satisfied.

The Company’s small UAS, medium UAS (“MUAS”) and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS, MUAS and UGV systems and spare parts, respectively.

The Company’s small UAS, MUAS and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of small UAS, MUAS and UGV systems and spare parts, respectively.

Revenue is recognized at the point in time when control transfers to the customer, which generally occurs when title and risk of loss have passed to the customer.

Performance obligations satisfied over time accounted for 60 % and 61 % of revenue during the three months ended July 30, 2022 and July 31, 2021, respectively.

Performance obligations satisfied at a point in time accounted for 40 % and 39 % of revenue during the three months ended July 30, 2022 and July 31, 2021, respectively.

On July 30, 2022, the Company had approximately $ 203,877,000 of remaining performance obligations under fully funded contracts with its customers, which the Company also refers to as funded backlog.

Performance obligations satisfied over time accounted for 65 % and 63 % of revenue during the three and six months ended October 29, 2022, respectively.

Performance obligations satisfied over time accounted for 51 % and 55 % of revenue during the three and six months ended October 30, 2021, respectively.

Performance obligations satisfied at a point in time accounted for 35 % and 37 % of revenue during the three and six months ended October 29, 2022, respectively.

Performance obligations satisfied at a point in time accounted for 49 % and 45 % of revenue during the three and six months ended October 30, 2021, respectively.

On October 29, 2022, the Company had approximately $ 293,147,000 of remaining performance obligations under fully funded contracts with its customers, which the Company also refers to as funded backlog.

The Company currently expects to recognize approximately 58 % of the remaining performance obligations as revenue in fiscal 2023 and the remaining 42 % in fiscal 2024 .

14 unchanged sentences

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.

Changes in cumulative revenue estimates, due to changes in the estimated transaction price or cost estimates, are recorded using a cumulative catch-up adjustment in the

period identified for contracts with performance obligations recognized over time.

If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the quarter it is identified, and it is recorded in other current liabilities.

During the three months ended October 29, 2022, the Company recognized forward loss reserves on two MUAS ISR contracts totaling $1,952,000 related to unfavorable changes in the estimated costs to complete the contracts.

The company recorded the forward loss reserves as the total estimated costs to complete the contracts are in excess of the total remaining consideration of the contracts.

The aggregate impact of the change in estimate decreased net income by $1,500,000 and diluted loss per share by $0.06.

The impact of adjustments in contract estimates on the Company’s operating earnings can be reflected in either operating costs and expenses, or revenue.

The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was not significant for the three month periods ended July 30, 2022 or the three month period ended July 31, 2021.

During the three months ended July 30, 2022, the Company revised its estimates of the total expected costs to complete a TMS variant contract.

The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was not significant for the three or six month periods ended October 29, 2022 nor the three or six month period ended October 30, 2021.

During the three months ended October 29, 2022, 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 an increase to revenue of approximately $ 1,332,000 .

During the six months ended October 29, 2022, the Company revised its estimates of the total expected costs to complete two TMS variant contracts.

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 $ 2,560,000 .

No adjustment on any one contract was material to the Company’s unaudited condensed consolidated financial statements for the three month ended July 31, 2021.

No adjustment on any one contract was material to the Company’s unaudited condensed consolidated financial statements for the three or six month periods ended October 30, 2021.

Revenue by Category

1 unchanged sentence

Three Months Ended

Six Months Ended

Revenue by segment

1 unchanged sentence

Three Months Ended

Six Months Ended

Revenue by contract type

7 unchanged sentences

Three Months Ended

Six Months Ended

Revenue by customer category

1 unchanged sentence

Three Months Ended

Six Months Ended

Revenue by geographic location

9 unchanged sentences

For the Company’s product revenue, the Company generally receives cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable.

Changes in the contract asset and liability balances during the three month period ended July 30, 2022 were not materially impacted by any other factors.

Changes in the contract asset and liability balances during the six month period ended October 29, 2022 were not materially impacted by any other factors.

For the Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

Revenue recognized for the three month periods ended July 30, 2022 that was included in contract liability balances as of April 30, 2022 was $ 1,925,000 , and revenue recognized for the three month periods ended July 31, 2021 that was included in contract liability balances as of April 30, 2021 was $ 309,000 .

Revenue recognized for the three and six month periods ended October 29, 2022 that was included in contract liability balances as of April 30, 2022 was $ 1,080,000 and $ 3,004,000 , respectively, and revenue recognized for the three and six month periods ended October 30, 2021 that was included in contract liability balances as of April 30, 2021 was $ 580,000 and $ 889,000 , respectively.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance.

As of July 30, 2022, the Company’s CODM, the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the allocation for research and development (“R&D”).

As of October 29, 2022, the Company’s CODM, the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the allocation for research and development (“R&D”).

Accordingly, the Company identifies four reportable segments.

1 unchanged sentence

The Company’s investments are accounted for as available-for-sale and are reported at fair value.

Unrealized gains and losses are excluded from earnings and reported as a separate component of stockholders’ equity, net of deferred income taxes for available-for-sale investments.

Unrealized gains and losses for debt securities 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.

Investments in equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income, net.

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date.

5 unchanged sentences

The final rates, if different from the provisional rates, may create an additional receivable or liability for the Company for CPFF and T&M contracts.

Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs.

For example, during the course of its audits, the DCAA may question the Company’s incurred costs, and if the DCAA believes the Company has accounted for such costs in a manner inconsistent with the requirements under Federal Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs.

Historically, the Company has not experienced material disallowed costs as a result of government audits.

1 unchanged sentence

The Company’s revenue recognition policy calls for revenue recognized on all cost reimbursable government contracts to be recorded at actual rates unless collectability is not reasonably assured.

At July 30, 2022 and April 30, 2022, the Company had no reserve for incurred cost claim audits.

Loss Per Share

Basic loss per share is computed using the weighted-average number of common shares outstanding, excluding shares of unvested restricted stock.

At October 29, 2022 and April 30, 2022, the Company had no reserve for incurred cost claim audits.

(Loss) Earnings Per Share

Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding, excluding shares of unvested restricted stock.

The reconciliation of basic to diluted shares is as follows (in thousands except share data):

Three Months Ended

July 30, 2022

July 31, 2021

Net loss attributable to AeroVironment, Inc.

Denominator for basic loss per share:

Six Months Ended

October 29, 2022

October 30, 2021

October 29, 2022

October 30, 2021

Net (loss) income attributable to AeroVironment, Inc.

Denominator for basic (loss) earnings per share:

Weighted average common shares

Dilutive effect of employee stock options, restricted stock and restricted stock units

Denominator for diluted loss per share

Due to the net loss for the three months ended July 30, 2022 and July 31, 2021, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 164,312 and 279,978 for the three months ended July 30, 2022 and July 31, 2021, respectively.

Denominator for diluted (loss) earnings per share

Due to the net loss for the three and six months ended October 29, 2022 and for the six months ended October 30, 2021, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 148,196 and 156,625 for the three months and six months ended October 29, 2022, respectively.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 4,742 and 266,077 for the three and six months ended October 30, 2021, respectively.

Recently Issued Accounting Standards

10 unchanged sentences

While the negotiations did not result in a settlement of any of the Company’s or Webasto’s claims at such time, as a result of the settlement negotiations, the Company established a litigation reserve, which reflected 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

The offer did not reflect the Company’s view of the merits of the claims made;

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 condensed consolidated statements of operations and in other current liabilities on the condensed consolidated balance sheet.

3 unchanged sentences

Under the terms of the written settlement agreement, the Company’s payment of the settlement amount of $ 20,000,000 will occur over a 24 month period from the effective date of the settlement agreement and Webasto will retain the Holdback.

As of July 30, 2022, $ 10,000,000 of the settlement has been paid.

As of October 29, 2022, $ 10,000,000 of the settlement has been paid.

Investments consist of the following (in thousands):

4 unchanged sentences

Total short-term investments

Long-term investments:

Available-for-sale securities:

Equity securities

Total long-term available-for-sale securities investments

Equity method investments

3 unchanged sentences

Available-For-Sale Securities

As of July 30, 2022 and April 30, 2022, the balance of available-for-sale securities consisted of state and local government municipal securities, U.S.

Debt Securities

As of April 30, 2022, the balance of available-for-sale debt securities consisted of state and local government municipal securities, U.S.

government securities and U.S.

2 unchanged sentences

Realized gains on sales of these investments on the basis of specific identification are recorded in interest expense, net.

The following table is a summary of the activity related to the available-for-sale investments recorded in short-term and long-term investments as of July 30, 2022 and April 30, 2022, respectively (in thousands):

July 30, 2022

Municipal securities

government securities

Total available-for-sale investments

As of October 29, 2022, the Company held no available-for-sale debt securities.

The following table is a summary of the activity related to the available-for-sale debt securities recorded in short-term investments as of April 30, 2022, respectively (in thousands):

April 30, 2022

1 unchanged sentence

government securities

Total available-for-sale investments

The amortized cost and fair value of the available-for-sale debt securities by contractual maturity at July 30, 2022 were as follows (in thousands):

Due within one year

Due after one year through five years

Total available-for-sale debt securities

Equity Securities

Equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income (expense), net.

Net gains recognized during the period on equity securities

Net gains recognized during the period on equity securities sold during the period

Unrealized gains recognized during the period on equity securities still held at the reporting date

Fair Value Measurements

4 unchanged sentences

● 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 July 30, 2022, were as follows (in thousands):

The Company’s financial assets measured at fair value on a recurring basis at October 29, 2022, were as follows (in thousands):

Fair Value Measurement Using

3 unchanged sentences

Available-for-sale securities

Equity securities

Contingently returnable consideration

The Company’s financial liabilities measured at fair value on a recurring basis at July 30, 2022, were as follows (in thousands):

The Company’s financial liabilities measured at fair value on a recurring basis at October 29, 2022, were as follows (in thousands):

Fair Value Measurement Using

26 unchanged sentences

Included in selling, general and administrative

Balance at July 30, 2022

The amount of total (gains) or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held at July 30, 2022

Pursuant to the Intelligent Systems Group business segment (“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 three years following closing.

Balance at October 29, 2022

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 October 29, 2022

Pursuant to the Intelligent Systems Group business segment (“ISG”) Purchase Agreement with Progeny Systems Corporation (the “ISG Seller”), the ISG 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 three years following closing.

The contingent consideration was valued using a Black-Scholes option-pricing model.

6 unchanged sentences

The analysis considered, among other items, contractual terms of the Telerob Purchase Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue and contract award targets required for payment of the contingent consideration will be achieved.

The fair value of the contingent consideration is recorded in other current liabilities on the condensed consolidated balance sheet.

The fair value of the

contingent consideration is recorded in other current liabilities on the condensed consolidated balance sheet.

The first year earnout of € 2,000,000 (approximately $ 2,424,000 ) was not achieved.

Refer to Note 18—Business Acquisitions for further details.

On September 12, 2022, the Company invested $5,000,000 and acquired 500,000 shares and 500,000 privately placed, redeemable warrants of Amprius Technologies, Inc.

The privately placed, redeemable warrants have an exercise price of $12.50 and redemption price of $20.00.

The Company measures the fair value of the privately placed, redeemable warrants using the quoted market price of the public warrants which have an exercise price of $11.50 and a redemption price of $18.00 and classifies the warrants as a level 2 fair value measurement.

On September 9, 2022, the Company acquired 10,000 shares of Nauticus Robotics, Inc.

for $100,000.

Inventories, net

7 unchanged sentences

Equity Method Investments

Investments in Limited Partnership Funds

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.

Under the terms of the limited partnership agreement, the Company contributed $ 10,000,000 during the fiscal years ended April 30, 2021 and 2022, and there were no further contribution commitments to this fund as of April 30, 2022.

In March 2022, the Company entered into a limited partnership agreement with a second limited partnership fund also focusing on highly relevant technologies and start-up companies serving defense and industrial markets.

Under the terms of the limited partnership agreement, the Company is committed to contributions totaling $ 20,000,000 over an expected five year period.

During the three months ended July 30, 2022, the Company made its initial contribution of $ 2,774,000 .

Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 17,226,000 to the fund.

The Company accounts for investments in limited partnerships as equity method investments as the Company is deemed to have influence when it holds more than a minor interest.

For the three and six months ended October 29, 2022, the Company recorded its ownership percentage of the net loss of the limited partnership, or $( 1,273,000 ) and $( 1,773,000 ), respectively, in equity method investment loss, net of $ 0 tax in the unaudited condensed consolidated statements of operations, respectively.

For the three and six months ended October 30, 2021, the Company recorded its ownership percentage of the net gain of the limited partnership, or $ 1,852,000 and $ 2,365,000 , respectively, net of $ 529,000 of tax expense, respectively, in equity method investment loss, net of tax in the unaudited condensed consolidated statements of operations.

At October 29, 2022 and April 30, 2022, the carrying value of the investment in the limited partnership of $ 16,434,000 and $ 15,433,000 , respectively, was recorded in long-term investments on the unaudited condensed consolidated balance sheet.

Investment in Altoy

On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun whereby the Company sold 35 % of the common shares of Altoy to Toygun.

On October 14, 2022, the company sold an additional 35 % of the common shares of Altoy to Toygun.

As a result of the sales, the Company decreased its interest in Altoy from 85 % to 15 %.

The Company no longer controls Altoy, and therefore, has deconsolidated Altoy in the Company’s condensed consolidated financial statements.

The Company maintains significant influence, accounts for its investment

in Altoy as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investments, net of tax.

For the three and six months ended October 29, 2022, the Company recorded $0 for its ownership percentage of the net loss of the limited partnership in equity method investment loss in the unaudited condensed consolidated statements of operations.

At October 29, 2022, the carrying value of the investment in Altoy of $ 96,000 was recorded in other assets on the unaudited condensed consolidated balance sheet.

Investment in HAPSMobile Inc.

In December 2017, the Company and SoftBank Corp.

20 unchanged sentences

Prior to the sale of the equity interest, the Company had 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, and therefore, the Company’s investment was accounted for as an equity method investment.

For the three months ended July 31, 2021, the Company recorded its ownership percentage of the net loss of HAPSMobile, or $ 1,655,000 , in equity method investment loss, net of tax in the condensed consolidated statements of income.

Investments in Limited Partnership Funds

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.

Under the terms of the limited partnership agreement, the Company is committed to contributions totaling $ 20,000,000 over an expected five year period.

During the three months ended July 30, 2022, the Company made its initial contribution of $ 2,774,000 .

Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 17,226,000 to the fund.

The Company accounts for investments in limited partnerships as equity method investments as the Company is deemed to have influence when it holds more than a minor interest.

For the three months ended July 30, 2022 and July 31, 2021, the Company recorded its ownership percentage of the net (loss) gain of the limited partnership, or $( 500,000 ) and $ 514,000 , respectively, in equity method investment loss, net of tax in the unaudited condensed consolidated statements of operations.

At July 30, 2022 and April 30, 2022, the carrying value of the investment in the limited partnership of $ 17,707,000 and $ 15,433,000 , respectively, was recorded in long-term investments on the unaudited condensed consolidated balance sheet.

For the three and six months ended October 30, 2021, the Company recorded its proportionate net loss of HAPSMobile, or $ 190,000 and $ 1,845,000 , respectively, in equity method investment loss, net of tax in the unaudited consolidated statement of operations.

Warranty Reserves

The Company accrues an estimate of its exposure to warranty claims based upon both current and historical product sales data and warranty costs incurred.

The warranty reserve is included in other current liabilities on the unaudited condensed consolidated balance sheet.

The warranty reserve is included in other current liabilities on the unaudited condensed

consolidated balance sheet.

The related expense is included in cost of sales.

Warranty reserve activity is summarized as follows for the three months ended July 30, 2022 and July 31, 2021, respectively (in thousands):

Warranty reserve activity is summarized as follows for the three and six months ended October 29, 2022 and October 30, 2021, respectively (in thousands):

Three Months Ended

Six Months Ended

Beginning balance

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Intangibles, net

The weighted average amortization period at July 30, 2022 and April 30, 2022 was four years .

Amortization expense for the three months ended July 30, 2022 and July 31, 2021 was $ 5,869,000 and $ 6,973,000 , respectively.

The weighted average amortization period at October 29, 2022 and April 30, 2022 was four years .

Amortization expense for the three and six months ended October 29, 2022 was $ 5,983,000 and $ 11,852,000 , respectively.

Amortization expense for the three and six months ended October 30, 2021 was $ 6,843,000 and $ 13,816,000 , respectively.

Technology and backlog intangible assets were recognized in conjunction with the Company’s acquisition of Planck on August 17, 2022.

Technology, backlog and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of Telerob on May 3, 2021.

The intangibles recognized in conjunction with the acquisition of Telerob are

recorded in Euros, and the balances change in accordance with the foreign currency translation at reporting date.

The intangibles recognized in conjunction with the acquisition of Telerob are recorded in Euros, and the balances change in accordance with the foreign currency translation at reporting date.

Refer to Note 18—Business Acquisitions for further details.

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Additions to goodwill

Balance at July 30, 2022

Balance at October 29, 2022

The goodwill addition to MUAS is attributable to the Planck acquisition.

The goodwill additions to the column entitled “All other” is attributable to the Telerob acquisition recorded in Euros and translated to dollars at each reporting date.

Refer to Note 18—Business Acquisitions for further details.

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.

In connection with the consummation of the acquisition of Arcturus UAV, Inc.

(“Arcturus”), a California corporation pursuant to a Stock Purchase Agreement with Arcturus and each of the shareholders and other equity interest holders of Arcturus, to purchase 100 % of the issued and outstanding equity of Arcturus (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”).

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Mandatory prepayments are also required in connection with the disposition of assets to the extent not reinvested and unpermitted debt transactions.

subsidiaries (limited to 65 % of outstanding equity interests in the case of foreign subsidiaries), and the proceeds thereof, with customary exclusions and exceptions.

In support of its obligations pursuant to the Credit Facilities, the Company has granted security interests in substantially all of the personal property of the Company and its domestic subsidiaries, including a pledge of the equity interests in its subsidiaries (limited to 65 % of outstanding equity interests in the case of foreign subsidiaries), and the proceeds thereof, with customary exclusions and exceptions.

The Company’s existing and future domestic subsidiaries, including Arcturus, are guarantors for the Credit Facilities.

The Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants, including certain restrictions on the ability of the Company and its subsidiaries (as defined in the Credit Agreement) to incur any additional indebtedness or guarantee indebtedness of others, to create liens on properties or assets, or to enter into certain asset and stock-based transactions.

In addition, the Credit Agreement includes certain financial maintenance covenants, requiring that (x) the Consolidated Leverage Ratio (as defined in the Credit Agreement) shall not be more than 3.00 to 1.00 as of the end of any fiscal quarter and (y) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) shall not be less than 1.25 to 1.00 as of the end of any fiscal quarter.

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.

On February 4, 2022, the Company entered into a First Amendment to Credit Agreement and Waiver relating to its existing Credit Agreement (the “First Amendment to Credit Agreement”).

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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.

As of July 30, 2022, the Company is in compliance with all amended covenants.

As of October 29, 2022, the Company is in compliance with all amended covenants.

Long-term debt and the current period interest rates were as follows:

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Current period interest rate

Future long-term debt principal payments at July 30, 2022 were as follows:

Future long-term debt principal payments at October 29, 2022 were as follows:

(In thousands)

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The components of lease costs recorded in cost of sales and selling, general and administrative (“SG&A”) expense were as follows (in thousands):

Three Months Ended

Six Months Ended

Operating lease cost

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Supplemental lease information were as follows:

Three Months Ended

Six Months Ended

(In thousands)

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Weighted average discount rate

Maturities of operating lease liabilities as of July 30, 2022 were as follows (in thousands):

Maturities of operating lease liabilities as of October 29, 2022 were as follows (in thousands):

Total lease payments

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The components of accumulated other comprehensive income (loss) and adjustments are as follows (in thousands):

Three Months Ended

Six Months Ended

Balance, net of $ 8 and $ 1 deferred taxes, as of April 30, 2022 and April 30, 2021, respectively

Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $ 6 and $ 0 for the three months ended July 30, 2022 and July 31, 2021, respectively

Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $ 0 for the six months ended October 29, 2022 and October 30, 2021

Change in foreign currency translation adjustments

Balance, net of $ 2 and $ 1 deferred taxes, as of July 30, 2022 and July 31, 2021, respectively

Balance, net of $ 0 and $ 1 deferred taxes, as of October 29, 2022 and October 30, 2021, respectively

Customer-Funded Research & Development

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Revenue from customer-funded R&D contracts is recognized in accordance with ASC 606 over time as costs are incurred.

Revenue from customer-funded R&D was approximately $ 22,999,000 and $ 16,911,000 for the three months ended July 30, 2022 and July 31, 2021, respectively.

Revenue from customer-funded R&D was approximately $ 24,937,000 and $ 47,936,000 for the three and six months ended October 29, 2022, respectively.

Revenue from customer-funded R&D was approximately $ 19,175,000 and $ 36,086,000 for the three and six months ended October 30, 2021, respectively.

Long-Term Incentive Awards

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Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.

For the three months ended July 30, 2022, the Company recorded $ 397,000 of compensation expense related to the Fiscal 2023 LTIP.

The Company recorded no compensation expense related to the Fiscal 2023 LTIP for the three months ended July 31, 2021.

At July 30, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2023 LTIP is $ 12,829,000 .

For the three and six months ended October 29, 2022, the Company recorded $ 664,000 and $ 1,061,000 of compensation expense related to the Fiscal 2023 LTIP.

The Company recorded no compensation expense related to the Fiscal 2023 LTIP for the three and six months ended October 30, 2021.

At October 29, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2023 LTIP is $ 12,829,000 .

During the three months ended July 31, 2021, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2022 LTIP”).

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Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.

For the three months ended July 30, 2022 and July 31, 2021, the Company recorded $ 195,000 and $ 308,000 of compensation expense related to the Fiscal 2022 LTIP, respectively.

At July 30, 2022, the maximum compensation expense that may be recorded for the performance-based

portion of the Fiscal 2022 LTIP is $ 10,148,000 .

For the three and six months ended October 29, 2022, the Company recorded a reversal of $( 311,000 ) and $( 116,000 ) of compensation expense related to the Fiscal 2022 LTIP, respectively.

For the three and six months ended October 30, 2021, the Company recorded $ 201,000 and $ 509,000 of compensation expense related to the Fiscal 2022 LTIP.

At October 29, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2022 LTIP is $ 10,148,000 .

During the three months ended August 1, 2020, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2021 LTIP”).

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Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.

For the three months ended July 30, 2022 and July 31, 2021, the Company recorded $ 76,000 and $ 65,000 of compensation expense related to the Fiscal 2021 LTIP, respectively.

At July 30, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2021 LTIP is $ 5,858,000 .

For the three and six months ended October 29, 2022, the Company recorded $ 116,000 and $ 192,000 of compensation expense related to the Fiscal 2021 LTIP, respectively.

For the three and six months ended October 30, 2021, the Company recorded a

reversal of $( 572,000 ) and $( 507,000 ) of compensation expense related to the Fiscal 2021 LTIP, respectively, due to a change in estimate resulting from a decrease in the estimated achievement.

At October 29, 2022, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2021 LTIP is $ 5,858,000 .

During the three months ended July 27, 2019, the Company also granted awards under the Restated 2006 Plan to key employees (“Fiscal 2020 LTIP”).

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During the three months ended July 31, 2022, the Company issued a total of 5,678 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2020 LTIP.

For the three months ended July 30, 2022 and July 31, 2021, the Company recorded no compensation expense and a reversal of $( 1,000 ) of compensation expense related to the Fiscal 2020 LTIP, respectively.

For the three and six months ended October 29, 2022, the Company recorded no compensation expense related to the Fiscal 2020 LTIP, respectively.

For the three and six months ended October 30, 2021, the Company recorded a reversal of $( 617,000 ) and $( 619,000 ) of compensation expense related to the Fiscal 2020 LTIP, respectively, due to a change in estimate resulting from a decrease in the estimated achievement.

At each reporting period, the Company reassesses the probability of achieving the performance targets for the PRSUs.

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No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited.

For the three months ended July 30, 2022, the Company recorded a provision for income taxes of $ 2,606,000 yielding an effective tax rate of ( 49.3 )%.

For the three months ended July 31, 2021, the Company recorded a benefit from income taxes of $( 957,000 ) yielding an effective tax rate of 7.0 %.

The variance from statutory rates for the three months ended July 30, 2022 was primarily due to a combination of federal R&D credits and the foreign-derived intangible income deduction and projected fiscal 2023 pre-tax income.

The variance from statutory rates for the three months ended July 31, 2021 was primarily due to federal R&D credits, foreign derived intangible income deductions and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options.

Share Repurchase

In September 2015, the Company’s Board of Directors authorized a program to repurchase up to $ 25,000,000 of the Company’s common stock with no specified termination date for the program.

No shares were repurchased under the program during the three months ended July 30, 2022 or July 31, 2021.

As of July 30, 2022 and April 30, 2022, approximately $ 21,200,000 remained authorized for future repurchases under this program.

For the three and six months ended October 29, 2022, the Company recorded a benefit from income taxes of $( 10,457,000 ) and $( 7,851,000 ) yielding an effective tax rate of 66.1 % and 37.2 %, respectively.

For the three and six months ended October 30, 2021, the Company recorded a benefit from income taxes of $( 9,511,000 ) and $( 10,468,000 ) yielding an effective tax rate of 117.6 % and 48.0 %, respectively.

Historically, the Company calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate (“AETR”) for the full fiscal year to the pretax income or loss for the interim reporting period.

For the three and six months ended October 29, 2022, the Company calculated the provision for income taxes using a discrete effective tax rate (“ETR”) method.

The Company determined that due to the fact small changes in the Company’s estimated pretax income or loss would result in significant changes in the estimated AETR, the historical method would not provide a reliable estimate for the three and six months ended October 29, 2022.

The variance from statutory rates for the three and six months ended October 29, 2022 was primarily due to a combination of federal R&D credits and the foreign-derived intangible income deduction.

The variance from statutory rates for the three months ended October 30, 2021 was primarily due to a change in estimate of full year projected income (loss) before income taxes, federal R&D credits and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options.

The variance from statutory rates for the six months ended October 30, 2021 was primarily due to federal R&D credits and the recording of discrete excess tax benefits resulting from the vesting of restricted stock awards and exercises of stock options.

Share Repurchase Plan and Issuances

In September 2015, the Company’s Board of Directors authorized a program to repurchase up to $ 25,000,000 of the Company’s common stock.

No shares were repurchased under the program during the six months ended October 29, 2022 or October 30, 2021.

As of April 30, 2022, approximately $ 21,200,000 remained authorized for future repurchases under this program.

In September 2022, the Company’s Board of Directors terminated the repurchase program effective immediately.

On September 8, 2022 the Company filed an S-3 shelf registration statement to offer and sell shares of the Company’s common stock, including a prospectus supplement in relation to an Open Market Sale Agreement SM , also dated September 8, 2022, with Jefferies LLC relating to the proposed offer and sale of shares of our common stock having an aggregate offering price of up to $ 200,000,000 from time to time through Jefferies LLC as the sales agent.

As of October 29, 2022, the Company has sold 125,441 of its shares for total gross proceeds of $ 12,700,000 , and the Company has $ 187,300,000 aggregate offering price remaining available under the registration.

Related Party Transactions

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Upon the execution of the MDDA, SoftBank issued the first order under the MDDA, which has a maximum value of approximately $ 51,200,000 .

The Company recorded revenue under both the MDDA and DDA of $ 10,352,000 for the three months ended July 31, 2021.

The Company recorded revenue under both the MDDA and DDA of $ 10,342,000 and $ 20,694,000 for the three and six months ended October 30, 2021.

Business Acquisitions

Planck Acquisition

On August 17, 2022 the Company closed its acquisition of Planck Aerosystems, Inc.

(“Planck”), a leading provider of advanced unmanned aircraft navigation solutions based in San Diego, California.

Pursuant to the purchase agreement, the Company paid a total purchase price of $ 5,105,000 from cash-on-hand plus a $ 500,000 holdback for certain assets of Planck.

Planck is a small technology company and post-acquisition will be incorporated into AeroVironment’s MUAS segment to focus on integrating its flight autonomy solutions, such as ACE™, or Autonomous Control Engine, into the Company’s offerings to enable safe, autonomous takeoff and landing from moving platforms on land or at sea in GPS-denied environments.

Other solutions include AVEM™, a fully integrated mobile tethered sensor platform designed for persistent autonomous operation from moving vehicles and vessels in any environment, and a suite of machine-learning object detection and tracking systems that are customized for specific end-user needs.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

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 Planck (in thousands):

Fair value of assets acquired:

Property and equipment, net

Total identifiable net assets

Fair value of liabilities assumed:

Customer advances

Total liabilities assumed

Total identifiable net assets

Fair value of consideration transferred:

Total consideration

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 Planck and expected future customers in the MUAS market.

For tax purposes the acquisition was treated as an asset acquisition and the goodwill is deductible.

Planck Supplemental Pro Forma Information (unaudited)

The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2021 (in thousands):

Three Months Ended

Six Months Ended

Net (loss) income attributable to AeroVironment, Inc.

Planck revenue since acquisition on August 17, 2022 was $ 68,000 .

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 31, 2021, reflecting the additional amortization that would have been charged and including the results of Planck prior to acquisition.

The Company incurred approximately $ 569,000 of acquisition-related expenses for the three months ended October 29, 2022.

These expenses are included in selling, general and administrative on the Company’s unaudited condensed 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 acquisition been consolidated in the tables above as of May 1, 2021, nor are they indicative of results of operations that may occur in the future.

Telerob Acquisition

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Pursuant to the Telerob Purchase Agreement at closing, the Company paid € 37,455,000 (approximately $ 45,400,000 ) in cash to the Telerob Seller (subject to certain purchase price adjustments as set forth in the Telerob Purchase Agreement), less (a) € 3,000,000 (approximately $ 3,636,000 ) to be held in escrow for breaches of the Telerob Seller’s fundamental warranties or any other of Telerob Seller’s warranties to the extent not covered by a representation and warranty insurance policy (the “RWI Policy”) obtained by the Company in support of certain indemnifications provided by the Telerob Seller;

(b) transaction-related fees and costs incurred by the Telerob Seller, including change in control payments triggered by the transaction;

(b) transaction-related fees and costs incurred by the Telerob Seller, including change in control

payments triggered by the transaction;

and (c) 50% of the cost of obtaining the RWI Policy.

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Three Months Ended

Six Months Ended

Net loss attributable to AeroVironment, Inc.

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Funded status of the plan

The projected benefit obligation includes assumptions of a discount rate of 1.7 % and pension increase for in-payment benefits of 1.5 % for July 30, 2022 and April 30, 2022.

The projected benefit obligation includes assumptions of a discount rate of 1.7 % and pension increase for in-payment benefits of 1.5 % for October 29, 2022 and April 30, 2022.

The accumulated benefit obligation is approximately equal to the Company’s projected benefit obligation.

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The Company does not expect to make any contributions to the plan in the fiscal year ending April 30, 2023.

The Company assumed expected return on plan assets of 2.9 % for July 30, 2022 and April 30, 2022.

The Company assumed expected return on plan assets of 2.9 % for October 29, 2022 and April 30, 2022.

Expected benefits payments as of April 30, 2022 (in thousands):

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Three Months Ended

Six Months Ended

(In thousands)

Expected return on plan assets

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Adjusted income (loss) from operations is defined as income (loss) from operations before intangible amortization, amortization of purchase accounting adjustment related to increasing the carrying value of certain assets to fair value, and acquisition related expenses.

Three Months Ended July 30, 2022

Three Months Ended October 29, 2022

Income (loss) from operations

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Adjusted income (loss) from operations

Three Months Ended July 31, 2021

Three Months Ended October 30, 2021

Income (loss) from operations

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Adjusted income (loss) from operations

Six Months Ended October 29, 2022

Income (loss) from operations

Acquisition-related expenses

Amortization of acquired intangible assets and other purchase accounting adjustments

Adjusted income (loss) from operations

Six Months Ended October 30, 2021

Income (loss) from operations

Acquisition-related expenses

Amortization of acquired intangible assets and other purchase accounting adjustments

Adjusted income (loss) from operations

Segment assets are summarized in the table below.

Corporate assets primarily consist of cash and cash equivalents, short-term investments, prepaid expenses and other current assets, long-term investments, property and equipment, net, operating lease right-of-use assets, deferred income taxes and other assets managed centrally on behalf of the business segments.

July 30, 2022

October 29, 2022

Identifiable assets

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Identifiable assets

Subsequent Events

On August 17, 2022 the Company closed its acquisition of Planck Aerosystems, Inc.

(“Planck”), a leading provider of advanced unmanned aircraft navigation solutions based in San Diego, California.

Pursuant to the purchase agreement, the Company paid a total purchase price of $ 5,600,000 from cash-on-hand for certain assets of Planck.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements