AeroVironment(AVAV) - 2024 Q2 - Quarterly Report

Revenue and Income - Revenue for the three months ended October 28, 2023, was $180.8 million, a 62$111.6 million for the same period in 2022[181]. - Revenue for the six months ended October 28, 2023 was $333.2 million, an increase of$113.1 million or 51% compared to $220.1 million for the same period in 2022[196]. - Net income for the three months ended October 28, 2023, was$17.8 million, compared to a net loss of $6.6 million for the same period in 2022[181]. - Net income for the six months ended October 28, 2023 was$39.7 million, compared to a net loss of $15.0 million for the same period in 2022[194]. - Adjusted income from operations for the three months ended October 28, 2023 was$30.7 million, compared to a loss of $5.9 million for the same period in 2022[184]. Gross Margin and Expenses - Gross margin for the three months ended October 28, 2023, was$75.4 million, compared to $25.9 million for the same period in 2022, reflecting a significant improvement[181]. - Gross margin for the six months ended October 28, 2023 was$141.0 million, an increase of $81.4 million or 137$59.6 million for the same period in 2022[200]. - Research and development expenses for the three months ended October 28, 2023, were $22.0 million, up from$16.6 million in the same period in 2022[181]. - Selling, general, and administrative expenses for the three months ended October 28, 2023, were $28.1 million, compared to$23.6 million for the same period in 2022[181]. - SG&A expense for the six months ended October 28, 2023 was $52.0 million, or 16$45.6 million or 21% of revenue in the prior year[201]. - R&D expense for the six months ended October 28, 2023 was $37.5 million, or 11$31.6 million or 14% of revenue for the same period in 2022[201]. Cash Flow and Backlog - Net cash used in operating activities for the six months ended October 28, 2023 was $(25.6) million, a decrease from net cash provided of$31.9 million in the prior year[218]. - Funded backlog as of October 28, 2023 was approximately $487.0 million, up from$424.1 million as of April 30, 2023[206]. - Unfunded backlog as of October 28, 2023 was $173.2 million, which does not guarantee future orders[207]. Adjustments and Impairments - Favorable cumulative catch-up adjustments for the three months ended October 28, 2023, amounted to$4.1 million, primarily due to final cost adjustments on seven contracts[165]. - Unfavorable cumulative catch-up adjustments for the same period were $1.3 million, related to higher than expected costs on seven contracts[165]. - For the six months ended October 28, 2023, favorable cumulative catch-up adjustments totaled$5.6 million, while unfavorable adjustments were $2.0 million[170]. - The company recognized a goodwill impairment charge of$156.0 million in the MUAS reporting unit during the fiscal year ended April 30, 2023, due to decreased projected future cash flows[176]. - The company has not identified any events that could trigger an impairment review prior to the annual goodwill impairment test as of October 28, 2023[177]. Financing and Investments - The company sold 807,370 shares for total gross proceeds of $91.3 million during the three and six months ended October 28, 2023[209]. - The total purchase price for the Tomahawk acquisition was$134.5 million, consisting of $109.8 million in stock and$24.2 million in cash[216]. - Net cash used in investing activities increased by $41.1 million to$37.6 million for the six months ended October 28, 2023, compared to net cash provided of $3.4 million for the same period in 2022[221]. - Net cash provided by financing activities increased by$42.5 million to $31.5 million for the six months ended October 28, 2023, compared to net cash used of$10.9 million for the same period in 2022[222]. Market Risks and Accounting - The current outstanding balance of the Credit Facilities is $80.0 million, bearing a variable interest rate, which may increase if market interest rates continue to rise[225]. - The company is exposed to various market risk factors, including fluctuations in interest rates and foreign currency exchange rates[224]. - The company has not experienced significant foreign exchange gains or losses, as a significant part of sales and expenses are denominated in U.S. dollars[226]. - The company engages in forward contracts in foreign currencies to limit exposure on non-U.S. dollar transactions[226]. - The company did not adopt any new accounting standards during the six months ended October 28, 2023[223].