AeroVironment, Inc. (AVAV) 2017 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the AeroVironment first-quarter fiscal 2017 earnings call.

各位女士、先生，大家好，歡迎參加 AeroVironment 2017 會計年度第一季財報電話會議。

(Operator Instructions)

（接線員指示）

As a reminder, this conference is being recorded for replay purposes.

提醒各位，本次會議將錄音以供日後重播。

With us today from the company is the President and Chief Executive Officer, Mr. Wahid Nawabi; 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. Steven Gitlin. Please go ahead, sir.

今天與會的公司代表包括：總裁兼執行長 Wahid Nawabi 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 Steven Gitlin 先生。先生，請開始。

Thank you, Christy, and welcome to our first-quarter FY17 2016 earnings call.

謝謝你，Christy，也歡迎各位參加我們 2016 會計年度第 17 財年第一季財報電話會議。

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 include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain words such as believe, anticipate, expect, estimate, intend, project, plan, or words or phrases with similar meaning. 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.

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。前瞻性陳述包括但不限於任何可能預測、預報、指出或暗示未來結果、表現或成就的陳述，並可能包含如 believe（相信）、anticipate（預期）、expect（預期）、estimate（估計）、intend（打算）、project（推估）、plan（計畫）等字眼，或具有類似意義的詞語或片語。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。

Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, reliance on sales to the US government; availability of US government funding for defense procurement and R&D programs; changes in the timing and/or amount of government spending; difficulty or inability to obtain required export authorizations to sell our products to international customers; potential need for changes in our long-term strategy in response to future developments; the extensive regulatory requirements governing our contracts with US government and international customers; the consequences to our financial position, business, and reputation that could result from failing to comply with such regulatory requirements; unexpected technical and marketing difficulties inherent in major research and product development efforts; changes in the supply and/or demand and/or prices for our products and services; the activities of competitors and increased competition; failure of the markets in which we operate to grow; failure to remain a market innovator and create new market opportunities; changes in significant operating expenses, including components and raw materials; failure to develop new products; product liability, infringement and other claims; changes in the regulatory environment; and general economic and business conditions in the United States and elsewhere in the world.

可能導致實際結果與前瞻性陳述存在重大差異的因素包括但不限於：對美國政府銷售的依賴；美國政府對國防採購及研發（R&D）計畫的資金可用性；政府支出時點及／或金額的變動；在向國際客戶銷售我們產品時，取得所需出口授權的困難或無法取得；因應未來發展而可能需要調整長期策略；規範我們與美國政府及國際客戶合約的廣泛監管要求；未能遵循該等監管要求可能對我們的財務狀況、業務及聲譽造成的後果；重大研究與產品開發工作固有的非預期技術與行銷困難；我們產品與服務的供給及／或需求及／或價格變動；競爭對手的活動與競爭加劇；我們所處市場未能成長；未能維持市場創新者地位並創造新的市場機會；重大營運費用（包括零組件與原物料）變動；未能開發新產品；產品責任、侵權及其他索賠；監管環境變化；以及美國及全球其他地區的一般經濟與商業狀況。

For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission. The content of this conference call contains time sensitive information that is accurate only as of today, August 30, 2016. The Company undertakes no obligation to make any revision to the statements contained in our remarks or to update them to reflect events or circumstances occurring after this conference call.

如需上述風險與不確定性的進一步清單與說明，請參閱我們向美國證券交易委員會（SEC）提交的報告。本次電話會議內容包含具時效性的資訊，僅在今日（2016 年 8 月 30 日）為準確。公司不承擔對我們發言中所含陳述進行任何修訂之義務，亦不承擔更新以反映本次電話會議後發生之事件或情況的義務。

We will now begin with remarks from Wahid Nawabi. Wahid?

接下來我們先請 Wahid Nawabi 發表談話。Wahid？

Thank you, Steve. Good afternoon, and welcome to our first-quarter fiscal 2017 earnings call. Our message today is this, we remain focused on continuing to execute our strategy in support of our full-year goals and long-term value creation. On today's call, I will review our first-quarter financial performance and the progress we are achieving across our business. I will then discuss our 2017 strategic objectives and how they support our long-term goals. Raymond Cook will then provide a detailed financial review before I discuss our outlook. Following our prepared remarks, Raymond, Steve, and I will take your questions.

謝謝你，Steve。各位下午好，歡迎參加我們 2017 會計年度第一季財報電話會議。我們今天要傳達的訊息是：我們仍專注於持續執行策略，以支持全年目標並創造長期價值。在今天的電話會議中，我將回顧第一季的財務表現，以及我們在各項業務上取得的進展。接著我將討論 2017 年的策略目標，以及這些目標如何支持我們的長期目標。之後 Raymond Cook 將提供更詳細的財務回顧，然後我會談我們的展望。在我們的準備稿結束後，Raymond、Steve 和我將回答各位的提問。

Now a brief review of first-quarter financials. First-quarter revenue of $36.2 million reflects our historical first-quarter seasonality and is consistent with the expectations we provided in our fourth-quarter earnings call. As you may recall, we said that we expected the first half of this year to produce one-third of fiscal 2017 revenue, and that the first quarter would represent about 40% of first-half revenue. I would like to remind you that our recurring seasonally lower first-quarter revenue stems mainly from customer order timing and the budget cycle of our customers. Because our spending plan and operations are based on the full fiscal year, lower first-quarter revenue and higher warranty and sustaining engineering expenses resulted in a lower gross margin with a net loss of $0.51 per share. Raymond will provide more details on the factors that drove this result in his prepared comments.

先簡要回顧第一季財務。第一季營收為 3,620 萬美元，反映我們歷來第一季的季節性特徵，並符合我們在第四季財報電話會議中所提供的預期。各位或許記得，我們曾表示預期今年上半年將貢獻 2017 會計年度營收的三分之一，而第一季約占上半年營收的 40%。我想提醒各位，我們每年第一季營收季節性偏低，主要源自客戶下單時點以及客戶的預算循環。由於我們的支出計畫與營運係以整個會計年度為基礎，第一季較低的營收，加上較高的保固與維持工程費用，導致毛利率較低，最終每股淨損 0.51 美元。Raymond 將在其準備稿中提供更多推動此結果的因素細節。

Our funded backlog increased by approximately 14% over fourth-quarter FY16 to $74.7 million contributing to full-year visibility of about 51% that Raymond will detail in his prepared comments. Our level of visibility at this point in this fiscal year is lower than what we experienced in recent years.

我們的已獲資金支持的在手訂單（funded backlog）較 16 財年第四季增加約 14%，至 7,470 萬美元，帶來約 51% 的全年可視度（visibility），Raymond 將在其準備稿中詳述。本會計年度此時點的可視度水準低於我們近年所經歷的情況。

Now let's review our progress in the first quarter. In our fourth-quarter earnings call two months ago, I introduced a set of key milestones to help communicate how we are progressing against our plans. I will now provide updates on those milestones for which new information is available. Our pipeline of international opportunities remains strong. In fiscal 2016, our international revenue more than tripled, increasing from roughly $20 million to more than $70 million.

接著回顧我們第一季的進展。在兩個月前的第四季財報電話會議中，我提出一組關鍵里程碑，以協助溝通我們相對於計畫的推進情況。現在我將就已取得新資訊的里程碑提供更新。我們的國際機會管線仍然強勁。在 2016 會計年度，我們的國際營收增加逾三倍，從約 2,000 萬美元成長至超過 7,000 萬美元。

We are currently working with existing and new customers in Europe and the Middle East that have significant requirements. We continue to see strong demand for our small UAS as they become embedded in the way our allies plan, train, and operate. We believe fiscal 2017 international small UAS revenue will remain strong in fiscal 2016. We believe this demand reflects recognition of our successful track record serving the US Armed Forces and our 35 international customers.

我們目前正與歐洲及中東的既有與新客戶合作，這些客戶有顯著需求。隨著小型無人航空系統（small UAS）逐漸融入盟友的規劃、訓練與作戰方式，我們持續看到對小型 UAS 的強勁需求。我們相信 2017 會計年度國際小型 UAS 營收將維持 2016 會計年度的強勁水準。我們認為此需求反映市場對我們成功服務美國武裝部隊以及 35 個國際客戶之良好實績的認可。

It is important to note that the timing of international deliveries can be particularly difficult to predict, and all international opportunities require US State Department approval and export licensing. The international market for our small UAS is very active, and our win rate is high. In tactical missile systems, we continue to develop a family of systems based on the architecture of our initial Switchblade solution but with a broad range of performance and mission effects.

需要特別指出的是，國際交付的時點往往特別難以預測，且所有國際商機都需要美國國務院核准與出口許可。小型 UAS 的國際市場非常活躍，而我們的得標率很高。在戰術飛彈系統方面，我們持續以最初的 Switchblade 解決方案架構為基礎，開發一系列系統，涵蓋廣泛的性能與任務效果。

A key difference between Switchblade and our Raven, Puma AE, and Wasp AE small UAS is its ability to self launch from a tube at a push of a button, as opposed to a hand launch by an operator. Because of its tube launch capability, Switchblade and its variants can readily be launched from the ground, the air, and the sea, including from underwater vessels as Blackwing illustrates. This means that these variants can be deployed in backpacks, on ground vehicles, on manned and unmanned aircrafts, on surface ships, and submarines.

Switchblade 與我們的 Raven、Puma AE 與 Wasp AE 小型 UAS 的一項關鍵差異，在於它能按下按鈕即可從發射筒自動發射，而非由操作員手擲發射。由於具備筒式發射能力，Switchblade 及其各種衍生型可輕易從地面、空中與海上發射，甚至可由水下載具發射，如 Blackwing 所示。這表示這些衍生型可部署於背包、地面車輛、有人與無人航空器、水面艦艇以及潛艦上。

Within our family of tactical missile systems, Switchblade in some of its variants each carry an explosive charge while Blackwing carries extra batteries instead of an explosive payload, resulting in greater endurance for longer reconnaissance missions covering greater distances. And because all of our TMS air vehicles incorporate AeroVironment's secured Digital Data Link, they can provide a pop-up communications and data relay network. This network can link people to each other and to other unmanned vehicles across large geographic areas to create entirely new concepts of operation. Furthermore, our tactical missile systems' architecture is scalable, meaning we can design air vehicles around payloads of different sizes to achieve different mission effects.

在我們的戰術飛彈系統系列中，Switchblade 的部分衍生型各自搭載爆炸裝藥，而 Blackwing 則以額外電池取代爆炸酬載，因此具備更長續航力，可執行距離更遠、涵蓋範圍更大的長時間偵察任務。此外，由於我們所有 TMS 飛行載具皆整合 AeroVironment 的加密數位資料鏈（secured Digital Data Link），因此可提供彈出式（pop-up）的通訊與資料中繼網路。此網路可在廣大地理範圍內，將人員彼此連結，並與其他無人載具連結，從而創造全新的作戰概念。再者，我們戰術飛彈系統的架構具可擴展性（scalable），意味著我們可圍繞不同尺寸的酬載設計飛行載具，以達成不同的任務效果。

Another important distinction between our tactical missile systems and our small UAS is that each TMS variant is designed only for a single use. In other words, they are consumable assets. The net result of this family of tactical missile systems is a unique and compelling set of capabilities targeting an expanding addressable market of customers, applications, concepts of operation, and ultimately, geographies.

我們的戰術飛彈系統與小型 UAS 的另一項重要差異是：每一種 TMS 衍生型都僅設計為一次性使用。換言之，它們是可消耗性資產。此戰術飛彈系統系列的最終成果，是一套獨特且具吸引力的能力組合，鎖定不斷擴大的可服務市場（addressable market），涵蓋客戶、應用、作戰概念，並最終擴及不同地理區域。

The historical US Department of Defense procurement of legacy military solutions for the type of missions Switchblade can address includes mortars, grenades, shoulder fire missiles, air launched missiles, and rockets. The value of these existing solutions, a proxy for our addressable market, represents hundreds of millions of dollars in annual procurement. Two recent government announcements, one for production of Switchblade systems and the other for support services for the period government FY17 through FY19, provide additional visibility into our progress and our customers' intent.

美國國防部過往針對 Switchblade 可執行之任務類型所採購的傳統軍事解決方案，包括迫擊砲、手榴彈、肩射飛彈、空射飛彈以及火箭。這些既有解決方案的價值（可作為我們可服務市場的替代指標）代表每年採購金額達數億美元。近期兩項政府公告——一項為 Switchblade 系統的生產，另一項為政府 2017 財年至 2019 財年期間的支援服務——進一步提升了我們對進展以及客戶意向的可見度。

Additionally, a recent news article identified a recent $24 million DOD reprogramming request to support an urgent need for 360 Switchblade rounds, 35 control units, and 150 inner training vehicles. To achieve its potential, we continue to enhance our Switchblade solution to address anticipated requirements for the US Army's [L-Man's] program of record. We expect this program to be highly competitive, similar to every DOD small UAS probe on the record. Note that we have won every program of record competition for DOD small UAS to date.

此外，近期一則新聞報導指出，國防部提出一項近期 2,400 萬美元的重編程（reprogramming）申請，以支援一項緊急需求：360 枚 Switchblade 彈藥、35 套控制單元，以及 150 輛內部訓練載具。為了實現其潛力，我們持續強化 Switchblade 解決方案，以滿足美國陸軍 [L-Man's] 計畫（program of record）的預期需求。我們預期該計畫競爭將非常激烈，與國防部所有已列案的小型無人機系統（small UAS）採購案相似。請注意，截至目前我們已贏得國防部所有已列案的小型無人機系統計畫競標。

We also continue to make solid progress on the multiple TMS variants we have been developing primarily through customer funded R&D. Among our forward TMS variants beyond Switchblade and Blackwing, we are producing and delivering one variant to customers, moving towards production of a second variant, and continuing to make progress on the other two.

我們也持續在多個 TMS 變體（variants）上取得穩健進展，這些變體主要透過客戶出資的研發（R&D）所開發。在 Switchblade 與 Blackwing 之外的前瞻 TMS 變體方面，我們正為客戶生產並交付其中一個變體，推進第二個變體邁向量產，同時也持續推動另外兩個變體的進展。

In our core small UAS business, we anticipate progress on the US government's frequency reallocation program with the US Army RFP expected by the end of our current fiscal year. As a reminder, this program involves upgrading all the federal government's existing Raven, Puma, and Wasp UAS to a new radio frequency in order to accommodate the government's decision to sell the spectrum currently used for small UAS. We believe this broad upgrade requirement will generate significant revenue and we're working hard to win it.

在我們核心的小型無人機系統（small UAS）業務方面，我們預期美國政府的頻率重新分配計畫將有所進展，且美國陸軍的 RFP 預計將於我們本會計年度結束前發布。提醒一下，該計畫涉及將聯邦政府現有的 Raven、Puma 與 Wasp 無人機系統全面升級至新的無線電頻率，以配合政府決定出售目前小型無人機系統所使用的頻譜。我們相信這項廣泛的升級需求將帶來可觀營收，我們正全力爭取中標。

With respect to new US DOD customers, the US Navy continues to deploy our Puma AE with its unique salt water and autonomous precision landing system. Our system's effective performance on Navy destroyers and patrol craft has generated significant interest in support from Navy personnel. One Navy official said the Puma gives those platforms some eyes in the sky they never had before. The Navy views Puma as a new capability for missions that include man overboard, personnel recovery, search and rescue, visit-board-search and seizure exercises and operations, as well as area surveillance and range clearance during gunnery exercises. The Navy's adoption of Puma AE along with Blackwing adoption represent important pathways to broader Navy and maritime procurement of AeroVironment solutions in the near and long term both domestically and internationally.

就新的美國國防部客戶而言，美國海軍持續部署我們的 Puma AE，其具備獨特的海水環境能力與自主精準降落系統。我們系統在海軍驅逐艦與巡邏艇上的有效表現，已引發海軍人員對支援的高度興趣。一位海軍官員表示，Puma 讓這些平台擁有了過去從未有過的「空中之眼」。海軍將 Puma 視為一項新能力，可用於包括人員落水（man overboard）、人員救援（personnel recovery）、搜救（search and rescue）、登檢搜查與扣押（visit-board-search and seizure）演訓與行動，以及區域監視與射擊演訓期間的靶場清場（range clearance）等任務。海軍採用 Puma AE 以及採用 Blackwing，代表 AeroVironment 解決方案在短期與長期、國內與國際的更廣泛海軍與海事採購方面，具有重要的推進途徑。

In commercial UAS information solutions, we continue to gain valuable knowledge and experience working with early adopter customers in agriculture, energy, utilities, and transportation. We are digitizing images of crops, power lines, railroad tracks, and towers, accumulating expertise, and refining our solution in the process. We look forward to sharing with you the compelling set of capabilities we have been working so hard to develop.

在商用無人機系統（UAS）資訊解決方案方面，我們持續透過與農業、能源、公用事業與運輸領域的早期採用者客戶合作，累積寶貴知識與經驗。我們正在將作物、電力線、鐵路軌道與塔架的影像數位化，累積專業能力，並在此過程中精進我們的解決方案。我們期待與各位分享我們努力開發的一系列極具吸引力的能力。

Taking a longer view, we are also engaged with partners and federal agencies to establish a leading market position for future beyond-visual line-of-sight commercial operations through advanced communications, [hence] and avoid, and air traffic management technology development.

從更長遠的角度來看，我們也正與合作夥伴及聯邦機構合作，透過先進通訊、[hence] 與避碰（detect and avoid），以及空中交通管理技術的研發，為未來超視距（beyond-visual line-of-sight）的商業運作建立領先的市場地位。

Shifting to our EES business, we continued our engagement with important automotive OEM players in the EV charging industry. Specifically, a top-five automaker selected our home and in-trunk charging solutions for distribution throughout their US dealer channel. Another OEM is pursuing international home charging opportunities with us, and we're discussing our solutions with a third OEM for their global EV presence. We're also seeing the highest interest in our EV test systems that we have seen in several years. We see heightened activity amongst automakers to increase EV adoption with more new plug-in models coming to market.

轉到我們的 EES 業務，我們持續與電動車（EV）充電產業中重要的汽車 OEM 參與者互動。具體而言，一家前五大車廠選擇了我們的家用與後車廂（in-trunk）充電解決方案，並透過其美國經銷通路進行配銷。另一家 OEM 正與我們共同推進國際家用充電商機，我們也正與第三家 OEM 討論其全球 EV 佈局所需的解決方案。此外，我們也看到近幾年來對我們 EV 測試系統的最高興趣。我們觀察到車廠為提升 EV 採用率而加大投入，更多新的插電式車款正陸續上市。

As I have outlined, we are making important progress on seven of our key milestones: domestic small UAS, international small UAS, the Army frequency reallocation project, Switchblade tactical missile systems, our commercial UAS information solution, Switchblade variants, and our EV charging offering. We will continue to execute on our strategy to deliver high long-term growth with continued progress in key initiatives targeting very large market opportunities.

如我所述，我們在七項關鍵里程碑上取得重要進展：國內小型無人機系統、國際小型無人機系統、陸軍頻率重新分配專案、Switchblade 戰術飛彈系統、我們的商用無人機系統資訊解決方案、Switchblade 變體，以及我們的 EV 充電產品。我們將持續執行策略，透過在鎖定極大型市場機會的關鍵計畫上持續推進，以實現長期的高成長。

Now, Raymond Cook will discuss first-quarter financial results. Raymond?

接下來，Raymond Cook 將說明第一季財務結果。Raymond？

Thank you, Wahid, and good afternoon, everyone.

謝謝你，Wahid，各位下午好。

Moving now to AeroVironment's fiscal 2017 first-quarter results are as follows. Our revenue for Q1 was $36.2 million, a decrease of $10.8 million or 23% as compared to $47.1 million a year ago.

接著說明 AeroVironment 2017 會計年度第一季的結果如下：我們第一季營收為 3,620 萬美元，較一年前的 4,710 萬美元減少 1,080 萬美元，或 23%。

Looking at our revenue by segment, our UAS revenue was $30.5 million, a decrease of $9.7 million or 24% compared to last year. The decrease is primarily due to a decrease in product deliveries of $9.8 million, a decrease in customer funded R&D work of $1.8 million, partially offset by an increase in service revenue of $1.9 million. EES revenue decreased $1.2 million or 17% to $5.7 million in the first quarter. This decrease was primarily due to a decrease in product deliveries of our power processing products and our industrial fast charge systems.

按部門來看營收，我們的 UAS 營收為 3,050 萬美元，較去年減少 970 萬美元，或 24%。下降主要來自產品交付減少 980 萬美元、客戶出資研發（R&D）工作減少 180 萬美元，部分被服務營收增加 190 萬美元所抵銷。EES 營收於第一季下降 120 萬美元或 17%，至 570 萬美元。此下降主要由於我們的電力處理產品與工業快速充電系統之產品交付減少。

Turning to gross margin, our gross margin for the first quarter was $6.7 million or 18%, a decrease of $9.3 million as compared to $16 million or 34% in the prior year. The decrease in gross margin was primarily due to a decrease in product margin of $9.4 million. Our product gross margin percentage for Q1 2017 was 3.3% as compared to Q1 2016 of 37.1%. Our service margins were consistent at 30.1%. The decrease in gross margin percentage was primarily due to an increase in warranty related costs of $1.7 million related to certain small UAS delivered in prior periods, an increase in engineering and technical analysis costs of $1.5 million related to existing products, a decrease in product sales volume which resulted in an increase in the per unit fixed manufacturing and engineering overhead support costs, and unfavorable product mix.

再看毛利率，第一季毛利為 670 萬美元或 18%，較前一年度的 1,600 萬美元或 34% 減少 930 萬美元。毛利下降主要由於產品毛利減少 940 萬美元。2017 會計年度第一季的產品毛利率為 3.3%，相較於 2016 會計年度第一季的 37.1%。服務毛利率則維持一致，為 30.1%。毛利率下降主要原因包括：與先前期間交付之特定小型無人機系統相關的保固成本增加 170 萬美元；與既有產品相關的工程與技術分析成本增加 150 萬美元；產品銷售量下降導致單位固定製造與工程間接費用（overhead）支援成本上升；以及不利的產品組合。

By segment, our UAS gross margin for the first quarter decreased to $5.4 million or 18% from $13.7 million or 34% in the prior year. The decrease was primarily due to an increase in warranty related costs related to certain small unmanned aircraft systems delivered in prior periods, an increase in engineering and technical analysis costs related to existing products, a decrease in product sales volume which resulted in an increase in the per unit fixed manufacturing and engineering overhead support costs, a decrease in product sales volume, and unfavorable product mix.

按部門來看，我們 UAS 第一季毛利降至 540 萬美元或 18%，低於前一年度的 1,370 萬美元或 34%。下降主要由於：與先前期間交付之特定小型無人航空系統相關的保固成本增加；與既有產品相關的工程與技術分析成本增加；產品銷售量下降導致單位固定製造與工程間接費用支援成本上升；產品銷售量下降；以及不利的產品組合。

EES gross margin for the first quarter decreased $1.1 million or 45% to $1.3 million in the quarter primarily due to a decrease in sales volume and unfavorable product mix. As a percentage of revenue, EES gross margin decreased from 34% to 22%. SG&A expense for the first quarter was $13.7 million or 38% of revenue compared to SG&A expense of $15.3 million or 32% of revenue in the prior year. R&D expense for the first quarter was $8.6 million or 24% of revenue compared to R&D expense of $9.8 million or 21% of revenue in the prior year.

EES 第一季毛利在本季下降 110 萬美元或 45%，至 130 萬美元，主要由於銷售量下降及不利的產品組合。以營收百分比計，EES 毛利率由 34% 降至 22%。第一季 SG&A 費用為 1,370 萬美元，占營收 38%，相較前一年度 SG&A 費用 1,530 萬美元，占營收 32%。第一季研發（R&D）費用為 860 萬美元，占營收 24%，相較前一年度研發費用 980 萬美元，占營收 21%。

The operating loss for the first quarter was $15.6 million or 43% of revenue compared to prior-year operating loss of $9.1 million or 19% of revenue. The operating loss increase was primarily due to the lower revenue and gross margin dollars. Net other income for the quarter was $0.1 million compared to the prior year net other expense of $2.2 million.

第一季營業損失為 1,560 萬美元，占營收 43%，相較前一年度營業損失 910 萬美元，占營收 19%。營業損失擴大主要由於營收與毛利金額較低。本季其他淨收益為 10 萬美元，相較前一年度其他淨費用為 220 萬美元。

The increase in other income was primarily due to the recording of an other than temporary impairment loss on our CybAero equity securities for the three months ended August 1, 2015. Our effective income tax benefit rate was 24.9% for the quarter as compared to an effective income tax benefit rate of 37.8% in the prior year. The net loss for the quarter was $11.6 million or a $0.51 loss per share compared to a net loss of $7 million or $0.30 per share in the same quarter last year. Looking at backlog, our funded backlog at the end of the first quarter was $74.7 million, a decrease of $14.3 million or 16% from the first quarter of the prior year and an increase of $8.9 million or 14% from the prior quarter.

其他收入的增加主要是由於截至2015年8月1日止三個月期間，我們就CybAero股權證券認列了一筆非暫時性減損損失。我們本季的有效所得稅利益率為24.9%，相較於前一年度的有效所得稅利益率37.8%。本季淨損為1,160萬美元，或每股虧損0.51美元；相較於去年同期淨損700萬美元，或每股虧損0.30美元。就積壓訂單而言，第一季末我們的已資金支持積壓訂單為7,470萬美元，較前一年度第一季減少1,430萬美元或16%，並較前一季增加890萬美元或14%。

Turning now to our balance sheet, cash, cash equivalents, and investments at the end of the first quarter totaled $257.2 million, a decrease of $4.3 million from the prior quarter. Net accounts receivable, including unbilled receivables and retentions, at the end of the first quarter totaled $47.1 million, a decrease of $27.8 million from the prior quarter. Net inventories were $44.1 million at the end of the quarter compared to $37.5 million at the end of the prior quarter. In the first quarter, we invested approximately $2.6 million or 7% of revenue in property improvements and capital equipment. We recognized $1.7 million of depreciation in the quarter.

接著看資產負債表，第一季末現金、約當現金及投資合計為2億5,720萬美元，較前一季減少430萬美元。第一季末應收帳款淨額（包含未開立帳單之應收款及保留款）合計為4,710萬美元，較前一季減少2,780萬美元。季末存貨淨額為4,410萬美元，前一季季末為3,750萬美元。第一季我們在不動產改善與資本設備上投資約260萬美元，約占營收7%。本季認列折舊費用170萬美元。

Now to an update of our FY17 visibility. As of today, we have year-to-date Q1 revenues of $36 million, Q1 ending backlog that we can execute into FY17 of an additional $67 million, Q2 quarter-to-date bookings that we can execute in FY17 of an additional $19 million, unfunded backlog from incrementally funded contracts that we expect to recognize revenue for the balance of this year of $1 million, and revenues needed to hold EES revenues flat relative to last year of $13 million. This adds up $136 million or 51% at the midpoint of our revenue guidance.

現在更新我們對FY17的能見度。截至今日，我們年初至今第一季營收為3,600萬美元；第一季期末可於FY17執行的積壓訂單另有6,700萬美元；第二季截至目前可於FY17執行的接單另有1,900萬美元；來自逐步撥款合約的未資金支持積壓訂單中，我們預期在本年度剩餘期間認列營收為100萬美元；以及為使EES營收相較去年持平所需的營收為1,300萬美元。合計為1億3,600萬美元，約占我們營收指引中點的51%。

Now, I would like to turn things back to Wahid to discuss AV's expectations for the remainder of fiscal year 2017.

現在，我想把時間交還給Wahid，請他說明AV對2017會計年度剩餘期間的展望。

Thanks, Raymond. As we look ahead across the balance of fiscal 2017, we continue to work towards full-year revenue of $260 million to $280 million with between $0.20 and $0.35 per diluted -- fully diluted earnings per share.

謝謝你，Raymond。展望2017會計年度剩餘期間，我們仍以全年營收2億6,000萬至2億8,000萬美元為目標，稀釋後—完全稀釋後每股盈餘介於0.20至0.35美元。

The lower first-quarter revenue and lower than planned bookings increased the amount of revenue we will need to realize in the second half of the year, most notably in the fourth quarter, to achieve our stated guidance. As I mentioned in our fourth-quarter earnings call, we expect continued strong international sales which will require State Department export licenses, adding time between orders and deliveries. Our focus remains on execution and long-term value creation, and we are excited about the multiple opportunities we are cultivating.

第一季營收較低且接單低於原先規劃，使我們為達成既定指引而需在下半年實現的營收金額增加，尤其是在第四季。如同我在第四季法說會中提到的，我們預期國際銷售將持續強勁，而這將需要國務院出口許可證，因而拉長下單與交付之間的時間。我們的重點仍在於執行與長期價值創造，並對我們正在培育的多項機會感到振奮。

We will provide updates on key orders when customer and competitive constraints permit. We expect second-quarter and remainder of fiscal 2017 gross margins to increase and move closer to historical levels after adjusting for the incremental sustaining engineering expenses we described in our fourth-quarter fiscal 2016 earnings call.

在客戶與競爭限制允許時，我們將就關鍵訂單提供更新。我們預期第二季及2017會計年度剩餘期間的毛利率將上升，並在調整我們於2016會計年度第四季法說會所描述的額外維持性工程費用後，更接近歷史水準。

We are confident in our ability to continue executing against our plan and generating value for our stockholders. I am confident in our team's ability to continue moving our business forward. Thank you for your ongoing interest in AeroVironment, and thanks to our outstanding team for their unwavering efforts to provide our customers with more actionable intelligence so they can proceed with certainty.

我們對持續依計畫執行並為股東創造價值的能力充滿信心。我也對團隊持續推動業務向前的能力充滿信心。感謝各位持續關注AeroVironment，也感謝我們優秀團隊不懈的努力，為客戶提供更可採取行動的情資，使其能夠更有把握地採取行動。

Now Raymond, Steve, and I will take your questions.

現在Raymond、Steve和我將回答各位的提問。

(Operator Instructions)

（接線員指示）

Our first question is from the line of Joseph DeNardi of Stifel. Your line is open.

第一個問題來自Stifel的Joseph DeNardi。您的線路已開通。

Wahid, I'm wondering if you could just provide a little bit more detail around the higher warranty costs in the quarter, maybe what program that was related to, and was it just the new capability being implemented that led to it, or just a little bit more detail there.

Wahid，我想請你就本季較高的保固成本提供更多細節，例如與哪個專案相關；是因為導入新能力而導致，還是其他原因？想請你多說明一些。

Sure. Hi, Joe. Good to talk to you.

當然。嗨，Joe。很高興和你交流。

If you recall on the last quarter's earnings call at Q4, we specifically mentioned that because our installed base of small UAS is really growing to a large number, well over 30,000 now, and the fleet has also been in use in different customers in 35 different countries for close to, if not more than, a decade. So, in general, there is opportunities for us for upgrades and sustainment. In order for some of those upgrades to occur, we said on the call that we are increasing our sustaining engineering investment incrementally this year so we can prepare ourselves to take advantage of that opportunity and to address customers' needs throughout the whole market.

如果你還記得，在上一季第四季的法說會上，我們特別提到，因為我們小型無人機系統（small UAS）的裝機基數確實成長到非常大的數量，現在已遠超過30,000套，而且該機隊也已在35個不同國家的不同客戶中使用了接近、甚至超過十年。因此，整體而言，我們在升級與維持（sustainment）方面有機會。為了讓其中一些升級得以發生，我們在電話會議中表示，今年我們將逐步增加維持性工程（sustaining engineering）的投資，以便做好準備把握該機會，並在整個市場中滿足客戶需求。

Related to the warranty expenses, on any given quarter or year, now since our installed base has grown so large, we typically accrue and reserve a certain dollar amount for various warranty needs that we provide. And knowing what our products are like and what they are used to and how the customers use this and how mission -- how critical it is to their mission, the expectation is that it has got to work when they operate it and it has got to do what it is supposed to do. Various customers and countries have different various levels of expectation as well on that regard.

就保固費用而言，在任何一個季度或年度，隨著我們的裝機基數變得如此龐大，我們通常會就各種我們提供的保固需求提列並保留一定金額。考量我們產品的特性、使用情境、客戶如何使用，以及任務—對其任務的重要性，客戶的期待是：在操作時必須能運作，並且必須達成其應有的功能。不同客戶與不同國家在這方面也有不同程度的期待。

So, we had some issues that we had recognized with one of our products in the small UAS back at the beginning -- we saw some signs of that last year, fiscal year, and we did not have a true root cause and we had to go do some more assessment of what exactly it is, the extent and all that. And as a result, we believe now that we have a specific solution. And the expenses that you see now, we accrued for that in the first quarter based on our assessment and based on what we found, and we expect this to address that issue and get back to business as usual going beyond Q1.

因此，我們在小型UAS的某一項產品上發現了一些問題，最早可追溯到年初—我們在上一個會計年度就看到一些跡象，但當時尚未找到真正的根本原因，因此必須進一步評估究竟是什麼問題、影響範圍等。基於此，我們現在相信已找到具體解決方案。你現在看到的費用，是我們在第一季依據評估結果與發現而提列的，我們預期這將能解決該問題，並在第一季之後恢復正常營運。

Okay. That's very helpful.

好的。這非常有幫助。

Just on Global Observer, if you could just provide us an update to the extent that you can, where do customer discussions stand at this point, and when do you think we'll know what the future of that program holds for you guys? Is there six months from now is when you think you will have a go or no-go decision -- just any color there.

另外關於Global Observer，如果可以的話，請提供最新進展：目前與客戶的討論進展到哪個階段？你認為我們何時會知道該專案未來對你們而言會如何發展？例如你是否認為大約六個月後會有做或不做（go or no-go）的決定——任何補充說明都可以。

Sure. Joe, in general, I have been in this business now for five years, and out of my 25 years of experience, the timing of prediction for when some of these decisions are made and when some of this adoption is going to occur, if it is going to occur, is extremely difficult. It has been difficult since the day I joined the Company.

當然。Joe，一般而言，我在這個業務領域已經五年了；以我25年的經驗來看，要預測這類決策何時做出、以及這類採用何時會發生（如果會發生的話）是極其困難的。自從我加入公司那天起就一直很困難。

Global Observer specifically is even more challenging because it is a very new capability, and the customers typically don't have this type of capability today as a comparable solution. There are other means by which they address their needs, but this is fairly new. The cycle is not really predefined by the customer -- the timing -- and the decision process are not very well defined.

Global Observer尤其更具挑戰，因為它是一項非常新的能力，而客戶通常目前並沒有可比擬的同類解決方案。雖然他們有其他方式來滿足需求，但這項能力相當新。其週期並非由客戶預先界定—時程—以及決策流程也不是很明確。

We have been engaged for years that we have been talking to you about Global Observer with interested customers. We continue to be engaged with interested parties. As updates become available, we will share it with you. Whether it is positive or negative, we will be able to share it with you, but that is what I can provide at this moment, to the extent possible.

多年來我們一直與對Global Observer有興趣的客戶接觸，也一直在與你們談論這件事。我們仍持續與有興趣的各方保持互動。一旦有可提供的更新，我們會與你分享。無論是正面或負面的消息，我們都會與你分享；在目前可行的範圍內，這就是我此刻能提供的資訊。

Thank you. And our next question is from the line of Josephine Millward of The Benchmark Company.

謝謝。下一個問題來自 The Benchmark Company 的 Josephine Millward。

Hi, guys.

嗨，各位。

Hi, Josephine.

嗨，Josephine。

Wahid, can you talk about timing on the Army's frequency reallocation? Is this a FY17 event? Help us to size this opportunity.

Wahid，你能談談陸軍頻率重新分配的時程嗎？這會是在 FY17 發生的事件嗎？請協助我們評估這個機會的規模。

Sure. So, Josephine, we've spoken about this for quite a while. This is a decision that it is upon the US DOD, primarily because of the government's decision to sell off the existing frequency that our UAS is having to operate on. So the government has sold that frequency spectrum. And in order for them to be able to deliver on that sale and commit on it -- commitment, they have to convert from the existing frequencies all of their installed base of our UAVs -- Puma, Raven, and Wasp -- to the new frequency.

當然。所以，Josephine，我們談這件事已經有一段時間了。這項決策取決於美國國防部（US DOD），主要是因為政府決定出售我們的 UAS 目前必須運作所使用的既有頻率。因此政府已經出售了該頻譜。為了能夠履行那筆出售並對其承諾——也就是履約承諾——他們必須把所有已部署的我們的 UAV——Puma、Raven 與 Wasp——從既有頻率轉換到新的頻率。

We are in constant engagement with the Army and other potential users of our product. The timing is, again, not in our control. It is up to the customer to decide.

我們持續與陸軍以及其他可能的產品使用者保持密切互動。時程同樣不在我們的控制之內，而是由客戶決定。

The indications that they have given us that I provided to you on my prepared remark is that they intend to have some movement on that by the end of our fiscal year. Whether that is going to hold true or not, I can't comment or guarantee, but we will keep you abreast of those movements and progress, and we will let you know.

他們給我們的指示——我在事先準備的發言中也提供給各位——是他們打算在我們會計年度結束前讓這件事有所進展。這是否會成真，我無法評論或保證，但我們會隨時向各位更新相關動向與進度，並讓各位知道。

Okay. That is helpful.

好的。這很有幫助。

Let's talk about the Navy. Is the Navy planning its own program of record for small UAS? How is this program getting funded right now, and how do you guys get visibility for longer-term requirements?

我們來談談海軍。海軍是否正在規劃自己的小型 UAS 正式建案（program of record）？目前這個計畫的資金來源是什麼？你們如何取得對較長期需求的能見度？

Sure. So, Josephine, we have been working with the Navy for quite some time now to help them incorporate and integrate small UAS within their operations -- in their Navy operations and Navy system. So we have two airplanes, as you know, Puma AE and Wasp AE, which we believe and our customers are telling us is very unique in terms of its capabilities and what it can do for the Navy.

當然。所以，Josephine，我們與海軍合作已經有相當長一段時間，協助他們在海軍作業與海軍系統中導入並整合小型 UAS。如你所知，我們有兩款飛機：Puma AE 與 Wasp AE；我們相信，而且客戶也告訴我們，就其能力與能為海軍做到的事情而言，這是非常獨特的。

Both have the ability to be all environment, which means that they can withstand operations and they can land in salt water, in the ocean, and then you can literally wash it off and wipe it off and just fly it again. You can do this over and over again. It's part of the specifications of the product.

兩者都具備全環境能力，意思是它們能承受各種作業環境，並且可以在海水、在海洋中降落，然後你幾乎只要把它沖洗、擦拭一下，就能再度起飛。你可以一再重複這樣做。這是產品規格的一部分。

So based on the engagement that we have with the Navy, on the small UAS front, they are working towards the, what I call the adoption process of how it actually becomes as part of a standard plan for the Army -- for the Navy.

因此，基於我們與海軍在小型 UAS 方面的互動，他們正朝著我所稱的「採用流程」推進，也就是它如何實際成為——更正，是成為海軍標準計畫的一部分。

We have received some funding to work with them in terms of delivering some products. We shared with you the progress we made in terms of the precision landing system recently that we have developed, which essentially allows the Puma AE to precisely land on a net which requires zero retrofit really to the ship's existing structure or operation. Essentially, it is a walk-on, walk-off capability, which is very exciting and very attractive to the US Navy.

我們已獲得一些資金，與他們合作交付部分產品。我們也與各位分享了我們近期在精準降落系統方面的進展；該系統基本上讓 Puma AE 能夠精準降落在一張網上，而幾乎不需要對艦艇既有結構或作業進行任何改裝。基本上，這是一種可直接上艦、直接離艦（walk-on, walk-off）的能力，對美國海軍而言非常令人振奮且極具吸引力。

So, are they planning to work on a program of record? I do not have any specific details on that to provide today, and I can't predict that right now. All indicators are that there is a fairly large opportunity for us. The Navy is very interested in this capability, and we believe that the adoption will happen; however, the timing is really unpredictable.

那麼，他們是否計畫推動正式建案（program of record）？我今天沒有任何具體細節可以提供，也無法在此刻做出預測。所有跡象顯示，對我們而言這是一個相當大的機會。海軍對這項能力非常有興趣，我們相信採用會發生；然而，時程確實難以預測。

Lastly, I want to add to this comment about Blackwing. We did demonstrate the capability of Blackwing, which is a variant of Switchblade. It has a longer endurance than our standard Switchblade. And we demonstrated this from submarines to the Navy, and this is a capability the Navy has been looking for, and it actually opens up a whole new set of capabilities and concepts of operation which has never been heard before in this space, in this segment.

最後，我想補充一點關於 Blackwing。我們確實向海軍展示了 Blackwing 的能力；它是 Switchblade 的一個變體，續航力比我們標準版 Switchblade 更長。我們從潛艦向海軍展示了這項能力，而這正是海軍一直在尋找的能力；它也開啟了一整套全新的能力與作戰概念（concepts of operation），在這個領域、這個細分市場中前所未聞。

So I think that Blackwing demonstration, and progress that we have made so far, also is a fairly significant long-term opportunity for our Business, the timing of which is unpredictable, again.

因此我認為，Blackwing 的展示以及我們迄今取得的進展，也為我們的業務帶來相當重要的長期機會；其時程同樣難以預測。

Next question is from the line of Troy Jensen of Piper Jaffray.

下一個問題來自 Piper Jaffray 的 Troy Jensen。

Thanks for taking my question, gentlemen. This is Austin on behalf of Troy.

感謝讓我提問，各位先生。我是 Austin，代表 Troy 提問。

The first one is for Wahid. I'd just like to dig into the commercial UAS opportunity. The UAS rules in place now are going into effect yesterday. We just wanted to get an update on that. And what are some milestones we should expect to see, whether it has to do with new product introductions or when to expect that part of the Business to be more material?

第一個問題給 Wahid。我想更深入了解商用 UAS 的機會。現行的 UAS 規則昨天開始生效。我們想請你更新一下進展。以及我們應該期待看到哪些里程碑——不論是新產品推出，或是何時預期這部分業務會變得更具實質性？

Sure, I will let Steve -- he has been immersed in this specific topic and I will let him give you the details. Steve?

當然。我會請 Steve 回答——他一直深度投入這個特定主題，我讓他提供細節。Steve？

Yes. Hi, Austin. The Part 107 rules that were implemented yesterday make it much easier for folks to become certified for operating unmanned aircraft systems in the national air space for commercial purposes, as you know. And it is still very much -- they are still required to operate within certain parameters, namely primarily daylight hours, 400 feet above ground level or above buildings, within visual line of sight.

好的。嗨，Austin。你也知道，昨天實施的 Part 107 規則讓人們更容易取得在國家空域中以商業目的操作無人航空系統的認證。不過仍然有相當多限制——他們仍必須在特定參數內操作，主要包括白天時段、距地面 400 英尺或高於建築物的高度，以及在目視視距（visual line of sight）範圍內。

And that is a really important development for the market because that is going to enable a wide range of applications that are localized in nature, whether they be for taking pictures or surveying localized infrastructure or crops and things of that nature. All of our pilots -- most of them are already licensed pilots within the AeroVironment organization, and all of our pilots are now working towards obtaining their certificates under these new rules.

這對市場而言是非常重要的發展，因為它將使各種在地化的應用成為可能，不論是拍照、勘測在地基礎設施、農作物等這類應用。我們所有的飛手——其中大多數在 AeroVironment 組織內本來就已是持照飛行員——現在也都在依照這些新規則取得證照。

In terms of our operations, we've already been operating under Section 333 exemptions, as well as operating under certificates of authorization with certain of our customers. So the Part 107 rules are helpful, but we have already been able to benefit from what we have already established from an operating perspective, and that helps us from the perspective of engineering and acceptance testing and also certain kinds of applications.

就我們的營運而言，我們先前已在 Section 333 豁免下運作，也曾針對部分客戶在授權證書（certificates of authorization）下運作。因此 Part 107 規則確實有幫助，但從營運角度來看，我們已能受益於既有建立的作業基礎；這也在工程、驗收測試以及某些類型的應用方面對我們有所助益。

We will be applying for waivers for extended visual line of sight operations and nighttime operations. And of course, that extended visual line of sight is not the same as beyond visual line of sight. It is probably a couple of miles range primarily, but that begins to open up the opportunity set for us and for our customers. So, we think it is all very favorable and very positive for the Business.

我們將申請延伸目視視距作業以及夜間作業的豁免（waivers）。當然，延伸目視視距不同於超視距（beyond visual line of sight）。它主要可能是幾英里的範圍，但這開始為我們與客戶打開更多機會。因此，我們認為這對業務而言都是非常有利且非常正面的。

In terms of milestones, as we have mentioned before, we're working with a number of early-adopter customers; Wahid said in his prepared comments that we're continuing to learn a great deal. We're continuing to refine our solution. He said earlier that, in prior calls, that we expect to introduce elements of our integrated solution this fiscal year. And we're very much focused on getting it right, such that it is going to really add value to customers' operations, as well as add value to our Business and our other stakeholders.

就里程碑而言，如我們先前提到的，我們正與多家早期採用者客戶合作；Wahid 在事先準備的評論中也提到，我們持續學到很多，也持續精進我們的解決方案。他先前在過往電話會議中說過，我們預期在本會計年度推出整合式解決方案的部分要素。我們非常專注把事情做對，讓它能真正為客戶的營運創造價值，同時也為我們的業務與其他利害關係人創造價值。

Okay. Just one quick follow-up -- Steve, you might be able to answer this or it might be a better question for Raymond. Just looking at the business model when tactical missile systems and the UAS begins to ramp, do you guys feel that could be accretive to margins? I'd just love to get a sense of how that will impact the Business model going forward.

好的。再追問一個很快的問題——Steve，你可能能回答，或這可能更適合問 Raymond。就商業模式而言，當戰術飛彈系統與 UAS 開始放量時，你們認為這會對毛利率有增益（accretive）嗎？我想了解這將如何影響未來的商業模式。

So, Austin, I will take that one. It's Wahid, again. Our historical gross margins has been quite healthy. And as our Business ramps up or stays the same, we generally think not only for FY17 but beyond FY17, we don't expect any major issues with our gross margins in general.

Austin，這題我來回答。我是 Wahid。過去我們的歷史毛利率一直相當健康。當我們的業務放量或維持相同規模時，一般而言，不僅是 FY17，甚至 FY17 之後，我們都不預期整體毛利率會出現任何重大問題。

What you saw -- the anomaly in Q1 was related primarily due to those four key drivers. Typically, it is a product mix issue that affects it. It's lower volume based on fixed costs, which essentially makes the overhead structure a little bit of a higher amount of absorption for a lower volume. We mentioned on our last quarter earnings call that we are incrementally investing in sustaining engineering this year, so we can keep up with the installed base. Lastly, this was a one-time warranty at an expense that we took on this quarter, which we believe that we have addressed the issue.

你在 Q1 看到的——那個異常——主要與四個關鍵驅動因素有關。通常是產品組合（product mix）問題所影響。其次是因固定成本造成的低出貨量效應，這會使得在較低出貨量下，間接費用結構的吸收（absorption）金額相對較高。我們在上一季的財報電話會議中提到，今年我們正逐步增加對維持性工程（sustaining engineering）的投資，以便跟上已安裝基礎（installed base）。最後，這一季我們認列了一筆一次性的保固費用（warranty expense），我們相信已經解決了該問題。

That is an anomaly, I refer to it. It should reflect back and bounce back for the FY17, and back to our historical levels minus the incremental investment in sustaining engineering that we are intentionally doing this year. So I do not see anything inconsistent with our historicals at a macro level on our gross margins, should our Business ramp up. Either it is tactical missile systems or small UAS or other products.

那是一個異常情況，我是這麼稱呼的。它應該會在 FY17 反映回來並回升，回到我們的歷史水準，扣除我們今年刻意進行、用於維持性工程（sustaining engineering）的額外投資。因此，若我們的業務開始放量，我不認為在總體層面上，我們的毛利率與歷史表現有任何不一致之處。不論是戰術飛彈系統、小型 UAS，或其他產品皆然。

Thank you. Next question is from the line of Howard Rubel of Jefferies.

謝謝。下一個問題來自 Jefferies 的 Howard Rubel。

Thank you very much. Wahid, I do want to follow up on this gross margin for a second. If we do the math, if I think I am correct, it is about a 50% incremental. So, as you look at mix or -- what in there was so dramatically different?

非常感謝。Wahid，我想再追問一下毛利率。如果我們算一下數字，如果我沒算錯，增量大約是 50%。所以，當你看產品組合或——其中到底是什麼因素造成如此顯著的差異？

Howard, I think Raymond is going to give you some comments on that.

Howard，我想 Raymond 會就此給你一些評論。

Yes, so I think as Wahid had mentioned, Howard, as we went through this quarter we did have the increase in our warranty-related costs for certain small UAS deliverables in the prior periods. That was about $1.7 million. We had that increase in engineering and technical analysis costs that Wahid had talked about from a sustaining perspective of about $1.5 million. Then you add into that our mix, as well as our fixed manufacturing costs being spread over a smaller base. When you take those things into account, that is really what drove the gross margin this quarter.

是的，我想如 Wahid 所提到的，Howard，我們在本季確實因先前期間某些小型 UAS 交付項目而增加了與保固相關的成本，約 170 萬美元。我們也有 Wahid 談到的、從維持性角度來看的工程與技術分析成本增加，約 150 萬美元。再加上我們的產品組合，以及固定製造成本分攤在較小的基礎上。把這些因素都納入考量後，這就是推動本季毛利率的主要原因。

All right, can we talk about revenues for half a second? We see inventories are up sequentially and you talked about missing sales somewhat. Can you elaborate a little bit on the recovery plan to get within the target range for the year?

好，我們能談一下營收嗎？我們看到庫存較前一季上升，而你也提到某種程度上少了些銷售。你能否更詳細說明一下復原計畫，以便在今年回到目標區間？

Sure. So Howard, I'll take that one. This is Wahid.

當然。Howard，這題我來回答。我是 Wahid。

So our revenue, I would say that we achieved our revenue based on what we provided in terms of the overall color and guidance in the last previous quarter. We said that one-third, two-third is two halves of our year, and a 40/60 split between first quarter and second quarter within the first half, which, $36 million, $36.2 million is really much in line with the math on that if you took our full-year guidance of $260 million to $280 million as your reference point.

就營收而言，我會說我們達成了我們在上一季所提供的整體說明與指引。我們說過全年分成上半年與下半年，約三分之一／三分之二；而在上半年內，第一季與第二季約為 40/60 的分配。以全年指引 2.6 億到 2.8 億美元作為參考點來計算，3,600 萬美元、3,620 萬美元其實與這個數學推算非常一致。

What we really fell a little bit short on was some of the bookings during first quarter, which we expected that did not occur during the first quarter as we expected it. And as a result of that, we expected a lower first quarter to begin with, and that basically is what we had planned to achieve and we had built for that. And in fact, we still feel confident that those orders are primarily a timing delay.

我們稍微不如預期的地方，主要是在第一季的一些接單（bookings），原本預期會在第一季發生，但並未如預期出現。因此，我們本來就預期第一季會較低，而這基本上就是我們計畫要達成、也據此做了產能與資源配置的水準。事實上，我們仍然有信心，這些訂單主要只是時點延後。

It is really hard for us to be able to predict the exact timing of those orders based on our quarter, our fiscal years, and our customers' budgeting process and their fiscal years. So, therefore, we expect to rebound. And for the full year, we will update you and we are still working hard to achieve the $260 million to $280 million revenue.

基於我們的季度與會計年度，以及客戶的預算流程與其會計年度，要精準預測這些訂單的確切時點非常困難。因此，我們預期會反彈。至於全年，我們會再更新你們，我們仍在努力達成 2.6 億到 2.8 億美元的營收。

Q4 now, because of the timing, does look larger than the previous years. There is still roughly about a one-third/two-thirds split between first half and second half. But because of the timing of Q1 for orders and bookings, now Q2 will be slightly lighter and our second half will be slightly bigger, which means that Q4 has a higher dollar amount associated with it.

目前第四季（Q4）因為時點因素，看起來會比以往年度更大。上半年與下半年之間仍大致維持約三分之一／三分之二的分配。但由於第一季訂單與接單的時點，現在第二季會稍微偏淡，而下半年會稍微更大，這也意味著第四季對應的金額會更高。

We are focused on this. This is part of our plan. We had planned for this at the beginning of the year, to the great extent that we could, and we do not have any data that suggests for us to change our plan any differently today. However, if anything changes, we will keep you updated.

我們正專注於此。這是我們計畫的一部分。我們在年初就已在能力所及的範圍內為此做了規劃，而目前我們沒有任何資料顯示需要在今天改變計畫。不過，如果有任何變化，我們會持續向各位更新。

We do have some significant orders that we expect to book in this quarter, during second quarter, which will -- which it is, by the way, on track. And the timing is the one that we always are challenged with and it is hard to predict. So as updates become available, we will let you know. But in general, our year is -- we expect to rebound -- recover from this throughout this amount of time.

我們確實有一些重大訂單，預期會在本季、也就是第二季入帳（book），而且順帶一提，目前進度是符合預期的。時點一直是我們面臨的挑戰，也很難預測。因此，當有更新可提供時，我們會告訴各位。但整體而言，我們預期今年會在這段期間內反彈——從這個狀況中恢復。

Raymond, do you want to add anything to it?

Raymond，你要補充什麼嗎？

Yes, and, Howard, on the inventory front, our inventory is up about $6.6 million for the quarter. That is based upon strategic plans that we have in place, bringing in long lead-time items so that we can have the necessary raw materials and with in-house in order to fulfill the anticipated orders for the second half of the year.

是的，Howard，關於庫存方面，我們本季庫存增加約 660 萬美元。這是基於我們既定的策略性計畫，提前採購長交期（long lead-time）項目，以便我們能備妥必要的原物料並在內部到位，來履行下半年預期的訂單。

I just want one small follow-up on export licenses that you alluded to. Is that part of the challenge?

我想就你提到的出口許可證再追問一個小問題。那是否也是挑戰的一部分？

Howard, great question. This is Wahid.

Howard，問得很好。我是 Wahid。

Last year, as you saw, our international sales was quite significantly up. We went from the $20 millions up to the $70 million range from FY15 to FY16. We expect FY17 to be as strong, if not stronger, and so, therefore, there is always risk.

去年如你所見，我們的國際銷售大幅成長。我們從 FY15 的約 2,000 萬美元提升到 FY16 的約 7,000 萬美元區間。我們預期 FY17 會同樣強勁，甚至更強，因此，這裡面一直都存在風險。

All of our products for a small UAS that we ship internationally to date require export licenses. And we do ship to countries that are -- and that we have prospects and customers in the Middle East and Europe and Asia, so therefore, that is always a risk factor within our plans.

截至目前，我們所有國際出貨的小型 UAS 產品都需要出口許可證。我們也出貨到——而且我們在中東、歐洲與亞洲都有潛在客戶與客戶，因此，這在我們的計畫中一直都是一項風險因素。

And the timing of that is unpredictable. We have had experiences both on very short turnarounds and also very long turnarounds.

而其時點是不可預測的。我們曾經遇過非常短的核准週期，也遇過非常長的核准週期。

Depending on -- we understand the process as far as how it works and what it should be doing. We have dedicated teams that focuses on that, and we track that on a regular basis. We have processes internally that we work on that.

至於——我們了解流程如何運作，以及它應該如何進行。我們有專責團隊聚焦於此，並定期追蹤。我們內部也有相關流程來處理。

However, the way the process works from the State Department's perspective, it's something that there is no specific guidance or commitment given in terms of a predictable timing of how long it takes. So, yes, that is a challenge and an issue that has been ongoing, and continues to be a challenge for us or an obstacle to overcome as we go forward.

然而，從國務院的角度來看，流程的運作方式是：在需要多久能完成這件事上，並沒有任何具體指引或承諾可提供可預測的時程。因此，是的，這是一項挑戰，也是一直存在的議題，並且在我們往前推進時，仍將是我們需要克服的挑戰或障礙。

Thank you. Our next question is from the line of Michael Ciarmoli of KeyBanc Capital Markets.

謝謝。下一個問題來自 KeyBanc Capital Markets 的 Michael Ciarmoli。

Hello. Good evening, guys. Thanks for taking my questions.

你好，晚上好，各位。謝謝回答我的問題。

Just one on maybe the visibility or just the model in general -- your service revenues this quarter were greater than the product revenues, and I think that is the first time that's occurred since maybe FY12. How are you guys thinking about that internally? I mean, is that a function of just a lack of new wins, or should we be concerned at all that the product revenues are not maybe growing as fast, and that this is becoming more of a service-based model, or is that the intent to shift this more towards the services? Or just if you can provide us any color there.

我有一題關於能見度或整體模式——你們本季的服務營收高於產品營收，我認為這可能是自 FY12 以來第一次發生。你們內部如何看待這件事？我的意思是，這只是因為缺乏新的得標案（new wins）所致嗎？或者我們是否應該擔心產品營收成長不夠快，導致模式更偏向服務？還是你們本來就打算把重心更多轉向服務？如果你能提供一些說明就太好了。

Sure, Michael, it is a great question. In a nutshell, I would not read into this too much in terms of the fundamentals of our Business. It is purely what I refer to as a timing effect -- timing of orders and timing of opportunities.

當然，Michael，這是個很好的問題。簡而言之，我不會從中過度解讀我們業務基本面。這純粹是我所稱的時點效應——訂單的時點與機會的時點。

In any given year, the past five years that I have been here and even before that within the Company, we have always had a certain percentage of our Business that is really related to what we refer to as customer funded R&D and/or services, project work that we do for various customers, primarily on the defense side, but we do a little bit of it also on the commercial EES side as well. That is a business that customers pay for based on a project and it's got a duration. It's more what I call predictable and reliable in terms of its execution and timing.

在任何一年，過去我在這裡的五年，甚至在此之前公司內部也是如此，我們的業務中一直有一定比例與我們所稱的客戶出資研發（customer funded R&D）和／或服務相關，也就是我們為各類客戶所做的專案工作，主要在國防端，但在商用 EES 端也有少量。這類業務是客戶依專案付費，且有一定期間。就執行與時點而言，我稱之為更可預測、也更可靠。

Product revenue is primarily based on opportunities and engagements where we have with different customers. And because the lumps of those opportunities are significant that we work on with various countries and various customers domestically, the timing of that at any given moment varies and changes. So the lens by which you look at those two services -- let's say at the end of Q1, does show that services and product revenue were out of line from historical levels. However, we expect historicals to get back to the normal averages of the years before, and it is just purely a timing issue related to first quarter. That is about it.

產品營收主要是基於我們與不同客戶所擁有的商機與合作案。由於我們在各國以及國內不同客戶所承作的這些商機金額相當可觀，因此在任何特定時點的認列時機都會有所不同並且變動。所以，從這兩項服務的角度來看——例如在第一季末——確實顯示服務與產品營收相較於歷史水準有所偏離。然而，我們預期歷史表現會回到過去幾年的正常平均水準，這純粹是與第一季相關的時點問題。大概就是這樣。

Okay. And then just back to the full-year plan, did you guys have any internal discussion about narrowing the guidance down or lowering it? You've obviously got the export issues, timing. It looks like EES now, a down year-over-year quarter. We may have a continuing resolution. Amid all that, there is still a good level of confidence, even though the visibility is at 51%?

好的。那再回到全年計畫，你們內部是否有討論過要把指引區間縮窄或下修？你們顯然面臨出口問題、時點因素。看起來 EES 現在也出現年對年下滑的一季。我們可能還會遇到持續決議（continuing resolution）。在這些情況之下，即使能見度只有 51%，你們仍然有相當程度的信心嗎？

So, Michael, the shorter answer is we have discussed this internally in great detail. We have a very disciplined process by which we look at our annual operating plan. We look at our order timing, our capture activities, our opportunities. And we look at it from the ups and downs, pluses and minuses, and all the interesting parts that goes along with it.

所以，Michael，簡短的回答是：我們已在內部非常詳細地討論過。我們有一套非常嚴謹的流程來檢視年度營運計畫。我們會看訂單時點、我們的標案/贏案活動（capture activities）、我們的商機。我們也會從上上下下、加加減減，以及所有伴隨而來的各種因素來評估。

As I shared in my prepared remarks and as Raymond shared with you, our Q1 on revenue was pretty much in line with what we expected. Our profitability in Q1, also we expected to be lower because of the volume primarily, but it was additionally incrementally lower because of the three or four items that we went through and Raymond outlined to you in his remarks.

如同我在事先準備的發言中分享的，以及 Raymond 也向各位說明的，我們第一季的營收基本上符合我們的預期。我們第一季的獲利能力也如我們所預期會較低，主要是因為量的因素，但此外也因為我們討論過的三到四個項目而進一步略低，而 Raymond 也在他的發言中向各位概述了這些項目。

So today, based on what we know, we have looked at our plans, we don't have enough or more information to suggest that we need to change our guidance. So we are, therefore, stating with our guidance.

因此，今天基於我們所掌握的資訊，我們已檢視了我們的計畫，並沒有足夠或更多的資訊顯示我們需要調整指引。所以，我們因此維持既有指引。

We are giving you all the, what I call the color that we have that shows the issues and challenges, the ups and downs that are within our Business, which, by the way, since the five years that I've been here is always a case with our Business any quarter, any given time. So we are working hard to achieve our $260 million to $280 million in revenue guidance, and we are also focused on the EPS of $0.20 to $0.35.

我們向各位提供我所稱的所有「補充說明」（color），以呈現我們業務中存在的問題與挑戰、起伏與變動。順帶一提，自從我在這裡的五年以來，這一直是我們業務在任何季度、任何時間點的常態。因此，我們正努力達成 2.6 億至 2.8 億美元的營收指引，同時也聚焦於每股盈餘（EPS）0.20 至 0.35 美元。

Should any of those variables that I mentioned earlier change, whether positive or negative, we will update you in our second-quarter results. We do expect significant orders to be booked in the second quarter, which will really what I call make the visibility and the runway for the remainder of the year much more clear. So, unfortunately, this is just the first quarter and the amount of data that we have today is such that it suggests that we are staying with our current guidance. And we'll update you as things progress further in the future.

若我先前提到的任何變數出現變化，不論是正面或負面，我們都會在第二季結果中向各位更新。我們確實預期第二季會有可觀的訂單入帳，這將真正使我所說的能見度以及今年剩餘期間的「跑道」更加清晰。所以，很遺憾，這只是第一季，而我們目前掌握的資料量顯示我們將維持現行指引。隨著未來進一步發展，我們也會持續向各位更新。

(Operator Instructions)

（接線員指示）

Joseph DeNardi of Stifel.

Stifel 的 Joseph DeNardi。

Thanks. Wahid, just to clarify your answer to -- your response to Howard's question about international -- you said it went from $20 million to $70 million last year, and you expect similar strength this year. Does that mean it goes to $120 million or it just stays at $70 million?

謝謝。Wahid，我想釐清一下你對 Howard 關於國際業務問題的回答——你說去年從 2,000 萬美元成長到 7,000 萬美元，而且你預期今年也會有類似的強勁表現。這是否表示會到 1.2 億美元，還是只是維持在 7,000 萬美元？

Joe, we do not break down specific revenue guidance by product line or by geographies. What I said is that, yes, we grew significantly last year. We expect FY17 to be similar dollar amounts as FY16, not necessarily similar growth levels.

Joe，我們不會按產品線或地理區域拆分提供具體的營收指引。我所說的是：是的，我們去年大幅成長。我們預期 2017 財年（FY17）的美元金額會與 2016 財年（FY16）相近，但不一定會有相同的成長幅度。

So I would just say that it is still a significant part of our Business. We have lots of opportunities that we are pursuing and we engage in, but it is really based on timing. All of these things that I have described that it really makes the lenses of our Business from different lenses look differently, it's primarily related to timing. Our win rate is pretty high, and it is the first quarter of the year.

所以我會說，這仍然是我們業務中相當重要的一部分。我們有很多正在追求與投入的商機，但這真的取決於時點。我所描述的所有這些事情，之所以會讓從不同角度看我們的業務呈現不同樣貌，主要都與時點有關。我們的得標率相當高，而現在也才是一年的第一季。

Yes. That is very helpful. Thank you.

是的。這非常有幫助。謝謝。

On Global Observer again, I think kind of at the end of last year on the earnings call then, Tim had mentioned that maybe there would be some customer decisions on Geo in the 12- to 18-month time frame, and it sounded like there were some specific customer discussions ongoing at that point that led to that visibility. Can you just help us out with -- have any customers kind of dropped out of the opportunity set at this point, or is that 12- to 18-month horizon just gotten pushed out a little bit?

再談 Global Observer，我記得在去年年底的財報電話會議上，Tim 曾提到在 12 到 18 個月的時間範圍內，客戶可能會對 Geo 做出一些決策，當時聽起來似乎有一些特定的客戶討論正在進行，才會有那樣的能見度。你能否協助我們了解——目前是否有任何客戶已經退出這些商機範圍，或者只是那個 12 到 18 個月的時程被稍微往後推了？

I can't comment on specific customer engagements, Joe, unfortunately, due to the constraints we have with our customers primarily, as well as the market issues. But I would say, of all of our Business, I just mentioned earlier that it is really hard to predict the timing. Large airplanes and high altitude airplanes, especially a Global Observer type airplane, is even more difficult. So, I could not predict that any better today than I was the last month or two.

Joe，很遺憾，我無法評論特定的客戶合作案，主要是因為我們與客戶之間的限制，以及市場方面的因素。但我會說，就我們所有業務而言，我先前也提到過，時點真的很難預測。大型飛機與高空飛機，尤其是像 Global Observer 這類型的飛機，更是困難。因此，我今天也無法比一兩個月前更好地預測。

We will keep you updated. If there is significant meaningful news or progress or negative news, we will be the first to tell you. At this point, we are engaged with interested parties. At any given time, there are always pluses and minuses, and it is one versus the other, and it is hard to give you any more clarity than that.

我們會持續向各位更新。如果有重大且有意義的消息、進展或負面消息，我們會第一時間告訴各位。目前，我們正與有興趣的各方保持接觸。在任何時點總是有利有弊，彼此權衡，而要提供比這更清楚的說明確實很難。

Just to add a note to that, Joe, as we stated in prior quarters, there is really no investment on the R&D side in Global Observer at this point. It's really focused on business development. From a very minor investment level to keep what could potentially be a very large opportunity, still on the radar screen, we think that the trade-off continues to make sense.

再補充一點，Joe，正如我們在前幾季所說，目前在 Global Observer 的研發（R&D）方面其實沒有投入。重點主要放在業務開發。以非常小的投資水準，讓一個可能非常龐大的商機仍然保持在雷達上，我們認為這樣的取捨仍然合理。

Thank you. That does conclude our Q&A session for today. I would like to turn the call back over to Mr. Steven Gitlin for any further remarks.

謝謝。今天的問答環節到此結束。我想把電話交回給 Steven Gitlin 先生，請他做進一步的結語。

Thanks very much, Christy, and thank you all for your attention and 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 at AVInc.com.

非常感謝你，Christy，也感謝各位對 AeroVironment 的關注與興趣。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 AVInc.com 上找到。

We look forward to speaking with you again following next quarter's results. Have a good day.

我們期待在下個季度的業績公布後再次與各位交流。祝各位有美好的一天。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a great day.

各位女士、先生，感謝您參與今天的會議。今天的議程到此結束。您現在可以掛線。各位，祝您有美好的一天。