AeroVironment, Inc. (AVAV) 2017 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the AeroVironment, Incorporated second-quarter FY17 earnings conference call.

各位女士、各位先生，大家好。歡迎參加 AeroVironment, Incorporated 2017 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 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. 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：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 Gitlin 先生。先生，請開始。

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

謝謝你，Andrew，也歡迎各位參加我們 2016 財年第二季財報電話會議。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，並可能包含例如 believe、anticipate、expect、estimate、intend、project、plan 等字眼，或具有相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，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, risks related to our international business, including compliance with export control laws, potential need for changes in our long-term strategy in response to future developments, the extensive regulatory requirements governing our contracts with the 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計畫的資金可得性；政府支出時點及／或金額的變動；與我們國際業務相關的風險（包括遵循出口管制法規）；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、業務與聲譽造成的後果；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；未能保持市場創新者地位並創造新的市場機會；包括零組件與原物料在內的重大營運費用變動；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, December 6, 2016. 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. We will now begin with remarks from Wahid Nawabi. Wahid?

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提交的報告。本次財報電話會議內容包含具時效性的資訊，僅在今日（2016 年 12 月 6 日）為準確。公司不承擔對我們發言中所包含之陳述作任何修訂，或為反映本次電話會議後發生的事件或情況而更新之義務。接下來由 Wahid Nawabi 發表談話。Wahid？

Thanks, Steve, and good afternoon. Our three messages today are as follows. First, we're on track for our stated FY17 plan and objectives. Second, strong order flow during the second quarter supports our plans for the remainder of FY17. And third, we're making significant progress on our key strategic milestones designed to drive long-term value creation.

謝謝你，Steve，各位下午好。我們今天有三點重點訊息。第一，我們正按計畫達成既定的 2017 財年計畫與目標。第二，第二季強勁的訂單流入支持我們對 2017 財年剩餘期間的規劃。第三，我們在關鍵策略里程碑上取得顯著進展，這些里程碑旨在推動長期價值創造。

On today's call, I will review our second-quarter financial performance and then provide an update on our FY17 milestones and objectives. Raymond Cook will then provide a detailed financial review, before I discuss our reaffirmed outlook for the year. Following our prepared remarks, Raymond, Steve, and I will take your questions.

在今天的電話會議中，我將回顧第二季的財務表現，並更新我們 2017 財年的里程碑與目標。接著 Raymond Cook 將提供更詳細的財務回顧，之後我會討論我們對全年展望的重申。在我們的準備發言之後，Raymond、Steve 和我將回答各位的提問。

Now a quick summary of second quarter financial performance. As we expected, we made great progress on our bookings plan during the quarter, increasing funded backlog by 60% sequentially, to $119.6 million. Second-quarter revenue of $50.1 million produced total first half revenue of $86.3 million, which represents 32% of the midpoint of our guidance range. Last quarter, we noted that we expected the first half to represent slightly less than 33% of full year revenue, and that's precisely the result we achieved.

現在簡要總結第二季財務表現。如我們所預期，本季在訂單（bookings）計畫方面取得重大進展，已獲資金支持的在手訂單（funded backlog）較前一季增加 60%，達到 1.196 億美元。第二季營收為 5,010 萬美元，使上半年總營收達到 8,630 萬美元，約為我們指引區間中點的 32%。上季我們提到，預期上半年將略低於全年營收的 33%，而我們達成的結果正是如此。

Profitability was lower than the prior year. As anticipated, and outlined last quarter, the decline was due primarily to two factors. First, the second quarter of FY16 included a $3.5 million reserve reversal for the settlement of prior year government incurred cost audits. Second, this fiscal year's increased sustaining and unit costs, which consist of activity associated with supporting our existing products, are included in our cost of sales. These increased costs, combined with a lower sales volume, reduced year-over-year gross margin in the second quarter. The net result of lower year-over-year revenue and lower gross margin was a loss per share of $0.18. Our strong funded backlog in the quarter demonstrates continued demand for our solutions and improves our visibility for the full year to about 77%, as Raymond will detail shortly.

獲利能力較去年同期下降。如預期且如上季所述，下降主要來自兩項因素。第一，2016 財年第二季包含 350 萬美元的準備金回轉，係因結清前一年度政府已發生成本稽核（incurred cost audits）。第二，本會計年度較高的維持性（sustaining）與單位成本（unit costs）——亦即與支援既有產品相關的活動——被計入銷貨成本。這些成本上升，加上銷售量較低，使第二季的毛利率較去年同期下降。由於營收年減與毛利率下降的綜合影響，每股虧損為 0.18 美元。本季強勁的已獲資金支持在手訂單顯示市場對我們解決方案的持續需求，並將我們對全年能見度提升至約 77%，Raymond 稍後將進一步說明。

Now let's review our progress in the second quarter by revisiting our main milestones for the year. In the domestic defense market, AeroVironment's small UAS remains the front line solution for American troops to acquire situational awareness whenever and wherever they need it. This results in the Pentagon's procurement and regular use of thousands of AeroVironment systems.

現在讓我們回顧第二季的進展，並重新檢視本年度的主要里程碑。在美國國內國防市場，AeroVironment 的小型無人航空系統（small UAS）仍是美軍在任何時間、任何地點取得態勢感知的前線解決方案。這使五角大廈採購並經常使用數千套 AeroVironment 系統。

Most US military services now possess the quantity of first generation small UAS they believe they need to successfully execute their missions. However, the US Navy is at a very early stage of small UAS adoption. The Navy has procured and deployed Puma systems on their coastal patrol craft which number more than a dozen. In August, we announced that a Navy destroyer had deployed with our Puma AE shipboard precision landing system. This demonstrates another step toward the adoption of Puma systems on the Navy's more than 60 guided missile destroyers. We continue to work collaboratively toward increased naval adoption of Puma AE and our precision landing system.

目前多數美軍軍種已擁有其認為足以成功執行任務的第一代小型無人航空系統數量。然而，美國海軍在採用小型無人航空系統方面仍處於非常早期的階段。海軍已在其沿岸巡邏艦艇上採購並部署 Puma 系統，該類艦艇數量超過十餘艘。8 月，我們宣布一艘海軍驅逐艦已部署我們的 Puma AE 艦載精準降落系統。這顯示海軍在其 60 多艘飛彈驅逐艦上採用 Puma 系統又向前邁進一步。我們將持續以合作方式推動海軍更廣泛採用 Puma AE 與我們的精準降落系統。

In addition to new system sales, we continue to provide spare parts to our domestic defense customers to support our large installed base of small UAS and we look forward to new procurement opportunities with the Army, including the soldier [bone stencil] program. We recently received an order for 30 of our Snipe unmanned aircraft systems for early evaluation. Our position in the domestic defense market remains strong.

除新系統銷售外，我們也持續向國內國防客戶提供備品，以支援我們龐大的小型無人航空系統既有裝機基礎（installed base），並期待與陸軍出現新的採購機會，包括 soldier [bone stencil] 計畫。我們近期收到一筆訂單，採購 30 套 Snipe 無人航空系統以進行早期評估。我們在國內國防市場的地位仍然穩固。

The international market for our small UAS continues to expand and we continue to identify opportunities to grow our business with existing customers and win new customers. The international market is about a decade behind the US DOD in small UAS adoption. We are seeing a similar adoption pattern emerging from a number of international customers as compared to the US DOD, in that initial procurement tend to be smaller in size and subsequent (inaudible) procurements grow as customers adopt and deploy our small UAS more broadly across their defense organizations.

我們小型無人航空系統的國際市場持續擴大，我們也持續辨識機會，與既有客戶擴大業務並贏得新客戶。國際市場在小型無人航空系統的採用上約落後美國國防部（US DOD）十年。我們看到，若干國際客戶正出現與美國國防部相似的採用模式：初期採購規模往往較小，而後續（聽不清）採購會隨著客戶在其國防組織中更廣泛採用與部署我們的小型無人航空系統而成長。

Our position as the leading supplier to the US DOD generates international interest, as customers recognize the unique value our solutions offer. In addition to our uniquely valuable family of systems, we offer a differentiated customer support solution, with comprehensive spares, training and logistics services. This is particularly important to our international customers, as we see their very high ops tempo translating into heavy and continuous use of our UAS.

我們作為美國國防部的領先供應商之地位帶來國際關注，因為客戶認可我們解決方案所提供的獨特價值。除我們具獨特價值的系統家族外，我們亦提供差異化的客戶支援方案，包含完整的備品、訓練與後勤服務。這對國際客戶尤其重要，因為我們看到他們非常高的作業節奏（ops tempo）轉化為對我們無人航空系統的高強度且持續使用。

We have now grown our international UAS footprint to include more than 35 Allied nations in an expanding geographic scope that spans from Europe to the Middle East to Central Asia and to Australia. For example, in September we announced a teaming relationship with our Australian partner XTEK and with Sentient and GD Mediaware to pursue small UAS opportunities with the Australian Army and Special Forces.

我們的國際無人航空系統版圖現已擴展至 35 個以上的盟國，且地理範圍持續擴大，涵蓋歐洲、中東、中亞以及澳洲。例如，9 月我們宣布與澳洲合作夥伴 XTEK，以及 Sentient 與 GD Mediaware 建立團隊合作關係，以共同爭取澳洲陸軍與特種部隊的小型無人航空系統機會。

In October, we announced that the Netherlands had awarded us a $10.3 million contract for Raven digital upgrades, Puma AE and Wasp AE systems, becoming a full family of systems customer, having first purchased Raven systems in 2008. Strong international demand from Allied nations remains a clear and ongoing opportunity for us, consistent with our message throughout last and this fiscal year.

10 月，我們宣布荷蘭已授予我們一份 1,030 萬美元的合約，用於 Raven 數位升級、Puma AE 與 Wasp AE 系統，並成為全系列系統客戶；其於 2008 年首次採購 Raven 系統。盟國強勁的國際需求，對我們而言仍是明確且持續的機會，這也與我們在本會計年度及上一會計年度一貫傳達的訊息一致。

The Army's frequency relocation project for small UAS remains a key FY17 objective for us. The Army very recently released its request for proposal for this project, and we intend to submit our proposal. We look forward to providing you more information when we are able to.

陸軍針對小型 UAS 的頻率遷移專案，仍是我們 FY17 的關鍵目標。陸軍近期剛發布該專案的投標徵求書（RFP），我們計畫提交提案。我們期待在適當時機能提供您更多資訊。

Our tactical missile systems business continues to grow at a healthy pace. For the first half of FY17, tactical missile systems order have tripled and TMS revenue has nearly doubled compared to the same period last year. We have once again created an entirely new market that we now lead. Within our tactical missile systems portfolio, we now have a growing family of systems, with four product variants either in production or moving toward production. Three of our FY17 objectives relate to continued progress with TMS, namely, Switchblade, Blackwing, and our other Switchblade variants.

我們的戰術飛彈系統（TMS）業務持續以健康的速度成長。在 FY17 上半年，戰術飛彈系統訂單較去年同期成長三倍，TMS 營收也幾乎倍增。我們再次開創了一個全新的市場，且目前由我們領先。在我們的戰術飛彈系統產品組合中，我們現已擁有一個持續擴大的系統家族，四種產品變體正處於量產中或正邁向量產。FY17 的三項目標與 TMS 的持續進展相關，分別是 Switchblade、Blackwing，以及我們其他 Switchblade 變體。

It is important to note that in the case of our TMS solution, we typically co-invest in the development of these products alongside customer funded R&D. Our investments in TMS are paying off. We achieved a key milestone for Switchblade when we announced a new $22.8 million contract for the Army for Block 10C system in October.

需要特別指出的是，就我們的 TMS 解決方案而言，我們通常會與客戶出資的研發（R&D）共同投資開發這些產品。我們在 TMS 的投資正在獲得回報。10 月我們宣布與陸軍簽訂一份新的 2,280 萬美元合約，採購 Block 10C 系統，這使我們在 Switchblade 上達成一項關鍵里程碑。

In addition to other improvements, the Block 10C version incorporates our digital data link, improving the security of communications and enabling operations of a larger number of Switchblades in a geographic area. The government funded this order through a Joint Urgent Operational Needs Statement, or JUON, which requires high level review support for approval.

除其他改良外，Block 10C 版本納入我們的數位資料鏈路，提升通訊安全性，並使在同一地理區域內可操作更多數量的 Switchblade。政府透過「聯合緊急作戰需求聲明」（Joint Urgent Operational Needs Statement，JUON）為此訂單提供資金；該機制在核准時需要高層級審查支持。

We are committed to continuous innovation, as evidenced by our recently introduced multi-pack launcher for Switchblade. The multi-pack launcher allows troops in forward operating bases to remain in protective structures while they launch and control Switchblade rounds remotely.

我們致力於持續創新，近期推出的 Switchblade 多聯裝發射器即為明證。多聯裝發射器讓前進作戰基地的部隊能留在防護結構內，同時以遠端方式發射並控制 Switchblade 彈體。

Another positive indication of strong customer demand for LMAMs appeared in the DOD's overseas contingency operations budget amendment, published in November. This amendment included a $46.5 million increase in funding for replenishment and fielding of LMAMs. This is another key objective that we anticipated, worked towards, and are making solid progress on.

在國防部（DOD）11 月公布的海外應急作戰（OCO）預算修正案中，也出現了另一項顯示 LMAM 強勁客戶需求的正面訊號。該修正案包含增加 4,650 萬美元資金，用於 LMAM 的補充與部署。這是我們預期、努力推進且目前正穩健取得進展的另一項關鍵目標。

Beyond LMAMs, an additional $226.7 million of funding appeared in this budget amendment for counter unmanned aerial systems, or counter UAS development, testing, integration, procurement, and fielding. Counter UAS is a high priority area in which we are continuously engaged with customers at high levels and offer compelling capabilities. We are making great progress with our multiple Switchblade variants, moving toward a family of tactical missile systems that can address an expanding market of opportunities.

除 LMAM 之外，該預算修正案亦新增 2 億 2,670 萬美元資金，用於反無人航空系統（counter UAS）的研發、測試、整合、採購與部署。反 UAS 是高度優先的領域，我們持續在高層級與客戶互動，並提供具吸引力的能力。我們在多種 Switchblade 變體上進展良好，正朝向建立一個可因應不斷擴大的市場機會之戰術飛彈系統家族邁進。

One of our TMS variants, Blackwing, continues to generate interest within the US Navy for procurement and deployment on submarines. Blackwing gives submarine commanders the ability to see far beyond periscope line of sight; and in September, we announced a successful demonstration of Blackwing's ability to link manned submarines with unmanned underwater vehicles and manned surface vessels to establish cross domain command, control and communication. This exploitation of Blackwing's valuable vantage points and its digital data link represents yet another important capability for enabling for submarines and naval fleets.

我們的其中一種 TMS 變體 Blackwing，持續在美國海軍內部引發採購與於潛艦部署的興趣。Blackwing 讓潛艦指揮官能看見遠超過潛望鏡視線範圍；而在 9 月，我們宣布成功展示 Blackwing 透過連結載人潛艦、無人水下載具與載人水面艦艇，建立跨域指揮、控制與通訊的能力。這種對 Blackwing 有利觀測位置及其數位資料鏈路的運用，代表另一項重要能力，可用於強化潛艦與海軍艦隊的作戰效能。

Let's shift now to our commercial initiatives and progress. We have received many requests for more details on our commercial market development. Having unveiled our solution in mid-November, we can finally discuss this opportunity in greater detail and share our excitement.

接下來讓我們轉向商業計畫與進展。我們收到許多要求，希望提供更多關於商業市場開發的細節。由於我們在 11 月中旬揭露了我們的解決方案，我們終於可以更深入地討論這個機會，並分享我們的興奮之情。

We officially unveiled what we believe is the first and only end-to-end commercial drone information solution to a strong, positive reception. This compelling solution, the result of our investments in hardware, software, and systems, includes a revolutionary drone, an integrated sensor suite, a data analytics platform, and turnkey services. During our extensive work with early adopters in agriculture and other industries over the past several years, we learned a great deal about what these customers need to help them succeed.

我們正式揭露了我們相信是首個且唯一的端到端商用無人機資訊解決方案，並獲得強烈且正面的回響。這項具吸引力的解決方案，是我們在硬體、軟體與系統投資的成果，包含一款革命性的無人機、整合式感測器套件、資料分析平台，以及交鑰匙服務。在過去數年與農業及其他產業的早期採用者進行大量合作的過程中，我們對這些客戶為了成功所需要的要素有了深刻理解。

Like our military customers before them, commercial customers need real-time access to specific information in order to make better decisions. They know that a solution that delivers this information has to be reliable, easy-to-use, and effective. In other words, it needs to operate in the harsh environments that farmers, energy companies and many others deal with day in and day out.

如同先前的軍方客戶，商業客戶也需要即時取得特定資訊，以做出更好的決策。他們知道，能提供這些資訊的解決方案必須可靠、易用且有效。換言之，它必須能在農民、能源公司及許多其他客戶日復一日面對的嚴苛環境中運作。

Many of these enterprise customers have already tried hobby drones and realized quickly, toys are not designed for the real word environment in which they operate. AeroVironment is uniquely capable of developing and delivering this type of solution to commercial customers, drones that operate easily, reliably, and safely in harsh environments. The customers we work with realize that drone-based solutions simply have to work, because their business will depend on it. We designed our commercial information solution specifically for these types of customers.

許多企業客戶已嘗試過消費級（嗜好型）無人機，並很快意識到：玩具並非為其實際運作的真實環境而設計。AeroVironment 具備獨特能力，能為商業客戶開發並交付此類解決方案——能在嚴苛環境中輕鬆、可靠且安全運作的無人機。我們合作的客戶明白，基於無人機的解決方案必須確實可用，因為他們的業務將仰賴它。我們的商業資訊解決方案正是為這類客戶量身打造。

The new Quantix drone is a hybrid vertical takeoff and landing and horizontal flight system with integrated RGB and multi-spectral sensors. The reason we selected this hybrid configuration is because it enables Quantix to be incredibly easy to use, to take off and land gently in a single location, and to collect high-resolution color and multi spectral imagery for more than 400 acres in a 45-minute flight. What's more, customers can view imagery immediately after the Quantix drone completes its mission and lands.

全新的 Quantix 無人機是一套混合式垂直起降與水平飛行系統，並整合 RGB 與多光譜感測器。我們選擇此混合配置的原因在於，它讓 Quantix 極其易用，能在單一地點平穩起降，並在 45 分鐘飛行中為超過 400 英畝的範圍收集高解析度彩色與多光譜影像。此外，客戶可在 Quantix 完成任務並降落後立即查看影像。

Our AV decision support system, or DSS, ingests the data collected by Quantix, then processes it in the cloud, providing a number of analytics and data products, which further help customers gain a better understanding of their crops or infrastructure; all of this through our robust and secure web platform.

我們的 AV 決策支援系統（Decision Support System，DSS）會匯入 Quantix 所蒐集的資料，並在雲端進行處理，提供多種分析與資料產品，進一步協助客戶更深入了解其作物或基礎設施；所有這些都透過我們強健且安全的網路平台完成。

We think Quantix and [AVD Assess] could revolutionize crop imaging in agriculture and infrastructure surveying in multiple other industries, the way our small UAS revolutionized the battlefield. We will begin taking preorders early in 2017 and intend to start shipping product in spring, at which point we will be able to provide an update on the market's reception. For now, we have seen a surge of interest in our commercial solution and believe it can help an entirely new set of AeroVironment customers proceed with certainty.

我們認為 Quantix 與 [AVD Assess] 可能會以我們的小型 UAS 革新戰場的方式，革新農業作物影像與多個其他產業的基礎設施勘測。我們將於 2017 年初開始接受預購，並計畫於春季開始出貨；屆時我們將能就市場反應提供更新。目前我們已看到市場對我們商業解決方案的興趣激增，並相信它能協助一批全新的 AeroVironment 客戶更有把握地推進其決策與行動。

Moving to our EES business, global auto makers continue to view AeroVironment as the premier residential charging provider in the industry, and I'm proud to cite two important recent achievements. First, today we announced that General Motors selected our charging system as the official residential charging solution for its highly anticipated Chevy Volt EV. General Motors will include our charger as optional or dealer sold equipment and will incorporate the cost of the charger into the vehicle's lease.

接著談到我們的 EES 業務，全球汽車製造商持續將 AeroVironment 視為業界首屈一指的家用充電供應商；我也很自豪地提出兩項近期重要成果。第一，今天我們宣布通用汽車（General Motors）選擇我們的充電系統，作為其備受期待的 Chevy Volt 電動車（EV）的官方家用充電解決方案。通用汽車將把我們的充電器作為選配或由經銷商銷售的設備，並將充電器成本納入車輛租賃費用中。

Second, a major European automaker has selected AeroVironment for a sole source multi-year contract to design, develop, and deliver residential chargers for distribution with their plug-in vehicles globally. This represents our first significant expansion into European and Chinese markets, and we plan to begin delivering products fully qualified for local requirements of these markets in mid 2017.

第二，一家主要的歐洲汽車製造商已選擇 AeroVironment，簽訂一份單一來源（sole source）的多年期合約，用於設計、開發並交付家用充電器，並隨其插電式車款在全球進行配套發放。這代表我們首次大幅擴展至歐洲與中國市場；我們計畫於 2017 年年中開始交付完全符合這些市場在地要求之合格產品。

Nine global auto OEMs have now chosen AeroVironment for home charging solution, reflecting the confidence automakers place in the safety, reliability, and effectiveness of our EV charging products. In total, we have now deployed more than 40,000 level 2 chargers. We're also seeing increased interest in our EV test systems after several years of low demand. We believe this reflects a global increase in electric vehicle battery pack investments and development activity.

目前已有 9 家全球汽車 OEM 選擇 AeroVironment 的家用充電解決方案，反映汽車製造商對我們 EV 充電產品之安全性、可靠性與有效性的信心。累計而言，我們已部署超過 40,000 台二級（Level 2）充電器。在經歷數年需求低迷後，我們也看到市場對 EV 測試系統的興趣增加。我們相信這反映全球對電動車電池組投資與開發活動的提升。

Virtually every Asian and North American firm engaged in large-scale battery pack development relies on AeroVironment test systems. In EV charging, EV test and industrial EV charging, EES remains very well-positioned to facilitate the broad and global transitions to electric propulsion technology. Now Raymond will discuss second quarter financial results. Raymond?

幾乎所有從事大規模電池組開發的亞洲與北美公司，都仰賴 AeroVironment 的測試系統。在 EV 充電、EV 測試與工業用 EV 充電領域，EES 仍具備非常有利的定位，可促進電力推進技術在全球範圍的廣泛轉型。接下來 Raymond 將說明第二季財務結果。Raymond？

Thank you, Wahid, and good afternoon, everyone. AeroVironment's FY17 second quarter results are as follows. Revenue for Q2 was $50.1 million, a decrease of $14.6 million, or 23%,from the second-quarter of FY16 revenue of $64.7 million. The decrease in revenue resulted from a decrease in product sales of $20.1 million, partially offset by an increase in contract service revenue of $5.5 million.

謝謝你，Wahid，各位下午好。AeroVironment 2017 財年第二季的業績如下。第二季營收為 5,010 萬美元，較 2016 財年第二季的 6,470 萬美元減少 1,460 萬美元，或 23%。營收下滑主要源自產品銷售減少 2,010 萬美元，部分被合約服務營收增加 550 萬美元所抵銷。

Looking at revenue by segment, UAS revenue was $40.8 million, a decrease of $15.8 million from the second quarter of FY16 revenue of $56.6 million. The decrease was primarily due to a decrease in product deliveries of $21.5 million, partially offset by an increase in customer funded R&D work of $4.3 million and an increase in service revenue of $1.4 million. EES revenue was $9.3 million, an increase of $1.1 million from the second quarter of FY16 revenue of $8.1 million. This increase was primarily due to an increase in product deliveries of our passenger fleet electric vehicle charging systems.

按部門來看營收，UAS 營收為 4,080 萬美元，較 2016 財年第二季的 5,660 萬美元減少 1,580 萬美元。下降主要由於產品交付減少 2,150 萬美元，部分被客戶出資的研發（R&D）工作增加 430 萬美元以及服務營收增加 140 萬美元所抵銷。EES 營收為 930 萬美元，較 2016 財年第二季的 810 萬美元增加 110 萬美元。此增長主要來自我們乘用車隊電動車充電系統產品交付增加。

Gross margin for the second quarter was $17.4 million, or 35%, as compared to $31.5 million, or 49%, for the second quarter of FY16. The decrease in gross margin was primarily due to a decrease in product sales margin of $14.5 million, partially offset by an increase in service margins of $0.4 million, both of which were impacted by the reserve reversal of $3.5 million for the settlement of prior year government incurred cost audits recorded in the second quarter of FY16, a decrease in product sales volumes, which resulted in an increase in the per unit fixed manufacturing and engineering overhead support costs, and an increase in sustaining engineering activities in support of our existing products of $1.3 million.

第二季毛利為 1,740 萬美元，毛利率 35%，相較於 2016 財年第二季的 3,150 萬美元、毛利率 49%。毛利下降主要由於產品銷售毛利減少 1,450 萬美元，部分被服務毛利增加 40 萬美元所抵銷；兩者皆受到以下因素影響：2016 財年第二季認列之 350 萬美元準備金回轉（與前一年度政府已發生成本稽核和解相關）、產品銷售量下降導致單位固定製造與工程間接費用分攤成本上升，以及為支援既有產品而增加的維持性工程活動成本 130 萬美元。

By segment, UAS gross margin decreased to $14.9 million for the second quarter of FY17, from $28.3 million. As a percentage of revenue, gross margin for UAS decreased from 50% to 36%, primarily due to the reserve reversal on settlement of prior year government incurred cost audits and the increase of sustaining engineering costs in support of our existing products. EES gross margin decreased $0.7 million to $2.5 million for the second-quarter of FY17, primarily due to the reserve reversal on settlement of prior year government incurred cost audits and the increase in sustaining engineering costs in support of our existing products, partially offset by increased sales volume.

按部門來看，UAS 毛利在 2017 財年第二季降至 1,490 萬美元，低於先前的 2,830 萬美元。以營收百分比計，UAS 毛利率由 50% 降至 36%，主要因前一年度政府已發生成本稽核和解的準備金回轉，以及為支援既有產品而增加的維持性工程成本。EES 毛利在 2017 財年第二季減少 70 萬美元至 250 萬美元，主要因前述準備金回轉及維持性工程成本增加，部分被銷售量增加所抵銷。

SG&A expense for the second quarter of FY17 was $13.4 million, or 27% of revenue, compared to SG&A expense of $14.7 million, or 23% of revenue, for the second-quarter of FY16. SG&A expense decreased $1.3 million, primarily due to decreases in bid and proposal costs.

2017 財年第二季的 SG&A（銷售、一般及行政）費用為 1,340 萬美元，占營收 27%，相較於 2016 財年第二季的 1,470 萬美元，占營收 23%。SG&A 費用減少 130 萬美元，主要由於投標與提案成本下降。

R&D expense for the second-quarter of FY17 was $8.5 million, or 17% of revenue, compared to R&D expense of $9.9 million, or 15% of revenue, for the second-quarter of FY16. The operating loss for the second quarter of FY17 was $4.5 million, or 9% of revenue, compared to operating income of $6.9 million, or 11% of revenue, for the second-quarter of FY16.

2017 財年第二季的 R&D（研發）費用為 850 萬美元，占營收 17%，相較於 2016 財年第二季的 990 萬美元，占營收 15%。2017 財年第二季營業損失為 450 萬美元，占營收 9%，相較於 2016 財年第二季營業利益 690 萬美元，占營收 11%。

Our effective income tax rate was 1.1% for the second-quarter of FY17, as compared to an effective income tax rate of 36.7% for the second-quarter of FY16. The variance from statutory rates for the three months ended October 29, 2016, was primarily due to federal legislation permanently reinstating the federal research and development tax credit during the three months ended January 30, 2016, and the reversal of a reserve for uncertain tax positions due to settlement of prior fiscal year audits recorded in the first quarter of FY17 which results in a decrease in our estimated FY17 annual effective tax rate.

2017 財年第二季的有效所得稅率為 1.1%，相較於 2016 財年第二季的有效所得稅率 36.7%。截至 2016 年 10 月 29 日止三個月的有效稅率與法定稅率之差異，主要由於聯邦立法在截至 2016 年 1 月 30 日止三個月期間永久恢復聯邦研發稅額抵減，以及我們在 2017 財年第一季因前一財政年度稽核結案而回轉不確定稅務部位準備金，進而降低我們對 2017 財年全年有效稅率的估計。

The net loss for the second quarter of FY17 was $4.2 million, or an $0.18 loss per diluted share, compared to net income of $4.4 million, or a $0.19 earnings per share, for the three months ended October 31, 2015. Earnings per share for the second-quarter of FY16 increased by $0.09, due to the reserve reversal on settlement and incurred cost claims.

2017 財年第二季淨損為 420 萬美元，稀釋後每股虧損 0.18 美元；相較於截至 2015 年 10 月 31 日止三個月的淨利 440 萬美元、每股盈餘 0.19 美元。2016 財年第二季每股盈餘因和解及已發生成本索賠相關的準備金回轉而增加 0.09 美元。

Now moving through our first half of FY17 results. Revenue for the first half of FY17 was $86.3 million, a decrease of $25.4 million as compared to $111.8 million for the six months ended October 31, 2015. The decrease in revenue was due to a decrease in product deliveries of $31 million, partially offset by an increase in contract service revenue of $5.6 million.

接著說明 2017 財年前半年的業績。2017 財年前半年的營收為 8,630 萬美元，較截至 2015 年 10 月 31 日止六個月的 1 億 1,180 萬美元減少 2,540 萬美元。營收下降係因產品交付減少 3,100 萬美元，部分被合約服務營收增加 560 萬美元所抵銷。

UAS revenue decreased $25.4 million to $75.3 million for the first half of FY17, primarily due to a decrease in product deliveries of $31.3 million, partially offset by an increase in service revenue of $3.4 million and an increase in customer funded R&D work of $2.5 million. EES revenue was $15 million for the first half of FY17 and the first half of FY16.

2017 財年前半年的 UAS 營收減少 2,540 萬美元至 7,530 萬美元，主要由於產品交付減少 3,130 萬美元，部分被服務營收增加 340 萬美元以及客戶出資的研發（R&D）工作增加 250 萬美元所抵銷。EES 營收在 2017 財年前半年度與 2016 財年前半年度皆為 1,500 萬美元。

Gross margin for the first half of FY17 was $24.1 million, as compared to $47.6 million for the first half of FY16. The decrease is primary due to a decrease in product margins of $23.9 million, partially offset by an increase in service margins of $0.4 million.

2017 財年前半年的毛利為 2,410 萬美元，相較於 2016 財年前半年的 4,760 萬美元。下降主要由於產品毛利減少 2,390 萬美元，部分被服務毛利增加 40 萬美元所抵銷。

UAS gross margin decreased to $20.3 million for the first half of FY17, from $42 million. As a percentage of revenue, gross margin for UAS decreased from 43% to 28%, primarily due to reversal of settlement of prior year government incurred cost audits, an increase in sustaining engineering costs in support of our existing products, and an increase in warranty-related costs. EES gross margin decreased to $1.8 million to $3.8 million for the first half of FY17, primarily due to the reserve reversal from the settlement of prior year government incurred cost audits and an increase in sustaining engineering costs in support of our existing products.

2017 財年前半年的 UAS 毛利降至 2,030 萬美元，低於 4,200 萬美元。以營收百分比計，UAS 毛利率由 43% 降至 28%，主要由於前一年度政府已發生成本稽核和解的回轉、為支援既有產品而增加的維持性工程成本，以及保固相關成本增加。2017 財年前半年的 EES 毛利由 380 萬美元降至 180 萬美元，主要由於前一年度政府已發生成本稽核和解所致的準備金回轉，以及為支援既有產品而增加的維持性工程成本。

SG&A expense for the first half of FY17 was $27.1 million, or 31% of revenue, compared to SG&A expense of $30 million, or 27% of revenue, for the first half of FY16. R&D expense for the first half of FY17 was $17.1 million, or 20% of revenue, compared to R&D expense of $19.7 million, or 18% of revenue, for the first half of FY16. The operating loss for the first half of FY17 was $20.1 million, or 23% of revenue, compared to the operating loss of $2.2 million, or 2% of revenue, for the first half of FY16.

2017 財年前半年的 SG&A（銷售、一般及行政）費用為 2,710 萬美元，占營收 31%，相較於 2016 財年前半年的 3,000 萬美元，占營收 27%。2017 財年前半年的 R&D（研發）費用為 1,710 萬美元，占營收 20%，相較於 2016 財年前半年的 1,970 萬美元，占營收 18%。2017 財年前半年的營業損失為 2,010 萬美元，占營收 23%，相較於 2016 財年前半年的營業損失 220 萬美元，占營收 2%。

The effective income tax benefit rate for the first six months ended October 29, 2016 was 19.8%, compared to the effective income tax benefit rate for the six months ended October 31, 2015 of 39.7%. The net loss for the first half of FY17 was $15.8 million, or a $0.69 loss per share, compared to a net loss of $2.6 million, or an $0.11 loss per share, for the first six months ended October 31, 2015. Our funded backlog as of October 29, 2016 was $119.6 million, an increase of $22.4 million from the second quarter of FY16 and an increase of $44.9 million from the first quarter of FY17.

截至 2016 年 10 月 29 日止前六個月的有效所得稅利益率為 19.8%，相較於截至 2015 年 10 月 31 日止前六個月的有效所得稅利益率 39.7%。2017 財年前半年的淨損為 1,580 萬美元，每股虧損 0.69 美元；相較於截至 2015 年 10 月 31 日止前六個月的淨損 260 萬美元、每股虧損 0.11 美元。截至 2016 年 10 月 29 日，我們的已獲資金支持之在手訂單（funded backlog）為 1 億 1,960 萬美元，較 2016 財年第二季增加 2,240 萬美元，並較 2017 財年第一季增加 4,490 萬美元。

Turning to our balance sheet. Cash, cash equivalents and investments at the end of the second-quarter of FY17 totaled $249.6 million, a decrease of $7.6 million from the prior quarter. The decrease in cash, cash equivalents and investments was driven by higher working capital requirements of the business. Accounts receivable, including unbilled and retention receivables, at the end of the second quarter of FY17 totaled $43 million, a decrease of $4.1 million from the prior quarter. Net inventory at the end of the second quarter of FY17 was $55.2 million, compared to $44.1 million at the end of the prior quarter. The increase in net inventory was primarily attributable to an increase in raw materials, work in progress, and finished goods inventory for anticipated second half shipments.

接著談我們的資產負債表。截至 FY17 第二季末，現金、約當現金及投資合計為 2.496 億美元，較前一季減少 760 萬美元。現金、約當現金及投資的減少主要係因業務營運資金需求提高所致。截至 FY17 第二季末，應收帳款（包含未開立帳單及保留款應收帳款）合計為 4,300 萬美元，較前一季減少 410 萬美元。截至 FY17 第二季末，淨存貨為 5,520 萬美元，較前一季末的 4,410 萬美元增加。淨存貨增加主要歸因於原物料、在製品及成品存貨增加，以因應預期下半年出貨。

Turning to capital expenditures, in the second-quarter of FY17 we invested approximately $1.9 million, or 4% of revenue, in property improvements and capital equipment and recognized $1.7 million of depreciation and amortization expense.

接著談資本支出，FY17 第二季我們在不動產改善及資本設備上投資約 190 萬美元，約占營收的 4%，並認列 170 萬美元的折舊與攤銷費用。

Now an update to our FY17 visibility. As of today, we had year-to-date revenues of $86 million, Q2 ending backlog that we expect to execute in FY17 of an additional $108 million, Q3 quarter-to-date bookings that we anticipate to execute in FY17 of an additional $8 million. We have no unfunded backlog from incrementally funded contracts that we anticipate to recognize revenue during the balance of the year, and revenues needed to hold EES revenues flat relative to last year of $5 million. This adds up to $207 million, or 77%, at the midpoint of our revenue guidance. Now I would like to turn things back to Wahid to discuss AV's expectations for the remainder of FY17.

現在更新我們對 FY17 的可見度。截至今天，我們年初至今營收為 8,600 萬美元；第二季期末積壓訂單中，我們預期於 FY17 執行的另有 1.08 億美元；第三季截至目前的接單中，我們預期於 FY17 執行的另有 800 萬美元。我們沒有來自逐步撥款合約的未撥款積壓訂單、且預期在今年剩餘期間認列營收者；以及為使 EES 營收相較去年持平所需的 500 萬美元營收。以上合計 2.07 億美元，約為我們營收指引中點的 77%。現在我想把時間交還給 Wahid，請他說明 AV 對 FY17 剩餘期間的預期。

Thanks, Raymond. Before addressing our reaffirmed outlook for the full year, I would like to frame the opportunity set within our core domestic defense market. The US Army, Marine Corps, Special Forces, and Air Force have largely procured their initial [total] record requirements for our Raven, Puma AE and Wasp AE first-generation small UAS solutions and require ongoing support for spare parts and upgrades. The Navy, other marine operators, and the Department of Homeland Security represent large new domestic procurement and support opportunities for those first-generation small UAS. The DOD's frequency relocation represents a significant upgrade opportunity across all DOD customers who currently own and operate AeroVironment's small UAS.

謝謝你，Raymond。在談我們對全年重申的展望之前，我想先就我們核心的美國國內國防市場，說明目前的機會組合。美國陸軍、海軍陸戰隊、特種部隊與空軍，已大致採購完成其對我們 Raven、Puma AE 與 Wasp AE 第一代小型無人機系統（small UAS）解決方案的初始（總）記錄需求，並需要持續的備品與升級支援。海軍、其他海事營運單位，以及國土安全部，則代表這些第一代小型無人機系統在美國國內新的大型採購與支援機會。國防部（DOD）的頻率遷移，對目前擁有並操作 AeroVironment 小型無人機系統的所有 DOD 客戶而言，代表一項重大的升級機會。

The US Army soldier borne sensor program represents a potential large new procurement opportunity for a second-generation small UAS that is almost pocketable in size and function. We are positioned extremely well to benefit from all of these opportunities by selling more first-generation small UAS, along with upgrades, spares, and services, and by developing the second generation capabilities that will further expand the benefits of small UAS to our customers.

美國陸軍的士兵攜行感測器（soldier borne sensor）計畫，代表一項潛在的大型新採購機會，對象為第二代小型無人機系統，其尺寸與功能幾乎可放入口袋。我們在這些機會上具備極佳的有利位置，可透過銷售更多第一代小型無人機系統，以及升級、備品與服務，同時開發第二代能力，進一步擴大小型無人機系統為客戶帶來的效益。

Now I would like to provide our view on the balance of the year. Our visibility for FY17 is consistent with our FY17 plans and expectations. Based on our current outlook, we continue to expect full-year revenue of $260 million to $280 million, with EPS of between $0.20 and $0.35.

現在我想提供我們對今年剩餘期間的看法。我們對 FY17 的可見度與我們的 FY17 計畫與預期一致。基於目前展望，我們仍預期全年營收為 2.60 億至 2.80 億美元，每股盈餘（EPS）介於 0.20 至 0.35 美元。

As we have been communicating since our fourth quarter FY16 call, seasonality is having a greater impact on the distribution of revenue this year than in previous years. Due to this year's pronounced seasonality, we believe it's important to provide you a preview of anticipated third-quarter financial performance, which we expected to be roughly in line with the quarter just completed. We anticipate third-quarter revenue between $50 million and $52 million, with loss per share between $0.34 and $0.38. This also implies very high fourth-quarter revenue and profit, which we have expected all along.

如同我們自 FY16 第四季電話會議以來持續溝通的，今年季節性對營收分布的影響比以往年度更大。由於今年季節性特別明顯，我們認為有必要先讓各位預覽第三季的預期財務表現，我們預期大致與剛結束的季度相當。我們預期第三季營收介於 5,000 萬至 5,200 萬美元，每股虧損介於 0.34 至 0.38 美元。這也意味著第四季將有非常高的營收與獲利，而這一直是我們的預期。

Our team is focused on effectively executing our plan in order to produce the results we expect. We have been planning for the seasonality back-end loaded year since the beginning of this year, including increasing inventory levels in order to support our customers' lead times and sense of urgency. We believe we're prepared to deliver.

我們的團隊專注於有效執行計畫，以產出我們所預期的成果。自今年年初起，我們就已為這種營收後段集中（back-end loaded）的季節性年度做規劃，包括提高存貨水位，以支援客戶的交期與急迫需求。我們相信我們已準備好交付。

To summarize today's three main points. First, we are on track for our stated FY17 plans and objectives. Second, strong order flow during the second quarter supports our plans for the remainder of FY17. And third, we're making significant progress on our key strategic milestones designed to drive long-term value creation.

總結今天的三個重點。第一，我們正按計畫達成 FY17 所述的計畫與目標。第二，第二季強勁的接單動能支持我們對 FY17 剩餘期間的規劃。第三，我們在關鍵策略里程碑上取得顯著進展，旨在推動長期價值創造。

Thank you for your continued support of AeroVironment. And thanks to our amazing employees whose commitment to our customers every single day helps them proceed with certainty. Now we will take your questions.

感謝各位持續支持 AeroVironment。也感謝我們優秀的員工，他們每天對客戶的承諾，協助客戶能夠更有把握地推進。現在我們開始回答各位的提問。

(Operator Instructions)

（接線員指示）

Josephine Millward, The Benchmark Company.

Josephine Millward，Benchmark Company。

Good afternoon.

下午好。

Good afternoon, Josephine.

下午好，Josephine。

Thanks for taking my question. Great bookings in Q2. Can you give us more color on your bookings, since you only announced two orders during the quarter. Were they mostly international?

謝謝讓我提問。第二季接單很亮眼。由於你們在本季只公告了兩筆訂單，能否就接單情況提供更多細節？是否主要來自國際市場？

Hi, Josephine. This is Wahid. Our orders on any given quarter, as you know, in any given year, vary significantly from customer, geographies and products. And this year, we have so far seen, as we stated from the beginning of the year, and I've explained that at the beginning of the fiscal year, strong demand for our small UAS products domestically -- I'm sorry, internationally -- as well as our tactical missile systems business for the family of systems and the variants of the products that we've developed.

嗨，Josephine。我是 Wahid。如你所知，我們在任何一個季度、任何一年，訂單都會因客戶、地理區域與產品而有顯著差異。今年截至目前，我們如同年初所說、也在會計年度開始時解釋過的，我們看到對小型無人機系統產品在國內——抱歉，是在國際——的強勁需求，以及我們戰術飛彈系統（TMS）業務對我們所開發的系統家族與各產品型號的需求。

So we see strong positions in the US market, and we have now grown our international customers for small UAS to 35-plus countries, and that list, we expect it to grow even further as the years go by. So in general, the bookings what we have is composed of a variety of different customers, both domestic and international, both small UAS, as well as TMS product lines.

因此，我們在美國市場具備強勢地位；同時，我們的小型無人機系統國際客戶已擴展至 35 個以上國家，我們預期這份名單在未來幾年還會持續增加。整體而言，我們的接單由多元客戶構成，涵蓋國內與國際，產品線則包含小型無人機系統以及 TMS 產品線。

Okay. The urgent request for the Switchblade, the $47 million. Do expect to receive and ship that order in your FY17? Is that reflected in your guidance?

了解。關於 Switchblade 的緊急需求請求，約 4,700 萬美元。你們是否預期會在 FY17 內收到並出貨該筆訂單？這是否已反映在你們的指引中？

I'm sorry. Josephine, you said -- what was the question, for the $47 million?

抱歉。Josephine，你剛剛說——關於 4,700 萬美元的問題是什麼？

The urgent request for the Switchblade. Do expect to receive that order and ship it in your FY17, and is that reflected in your guidance?

Switchblade 的緊急需求請求。你們是否預期會收到該筆訂單並在 FY17 內出貨？以及這是否已反映在你們的指引中？

Josephine, first just a little point of clarification. The roughly $47 million that you mentioned, and I mentioned in my remarks, is not an urgent need designated request. It's actually in the OCO budget of the government, in an amendment. So it may turn out to be executed by the government as an urgent need or may not. We don't know that, at this point, and we can't comment on that specifically. However, as you could tell from our inventory positions and our backlog, we have been planning for these particular opportunities all year long and even before the year. And I am not in a position to be able to precisely predict the timing of these orders, but we remain prepared and we're heavily, strongly engaged with customers in all these procurement activities.

Josephine，首先做一點澄清。你提到、我在談話中也提到的約 4,700 萬美元，並不是被指定為緊急需求（urgent need）的請求。它其實是在政府的 OCO 預算中，以修正案形式列入。因此政府最終可能以緊急需求方式執行，也可能不會。我們目前並不知道，也無法就此做具體評論。不過，從我們的存貨水位與積壓訂單你也看得出來，我們整年、甚至在今年之前，就一直在為這些特定機會做準備。我無法精準預測這些訂單的時間點，但我們仍保持準備就緒，並且在所有這些採購活動中與客戶保持高度、密切的互動。

Thank you.

謝謝。

Austin Bohlig, Piper Jaffray.

Austin Bohlig，Piper Jaffray。

Thanks for taking my question, gentlemen. And just a couple questions here. First, just want to dig more into your guys' commercial opportunity. And now with your commercial platform launch, just wondering if you could get a little bit more color on the sizing this opportunity for you, maybe as a percentage of revenues, of how big you guys think it could get down the line?

謝謝讓我提問，各位先生。我有幾個問題。第一，我想更深入了解你們的商用機會。現在你們推出商用平台後，想請你們就這個機會的規模提供更多說明，例如以營收占比來看，你們認為長期而言可能成長到多大？

Hello, Austin. Sure, no problem. This is Wahid.

你好，Austin。當然，沒問題。我是 Wahid。

We are extremely excited about the commercial information solution and the opportunity in front of us. We have tried to stay away from sizing the market ourselves, because it seems like there are so many other experts in the industry, domestically, as well as internationally and globally, that size this market in many, many different ways. Suffice to say that the overall size of the market is definitely in the billions of dollars over a long period of time. Whichever way and whatever specific research report or analysis that you look at, they all project similar type of very large numbers, number one.

我們對商用資訊解決方案以及眼前的機會感到非常振奮。我們一直刻意避免自行估算市場規模，因為產業內有許多其他專家，無論在美國國內、國際或全球，都以各種不同方式來估算這個市場。簡而言之，整體市場規模在很長一段時間內肯定是以數十億美元計。無論你看哪一種、或任何特定的研究報告或分析，它們都預測出類似的、非常龐大的數字，這是第一點。

Number two, we believe that what's really important now is to get the right solution that addresses the key problems and needs of our customers in the commercial industrial space effectively, better than anyone else, in a very differentiated and cost effective manner. And we believe that our comprehensive solution that we just unveiled, inclusive of our Quantix drone, the integrated payload and sensors within it, the software analytics that we offer as part of our DSS system, and the services to operate and conduct these activities for our customers is one of the most comprehensive and highly differentiated solutions in the industry.

第二點，我們認為目前真正重要的是，提出正確的解決方案，以非常差異化且具成本效益的方式，有效地解決我們在商用工業領域客戶的關鍵問題與需求，並且做得比任何人都更好。我們相信，我們剛剛揭露的整體解決方案——包含我們的 Quantix 無人機、其中整合的載荷與感測器、作為我們 DSS 系統一部分所提供的軟體分析，以及為客戶操作並執行這些活動的服務——是業界最全面且高度差異化的解決方案之一。

We believe that we're uniquely positioned to take advantage of the opportunity in front of us. Right now, we're primary focused on getting this product to market in terms of a shipping date that we expect and first customer shipped, and as well as to receive pre orders for them. And so until and unless we get the product to the market and receive some indicators from the customers, I won't be in a position to comment on the revenues and size of the market in the future, but at that time we'll be able to provide you some more clarity.

我們相信我們具備獨特的定位，能夠把握眼前的機會。目前我們的首要重點是將這項產品推向市場，包括我們預期的出貨日期與首位客戶出貨，以及接收其預購訂單。因此，在我們將產品推向市場並從客戶那裡獲得一些指標之前，我還無法就未來的營收與市場規模發表評論；但到那個時候，我們就能為各位提供更清楚的資訊。

Okay. And then on top of that, a good transition, just wondering about your distribution strategy or your go-to-market strategy with your commercial platform. Do you guys plan on going straight direct, or is it possible that you guys could team up with leading industrial players, such as John Deere or any of these bigger industrial players, similar to what your competitors have done?

好的。接著延伸一下，我想請教你們商用平台的通路策略或上市策略。你們打算完全採取直銷，還是有可能與領先的工業玩家合作，例如 John Deere 或其他更大型的工業業者，類似你們競爭對手所做的那樣？

Sure. So Austin, as you know, I've spent a great deal of my career in the commercial space and I'm quite familiar, and many others in our company that we have built a team who has extensive experience in multiple channel distribution strategies and different experiences in those markets. We realized that there's not a one-size-fits-all channel strategy for this business for all the verticals that are out there.

當然。Austin，如你所知，我的職涯有很大一部分都在商用領域，因此我相當熟悉；而我們公司內也有許多同仁，我們建立了一支在多通路分銷策略以及不同市場經驗方面都非常資深的團隊。我們了解到，對於這個業務以及所有存在的垂直領域而言，並不存在一種放諸四海皆準的通路策略。

We also recognize that selling hand-to-hand to every single farmer across the globe is not the most optimal solution and strategy for the agricultural market, for example. However, so we are looking, and we're developing a multi channel strategy, and for different industries, it most likely will include different types of channel strategies.

我們也認知到，例如在農業市場，逐一與全球每一位農民面對面銷售，並不是最理想的解決方案與策略。因此，我們正在規劃並發展多通路策略；而針對不同產業，很可能會包含不同類型的通路策略。

Many of the large enterprise customers, in the utilities, in oil and gas and transportation, they are smaller in number, but very large in size in terms of the opportunity and their assets. So that could bode well for a direct channel strategy, because they also expect to do business direct with the suppliers and vendors, and that's very similar to our defense business.

許多大型企業客戶，例如公用事業、石油與天然氣以及運輸領域，客戶數量較少，但就機會規模與其資產而言非常龐大。因此，這可能有利於直銷通路策略，因為他們也期望與供應商與廠商直接往來，這點與我們的國防業務非常相似。

So a lot of what we've done in the defense space bodes very well with those enterprise class customers that we're engaged with actively and we have been working with for many years now. On other applications and the global opportunity, we will most likely deploy a multi channel strategy, which we will most likely phase and we'll give you more update as we're prepared and ready to do so. But right now, we're really focused on execution and we're excited about the opportunity.

因此，我們在國防領域所做的許多事情，對於我們正積極接觸、且已合作多年的那些企業級客戶而言非常契合。至於其他應用與全球性機會，我們很可能會部署多通路策略，並且可能會分階段推進；待我們準備就緒時，會再向各位提供更多更新。不過目前，我們確實專注於執行，我們也對這個機會感到振奮。

Okay. Thank you, gentlemen. Good luck in the second half.

好的。謝謝各位先生。祝下半年順利。

Thank you very much, Austin.

非常感謝你，Austin。

(Operator Instructions)

（接線員指示）

Howard Rubel, Jefferies.

Jefferies 的 Howard Rubel。

Thank you. Two. First, when you had indicated the year was going to be back half loaded, had you expected it to be really jammed into the fourth quarter?

謝謝。兩個問題。第一，當你們先前表示今年會偏向下半年認列時，你們是否預期會高度集中在第四季？

Hi, Howard. This is a Wahid. The short answer is yes. As you know, I've been here for five years, and folks who have been here for a lot longer than five years. There's one thing very true about our business, which is, it's very difficult to predict it on a quarterly basis. And I believe, for that same reason, it's one of the reasons why we haven't guided quarterly in many previous years before us. And whenever we could provide some color, we have been able to provide it confidently, we have done so.

嗨，Howard。我是 Wahid。簡短答案是：是的。如你所知，我在這裡五年了，也有同仁在這裡遠超過五年。有一件事在我們的業務上非常真實，那就是：要以季度為單位做預測非常困難。我也認為，基於同樣原因，這也是為什麼在過去許多年裡我們沒有提供季度指引。而當我們能夠提供一些說明時，只要我們有把握，我們就會提供。

So when we set our plans at the beginning of this fiscal year, and even prior to the beginning of this fiscal year, we had a fairly good understanding of what our revenue was going to look like. And we had actually specifically planned for that. And so far, for the first half of the year, as you saw from our results, were very much in line with our expectation. If you recall on the first quarter, I mentioned that we see first half revenue to be about 33% and second half be about roughly 66% And 32% versus 33.3% is exactly where we landed.

因此，當我們在本會計年度開始之初、甚至在本會計年度開始之前制定計畫時，我們對營收的樣貌已有相當不錯的掌握，並且也針對此做了明確規劃。到目前為止，就上半年而言，正如你從我們的結果所看到的，基本上非常符合我們的預期。若你還記得，在第一季我提到我們預期上半年營收約占 33%，下半年約占 66%。而 32% 對 33.3% 正是我們最終落點。

We also knew at that time that fourth quarter is going to be a bigger quarter for us, primarily because of the urgent needs of our customers' requirements. And so since then, even since the beginning of the year or even prior to that, we have ordered raw material. We have built sub assemblies at subcontractors and we have been developed in building product in anticipation for these customers' urgent needs, because they're talking to us specifically about these requirements and their needs and the timing of them. So in a nutshell, we expected it.

我們當時也知道第四季會是我們較大的一季，主要是因為客戶需求的急迫性。因此，自那時起，甚至從年初或更早之前，我們就已訂購原物料、在分包商處建立次組件，並且提前製造產品，以因應這些客戶的急迫需求，因為他們一直在與我們明確討論這些需求、其必要性以及時程。總而言之，我們是有預期的。

We're on track with that expectation. And we believe that we're ready to execute against that in the second half of the year.

我們目前的進度符合該預期。我們相信我們已準備好在下半年依此執行。

You did a filing subsequent, I think, to the second quarter to reinforce the fact that, or rather, the first quarter, rather that the second quarter was going to be a challenging gross margin. So I understand that. I just am surprised at the -- this would be a record and then some fourth quarter, if one does the math. I don't know what else to say other than, close to half of your year is going to be in Q4.

你們在第二季之後做了一份申報文件，我想是為了再次強調——或者說是在第一季之後——第二季的毛利率會具有挑戰性。我理解這點。我只是對——如果按數學推算——感到驚訝：第四季將會是創紀錄、而且遠超以往的一季。我也不知道還能怎麼說，接近你們全年一半的營收會落在第四季。

Howard, yes, you're absolutely right about that. We have been aware of that and we've been prepared for this specific situation because of our customers' urgent needs and expectations and timing. So although, as you know, every year our fourth quarter has been the largest quarter. And from my past five years, we've also set records in the last few years, although this year seems to be even bigger than that. But I think the one thing that we're doing somewhat differently now and even more is to prepare for these types of customer requirements and needs, and we believe that all along we've been prepared and we're ready to execute against that.

Howard，是的，你說得完全正確。我們一直都知道這點，也因為客戶需求的急迫性、期望與時程，我們已為這個特定情況做好準備。所以，雖然如你所知，每一年第四季都是我們最大的一季；以我過去五年的經驗，我們在過去幾年也都創下紀錄，而今年看起來甚至更大。但我認為我們現在做得稍微不同、而且更進一步的一點，是更早地為這類客戶需求與要求做準備；我們相信我們一路以來都已準備就緒，並且可以據此執行。

And then a follow-up question. It sounds as if the international business has clearly grown in share. Could you provide us with a percentage of how the mix has shifted from domestic to international?

接著一個追問。聽起來國際業務的占比顯然已經提高。你們能否提供一下，從國內到國際的組合占比大概如何變動（以百分比表示）？

So Howard, we typically don't provide on a quarterly basis details on international and specific customers in general. What I could say that in general, our international business, as we've said it two, three quarters ago, is very promising. We've been executing very well. Our customers seem to really, really cling onto our value proposition and benefit and see value in our solutions. And also, international customers tend to be, we believe, about a decade behind in adoption than the US DOD.

Howard，我們通常不會在季度層級提供國際業務以及特定客戶的細節。不過我可以說，整體而言，我們的國際業務——正如我們在兩、三個季度前所說——非常有前景。我們執行得非常好；客戶似乎非常、非常認同我們的價值主張與效益，並且看見我們解決方案的價值。此外，我們認為國際客戶在採用方面通常比美國國防部（U.S. DOD）落後大約十年。

So this year, as you remember last year, we had a very, very successful year internationally. And we also mentioned that we expect successful and a strong year this year for international sales and orders. And so far that's been reflective.

因此，今年——如你記得——去年我們在國際市場非常、非常成功。我們也提到，我們預期今年國際銷售與訂單也會是成功且強勁的一年；到目前為止，情況確實反映了這點。

And just to point out, in our annual filing, Howard, in our 10-K, we typically break out international revenue at a company level. And in the last 10-K we issued, it was in the high 20 percentage range, which was a record for the Company.

另外補充一點，Howard，在我們的年度申報文件中，也就是 10-K，我們通常會在公司層級拆分國際營收。在我們最近發布的 10-K 中，國際營收占比落在接近 20% 後段（high 20%）的區間，這是公司的一項紀錄。

Yes, I was recalling 28% or 29%, it just seems. But with this growth in international, you've been able to still manage your SG&A. And just a follow-up on that. How have you been able to manage the balance, because typically international sales tend to require more selling requirements and more time and other things.

是的，我記得是 28% 或 29%，看起來就是這樣。不過在國際業務成長的同時，你們仍然能夠管理好 SG&A。再追問一下：你們是如何在兩者之間取得平衡的？因為通常國際銷售往往需要更多的銷售投入、更多時間以及其他事項。

So is there anything you've been able to do there, Wahid? The customers see what the US military is doing and they come to you, or do you have to go search them out?

所以在這方面你們有做什麼嗎，Wahid？客戶看到美軍在做什麼就會找上你們，還是你們必須主動去尋找客戶？

No, great point, Howard. So international customers have some uniqueness to them relative to the domestic customers. In some ways, for example, we are involved directly with some of these customers. In other cases, we're also using manufacturers' representatives, so sales agents that require that they have local relationships. They are set up for those countries. And certain countries also require that you do business through a local entity.

不，說得很好，Howard。國際客戶相較於國內客戶確實有一些獨特性。某些情況下，例如，我們會直接與其中一些客戶合作；在其他情況下，我們也會使用製造商代表，也就是需要具備在地關係的銷售代理。他們在那些國家已建立運作架構。而且有些國家也要求你必須透過當地實體來進行業務往來。

For example, if you know, and we have a joint venture partnership in Turkey with a company that we formed called Altoy which we've been working with. And similarly, we announced this quarter in Australia we're partnering with multiple partners, local partners. So the international customers tend to be somewhat unique on their own and each one is somewhat different from the other.

例如，如果你知道的話，我們在土耳其與一家我們共同成立、名為 Altoy 的公司有合資合作夥伴關係，並一直與其合作。同樣地，我們本季也宣布在澳洲與多個合作夥伴、當地合作夥伴合作。因此，國際客戶往往各自具有一定的獨特性，而且每一個客戶彼此之間也都不太相同。

And the G&A that you mentioned, we typically don't talk about and disclose G&A for specific regions or customers. I could tell you that we are well aware of the cost and we believe we're pretty strong and bullish on our international prospects in general. In general, we always compete with the large players, as well as the small local players. And our win rate is extremely high. And it remains high, as based on our engagements with all these customers. So we're optimistic about it, Howard.

至於你提到的 G&A，我們通常不會針對特定地區或客戶去討論或揭露 G&A。我可以告訴你，我們非常清楚相關成本，而且整體而言，我們對國際前景相當有信心、也相當看多。一般來說，我們總是同時與大型業者以及當地的小型業者競爭，而我們的得標率非常高；根據我們與這些客戶的互動，得標率仍維持在高水準。所以我們對此很樂觀，Howard。

Thank you very much, Wahid.

非常感謝你，Wahid。

You're welcome, Howard.

不客氣，Howard。

Josephine Millward, The Benchmark Company.

Josephine Millward，Benchmark Company。

Hello, Josephine.

你好，Josephine。

Yes, thank you. Wahid, can you talk about your Towner UAS offering? There seems to be very strong DOD interest there. Are you developing or proposing something based on the Switchblade?

是的，謝謝。Wahid，你能談談你們的 Towner UAS 產品嗎？國防部（DOD）似乎對此非常有興趣。你們是在開發或提出基於 Switchblade 的方案嗎？

Josephine, I wish I could comment on this topic, because it is a very exciting category. We have been aware of this for a while, and we are actively engaged with customers on developing what we believe very differentiated, unique and compelling solutions that could help our customers with them and obviously, we proceed with certainty. So unfortunately, I'm not in a position to be able to discuss the details, due to our customer's wishes.

Josephine，我希望我能評論這個主題，因為這是一個非常令人興奮的類別。我們已經注意到一段時間了，並且正積極與客戶合作，開發我們認為非常差異化、獨特且具吸引力的解決方案，能夠協助客戶；當然，我們也會在確定性之下推進。因此很遺憾，基於客戶的意願，我目前無法討論細節。

I understand. I'm going to ask another one for you. Can you comment on Fleer's recent acquisition of Prox Dynamics? Do you think they're targeting the Army's soldier borne sensor with a more affordable Black Hornet?

我理解。我再問你另一個問題。你能評論一下 Fleer 最近收購 Prox Dynamics 嗎？你認為他們是否在以更平價的 Black Hornet 鎖定陸軍的士兵攜行感測器（soldier borne sensor）？

So very good question, Josephine. You obviously know, and others who may not know, that Fleer announced this quarter, this month, at least a couple of weeks ago, that they have acquired Prox Dynamics, which is what we consider a small competitor, international competitor in the nano category of UAVs.

這是個很好的問題，Josephine。你當然知道，而其他可能不知道的人也可以了解：Fleer 在本季、這個月——至少在幾週前——宣布他們已收購 Prox Dynamics；我們認為這是一家在奈米級 UAV 類別中的小型競爭對手、國際競爭對手。

First, I would like to point out that Fleer is one of multiple vendors for our business for sensors and cameras of that nature. And we have had a strong relationship with Fleer. We've already been in communications with them before, as well as after this acquisition. And we believe that we will continue our relationship. Yet we always have these strategic questions answered internally. We address them to make sure we're not dependent on one particular vendor or supplier.

首先，我想指出，Fleer 是我們感測器與此類相機業務的多家供應商之一。我們與 Fleer 一直維持良好關係。在這次收購之前以及之後，我們都已與他們保持溝通。我們相信這段合作關係會持續。不過，我們也會在內部針對這些策略性問題做出解答，確保我們不會依賴單一供應商或供應來源。

And in terms of the nano UAV that you mentioned, we're very strongly excited about our own offering and our value proposition in our solution, and our engagement with the customer. You heard from my remarks, we have received an order for 30 snipe systems for early evaluation. And we are very excited about this product and we are very much willing to compete.

至於你提到的奈米 UAV，我們對自家的產品、解決方案的價值主張，以及與客戶的互動都感到非常振奮。你也從我的發言中聽到，我們已收到 30 套 snipe 系統的訂單，用於早期評估。我們對這項產品非常興奮，也非常願意參與競爭。

And our team, obviously we've known Prox Dynamics for a long time. We continuously attest competitive nature of our business. And all I could say that we feel fairly confident about our position and our solution offering and our competitive nature, despite Fleer's acquisition.

而我們的團隊當然也認識 Prox Dynamics 很久了。我們持續檢視我們業務的競爭態勢。我能說的是，儘管 Fleer 進行了收購，我們對自身的市場地位、解決方案供給以及競爭力仍相當有信心。

We might just add that the deal does suggest that there is broad and deep recognition of the value in small UAS and the growth opportunities ahead, not just by us, but by other companies in the industry.

我們也可以補充一點：這筆交易確實顯示，不僅是我們，產業中的其他公司也廣泛且深刻地認可小型 UAS 的價值，以及未來的成長機會。

That's helpful. Thank you very much.

這很有幫助。非常感謝。

Thank you, Josephine.

謝謝你，Josephine。

Austin Bohlig, Piper Jaffray.

Austin Bohlig，Piper Jaffray。

Gentlemen, just a quick follow-up for Raymond. More on the modeling concept. Just wondering if you could help us out on how we should think about taxes or the tax rate for the next couple quarters.

各位先生，我想對 Raymond 做個簡短追問，更多是關於建模的概念。想請教你能否協助我們理解，接下來幾個季度我們應該如何看待稅負或有效稅率？

Yes. So our taxes are moving, as you've seen, as we are near, as we get near that breakeven number. So I think going forward, we will be at a sub statutory level from both a federal and a state perspective. But as we hover around the breakeven level, you should see it in the low digit numbers to teens.

好的。如你所見，隨著我們接近損益兩平點，我們的稅負也在變動。因此我認為往後，無論是聯邦或州的角度，我們的稅率都會低於法定稅率水準。但當我們在損益兩平附近徘徊時，你應該會看到稅率落在低個位數到十幾%的區間。

Okay. Perfect. Thank you, gentlemen.

好的。完美。謝謝各位先生。

John Ladewig, Stifel.

John Ladewig，Stifel。

Hi, gentlemen. One quick question. Are we still expecting the 12% of sales for research and development?

嗨，各位先生。我有一個簡短問題。我們是否仍預期研發費用約為銷售額的 12%？

John, yes. As we have said at the beginning of the fiscal year that we have been lowering our incremental R&D investments on the strategic initiatives, group initiatives, since the beginning of the year and we expect this year to be roughly about 12% of revenue for the full year.

John，是的。正如我們在會計年度開始時所說，自年初以來，我們一直在降低針對策略性計畫、集團計畫的增量研發投資；我們預期今年全年研發費用約為營收的 12%。

(Operator Instructions)

（接線員指示）

I'm seeing no other questioners in the queue at this time, so I'd like to turn the call back over to management for closing comments.

我目前看到隊列中沒有其他提問者，因此我想把電話交回管理層作結語。

Thanks very much, Andrew, and thank you all for your attention and your ongoing interest in AeroVironment. An archived version of this call, all SEC filings, and relevant company and industry news can be found on our website, AVInc.com. We wish you a joyous holiday season and new year, and we look forward to speaking with you again following next quarter's results. Good afternoon.

非常感謝你，Andrew，也感謝各位的關注以及對 AeroVironment 持續的興趣。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 AVInc.com 上找到。我們祝各位佳節愉快、新年快樂，也期待在下個季度業績公布後再次與各位交流。下午好。

Ladies and gentlemen, thank you again for your participation in today's conference. This now concludes the program and you may all disconnect at this time. Everyone have a great afternoon.

各位女士、先生，再次感謝各位參與今天的會議。現在會議到此結束，大家此刻可以中斷連線。祝各位下午愉快。