AeroVironment, Inc. (AVAV) 2017 Q4 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the AeroVironment Incorporated Fourth Quarter and Full Fiscal 2017 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

各位女士、各位先生，大家好。歡迎參加 AeroVironment Incorporated 2017 會計年度第四季及全年財報電話會議。(接線員指示) 提醒各位，本次會議將錄音以供重播之用。

With us today from the company is the President and Chief Executive Officer, Mr. Wahid Nawabi; Senior Vice President and Chief Financial Officer, Ms. Teresa Covington; and Vice President of Investor Relations, Mr. Steven Gitlin.

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 Teresa Covington 女士；以及投資人關係副總裁 Steven Gitlin 先生。

And now, at this time, I would like to turn the conference over to Mr. Gitlin. Please go ahead, sir.

現在，我想把電話會議交給 Gitlin 先生。先生，請開始。

Thank you, Chelsea. Welcome to AeroVironment's fourth quarter and full fiscal 2017 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. 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 U.S. government; availability of U.S. 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 United States 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; the impact of potential security and cyber threats; changes in the supply and/or demand and/or prices for our products and services; the activities and competitors and increased competition; failure of the markets in which we operate to grow; uncertainty in the customer adoption rate of commercial unmanned aircraft systems and electric vehicles; 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. For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission.

謝謝你，Chelsea。歡迎參加 AeroVironment 2017 會計年度第四季及全年財報電話會議。請注意，在本次電話會議中所提供的部分資訊，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、績效或成就的陳述，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（規劃）等字詞，或具有類似意義的字詞或片語。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。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；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；潛在安全與網路威脅的影響；我們產品與服務的供給及／或需求及／或價格變動；競爭對手的活動及競爭加劇；我們所處市場未能成長；商用無人航空系統與電動車的客戶採用率不確定；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；以及美國及全球其他地區的監管環境變化與整體經濟及商業狀況。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。

The content of this conference call contains time-sensitive information that is accurate only as of today, June 27, 2017. The company undertakes no obligation to make any revision to the statements contained in our remarks or to update them to reflect the events or circumstances occurring after this conference call.

本次電話會議內容包含具時效性的資訊，僅截至今日（2017 年 6 月 27 日）為準且屬正確。公司不承擔任何義務對我們發言中所包含的陳述進行修訂，或更新以反映本次電話會議後發生的事件或情況。

Let's begin with remarks from Wahid Nawabi. Wahid?

接下來先請 Wahid Nawabi 發表談話。Wahid？

Thank you, Steve. Our 3 main messages today are as follows: first, our business remains strong and profitable and our team achieved or exceeded our financial objectives for fiscal 2017; second, we made good progress on our fiscal 2017 milestones that maintained the leading market positions in our core business and advanced our differentiated solutions for large new global opportunities in our growth portfolio; and third, we remain on track for long-term value creation.

謝謝你，Steve。我們今天的三個主要訊息如下：第一，我們的業務仍然強勁且具獲利能力，我們的團隊在 2017 會計年度達成或超越了財務目標；第二，我們在 2017 會計年度的里程碑方面取得良好進展，維持了核心業務的領先市場地位，並推進我們具差異化的解決方案，以把握成長組合中龐大且全新的全球機會；第三，我們仍按計畫推進長期價值創造。

On today's call, I will provide a summary of fourth quarter and full year financial performance, and we'll review our achievements in fiscal 2017. Teresa Covington will provide a more detailed review of our financials before I share with you our goals for fiscal 2018. Teresa, Steve, and I will then take your questions.

在今天的電話會議中，我將概述第四季及全年財務表現，並回顧我們在 2017 會計年度的成果。在我分享 2018 會計年度目標之前，Teresa Covington 將更詳細地說明我們的財務狀況。接著 Teresa、Steve 與我將回答各位的提問。

When I assumed the role as AeroVironment's Chief Executive Officer a little more than a year ago, I was confident we were well positioned to execute our strategy successfully, drive value for shareholders and provide our customers more actionable intelligence so they can proceed with certainty. To troops on the frontline, that certainty can mean the difference between life and death. To businesses, it can mean helping to ensure their financial prosperity. Our core business is strong with leading market positions and the ability to generate attractive returns. And our growth portfolio is compelling with the highly differentiated solutions we have been developing for launch into the large, new global market opportunities.

在我於一年多前接任 AeroVironment 執行長一職時，我有信心我們已具備良好定位，能成功執行策略、為股東創造價值，並為客戶提供更可採取行動的情資，使其能夠更有把握地推進決策。對前線部隊而言，這份把握可能意味著生與死的差別。對企業而言，則可能意味著協助確保其財務繁榮。我們的核心業務強勁，擁有領先的市場地位，並具備創造具吸引力報酬的能力。而我們的成長組合也相當具吸引力，因為我們正在開發高度差異化的解決方案，準備推向龐大且全新的全球市場機會。

Achieving these opportunities requires planning. When we developed our fiscal 2017 plan, customer order timing resulted in a heavily weighted fiscal fourth quarter. Thanks to the support and dedication of our amazing team, we delivered record fourth quarter results as follows: revenue of $125 million, an increase of 48% year-over-year; operating income of $34 million, an increase of nearly 400% year-over-year; and fully diluted earnings per share of $1.30, an increase of more than 450% from the prior year. Our outstanding fourth quarter performance combined with careful operating expense management throughout the year produced full year revenue of $264.9 million, a small increase over fiscal 2016 and fully diluted earnings per share of $0.54, well above our guidance and a 36% increase year-over-year.

要把握這些機會需要規劃。在我們制定 2017 會計年度計畫時，客戶訂單時點使得業績高度集中於會計年度第四季。在我們優秀團隊的支持與投入下，我們交出創紀錄的第四季成果如下：營收 1.25 億美元，年增 48%；營業利益 3,400 萬美元，年增近 400%；完全稀釋每股盈餘 1.30 美元，較去年增加逾 450%。我們卓越的第四季表現，加上全年審慎的營運費用管理，使全年營收達 2.649 億美元，較 2016 會計年度小幅成長；完全稀釋每股盈餘為 0.54 美元，不僅明顯高於我們的指引，亦較去年年增 36%。

Gross margin decreased, partly the result of a onetime reserve reversal in fiscal 2016 and partly due to higher sustaining expenses. Our focus on operating expense management more than offset lower gross margin to produce operating income of $12.5 million, a 29% increase over last year.

毛利率下滑，部分原因是 2016 會計年度一次性準備金回轉的影響，部分則是因維持性支出較高。我們對營運費用管理的重點投入，足以抵銷較低的毛利率，帶動營業利益達 1,250 萬美元，較去年成長 29%。

Our expense management included reducing internal R&D investments from 16% of revenue in fiscal 2016 to 12% of revenue in fiscal 2017 as we consistently communicated to you throughout the year. In addition to our financial performance, we achieved nearly all of the objectives for fiscal 2017 that we shared with you a year ago and we emerged even better positioned for long-term value creation than before.

我們的費用管理措施包括：如同我們在全年持續向各位溝通的，我們將內部研發（R&D）投資占營收比重由 2016 會計年度的 16% 降至 2017 會計年度的 12%。除財務表現外，我們也幾乎達成一年前與各位分享的 2017 會計年度所有目標，並且相較以往更具備長期價值創造的有利定位。

At the beginning of fiscal 2017, I shared with you our 10 key milestones for the year, which I will now report on.

在 2017 會計年度開始時，我曾與各位分享當年度 10 項關鍵里程碑，接下來我將就此進行報告。

We continued the expansion of our domestic small UAS business through sustainment and upgrades, deliveries that support potential U.S. Army procurement programs and promising U.S. Navy adoption. We began shipments of Mantis i45 sensors to DoD customers for Puma AE upgrades at the end of fiscal 2017. The i45 sensor suite delivers unparalleled imaging capabilities for small UAS and has the potential to drive its own significant upgrade cycle among Puma AE customers. We also improved our positioning for a U.S. Army soldier borne sensor competition with our next generation pocketable snipe unmanned aircraft system, including completing shipments of our first 30 systems for customer evaluation. And we continued to demonstrate effective small UAS capabilities aboard naval vessels to drive further naval adoption of our solution.

我們透過維持與升級，持續擴展美國國內小型無人航空系統（small UAS）業務；同時進行交付以支援潛在的美國陸軍採購計畫，並推動美國海軍具前景的採用。在 2017 會計年度末，我們開始向國防部（DoD）客戶出貨 Mantis i45 感測器，用於 Puma AE 升級。i45 感測器套件為小型 UAS 提供無與倫比的成像能力，並有潛力在 Puma AE 客戶群中帶動其自身顯著的升級週期。我們也透過下一代可放入口袋的 Snipe 無人航空系統，強化我們在美國陸軍士兵攜行感測器競標中的競爭定位，其中包括完成首批 30 套系統的出貨供客戶評估。此外，我們持續在海軍艦艇上展示小型 UAS 的有效能力，以推動海軍進一步採用我們的解決方案。

We expanded our international small UAS install base with existing and new customers. Small UAS constitutes the majority of AeroVironment's international revenue which grew from 28% to 36% of company revenue in fiscal 2017, or from about $70 million to nearly $90 million. We offer a comprehensive solution that appeals to our international customers and they are procuring one or more products from our family of small UAS as well as multiyear services such as training and repairs. Some of these customers are even using our systems 24/7, relying heavily on them to protect their forces and pushing the extreme capabilities of our unmanned solutions. AeroVironment is, without question, helping these customers proceed with certainty with very high stakes on the line. This integrated Family of Systems has helped to spur increased adoption across a broader geographic range from western to eastern Europe, from the Middle East to Asia and Oceania, expanding our list of allied customers to more than 40 countries.

我們與既有及新客戶合作，擴大了我們在國際小型無人航空系統（UAS）的裝機基礎。小型UAS構成AeroVironment國際營收的大宗；其占公司營收比重在2017會計年度由28%提升至36%，亦即由約7,000萬美元增至接近9,000萬美元。我們提供一套完整解決方案，深受國際客戶青睞；他們採購我們小型UAS產品系列中的一項或多項產品，並採購如訓練與維修等多年期服務。其中部分客戶甚至全天候（24/7）使用我們的系統，極度倚賴其保護其部隊，並將我們無人化解決方案的極限能力推向更高。毫無疑問，AeroVironment正協助這些客戶在高風險情境下更有把握地推進任務。這套整合式「系統家族」有助於在更廣泛的地理範圍內推動採用，從西歐到東歐、從中東到亞洲與大洋洲，並將我們的盟友客戶名單擴展至40多個國家。

New UAS customers in fiscal 2017 included Latvia, Lithuania and 3 other NATO and Middle East countries. As an example of Family of Systems adoption, in October, we announced a $10.3 million contract with The Netherlands for digital upgrades to their existing Raven fleet and for new Wasp AE and Puma AE systems.

2017會計年度新增的UAS客戶包括拉脫維亞、立陶宛以及另外3個北約與中東國家。作為「系統家族」採用的例子，我們於10月宣布與荷蘭簽訂1,030萬美元合約，為其既有Raven機隊進行數位升級，並提供新的Wasp AE與Puma AE系統。

On June 1, we announced that the Australian Defence Force selected our Wasp AE for its small UAS program. We anticipate more multiyear contracts from international customers ahead as our install base grows and we create more opportunities to build recurring revenue streams from sustainment services and upgrades.

6月1日，我們宣布澳洲國防軍選擇我們的Wasp AE作為其小型UAS計畫之用。隨著我們的裝機基礎成長，並創造更多由維持服務與升級所帶來的經常性營收機會，我們預期未來將有更多來自國際客戶的多年期合約。

We continue to progress towards the U.S. DoD's frequency relocation program for small UAS, winning an initial contract that we believe positions us well for follow-on work expected this fiscal year.

我們持續朝美國國防部（DoD）小型UAS頻率遷移計畫邁進，並贏得一項初始合約；我們相信這使我們在本會計年度預期的後續工作上具備良好定位。

The strategic investments we've been making to build our TMS business continue to deliver results. In fiscal 2011, our TMS revenue was about $6 million, growing to more than $40 million in fiscal 2016.

我們為打造TMS業務所進行的策略性投資持續帶來成果。在2011會計年度，我們的TMS營收約為600萬美元，並在2016會計年度成長至超過4,000萬美元。

In fiscal 2017, TMS revenue grew to more than $75 million, an increase of more than 80% over the previous year. From fiscal 2011, this represents a compound annual growth rate of 56%. As you can see, the returns on our strategic incremental TMS investments of previous years are very positive. TMS now accounts for 29% of total company revenue. We continue to build our family of tactical missile systems to address the important needs of a growing number of customers and we continue to successfully deliver Switchblade systems to our U.S. government customers.

在2017會計年度，TMS營收成長至超過7,500萬美元，較前一年增加逾80%。自2011會計年度起計算，這相當於56%的年複合成長率。如各位所見，我們過去數年策略性、逐步增加的TMS投資報酬非常正面。TMS目前占公司總營收的29%。我們持續擴充戰術飛彈系統家族，以滿足愈來愈多客戶的重要需求，並持續成功向美國政府客戶交付Switchblade系統。

In October, we announced a $22.8 million contract from the U.S. Army for Switchblade systems, which strengthens our position as the leader in loitering munitions, one type of a tactical missile system.

10月，我們宣布獲得美國陸軍2,280萬美元的Switchblade系統合約，進一步鞏固我們在滯空彈藥（loitering munitions）領域的領導地位；滯空彈藥是戰術飛彈系統的一種類型。

In fiscal 2017, we deployed Blackwing systems for use on Navy submarines with very positive results, an encouraging milestone on the path towards long-term adoption into a Navy program of record.

在2017會計年度，我們部署Blackwing系統供海軍潛艦使用，並取得非常正面的成果；這是在邁向長期納入海軍正式建案（program of record）採用路徑上的一項令人鼓舞的里程碑。

Still within our TMS business, progress continued on our multiple Switchblade variants, including production and delivery of one variant

在我們的TMS業務中，我們多款Switchblade衍生型的進展仍在持續，包括其中一款衍生型的生產與交付

(technical difficulty)

（技術困難）

Ladies and gentlemen, we apologize for the technical issues. (Operator Instructions) You may resume.

各位女士、先生，我們對技術問題深表歉意。（接線員指示）您可以繼續。

Thank you very much, this is Steve Gitlin. And again, we apologize for whatever technical issues cut our call off. So Wahid's going to start a little bit earlier in the script. Apologies if there's some repetition here, but we want to make sure that you're tracking with his prepared comments.

非常感謝，我是Steve Gitlin。再次對任何導致通話中斷的技術問題致歉。因此，Wahid會在講稿中稍微往前一點開始。若有些內容重複，敬請見諒，但我們希望確保各位能跟上他事先準備的發言。

Thank you, Steve. We continue to progress toward the U.S. DoD's frequency relocation program for small UAS, winning an initial contract that we believe positions us well for follow-on work expected this fiscal year.

謝謝你，Steve。我們持續朝美國國防部（DoD）小型UAS頻率遷移計畫邁進，並贏得一項初始合約；我們相信這使我們在本會計年度預期的後續工作上具備良好定位。

The strategic investments we have been making to build our TMS business continue to deliver results. In fiscal 2011, our TMS revenue was about $6 million, growing to more than $40 million in fiscal 2016. In fiscal 2017, TMS revenue grew to more than $75 million, an increase of more than 80% over the previous year.

我們為打造TMS業務所進行的策略性投資持續帶來成果。在2011會計年度，我們的TMS營收約為600萬美元，並在2016會計年度成長至超過4,000萬美元。在2017會計年度，TMS營收成長至超過7,500萬美元，較前一年增加逾80%。

From fiscal 2011, this represents a compound annual growth rate of 56%. As you can see, the returns on our strategic incremental TMS investments of previous years are very positive. TMS now accounts for 29% of total company revenue. We continue to build out our family of tactical missile systems to address the important needs of a growing number of customers, and we continue to successfully deliver Switchblade systems to our U.S. government customers.

自2011會計年度起計算，這相當於56%的年複合成長率。如各位所見，我們過去數年策略性、逐步增加的TMS投資報酬非常正面。TMS目前占公司總營收的29%。我們持續擴充戰術飛彈系統家族，以滿足愈來愈多客戶的重要需求，並持續成功向美國政府客戶交付Switchblade系統。

In October, we announced a $22.8 million contract from the U.S. Army for Switchblade systems, which strengthens our position as the leader in loitering munitions, one type of tactical missile system.

10月，我們宣布獲得美國陸軍2,280萬美元的Switchblade系統合約，進一步鞏固我們在滯空彈藥（loitering munitions）領域的領導地位；滯空彈藥是戰術飛彈系統的一種類型。

In fiscal 2017, we deployed Blackwing systems for use on Navy submarines with very positive results, an encouraging milestone on the path toward long-term adoption into a Navy program of record.

在2017會計年度，我們部署Blackwing系統供海軍潛艦使用，並取得非常正面的成果；這是在邁向長期納入海軍正式建案（program of record）採用路徑上的一項令人鼓舞的里程碑。

Still within our TMS business, progress continued on our multiple Switchblade variants, including production and delivery of one variant and further development of others. Nearly half of our fiscal 2017 TMS revenue comes in the form of customer funded research and development. While customer funded R&D is usually lower-margin business, structured in cost plus contracts, it's also a strong indicator of customer engagement that generally leads to higher-margin product revenue in subsequent years.

在我們的TMS業務中，我們多款Switchblade衍生型的進展仍在持續，包括其中一款衍生型的生產與交付，以及其他衍生型的進一步開發。我們2017會計年度TMS營收中，近一半來自客戶出資的研發。雖然客戶出資研發通常屬於較低毛利的業務（多以成本加成合約結構），但它同時也是客戶投入程度的強力指標，通常會在後續年度帶來較高毛利的產品營收。

Additionally, we are demonstrating effective counter UAS capabilities that have the potential to protect troops from the growing threat of lethal drones operated by our adversaries. In our Commercial Information Solutions business, we unveiled our innovative Quantix drone, an AV decision support system analytics platform, shared news about important and relevant research with Fresno State University and made continued progress with early adopter customers in multiple industries.

此外，我們正在展示有效的反無人機（counter UAS）能力，具備保護部隊免受對手操作之致命無人機日益增加威脅的潛力。在我們的商業資訊解決方案（Commercial Information Solutions）業務中，我們發表了創新的Quantix無人機、AV決策支援系統分析平台，分享了與Fresno State University的重要且相關的研究消息，並在多個產業的早期採用者客戶方面持續取得進展。

In April, we performed an important demonstration with Ligado Networks, Dominion Virginia Power and Virginia Tech. During this event, we flew our Puma AE system up to 14 miles away from its operator along power lines using Ligado's satellite and terrestrial capabilities to maintain communication and control. This demonstration illustrated a safe and effective approach to controlling drones and beyond visual line of sight operations. This type of capability will be critical towards maximizing the economic benefits of drones in commercial applications. Additionally, we achieved further engagement with potential customers for atmospheric satellite systems.

4月，我們與Ligado Networks、Dominion Virginia Power以及Virginia Tech進行了一項重要示範。在此活動中，我們運用Ligado的衛星與地面能力維持通訊與控制，讓Puma AE系統沿著電力線在距離操作員最遠達14英里處飛行。此示範展示了一種安全且有效的無人機控制方式，以及超視距（beyond visual line of sight）作業。此類能力對於在商業應用中最大化無人機的經濟效益至關重要。此外，我們也與大氣衛星系統的潛在客戶達成更深入的互動。

In our EES business, we grew revenue by 18% year-over-year and accelerated our global EV charging strategy by winning a contract with Volvo to support their plug-in vehicle rollout in Europe and China, which we announced in March.

在我們的EES業務中，我們的營收年增18%，並透過贏得Volvo的合約加速全球電動車（EV）充電策略，以支援其在歐洲與中國的插電式車款推廣；我們已於3月對外宣布此消息。

We continue to enjoy strong demand and growth for EV test systems from global OEMs and battery manufacturers, particularly in China, North America and South Korea. Our passenger EV charging solutions enjoyed strong unit growth in 2017 and we surpassed 54,000 level 2 charging systems deployed.

我們持續受惠於全球OEM與電池製造商對EV測試系統的強勁需求與成長，尤其是在中國、北美與南韓。我們的乘用車EV充電解決方案在2017年實現強勁的出貨量成長，且我們已部署超過54,000套Level 2充電系統。

Shipments of EVSEs increased sharply over last year as we supported the launch of the Chevrolet Bolt EV. Outside of North America, our multiyear program with Volvo to develop a residential charger for the European, Chinese and North American markets is in progress, building on our next-generation EV charging systems architecture and is compatible with 2018 global standards and agency requirements.

隨著我們支援雪佛蘭 Bolt EV 的上市，EVSE 的出貨量較去年大幅增加。在北美以外，我們與沃爾沃合作、為歐洲、中國及北美市場開發家用充電器的多年期計畫正在進行中；該計畫以我們下一代電動車充電系統架構為基礎，並符合 2018 年全球標準及主管機關要求。

Also in fiscal 2017, our EV CRS -- EVSE-RS system was integrated with eMotorWerks' JuiceNet for 2 utility programs. This development added to our broad portfolio of network integrated charging solutions that demonstrate our adaptability to the evolving EV charging network ecosystem for demand response and vehicle-to-grid applications.

此外，在 2017 會計年度，我們的 EV CRS -- EVSE-RS 系統已與 eMotorWerks 的 JuiceNet 整合，用於 2 項公用事業計畫。此項發展進一步擴充了我們廣泛的網路整合式充電解決方案組合，展現我們對於不斷演進的電動車充電網路生態系（用於需量反應與車輛到電網應用）的適應能力。

Finally, in EES, we began shipping turbo cord Level 2 chargers to a major global German automaker. We made good progress on our continuous improvement initiatives, enhancing business processes, quality, our organization, planning and execution. These initiatives have already delivered high customer and employee satisfaction, which ultimately contribute to shareholder value.

最後，在 EES 方面，我們開始向一家主要的全球德國汽車製造商出貨 turbo cord 二級（Level 2）充電器。我們在持續改善計畫上取得良好進展，強化了業務流程、品質、組織、規劃與執行。這些計畫已帶來高度的客戶與員工滿意度，最終有助於提升股東價值。

Across our business, we achieved our goals in fiscal 2017 and improved our positioning to achieve our long-term growth objectives.

在整體業務方面，我們於 2017 會計年度達成目標，並改善了我們實現長期成長目標的競爭定位。

Now I will turn the call over to Teresa to provide more detail on our financial performance in the fourth quarter and for the full fiscal year. Teresa?

現在我將把電話會議交給 Teresa，請她更詳細說明我們第四季及全年度的財務表現。Teresa？

Thank you, Wahid, and good afternoon, everyone. AeroVironment's fiscal 2017 fourth quarter results are as follows: revenue for Q4 was $125.4 million, an increase of $40.6 million or 48% from the fourth quarter of fiscal 2016 revenue of $84.8 million. The increase in revenue resulted from an increase in product sales of $51.5 million, partially offset by a decrease in contract services revenue of $10.8 million. Looking at revenue by segment, UAS revenue was $115.7 million, an increase of $39.8 million or 52% from the fourth quarter fiscal 2016 revenue of $75.9 million. The increase was due to an increase in product deliveries of $50.4 million and an increase in service revenue of $2.1 million, partially offset by a decrease in customer-funded R&D work of $12.7 million.

謝謝你，Wahid，各位下午好。AeroVironment 2017 會計年度第四季的結果如下：第四季營收為 1.254 億美元，較 2016 會計年度第四季的 8,480 萬美元增加 4,060 萬美元，增幅 48%。營收增加主要來自產品銷售增加 5,150 萬美元，但部分被合約服務營收減少 1,080 萬美元所抵銷。按部門別來看，UAS 營收為 1.157 億美元，較 2016 會計年度第四季的 7,590 萬美元增加 3,980 萬美元，增幅 52%。此增加係因產品交付增加 5,040 萬美元及服務營收增加 210 萬美元，但部分被客戶出資研發（R&D）工作減少 1,270 萬美元所抵銷。

EES revenue was $9.7 million, an increase of $0.8 million or 9% from the fourth quarter of fiscal 2016 revenue of $8.9 million. This increase was primarily due to an increase in product deliveries of EV test systems.

EES 營收為 970 萬美元，較 2016 會計年度第四季的 890 萬美元增加 80 萬美元，增幅 9%。此增加主要來自電動車測試系統產品交付增加。

Turning to gross margin. Gross margin for the fourth quarter was $58.7 million or 47% as compared to $37.9 million or 45% for the fourth quarter of fiscal 2016. The increase in gross margin was primarily due to an increase in product sales margin of $26.5 million, partially offset by a decrease in service margins of $5.8 million. By segment, UAS gross margin increased to $56.3 million for the fourth quarter of fiscal 2017 from $35 million. As a percentage of revenue, gross margin for UAS increased from 46% to 49%, primarily due to an increase in product sales volume and favorable product mix.

接著談毛利率。第四季毛利為 5,870 萬美元或 47%，相較於 2016 會計年度第四季的 3,790 萬美元或 45%。毛利增加主要來自產品銷售毛利增加 2,650 萬美元，但部分被服務毛利減少 580 萬美元所抵銷。按部門別，UAS 毛利於 2017 會計年度第四季增至 5,630 萬美元，較先前的 3,500 萬美元增加。以營收百分比計，UAS 毛利率由 46% 提升至 49%，主要因產品銷售量增加及有利的產品組合。

EES gross margin decreased $0.6 million to $2.3 million for the fourth quarter of fiscal 2017, primarily due to unfavorable product mix. SG&A expense for the fourth quarter of fiscal 2017 was $16.7 million or 13% of revenue compared to SG&A expense of $16.8 million or 20% of revenue for the fourth quarter of fiscal 2016.

EES 毛利於 2017 會計年度第四季減少 60 萬美元至 230 萬美元，主要因不利的產品組合。2017 會計年度第四季的銷售、一般及行政（SG&A）費用為 1,670 萬美元，占營收 13%；相較之下，2016 會計年度第四季 SG&A 費用為 1,680 萬美元，占營收 20%。

R&D expense for the fourth quarter of fiscal 2017 was $7.9 million or 6% of revenue compared to R&D expense of $14.3 million or 17% of revenue for the fourth quarter of fiscal 2016.

2017 會計年度第四季研發（R&D）費用為 790 萬美元，占營收 6%；相較之下，2016 會計年度第四季研發費用為 1,430 萬美元，占營收 17%。

Operating income for the fourth quarter of fiscal 2017 was $34 million or 27% of revenue compared to operating income of $6.8 million or 8% of revenue for the fourth quarter of fiscal 2016. The operating income increase was primarily due to higher gross margins of $20.7 million and a decrease in R&D expense of $6.4 million.

2017 會計年度第四季營業利益為 3,400 萬美元，占營收 27%；相較之下，2016 會計年度第四季營業利益為 680 萬美元，占營收 8%。營業利益增加主要因毛利提高 2,070 萬美元，以及研發費用減少 640 萬美元。

Net other income for the fourth quarter of fiscal 2017 was $1 million compared to the prior year net other income of $0.5 million. During the fourth quarter of fiscal 2017, we acquired an additional equity ownership in our Turkish joint venture, ALTOY, for total proceeds of $625,000, providing us with a controlling interest. As a result, ALTOY's financial results have been consolidated into AeroVironment's consolidated financial statements, which resulted in a gain on acquisition of $0.6 million or $0.02 earnings per diluted share.

2017 會計年度第四季其他淨收益為 100 萬美元，相較於前一年度其他淨收益 50 萬美元。在 2017 會計年度第四季，我們以總價款 62.5 萬美元取得土耳其合資企業 ALTOY 額外的股權持有，使我們取得控制性權益。因此，ALTOY 的財務結果已併入 AeroVironment 的合併財務報表，並產生 60 萬美元的收購利益，或稀釋後每股盈餘增加 0.02 美元。

Our effective income tax rate was 13% for the fourth quarter of fiscal 2017 as compared to an effective income tax rate of 26.4% for the fourth quarter of fiscal 2016.

2017 會計年度第四季的有效所得稅率為 13%，相較於 2016 會計年度第四季的有效所得稅率 26.4%。

Net income attributable to AeroVironment for the fourth quarter of fiscal 2017 was $30.5 million or a $1.30 earnings per diluted share compared to net income attributable to AeroVironment of $5.4 million or $0.23 earnings per diluted share for the fourth quarter of fiscal 2016.

2017 會計年度第四季歸屬於 AeroVironment 的淨利為 3,050 萬美元，或稀釋後每股盈餘 1.30 美元；相較之下，2016 會計年度第四季歸屬於 AeroVironment 的淨利為 540 萬美元，或稀釋後每股盈餘 0.23 美元。

Now moving through full fiscal year 2017 results as compared to fiscal year 2016. Revenue for fiscal 2017 was $264.9 million, an increase of $0.8 million as compared to $264.1 million for fiscal 2016. The increase in revenue was due to an increase in product deliveries of $3.9 million, partially offset by a decrease in contract service revenue of $3.1 million.

接著說明 2017 會計年度全年度結果，並與 2016 會計年度比較。2017 會計年度營收為 2.649 億美元，較 2016 會計年度的 2.641 億美元增加 80 萬美元。營收增加係因產品交付增加 390 萬美元，但部分被合約服務營收減少 310 萬美元所抵銷。

UAS revenue decreased $4.8 million to $228.9 million for fiscal 2017, primarily due to a decrease in customer-funded R&D work of $9.9 million and a decrease in product deliveries of $2.4 million, partially offset by an increase in service revenue of $7.5 million.

2017 會計年度 UAS 營收減少 480 萬美元至 2.289 億美元，主要因客戶出資研發（R&D）工作減少 990 萬美元及產品交付減少 240 萬美元，但部分被服務營收增加 750 萬美元所抵銷。

EES revenue increased $5.6 million to $35.9 million for fiscal 2017, primarily due to an increase in product deliveries of EV test systems and passenger EV charging solutions.

2017 會計年度 EES 營收增加 560 萬美元至 3,590 萬美元，主要因電動車測試系統及乘用電動車充電解決方案的產品交付增加。

Gross margin for fiscal 2017 was $102.1 million or 39% as compared to $112.1 million or 42% for fiscal 2016. The decrease was primarily due to a decrease in product margins of $5.7 million and a decrease in service margins of $4.3 million.

2017 會計年度毛利為 1.021 億美元或 39%，相較於 2016 會計年度的 1.121 億美元或 42%。下降主要因產品毛利減少 570 萬美元及服務毛利減少 430 萬美元。

UAS gross margin decreased to $93 million for fiscal 2017 from $101.5 million in fiscal 2016. As a percentage of revenue, gross margin for UAS decreased from 43% to 41%, primarily due to the reversal for the settlement of prior year government-incurred cost audits reported in the second quarter of fiscal 2016 and an increase in sustaining engineering costs in support of our existing products.

2017 會計年度 UAS 毛利降至 9,300 萬美元，低於 2016 會計年度的 1.015 億美元。以營收百分比計，UAS 毛利率由 43% 降至 41%，主要因 2016 會計年度第二季所認列之先前年度政府發生成本審計和解的回轉，以及為支援既有產品而增加的維持工程成本。

EES gross margin decreased $1.5 million to $9.1 million for fiscal 2017, primarily due to an increase in sustaining engineering costs in support of our existing products and the reserve reversal for the settlement of prior year government incurred cost audits recorded in the second quarter fiscal 2016, partially offset by the increased sales volume.

EES 毛利於 2017 會計年度下降 150 萬美元至 910 萬美元，主要由於為支援我們既有產品而增加的維持性工程成本，以及於 2016 會計年度第二季入帳、針對前一年度政府已發生成本稽核結算所作之準備金回轉，部分被銷售量增加所抵銷。

SG&A expense for fiscal 2017 was $56.5 million or 21% of revenue compared to SG&A expense of $60.1 million or 23% of revenue for fiscal 2016. SG&A expense decreased $3.5 million, primarily due to a decrease in bid and proposal costs and a decrease in professional services.

2017 會計年度的 SG&A 費用為 5,650 萬美元，占營收 21%，相較之下 2016 會計年度 SG&A 費用為 6,010 萬美元，占營收 23%。SG&A 費用減少 350 萬美元，主要由於投標與提案成本下降，以及專業服務費用下降。

R&D expense for fiscal 2017 was $33 million or 12% of revenue compared to R&D expense of $42.3 million or 16% of revenue for fiscal 2016. The decrease in internal R&D expense was primarily due to a decrease in development activities for certain strategic initiatives.

2017 會計年度的研發（R&D）費用為 3,300 萬美元，占營收 12%，相較之下 2016 會計年度研發費用為 4,230 萬美元，占營收 16%。內部研發費用的下降主要是因為若干策略性計畫的開發活動減少。

Operating income for fiscal 2017 was $12.5 million or 5% of revenue compared to operating income of $9.7 million or 4% of revenue for fiscal 2016. The increase in operating income was primarily due to decreases in R&D expense of $9.2 million and SG&A expense of $3.5 million, partially offset by lower gross margins of $10 million.

2017 會計年度營業利益為 1,250 萬美元，占營收 5%，相較之下 2016 會計年度營業利益為 970 萬美元，占營收 4%。營業利益增加主要由於研發費用減少 920 萬美元及 SG&A 費用減少 350 萬美元，部分被毛利降低 1,000 萬美元所抵銷。

Net other income for fiscal year 2016 was $1.7 million compared to the prior year net other expense of $1.7 million. Net other income increased primarily due to the recording of an other-than-temporary impairment loss of our CybAero equity securities during fiscal 2016 and the gain associated with our acquisition of a controlling interest in our Turkish joint venture.

2016 會計年度其他淨收益為 170 萬美元，相較前一年度其他淨費用為 170 萬美元。其他淨收益增加主要由於 2016 會計年度認列我們 CybAero 權益證券之非暫時性減損損失，以及我們收購土耳其合資企業控制性權益所產生的利益。

The effective income tax rate for fiscal 2017 was 12.3% compared to the effective income tax rate of minus 11.1% for fiscal 2016. The fiscal 2017 tax rate included a reversal of a reserve of $1 million for uncertain tax positions due to the settlement of prior fiscal year audits. Net income attributable to AeroVironment for fiscal 2017 was $12.5 million or $0.54 earnings per diluted share compared to net income of $9 million or $0.39 earnings per diluted share for fiscal 2016.

2017 會計年度有效所得稅率為 12.3%，相較之下 2016 會計年度有效所得稅率為負 11.1%。2017 會計年度稅率包含因結清前一會計年度稽核而回轉 100 萬美元之不確定稅務部位準備金。2017 會計年度歸屬於 AeroVironment 的淨利為 1,250 萬美元，或稀釋後每股盈餘 0.54 美元，相較之下 2016 會計年度淨利為 900 萬美元，或稀釋後每股盈餘 0.39 美元。

Our funded backlog as of April 30, 2017, was $78 million, an increase of $12.2 million or 19% from the fourth quarter of fiscal year 2016 and a decrease of $56.1 million or 42% from the third quarter of fiscal 2017.

截至 2017 年 4 月 30 日，我們的已獲資金支持之在手訂單（funded backlog）為 7,800 萬美元，較 2016 會計年度第四季增加 1,220 萬美元（19%），但較 2017 會計年度第三季減少 5,610 萬美元（42%）。

Turning to our balance sheet. Cash, cash equivalents and investments at the end of fiscal year 2017 totaled $242 million, a decrease of $19.6 million from the end of fiscal 2016. The decrease in cash, cash equivalents and investments was driven by higher working capital requirements of the business with our record fourth quarter revenue.

接著看我們的資產負債表。2017 會計年度期末的現金、約當現金及投資合計為 2.42 億美元，較 2016 會計年度期末減少 1,960 萬美元。現金、約當現金及投資的減少，係由於在第四季營收創新高的情況下，業務對營運資金的需求提高所致。

Accounts receivable, including unbilled and retentions receivables at the end of fiscal year 2017, totaled $88.5 million, an increase of $13.6 million from the end of fiscal year 2016. Total days sales outstanding for fiscal 2017 was approximately 113 days compared to 87 days for fiscal 2016.

2017 會計年度期末應收帳款（含未開立帳單及保留款應收帳款）合計為 8,850 萬美元，較 2016 會計年度期末增加 1,360 萬美元。2017 會計年度應收帳款週轉天數（DSO）約為 113 天，相較 2016 會計年度為 87 天。

Net inventory at the end of fiscal year 2017 was $60.1 million compared to $68.8 million at the end of the prior quarter and $37.5 million at the end of fiscal year 2016. Days in inventory for fiscal year 2017 were approximately 90 days compared to 92 days for fiscal 2016. This increase in inventory dollars was primarily due to anticipated first half shipments.

2017 會計年度期末淨存貨為 6,010 萬美元，相較前一季期末為 6,880 萬美元，2016 會計年度期末為 3,750 萬美元。2017 會計年度存貨天數約為 90 天，相較 2016 會計年度為 92 天。存貨金額增加主要是因為預期上半年出貨。

Turning to capital expenditures. In the fiscal year 2017, we invested approximately $9.9 million or 4% of revenue and property improvements and capital equipment and recognized $7.1 million of depreciation and amortization expense.

接著談資本支出。在 2017 會計年度，我們在廠房改善及資本設備方面投資約 990 萬美元（約占營收 4%），並認列 710 萬美元的折舊與攤銷費用。

Now an update to our fiscal 2018 visibility. As of today, we have Q4 ending backlog that we expect to execute in fiscal 2018 of $75 million. Quarter-to-date bookings that we anticipate to execute in fiscal 2018 of $17 million, unfunded backlog from incrementally funded contracts that we anticipate to recognize revenue during the balance of the year of $3 million, revenues needed to hold EES revenues flat relative to last year of $24 million. This adds up to $120 million, 41% at the midpoint of revenue guidance.

現在更新我們對 2018 會計年度的可視度。截至今日，我們有第四季期末在手訂單中預期於 2018 會計年度執行的 7,500 萬美元。本季迄今的接單中預期於 2018 會計年度執行的 1,700 萬美元；來自逐步撥款合約的未獲資金支持在手訂單中，預期於本年度剩餘期間認列營收的 300 萬美元；以及為使 EES 營收相較去年持平所需的 2,400 萬美元營收。合計為 1.2 億美元，約占營收指引中點的 41%。

Now I'd like to turn things back to Wahid to discuss AeroVironment's expectations for fiscal year 2018.

現在我想把時間交回給 Wahid，請他說明 AeroVironment 對 2018 會計年度的展望。

Thanks, Teresa. Now I would like to provide a macro view on our industry. Industry trends are favorable for our -- in fiscal 2018. First, the global threat environment remains very dynamic, requiring highly capable small military teams that can operate flexibly and effectively in a wide variety of theaters around the globe. In this environment, organic intelligence, surveillance and reconnaissance and precision strike solutions, like our small UAS and TMS, offer game-changing capabilities that help troops obtain the actionable intelligence they need to act decisively and proceed with certainty. Because U.S. forces are not operating alone in these theaters, demand from our allies for AeroVironment solutions remain strong as well.

謝謝你，Teresa。現在我想就我們的產業提供一個宏觀觀點。在 2018 會計年度，產業趨勢對我們而言是有利的。首先，全球威脅環境仍然非常動態，因而需要高能力的小型軍事團隊，能在全球各種戰區中以彈性且有效的方式作戰。在此環境下，有機情資、監視與偵察以及精準打擊解決方案（例如我們的小型無人機系統 UAS 與 TMS）提供了改變遊戲規則的能力，協助部隊取得可採取行動的情資，以果斷行動並更有把握地推進。由於美軍並非在這些戰區單獨行動，我們盟友對 AeroVironment 解決方案的需求也依然強勁。

Second, the federal government fiscal year 2018 budget request includes procurement line items associated with AeroVironment solutions. The budget request includes approximately $40 million for the U.S. Army, Navy, Marine Corps, U.S. SOCOM and for the first time, Coast Guard and Customs and Border Patrol programs, seeking AeroVironment small UAS or Tactical Missile Systems.

第二，聯邦政府 2018 會計年度預算請求包含與 AeroVironment 解決方案相關的採購科目。該預算請求包含約 4,000 萬美元，提供給美國陸軍、海軍、海軍陸戰隊、美國特種作戰司令部（SOCOM），以及首次納入的海岸防衛隊與海關及邊境保護局計畫，用於採購 AeroVironment 小型 UAS 或戰術飛彈系統。

Third, our international footprint continues to grow with an increasing number of new international customers. We now count more than 40 countries outside of the U.S. as customers for our family of small UAS. Similarly, our family of Tactical Missile Systems footprint among U.S. customers continues to advance with strong pull from the unique and game-changing capabilities these systems offer in the highly dynamic threat environment.

第三，隨著新增國際客戶數量增加，我們的國際版圖持續擴大。目前在美國以外，已有超過 40 個國家成為我們小型 UAS 系列產品的客戶。同樣地，在美國客戶方面，我們的戰術飛彈系統系列版圖也持續推進；在高度動態的威脅環境下，這些系統所提供的獨特且改變遊戲規則的能力帶來強勁的拉動需求。

In our DoD small UAS market, we see incremental opportunities and upgrades, the Soldier Borne Sensor or SBS program and frequency relocation. Combined with growing international demand for our family of small UAS, we see healthy opportunities for us in this core part of our business.

在國防部（DoD）小型 UAS 市場，我們看到增量機會與升級，包括 Soldier Borne Sensor（SBS）計畫以及頻率遷移。結合我們小型 UAS 系列產品日益成長的國際需求，我們在這項核心業務領域看見良好的機會。

As for our growth portfolio, in TMS, Switchblade and its variants not only represent our second largest business but also continue to improve our positioning for an annual domestic market opportunity that we estimate exceeds $1 billion in value.

至於我們的成長型產品組合，在 TMS 方面，Switchblade 及其各型號不僅是我們第二大業務，也持續改善我們在國內年度市場機會中的定位；我們估計該市場機會價值超過 10 億美元。

In CIS, we are poised to make the next step in our plan to enter that what could be a multibillion global market opportunity.

在 CIS 方面，我們已準備好在進入一個可能達數十億美元規模的全球市場機會之計畫上邁出下一步。

Looking ahead, we're focused on building on our 2017 success and accomplishing our fiscal 2018 objectives, which I will now outline.

展望未來，我們將專注於在 2017 年成功的基礎上再接再厲，並達成 2018 會計年度的目標，我現在將加以說明。

First, increasing our small UAS footprint in domestic and international markets, continuing strong multiyear international revenue momentum, winning the U.S. Army SBS program should a competition and award take place this year, achieving further progress in our U.S. government's frequency relocation program and demonstrating progress with other U.S. government customers, such as the Coast Guard and DHS.

第一，擴大我們小型 UAS 在國內與國際市場的佔有率，延續強勁的多年期國際營收動能；若今年進行競標並完成授標，則爭取贏得美國陸軍 SBS 計畫；在美國政府的頻譜遷移計畫上取得進一步進展，並向其他美國政府客戶（如海岸防衛隊與國土安全部（DHS））展現進度。

Second, continue to grow our TMS business while increasing its contribution to funded backlog and continuing adoption momentum of Switchblade variants.

第二，持續成長我們的 TMS 業務，同時提高其對已獲資金支持的訂單積壓（funded backlog）的貢獻，並延續 Switchblade 各型號的採用動能。

Third, achieving the next major milestone in our CIS business plan this calendar year, which includes shipments of initial Quantix drone and Decision Support System subscriptions to customers in agriculture. We are taking a gated approach that includes evaluating adoption to inform each subsequent phase of how we build this potentially large business.

第三，在本曆年達成我們 CIS 業務計畫的下一個重大里程碑，其中包括向農業客戶出貨首批 Quantix 無人機，以及 Decision Support System（決策支援系統）訂閱服務。我們採取分階段（gated）的方式，包含評估採用情況，以便為後續各階段如何打造這個潛在規模龐大的業務提供依據。

Fourth, continuing to grow our EV charging business, domestically and globally, through relationships with automakers while maintaining our leadership in industrial EV charging and EV test systems.

第四，透過與汽車製造商的合作關係，在國內與全球持續擴大我們的電動車充電業務，同時維持我們在工業用電動車充電與電動車測試系統方面的領導地位。

And fifth, successfully deploying our key fiscal 2018 strategic internal initiatives, which include our people strategy and our business process improvement program to further position AeroVironment for long-term growth and value creation.

第五，成功推動我們 2018 會計年度的關鍵策略性內部倡議，包括人才策略與業務流程改善計畫，以進一步讓 AeroVironment 具備長期成長與價值創造的有利條件。

Now I will share our view of fiscal 2018. As Teresa described moments ago, our total visibility for fiscal 2018 is now 41%, the same as this time last year. Given our visibility, the strong performance of our team, our planning and forecasting based on customer demand signals, favorable macro factors and our strong position, we expect revenue to grow to between $280 million and $300 million this year.

接下來我將分享我們對 2018 會計年度的看法。如 Teresa 剛才所述，我們對 2018 會計年度的整體可視度（visibility）目前為 41%，與去年此時相同。基於我們的可視度、團隊的強勁表現、依據客戶需求訊號所做的規劃與預測、有利的總體因素以及我們的強勢地位，我們預期今年營收將成長至 2.80 億至 3.00 億美元之間。

We expect the mix of revenue, meaning the blend of higher-margin product revenue and fixed price contracts versus lower-margin services revenue in cost plus contracts to result in lower gross margin this year than last year.

我們預期營收組合（亦即高毛利產品營收與固定價格合約，相對於成本加成合約中低毛利服務營收的搭配）將使今年的毛利率低於去年。

We plan to spend between 9% and 10% of revenue on internal research and development investments in fiscal 2018 and we expect a significantly higher tax rate than last year. We anticipate the net impact of revenue, mix, spending and taxes will produce fully diluted earnings per share between $0.45 and $0.65. We expect lower seasonality in our results than last year with first half revenue representing about 40% of our full year. We anticipate revenue in our first quarter, historically, the lowest of each fiscal year of between $40 million and $44 million, with fully diluted loss per share of between $0.32 and $0.40.

我們計畫在 2018 會計年度將營收的 9% 至 10% 用於內部研發投資，且我們預期稅率將顯著高於去年。我們預估營收、組合、支出與稅負的綜合淨影響，將使完全稀釋每股盈餘介於 0.45 美元至 0.65 美元。我們預期今年的季節性波動將低於去年，上半年營收約占全年 40%。我們預期第一季（歷來為每個會計年度最低的一季）營收介於 4,000 萬至 4,400 萬美元，完全稀釋每股虧損介於 0.32 美元至 0.40 美元。

Before we move to Q&A, I would like to reemphasize the main points of today's call. First, our business remains strong and profitable and our team achieved or exceeded our financial objectives for fiscal 2017. Second, we achieved good progress on our fiscal 2017 milestones that maintained the leading market positions in our core business and advanced our differentiated solutions for large and new global opportunities in our growth portfolio.

在進入問答之前，我想再次強調今天電話會議的重點。第一，我們的業務仍然強勁且具獲利能力，我們的團隊在 2017 會計年度達成或超越了財務目標。第二，我們在 2017 會計年度的里程碑上取得良好進展，維持了核心業務的市場領先地位，並推進了我們具差異化的解決方案，以把握成長組合中龐大且新興的全球機會。

And third, we remain on track for long-term value creation. I would also like to remind you that AeroVironment continues to maintain a strong position in the most exciting categories of the defense market with profitable businesses and strong growth prospects. Our strategic growth opportunities, such as our commercial businesses, offer the ability to capitalize on additional multibillion market opportunities. And our strong balance sheet gives us the important ability to move quickly to seize new markets when opportunities emerge.

第三，我們仍按計畫推進長期價值創造。我也想提醒各位，AeroVironment 持續在國防市場中最令人振奮的類別保持強勢地位，擁有具獲利能力的業務與強勁的成長前景。我們的策略性成長機會（例如商用業務）使我們能把握額外的數十億美元市場機會。而我們強健的資產負債表，讓我們具備在新機會出現時迅速行動、掌握新市場的重要能力。

Thank you to the AeroVironment team for your outstanding efforts in fiscal 2017 and for your relentless dedication to supporting our customers. Thank you to our customers who continue to make AeroVironment their preferred choice. And thank you to our shareholders for your continued interest and confidence in us.

感謝 AeroVironment 團隊在 2017 會計年度的傑出努力，以及對支援客戶不懈的投入。感謝我們的客戶持續將 AeroVironment 視為首選。也感謝股東對我們持續的關注與信任。

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

現在，Teresa、Steve 和我將回答各位的提問。

(Operator Instructions) And our first question comes from the line of Joseph DeNardi with Stifel.

（接線員指示）我們的第一個問題來自 Stifel 的 Joseph DeNardi。

Wahid, I think you mentioned seeing some renewed interest in Global Observer, I guess, in the quarter. I wonder if you could just talk about that a little bit more in detail.

Wahid，我想你提到本季似乎看到對 Global Observer 的一些重新興趣。想請你能否更詳細談談？

Sure, Joe. As we've said before, AeroVironment remains to be a leader in that particular area of capability with a very strong demonstrated track record over 2 decades of successes in programs that we have executed on. And as we said from approximately 3 years ago that we've been engaged, to my knowledge at least, engaged with various interested customers, both in the defense as well as the commercial markets for potential adoption and contracts for such capability. And we -- although the investment level there is fairly low, but we are still engaged and we continue to be engaged with customer -- with interested customers for that capability. The -- we've also said in the past, and I repeat, that, that represents a very large opportunity, which remains so far to be essentially a 0 for us in terms of capitalizing on that and making it into a real business. And however, should that odds change or that situation change, it does represent a very large opportunity for AeroVironment, and AeroVironment offers a very compelling differentiated capability than anyone else in the world in that front. And as we have more progress and engagements with the customers that are significant, we'll keep you abreast and informed.

當然可以，Joe。如同我們先前所說，AeroVironment 在該項能力領域仍是領導者，並在過去 20 年我們所執行的專案中，展現了非常強而有力且可驗證的成功紀錄。而且如我們約 3 年前所說，據我所知，我們一直與各類有興趣的客戶接洽，包含國防與商用市場，探討採用該能力的可能性以及相關合約。我們——雖然在那方面的投資水準相當低——但我們仍在投入，並持續與客戶——與對該能力有興趣的客戶——保持接觸。我們過去也說過，我再重申一次：這代表一個非常大的機會，但截至目前，對我們而言在把握該機會、將其轉化為實質業務方面，基本上仍是 0。不過，若機率或情勢有所改變，這確實會為 AeroVironment 帶來非常大的機會；而在這個面向上，AeroVironment 相較全球任何其他公司都提供非常具說服力且差異化的能力。當我們與客戶的互動有更顯著的進展時，我們會持續向各位更新並提供資訊。

Okay. But should I understand the comment that you made to suggest that you did see that in the quarter? You have seen some renewed interest there, or no?

好的。但我是否應該把你剛才的評論理解為：你確實在本季看到了這種情況？你看到那邊有一些重新燃起的興趣，還是沒有？

All I've said is that we continue to be engaged with various customers who have an interest in that capability. I have not said whether we have been engaged more or less than before. It's been an ongoing activity and effort for us. Very small, very small insignificant investment, but still a small investment to pursue those opportunities that have a serious, what I call, qualified potential customers that could turn into an adoption eventually. But so far, there's nothing new to report.

我所說的只是：我們持續與多位對該能力有興趣的客戶保持接觸。我並沒有說我們的接觸程度比以前更多或更少。這一直是我們持續進行的活動與努力。投資非常小、非常小且不具重大性，但仍有小幅投資，用以追求那些我所稱的、具嚴肅性且「合格」的潛在客戶機會，未來可能最終轉化為採用。但截至目前，沒有新的進展可報告。

And our next question comes from the line of Greg Konrad with Jefferies.

下一個問題來自 Jefferies 的 Greg Konrad。

I just wanted to touch on LMAMS, kind of where that program stands. And if you look at the [HASC] mark, they're obviously very supported, and you saw a nice markup there. Maybe some of the milestones for that program or what type of feedback you're getting from the customer?

我想簡單談一下 LMAMS，這個計畫目前進展到哪個階段。如果你看一下 [HASC] 的標記，他們顯然非常支持，而且你也看到那裡有不錯的加碼。也許可以談談這個計畫的一些里程碑，或你們從客戶那邊收到什麼樣的回饋？

Greg, yes. Sure. So you're absolutely correct that the government budgeting process and the [HASC] or [HAPC], I think, it's referred to, has had a favorable indicator for the procurement of those solutions and budgeting for that through the congressional budget approval process. Again, that remains to be just -- again it's going through the process by itself right now. There is a specific line item on the Army's OCO or Overseas Contingency Operations line item for missile procurement of LMAMS and it's -- essentially, it's, I believe, it's line 14 on the actual budget line and it represents roughly $8.7 million worth of appropriation. Now keep in mind that, that does not mean that actual dollars are completely approved or funded. It's a request that has been made by the President's budget request or submittal, and it has to go through the approval process as it always does. What I can tell you is that, as you saw from our results in fiscal 2017 in the fourth quarter, we remain fairly enthusiastic and excited about the prospects of our Tactical Missile Systems product portfolio, but we are positioned very well because we have delivered very successfully in the past on multiple such opportunities -- -and one of which that I mentioned early in the call in fiscal 2017. The customer seem to really appreciate and prefer AeroVironment's capability and offering. And as I mentioned on my earlier remarks, also the macro threat environment is such that, I believe, we're in an exciting category of the defense as well as in a very exciting subcategory of UAVs or drones, which is a loitering munition, which Switchblade offers.

Greg，是的。當然。所以你完全正確，政府的預算編列流程以及[HASC]或[HAPC]（我想是這麼稱呼）一直對這些解決方案的採購，以及透過國會預算核准流程為其編列預算，提供了有利的指標。再次強調，這件事仍然只是——同樣地，它目前正自行走流程。在陸軍的OCO（海外應急行動）預算科目中，針對LMAMS飛彈採購有一個特定的細項——基本上，我相信在實際預算明細中是第14行，約代表8.7百萬美元的撥款額度。現在請記住，這並不代表實際資金已完全核准或到位。這是一項由總統預算請求或提交所提出的申請，並且一如往常必須經過核准流程。我可以告訴你的是，正如你從我們2017會計年度第四季的業績所看到的，我們對於戰術飛彈系統（Tactical Missile Systems）產品組合的前景仍然相當樂觀且興奮；而且我們的定位非常好，因為過去在多個此類機會上我們都非常成功地交付——其中之一我在本次電話會議較早時提到，發生在2017會計年度。客戶似乎非常欣賞並偏好AeroVironment的能力與方案。而且如我先前所說，宏觀威脅環境使得我相信，我們正處於國防領域一個令人振奮的類別，同時也在UAV或無人機的一個非常令人振奮的子類別——滯空攻擊彈藥（loitering munition）——而這正是Switchblade所提供的。

One thing to add, Greg, this is Steve, is that LMAMS refers to a specific program for the Army that we're currently addressing with the product that we call Switchblade, which is the first -- the initial but only one of -- one element of our emerging family of Tactical Missile Systems that are now addressing a broad range of customers, opportunities and potential market value. So progress on LMAMS, progress with our Switchblade product. But also as you can see from the results in the year, significant progress across the breadth of our portfolio in Tactical Missile Systems contributing to that 56% CAGR from 2011 and revenue associated with that part of our business.

Greg，補充一點，我是Steve：LMAMS指的是陸軍的一個特定計畫，我們目前正以我們稱為Switchblade的產品來因應；這是——最初的、但也是——我們正在形成的戰術飛彈系統新興產品家族中的其中一個要素，而該家族目前正面向廣泛的客戶、機會與潛在市場價值。所以，LMAMS的進展、我們Switchblade產品的進展。但同時，如你從本年度的結果所見，我們在戰術飛彈系統產品組合的廣度上也取得了顯著進展，並促成自2011年以來該業務相關營收達到56%的年複合成長率（CAGR）。

And then just I wanted to touch on working capital. I think you mentioned in the script that there was buildup of inventory to need a first half shipment. Should we expect to see working capital come down as we kind of move through 2018? Or is this kind of the appropriate level?

另外我想談一下營運資金。我想你在講稿中提到，為了滿足上半年出貨需求，庫存有所增加。我們是否應該預期，隨著我們在2018年推進，營運資金會下降？還是說這大致就是適當的水準？

So Greg, this is Teresa. Yes, in my prepared remarks, I talked that inventory, although down from the third quarter, ending the year at $60 million was above the prior year. I mentioned that, yes, some of that is related to shipments that we expect in the first half of fiscal 2018. We do, from time to time, on a case-by-case basis, we will increase our inventory levels to respond quickly to a international small UAS customer or a key domestic customer that we believe gives us the ability to win business and has proven effective for us, but that's on a case-by-case basis. Also, our accounts receivables, including our unbilled, was up $13 million at the end of '17 versus '16. That is a result of just the high revenue in Q4. No change in terms of our DSO or our collections.

Greg，我是Teresa。是的，在我事先準備的發言中，我提到庫存雖然較第三季下降，但年末為6,000萬美元，仍高於前一年。我也提到，是的，其中一部分與我們預期在2018會計年度上半年出貨有關。我們確實會不時地、依個案情況，提高庫存水位，以便能快速回應國際小型UAS客戶或我們認為能讓我們贏得業務、且已被證明對我們有效的關鍵國內客戶，但這是逐案處理。另外，我們的應收帳款（包含未開立帳單部分）在2017年末較2016年末增加了1,300萬美元。這只是第四季營收很高所致。就DSO（應收帳款週轉天數）或收款而言沒有變化。

And our next question comes from the line of Peter Arment with Baird.

我們的下一個問題來自Baird的Peter Arment。

Wahid, on the guidance for revenues, the $280 million to $300 million, wonder if you could just clarify why the kind of expectation you had a lower-margin mix. It seems like TMS is really ramping; international is really ramping. It would seem that, that would be -- that might potentially have some additional favorable margins.

Wahid，關於營收指引2.8億到3.0億美元，我想請你釐清一下，為什麼你們會預期產品組合的毛利率較低。看起來TMS正在快速成長；國際業務也在快速成長。似乎這——可能會帶來一些額外的有利毛利。

Peter, great question. As I mentioned on my remarks, so we do expect the gross margin percentage for the year, fiscal '18, to be slightly lower than fiscal '17. And there's actually 2 factors related to -- 3 things or factors that make up the gross margin percentage in the product category. First one is the different products such as one version of the Raven versus a different version of the Raven have different profitability profiles. So a different product mix by itself has a different profile. Number two is variations between product sales and services sales. As you could see from our Tactical Missile Systems business, for example, that we generated a significant amount of revenue from customer funded R&D programs or serve -- engineering services type programs or projects, and those tend to be slightly lower-margin than just selling products as a product revenue. And then third, the type of contracts that we actually engage with customers or we deliver products to, or services to customers, also have a different profile of profitability. For example, products that we sell at firm fixed-price contracts tend to generally have slightly higher risk but higher profit for the company, primarily because we invest money to sell those -- to make those products and then we sell them as a fixed price contract. On the other hand, cost plus contracts, relatively speaking, has a slightly lower gross margin and profitability profile due to the fact that it has lower risk, but also lower profit profile. So based on those 3 main factors of types of mix of changes in the product, we expect the gross margins in fiscal '18 to be lower. And that usually changes every year to some degree or another but that's what the profile looks like for fiscal '18 right now.

Peter，問得很好。如我在發言中提到，我們確實預期2018會計年度的毛利率百分比會略低於2017會計年度。而且實際上，產品類別的毛利率百分比由——兩個因素相關的——三件事或因素所構成。第一，不同產品（例如某一版本的Raven相較於另一版本的Raven）有不同的獲利結構。因此，僅僅是不同的產品組合本身就會呈現不同的輪廓。第二，是產品銷售與服務銷售之間的差異。例如，從我們的戰術飛彈系統業務你可以看到，我們有相當一部分營收來自客戶出資的研發計畫或——工程服務類型的計畫或專案，而這些通常比單純以產品營收形式銷售產品的毛利略低。第三，我們實際與客戶簽訂或交付產品、或向客戶提供服務的合約類型，也會有不同的獲利輪廓。例如，我們以「固定總價」（firm fixed-price）合約銷售的產品，通常風險略高但公司利潤也較高，主要因為我們先投入資金製造這些產品，然後以固定價格合約出售。另一方面，「成本加成」（cost plus）合約相對而言毛利率與獲利輪廓略低，原因是其風險較低，但利潤輪廓也較低。因此，基於上述三個主要因素（產品組合變化的類型），我們預期2018會計年度的毛利率會較低。而這通常每年都會在某種程度上有所變動，但目前2018會計年度的輪廓就是如此。

Got it. And just one follow-up. On TMS, the growth has been exponential, and $70 million, I guess, in revenue was, I think, the number you quoted for fiscal '17. At what point does this business start to acquire significantly more CapEx going forward?

了解。再追問一個。關於TMS，成長呈指數型，2017會計年度營收約7,000萬美元，我想那是你引用的數字。往後這項業務在什麼時點會開始需要顯著更多的資本支出（CapEx）？

Another great question, Peter. So we have been obviously very enthusiastic and bullish on our Tactical Missile Systems for a while. If you recall, about 3 years ago, one of our strategic growth initiatives where we communicated to our shareholders that we were going to invest incrementally above and beyond our historical levels was the Tactical Missile Systems business. And while we could not share the specific details of how much and to what products, we were fairly confident that the investments were going to pay off dividends, and they have done so as you can see from the results in the past few years. And so fiscal '17 revenues were close to $75 million versus about $41 million or $40 million in fiscal '16. So that family of products -- and so in addition to that, we now have multiple variants of the product, as I said, for different customer needs and different mission profiles and different applications. And all that -- we're pursuing a few potential programs of record as well, as I mentioned. So all of that means that when there's a program of record or there is more customer demand for -- or buying signals for those products, we will have to invest in ramping up manufacturing and building additional production capacities. And part of the investment that we made in that fiscal year was actually to expand and upgrade that capability to build the world's best, what I call, tactical missile systems or loitering munitions manufacturing capability in the world. And so we're on track with that and we will make the investments as we see them judiciously and prudently.

Peter，又是一個很好的問題。所以我們顯然對戰術飛彈系統業務已經樂觀且看多一段時間了。如果你記得，大約3年前，我們向股東溝通的策略成長計畫之一，就是戰術飛彈系統業務；我們表示將在歷史水準之上進一步增加投資。雖然我們無法分享具體細節（投資多少、投到哪些產品），但我們相當有信心這些投資會帶來回報；而且正如你從過去幾年的結果所見，確實如此。因此，2017會計年度營收接近7,500萬美元，而2016會計年度約為4,100萬或4,000萬美元。所以這個產品家族——此外，如我所說，我們現在也有多個產品變體，以滿足不同客戶需求、不同任務輪廓與不同應用。而且如我提到的，我們也在追求幾個潛在的正式列裝計畫（programs of record）。因此，這一切都意味著，當出現正式列裝計畫，或客戶對這些產品有更多需求——或出現採購訊號時，我們將必須投資於提升製造爬坡並建立額外的產能。而我們在該會計年度所做的部分投資，實際上就是為了擴充並升級該能力，以打造我所稱的、世界上最好的戰術飛彈系統或滯空攻擊彈藥的製造能力。因此，我們正按計畫推進，並將在看到需求時審慎且謹慎地進行投資。

And our next question comes from the line of Troy Jensen with Piper Jaffray.

我們的下一個問題來自 Piper Jaffray 的 Troy Jensen 專線。

It's actually [Nick Johnson] on for Troy. I wanted to ask on the news of your contract with the Australian Defence Force and your comments on future expansion with international customers. Would you guys expect these future contracts with new countries to be substantial in size, similar to the one with Australia? Additionally, do you further expect to expand your fleet with your current international customers?

其實我是代替 Troy 的 [Nick Johnson]。我想就你們與澳洲國防軍合約的消息，以及你們對未來與國際客戶擴張的評論提問。你們是否預期未來與新國家簽訂的合約規模會相當可觀，類似與澳洲的那一筆？另外，你們是否也預期會在現有的國際客戶中進一步擴充你們的機隊？

Yes. So [Nick], and as you also saw from our previous -- my previous -- earlier comments, the international small UAS category of our business has been very strong in the last few years. And I've said this many times in the past, which is the adoption cycle and phase, which most of our international customers, on aggregate, are at, is about 5 to 10 years behind our domestic U.S. DoD customer adoption curve. And the number of countries, I'm pleased to inform -- obviously announce that we achieved over 40 countries. It's a very reputable list of countries around multiple continents and multiple geographies. So that all bodes really well for the strength and the customer's desire and pull for our solutions and our differentiated capabilities. Every country is somewhat different and unique in its profile of need as well as the adoption curve. So specific to your question, we have a mix of all. We have a mix of some customers that are fairly advanced in their adoption curve, such as the announcement with our Netherland customers, we see a contract that I mentioned on my call, for multimillions of dollars, and it was primarily an upgrade and expansion of our line versus other customers that are just initiating an initial buy. Or the Australian case where they had evaluated our products and now, they're actually proceeding with a program of record for the Wasp AE Family of Systems. So in general, we expect that to grow and continue to be strong throughout the -- this year and coming years. And we're very delighted about our position, and pleased with the results that we've achieved so far.

是的。所以，[Nick]，而且如你也從我們先前——我先前——較早的評論中看到的，過去幾年我們業務中的國際小型 UAS 類別一直非常強勁。我過去多次提到，整體而言，我們多數國際客戶所處的採用週期與階段，大約比我們美國國內的美國國防部（U.S. DoD）客戶採用曲線落後 5 到 10 年。我也很高興地告訴大家——並且正式宣布——我們已經達到超過 40 個國家。這是一份涵蓋多個洲、不同地理區域、非常具聲譽的國家名單。因此，這些都非常有利於顯示我們解決方案的實力，以及客戶對我們方案與差異化能力的需求與拉動力。每個國家在需求輪廓以及採用曲線上都略有不同且各具特色。因此，針對你的問題，我們的情況是多元混合的。我們有一些客戶在採用曲線上相當成熟，例如我們與荷蘭客戶的公告，我們看到一份我在電話會議中提到的、數百萬美元規模的合約，主要是對我們產品線的升級與擴充；相較之下，也有其他客戶才剛開始進行首次採購。或者像澳洲的案例，他們已評估過我們的產品，現在實際上正推進 Wasp AE 系統家族的正式列裝計畫（program of record）。因此整體而言，我們預期這部分在今年以及未來幾年都會成長並持續強勁。我們對自身的市場位置感到非常欣喜，也對迄今為止所取得的成果感到滿意。

(Operator Instructions) And we have a follow-up question from the line of Joseph DeNardi with Stifel.

(接線員指示) 我們有一個追問，來自 Stifel 的 Joseph DeNardi 專線。

Wahid, thanks for the additional color on TMS in terms of disclosing the revenue. If you look at UAS, excluding the growth from TMS revenues, we're down there. Does that -- does the remainder of the UAS business start to stabilize in FY '18? Is that your expectation?

Wahid，謝謝你就 TMS 在揭露營收方面提供更多說明。如果看 UAS，在排除 TMS 營收成長之後，我們那部分是下滑的。那——UAS 業務其餘部分在 2018 財年會開始趨於穩定嗎？這是你的預期嗎？

Great question, Joe. You're welcome about the comment earlier. So here's how I view this in general, Peter -- Joe. First and foremost, since our product portfolio has grown over the last few years significantly, we now have different customers and different markets and geographies and different applications with various degrees or different phases of their adoption and life cycle. I would characterize the domestic small UAS customer base, the most, what I call, advanced or ahead of the adoption curve, where they're in a sustainment and upgrade mode. I refer to those terminologies internally, so I hope you can understand my rationale behind that. And what I mean by that is that we have a very large install base, they are very comfortable with our products, they see the value in our products. And primarily, they are buying upgrades and sustainment parts, spare parts and logistics services for the products. And in those cases, for example, the i45, which we announced and shipped a significant number of them in fourth quarter was one example of that upgrade opportunity within our domestic U.S. customer base. In addition to that, we're also launching new products and introducing new products, such as the example of the Snipe UAV that I mentioned that we delivered 30 systems in the fourth quarter and that's geared towards a new program or potential program of record called [SDS], or [sociable] sensor program. And so that represents a new growth opportunity. Additionally, we're pursuing new customers for existing and new products. And I mentioned on the call earlier that we're pursuing adoption and we've made progress with the U.S. Navy and also their line items in the budget for Department of Homeland Security or Customs and Border Patrol as well as U.S. Coast Guard. These are customers that we've been pursuing and engaged with for a while, and they're now starting to come online or -- and do procurements and budget for these capabilities, which I expect in the long run to pay fairly strong dividends for us in general. So I don't view it as it's down. I view it -- it's going through a different cycle of its phase and it has growth opportunities within itself, but also upgrade in new product sales to new and existing customers.

好問題，Joe。也不客氣，關於我先前的說明。我整體上是這樣看待的，Peter——Joe。首先也是最重要的，隨著過去幾年我們的產品組合顯著擴大，我們現在面對不同客戶、不同市場與地理區域，以及不同應用，而它們各自處於不同程度或不同階段的採用與生命週期。我會把美國國內小型 UAS 客戶群形容為最——我所稱——最成熟或走在採用曲線前端的族群，他們目前處於維持（sustainment）與升級（upgrade）模式。這些是我在內部使用的術語，希望你能理解我背後的邏輯。我的意思是，我們有非常龐大的既有裝機基礎，客戶對我們的產品非常熟悉，也看得到產品價值。而他們主要採購的是升級與維持所需的零組件、備品與後勤服務。在這些案例中，例如 i45——我們在第四季公告並出貨了相當數量——就是我們在美國國內客戶群中一個升級機會的例子。除此之外，我們也在推出新產品並導入新產品，例如我提到的 Snipe UAV，我們在第四季交付了 30 套系統，這是針對一個新的計畫或潛在的正式列裝計畫，稱為 [SDS]，或 [sociable] 感測器計畫。因此，這代表一個新的成長機會。另外，我們也在為既有與新產品開拓新客戶。我先前在電話會議中提到，我們正在推動採用，並且在美國海軍方面取得進展；同時在國土安全部（Department of Homeland Security）或海關與邊境保護局（Customs and Border Patrol），以及美國海岸防衛隊（U.S. Coast Guard）的預算科目中也有相關項目。這些客戶我們已經追蹤並互動了一段時間，現在他們開始上線——並進行採購與為這些能力編列預算；我預期長期而言，這將為我們帶來相當可觀的回報。所以我不認為它是下滑。我認為——它正處於其不同階段的循環之中，內部仍有成長機會，同時也包括對新舊客戶的升級與新產品銷售。

Okay. And then I guess just on TMS. Can you just talk about, to the extent you can, how big that business can get in terms of the way it's being deployed now? Is it being used more broadly than you had expected? I mean, just any color on what your expectations are for that family of products.

了解。那接著我想問一下 TMS。在你能分享的範圍內，能否談談就目前的部署方式而言，那個業務規模可能成長到多大？它的使用範圍是否比你原先預期更廣？也就是說，任何關於你對那個產品家族的預期的補充說明都可以。

Sure. So Joe, a long time ago, we decided to really provide specific guidance in terms of the exact size of these markets except to refer to third party data. What we have shared in the Tactical Missile Systems category, for example, specifically the original Switchblade, that the addressable market which Switchblade, the original Switchblade, can and does provide a more compelling value proposition, that can replace or displace, represents roughly about $1 billion worth of annual spend in the U.S. DoD budget line items alone. And so again, that's just a general rough estimate of the size of that potential market opportunity for the original Switchblade. And as I mentioned, we have more than one variant of our original Switchblade, one variant of which we've been able to disclose with you in more detail, which was the Blackwing product. And that is a submarine launched UAV nonlethal, that essentially gives a submarine a visual line of sight beyond the periscope. And it allows it to communicate multi-domain platforms through a ship, airplane, satellite and submarines and UAVs. And so that portfolio is growing. The customer interest in that product line is strong and fairly healthy. And also, our execution and our value proposition seems to be resonating with the customer base and very compelling and differentiate-able.

當然。Joe，很久以前我們就決定，除非引用第三方資料，否則不會就這些市場的確切規模提供非常具體的指引。我們在戰術飛彈系統（Tactical Missile Systems）類別中分享過，例如就最初的 Switchblade 而言，其可服務市場（addressable market）——也就是原始 Switchblade 能夠、且確實能提供更具吸引力價值主張、可用來替代或排擠的部分——僅就美國國防部預算科目而言，每年約代表 10 億美元的支出。因此再次強調，這只是對原始 Switchblade 潛在市場機會規模的一個大致粗估。如我所提到的，我們的原始 Switchblade 不只一種型號，其中一個型號我們能對各位揭露較多細節，也就是 Blackwing 產品。那是一款由潛艦發射的非致命 UAV，基本上能讓潛艦在潛望鏡之外取得目視視線（visual line of sight）。並且讓它能透過艦艇、飛機、衛星、潛艦與 UAV 等多領域平台進行通訊。因此，這個產品組合正在成長。客戶對該產品線的興趣強勁且相當健康。同時，我們的執行力與價值主張似乎也正在與客戶群產生共鳴，具備很強的吸引力且可形成差異化。

And our next question comes from the line of [Martin Miller], a private investor.

我們的下一個問題來自 [Martin Miller] 專線，他是一位私人投資人。

I apologize in advance if this subject has been covered because I was disconnected for a short time. As follows, in the last reporting period, I recall that we were told that the company was essentially debt free. I might not be using the phrase correctly, but I'm wondering if that has changed materially -- or?

如果這個主題已經被討論過，我先致歉，因為我剛才短暫斷線。如下：在上一個報告期間，我記得我們被告知公司基本上是無負債的。我可能用詞不精確，但我想知道這個情況是否已經出現重大變化——還是？

Thank you, [Martin]. This is Wahid. We have -- we're fairly in a good position in terms of our balance sheet. You're fairly accurate on your conclusion that the company doesn't carry much debt. So we had lines of credits, but we don't -- really don't carry much debt at all in our balance sheet. And we do have a strong cash position on our balance sheet. Primarily, the board looks at that on a very regular basis. We, as management team, review that very regularly and there are many reasons as to why we have the position that we have based on our strategy and our business profile.

謝謝你，[Martin]。我是 Wahid。我們——就資產負債表而言，我們的狀況相當良好。你對公司負債不多的結論相當準確。所以我們有信用額度，但我們——在資產負債表上其實幾乎沒有負債。而且我們的資產負債表上確實有強勁的現金部位。主要是董事會會非常定期地檢視這一點。我們管理團隊也會非常定期地檢視；基於我們的策略與業務特性，有許多原因使我們維持目前這樣的部位。

All right. And may I have the second question? Again, I apologize in advance if covered already. And I'm wondering if our team is addressing with the government regulators the issues of altitude and distance from air traffic and the like and are we making progress? Are we being joined by other interested manufacturers?

好的。那我可以問第二個問題嗎？如果之前已經提到，我先致歉。我想知道我們的團隊是否正在與政府監管機構處理高度、與航管距離等相關議題，我們是否有進展？是否有其他有興趣的製造商加入我們？

Sure, Martin. This is Wahid again. So we enjoy a very good and positive working relationship with various regulatory agencies in the national airspace, primarily the FAA. We've had a relationship with FAA for a very long time and I characterize it as a very cooperative, productive and successful healthy relationship. There are a number of different activities that we're involved with and engaged with, FAA and the industry partners and the commercial rules and regulatory requirements around the use of drones and UAVs in the national airspace for commercial applications. There are multiple different projects, and we'll be glad to share that with you in more detail later at a separate time, if you like. But we are involved in that and we are aware of the fact that, that would play a significant role in the long run in terms of the adoption of UAV for the commercial airspace. One example that I shared on the previous -- on my comments earlier was the demonstration that we made with Dominion Virginia Power and Virginia Tech with a strategic industry partner called Ligado. And what we did is we flew our U -- Puma UAVs approximately 14 miles away from the site where it was launched, along power lines, and we transferred communication and control of the UAV to a satellite and [threshold] system provided by the Ligado Networks, which essentially demonstrated the capability of operating beyond visual line of sight. And that is a significant demonstration, in my opinion, in terms of demonstrating the ability that we can operate these UAVs safely and successfully, well beyond the visual line of sight in the national airspace for commercial applications. And we did that earlier this summer -- this year, and I consider that as one example of such engagements that we have with the industry and various government agencies.

當然可以，Martin。我又是 Wahid。因此，我們與國家空域內的各個監管機構——主要是 FAA——維持非常良好且正向的合作關係。我們與 FAA 的關係已經很久了；我會形容這是一段非常合作、具生產力、成功且健康的關係。我們參與並投入多項不同的活動，與 FAA、產業夥伴一起推動在國家空域中，無人機與 UAV 用於商業應用的商業規則與監管要求。目前有多個不同的專案；如果你願意，我們也很樂意之後另找時間再更詳細與你分享。但我們確實有參與其中，也了解這在長期而言，將在 UAV 於商業空域的採用上扮演重要角色。我先前——在我較早的評論中——分享過的一個例子，是我們與 Dominion Virginia Power、Virginia Tech，以及名為 Ligado 的策略性產業夥伴所做的示範。我們所做的是：讓我們的 U——Puma UAV 從起飛地點沿著電力線飛行，距離約 14 英里，並將 UAV 的通訊與控制轉交給 Ligado Networks 提供的衛星與[threshold]系統，這基本上展示了超視距（beyond visual line of sight）操作的能力。以我之見，這是一項重要的示範，因為它證明我們能在國家空域中，為商業應用安全且成功地操作這些 UAV，且遠遠超出目視範圍。我們在今年夏天較早時——今年——完成了這件事；我認為這是我們與產業及各政府機構互動合作的其中一個例子。

And one note to add to that, if I may. Our products, unlike many others in the -- who are entering the market have been used for decades regularly around the world in some of the most inhospitable environments and beyond visual line of sight, missions and applications. So we design our products to perform effectively, safely and reliably in a wide variety of applications, including beyond visual line of sight. And as Wahid mentioned, we're actively engaged domestically and are eager to help lead the way into a future where safe, effective and reliable beyond visual line of sight drone operations take place.

如果可以的話，我補充一點。我們的產品不同於許多其他——正在進入市場的——產品；我們的產品在全球一些最惡劣的環境中，且在超視距的任務與應用下，已經被規律使用了數十年。因此，我們在設計產品時，就讓其能在各式各樣的應用中有效、安全且可靠地運作，包括超視距。正如 Wahid 所提到的，我們在國內也積極投入，並渴望協助引領未來，讓安全、有效且可靠的超視距無人機操作得以實現。

And we have a follow-up question from the line of Peter Arment with Baird.

接下來我們有一個追問，來自 Baird 的 Peter Arment。

Just a quick housekeeping one. You mentioned a higher tax rate for fiscal 2018. Teresa, is there any sort of expected range that you're looking at?

我有個很快的行政性問題。你提到 2018 會計年度的稅率會較高。Teresa，你們預期的區間大概會是多少？

Yes, Peter. I did not include -- we didn't provide guidance on a range. We are expecting it to be higher. Historically, with higher pretax income, AeroVironment's tax range has been in the 25% to 35% range.

是的，Peter。我沒有納入——我們也沒有提供區間指引。我們預期它會更高。歷史上，隨著稅前收入較高，AeroVironment 的稅率區間大約在 25% 到 35% 之間。

And I'm showing no further questions at this time. I would now like to turn the call back to Mr. Steven Gitlin for any closing remarks.

目前顯示沒有其他問題。我現在想把電話交回給 Steven Gitlin 先生，請他做結語。

Thank you, Chelsea. We do apologize for the technical issues that arose during the course of today's call. We're going to work diligently to determine what the cause of those are and ensure that those don't happen again. We're also going to be working closely with the folks who develop the transcript for this call to ensure that it accurately reflects the comments that were delivered by both CEO, Wahid Nawabi; and CFO, Teresa Covington, today. So we can -- so you can be sure that you're certain about the content we provided today.

謝謝你，Chelsea。我們對今天電話會議過程中出現的技術問題深表歉意。我們將努力查明原因，並確保不再發生。我們也會與負責製作本次電話會議逐字稿的團隊密切合作，確保逐字稿能準確反映今天由執行長 Wahid Nawabi 與財務長 Teresa Covington 所發表的評論。因此我們可以——也讓你可以確定——你對我們今天提供的內容有充分把握。

Thank you for your attention and for your interest in AeroVironment. An archived version of this call, all SEC filings, and relevant company and industry news can be found on our website at avinc.com. And we look forward to speaking with you and being heard by you without interruption, again, following next quarter's results. Thank you very much.

感謝各位的關注，以及對 AeroVironment 的興趣。本次電話會議的存檔版本、所有 SEC 申報文件，以及相關的公司與產業新聞，都可在我們的網站 avinc.com 上找到。我們也期待在下季財報公布後，再次與各位交流，並在不受干擾的情況下讓各位聽到我們的聲音。非常感謝。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and 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。本次議程到此結束，您現在可以掛線。祝各位有美好的一天。