AeroVironment, Inc. (AVAV) 2010 Q1 法說會逐字稿

Welcome to the first quarter fiscal year 2010 AeroVironment Inc. earnings conference call. I will be your coordinator for today. All participants are in a listen-only mode. We will conduct a question-and-answer session after management's remarks. As reminder, this conference call is being recorded for replay purposes. With us from the Company is Chairman and Chief Executive Officer, Mr. Tim Conver. Chief Financial Officer, Mr. Steve Wright and Director of Investor Relations Mr. Steven Gitlin. I would like to turn the presentation over to Mr. Gitlin. Please go ahead, sir.

歡迎參加 AeroVironment Inc. 2010 會計年度第一季財報電話會議。我將擔任今天的會議協調人。所有與會者目前皆為僅收聽模式。管理層致詞結束後，我們將進行問答環節。提醒各位，本次電話會議將錄音以供重播。與會的公司代表包括董事長兼執行長 Tim Conver 先生、財務長 Steve Wright 先生，以及投資人關係總監 Steven Gitlin 先生。現在我想把簡報交給 Gitlin 先生。先生，請開始。

Welcome to AV's first quarter fiscal 2010 earnings call. Before I hand the call over to Tim, please note that on this call certain information presented contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties including but not limited to economic competitive governmental and technological factors outside of our control that may cause our business strategy or actual results to differ materially from the forward-looking statements.

歡迎參加 AV 2010 會計年度第一季財報電話會議。在我把電話交給 Tim 之前，請注意，本次電話會議中所呈現的部分資訊包含《1995 年私人證券訴訟改革法》所界定的前瞻性陳述。前瞻性陳述係基於目前的預期、預測與假設，並涉及風險與不確定性，包括但不限於我們無法控制的經濟、競爭、政府及技術因素，這些因素可能導致我們的業務策略或實際結果與前瞻性陳述存在重大差異。

For a list and description of such risks and uncertainties, see the reports we filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak as of the date on which they are made. We do not intend and undertake no obligation up to date any forward-looking statements whether as a result of new information future events or otherwise. The content of this conference call contains time sensitive information that is accurate only as of today September 8th 2009.

關於此類風險與不確定性的清單及說明，請參閱我們向美國證券交易委員會提交的報告。投資人應注意勿過度依賴前瞻性陳述；該等陳述僅反映其作出當日的情況。我們無意且不承擔任何義務更新任何前瞻性陳述，不論係因新資訊、未來事件或其他原因。本次電話會議內容包含具時效性的資訊，僅於今日（2009 年 9 月 8 日）為準且僅在今日為正確。

The Company under takes no obligation to make revision to the statements contained in our remarks or update them to reflect the events or circumstances occurring after this conference call. With that, it is my pleasure to turn the call over to Tim Conver.

公司不承擔任何義務修訂我們發言中所包含的陳述，或更新以反映本次電話會議後發生的事件或情況。接下來，我很高興把電話交給 Tim Conver。

Thank you, Steven. Welcome to our first quarter fiscal 2010 conference call. I would like to begin by emphasizing three points. First, we are seeing about the performance we expected and that we outlined in the Q4 earnings call. Second we are confident in our FY 2010 guidance of 18% to 22% revenue growth weighted to the second half. And third, the long-term growth drivers of our business look very good. Thousands of our Raven and aircraft continue to help US and ground forces operate affectively and safely and thousands of our POSI charge systems help materially handling vehicles operate safely every day. The underlying demand for solutions remains strong and the potential market opportunities for solutions and development remain attractive.

謝謝你，Steven。歡迎參加我們 2010 會計年度第一季電話會議。我想先強調三點。第一，我們目前看到的表現大致符合我們在第四季財報電話會議中所預期並說明的情況。第二，我們對 2010 會計年度營收成長 18% 至 22%（且成長主要集中在下半年）的財測指引仍具信心。第三，我們業務的長期成長驅動因素看起來非常良好。數以千計的 Raven 與其他飛行器持續協助美國及地面部隊更有效且更安全地執行任務；同時，數以千計的 POSI Charge 充電系統每天也在實質上協助物料搬運車輛安全運作。對解決方案的基本需求仍然強勁，而解決方案與開發的潛在市場機會仍具吸引力。

Now, I would like to expand on those three initial points. We are seeing about the performance that we expected and outlined in our call. Our predicted low Q1 and Q2 and high Q3 and Q4 performance is driven by the planned conversion from analog to digital Raven Systems by US Army and Marine Corps. The conversion and retro fit to digital systems is a high priority for both customers. Product and services revenue in first quarter was down, mainly as a result of customers waiting to place Raven orders until new digital systems become available if the second half of the year.

現在，我想進一步說明上述三點。我們看到的表現大致符合我們在電話會議中所預期並說明的情況。我們預期第一季與第二季偏低、第三季與第四季偏高的表現，主要是由美國陸軍與海軍陸戰隊計畫將 Raven 系統由類比轉為數位所驅動。此項轉換以及將系統改裝為數位化，對兩個客戶而言都是高度優先事項。第一季的產品與服務營收下滑，主要是因為客戶在等待下半年新的數位系統可供交付後，才下 Raven 訂單。

As we said in our last call, digital Raven Systems and retro fit kits for the hundreds of deployed Raven Systems are planned for transition to production at the end of Q2 with volume ramping significantly through Q3 and Q4. The digital Raven change is extensive affects most of the system and requires over six months to cut in to production. While the production system price increase will be modest, the retro fit of analog system to digital will be extensive and cost about $50,000. The compelling advantages of digital systems, the expectation of broad retro fit of installed base and that price difference let our customers to defer additional Raven System orders until digital deliveries began in the second half.

如同我們在上次電話會議所說，數位 Raven 系統以及用於數百套已部署 Raven 系統的改裝套件，計畫在第二季末轉入量產，並在第三季與第四季大幅提升產量。數位化的 Raven 變更幅度很大，影響系統的大部分，且需要超過六個月才能導入量產。雖然量產系統的價格上調幅度不大，但將類比系統改裝為數位系統的工程相當龐大，成本約為 50,000 美元。由於數位系統具備明顯優勢、預期將對既有裝機基礎進行廣泛改裝，以及上述價差因素，使得客戶延後追加 Raven 系統訂單，直到下半年開始交付數位版本。

While our first quarter unfolded generally as we anticipated, and as we discussed in our last conference call, revenue in first quarter was a bit lower than we planned. Sales were $3 million to $4 million less than we expected primarily at EES, and largely attributable to timing of orders. To prepare for a second half surge, we have been building production readiness, spooling up supply chain and making investments to enable that growth. Also we noted in the last call our SG&A and our R&D spending remains sized for full year and continued growth expectations. The low revenue in first quarter combined with the steady spending to support full year growth adversely impacted our profitability and produced a first quarter loss, although I'm not pleased with our first loss as a public Company, this general pattern did not come as a surprise given the imperatives of the digital Raven transition, low revenue if the resulting negative profitability in first quarter was a necessary price for the transition to a compelling new digital capability. One that is important to our customers and to AV.

雖然第一季的進展大致如我們預期，且如同我們在上次電話會議所討論，第一季營收仍比我們原先規劃略低。銷售額比預期少了 300 萬至 400 萬美元，主要發生在 EES，且多半可歸因於訂單時點。為了因應下半年可能出現的成長高峰，我們一直在提升量產準備度、擴充供應鏈並進行投資以支援成長。此外，我們在上次電話會議也提到，我們的 SG&A（銷售、一般及行政費用）與研發支出仍以全年及持續成長的預期規模配置。第一季偏低的營收，加上為支援全年成長而維持的穩定支出，對獲利造成不利影響，導致第一季出現虧損。雖然我對我們作為上市公司以來的首次虧損並不滿意，但考量數位 Raven 轉換的必要性，這樣的整體型態並不令人意外；由於數位 Raven 轉換的迫切性，第一季因營收偏低而造成的負獲利，是轉換至具吸引力的新數位能力所必須付出的代價，而這項能力對我們的客戶與 AV 都很重要。

My second point referred to confidence in full year guidance, several factors support our view. We are moving from digital towards Raven production, on schedule, with performance tests customer valuations, design finalizations and production readiness going well. The second 2009 supplemental spending bill and the 2010 DOD budget request include $163 million for digital Raven Systems and retro fits. Combined with the $17 million Army order, we previously announced, this totals almost $180 million. This is a positive indication of demand, and provides good visibility in to the expected orders supporting our second half revenue plan. Beyond Raven, we have good visibility in to global observer fiscal year revenue with existing backlog and customers positive about evaluation of WASP and Puma Systems for broader procurement. In summary, despite quarterly operating results that fell short of our expectations, our fiscal year is developing as planned with good progress important achievements and focus on execution.

我的第二點是對全年指引的信心，有幾項因素支持我們的看法。我們正按計畫從數位化開發邁向 Raven 量產；效能測試、客戶評估、設計定案與量產準備皆進展順利。2009 年第二份補充支出法案以及 2010 年國防部（DOD）預算請求中，包含 1.63 億美元用於數位 Raven 系統與改裝。再加上我們先前公布的 1,700 萬美元陸軍訂單，合計接近 1.8 億美元。這是需求的正面指標，並為支撐我們下半年營收計畫的預期訂單提供良好能見度。除 Raven 之外，憑藉既有在手訂單（backlog），我們對 Global Observer 在本會計年度的營收也有良好能見度；客戶對 WASP 與 Puma 系統的評估亦持正面態度，可能進一步擴大採購。總結而言，儘管單季營運結果未達我們預期，我們的會計年度仍按計畫推進，並在重要里程碑上取得良好進展，且持續專注於執行。

Point number three was that long-term growth drivers continued to look good. I will go in to more program detail when I discuss the segments, but our long-term growth opportunities are exciting and have never looked better. Our new Digital Data Link significantly increases the value proposition for our family of small unmanned aircraft systems and further strengthens our competitive position in this growing market. Switchblade has the potential to open a new and large market opportunity for us. Global Observer development is progressing well and the customer demand for affordable persistence will create a large new market for which we are well positioned. We are also well positioned for the charging infrastructure demand that we anticipate will be created as new planned battery and plug in hybrid cars come to market over the next few years.

第三點是長期成長驅動因素仍然看好。我在討論各事業部門時會提供更多專案細節，但我們的長期成長機會令人振奮，且從未像現在這麼好。我們新的 Digital Data Link（數位資料鏈）大幅提升我們小型無人機系統產品家族的價值主張，並進一步強化我們在此成長市場中的競爭地位。Switchblade 有潛力為我們開啟一個新的且龐大的市場機會。Global Observer 的開發進展順利，而客戶對可負擔的長時間滯空（affordable persistence）的需求，將創造一個龐大的新市場，我們已具備良好布局。此外，隨著未來幾年新規劃的電池車與插電式混合動力車陸續上市，我們預期充電基礎設施需求將被帶動，而我們在此方面也具備良好定位。

Let's discuss our unmanned aircraft systems business segment. The Digital Data Link I've been talking about a communications architecture we developed in-house, because there were no Digital Data Links that could meet the requirement force integration in to our Raven small unmanned aircraft system. Remember Raven is a 4.2 pound airplane that flies for 90 minutes using electric battery pack. The reason the digital conversion represent such a key component for our current years activity, is that it provides new capabilities that make small unmanned aircraft systems much more useful to our customers. The benefits of digital Raven Systems include expanding the number of channels Raven can utilize with the existing frequency allocation from the original four to as many as 40, which enables customers to fly many many airplanes in a geographical area without radio channel conflict, enhancing digital signal encryption which provides enhanced security for the critical information generated by these systems. Enabling beyond line of sight operation through airborne digital relay, which will enable users to expand the range in which these systems can be operated as well as neutralize the effects of many topographical obstacles that would otherwise interfere with line of sight communications and flow of data or facilitating it through our system of IP formatting making it easier to share video, voice and data across the battlefield. Each Raven airplane and ground station will soon be a known for a self forming pop up IP network any place any time. Our Digital Data Link will find its way in to production integration in to new Raven Systems in the production process and retro fits that will convert existing analog systems to digital systems, which will be processed in the factory and parallel with the new system production. We are in the process of finalizing the system details and production level drawings and test procedures as we complete the move from development to high rate production. Our experience a year ago cutting in frequency change production of WASP and Raven prepared us well for the production system to Digital Raven.

接下來談談我們的無人機系統（unmanned aircraft systems）事業部門。我一直提到的 Digital Data Link，是我們自行研發的通訊架構，因為當時市面上沒有任何數位資料鏈能滿足將其整合到我們 Raven 小型無人機系統中的需求。請記得，Raven 是一架 4.2 磅的飛機，使用電池組可飛行 90 分鐘。數位化轉換之所以成為我們本年度活動的關鍵組成，是因為它帶來的新能力，能讓小型無人機系統對客戶更有用。數位 Raven 系統的效益包括：在既有頻譜分配下，將 Raven 可使用的通道數從原本的 4 個擴增至最多 40 個，使客戶能在同一地理區域內同時操作大量飛機而不會發生無線電通道衝突；強化數位訊號加密，提升這些系統所產生關鍵資訊的安全性；透過空中數位中繼實現超視距（beyond line of sight）操作，使使用者能擴大系統可運作的範圍，並減輕許多地形障礙對視距通訊與資料傳輸的干擾；或透過我們的 IP 格式化系統加以促成，使戰場上的影像、語音與資料更容易共享。每一架 Raven 飛機與地面站很快都將成為可在任何地點、任何時間自我形成、即時建立的 IP 網路節點。我們的 Digital Data Link 將在量產流程中整合至新的 Raven 系統，並用於把既有類比系統改裝為數位系統的改裝作業；改裝將在工廠內與新系統量產並行進行。我們正在完成從研發轉向高產能量產的過程中，持續定案系統細節、量產版圖面與測試程序。一年前我們在 WASP 與 Raven 的頻率變更導入量產方面的經驗，已讓我們為 Raven 系統數位化導入量產做好充分準備。

Our WASP system is evaluated by customers beyond the US Air Force and the Marine Corps., and new puma systems generating positive feedback from initial and potential new customers. We recently demonstrated Puma publicly for the first time at the AUVSI conference in Washington DC, generating a great deal of interest in this unique platform. The announcer at the AUVSI air show repeatedly commented on how quiet the Puma was, characterizing its that quietist UAV at the show. Whereas WASP is a one pound air vehicle that is extremely small, Puma is larger hand launched air vehicle that flies for two hours and highest quality imaging payload that we have yet developed. Puma is also the only production small unmanned aircraft system able to land repeatedly on the ground or in the water. Raven, WASP and Puma all operate off common and inner operable ground control system, which includes a hand-held controller with embedded color monitor. We are now developing plans for the transition in the future of both WASP and Puma to digital systems working towards a small unmanned aircraft system family of interoperable systems built around a common digital ground control system.

我們的 WASP 系統正接受美國空軍與海軍陸戰隊以外的客戶評估，而新的 Puma 系統也從既有客戶與潛在新客戶的初期回饋中獲得正面評價。我們最近在華盛頓特區的 AUVSI 會議上首次公開展示 Puma，引發外界對這一獨特平台的高度興趣。AUVSI 航空展的主持人多次評論 Puma 的安靜程度，並形容它是展會上最安靜的無人機。WASP 是一款僅一磅重、體積極小的飛行器；相較之下，Puma 是較大型的手掷起飛飛行器，可飛行兩小時，並搭載我們迄今開發的最高品質成像載荷。Puma 也是唯一可量產的小型無人航空系統，能夠反覆在地面或水面著陸。Raven、WASP 與 Puma 皆可使用共通且可互通的地面控制系統，其中包含具內建彩色顯示器的手持式控制器。我們目前正規劃未來將 WASP 與 Puma 轉換為數位系統，朝向以共通數位地面控制系統為核心、由可互通系統所構成的小型無人航空系統家族邁進。

On the development front, Global Observer is about two years in to its customer funded three plus year Joint Capability Technology Demonstration Program. The objective of the JCTD is to develop a unmanned aircraft system that will deliver affordable persistence for multiple high value remote sensing and communication relay payloads. With flight duration of up to seven days per aircraft, a two aircraft Global Observer system will provide satellite like persistence over any area on the earth by alternating the aircraft sequentially to maintain seemless persistence over the designated orbit. With over $120 million funding, Global Observer moved successfully from the development phase to assembly with aircraft number one nearing completion and aircraft two beginning to take shape in the low production line. I'm pleased to report that an important milestone in the Global Observer development program is in sight. Current plans call for the first Global Observer airplane to move to Edwards Air Force Base this quarter, where it will undergo final system level ground testing, flight readiness and then flight testing at this historic flight test center. After the flight testing phase is completed, payloads will be integrated into the aircraft and tested and military assessment of the entire Global Observer system will begin. We remain on track for system integration and flight testing in the second half of fiscal 2010.

在研發方面，Global Observer 已進入由客戶出資、為期三年以上的「聯合能力技術示範計畫（JCTD）」約兩年。JCTD 的目標是開發一套無人航空系統，以可負擔的成本為多種高價值的遠端感測與通訊中繼載荷提供長時間滯空能力。每架飛機最長可連續飛行七天；由兩架飛機組成的 Global Observer 系統可透過兩機依序交替，於地球上任何區域提供類衛星的持續覆蓋，在指定軌道上維持無縫的持續性。憑藉超過 1.2 億美元的資金支持，Global Observer 已成功由研發階段轉入組裝階段：第一架飛機接近完工，第二架也開始在低量產線上成形。我很高興報告，Global Observer 研發計畫的一項重要里程碑已近在眼前。依目前規劃，第一架 Global Observer 飛機將於本季移至愛德華空軍基地（Edwards Air Force Base），在這座歷史悠久的飛行測試中心進行最終系統級地面測試、飛行就緒作業，並隨後展開飛行測試。飛行測試階段完成後，將把載荷整合至飛機並進行測試，並開始對整套 Global Observer 系統進行軍方評估。我們仍按計畫在 2010 會計年度下半年完成系統整合與飛行測試。

The challenges facing US and NATO troops in Afghanistan reemphasize the game changing potential of stratospheric systems with affordable persistence that can provide critically important ISR and communication in areas that otherwise are under served, or where it is unavailable most of the time. Switchblade is another of our important UAS development programs. Switchblade is a loitering precision munition offering an entirely new solution for finding and verifying specific targets addressing the proximity of noncombatants to avoid collateral damage, producing high precision force protection and standoff strike affects. Switchblade demonstrations in first quarter continue to perform well in new applications, impress potential customers and generate significant customer activity. Just this quarter we completed a very successful three day demonstration at a government site with over 50 people representing many potential customers. Switchblade is a very high potential development because its unique characteristics and proven prototype performance appear to be very well matched to current needs and policy. Adoption timing remains uncertain but I continue to expect initial orders for preproduction systems yet this fiscal year.

美國與北約部隊在阿富汗面臨的挑戰，再次凸顯平流層系統的顛覆性潛力：以可負擔成本提供長時間滯空能力，能在原本服務不足或多數時間無法取得的區域，提供至關重要的 ISR（情監偵）與通訊能力。Switchblade 是我們另一項重要的無人航空系統研發計畫。Switchblade 是一種滯空型精準彈藥，提供全新的解決方案，用於發現並確認特定目標，並在考量非戰鬥人員接近的情況下避免附帶損害，從而產生高精度的部隊防護與遠距打擊效果。第一季的 Switchblade 示範在新應用上持續表現良好，令潛在客戶印象深刻並帶動顯著的客戶活動。就在本季，我們在一處政府場地完成了一場非常成功的三天示範，現場有超過 50 人代表多個潛在客戶參與。Switchblade 具備極高的開發潛力，因其獨特特性與已驗證的原型機表現，似乎非常符合當前需求與政策方向。導入時程仍不確定，但我仍預期在本會計年度內可收到首批前量產系統的訂單。

Our development systems continue to make progress on with SP2S, the stealthy persistent perch and stare, a small UAS funded by DARPA. Further back in the development pipeline is the DARPA funded Nano Air Vehicle Program, another program that in true AV fashion is expanding the envelope of small unmanned aircraft capabilities. During first quarter we released a video showing several stations of the Nano Air Vehicle s development. The video shows the flapping wing test aircraft flying up, down, sideways and front to back, using only its two wings for control lift and thrust. To our knowledge this tri-access control has never before been achieved. Significant technology challenges remain on the NAV R&D program, but it's a useful example of the kind of cutting edge work that takes place regularly at AV. Beyond the market for UAS in the United States, international companies are re-engaging in the pre-procurement small UAS acquisition activities and we may be seeing a thaw or the beginning of thaw in the nonUS segments of the market. In summary, the outlook for UAS products and development programs remain strong.

我們的研發系統持續取得進展，包括由 DARPA 資助的小型無人航空系統 SP2S（具匿蹤、長時間滯空的「停棲與凝視」能力）。在更後段的研發管線中，還有同樣由 DARPA 資助的奈米空中載具（Nano Air Vehicle, NAV）計畫；該計畫以典型 AV 風格持續拓展小型無人機能力的邊界。第一季我們發布了一段影片，展示 NAV 研發的多個階段。影片顯示拍翼測試飛行器可向上、向下、側向以及前後飛行，僅使用兩片機翼即可完成控制、升力與推力。據我們所知，這種三向（tri-axis）控制此前從未實現。NAV 研發計畫仍面臨重大技術挑戰，但它是 AV 定期進行尖端工作的有力例證。除美國的無人航空系統市場外，國際企業也正重新投入小型無人航空系統的前期採購活動，我們可能正在看到非美國市場區隔的解凍，或解凍的開始。總結而言，無人航空系統產品與研發計畫的展望仍然強勁。

Our Efficient Energy Systems or EES segment levers decades of experience in high efficiency, electric energy systems to deliver clean transportation and clean energy solutions. In addition to spawning new market leading products such as POSI charge, fast charge systems and electric vehicle test systems EES develops key subsystems that support the unmanned aircraft segment. Efficient electric generator propulsion motors and energy storage systems in Global Observer developed by EES team and state of the art. Additionally EES is actively involved in exploring fuel cell technology integration to expand significantly the flight duration of our small unmanned aircraft. Revenue in EES declined in first quarter, we saw continuing economic pressure in the industrial markets in which we sell POSI charge systems and delays in orders for electric vehicle test systems, some of which we believe were affected by pending decisions in federal funding for clean transportation initiatives.

我們的高效能源系統（Efficient Energy Systems, EES）事業部運用數十年在高效率電能系統方面的經驗，提供潔淨運輸與潔淨能源解決方案。除孕育出 POSI charge、快速充電系統與電動車測試系統等市場領先的新產品外，EES 也開發支援無人航空事業部的關鍵子系統。由 EES 團隊為 Global Observer 開發的高效率發電機、推進馬達與儲能系統均屬最先進水準。此外，EES 也積極探索燃料電池技術整合，以大幅延長我們小型無人機的飛行時間。EES 第一季營收下滑；我們看到工業市場（我們銷售 POSI charge 系統的市場）持續承受經濟壓力，且電動車測試系統訂單出現延遲，其中部分我們認為受到聯邦政府對潔淨運輸倡議資金決策尚未明朗的影響。

During the quarter we announced the introduction of AV800. At 800-kilowatts, the AV800 is now the highest power EV test system we offer and know of in the market. The first AV800 was purchased by the US Army Tank Automotive and Armaments Command in Warren, Michigan. It will provide new capabilities that will enable the development and testing of high duty electric and hybrid electric vehicles and serves as an example of the breadth of our involvement in and understanding of the electric vehicle technologies. We also announced we received a patent for a method of enabling the collection of data from electric vehicles. This supports one of the important opportunities in the emerging electric vehicle and hybrid electric transportation market, which relates to managing energy and information between the utility and the battery charging system.

本季我們宣布推出 AV800。AV800 功率為 800 千瓦，現已成為我們所提供、且我們所知市場上最高功率的電動車（EV）測試系統。首套 AV800 由位於密西根州沃倫（Warren）的美國陸軍坦克汽車與軍備司令部（Tank Automotive and Armaments Command）採購。該系統將提供新能力，使高負載電動與油電混合車輛的開發與測試成為可能，並展現我們在電動車技術上的參與廣度與理解深度。我們也宣布取得一項專利，內容為一種可促成電動車資料蒐集的方法。這支持新興電動車與油電混合運輸市場中的一項重要機會，即在公用事業端與電池充電系統之間進行能源與資訊的管理。

From a broader perspective, we offer a range of charging, data management, energy management, testing and consulting solutions designed to enable broad electric vehicle and plug in hybrid adoption and their practical use. Our EV solutions group has made great progress with vehicle OEM's around the world, which are developing electric and hybrid electric vehicles for market introduction over the next three years. Recent government funding for clean transportation has been directed towards EV infrastructure projects and represents a start in the direction of supporting battery and plug in hybrid electrical vehicle adoption. I believe that EV's will be adopted in to the mainstream. Although, it's difficult to know when. For now there are over two dozen electric vehicles in development for introduction over the next few years, we intend to be ready to support passenger and flight EV adoption. We will offer comprehensive development support in charging solutions including true fast charge capable systems, systems capable of fully recharging certain battery packs in less than 10 minutes. I continue to believe that AV is strategically well positioned with our UAS team focused on enabling the growing demand for actionable intelligence and communications and EES team focus on enabling the adoption of material handling and transportation vehicles. That is a broad overview of our business.

從更宏觀的角度來看，我們提供一系列充電、資料管理、能源管理、測試與顧問解決方案，旨在促進電動車與插電式油電混合車的廣泛採用及其實際使用。我們的 EV 解決方案團隊已與全球各地的車輛 OEM 取得重大進展；這些 OEM 正在開發電動與油電混合車，預計於未來三年內推向市場。近期政府對潔淨運輸的資金投入已導向 EV 基礎設施專案，代表朝向支持電池與插電式油電混合電動車採用的方向邁出第一步。我相信 EV 將被主流市場採用，雖然很難判斷時間點。目前已有二十多款電動車正在開發中，預計在未來幾年推出；我們將做好準備，支援乘用與飛行 EV 的採用。我們將在充電解決方案方面提供全面的開發支援，包括真正具備快速充電能力的系統；某些電池組可在 10 分鐘內完成充滿。我仍相信 AV 在策略上具備良好定位：我們的無人航空系統團隊專注於滿足對可採取行動的情報與通訊日益成長的需求，而 EES 團隊則專注於促進物料搬運與運輸車輛的採用。以上是我們業務的整體概述。

Steve will now take you through our financial performance in the next quarter.

接下來 Steve 將帶各位回顧我們下一部分的財務表現。

Thanks Tim. Good afternoon everyone. Revenue for the first quarter was $37.9 million, a decrease of 29% from first quarter prior year of $53.6 million.

謝謝 Tim。各位下午好。第一季營收為 3,790 萬美元，較去年第一季的 5,360 萬美元下降 29%。

Looking at revenue by segment, UAS revenue was $33.3 million. This is a decrease of 28% from the prior year. The decrease in the UAS revenue was primarily due to lower product deliveries of $14.2 million, and lower service revenue of $9.8 million, partially offset by increase in customer funded R&D of $11.2 million. The decrease in UAS product deliveries and service revenue was primarily due to a cessation of Raven deliveries as we prepare for the introduction of DDL. This increase is customer funded R&D was primarily due to increased activity on the Global Observer contract. EES revenue was $4.6 million, a decrease of 39% from first quarter last year. The decrease in EES was primarily due to lower deliveries of EV test and fast charge systems.

按事業部別來看營收，無人航空系統（UAS）營收為 3,330 萬美元，較去年同期下降 28%。UAS 營收下滑主要由於產品交付減少 1,420 萬美元，以及服務營收減少 980 萬美元；部分被客戶出資研發（R&D）增加 1,120 萬美元所抵銷。UAS 產品交付與服務營收的下降，主要是因我們在準備導入 DDL 之際停止 Raven 的交付。客戶出資研發的增加，主要是由於 Global Observer 合約活動增加所致。高效能源系統（EES）營收為 460 萬美元，較去年第一季下降 39%。EES 的下滑主要是由於 EV 測試系統與快速充電系統交付減少。

Turning to gross margin, gross margin in the first quarter was $10.7 million. Down 48%, from first quarter of last year. Gross margin as a percent of revenue was 28%, versus 38% in first quarter last year. By segment, UAS gross margin was $9 million, down 46% from first quarter of last year. As a percent of revenue, UAS gross margin was 27%, compared to 36% in first quarter last year. This decrease in gross margin rate was primarily due to lower production and service revenue resulting in higher unabsorbed overhead cost. EES gross margin was $1.7 million, down 56% from first quarter of last year. As a percent of revenue, EES gross margin was 37%, compared to 52% last year. This decrease in gross margin rate was primarily due to overall lower product deliveries, again resulting in higher unabsorbed overhead cost. SG&A for the quarter totaled $10.5 million or 28% of revenue, compared to $8.1 million, or 15% of revenue in the prior year. SG&A growth is primarily due to higher selling and business development expense, increased hidden proposal activity and higher administrative costs.

談到毛利率，第一季毛利為 1,070 萬美元，較去年第一季下降 48%。毛利占營收比重為 28%，去年第一季為 38%。按事業別來看，UAS 毛利為 900 萬美元，較去年第一季下降 46%。以營收百分比計，UAS 毛利率為 27%，去年第一季為 36%。毛利率下降主要是因生產與服務營收較低，導致未吸收製造費用（unabsorbed overhead）成本較高。EES 毛利為 170 萬美元，較去年第一季下降 56%。以營收百分比計，EES 毛利率為 37%，去年為 52%。毛利率下降主要是整體產品交付量較低，同樣導致未吸收製造費用成本較高。本季 SG&A（銷售、一般及行政費用）合計 1,050 萬美元，占營收 28%，相較去年為 810 萬美元、占營收 15%。SG&A 增加主要來自較高的銷售與業務開發費用、增加的隱性提案活動，以及較高的行政成本。

R&D for the quarter totaled $5.7 million or 15% of revenue, compared to the prior year amount of $5.3 million or 10% of revenue. The majority of R&D investments were for various UAS development initiatives. Operating loss for the quarter was $5.5 million or negative 14% of revenue compared to an operating income of $7.2 million, or 13% in the prior year. The operating loss was attributable to lower sales volume resulting in a lower gross margin in the prior year and higher SG&A and R&D expense. Net loss for the quarter was $3.6 million, or $0.17 loss per share compared to net income of $4.8 million or $0.22 for fully diluted share in the same quarter last year. Looking at backlog, funded backlog at the end of the first quarter totaled $108.7 million, down $6.1 million or 5% from April 30th, 2009.

本季研發（R&D）費用合計 570 萬美元，占營收 15%，相較去年為 530 萬美元、占營收 10%。研發投資多數用於各項 UAS 開發計畫。本季營業損失為 550 萬美元，或占營收負 14%，相較去年同期營業利益 720 萬美元、占營收 13%。營業損失主要歸因於銷售量較低導致毛利較低，以及 SG&A 與研發費用較高。本季淨損為 360 萬美元，或每股虧損 0.17 美元，相較去年同季淨利 480 萬美元，或完全稀釋後每股盈餘 0.22 美元。就在手訂單（backlog）而言，第一季末已獲資金支持的在手訂單合計 1.087 億美元，較 2009 年 4 月 30 日減少 610 萬美元或 5%。

Turning to balance sheet, cash equivalence and investments at the ends of the first quarter totaled $147.7 million. This is up $2.5 million from our prior quarter amount, of $145.2 million. Positive cash flow was largely due to lower working capital, partially offset by operating loss and capital expenditures. Long-term investments at the end of the first quarter totaled $7 million. Down from the previous quarter amount of $7.2 million. The decrease in investments was largely due to redemptions and municipal option rate securities.

談到資產負債表，第一季末現金、約當現金及投資合計 1.477 億美元，較前一季的 1.452 億美元增加 250 萬美元。正向現金流主要來自營運資金降低，但部分被營業損失與資本支出所抵銷。第一季末長期投資合計 700 萬美元，較前一季的 720 萬美元下降。投資下降主要是因贖回以及市政選擇權利率證券（municipal option rate securities）。

Turning to receivables, at the end of the first quarter, our accounts receivable including unbilled receivables totaled $31.9 million. Down $30.7 million from the prior quarter. Total day sales outstanding were approximately 76 days, compared to 74 days of the prior quarter end. Looking at inventory, inventories totaled $19.2 million at the end of the quarter compared to $11.6 million at the end of the prior quarter. Days in inventory were approximately 64 days, versus 43 days at the prior quarter end. Turning to capital expenditures, in the first quarter we invested approximately $2.3 million, or 6% of revenue in property improvements and capital equipment.

談到應收款項，第一季末我們的應收帳款（含未開立帳單之應收款）合計 3,190 萬美元，較前一季減少 3,070 萬美元。應收帳款週轉天數（DSO）約為 76 天，前一季末為 74 天。就存貨而言，季末存貨合計 1,920 萬美元，前一季末為 1,160 萬美元。存貨天數約為 64 天，前一季末為 43 天。談到資本支出，第一季我們在不動產改善與資本設備上投資約 230 萬美元，約占營收 6%。

I would like the turn things back to Tim to discuss expectations for the full year.

我想把時間交回給 Tim，請他說明對全年預期的看法。

Thanks Steve. The business is tracking to our view of 2010 and remains well positioned for long-term growth. We lead the market in small unmanned aircraft systems supporting all existing programs of record in the US Department of Defense. Ground forces rely on these systems to operate affectively and safely and become embedded capabilities that move with them where they deploy and where they train. Dod and administration remain committed to supporting ground forces to enhance intelligence -- protection. Our solutions are consistent with that goal and uniquely affordable. Out development programs address critical domestic and international priorities and proceeding on the right path towards market entry. Customer relationships are strong and they we increased the size of our team of outstanding high performing associates. Our view of the full fiscal year is unchanged. We expect revenue growth of 18 to 22%, over FY 2009. Which would be $292 million to $302 million with an operating margin between 12 and 14%. Visibility in to customer intent and government budgeting plans along with our own production capabilities support our ability to achieve these goals. Given the importance of to the Army and the Marine Corps. of early acquisition and retro fit of digital Raven Systems as a catalyst for new rach system and retro fit order anticipate our second half to account for 70% of our fiscal year revenue. With the quality and relevance of our products and of our solutions in development, and the quality and the passionate focus of our team, I believe that we are in a position to continue to help our customers win help our people develop, and help our stockholders benefit. Thank you once again for your attention and the interest in our Company and Steve and I will take your questions.

謝謝 Steve。我們的業務進展符合我們對 2010 年的看法，且在長期成長方面仍具備良好定位。我們在小型無人航空系統市場居於領先地位，支援美國國防部所有既有的正式列裝計畫（programs of record）。地面部隊仰賴這些系統以有效且安全地執行任務，並使其成為隨部署與訓練而移動的嵌入式能力。國防部與政府仍致力於支援地面部隊以強化情報——防護。我們的解決方案與該目標一致，且具備獨特的可負擔性。我們的開發計畫聚焦於關鍵的國內與國際優先事項，並正沿著正確路徑推進至市場導入。客戶關係穩固，而且我們也擴大了由優秀高績效同仁組成的團隊。我們對整個會計年度的看法維持不變。我們預期營收較 2009 會計年度成長 18% 至 22%，亦即 2.92 億至 3.02 億美元，營業利益率介於 12% 至 14%。對客戶意向與政府預算規劃的能見度，加上我們自身的生產能力，支持我們達成這些目標的能力。鑑於陸軍與海軍陸戰隊對於提前採購與數位 Raven 系統改裝（retro fit）的重要性，作為新 rach 系統與改裝訂單的催化劑，我們預期下半年將占本會計年度營收的 70%。憑藉我們產品的品質與相關性、開發中解決方案的品質，以及我們團隊的品質與熱情專注，我相信我們有能力持續協助客戶取勝、協助員工成長，並讓股東受益。再次感謝各位對本公司的關注與興趣。Steve 和我現在開始回答各位的問題。

(Operator Instructions). First to Mike Lewis with BB&T.

（接線員指示）。首先請 BB&T 的 Mike Lewis 提問。

Thank you, very much, for taking my questions. Tim, dod a few weeks ago released an award to you for some option, an option award, it was actually if many hundreds of ddl retro fit, now I don't believe that you have released this in a press release. I guess my question with regard to the ddl option is this what you are expecting to see the ramp in in the second half off of this most recent option award?

非常感謝讓我提問。Tim，國防部幾週前發布了一項授予你們的選擇權（option）獎項，實際上是數百套 ddl 改裝（retro fit），我想你們並未以新聞稿發布。我關於 ddl 選擇權的問題是：你們是否預期下半年會因這次最新的選擇權授予而開始加速放量（ramp）？

Yes. Mike, thanks. I think what you are referring to was a release that the army made of the it was the synopsis of their intent to pro cure sole source digital ravens from ad and I think that's probably there were doctor there have been a few that come out of the program office. Most recent one was the intent in funding in the overseas contingency operations line that is planned in fy10.

是的。Mike，謝謝。我想你指的是陸軍發布的一則訊息，那是他們意向的摘要，打算以單一來源（sole source）採購數位 Raven（digital ravens），來自 ad，我想那大概是——那邊有幾則是由計畫辦公室發布的。最近的一則是關於海外應急行動（OCO）預算線中的意向與資金安排，該項目計畫列入 10 會計年度（fy10）。

Okay. So, okay, but all we know is it's out there and coming.

好的。所以，好的，但我們所知道的就是它已經在那裡，而且會來。

Yes. Mike, -- we haven't actually negotiated that, that's still ahead of us. I would say Mike, that what we've seen publicly released from the army for army and marine Corp. procurements in both the supplemental, the OCO funding and fy ten budget, is what totals to the 163 million that I referenced in my comments.

是的，Mike，——我們其實還沒有就此完成談判，那仍在後面。我會說，Mike，我們從陸軍公開發布的、針對陸軍與海軍陸戰隊在補充預算、OCO 資金以及 10 會計年度預算中的採購資訊，加總起來就是我在評論中提到的 1.63 億美元。

Okay. Just a quick follow up. In the press release you actually discussed that there is a quote unquote thousands of UAS in the field. Could you perhaps quantify the number of Raven a. s that you think the army is going to look at to convert with the ddl package?

好的。再快速追問一下。在新聞稿中你們提到所謂「現場有數千套 UAS」。你能否量化一下，你認為陸軍會考慮用 ddl 套件來轉換的 Raven a. s 數量大概是多少？

Let me preface that with a couple of comments, we are visibility in to the near term intent with these announcements they've made on their plans to track with us for both new systems and retro fits and Steve probably has some specific quantities associated with those. Beyond that, we certainly don't -- but it's my expectation that they will intend to end up with a common digital fleet of their entire installed base but will have to wait to see until that rolls out in future years to be sure of that.

我先補充幾點說明：就他們已發布的這些公告而言，我們對短期意向有一定能見度，這些公告顯示他們計畫與我們合作，涵蓋新系統與改裝（retro fits），而 Steve 可能掌握與此相關的一些具體數量。除此之外，我們當然不——但我的預期是，他們最終會希望其整個既有裝機基礎（installed base）形成一致的數位機隊（common digital fleet），但仍需等到未來年度逐步推進後才能確定。

For Army, Marines and everyone else we delivered over 7000 new vehicles today.

就陸軍、海軍陸戰隊以及其他所有客戶而言，我們迄今已交付超過 7,000 台新載具。

Steve, one more question for you. Interest income $59,000 at the quarter. You haven't got$ 50 million in cash and investments, why is a s that number much higher?

Steve，我還有一個問題。這一季利息收入是 59,000 美元。你們不是有 5,000 萬美元的現金與投資嗎？為什麼那個數字沒有高很多？

We are really invested primarily in T bills and earning almost nothing on those investments. We have (inaudible) for nine months to a year been focused primarily on safety.

我們主要投資在國庫券（T bills），在那些投資上幾乎賺不到什麼收益。我們在（聽不清）九個月到一年期間一直主要聚焦於安全性。

Thanks very much.

非常感謝。

Thank you. We will go next to Chris Donaghey with SunTrust Robinson Humphrey. Chris your line is open, please check your mute function.

謝謝。接下來請 SunTrust Robinson Humphrey 的 Chris Donaghey。Chris，你的線路已開啟，請檢查你的靜音功能。

Sorry about that. Tim?

抱歉。Tim？

Yes.

是。

Just wanted to clarify something real quick you mentioned the 163 million S that for Digital Data Link upgrades and new production or was that upgrades only?

我想快速釐清一點：你提到的 1.63 億美元，是用於數位資料鏈（Digital Data Link）升級與新生產，還是只有升級？

That was included both, Chris, both new systems and upgrades retro fit upgrades that have been publicly announced.

Chris，那個數字包含兩者：新系統以及已公開宣布的升級改裝（retro fit upgrades）。

Okay. Just -- is there anyway you can help us breakdown what percentage of that you believe is going to have a 2010 fiscal 2010 impact? Just based on what you know of the time.

好的。只是——你是否能協助我們拆解一下，你認為其中有多少百分比會在 2010 會計年度產生影響？就你目前對時程的了解而言。

I will jump in here, we haven't negotiated a lot of these contract vehicles so it's hard to say but our best information today is that we will perform on about a thousand new and refurbished Raven systems with ddl this fiscal year. That's what our guidance in our current fiscal year plans assume.

我先在這裡補充一下，我們尚未就其中許多合約載具進行大量協商，所以很難下定論；但就我們目前掌握的最佳資訊來看，本會計年度我們將以 DDL 交付並履約約一千套全新與翻新（refurbished）的 Raven 系統。這也是我們在本會計年度現行計畫指引中所假設的。

Okay. Can you tell was the percentage of that is would be predicated on the government's fiscal 2010 budget being approved on time, or is there enough funding available with what is left in the fiscal 09 budget to get us there?

好的。你能否說明其中有多少比例會取決於政府 2010 會計年度預算能否如期獲准？或者，以 2009 會計年度預算剩餘的資金是否已足以讓我們達成？

Well, I think I have to be hedge a little bit here op timing, but let me try to answer your question Chris. I think clearly the sooner the fy10 budget is approved and flows through in to contracts the better. I mean that's maybe a foregone conclusion. We anticipate some delay as we have often seen in the budget approval cycle when we are considering our expectations for the year. But the farther that pushes out, the less room we have at the end of the year. So I'm not sure that I can get it down to a specific percentage. Maybe Steve has a better cut at that answer than I had.

嗯，我想在時程上我得稍微保留一點，但我試著回答你的問題，Chris。我認為很明顯，FY10 預算越早獲准並落實到合約中越好。這大概是不言自明的。我們在評估今年的預期時，預計會有一些延遲，因為我們在預算核准循環中經常看到這種情況。但延後得越久，我們在年底可運用的空間就越小。所以我不確定我是否能把它量化到一個特定百分比。也許 Steve 對這個問題能給出比我更好的答案。

I don't but I do want to go back to my earlier answer to your question, Chris. Of the thousand systems that's both retro fits and new systems and we don't know the exact mix there. So probably the right way to think about it is maybe 50/50. 500 retro fit systems and 500 new systems.

我沒有，但我想回到我先前對你問題的回答，Chris。那一千套系統包含改裝（retrofit）與新系統，而我們還不清楚確切的組合。所以比較合適的理解方式可能是大約 50/50：500 套改裝系統與 500 套新系統。

Okay, great. Any insight whatsoever yet in to how Raven demand is going to look going forward, before we started getting the -- before we got the disruption from the frequency, new frequency cutover and the cutover from analog Raven to Digital Data Link I think you were running at 200 to 250 or so airframes per month. Do you see that as a normalized production rate going forward or what are your expectations? Once you get beyond this surge in DDL equipment.

好的，很好。對於未來 Raven 需求的走勢，你目前有任何看法嗎？在我們開始受到——在我們因頻率中斷、新頻率切換，以及從類比 Raven 切換到 Digital Data Link 之前，我記得你們每月大約在 200 到 250 架機體左右的產出。你認為這會是未來常態化的生產速率嗎？或者你的預期是什麼？在你們度過這波 DDL 設備的激增之後。

The DDL surge to the extent that we continue with retro fit programs we'll probably go along beyond this year. Again it's my guess that most customers are going to want a homogenous digital fleet -- significant retro fit over time. As of this quarter we are 57% in to the existing army acquisition objective for ravens. The capabilities that the digital system brings to the customer and to the users on the ground are likely to be even greater than they anticipated when they made their production decisions in the beginning. And if that turns out to be true, then I would expect that to have a positive affect on overall Raven demand.

DDL 的激增，在我們持續推動改裝計畫的情況下，可能會延續到今年之後。再說一次，我的推測是多數客戶會希望擁有同質化的數位機隊——也就是隨時間推進進行大量改裝。截至本季，我們已完成陸軍現有 Raven 採購目標的 57%。數位系統帶給客戶與地面使用者的能力，可能會比他們在一開始做出生產決策時所預期的更大。如果確實如此，我預期這將對整體 Raven 需求帶來正面影響。

Just as a related question to that then, ddl was developed specifically for the Raven but has applications to -- puma AV, do you see the potential for ddl beyond Raven as a future opportunity and have those discussions or negotiations been underway?

那我再延伸問一個相關問題：DDL 是專為 Raven 開發的，但也可應用到——Puma AV。你是否看見 DDL 在 Raven 之外的潛在機會，並且相關討論或協商是否已在進行中？

Yes. We expect that we will -- we are already in the process of planning the conversion of both WASP and puma to digital systems. That's in the future, but its definitely our intent on ultimately we would see a offering, a family of unmanned aircraft systems all of which have interoperable digital ground control systems and user interface. The one of the elements that made -- has made the digital conversion of rach Raven so extensive we designed it to be back ward compatible so we can upgrade Raven -- analog systems as well as forward compatible to what we would envision as the next generation ground condition troll system. So our view is that those other two existing production programs would have digital options in the future and that all of this -- we produce would be inner operable with common user interface.

是的。我們預期我們將——我們已經在規劃把 WASP 與 Puma 轉換為數位系統。那是在未來，但這絕對是我們的意圖；最終我們希望提供一個無人航空系統家族，所有系統都具備可互通的數位地面控制系統與使用者介面。造成 Raven 數位化轉換如此廣泛的一個因素是：我們把它設計成向後相容，因此我們可以升級 Raven——類比系統；同時也向前相容，符合我們對下一代地面控制系統的構想。因此我們的看法是，另外兩個既有量產計畫未來也會有數位選項，而我們所生產的這一切——都將能以共同使用者介面互通。

Okay, great. Just one last question, Tim on the Global Observer, as you start to enter the operational evaluation, say I know you got two more aircrafts to build but can you help us with what where you see from a milestone perspective there, do you see a revenue bathtub for Global observer or does it depend really on how the initial aircraft tests go, maybe there are things that can happen to fill in that bathtub once you get in to the formal testing phase, thanks.

好的，很好。最後一個問題，Tim，關於 Global Observer：當你們開始進入作業評估時，我知道你們還有兩架飛機要造，但你能否從里程碑的角度協助我們理解你們的看法？Global Observer 的營收是否會出現一個「浴缸期」（revenue bathtub），還是其實取決於初期飛機測試的結果？也許在你們進入正式測試階段後，有些事情可以發生來填補那個浴缸期，謝謝。

Great question Chris and significant area of focus that we have had for sometime as have had our customers. Or as our customers have had. This bathtub affect that you referred to is almost This bathtub affect that you referred to is almost in JC td programs that capability that the secretary of defense office has developed to push or pull forward promising new technology capabilities more rapidly than the conventional Procurement system. It's been really successful at that and we I think Global Observer is a good demonstration as was Raven and the Digital Data Link that we are now incorporating in Raven. However the potential for this GAAP between the end of the JC td and the beginning of a program of record has always been there as we have discussed this follow on funding issue with the half a dozen customers that currently fund the development of Global Observer, almost a universal response has been if you fly it, we will come. So I think the because its such a revolutionary capability, it is going to be very important for our customers to see it in transitioning from development to flight test. Of opportunities, being discussed with a number of customers to bridge that GAAP from the end of the JC td program, to the beginning of a production program, and we're aggressively working with them to that end.

Chris，這是個很好的問題，也是我們一段時間以來的重點關注領域，我們的客戶也是——或者說我們的客戶一直以來也是如此。你提到的這個「浴缸效應」幾乎是……你提到的這個「浴缸效應」幾乎存在於 JC TD 計畫中；那是國防部長辦公室所建立的一種能力，用以更快速地推進或提前有前景的新技術能力，相較於傳統的採購體系。這在推動上非常成功，而我認為 Global Observer 是一個很好的示範，就像 Raven 以及我們現在正納入 Raven 的 Digital Data Link 一樣。然而，從 JC TD 結束到正式列入「正式計畫」（program of record）開始之間出現落差（gap）的可能性一直都存在。當我們與目前資助 Global Observer 開發的半打客戶討論後續資金問題時，幾乎一致的回應都是：「只要你飛得起來，我們就會來。」因此我認為，因為這是一項如此革命性的能力，讓客戶看到它從開發轉入飛行測試將非常重要。關於如何在 JC TD 計畫結束到量產計畫開始之間搭橋填補這個落差的機會，我們正與多位客戶討論，並且正積極與他們合作以達成這個目標。

Great, thank you.

很好，謝謝你。

Thank you, Troy Lahr with Stifel Nicolaus.

謝謝。接下來是 Stifel Nicolaus 的 Troy Lahr。

Thanks I'm wondering if you could walk me through the risk of digital rach and it might not ramp up as you are thinking about the third quarter.

謝謝。我想請你帶我梳理一下數位 Raven 的風險：它是否可能無法如你們所想在第三季順利拉升（ramp up）？

Thanks Troy another good question. It clearly is a big ramp and it is a significant change integration in to the Raven system. We are confident in where we are in the plans we put in place and where we are on executing those plans. We are moving ahead on schedule and as we expected, we have the recent experience from a year ago, when we introduced the new frequencies and channel changes to the communication links for both rach and WASP if you recall we developed those tested them, we did field tests on prototypes we shutdown each of those production lines see sequentially we cut in the change, we ramped back up and executed that well and to our customers satisfaction. I think another example of this kind of complex production ramp was when we transitioned from the early small volume production of Raven and our other small UAS to rate production, a few years ago, in a six month period we went from two airplanes a week to ten airplanes a day, per day. And we missed no deliveries and delivered high quality products. So I think making this kind of complex production ramp implementation is difficult, but it's what we do, it's what we got an extraordinary team of highly motivated smart people that have done this before have planned this well and I think we are confident in its execution.

謝謝你，Troy，又是一個好問題。這確實是一個很大的拉升，而且是對 Raven 系統的一項重大整合變更。我們對已制定的計畫、以及我們執行這些計畫的進度很有信心。我們正按期推進；而且如同我們所預期的，我們有一年前的近期經驗：當時我們為 Raven 與 WASP 的通訊鏈路導入新頻率與通道變更——如果你還記得，我們開發並測試了它們，對原型做了野外測試，我們依序關停各條產線、切入變更、再把產能拉回來，並且執行得很好，讓客戶感到滿意。我認為另一個類似的複雜量產拉升例子，是幾年前我們從 Raven 與其他小型 UAS 的早期小量生產轉換到量產：在六個月內，我們從每週兩架飛機提升到每天十架飛機，每天。且我們沒有錯過任何交付，並交付了高品質產品。所以我認為，實施這種複雜的量產拉升確實困難，但這就是我們在做的事；我們有一支非凡的團隊，由高度投入且聰明的人組成，他們以前做過、也把計畫規劃得很好，因此我們對執行很有信心。

Is it getting your production line up and running or technology lines that -- is it production or technology that kind of gauges us on where we are on track for the Q3.

這主要取決於把產線拉起來，還是技術線——也就是說，影響我們是否能在第三季如期達標的，是生產端還是技術端？

It's probably a bit of both. This process involves the development of the digital link itself which we had been doing for a number of years. Leading up to this transition, so the transition however is much more than the data link it's is integration of those links throughout the system and the system modifications in order to enable that. So that process led us to build preproduction systems, a number of those systems that we use for our development and then our testing and verification. We've done training of our initial customer users with those systems. And then our customers have taken those systems in to the field and given them to operators to use so that they can evaluate the affects and the actual interface in their real live operations. And that's typical of both new system introduction and major change introduction. It's a combination of our process as well as our customers rigorous formal process.

可能兩者都有。這個流程包含數位鏈路本身的開發，而我們已經做了好幾年。在這次轉換之前就一直在進行；但這次轉換不只是資料鏈路而已，而是把這些鏈路整合到整個系統中，並進行系統修改以使其可用。因此這個流程促使我們打造了前量產系統，其中有若干套系統用於我們的開發，接著用於測試與驗證。我們也用這些系統對第一批客戶使用者進行訓練。然後客戶把這些系統帶到現地，交給操作人員使用，讓他們能在真實作業中評估其影響與實際介面。這同時也是新系統導入與重大變更導入的典型作法：結合我們的流程，以及客戶嚴謹的正式流程。

In that process of evaluation, we expect that new things will be found either something shows up in operation, that department show up on bench tests or something shows up in operation that the customers department anticipate and they want something different than they thought they wanted. Those lead to despite finalization and revisions, we are just finishing up that latest version of those. At the same time in a ideal world I think we would wait until we would have waited until all of that is done until we do final documentation and tooling and supply chain commitments. In order to be adequately responsive to our market and our customers we historically do all that in parallel. So we are in the midst of that now and that involves supply chain involves new test equipment on the floor and validating that as well as the assembly process.

在這個評估流程中，我們預期會發現新的問題：可能是某些狀況在實際操作中才出現，而在台架測試（bench tests）中沒有出現；或是某些狀況在操作中出現，而客戶原本沒有預期到，因而希望與原先想要的有所不同。這些都會導致設計的最終定案與修訂；我們正要完成最新版本。同時，在理想狀況下，我想我們會等到這一切都完成後，才做最終文件、治具（tooling）與供應鏈承諾。為了能充分回應市場與客戶需求，我們歷來都是並行進行所有這些工作。所以我們現在正處於這個並行階段，這涉及供應鏈、產線上的新測試設備及其驗證，以及組裝流程。

Is the customer field testing is that complete or is that still on going and when will that come to a conclusion?

客戶的場測是否已經完成，還是仍在進行中？預計何時會有結論？

I believe the customer has the systems in the field and but I think we have a good grasp of what their perception is. I think we are moving ahead with confidence.

我相信客戶已將系統部署到現場，不過我認為我們已相當掌握他們的觀感。我認為我們正有信心地往前推進。

Okay. Then the timing on the negotiation. You still don't have orders for this ramp up. When do you expect to have the orders in hands.

好的。那麼談判的時程呢？你們目前仍未拿到這次擴產爬坡的訂單。預計何時能把訂單拿到手？

Some of those, there is some backlog as I mentioned. $17 million that we announced in January. We -- there is a segment of orders in incorporated in the second supplemental for 2009. And that's in the process of being converted to contracts. And there is a budget request in the fy2010 both the base dod budget and the oco budget. Those have been announced publicly. And we would be expect that as soon as the -- as that budget is approved and signed by the President, it would flow through to the army and we would be in contract negotiation. We know that both the army and the marine Corp. are anxious to execute both the acquisition of new digital systems through those fy ten budgets and the large number of retro fits, we think it is likely to move rapidly once it's approved.

其中一部分，如我提到的，確實有一些積壓訂單。我們在一月公告的 1,700 萬美元。我們——有一部分訂單已納入 2009 年第二次補充預算中，而目前正轉換為合約的過程中。此外，在 FY2010 的預算申請中，包含國防部（DoD）基本預算與 OCO 預算。這些都已公開宣布。我們預期一旦該預算獲得核准並由總統簽署，就會下達到陸軍，接著我們就會進入合約談判。我們知道陸軍與海軍陸戰隊都急於透過 FY10 預算執行新數位系統的採購，以及大量的改裝（retrofit）。我們認為一旦核准，推進速度很可能會很快。

Last question, sorry to keep going on here, but UAS revenues first quarter, did that represent a low point from the year, we should ramp up from this point on or second quarter similar to the point.

最後一個問題，抱歉我一直問下去。第一季的 UAS 營收是否代表全年低點？接下來應該會從這裡開始爬升，還是第二季會與這個水準差不多？

It's a low point. Tim said earlier, 70% of the year in the second half and I think then you can do the math on what that Q2 would tend to look like.

這是低點。Tim 先前提到，全年有 70% 會落在下半年，我想你可以據此推算第二季大概會呈現什麼樣子。

Okay, thanks, guys.

好的，謝謝各位。

We will go next to Jeff Evanson with Dougherty and Company.

接下來我們請 Dougherty and Company 的 Jeff Evanson。

Thanks for taking my questions.

謝謝讓我提問。

Hi, Jeff.

嗨，Jeff。

Well, I guess in first question is, is there a third aircraft go aircraft in our backlog figure?

我想第一個問題是：我們的積壓訂單（backlog）數字裡，是否包含第三架飛機（third aircraft）的 go aircraft？

Yes, the -- there was the third aircraft funding for the third aircraft was included in change orders that were released, did we announce that in Q3? I think it was Q3 last year.

是的——第三架飛機的資金已包含在已發布的變更訂單（change orders）中。我們是在第三季宣布的嗎？我想是去年第三季。

It was it is now in backlog?

所以現在已經在積壓訂單裡了？

Yes, since that announcement, -- Q3 I think -- I wanted to make sure it was funded in and in the backlog order.. It was funded and announced and we continue to work with our customers on the Global Observer program. Continues to be change orders that priorities move around for what customers want when they want it, what's -- how much funding is one in plan or another. So at any given time the content within a specific contract line item can and does move around.

是的，自那次公告以來——我想是第三季——我想確認它已到位並納入積壓訂單。它已獲資金支持並已公告，而我們也持續與客戶就 Global Observer 計畫合作。變更訂單仍在持續，因為客戶想要的優先順序會變動：他們何時要、要什麼、某個方案或另一個方案的資金規劃有多少。因此在任何時間點，特定合約明細項目（contract line item）中的內容都可能、也確實會有所調整。

Okay. Obviously learning that spares and repairs can be lumpy. US service revenue calculation of lay at 5.5 million in the quarter. Could you verify that and give us some color commentary around how that's tied to overall UAS activity level? Where you see that going?

好的。顯然我們也了解到備品與維修可能會有波動。你們本季美國服務營收（US service revenue）的計算大約是 550 萬美元。你能否確認一下，並說明它與整體 UAS 活動水準的關聯？你們認為未來會怎麼走？

Yes. $5.3 million for the quarter.

可以。本季是 530 萬美元。

Okay. Yes, that's sort of where it was in Q3 of last year and it's moved all over the place sense then. I think we would look at this level as being somewhat low. Expect that to grow as we go through the year. We think it's been somewhat impacted along with product deliveries with customers waiting to buy spares for Digital Data Link.

好的。是的，這大概跟去年第三季差不多，但之後就上下波動很大。我們會把目前這個水準視為偏低，預期隨著年度推進會成長。我們認為它與產品交付一樣，多少受到客戶等待購買 Digital Data Link 備品的影響。

I think there is no question that our largest customers for Raven that are if the process of converting from analog to digital have been trying to minimize expenditures for analog spares. As they anticipate the conversion to digital and there's some obvious difficulty in guessing how many spares will be required to support the analog installed base before its converted to digital. But there is no question that they are trying to husband their funds so that they have more capability to support the conversion to digital going forward.

毫無疑問，我們 Raven 的最大客戶目前正處於從類比轉為數位的過程中，他們一直試圖把類比備品的支出降到最低。因為他們預期將轉換到數位，而在猜測在類比既有裝機基礎轉換為數位之前，需要多少備品來支撐維運，確實有明顯難度。但毫無疑問的是，他們正努力節省資金，以便未來有更多能力支援向數位的轉換。

So frankly given the delay here, it would make sense we might see another tough quarter on service revenue.

所以坦白說，考量到這裡的延遲，我們可能會在服務營收上再看到一個艱難的季度，這樣推論合理嗎？

I guess we are not guiding on those individual elements. Probably where we got to leave it is the overall guidance that Tim gave and then the 70% in the second half and that's probably as close as we want to get to Q2.

我想我們不會針對那些個別元素提供指引。我們大概只能回到 Tim 提供的整體指引，以及下半年占 70% 這點；這大概也是我們願意對第二季給出的最接近的說法。

Okay.

好的。

Specificity.

夠具體了。

All right. Now obviously we've had some testing on the puma and positive feed back there, I thought you had gone in to production in May. When do you think we might see production orders for the puma?

好。接著，顯然我們對 puma 做了一些測試且回饋正面；我原以為你們五月就已進入量產。你們認為何時可能會看到 puma 的量產訂單？

I saw some line items in the House version of the defense appropriation bill. I know that there are multiple customers with an appetite for either new pumas or more pumas and I can't really comment on where they are in the process of lining up the funding for their earlier acquisition. But I think in general everything I can see with customers that have used or seen the product is positive and I think that bodes well for acquisition. I don't have enough insight in to the funding line items there to put a pin point on timing.

我在眾議院版本的國防撥款法案中看到一些明細項目。我知道有多個客戶對於採購新的 puma 或增加 puma 數量很有興趣，但我無法評論他們在為早期採購籌措資金的進度。不過整體而言，我所看到的——凡是使用過或看過產品的客戶——反應都很正面，我認為這對採購是好兆頭。我對那些資金明細項目的掌握不足，無法精確指出時程。

I would add in first quarter, the product revenue that you do see accepting the EES product revenue is not for Raven. We a had no Raven product revenue in first quarter it would all be puma and WASP.

我補充一下：第一季你們看到的產品營收（不含 EES 產品營收）並不是 Raven。我們第一季沒有 Raven 的產品營收，全部都是 puma 和 WASP。

As you look at 70% of revenue in the back half of the year, what do you see as a max production level per month of Ravens and DDL upgrade kits to achieve that. I'm going to attempt to back in to number but I'm sure you guys thought it through thoroughly. Well we clearly have a production plan.

當你們說全年營收有 70% 在下半年時，你們認為每月 Raven 與 DDL 升級套件的最大產能需要到多少才能達成？我會試著倒推數字，但我相信你們已經仔細想過。你們顯然有一個生產計畫。

I'm trying to see how I can answer your question without getting in to more detail there than we --

我在想要怎麼回答你的問題，才不會透露比我們——更多的細節……

I can try a couple of data points. Inventory grew we might expect inventory to grow somewhat more as we build and pro cure what component subsystems we can ahead of time to help make those deliveries. Beyond that I think we mentioned earlier our internal plans call for production of about 1000 systems worth. Either retro fits or new Raven systems in the balance of the year. Mostly if the second half.

我可以提供幾個數據點。庫存增加了；我們可能預期庫存還會再增加一些，因為我們會提前建置並採購（procure）我們能先準備的零組件子系統，以協助完成交付。除此之外，我想我們先前提到，我們內部計畫是在今年剩餘期間生產約 1,000 套系統的量——不論是改裝（retrofits）或新的 Raven 系統——而且大多會在下半年。

Given you got finished good and work in progress in inventory you are planning it's going to be tough but you are planning to meet that challenge right?

考量你們庫存裡有成品與在製品（work in progress），你們的規劃會很吃緊，但你們是打算迎接並達成這個挑戰，對吧？

We are not saying it's a slam dunk but we think we've got the capacity to do it.

我們不會說這是十拿九穩，但我們認為我們有能力做到。

All right. Last question, sorry for all these, my last question, just curious, Tim, what federal decision points are you waiting for in the timing around ramping of EV test systems you said that was weak in the quarter due to timing of federal decisions.

好。最後一個問題，抱歉問這麼多。最後我只是好奇，Tim，你提到 EV 測試系統在本季偏弱是因為聯邦決策時點的關係；你們正在等待哪些聯邦端的決策節點，才會影響擴產爬坡的時程？

And I what I meant this, Jeff, was that a number of our customers for electric vehicle test systems, either OEMs or battery manufacturers had proposals in for government funding as some of what would likely be applicable to the test equipment for their development programs. And so I think we had some indication that waiting for those decisions and that potential cash affected their procurement . Beyond that, there are opportunities for charging systems that we would sell other than the test equipment, to support the implementation of infrastructure for electric vehicles which potentially could show up in the future.

Jeff，我的意思是：我們一些電動車測試系統的客戶——不論是 OEM 或電池製造商——都有申請政府資金的提案，而其中一部分資金很可能可用於其開發計畫所需的測試設備。因此我們得到一些訊息是，他們在等待那些決策，而那筆潛在資金的到位與否影響了他們的採購。除此之外，除了測試設備之外，我們也有機會銷售充電系統，用以支援電動車基礎建設的導入，未來可能會出現這類需求。

Okay, thank you very much.

好的，非常感謝。

Thank you next we will go to Peter Armond with Broad Point AmTech.

謝謝。接下來我們請 Broad Point AmTech 的 Peter Armond。

A lot of questions have been answered you mentioned new customers on the WASP and potentially puma. Maybe you could just provide more insight on that if you could.

很多問題都已經被回答了。你提到 WASP 以及可能的 puma 有新客戶。若可以的話，能否就此提供更多見解？

I'm reluctant to get in to what customers might be considering what procurements in the future and we made a habit of not commenting on our proposal activity. But there are US government customers, DOD customers, beyond the Air Force and the Marines that currently have acquired WASP that have been evaluating it, appear to be positively disposed to acquiring WASP in the future. And there are also international customers that are in that same, in that same stance.

我不太願意談論哪些客戶未來可能考慮哪些採購，而且我們一向不評論我們的提案活動。不過，除了空軍與海軍陸戰隊之外，還有其他美國政府客戶、國防部（DOD）客戶，目前已採購 WASP、也正在評估，並且看起來對未來採購 WASP 持正面態度。此外也有國際客戶處於相同狀態。

I think as to puma, our initial customer was and continues to be special operations command. All of the feedback has been very positive there. I think that's a matter of funding approval and timing for that. We just began showing puma to potential new customers within the last couple of months. And as I mentioned in my comments, the response has been very positive. I think that's going to be a popular product, again both domestically and potentially internationally. We're still very early in the marketing stage with puma.

至於 puma，我們的初始客戶是、且目前仍是特種作戰司令部。那邊的回饋都非常正面。我認為接下來就是資金核准與時程的問題。我們在過去幾個月才剛開始向潛在新客戶展示 puma。正如我在評論中提到的，反應非常正面。我認為這會是一個很受歡迎的產品，同樣地，無論在國內或潛在的國際市場都是如此。我們在 puma 的行銷階段仍非常早期。

I appreciate that. Have you seen any change at least qualitatively in terms of requirements concerning the ramp in Afghanistan and potentially further additional troops there.

了解，謝謝。至少從質性角度來看，針對阿富汗增兵的擴張，以及可能進一步增加兵力，你們是否看到需求面有任何變化？

Well, general McCrystal's made a number of comments including something to the affect that he expects never to have enough ISR. And this issue of collateral damage has entered in to his public comments on how he is conducting and implementing policy there. I think those overarching large scale issues come right in to providing more ISR and more situational awareness, more persistence and more precision at the ground level and I think that's what our systems provide to our users. So I think it's -- I think we can continue to bring more to the party.

嗯，McCrystal 將軍已經發表了多項評論，其中包括他預期永遠不會有足夠的 ISR（情報、監視與偵察）。而「附帶損害」這個議題也已進入他對外公開談論其在當地如何執行與落實政策的評論之中。我認為這些宏觀、整體性的重大議題，正好直接對應到提供更多 ISR、更多態勢感知、更高的持續性，以及在地面層級更高的精準度；我認為這正是我們的系統為使用者所提供的。因此我認為——我認為我們可以持續為整體貢獻更多。

Thank you very much.

非常感謝。

Next we'll go to [Randy Cuiersen] with Barren Capital.

接下來我們請 Barren Capital 的 [Randy Cuiersen]。

In term of looking out in terms of the quarterly calculations, I know you are not giving a lot beyond the 70% in the second half. On the revenue line, are you assuming that EES is relatively flat through the first quarter throughout the rest of the year or counting on pick up there as well?

就季度推算來看，我知道你們除了下半年 70% 之外沒有提供太多指引。在營收端，你們是否假設 EES 在第一季之後到今年其餘時間大致持平，還是也預期會有回升？

This is Steve. I think we don't expect ees to continue at the level that we saw in first quarter. That was a disappointment to us.

我是 Steve。我想我們不預期 EES 會維持在第一季看到的水準。那對我們來說是個失望。

Okay. And we can make our assumptions as to revenue but obviously its a huge jump from Q2 to Q3, are there any scenario, on the operating expense line, you guys mentioned in the prepared comments that SG&A is basically fully loaded because you have proposal activity and full teaming to sell existing future systems at -- so is it fair to assume that that run rate will be stable throughout the rest of the year?

好的。營收方面我們可以自行做假設，但顯然從 Q2 到 Q3 是很大的跳升。在營業費用方面，你們在事先準備的評論中提到，因為有提案活動以及完整的團隊合作來銷售現有與未來系統，所以 SG&A 基本上已經是滿載——那麼是否可以合理假設這個費用率在今年剩餘時間會保持穩定？

I think if we fit our top -- I will let Tim say more, -- but if we hit our top line the way to think of it is SG&A and R&D think of it as a percent of revenue, not unlike what we saw last year, so that would indicate in the balance of the year we would see some continued investment in the expense area. Maybe not right off the bat. But by the end of the year.

我想如果我們達到營收——我讓 Tim 再補充——但如果我們達到營收目標，思考方式是把 SG&A 和 R&D 視為營收的百分比，與去年看到的情況類似；這表示在今年剩餘時間，我們會在費用端持續投入一些資源。也許不會立刻發生，但到年底會是如此。

So for example in the Q4 you guys were running 13.5% on the SG&A line and 9% on R&D, and Q4 was the most revenue, are those reasonable percentages or how do I think about that?

例如在 Q4，你們 SG&A 約為 13.5%，R&D 約為 9%，而 Q4 的營收也是最高的；這些百分比是否合理？或我應該怎麼看待？

Randy, would be looking at it on an annual basis and we have in the past and we are currently looking at the year to come in at 13% or 12% to 14% operating margin on the total annual revenue.

Randy，我會以年度基礎來看。我們過去一直如此，目前也預期明年全年總營收的營業利益率會落在 13% 左右，或 12% 到 14% 的區間。

Right.

了解。

So we're as a percentage we are much higher in the front half where we've got lower revenue and I think as a percentage we would be lower in the back half with higher revenue but overall I would expect our expense spending to be higher in Q4 than it was in first quarter as we typically have continued to grow and those investments over time. Does that helpful?

所以以百分比來看，上半年因為營收較低，我們的比率會高很多；下半年營收較高，比率會較低。但整體而言，我預期我們在 Q4 的費用支出會高於第一季，因為我們通常會持續成長並隨時間進行這些投資。這樣有幫助嗎？

That's helpful. I will have to back in to the individual quarters as to how to get the 12% to 14%. But it makes sense. Then switching gear as little on switchblade you guys have been consistent in looking for orders by the ends of the fiscal year, what is kinds of holding things back, is it production, funding, contract negotiations or something else?

有幫助。我得再倒推各季如何達到 12% 到 14%，但這樣說得通。接著稍微換個話題談 switchblade，你們一直說希望在會計年度結束前拿到訂單；目前是什麼在拖延？是產能、資金、合約談判，還是其他因素？

I think it is at a high level, the issue is that this is an entirely new capability. This is really out of the box. Few if any -- few customers even anticipated this capability being possible even a year ago. While our initial customer was funding the early development and evaluation, most others were, this wasn't on their radar screen. So its like most innovative new solutions. It requires customers to think about how they would implement this in to their system, how they would fund it. Who owns it, how they operate it. And how this fits in to their enterprise and I think that's whether it's Global Observer, whether it is switchblade or the original introduction of hand launched unmanned aircraft, it just appears to require a considerable amount of time for customers to sort through those issues. And whether it's DOD or whether it's retailers operating distribution center with electric forklifts the introduction of a fundamentally new technology solution just seems to take a lot of time and that's why we've never been great at predicting the timing of adoption.

我想從高層次來看，問題在於這是一項全新的能力，真的是突破框架的。幾乎沒有——很少有客戶甚至在一年前就預期這種能力是可能的。雖然我們的第一個客戶資助了早期開發與評估，但其他大多數客戶並未把它列入考量。因此就像多數創新解決方案一樣，客戶需要思考如何把它導入他們的系統、如何編列預算、由誰擁有、如何操作，以及它如何融入他們的整體架構。我認為不論是 Global Observer、switchblade，或是最初手持發射無人機的導入，看起來都需要客戶花相當多時間釐清這些問題。無論是國防部（DOD），或是零售商在配送中心導入電動堆高機，根本性的新技術解決方案導入似乎都需要很長時間；這也是為什麼我們一直不擅長預測採用時點。

So having said that, the -- I think what is going on right now is I think there is a lot of activity in a lot of customers that is -- that began when we did our end to end solution at the end of last calendar year and I think that's continuing to move ahead and gain steam. It's certainly not abating and as I mentioned in the comments, this three day demonstration just a couple of weeks ago had over 50 people there for three days in a what was the determinant undisclosed -- federal facility watching extraordinary challenges to the demonstration of switchblade and it was very very successful.

話雖如此——我認為目前正在發生的是：許多客戶端有大量活動，這些活動是在我們去年曆年年底做了端到端解決方案展示後開始的，而現在仍在持續推進並逐漸加速。這些動能當然沒有減弱；正如我在評論中提到的，幾週前那場為期三天的展示，有超過 50 人連續三天參與，在一個當時未公開的——聯邦設施——中觀摩 switchblade 展示所面對的非凡挑戰，而結果非常、非常成功。

My next question was going to be was the facility state side or overseas.

我下一個問題本來是：那個設施是在美國本土還是海外？

It was domestic but it department necessarily look that way.

是在國內，但不一定看起來像是在國內。

Okay. Good enough. Just a quick question, cash flow from operations in the quarter?

好的，這樣就夠了。快速問一下，本季營運活動現金流？

$4.5 million positive.

正數 450 萬美元。

And what was DA Steve?

Steve，DA 是多少？

1950.

1950。

Okay. Thank you guys very much.

好的。非常感謝各位。

Thank you. Thanks Randy.

謝謝。謝謝 Randy。

Thank you next we will go to Josephine Millward with Dougherty and Company. Josephine your line is open. Please check your mute function.

謝謝。接下來我們請 Dougherty and Company 的 Josephine Millward。Josephine，您的線路已開通，請確認您的靜音功能。

Hello?

喂？

Hello, Josephine.

喂，Josephine。

How are you?

你好嗎？

Doing well, how are you?

我很好，你呢？

I'm doing very well, thank you. Just -- you may have talked about this. I want to confirm that you're reiterating your is 12% to 14% operating margin including the loss in first quarter.

我很好，謝謝。只是——你們可能已經談過這個。我想確認一下：你們重申的 12% 到 14% 營業利益率，是包含第一季的虧損在內嗎？

That's correct.

沒錯。

Okay. All my other questions have been answered. Actually let me confirm something, did you say that the puma funding was in the House appropriations bill?

好的。我其他問題都已經被回答了。其實我再確認一件事：你剛才是說 puma 的經費在眾議院撥款法案裡嗎？

Yes. The last time I saw the or was aware of where we stood, I had the -- there was approved funding or for puma in the House appropriations bill.

是的。就我上次看到或了解我們所處的位置而言，我的理解是——眾議院撥款法案中已核准 puma 的經費。

That's good news. I know it was approved by the House and Senate defense authorization. So it got it was in your probes as well. Can you confirm if it was $14 million or $15 million, the same amount in the authorization bill?

這是好消息。我知道它已在眾議院與參議院的國防授權法案中獲得核准，所以也納入你們的預測之中。你能否確認金額是 1,400 萬或 1,500 萬美元，是否與授權法案中的金額相同？

That was my sense. I'm trying to pull it out of memory Josephine. But I think that's what it was. I think it was not did not end up in the Senate version and so I think we find out what really happens after conference.

我的印象是如此。我在努力從記憶中回想，Josephine。但我想就是那樣。我想它最後沒有出現在參議院版本裡，所以我想我們要等協商會議（conference）之後才會知道真正結果。

Sure. I think you still have time to work on that. I think the Senate is still has a lot of work to do. Great that's good news, thank you very much.

了解。我想你們還有時間可以推動這件事。我想參議院還有很多工作要做。很好，這是好消息，非常感謝。

Thanks Josephine.

謝謝 Josephine。

Thank you, next we will go to Brian Rutenberg with Morgan Keegan.

謝謝。接下來我們請 Morgan Keegan 的 Brian Rutenberg。

How long does a ramp of DDL go, I know you talked about third and Q4 that's when its kicking in. I want to know is it a three quarter ramp, four quarter rach, five quarter rach, what is the state after that ramp? A big rush for the DDL and then what is it going to come back down to. Look likes you are going to take it up in Q3 and Q4 to $100 million run rate in total. I'm trying to figure out what the run rate is, where it falls off to.

DDL 的爬坡期會持續多久？我知道你們談到第三季和 Q4 會開始發力。我想知道是三個季度的爬坡、四個季度、五個季度，還是怎樣？爬坡之後會是什麼狀態？DDL 會先有一波大衝刺，然後會回落到什麼水準？看起來你們在 Q3 和 Q4 會把總體拉到 1 億美元的年化（run rate）。我想弄清楚這個 run rate 之後會掉到哪裡。

I think our view will probably change over time as we see what customers actually do beyond the what we can see now in the FY10 budget request. But given what we know now we will peak capacity in Q4 probably as we continue to move forward with digital systems and retro fit kits after that. But -- I don't have great visibility deep in to the next year at this point.

我想隨著時間推進、當我們看到客戶在 FY10 預算請求之外實際怎麼做時，我們的看法可能會改變。但就目前我們所知，我們可能會在 Q4 達到產能峰值，之後仍會持續推進數位系統與改裝套件（retrofit kits）。但是——目前我對明年更深層的情況沒有很好的能見度。

Would a trail off number be more like $80 million from the $100 million run rate. What do you see the trail, where do you see a steady stake after the big buildup?

那麼回落後的數字會比較像是從 1 億美元年化降到 8,000 萬美元嗎？在大幅擴張之後，你們認為穩態會落在哪裡？

Well, I don't think, again, I want to lock down on what happens after fiscal ten. But so but what I'm talking about capacity, I'm referring to the capacity we are building in to our production capability. And we are sizing that to be a little over what I think the peak demand will be. If that changes, and goes up, we will just increase capacity and that's not going to be a huge problem for us.

嗯，我不想——再說一次——把財政年度 10 之後會發生什麼鎖死。但我在談產能時，指的是我們正在建立的生產能力產能。我們把它規劃得略高於我認為的需求峰值。如果需求改變並上升，我們只要提高產能即可，對我們來說不會是很大的問題。

Then last question on the Global Observer, do you expect the revenue from the three systems to come in in fiscal 11 or a big chunk of it, is that right?

那麼關於 Global Observer 的最後一個問題，您是否預期這三套系統的營收會在第 11 會計年度入帳，或其中很大一部分會在那時入帳，對嗎？

Mainly it's we are sort of -- we are in the middle or on the other side of the middle on that program. So we are really running at pace on Global Observer this year.

主要是我們——我們在那個專案上大概已經走到中段，或是略過中段了。所以今年我們在 Global Observer 上的執行進度確實是按部就班、全速推進。

Okay. Very good. Thank you very much. That's was all my questions.

好的。非常好。非常感謝。我的問題就到這裡。

Thank you.

謝謝。

We will take our next question from Tyler Hojo with Sidoti and Company.

我們接下來的問題來自 Sidoti and Company 的 Tyler Hojo。

Good evening everybody. A couple of housekeeping things first. What was the number of Raven systems purchased by the army in the quarter?

各位晚安。先問幾個例行事項。本季陸軍採購了多少套 Raven 系統？

Zero.

零。

Talking about the army acquisition ?

您是指陸軍的採購嗎？

Right. It was 57% delivered in Q4, we remain at 57% in first quarter. I think in the quarter we delivered on the order of two Raven air vehicle out of the factory and to nonDOD customers in first quarter. We are -- that part of the Company was really just working to get ready for DDL

對。第四季交付了 57%，第一季我們仍維持在 57%。我想本季我們大約從工廠交付了兩架 Raven 空中載具給非國防部（nonDOD）客戶（在第一季）。我們——公司那一部分主要是在為 DDL 做準備。

And I know you guys don't look at this, but what was the unfunded backlog in the quarter?

我知道你們不太看這個，但本季未獲資金支持的在手訂單（unfunded backlog）是多少？

$513 million approximately and again, you're correct we don't view this as a real backlog number.

約 5.13 億美元；而且你說得對，我們不把這視為真正的在手訂單數字。

Just to plug it in the model. And just lastly, you've got this question asked a lot of different ways but in terms of digital Raven at what point in the fiscal year do you actually need to have funded orders in hand to make the guidance that you gave or -- backed here today.

只是想把它放進模型裡。最後一個問題，這個問題你們被用很多不同方式問過：就數位 Raven 而言，在會計年度的哪個時間點，你們實際上必須手上已經有獲資金支持的訂單，才能達成你們今晚給出或重申的指引？

Let me take another shot at answering that a little differently and see if it helps. There is different places that publicly available funding is coming from. And the I believe that the amount that's in the second '09 supplemental is already appropriated and in the contracting process. So what's left is in the base defense budget and in the 2010 OCO request. Typically, that could get approved as soon as the end of this month. But we have often seen those orders slide out in to our third quarter. So I think we can certainly handle a couple of months slide there without affecting our existing plan. Is it -- if it gets extraordinarily late then we are going to be up against it and we will do what we normally do which is build ahead, fill -- smooth our production flow, and be in a position to put the maximum amount of hardware out to our customers in the shortest amount of time when contracts finally do flow in. But it's very difficult to pin that down to a date certain at which point we are just too far.

我換個方式再試著回答一次，看看是否更有幫助。公開可得的資金來源有不同管道。我相信 2009 年第二次補充預算（second '09 supplemental）中的金額已經完成撥款（appropriated），並且正在走合約流程。所以剩下的就在基本國防預算（base defense budget）以及 2010 年 OCO 申請（request）裡。一般來說，最快可能在本月底就能獲核准。但我們也常看到那些訂單延後到我們第三季才下來。所以我認為，即使延後幾個月，也不至於影響我們現有計畫。若是——如果拖得非常晚，那我們就會面臨壓力；我們會做我們一貫會做的事：提前生產、填補——讓生產流程更平順，並在合約最終到位時，能在最短時間內把最多硬體交付給客戶。但要把那個時間點精確釘在某個日期、說到了那天我們就來不及了，這非常困難。

But it sounds like even if you get these orders by the end of your calendar year or before January, that you could still meet the goals that you've set out here tonight?

但聽起來即使你們在日曆年底或一月之前才拿到這些訂單，你們仍然可以達成今晚在這裡設定的目標？

That timing has happened in the past and when it has we have been able to meet our annual plans anyway. It gets a little more difficult when we got this heavy back end load but its the kind of planning flexibility that we built in to our system.

過去確實發生過那樣的時點，而在那種情況下我們仍能達成年度計畫。當我們的出貨高度集中在後段時會更具挑戰，但這正是我們在系統中建立的那種規劃彈性。

Fantastic, thanks a lot.

太棒了，非常感謝。

Let me interject before we move on. Josephine asked me about the puma numbers in the budget and I -- I said that I last time I saw the expectation on the House appropriations bill that those that puma funding was there still even though it wasn't in the Senate. Steve points out he thinks it was not in the House appropriations so I would like to get back with you, Josephine, on what we really think the answer is on that status after we check it tomorrow.

在我們繼續之前我插一句。Josephine 問我預算裡 Puma 的數量，我——我說我上次看到眾議院撥款法案（House appropriations bill）的預期是，即使參議院沒有，Puma 的資金仍在其中。Steve 指出他認為眾議院撥款中其實沒有，所以我想在我們明天查核後，再回覆你，Josephine，關於我們對該狀態的真正判斷。

Next is Erik Olbeter with Pacific Crest.

下一位是 Pacific Crest 的 Erik Olbeter。

Thank you for taking my question. Going back to a little bit to a Global Observer, had a strong ramp, how should we expect that through the remainder of this year, is this a high water mark in terms of revenue you are going to book? It's going to continue as you get the products out the door?

謝謝讓我提問。回到 Global Observer，它的拉升（ramp）很強，對於今年剩餘期間我們應該如何預期？就你們將認列的營收而言，這是高水位（high water mark）嗎？還是隨著產品出貨會持續？

Generally, its going to continue through our fiscal year at something close the rate we saw in first quarter. As reminder global doesn't make up all of the project R&D that we break out by program but the largest component of that.

一般而言，它會在我們本會計年度持續，速度大致接近第一季看到的水準。提醒一下，Global 並不涵蓋我們按專案拆分的所有專案研發（project R&D），但它是其中最大的組成部分。

Right, maybe just going back to the EES business, there's been a fair amount of loan guarantees going through the pipeline, right now, at the federal level, projects waiting for that financing to see if it materializes, is that sort of a specifically something we should look for to see when those loan guarantees are actually pilot funds are released as indicated of the business coming back on line.

了解。再回到 EES 業務，目前在聯邦層級有相當多的貸款擔保正在流程中，許多專案在等待那筆融資是否會落實；這是否是我們應該特別關注的指標——也就是當那些貸款擔保真正到位、或如所示試點資金（pilot funds）釋出時，作為業務重新啟動的訊號？

I don't think I would tie our business directly to the timing on those federal loan guarantees Eric. I think there has been an affect on our sales of our electric vehicle test equipment, that's been driven by those anticipation of those loans and other grants, moving through the federal process and I would expect as that moves through that those customers that then intend to use that funding to build up their test capability would we would see that in our test equipment revenue.

Eric，我不會把我們的業務直接綁定在那些聯邦貸款擔保的時間點上。我認為這確實影響了我們電動車測試設備的銷售，因為客戶預期那些貸款與其他補助會在聯邦流程中推進；我也預期隨著流程往前走，那些打算用該資金來建置測試能力的客戶，我們會在測試設備營收上看到反映。

That's helpful. Last question for me, Tim, I know you guys don't guide on gross margin, but as you think about the ramp in Q3 and Q4 for the UA business, is that should we expect sort of gross margins come down a little bit. I assume a lot of people busting the hump to get this out, is that something you guys have forecasted in our model?

很有幫助。我最後一個問題，Tim，我知道你們不提供毛利率指引，但當你們思考 UA 業務在第三季與第四季的拉升時，我們是否應該預期毛利率會稍微下滑？我猜很多人會拼命趕工把它做出來；這是你們在模型裡有預測到的嗎？

I think in general Eric, certainly there is the probability that we are going to be busting our hump as you put it, to make this heavy back end production happen. But -- the my expectation would be that the larger affect would be that the higher revenue of more of our overhead just like the lower revenue absorbed less of our overhead in first quarter.

Eric，我想整體而言，確實有可能如你所說我們會非常拼命，才能讓後段大量生產如期發生。不過——我的預期是，更大的影響會來自較高的營收能吸收更多的間接費用（overhead），就像第一季較低的營收吸收的間接費用較少一樣。

And I will add first quarter I mean we certainly expect gross margins to move up from first quarter levels when we get in to the second half of the year. first quarter was about 70% cost plus. And we will be -- we will have a normal mix as we go in to the balance of the year.

我再補充一下，第一季我們確實預期在進入下半年後，毛利率會從第一季水準往上走。第一季大約有 70% 是成本加成（cost plus）。而在今年剩餘期間，我們——我們的產品組合會回到正常水準。

Great, thank you, gentlemen.

很好，謝謝各位先生。

Thank you Eric.

謝謝你，Eric。

Thank you, time for one final question. We will move to Michael [Chimole] with (inaudible).

謝謝。最後再開放一個問題。我們轉到 Michael [Chimole]，來自（聽不清）。

Thanks for taking my question. Tim, on the -- I will ask one quick one here on the Digital Data Link. I was told that the Army actually owns the wave form for the DDL, and a push was going to be made to deploy DDL to all of the Army's unmanned systems not only the aeroenvironment, but fire scouts, hunters, an additional revenue opportunity for you guys to sell ddl to perhaps some of your competitors or other army customers out there?

謝謝讓我提問。Tim，關於——我這裡快速問一個 Digital Data Link（DDL）。我聽說陸軍其實擁有 DDL 的波形（waveform），而且將推動把 DDL 部署到陸軍所有的無人系統，不僅是 AeroVironment 的系統，還包括 Fire Scouts、Hunters；這是否為你們帶來額外的營收機會，讓你們把 DDL 賣給一些競爭對手或其他陸軍客戶？

Eric, when we -- the DDL development started internally, we built prototypes we took those to customers and to gauge their ultimate interest and that led to incorporating the further development of DDL within a advanced ACTD program. That was partially sponsored by the Army and partially by the office of Secretary of Defense and potentially others. As we developed that, we wanted to make sure that the wave form was approved within the government system and it is. One of the either the few or only -- I guess I should characterize that as its one of the few at least of the wave forms that have a jitter exemption within the larger department of defense so.

Eric，當我們——DDL 的研發在內部啟動時，我們做了原型，帶去給客戶以評估他們最終的興趣，這也促成把 DDL 的後續研發納入一個先進的 ACTD 專案中。該專案部分由陸軍贊助，部分由國防部長辦公室（office of Secretary of Defense）以及可能的其他單位贊助。在研發過程中，我們希望確保該波形能在政府體系內獲得核准，而它確實已核准。它是少數——或可能是唯一——我想我應該這樣描述：至少它是少數幾個在更大的國防部體系中具有抖動（jitter）豁免的波形之一。

As we have now moved this to production, it has a unique position in the overall wave form approval process, and I certainly have heard a number of indications from our existing customers that they would like to use this dimming digital data fling other applications. Long answer to your question that probably could have been yes. But hope it provides a little more color.

現在我們已把它推進到量產階段，它在整體波形核准流程中具有獨特地位；而且我確實從我們現有客戶那裡聽到不少訊息，他們希望把這個該死的數位資料鏈（dimming digital data fling）用在其他應用上。對你的問題的長答案，其實可能一句「是」就能回答。但希望這能提供更多背景。

That does, thanks a lot. Most of my questions have been answered. Thanks, guys.

有的，謝謝。我的大部分問題都已經被回答了。謝謝各位。

Thank you, Mike.

謝謝你，Mike。

With that, I would like to turn your program back over to Mr. Gitlin for closing comments.

那麼，我想把會議交回給 Gitlin 先生做結語。

Thank you for your continued interest in AeroVironment archived version of this call, all filings and with found at avinc.com. We look forward to speaking with you again following next quarter's results, have a good day.

感謝各位持續關注 AeroVironment。本次電話會議的存檔版本、所有申報文件等，可在 avinc.com 查閱。我們期待在下季財報結果公布後再次與各位交流，祝各位有美好的一天。

That does conclude today's conference. Thank you for your participation.

今天的電話會議到此結束。感謝各位的參與。