AeroVironment, Inc. (AVAV) 2016 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the AeroVironment, Inc. second-quarter FY16 earnings call.

各位女士、各位先生，大家好。歡迎參加 AeroVironment, Inc.2026 財年第二季財報電話會議。

(Operator Instructions)

(接線員指示)

As a reminder, this conference is being recorded for replay purposes. With us today from the Company is the Chairman and Chief Executive Officer, Mr. Tim Conver; Senior Vice President and Chief Financial Officer, Mr. Raymond Cook; and Vice President of Investor Relations Mr. Steven Gitlin. And now at this time, I would like to turn the conference over to Mr. Gitlin. Please go ahead, sir.

提醒各位，本次會議將錄音以供重播。今天與會的公司代表包括：董事長兼執行長 Tim Conver 先生；資深副總裁兼財務長 Raymond Cook 先生；以及投資人關係副總裁 Steven Gitlin 先生。現在我想把會議交給 Gitlin 先生。先生，請開始。

Thank you, Sherre, and welcome to our second-quarter FY16 earnings call.

謝謝你，Sherre，歡迎參加我們 2026 財年第二季財報電話會議。

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. 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 any forward-looking statements, which speak only as of the date on which they are made. We do not intend and undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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》所定義的前瞻性陳述。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。有關此類風險與不確定性的清單與說明，請參閱我們向美國證券交易委員會提交的報告。提醒投資人不要過度依賴任何前瞻性陳述；該等陳述僅截至其作出之日有效。我們無意且不承擔任何義務因新資訊、未來事件或其他原因而更新任何前瞻性陳述。

The content of this conference call contains time-sensitive information that is accurate only as of today, December 8, 2015. The Company undertakes no obligation to make any revision to the statements contained in our remarks or to update them to reflect the events or circumstances occurring after this conference call.

本次電話會議內容包含具時效性的資訊，僅在今日（2015 年 12 月 8 日）為準確。公司不承擔對我們發言中所含陳述作任何修訂或更新之義務，以反映本次電話會議後發生的事件或情況。

We will now begin with remarks from Tim Conver. Tim?

接下來由 Tim Conver 發表談話。Tim？

Thank you, Steve, and welcome to our second quarter FY16 conference call. Our FY16 plan is on track. Second quarter revenue of $64.7 million brought first half revenue to 41% of our FY16 guidance midpoint, as expected. And second quarter gross margin was strong. Adoption and new orders for Switchblade variants continued to attract new customer funding in Q2 and customer interest in our large UAS and commercial UAS growth opportunities was active.

謝謝你，Steve，歡迎參加我們 2026 財年第二季電話會議。我們的 2026 財年計畫進展順利。第二季營收為 6,470 萬美元，使上半年營收達到我們 2026 財年財測指引中點的 41%，符合預期。第二季毛利率表現強勁。Switchblade 各型號的採用與新訂單在第二季持續吸引新客戶資金投入；同時，客戶對我們大型 UAS 與商用 UAS 的成長機會也保持高度興趣。

On today's call, I'll review Q2 performance, provide an update for our core business, which includes small UAS and efficient energy systems, and then review progress in our growth portfolio. Raymond Cook will discuss our financial performance, I'll update our view of the second half of FY16, and then Raymond and I will take your questions.

在今天的電話會議中，我將回顧第二季表現，更新我們核心業務（包括小型 UAS 與高效能源系統）的進展，並接著回顧我們成長型投資組合的進度。Raymond Cook 將說明我們的財務表現；我會更新我們對 2026 財年下半年的看法；之後我與 Raymond 將回答各位的提問。

Second quarter revenue of $64.7 million and gross profit of $31.5 million increased significantly over last quarter and over the second quarter of last year. Our performance also drove first half revenue up by 7% and gross profit up by 49%. Q2 gross profit was robust even before positive impact of a one-time $3.5 million reversal of a reserve. Q2 funded backlog of $97.2 million is up 50% from the prior fiscal year end and has been augmented by additional bookings of $21.3 million thus far in Q3.

第二季營收 6,470 萬美元、毛利 3,150 萬美元，較上一季及去年同期均大幅成長。我們的表現也帶動上半年營收成長 7%，毛利成長 49%。即使不計入一次性沖回準備金 350 萬美元的正面影響，第二季毛利仍然強勁。第二季已獲資金支持的在手訂單（funded backlog）為 9,720 萬美元，較上一財年年底增加 50%，且在第三季迄今又新增訂單 2,130 萬美元。

In the EES portion of our core business, Hyundai selected us as the preferred electrical vehicle charging provider for its dealerships in Q2, and we will begin supplying its nation-wide dealer network with chargers in the second half. Hyundai is the seventh global automotive OEM to select AeroVironment as its charging supplier. Automotive dealerships represent a portion of our North American EBSE charge dock deployment footprint, which also includes residences and other businesses and totaled more than 29,000 units at the end of Q2.

在我們核心業務中的 EES 部分，現代汽車於第二季選定我們為其經銷商的首選電動車充電供應商，我們將於下半年開始向其全國經銷網供應充電設備。現代汽車是第七家選擇 AeroVironment 作為充電供應商的全球汽車 OEM。汽車經銷商是我們北美 EBSE 充電座部署版圖的一部分；該版圖亦涵蓋住宅與其他商業場所，至第二季末累計超過 29,000 台。

In other EES news, our TurboCord dual voltage cord set was selected as a finalist for the Automotive News 2016 PACE Awards, an important auto industry recognition of this innovative charging solution. These accomplishments help to illustrate our leadership in the electric vehicle charging business.

在其他 EES 方面，我們的 TurboCord 雙電壓充電線組入圍《Automotive News》2016 年 PACE 大獎決選，該獎項是汽車產業對此創新充電解決方案的重要肯定。這些成果有助於展現我們在電動車充電業務的領導地位。

In emerging markets, a key component of maintaining our leadership while maximizing return on investment is evaluating shifts and trends as the market develops and appropriately optimizing our business models. We recently concluded that deemphasizing fast charge and public charging infrastructure solutions while sharpening our focus on consumer and business charging solutions will drive more profitable long-term growth for our on road electric vehicle charging business. Our TurboCord and TurboDock both represent components of this strategy.

在新興市場中，為在維持領導地位的同時最大化投資報酬，關鍵之一在於隨市場發展評估變化與趨勢，並適時優化我們的商業模式。我們近期得出結論：降低對快速充電與公共充電基礎設施解決方案的投入，並更聚焦於消費者與企業充電解決方案，將為我們的道路用電動車充電業務帶來更具獲利性的長期成長。TurboCord 與 TurboDock 皆是此策略的組成要素。

The resultant decrease in fast charging sales was the largest contributor to the 26% year-over-year decline in first half EES revenue. With this strategy refinement, we believe we are well-positioned to benefit from an increase in EV adoption.

因此，快速充電銷售下滑是上半年 EES 營收年減 26% 的最大主因。透過此策略調整，我們相信已具備良好定位，可受惠於電動車採用率的提升。

Let's move from our EES to our UAS portion of our core business. We continue to develop and support the solutions that will help our small UAS customers quickly gather the clear, actionable information they need in the dangerous world in which they operate. Our UAS business continued to perform well, producing $56.6 million in second quarter revenue, an increase of 31% year-over-year.

接下來我們從 EES 轉到核心業務中的 UAS 部分。我們持續開發並支援各項解決方案，協助我們的小型 UAS 客戶在其所處的危險環境中，快速取得清晰且可採取行動的資訊。我們的 UAS 業務持續表現良好，第二季營收達 5,660 萬美元，年增 31%。

Presented with an ever-increasing number of competing UAS choices, customers continue to choose AeroVironment's small UAS when it comes to equipping their force for uncertain situations. For example, in Q2, the US Marine Corps purchased its first group of Puma AE systems against its new requirement for a family of small UAS with a $13 million contract. And beyond domestic demand, the large pipeline of international small UAS procurement activities produced foreign military sales contracts of $18.5 million for Raven systems in Q2.

面對日益增加的競爭性 UAS 選擇，客戶在為其部隊因應不確定情勢進行裝備配置時，仍持續選擇 AeroVironment 的小型 UAS。例如在第二季，美國海軍陸戰隊依其對小型 UAS 系列的新需求，透過一份 1,300 萬美元合約採購了首批 Puma AE 系統。除國內需求外，龐大的國際小型 UAS 採購活動管線亦在第二季帶來 1,850 萬美元的 Raven 系統對外軍售合約。

So far in Q3, we have already received an additional $13.5 million contract for Puma AE systems from another international customer. We expect continued owner flow from initial adoption of our DoD proven small UAS, both by new customers in allied countries, in addition to growing requirements from our more than 35 current global customers.

截至第三季目前為止，我們已自另一位國際客戶取得額外 1,350 萬美元的 Puma AE 系統合約。我們預期，隨著新客戶（盟國）初期採用我們經美國國防部驗證的小型 UAS，以及我們全球超過 35 個現有客戶需求持續成長，將帶來持續的訂單動能。

Expanding the utility of our small UAS beyond ground applications remains one of our key objectives. To this end, pre-adoption trials of our all environment Puma system in maritime applications continued to produce successful results during the quarter. Of note, the US Navy purchased a number of Puma systems for operational deployment. We believe the adoption of small UAS by the US Navy and in other maritime applications can drive significant demand for Puma over the next few years.

將我們小型 UAS 的效用擴展至地面應用以外，仍是我們的關鍵目標之一。為此，我們的全環境 Puma 系統在海事應用上的採用前測試於本季持續取得成功成果。值得一提的是，美國海軍採購了多套 Puma 系統用於作戰部署。我們相信，美國海軍及其他海事應用對小型 UAS 的採用，未來幾年可望帶動 Puma 顯著需求。

In addition to new system procurements, we continue to sustain and upgrade the large fleet of our small UAS deployed across the Department of Defense in many allied countries. FY16 sustainment contracts through July totaling $35 million from the US Army demonstrated the ongoing value of our large installed base continues to generate.

除新系統採購外，我們也持續維護並升級在美國國防部及多個盟國廣泛部署的大量小型 UAS 機隊。截至 7 月的 2026 財年維保合約中，來自美國陸軍合計 3,500 萬美元，顯示我們龐大已安裝基礎所持續創造的價值。

Customers have consistently chosen to retrofit many of the thousands of existing systems they own, when new upgrades have been made available that deliver needed system capabilities, generating incremental revenue. As AV continues to enhance the capability of our family of small UAS in anticipation of customer needs, we expect to offer new upgrades to those customers over the next few years.

當推出可提供所需系統能力的新升級時，客戶一貫選擇為其擁有的數千套既有系統進行改裝，從而帶來增量營收。隨著 AV 持續強化我們小型 UAS 系列的能力以預先因應客戶需求，我們預期未來幾年將向這些客戶提供新的升級方案。

Shifting now to our growth portfolio, demand for Switchblade tactical missile systems and their support remains strong and demand for new variants grew in Q2. The Army awarded a Switchblade contract extension of one year for options totaling $29.3 million, in addition to the Army announcing their intent to solicit and award additional scope for Switchblade services and support for joint operational needs through December, 2016.

現在轉到我們的成長型產品組合，Switchblade 戰術飛彈系統及其支援的需求仍然強勁，且第二季對新型號的需求有所成長。陸軍授予 Switchblade 合約延長一年，選擇權總額為 2,930 萬美元；此外，陸軍也宣布其意圖徵求並授予額外範圍的 Switchblade 服務與支援，以滿足聯合作戰需求，期限至 2016 年 12 月。

All three of the Switchblade variants that we successfully demonstrated last year have generated growing customer support and funding this year. I told you last quarter that one variant of Switchblade demonstrated last year had transitioned to procurement. In Q2, we received additional contracts for that successful variant.

我們去年成功展示的三種 Switchblade 變體，今年都獲得日益增加的客戶支持與資金挹注。我在上季告訴各位，去年展示的其中一種 Switchblade 變體已轉入採購階段。在第二季，我們又取得該成功變體的額外合約。

This quarter, we received additional funding for engineering manufacturing development of a second variant. A third variant completed additional successful user demonstrations during the quarter and is now it appears likely to transition to a production program.

本季，我們獲得第二種變體之工程製造開發（EMD）的額外資金。第三種變體在本季完成更多成功的使用者展示，目前看來很可能轉入量產計畫。

To put further color on the opportunity, we are now working with five different customers and other new tactical missile system proposals are under consideration. In terms of how our investments yield results, consider that the incremental R&D investments we made in FY15 have already driven three customer funded programs forward and created active interest in others.

為了更具體說明這項機會，我們目前正與五個不同客戶合作，且其他新的戰術飛彈系統提案也在評估中。就我們投資如何產生成果而言，請注意我們在 2015 會計年度所增加的研發投資，已推動三個由客戶出資的計畫向前進展，並在其他計畫上創造了積極的興趣。

Our tactical missile systems continue to demonstrate success in their operational deployment. With seven successful demonstrations in Q2 and new system developments currently funded by customers, we consider our new family of tactical missile systems to be well into the early stage of adoption, with significant growth potential.

我們的戰術飛彈系統在作戰部署中持續展現成功。第二季完成七次成功展示，且目前由客戶出資的新系統開發正在進行中；我們認為新的戰術飛彈系統系列已進入採用的早期階段，具備顯著的成長潛力。

In the large UAS area within our growth portfolio, during our second quarter we completed Phase II of the DARPA Tern development contract and were informed we would not receive a Phase III contract. We may yet find customers for this innovative capability in the future; but for now, the R&D team that was working on Tern has redeployed to other programs with more immediate return potential.

在我們成長型產品組合中的大型無人機系統（UAS）領域，第二季我們完成了 DARPA「Tern」開發合約的第二階段，並獲知我們將不會獲得第三階段合約。未來我們仍可能為這項創新能力找到客戶；但就目前而言，原先投入 Tern 的研發團隊已重新部署至其他具更即時回報潛力的計畫。

Our largest UAS platforms are intended to operate as cost-effective satellites in the stratosphere. Our business investments in this area are currently focused on bid and proposal activities, sometimes involving teaming agreements, in response to customer interest in international applications for these unique, long endurance stratospheric UAS.

我們最大的 UAS 平台旨在於平流層中作為具成本效益的衛星運作。我們在此領域的業務投資目前聚焦於投標與提案活動，有時也包含合作協議，以回應客戶對這些獨特、長航時平流層 UAS 之國際應用的興趣。

Generating organic growth requires carefully managed investment. This year, we expect our typical internal research and development investment range of 8% to 10% of revenue to be sufficient to support not only our leading market positions in our core small UAS and EES businesses, but also the ongoing adoption of tactical missile systems and our large UAS.

創造內生成長需要審慎管理的投資。今年我們預期，典型的內部研發投資區間（占營收 8% 至 10%）將足以支撐我們在核心小型 UAS 與 EES 業務的市場領先地位，同時也支持戰術飛彈系統與大型 UAS 的持續採用。

For our emerging commercial UAS opportunity for growth, we are making significant incremental R&D investments above that typical range this year, as well as higher investments in business development to build out and validate our solution for this new and potentially large opportunity. Our R&D investments in commercial UAS supported the continued development of optimized platforms, payloads and software solutions in Q2. Our business development investments in this area included working closely with a few select early customers. These engagements are essential to our understanding the customer needs, how best to integrate UAS into their operations, and the relative value of new, actionable information to their enterprises and, by extension, to other customers in their industry.

針對我們新興的商用 UAS 成長機會，今年我們在上述典型區間之上進行顯著的額外研發投資，並提高業務開發投入，以建構並驗證我們針對這項新且可能規模龐大的機會所提出的解決方案。第二季，我們在商用 UAS 的研發投資支持了最佳化平台、酬載與軟體解決方案的持續開發。我們在此領域的業務開發投資包括與少數精選的早期客戶密切合作。這些合作對於我們理解客戶需求、如何最佳將 UAS 整合進其營運，以及新且可採取行動的資訊對其企業的相對價值（並進一步延伸至其產業中的其他客戶）至關重要。

In the interest of providing some metrics to help you understand our progress, in the last six months we have engaged with 10 such businesses on two continents in energy, transportation, power and agriculture industries. During the first half, we collected and analyzed terabytes of data from multiple types of sensors in nearly 20 different applications using our small UAS-based information solution. We delivered actionable information through more than a dozen types of data products to customer decision makers. In one pilot project, we flew over and analyzed 9,000 acres of crops.

為提供一些指標以協助各位了解我們的進展，在過去六個月中，我們已在兩大洲與能源、運輸、電力與農業等產業的 10 家企業展開合作。在上半年，我們使用以小型 UAS 為基礎的資訊解決方案，於近 20 種不同應用中，從多種類型感測器蒐集並分析了數 TB 的資料。我們透過十多種資料產品，向客戶決策者交付可採取行動的資訊。在一個試點專案中，我們飛行覆蓋並分析了 9,000 英畝的作物。

These customer engagements help validate our business models, inform the design optimization of our commercial UAS solutions, and build relationships for ongoing collaboration and adoption. We are confirming that large customers in multiple industries can gain significant benefit from small UAS-based solutions that deliver timely, actionable information to provide increased certainty for their decisions and actions. Our experience in these enterprise customer interactions suggests that the right solution requires a reliable integrated system that effectively and simply delivers this value.

這些客戶合作有助於驗證我們的商業模式、為商用 UAS 解決方案的設計最佳化提供資訊，並建立持續合作與採用的關係。我們正在確認，多個產業的大型客戶可從以小型 UAS 為基礎、提供即時且可採取行動資訊的解決方案中獲得顯著效益，從而提升其決策與行動的確定性。我們在與企業客戶互動的經驗顯示，正確的解決方案需要一套可靠的整合式系統，能有效且簡單地交付此一價值。

With that summary of recent performance and opportunities, Raymond Cook will now review our financial performance in more detail. Raymond?

在以上對近期表現與機會的摘要之後，接下來將由 Raymond Cook 更詳細地檢視我們的財務表現。Raymond？

Thank you, Tim, and good afternoon, everyone. AeroVironment's FY16 second quarter results are as follows. Revenue for Q2 was $64.7 million, an increase of $12.1 million, or 23%, as compared to $52.7 million a year ago. The increase in revenue was due to an increase in product deliveries of $6.6 million and an increase in service revenue of $5.4 million.

謝謝你，Tim，各位下午好。AeroVironment 2016 會計年度第二季的結果如下。第二季營收為 6,470 萬美元，較去年同期的 5,270 萬美元增加 1,210 萬美元，增幅 23%。營收增加主要來自產品交付增加 660 萬美元，以及服務營收增加 540 萬美元。

Looking at revenue by segment, UAS revenue was $56.6 million, an increase of $13.5 million, or 31% compared to last year. The increase was primarily due to an increase in product deliveries of $8 million, principally from an increase in product deliveries of small UAS, an increase in service revenue of $0.9 million, and an increase in customer funded R&D work of $4.6 million, principally due to an increase in development programs related to tactical missile systems and large UAS.

按部門別來看，UAS 營收為 5,660 萬美元，較去年增加 1,350 萬美元，增幅 31%。增加主要來自產品交付增加 800 萬美元（主要是小型 UAS 產品交付增加）、服務營收增加 90 萬美元，以及客戶出資研發工作增加 460 萬美元（主要因與戰術飛彈系統及大型 UAS 相關的開發計畫增加）。

EES revenue decreased $1.5 million, or 15%, to $8.1 million in the second quarter. This decrease was primarily due to a decrease in product deliveries of our industrial fast charge systems and our passenger electric vehicle charging systems.

EES 營收在第二季減少 150 萬美元（降幅 15%），至 810 萬美元。此下降主要由於我們的工業用快速充電系統與乘用電動車充電系統之產品交付減少。

Turning to gross margin. Gross margin for the second quarter was $31.5 million, or 49%, an increase of $13.7 million as compared to $17.9 million, or 34% in the prior year. The increase in gross margin was due to an increase in product margins, increase in service revenue margins, and a $3.5 million increase related to a reserve reversal on the settlement of incurred cost claims with the DCMA for FY07 through FY09.

接著看毛利。第二季毛利為 3,150 萬美元（毛利率 49%），較去年同期的 1,790 萬美元（毛利率 34%）增加 1,370 萬美元。毛利增加係因產品毛利率提升、服務營收毛利率提升，以及與 DCMA 就 2007 至 2009 會計年度已發生成本索賠結算相關的準備金回轉增加 350 萬美元。

By segment, UAS gross margin increased $12.8 million, or 83%, to $28.3 million in the quarter. The increase was primarily due to an increase in margins on product sales and service related contracts and the reserve reversal on settlement of incurred cost claims. As a percentage of revenue, gross margin for UAS increased from 36% to 50%.

按部門別，UAS 毛利在本季增加 1,280 萬美元（增幅 83%），至 2,830 萬美元。增加主要來自產品銷售與服務相關合約的毛利率提升，以及已發生成本索賠結算的準備金回轉。以營收百分比計，UAS 毛利率由 36% 提升至 50%。

EDS gross margin increased $0.9 million, or 36%, to $3.3 million in the quarter, primarily due to favorable product mix and the reserve reversal on settlement of incurred cost claims. As a percentage of revenue, EES gross margin increased from 25% to 40%.

EDS 毛利在本季增加 90 萬美元（增幅 36%），至 330 萬美元，主要由於有利的產品組合，以及已發生成本索賠結算的準備金回轉。以營收百分比計，EES 毛利率由 25% 提升至 40%。

SG&A expense for the second quarter was $14.7 million, or 23% of revenue, compared to SG&A expense of $13.5 million, or 26% of revenue in the prior year. SG&A expense increased $1.3 million, primarily due to higher professional services and bid proposal costs.

第二季銷售、一般及行政（SG&A）費用為 1,470 萬美元，占營收 23%；去年同期 SG&A 費用為 1,350 萬美元，占營收 26%。SG&A 費用增加 130 萬美元，主要由於專業服務費用與投標提案成本較高。

R&D expense for the second quarter was $9.9 million, or 15% of revenue, compared to R&D expense of $8.5 million, or 16% of revenue in the prior year. The increase in R&D expense was primarily due to increased development activities for certain strategic initiatives.

第二季研發（R&D）費用為 990 萬美元，占營收 15%；去年同期研發費用為 850 萬美元，占營收 16%。研發費用增加主要由於特定策略性倡議的開發活動增加。

The operating income for the second quarter was $6.9 million, or 11% of revenue, compared to prior year operating loss of $4.1 million, or 8% of revenue. The operating income increase was primarily due to higher gross margins and the reserve reversal on settlement of incurred cost claims.

第二季的營業利益為 690 萬美元，占營收的 11%，相較於去年同期營業損失 410 萬美元，占營收的 8%。營業利益增加主要係因毛利率提高，以及已發生成本索賠和解時的準備金回轉。

Net other income for the quarter was $0.1 million, compared to the prior year net other expense of $0.4 million. Other income increased due to the prior year change in fair value of our CybAero convertible bond investment not present in the current year. The provision for income taxes for the quarter was $2.6 million, or an effective tax rate of 36.7%, compared to the benefit for the income taxes of $1.6 million, or an effective tax rate of 35.8% in the prior year.

本季淨其他收益為 10 萬美元，相較於去年同期淨其他費用 40 萬美元。其他收益增加係因去年我們對 CybAero 可轉換公司債投資的公允價值變動在本年度未再發生。本季所得稅費用為 260 萬美元，實際稅率為 36.7%，相較於去年同期所得稅利益 160 萬美元，實際稅率為 35.8%。

The net income for the quarter was $4.4 million, or a $0.19 earnings per diluted share, compared to a net loss of $2.9 million, or a $0.13 loss per share in the same quarter last year. The loss per share for the second quarter last year increased by $0.01 due to the decrease in fair value of our CybAero convertible bond investment. There was no impact to EPS for the second quarter of FY16 for the convertible bond investment. The earnings per diluted share for the second quarter of FY16 increased by $0.09, due to the reserve reversal on settlement of incurred cost claims with the DCMA.

本季淨利為 440 萬美元，稀釋後每股盈餘為 0.19 美元，相較於去年同季淨損 290 萬美元， 每股虧損 0.13 美元。去年第二季每股虧損因我們對 CybAero 可轉換公司債投資的公允價值下降而增加 0.01 美元。FY16 第二季可轉換公司債投資對 EPS 並無影響。FY16 第二季稀釋後每股盈餘增加 0.09 美元，係因與 DCMA 就已發生成本索賠達成和解而進行準備金回轉。

Now moving through our first half FY16 results. Revenue for the first half of FY16 was $111.8 million, an increase of $7.3 million, or 7%, as compared to $104.5 million a year ago. The increase in revenue was due to an increase in service revenue of $16.8 million and a decrease in product deliveries of $9.6 million.

接著說明 FY16 上半年業績。FY16 上半年營收為 1.118 億美元，較一年前的 1.045 億美元增加 730 萬美元，增幅 7%。營收增加係因服務營收增加 1,680 萬美元，並被產品交付減少 960 萬美元部分抵銷。

UAS revenue was $96.8 million, an increase of $12.5 million, or 15%, compared to last year. The increase was primarily due to an increase in customer funded R&D work of $16.8 million, an increase in service revenue of $0.5 million, offset by a decrease in product deliveries of $4.8 million. EES revenue decreased $5.3 million, or 26%, to $15 million in the first half. This decrease was primarily due to a decrease in product deliveries of our industrial fast charge systems and our passenger electric vehicle charging systems.

UAS 營收為 9,680 萬美元，較去年增加 1,250 萬美元，增幅 15%。增加主要係因客戶出資的研發工作增加 1,680 萬美元、服務營收增加 50 萬美元，並被產品交付減少 480 萬美元所抵銷。EES 營收於上半年減少 530 萬美元（降幅 26%）至 1,500 萬美元。此減少主要係因我們的工業用快速充電系統及乘用電動車充電系統的產品交付減少。

Gross margin for the first half was $47.6 million, or 43%, an increase of $15.6 million as compared to $31.9 million, or 31%, in the prior year. The increase in gross margin was due to an increase in product margins, increasing service revenue margins, and the reserve reversal on settlement of incurred cost claims. UAS gross margin increased $16.3 million, or 64%, to $42 million in the quarter. The increase was primarily due to an increase in margins on product sales and service related contracts and the reserve reversal on settlement of incurred cost claims.

上半年毛利為 4,760 萬美元，占營收 43%，較去年同期的 3,190 萬美元（占營收 31%）增加 1,560 萬美元。毛利增加係因產品毛利率提升、服務營收毛利率提高，以及已發生成本索賠和解時的準備金回轉。UAS 毛利於本季增加 1,630 萬美元（增幅 64%）至 4,200 萬美元。增加主要係因產品銷售與服務相關合約的毛利率提升，以及已發生成本索賠和解時的準備金回轉。

As a percentage of revenue, gross margin for UAS increased from 30% to 43%. EES gross margin decreased $0.7 million, or 11%, to $5.6 million in the quarter, primarily due to lower sales volume. As a percentage of revenue, EES gross margin increased from 31% to 37%.

以營收百分比計，UAS 毛利率由 30% 提升至 43%。EES 毛利於本季減少 70 萬美元（降幅 11%）至 560 萬美元，主要係因銷售量較低。以營收百分比計，EES 毛利率由 31% 提升至 37%。

SG&A expense for the first half was $30 million, or 27% of revenue, compared to SG&A expense of $26.9 million, or 26% of revenue, in the prior year. SG&A expense increased $3.1 million, primarily due to higher professional services and bid and proposal costs.

上半年銷售、一般及行政（SG&A）費用為 3,000 萬美元，占營收 27%，相較於去年同期 SG&A 費用 2,690 萬美元，占營收 26%。SG&A 費用增加 310 萬美元，主要係因專業服務費用及投標與提案成本較高。

R&D expense for the first half were $19.7 million, or 18% of revenue, compared to R&D expense of $15.7 million, or 15% of revenue, in the prior year. The increase in R&D expense was primarily due to increased development activities for certain strategic initiatives.

上半年研發（R&D）費用為 1,970 萬美元，占營收 18%，相較於去年同期研發費用 1,570 萬美元，占營收 15%。研發費用增加主要係因若干策略性計畫的開發活動增加。

The operating loss of the first half was $2.2 million, or 2% of revenue, compared to prior year loss of $10.6 million, or 10% of revenue. The operating loss decrease was primarily due to higher gross margins of $15.6 million offset by an increase in R&D of $4.1 million and an SG&A expense of $3.1 million.

上半年營業損失為 220 萬美元，占營收 2%，相較於去年同期損失 1,060 萬美元，占營收 10%。營業損失減少主要係因毛利增加 1,560 萬美元，但被研發費用增加 410 萬美元及 SG&A 費用增加 310 萬美元所抵銷。

Net other expense for the first half was $2.1 million, compared to the prior year net other income of $0.4 million. Other income decreased, primarily due to the other than temporary impairment loss on our CybAero equity securities. The effective tax rate benefit rate for the six months was 39.7%, compared to the effect of tax benefit rate from prior year of 36.1%.

上半年淨其他費用為 210 萬美元，相較於去年同期淨其他收益 40 萬美元。其他收益下降主要係因我們持有的 CybAero 權益證券發生非暫時性減損損失。六個月的實際稅率（稅負利益率）為 39.7%，相較於去年同期稅負利益率的影響為 36.1%。

The net loss for the first half of FY16 was $2.6 million, or an $0.11 loss per share, compared to a net loss of $6.5 million, or a $0.29 loss per share, in the first half of last year. The loss per share for the first half of FY16 increased by $0.06 due to losses on the impairment and sale of CybAero equity securities and decreased by $0.09 due to the reserve reversal on settlement of incurred cost claims. Loss per share for the first six months last year decreased by $0.01 due to the increase in fair value of the CybAero convertible bond investments.

FY16 上半年淨損為 260 萬美元，每股虧損 0.11 美元，相較於去年上半年淨損 650 萬美元、每股虧損 0.29 美元。FY16 上半年每股虧損因 CybAero 權益證券減損及出售損失而增加 0.06 美元，並因與已發生成本索賠和解的準備金回轉而減少 0.09 美元。去年前六個月每股虧損因 CybAero 可轉換公司債投資公允價值上升而減少 0.01 美元。

Looking at backlog. Funded backlog at the end of the second quarter was $97 million, a decrease of $28 million, or 22%, from the second quarter of the prior year and an increase of $8 million, or 9%, from the prior quarter.

接著看在手訂單。第二季末已獲資金支持的在手訂單為 9,700 萬美元，較去年同期第二季減少 2,800 萬美元（降幅 22%），並較前一季增加 800 萬美元（增幅 9%）。

Turning to our balance sheet. Cash, cash equivalents and investments at the end of the second quarter totaled $243.7 million, a decrease of $18.5 million from the prior quarter. The decrease in cash, cash equivalents and investments was driven by higher working capital requirements of the business and $3.8 million used in the quarter for share repurchases.

接著看資產負債表。第二季末現金、約當現金及投資合計為 2.437 億美元，較前一季減少 1,850 萬美元。現金、約當現金及投資的減少主要係因營運資金需求提高，以及本季用於庫藏股回購的 380 萬美元。

Turning to receivables. At the end of the second quarter, our accounts receivable, including unbilled and retention receivables, totaled $54.5 million, an increase of $12.3 million from the prior quarter. Total days sales outstanding was approximately 76 days, compared to 81 days at the end of the prior quarter.

接著看應收款項。第二季末，我們的應收帳款（包含未開立帳單及保留款應收款）合計為 5,450 萬美元，較前一季增加 1,230 萬美元。應收帳款週轉天數約為 76 天，相較於前一季末的 81 天。

Taking a look at inventory. Inventories were $48.3 million at the end of the quarter, compared to $43.9 million at the end of the prior quarter. Days in inventory were approximately 131 days, compared to 127 days at the end of the prior quarter. This increase in days in inventory was primarily attributable to an increase in inventory for anticipated second half shipments and lower cost of goods sold as a percentage of revenue, driven by the reserve reversal for settlements of incurred cost claims with the DCMA.

再看存貨。本季末存貨為 4,830 萬美元，相較於前一季末的 4,390 萬美元。存貨天數約為 131 天，相較於前一季末的 127 天。存貨天數增加主要係因為預期下半年出貨而增加存貨，以及因與 DCMA 就已發生成本索賠和解而進行準備金回轉，帶動銷貨成本占營收比率下降。

Turning to capital expenditures. In the second quarter, we invested approximately $1.9 million, or 3% of revenue, in property improvements and capital equipment. AV recognize $1.4 million of depreciation and amortization in the quarter.

接著談資本支出。在第二季，我們在不動產改善與資本設備上投資約190萬美元，約占營收的3%。AV於本季認列140萬美元的折舊與攤銷。

Now an update to our FY16 visibility. As of today, we have year-to-date Q2 revenues of $112 million, Q2 ending backlog that we expect to execute in FY16 of an additional $89 million, Q3 quarter-to-date bookings that we anticipate to execute in FY16 of an additional $21 million, unfunded backlog from incrementally funded contracts that we anticipate to recognize revenue during the balance of the year of $2 million, and revenues needed to hold EES revenues flat relative to last year of $16 million. This adds up to $240 million, or 89%, at the midpoint of our revenue guidance.

現在更新我們對FY16的可見度。截至今日，我們年初至今第二季營收為1.12億美元；第二季期末、我們預期將於FY16執行的在手訂單（backlog）另有8,900萬美元；第三季截至目前、我們預期將於FY16執行的接單（bookings）另有2,100萬美元；來自逐步撥款合約的未撥款在手訂單（unfunded backlog），我們預期在今年剩餘期間認列營收為200萬美元；以及為使EES營收相較去年持平所需的營收為1,600萬美元。合計為2.40億美元，或在我們營收指引中點的89%。

Now I'd like to turn things back to Tim to discuss AV's expectations for the remainder of FY16.

現在我想把時間交回給Tim，請他談談AV對FY16剩餘期間的預期。

Thank you, Raymond. We are focused on two strategic objectives, first, growing our leading core businesses in small UAS and efficient energy systems, and second, playing to win in large, innovative growth opportunities that can deliver compelling value to new and existing customers and significantly accelerate our growth.

謝謝你，Raymond。我們聚焦於兩項策略目標：第一，成長我們在小型UAS與高效率能源系統的領先核心業務；第二，在大型、創新型的成長機會上全力以赴，為新舊客戶帶來具吸引力的價值，並顯著加速我們的成長。

The AeroVironment team is, as usual, executing on a high level on both fronts. We support customers and maintain market leadership in our core businesses by anticipating and satisfying our customers' important needs, with unique solutions to meet those needs exceptionally well. We see growth potential in both EES and small UAS.

AeroVironment團隊一如往常，在這兩方面都以高水準執行。我們透過預先洞察並滿足客戶的重要需求，以獨特的解決方案把需求做到極致，來支持客戶並維持我們在核心業務的市場領導地位。我們在EES與小型UAS兩者都看到成長潛力。

The initial adoption of our tactical missile systems has delivered compelling results for our customers and continues to generate revenue and operational system deliveries, support and customer funded R&D. Current and new customer engagements suggest significant growth potential for this new business that addresses an estimated $1 billion per year market with a unique performance solution. We have yet to translate our large UAS developments to adoption and deployment of production businesses; however, we are engaged with customers that have an interest and the potential to adopt these solutions to exploit the potential of atmospheric satellites.

我們戰術飛彈系統的初期採用已為客戶帶來具說服力的成果，並持續帶來營收、作戰系統交付、支援以及客戶出資的研發。現有與新客戶的互動顯示，這項新業務具有顯著成長潛力；其以獨特的性能解決方案，切入估計每年10億美元的市場。我們尚未將大型UAS的研發成果轉化為量產業務的採用與部署；不過，我們正與對採用這些解決方案有興趣且具潛力的客戶合作，以發揮「大氣衛星」的潛力。

As I mentioned earlier, we expect internal R&D of 8% to 10% of revenue to support all of these initiatives, except commercial UAS. It's important to note that our planned incremental research and development and SG&A investments in commercial UAS this year could offset the operating profit that we would otherwise generate from the revenue and the gross profit we expect to produce this year. For that reason, our profit focus is on gross profit margin, rather than earnings per share this year. That said, the objective of our investments is to get the right solution to market to deliver the compelling value to multiple very large global industries that can create a large growing business and thereby drive high sustained stockholder value.

如我先前提到，我們預期內部研發將占營收的8%到10%，以支持上述所有計畫（商用UAS除外）。需要特別注意的是，我們今年在商用UAS上規劃的增量研發與銷售、一般及行政費用（SG&A）投資，可能會抵銷原本可由今年預期的營收與毛利所帶來的營業利益。因此，我們今年的獲利重點將放在毛利率，而非每股盈餘。即便如此，我們投資的目標是把正確的解決方案推向市場，為多個非常龐大的全球產業提供具吸引力的價值，進而打造規模大且持續成長的業務，並推動股東價值長期維持在高水準。

As we look to the balance of the fiscal year, we still need to book and ship an additional 11%, or $30 million, this year, as Raymond discussed in his FY16 visibility walk down. We continue to expect FY16 revenue of $260 million to $280 million and gross profit margin of 36% to 37.5%, net of the reserve effect. We are optimistic about the opportunities we've cultivated by serving our customers extremely well and about accelerating our growth with the adoption of multiple new solutions in our growth portfolio, all designed to deliver much more certainty to customers operating in inherently uncertain environments.

展望本會計年度剩餘期間，如Raymond在FY16可見度拆解中所述，我們今年仍需再接單並出貨額外的11%，約3,000萬美元。我們仍預期FY16營收為2.60億至2.80億美元，且在扣除準備金影響後的毛利率為36%至37.5%。我們對於透過極致服務客戶所培育的機會感到樂觀，也對於在成長組合中多項新解決方案被採用、進而加速成長感到樂觀；這些方案皆旨在為在本質上充滿不確定性的環境中運作的客戶，提供更高的確定性。

Thank you to the outstanding AeroVironment team of innovators and doers that are committed to the success of our customers and to each other. Thank you on the call for your interest in AV. And now, Raymond and I will take your questions.

感謝AeroVironment這支傑出的創新者與實幹家團隊，致力於客戶的成功，也彼此相互支持。也感謝各位在電話會議中對AV的關注。接下來，Raymond和我將回答各位的提問。

(Operator Instructions)

（接線員指示）

Andrea James, Dougherty & Company.

Andrea James，Dougherty & Company。

Hi. Thanks for taking my questions. It sounds like this year's really on track. You said you had 84% visibility into your full-year guidance. How does that compare to historically? I think last year, you had 97% visibility at this point. But I think last year might've been an anomaly.

嗨。謝謝讓我提問。聽起來今年確實進展順利。你提到你們對全年指引有84%的可見度。這和過往相比如何？我記得去年在這個時間點你們有97%的可見度。但我想去年可能是個例外。

Yes. Actually, we had 89% visibility into the midpoint of our guidance, Andrea. And last year, we were at 96% at this same point last year. When you look at the lumpiness of the revenue trend, it's one of those where we're always going out and looking for the additional orders for book and ship, and this is our historic run rate. It may be a little bit lower this year. But historically, we've always been within this 85% to 95% range at the end of the second quarter.

是的。其實，Andrea，我們對指引中點的可見度是89%。而去年在同一時間點是96%。當你看營收趨勢的波動性時，情況就是我們總是要持續外出爭取額外訂單來完成「接單並出貨」，這也是我們歷史上的常態水準。今年可能會稍微低一些。但歷史上，在第二季結束時，我們通常都落在85%到95%這個區間。

Okay. That's helpful. And then also, how do you see the seasonality playing out for the rest of the year?

好的。這很有幫助。另外，你們如何看待今年剩餘期間的季節性走勢？

Back to history again, Andrea. We are typically back-end loaded in the second half. I expect we will probably see that again this year, maybe crudely 40/60, third quarter, fourth quarter.

再回到歷史來看，Andrea。我們通常在下半年呈現後段偏重。我預期今年大概也會如此，粗略來看可能是40/60，第三季、第四季。

Okay. That's very helpful. I'll get back in the queue. Thanks.

好的。這非常有幫助。我回到等候隊列。謝謝。

Troy Jensen, Piper Jaffray.

Troy Jensen，Piper Jaffray。

Congrats on the nice quarter, gentlemen.

恭喜各位，本季表現不錯。

Thanks, Troy.

謝謝你，Troy。

Two questions. The first one, for Tim, can you point us out to what milestones that we'll be able to see that's going to give us evidence that you're getting traction with the commercial drone market?

兩個問題。第一個給Tim：你能否指出一些我們可以看到的里程碑，讓我們有證據顯示你們在商用無人機市場正在取得進展？

As you saw in the prior comments, Troy, I was trying to give you what I could in terms of just some status of what we're doing with our pilot programs and our engagement with a few lead adopters. And I can keep you updated in some of those metrics, just so you know generally what we're out doing. We're also working quite aggressively in the development area to put the complete solution together, as I indicated previously, and that's platforms, payloads and software. We don't expect to be generating material revenues this fiscal year, because we're still developing and finalizing the solution and working with early adopters to refine the value proposition. So I would expect that's about what I can anticipate to give you over the next couple of quarters.

如你從先前的評論所見，Troy，我試著在可透露的範圍內，提供我們在試點計畫以及與幾位領先採用者互動方面的一些進度。我也可以就其中一些指標持續向你更新，讓你大致了解我們在做什麼。同時，我們也在研發端相當積極地把完整解決方案整合起來，如我先前所說，包括平台、載荷與軟體。我們不預期在本會計年度產生具重大性的營收，因為我們仍在開發並定案解決方案，並與早期採用者合作以精煉價值主張。因此，我預期未來幾季我大概就能提供你這些內容。

All right. That's fair. And then just a follow-up for Tim. There was a program of record talked about at the iRobot Analyst Day, and I think they called it Christy and Clark, that may be incorrect. But it looked like it was A, a large program of record, and it was looking for maybe a common ground controller that would work with both ground recon and UAV. So just curious if this is a program of record you guys are working on and if I'm thinking about the pieces of this correctly?

好的。這樣合理。接著再追問Tim。在iRobot的分析師日有提到一個「正式建案」（program of record），我記得他們稱之為Christy和Clark，可能不太正確。但看起來A，這是一個很大的正式建案，而且它可能在尋找一個可同時用於地面偵察與無人機（UAV）的通用地面控制器。所以我想請教，這是否是你們正在參與的正式建案？以及我對其組成要素的理解是否正確？

The idea of a common ground controller for small UAS and UGS, unmanned ground systems, has been a desirable get for many of our customers for a long time. And there have been multiple developments sponsored by different customers within DOD to pursue that objective. I think that's probably an ongoing desire. You may know that the Army has developed a common system for larger platforms, larger unmanned aerial platforms. So I suspect ultimately the benefit of minimizing the demand on operators that use these systems will continue to be beneficial, and we'll be involved wherever we can be helpful.

針對小型UAS與UGS（無人地面系統）採用共通地面控制器的構想，長期以來一直是我們許多客戶非常希望取得的能力。而在國防部（DOD）內部，也有多項由不同客戶贊助的研發計畫在推動這個目標。我認為這大概會是一項持續存在的需求。你可能知道，陸軍已為較大型的平台、較大型的無人航空平台，開發了一套共通系統。因此我推測，最終能夠降低操作人員使用這些系統的負擔，所帶來的效益將會持續顯著，而我們也會在任何能提供協助之處參與其中。

Tim, do you guys have to partner, then, for the UAGs?

Tim，那你們在UAGs方面是否就必須合作夥伴？

Most of the customer initiatives around common systems, ground control systems that run across both aerial platforms and ground platforms, have to interface with the airplane and the ground robot, but they are often independent of both. I think it's not determined yet when and if that common system gets to a program of record, and if it does, whether it's an independent system that plugs into interfaces on both the aerial and the ground side or whether it's more deeply embedded in one vehicle or the other.

多數客戶針對共通系統的倡議——也就是可同時涵蓋空中平台與地面平台的地面控制系統——必須與飛機以及地面機器人進行介接，但往往又同時獨立於兩者之外。我認為目前尚未確定這套共通系統何時、以及是否會成為正式的「列裝計畫」（program of record）；若成為列裝計畫，也尚不確定它會是一套獨立系統、透過介面分別接入空中端與地面端，或是更深度地嵌入某一種載具之中。

Howard Rubel, Jefferies.

Howard Rubel，Jefferies。

Thank you very much. First, on the UAS, can you provide a little bit of indication of how much share you have, Tim, with respect to Switchblade as a percentage of the business now?

非常感謝。首先關於UAS，Tim，你能否稍微說明一下，就Switchblade而言，你們目前在這項業務中的占比大概是多少（以百分比計）？

It's hard to give you a meaningful answer on that, Howard, because the primary program of record that's been discussed that would encompass the capabilities that Switchblade's delivering has been LMAMS. And as of now, the Army has not announced an LMAMS program of record in their palm. So when we look at the kinds of existing solutions that are similar to what Switchblade and its variants are providing, we add that up to approximately $1 billion a year of current procurement; and clearly, Switchblade's not yet at a 1% level of that market share.

Howard，這個問題很難給出一個有意義的答案，因為目前被討論、且可涵蓋Switchblade所提供能力的主要列裝計畫是LMAMS。而截至目前，陸軍尚未在其POM（計畫目標備忘錄）中宣布LMAMS的列裝計畫。因此，當我們觀察現有與Switchblade及其衍生型所提供能力相近的解決方案時，我們加總後估計目前每年的採購規模約為10億美元；而很明顯，Switchblade目前在該市場的占比尚未達到1%。

On the other hand, if you look at the capabilities that Switchblade delivers and the requirements of an LMAMS program, as it's been defined to date, I'm not aware of any other deployed system that meets those requirements. So if we define the market narrowly around the capabilities that we're addressing, which some people have said is changing the definition of the smart munition, then we're a very high share of a very small market, and it's vice versa if you look at the procurement of existing similar systems that have been developed over the last two or three decades.

另一方面，如果你看Switchblade所提供的能力，以及LMAMS計畫（截至目前的定義）所要求的需求，我並不知道有任何其他已部署的系統能符合那些需求。所以如果我們把市場狹義地界定在我們正在解決的那些能力上——有人說這正在改變「智慧彈藥」的定義——那麼我們是在一個非常小的市場中占有非常高的份額；反過來，如果你看的是過去二、三十年所開發、且目前仍在採購的既有類似系統，那情況就相反。

I get that, sort of. The other thing is that on EES, what's pretty remarkable is even though you had the decline in volumes, you held gross margins. Gross margins were pretty good. Could you talk about, was it mix change or was it the way in which you're distributing product? You talked a little bit about strategy, so could you elaborate a little bit on that, please?

我大概理解。另外一點是，關於EES，相當引人注目的是，即使你們的出貨量下滑，毛利率仍然守住了。毛利率表現相當不錯。你能談談這是產品組合變化所致，還是你們分銷產品方式的改變？你提到了一些策略，所以能否再多闡述一下？謝謝。

Thank you. Two parts. I think mix usually contributes significantly to the variance we see in gross margin, and that was the case in this quarter. But to the specific point of your question, I believe the change in our business model approach that I described earlier, where we're deemphasizing fast charging and public infrastructure and putting a greater emphasis on consumer and business solutions, not only contributed the largest piece of that revenue reduction, but it also would have contributed a significant part of the gross margin performance. So not surprisingly, we would be deemphasizing low margin solutions and emphasizing products that deliver greater value to customers with greater growth potential in the future.

謝謝。分兩部分。我認為產品組合通常會對我們看到的毛利率變動貢獻很大，本季也是如此。但就你問題的重點而言，我相信我先前描述的商業模式調整——我們降低對快速充電與公共基礎設施的著重，並更強調消費者與企業解決方案——不僅是營收下滑的最大來源，也對毛利率表現有相當大的貢獻。因此不意外地，我們會降低低毛利解決方案的比重，並更聚焦於能為客戶帶來更高價值、且未來成長潛力更大的產品。

Peter Arment, Sterne Agee.

Peter Arment，Sterne Agee。

Yes. Good afternoon, Tim and Ray. Tim, maybe just a quick one. You mentioned that you are seeing a lot of retrofit spending. Can you give us an idea where that is on a percentage against the installed base, or at least from maybe, if you want to use a baseball analogy, of what inning we're in, just when you compare it?

是的。Tim、Ray，下午好。Tim，我可能問個簡短的問題。你提到你們看到很多改裝（retrofit）支出。你能否讓我們了解一下，這相對於既有裝機基礎（installed base）的比例大概是多少？或者如果你想用棒球作比喻，跟過去相比，我們大概進行到第幾局了？

We've gone through a number of different retrofit adoptions across our small UAS installed base, Peter. The latest one was the payload, the (inaudible) payload retrofit available for Raven. And I believe that most of that retrofit for the Army and the Marine Corps has now been completed. So the point of my comment was that we have an ongoing revenue stream of sustainment for that fleet, and we have a pattern, a historic pattern, of customer adoption of major retrofits when they are available and compelling. And I expect that we will continue to develop that retrofit capability and make them available to our customers, with an eye to delivering compelling value to them over the next few years.

Peter，我們在小型UAS的既有裝機基礎上，已經歷過多次不同的改裝採用。最近一次是酬載——Raven可用的（聽不清）酬載改裝。我相信陸軍與海軍陸戰隊的大部分改裝目前都已完成。所以我那段話的重點是：我們對該機隊有持續性的維保（sustainment）營收來源，而且在歷史上，當重大改裝方案可用且具吸引力時，客戶往往會採用。我預期我們會持續開發這些改裝能力並提供給客戶，目標是在未來幾年為他們帶來具吸引力的價值。

Okay. That's helpful. And then if I could ask one follow-up. Thinking about operational tempo, going back several years, you were very tied to all the activity overseas. And with the recent step up in some of the activity we've seen in the Middle East, are you guys seeing any pickup in terms of conversations regarding either urgent need requests or change in requirements versus over the last 12 months or so?

好的。這很有幫助。那我再追問一個。談到作戰節奏（operational tempo），回到幾年前，你們與海外各項行動高度連動。而隨著近期我們看到中東地區部分活動升溫，你們是否在對話上看到任何回升，例如緊急需求請求（urgent need requests）或需求變更，相較於過去12個月左右？

The small UAS have proven themselves now, I think beyond any doubt, in terms of their value to troops on the ground. And particularly, they are used by small teams on the ground to provide situational awareness and the actionable intelligence that they need, as I commented before, to bring a lot more certainty to the very dangerous situation they operate in. And the tactical missile systems, like Switchblade, are similarly designed to be utilized, metaphorically maybe, as a rucksack, packable air support for small teams and teams on the ground. So I would expect that these systems go where boots go, and they have been a compelling value. I have heard more use of the term urgent needs in the last year than I did probably in the prior couple of years, to specifically answer your question.

我認為小型UAS如今已經毫無疑問地證明了其對地面部隊的價值。尤其是，它們被地面的小型分隊用來提供態勢感知，以及他們所需的可行動情資（actionable intelligence）；如我先前所說，這能讓他們在所處的高度危險環境中，帶來更高的確定性。而像Switchblade這類戰術飛彈系統，同樣也是為了讓小隊與地面部隊使用而設計的——或許可以用比喻來說，就像可裝入背包的空中支援。因此我預期這些系統會跟著部隊部署到有「靴子落地」的地方，而且它們一直展現出很強的價值。為了直接回答你的問題，我在過去一年聽到「緊急需求」這個詞的頻率，確實比前兩年更高。

Joseph DeNardi, Stifel.

Joseph DeNardi，Stifel。

Thanks. Tim, I think you've spoken before about wanting to make a decision at some point as to whether investing profits from the core business into commercial, how long that can continue. So can you just talk about whether that's still the thought process or whether the pipeline now you think supports continuing that into next year?

謝謝。Tim，我記得你之前談過，你們希望在某個時間點做出決定：把核心業務的利潤投入商業領域，這樣的投入能持續多久。所以你能談談這是否仍是你們的思考方向？或者你現在認為產品/專案管線已足以支持把這件事延續到明年？

Well, we clearly are in the midst of developing the product solution, service solution itself, as I described earlier, as well as refining our understanding of customer needs and the value proposition to them, and we intend to continue to build out that solution throughout this year. And we don't see that being finalized and launched as an operating service this fiscal year. So those things, those elements are pretty clear and that's the plan we're proceeding on. How far we go beyond that before we're launched and in the market, I think we'll have to wait and see another couple of quarters.

嗯，我們很明確地正處於開發產品解決方案、以及服務解決方案本身的過程中，如我先前所描述；同時也在精煉我們對客戶需求與其價值主張的理解，而我們打算在今年持續把這套解決方案建構完善。我們不認為會在本會計年度內完成定案並以營運服務的形式正式推出。所以這些事情、這些要素都相當明確，這也是我們正在推進的計畫。至於在正式推出並進入市場之前，我們會把投入延伸到多遠，我想還得再觀察接下來一、兩個季度。

Okay. And then on large UAV, I think it was about six months ago that you said you expected an announcement around 12 months from then. So should we expect something within six months? Just any update you can provide there. Is it still the same customer you're speaking to or are there more customers now involved in that capability?

好的。另外關於大型UAV，我記得大約六個月前你說你預期在那之後約12個月會有一項公告。所以我們是否應該在六個月內期待一些消息？你能提供任何更新嗎？你談的仍是同一位客戶，還是現在有更多客戶也參與這項能力？

We are engaged with more than one customer on stratospheric satellite solutions. I still think that timeframe is for getting a solid indication of what the probable outcome will be, and the level of interest is still good, although I vaguely remember I said 12 to 18 months, rather than 12 months. But your memory may be better than mine. But I was largely thinking we're going to see that, crudely, next calendar year. Crudely, in terms of a crude estimate of timing.

我們正與不只一位客戶就平流層衛星解決方案進行洽談。我仍然認為，那個時間範圍是用來取得對可能結果的明確指標，而目前的興趣程度仍然不錯，雖然我隱約記得我說的是12到18個月，而不是12個月。不過你的記憶可能比我的好。但我主要的想法是，我們大致會在下一個曆年看到那個結果。大致而言，就時間點做一個粗略估計。

Josephine Millward, The Benchmark Company

Josephine Millward，The Benchmark Company

Hi, Tim. My question for you is, I was hoping for an update on your joint venture in Turkey regarding the Global Observer. Has anything changed post their November election, also with escalating turmoil in the region?

嗨，Tim。我想請你更新一下你們在土耳其、關於Global Observer的合資案。在他們11月選舉之後，以及該地區動盪升高的情況下，有沒有任何變化？

Hi, Josephine. We are continuing to be actively engaged in that joint venture and in the pursuit of opportunities for Global Observer. And I suspect the period of time between elections in Turkey may have preoccupied decision makers. So I think they clearly resolved their election process now. I suspect they, as most countries, are in the process of resetting the government and moving forward. To the extent, I have no insight into what extent that may affect or have affected our opportunity, but we have not seen a diminishment of the opportunity.

嗨，Josephine。我們仍持續積極參與該合資案，並持續尋求Global Observer的機會。我猜土耳其兩次選舉之間的那段期間，可能讓決策者分身乏術。所以我認為他們現在已經明確完成選舉程序。我猜他們和大多數國家一樣，正在重整政府並繼續往前推進。至於這在多大程度上可能影響或已影響我們的機會，我沒有洞見；但我們並未看到機會有所減弱。

Great. I would also appreciate an update on your joint venture in India under the US-India Defense Technology Transfer Initiative?

很好。我也希望你能更新一下你們在印度、在美印國防技術轉移倡議（US-India Defense Technology Transfer Initiative）下的合資案？

We remain engaged with our MOU with our partner in Turkey -- or in India, excuse me -- and we had been selected as one of the pilot programs for the program between the US government and the Indian government. That's going slowly. There was a high level of activity early on, and the level of activity has diminished. It's hard for me to predict the timing or the outcome of that opportunity, at this point.

我們仍在推進與印度夥伴的MOU（諒解備忘錄）——抱歉，剛剛說成土耳其——而且我們已被選為美國政府與印度政府之間該計畫的試點專案之一。目前進展緩慢。一開始活動量很高，但後來活動量已經下降。就目前而言，我很難預測這個機會的時程或結果。

(Operator Instructions)

（接線員指示）

Kevin Ciabattoni, KeyBanc Capital Markets.

Kevin Ciabattoni，KeyBanc Capital Markets。

Good afternoon, guys. It's actually Mike Ciarmoli on. Tim, just one big picture, defense budget question. This recent two-year budget deal coupled with the recent events in Paris, as you guys look at the contracting environment, you look at the potential programs that are out there, do you get a better comfort level with the contracting velocity and stability over this two-year period, where this deal kind of encompasses us, or do you not think it will have that much of a meaningful impact on your business?

各位下午好。其實在線上的是Mike Ciarmoli。Tim，我有一個宏觀層面的國防預算問題。最近這份兩年期預算協議，再加上巴黎近期事件，當你們看待承包環境、以及外面可能存在的專案時，你們是否對這兩年期間的簽約速度與穩定性更有信心——因為這份協議大致涵蓋了我們——還是你們認為它對你們的業務不會有太大的實質影響？

Mike, I think one of the major challenges in our short cycle defense environment, the short cycle nature of our business in the defense environment, is uncertainty of budgets from our customers' perspective. So the more uncertainty, the less willing our customers are to make short-term commitments. So I think one of the strongest indicators for us is a longer period of certainty in budget, which allows our customers to plan and make priority decisions in the context of a longer period of financial comfort. Whether it's a higher or lower number I think is less important than the level of certainty. So I guess that answer is yes.

Mike，我認為在我們的短週期國防環境中——也就是我們在國防環境下業務的短週期特性——其中一個主要挑戰，是從客戶角度來看預算的不確定性。因此，不確定性越高，客戶就越不願意做出短期承諾。所以對我們而言，最強的指標之一，是更長期間的預算確定性，這讓客戶能在較長期間的財務安心感下進行規劃，並做出優先順序決策。我認為數字是高是低，重要性不如確定性的程度。所以我想答案是肯定的。

Got it. That's helpful. That's all I had, guys. Thanks.

了解。這很有幫助。我就這些了，各位。謝謝。

Joseph DeNardi, Stifel.

Joseph DeNardi，Stifel。

Thanks. Tim, can you quantify for us, just on your comments about some of the retrofit being completed for the Army and Marines, can you quantify what sort of headwind that represents for you maybe until you get the next upgrade from them?

謝謝。Tim，針對你提到陸軍與海軍陸戰隊的一些改裝（retrofit）已完成，你能否量化一下，這對你們可能造成多大的逆風，或許直到他們下一次升級之前？

I don't see it as a headwind, Joe. I think the Raven retrofit has largely been completed for, I'm guessing, what, a year or so ago. I don't think it's affecting our current business. I think the cycle and the pattern of adoption and retrofitting is a significant opportunity going forward, but I don't see a headwind character to it.

Joe，我不把它視為逆風。我認為Raven的改裝大致已完成，我猜大概是一年前左右。我不認為它正在影響我們目前的業務。我認為採用與改裝的週期與模式，未來是一個重要機會，但我不認為它具有逆風的性質。

Okay. Makes sense. Thank you.

好的。有道理。謝謝你。

Thank you.

謝謝。

Howard Rubel, Jefferies.

Howard Rubel，Jefferies。

Thank you. Tim, the Tern technology, are you free to use that for other applications and have you found uses for such?

謝謝。Tim，Tern技術你們是否可以自由用於其他應用？你們是否已找到這類用途？

I believe we are free to use that, Howard. We intend to continue dialogue with potentially -- customers that are potentially interested in what is probably a unique capability there. And if we find that interest, we will support it and move ahead with it. But as I said before, for right now, the IR&D that we were supporting the program with, we've shut down and that team has moved on to other more immediate return opportunities.

Howard，我相信我們可以自由使用那項技術。我們打算持續與可能——對那裡可能屬於獨特能力的客戶——保持對話。如果我們發現有這樣的興趣，我們會予以支持並推進。但如我先前所說，就目前而言，我們用來支持該計畫的IR&D（內部研發）已經停止，那個團隊也已轉去做其他更能立即帶來回報的機會。

So that means that if you'd looked at what your budget was for this year for that program, then there's a little less R&D than you would have otherwise planned on?

所以這表示，如果你們回頭看今年原本為該計畫編列的預算，那麼你們的研發支出會比原先規劃的少一點？

To a very small degree, Howard. The nature -- most of the IR&D committed planned for Tern was coincident with Phase II of the program. And the contract structure that DARPA had anticipated and that we were planning on would have been such that any new IR&D we would have planned to support Phase III would not start until about next fiscal year.

Howard，只是非常小的程度。其性質是——原先為Tern所規劃承諾的大部分IR&D，都是與該計畫第二階段（Phase II）同步進行。而DARPA原先預期、我們也據以規劃的合約架構是：任何我們原本打算用來支持第三階段（Phase III）的新增IR&D，都要到大約下一個會計年度才會開始。

Speakers, I'm showing no further questions at this time. I would like to now turn the call back over to Mr. Steven Gitlin.

各位講者，我這邊顯示目前沒有其他提問。我現在把電話交回給Steven Gitlin先生。

Thank you, Sherre, and thank you all for your attention and for your interest in AeroVironment. An archived version of this call, all SEC filings, and relevant Company and industry news can be found on our website, www.avinc.com. We wish you a joyous and healthy holiday season and look forward to speaking with you again following next quarter's results.

謝謝你，Sherre，也謝謝各位的關注，以及對AeroVironment的興趣。本次電話會議的存檔版本、所有SEC申報文件，以及相關的公司與產業新聞，都可在我們的網站www.avinc.com上找到。祝各位佳節愉快、身體健康，也期待在下季財報結果公布後再次與各位交流。

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.

各位女士先生，今天的電話會議到此結束。感謝各位的參與，祝各位有美好的一天。各位現在可以掛線。