AeroVironment, Inc. (AVAV) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the AeroVironment Second Quarter 2018 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

各位女士、先生，大家好，歡迎參加 AeroVironment 2018 年第二季財報電話會議。（接線員指示）提醒各位，本次會議將錄音以供重播。

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。

At this time, I would like to turn the conference over to Mr. Gitlin. Please go ahead.

現在，我想把會議交給 Gitlin 先生。請開始。

Thank you, Victoria, and welcome to our second quarter fiscal '18 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，Victoria，歡迎參加我們 2018 會計年度第二季財報電話會議。請注意，在本次電話會議中所呈現的部分資訊，包含《1995 年私人證券訴訟改革法》所定義的前瞻性陳述。前瞻性陳述包括但不限於任何可能預測、預報、指出或暗示未來結果、表現或成就的陳述；並可能包含如 believe（相信）、anticipate（預期）、expect（預期）、estimate（估計）、intend（打算）、project（推估）、plan（計畫）或具有類似含義的字詞或片語。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、政府與技術因素，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 U.S. government; availability of U.S. government funding for defense procurement and research and development 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 U.S. 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 of 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.

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：依賴對美國政府的銷售；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；大型研發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；競爭對手的活動與競爭加劇；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；監管環境變化，以及美國與世界其他地區的一般經濟與商業狀況。關於此類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。

The content of this conference call contains time-sensitive information that is accurate only as of today, December 5, 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.

本次財報電話會議內容包含具時效性的資訊，僅截至今日（2017 年 12 月 5 日）為準且為正確。公司不承擔對我們發言中所包含之陳述作任何修訂的義務，亦無義務更新以反映本次電話會議後發生的事件或情況。

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

接下來由 Wahid Nawabi 發表談話。Wahid？

Thank you, Steve. Good afternoon. Our strong second quarter results reflect continued momentum in fiscal 2018 as we successfully execute on our fiscal year 2018 and long-term plans and focus on creating value for our stockholders, customers and employees. On today's call, I will briefly review AeroVironment's second quarter financial results, and then share with you the significant progress we made during the quarter on our fiscal year 2018 and long-term plans. Teresa Covington will review second quarter financials in detail, then I will discuss our outlook for the balance of the year. Following this, Teresa, Steve and I will take your questions.

謝謝你，Steve。各位下午好。我們第二季的強勁成果反映出 2018 會計年度持續的動能，因為我們成功執行 2018 會計年度與長期計畫，並專注於為股東、客戶與員工創造價值。在今天的電話會議中，我將簡要回顧 AeroVironment 第二季的財務結果，接著與各位分享我們在本季於 2018 會計年度與長期計畫方面取得的重大進展。Teresa Covington 將詳細說明第二季財務表現，之後我將討論我們對今年剩餘期間的展望。最後，Teresa、Steve 與我將回答各位的提問。

Today's 3 main messages are as follows: first, we successfully executed our plan in the second quarter and delivered strong results; second, strong order flow in the quarter, which was the fourth highest in AV's history, increased our visibility into full year revenue objectives; and third, we're excited and remain focused on executing our strategy to create long-term value.

今天的三大重點如下：第一，我們在第二季成功執行計畫並交出強勁成果；第二，本季強勁的訂單流入（為 AV 歷史第四高）提升了我們對全年營收目標的能見度；第三，我們對執行策略以創造長期價值感到振奮，並將持續專注於此。

Now let's review the strong year-over-year results our team delivered in the second quarter. Revenue of $73.8 million increased by 47%. Gross margin of $31 million increased by 78% and earnings per diluted share of $0.29 rose sharply from last year's second quarter loss of $0.18 per share.

現在讓我們回顧團隊在第二季交出的強勁年增成果。營收 7,380 萬美元，成長 47%。毛利 3,100 萬美元，成長 78%；稀釋後每股盈餘 0.29 美元，較去年第二季每股虧損 0.18 美元大幅改善。

We continue to earn market leadership in small UAS globally, and in TMS, EV charging, industrial EV charging and EV test systems domestically. Robust demand for our products and services in the United States and abroad drove funded backlog up to $127 million, which equates to its 49% increase from the end of our first quarter. This backlog significantly increased our revenue visibility for the current fiscal year. Across the board, we produced solid results in the quarter.

我們持續在全球小型無人航空系統（small UAS）市場取得領導地位，並在國內的 TMS、電動車（EV）充電、工業用 EV 充電以及 EV 測試系統領域保持領先。美國及海外對我們產品與服務的強勁需求，推動已獲資金支持的在手訂單（funded backlog）提升至 1.27 億美元，較第一季末增加 49%。這些在手訂單顯著提升了我們對本會計年度營收的能見度。本季我們在各方面都取得穩健成果。

During our fourth quarter of fiscal 2017 call, I shared with you 5 priorities for fiscal 2018, which I will now provide an update on.

在 2017 會計年度第四季的電話會議中，我與各位分享了 2018 會計年度的五項優先事項，接下來我將提供最新進度。

First, in our core small UAS business, we increased our footprint in domestic and international markets. Our recently announced Puma 3 AE system with our Mantis i45 sensor suite generated strong demand from U.S. and foreign military customers. Puma 3 AE is our third generation Puma system, and it includes many important enhancements. We launched Puma AE in 2008 by winning the United States Special Operations Command or USSOCOM all environment capable variant program competition. Since that time, not only have we continued to improve its capabilities and performance, but Puma AE has been adopted as the long-range small UAS of choice by USSOCOM, the U.S. Army, the Marine Corps, U.S. Air Force and increasingly by the U.S. Navy.

第一，在我們核心的小型 UAS 業務方面，我們擴大了在國內與國際市場的布局。我們近期發布、搭載 Mantis i45 感測器套件的 Puma 3 AE 系統，已在美國及海外軍方客戶中帶動強勁需求。Puma 3 AE 是我們第三代 Puma 系統，包含多項重要強化功能。我們於 2008 年透過贏得美國特種作戰司令部（United States Special Operations Command，USSOCOM）「全環境能力型」變體計畫的競標而推出 Puma AE。自那時起，我們不僅持續提升其能力與性能，Puma AE 也已被 USSOCOM、美國陸軍、海軍陸戰隊、美國空軍採用為首選的長航程小型 UAS，且美國海軍的採用程度也日益提高。

A large and increasing number of international customers have also adopted Puma AE. In some cases, these customers operate their Puma Systems 24/7, relying on them to protect their forces. Supporting our international customers in a timely manner is a requirement for continuing to expand our international footprint successfully. In support of continued robust international demand for our small UAS, we established a regional logistics support capability in Australia, and plan to set up similar operations in at least 2 other key global regions, including Europe and the Middle East. Being closer to our customers helps us learn more about their requirements, so we can better anticipate their needs and respond more promptly and efficiently to them. We believe that providing support on a local basis can significantly increase customer satisfaction, which would translate into greater value for our stockholders.

越來越多的國際客戶也採用了 Puma AE。在某些情況下，這些客戶 24/7 全天候操作其 Puma 系統，仰賴其保護部隊。及時支援國際客戶，是我們持續成功擴大國際布局的必要條件。為支援小型 UAS 持續強勁的國際需求，我們已在澳洲建立區域物流支援能力，並計畫在至少另外兩個全球關鍵區域（包括歐洲與中東）設立類似營運據點。更貼近客戶有助於我們更深入了解其需求，從而更好地預判並更迅速、有效率地回應。我們相信，以在地化方式提供支援可顯著提升客戶滿意度，進而為股東帶來更大價值。

Back in the U.S., we previously discussed 3 new small UAS opportunities within the U.S. government; an upcoming Army Soldier Borne Sensor or SBS program competition, the Army's frequency relocation program and the emerging Homeland Security program with U.S. Customs and Border Patrol.

回到美國，我們先前討論過美國政府內三項新的小型 UAS 機會：即將到來的陸軍「士兵攜行感測器」（Soldier Borne Sensor，SBS）計畫競標、陸軍的頻率遷移計畫，以及與美國海關與邊境保護局（U.S. Customs and Border Patrol）相關、正在成形的國土安全計畫。

Now I would like to provide an update on the status of these opportunities. As we expected, the Army recently moved responsibility from small UAS from its Program Executive Office Aviation or PEO Aviation to PEO Soldier. This focus on the soldier is appropriate for small UAS because they are transported by, employed by and deliver life-saving information directly to the soldiers and other war fighters on the front lines.

現在我想就這些機會的狀態提供最新進度。如我們所預期，陸軍近期已將小型 UAS 的主管責任，從其「航空計畫執行辦公室」（Program Executive Office Aviation，PEO Aviation）移轉至「士兵計畫執行辦公室」（PEO Soldier）。這種以士兵為核心的聚焦對小型 UAS 而言是恰當的，因為小型 UAS 由前線士兵攜行、操作，並直接向前線士兵及其他作戰人員提供可挽救生命的資訊。

We've positioned our Snipe nano UAS for the Army SBS program and delivered initial systems for evaluation. We are incorporating feedback from that evaluation into the Snipe system with a focus on the upcoming, yet unscheduled competition. We believe Snipe offers a unique combination of day and night multi-sensors stability and unmatched reliability.

我們已將 Snipe 奈米級 UAS 定位為陸軍 SBS 計畫的候選方案，並交付初始系統供評估。我們正將該評估回饋納入 Snipe 系統改良，並聚焦於即將到來但尚未排定時程的競標。我們相信，Snipe 提供日／夜多感測器穩定性與無可匹敵的可靠性之獨特組合。

Army leadership has combined the small UAS frequency relocation program with an effort to develop a next-generation ground control station referred to as Tactical Open Government Architecture or TOGA. We won a contract for Phase I of the frequency relocation program, and we are completing deliveries of upgraded Puma avionics data link modules to the Army for evaluation. These evaluations are scheduled to take place in early calendar 2018.

陸軍領導層已將小型 UAS 頻率遷移計畫，與開發下一代地面控制站的工作合併；該地面控制站稱為「戰術開放政府架構」（Tactical Open Government Architecture，TOGA）。我們贏得了頻率遷移計畫第一階段（Phase I）的合約，目前正完成向陸軍交付升級後的 Puma 航電資料鏈路模組以供評估。這些評估預計於 2018 年曆年年初進行。

We have also recently provided a proposal to the Army, supporting Phase II of the Flight Control System or FCS program. The total anticipated value of this frequency relocation and TOGA program is estimated to be about $100 million over multiple years, and we believe we are uniquely positioned to win it. The initial customer experience and feedback we have received so far has been positive and encouraging.

我們最近也向陸軍提交了一項提案，支持飛行控制系統（FCS）計畫的第二階段。此頻率遷移與 TOGA 計畫在多年期間的預期總價值估計約為 1 億美元，我們相信我們具備獨特優勢可望得標。迄今為止我們所收到的初期客戶使用體驗與回饋均為正面且令人鼓舞。

Still within core UAS government market, we continue to work with the U.S. Coast Guard on an evaluation of small UAS. We also continue to support the U.S. Customs and border patrol in their initial evaluation of our Puma and Raven systems.

在核心的政府 UAS 市場方面，我們持續與美國海岸防衛隊合作，進行小型 UAS 的評估。我們也持續支援美國海關與邊境巡邏隊對我們 Puma 與 Raven 系統的初步評估。

Now I will discuss our second fiscal 2018 priority, our tactical missile systems or TMS business. Our TMS team continues to make significant progress in providing a better way to protect our forces in very dangerous environments, while also greatly reducing collateral damage. We've achieved important results in positioning Switchblade for new opportunities within the U.S. DoD and continued strong customer funding for development of multiple TMS variants, reflect strong customer engagement.

接下來我將討論我們 2018 會計年度的第二項優先事項：我們的戰術飛彈系統（TMS）業務。我們的 TMS 團隊持續取得重大進展，提供一種更好的方式在極度危險的環境中保護我方部隊，同時大幅降低附帶損害。我們在為 Switchblade 於美國國防部（DoD）內部的新機會進行布局方面已取得重要成果，且客戶持續提供強勁資金以開發多種 TMS 變體，反映出客戶高度投入。

Customer funded R&D also highlights our customers' recognition of the uniquely innovative offering we provide as a supplier of important solutions that deliver mission-critical capabilities.

由客戶出資的研發也凸顯了客戶對我們所提供之獨特創新方案的認可；作為供應商，我們提供能交付任務關鍵能力的重要解決方案。

With respect to the U.S. DoD budget, we identified approximately $60 million of funding in the President's 2018 budget request for requirements addressable by AeroVironment Solutions. House and Senate committees are working through the budget and we hope to learn more as the process proceeds toward its conclusion.

就美國國防部預算而言，我們在總統 2018 年度預算請求中辨識出約 6,000 萬美元的資金，對應到 AeroVironment Solutions 可滿足的需求。眾議院與參議院委員會正就預算進行審議，我們希望隨著流程推進至結案時能獲得更多資訊。

Third, in our Commercial Information Solutions business or CIS, we continue to make strong progress in our three-phase launch plan. In Phase I, about 1 year ago, we announced our offering to generate awareness in the market, and establish a foundation upon which to build. In Phase II, we began beta testing our highly differentiated Quantix drone, supported by our AV DSS platform to target customers in the agricultural market. Phase III will begin in January when we begin selling our solutions directly and through precision agriculture dealers in the United States and in Brazil, where we also experienced strong interest.

第三，在我們的商業資訊解決方案（CIS）業務方面，我們在三階段上市計畫上持續取得強勁進展。在第一階段，約 1 年前，我們宣布了我們的產品方案，以提升市場認知並建立可供後續發展的基礎。在第二階段，我們開始對高度差異化的 Quantix 無人機進行 Beta 測試，並由我們的 AV DSS 平台支援，以鎖定農業市場客戶。第三階段將於 1 月開始，屆時我們將在美國與巴西透過直銷及精準農業經銷商銷售我們的解決方案；我們在巴西也看到強烈的興趣。

We will benefit from continuous growing and harvesting seasons by launching our CIS business into markets with massive agricultural operations in the northern and southern hemispheres. This will help accelerate our learning and our ability to improve and enhance our integrated solution.

我們將藉由把 CIS 業務導入北半球與南半球擁有大規模農業作業的市場，受益於全年持續的生長與收成季節。這將有助於加速我們的學習，並提升我們改良與強化整合式解決方案的能力。

Recently, we successfully established our Quantix production operation with a leading global contract manufacturer. We designed this new production line with world-class automated assembly and testing capabilities, which will enable us to scale efficiently and address potential market demand.

近期，我們已成功與一家全球領先的委外製造商建立 Quantix 的量產作業。我們以世界級的自動化組裝與測試能力設計了這條新的生產線，使我們能有效率地擴產並因應潛在的市場需求。

Early customer and channel response to Quantix and AV DSS has been extremely positive. Customers are already recognizing the unique and differentiated value proposition of our end to end solution. We look forward to providing you more updates as we progress through our market introduction.

早期客戶與通路對 Quantix 與 AV DSS 的反應極為正面。客戶已開始認知到我們端到端解決方案所具備的獨特且差異化的價值主張。隨著我們推進市場導入，我們期待向各位提供更多更新。

For the fourth of our fiscal '18 initiatives, I will briefly discuss progress in our efficient energy systems or EES business. In EES, we offer a comprehensive set of solutions for battery and electric vehicle development, industrial EV charging and level 2 and level 3 -- level 1 and level 2 charging systems for passenger EVs. Our EV test systems are used by battery developers and manufacturers, advanced battery chemistry researchers, universities and battery testing facilities around the world.

至於我們 2018 會計年度的第四項倡議，我將簡要說明我們高效能源系統（EES）業務的進展。在 EES 方面，我們提供一套完整的解決方案，涵蓋電池與電動車開發、工業用電動車充電，以及乘用電動車的 Level 2 與 Level 3——以及 Level 1 與 Level 2 充電系統。我們的電動車測試系統被全球的電池開發商與製造商、先進電池化學研究人員、大學及電池測試機構所使用。

Our industrial charging systems under the brand name PosiCharge recharge electric forklifts, reach trucks and tugs and factories' distribution centers and airports globally, and our passenger EV charging systems have been chosen by 9 global automakers as the solution of choice for their plug-in vehicles. These automakers include GM Chevrolet, Nissan, Ford, Fiat Chrysler, Hyundai, Kia, Mitsubishi and Volvo, who all selected our charging solutions over those from our competitors.

我們以 PosiCharge 品牌推出的工業充電系統，為全球工廠的配送中心與機場中的電動堆高機、前移式叉車與牽引車進行充電；而我們的乘用電動車充電系統已被 9 家全球汽車製造商選為其插電式車款的首選解決方案。這些車廠包括 GM Chevrolet、Nissan、Ford、Fiat Chrysler、Hyundai、Kia、Mitsubishi 與 Volvo，皆在與競爭對手方案比較後選擇了我們的充電解決方案。

And this past September, we announced the selection of our award-winning TurboCord by BMW and Mini, making AeroVironment the official provider of varied recharging accessory in North America.

此外，在去年 9 月，我們宣布屢獲獎項的 TurboCord 獲 BMW 與 Mini 選用，使 AeroVironment 成為北美地區多樣化充電配件的官方供應商。

For our fifth priority for fiscal 2018, our internal initiatives on generating positive results within our organization. Our people strategy is speeding up recruitment efforts to hire the top talent we need in order to maintain our forward momentum and innovation leadership. Our continuous improvement and business process improvement initiative is strengthening our operations by implementing more efficient best practices and leaner business processes. These continuous improvement and business process improvement efforts will drive efficiencies and ultimately create value for our stockholders. There is still more for us to do, but halfway through the year, I am encouraged by our progress.

我們 2018 會計年度的第五項優先事項，是推動組織內部倡議以在公司內部創造正向成果。我們的人才策略正加速招募工作，以延攬我們維持前進動能與創新領導地位所需的頂尖人才。我們的持續改善與業務流程改善倡議，透過導入更有效率的最佳實務與更精實的業務流程來強化營運。這些持續改善與流程改善的努力將帶動效率提升，並最終為股東創造價值。我們仍有更多工作要做，但在年度過半之際，我對我們的進展感到鼓舞。

Now Teresa will provide a detailed review of our second and year-to-date financial performance. Teresa?

接下來 Teresa 將就我們第二季及年初至今的財務表現提供詳細回顧。Teresa？

Thank you, Wahid, and good afternoon, everyone. AeroVironment's fiscal 2018 second quarter results are as follows. Revenue for Q2 was $73.8 million, an increase of $23.7 million or 47% from the second quarter of fiscal 2017 revenue of $50.1 million. The increase in revenue resulted from an increase in product sales of $23.6 million, and an increase in contract services revenue of $0.1 million.

謝謝你，Wahid，各位下午好。AeroVironment 2018 會計年度第二季的結果如下：第二季營收為 7,380 萬美元，較 2017 會計年度第二季的 5,010 萬美元增加 2,370 萬美元，增幅 47%。營收增加主要來自產品銷售增加 2,360 萬美元，以及合約服務營收增加 10 萬美元。

Looking at revenue by segment. UAS revenue was $64 million, an increase of $23.2 million or 57% from the second quarter of fiscal 2017 revenue of $40.8 million. The increase was due to an increase in product deliveries of $23.1 million and a decrease in service revenue of $0.8 million, partially offset by a decrease in customer-funded R&D work of $0.7 million.

按部門來看營收：UAS 營收為 6,400 萬美元，較 2017 會計年度第二季的 4,080 萬美元增加 2,320 萬美元，增幅 57%。增加原因為產品交付增加 2,310 萬美元，以及服務營收減少 80 萬美元；其中部分被客戶出資研發工作減少 70 萬美元所抵銷。

EES revenue was $9.8 million, an increase of $0.6 million or 6% from the second quarter of fiscal 2017 revenue of $9.3 million. This increase was primarily due to an increase in product deliveries of PosiCharge industrial electric vehicle charging systems.

EES 營收為 980 萬美元，較 2017 會計年度第二季的 930 萬美元增加 60 萬美元，增幅 6%。此增長主要來自 PosiCharge 工業電動車充電系統的產品交付增加。

Turning to gross margin. Gross margins for the second quarter was $31 million or 42% as compared to $17.4 million or 35% for the second quarter of fiscal 2017. The increase in gross margin was primarily due to an increase in product sales margin of $12.8 million and an increase in service margins of $0.8 million.

接著看毛利率。第二季毛利為 3,100 萬美元，毛利率 42%；相較之下，2017 會計年度第二季毛利為 1,740 萬美元，毛利率 35%。毛利增加主要來自產品銷售毛利增加 1,280 萬美元，以及服務毛利增加 80 萬美元。

By segment, UAS gross margin increased to $28.2 million for the second quarter of fiscal 2018 or $14.9 million. As a percentage of revenue, gross margin for UAS increased from 36% to 44%, primarily due to the increased sales volume and an increase in the proportion of product sales to total revenue.

按部門來看，UAS 第二季毛利增加至 2,820 萬美元，較 2018 會計年度第二季增加 1,490 萬美元。以營收百分比計，UAS 毛利率由 36% 提升至 44%，主要因銷售量增加，以及產品銷售占總營收比重提高。

EES gross margin increased $0.3 million to $2.8 million for the second quarter of fiscal 2018, primarily due to an increase in product sales volume. As a percentage of revenue, gross margin for EES increased from 27% to 29%.

EES 第二季毛利增加 30 萬美元至 280 萬美元，主要因產品銷售量增加。以營收百分比計，EES 毛利率由 27% 提升至 29%。

SG&A expense for the second quarter of fiscal 2018 was $14.5 million or 20% of revenue compared to SG&A expense of $13.4 million or 27% of revenue for the second quarter of fiscal 2017. Due to the current political situation within Turkey and the increased uncertainty in the relations between the U.S. and Turkey, we recorded impairment charges totaling $1 million to SG&A during the second quarter of fiscal 2018 to the identifiable intangible assets and goodwill of our Turkish majority-owned subsidiary.

2018 會計年度第二季的銷售、一般及行政（SG&A）費用為 1,450 萬美元，占營收 20%；相較之下，2017 會計年度第二季 SG&A 費用為 1,340 萬美元，占營收 27%。由於土耳其目前的政治情勢，以及美土關係不確定性增加，我們在 2018 會計年度第二季於 SG&A 中認列合計 100 萬美元的減損費用，針對我們在土耳其的多數持股子公司之可辨認無形資產與商譽。

R&D expense for the second quarter of fiscal 2018 was $7.3 million or 10% of revenue compared to R&D expense of $8.5 million or 17% of revenue for the second quarter of fiscal 2017.

2018 會計年度第二季研發（R&D）費用為 730 萬美元，占營收 10%；相較之下，2017 會計年度第二季研發費用為 850 萬美元，占營收 17%。

Income from operations for the second quarter of fiscal 2018 was $9.3 million or 13% of revenue compared to a loss from operations of $4.5 million or minus 9% of revenue for the second quarter of fiscal 2017. The operating income increase was primarily due to higher gross margins of $13.6 million and a decrease in R&D expense of $1.2 million, partially offset by an increase in SG&A of $1.1 million.

2018 會計年度第二季營業利益為 930 萬美元，占營收 13%；相較之下，2017 會計年度第二季營業損失為 450 萬美元，占營收為負 9%。營業利益增加主要因毛利提高 1,360 萬美元，以及研發費用減少 120 萬美元；部分被 SG&A 增加 110 萬美元所抵銷。

Net other income for the second quarter of fiscal 2018 was $0.4 million compared to the prior year net other income of $0.3 million. The effective income tax rate was 29.3% for the second quarter of fiscal 2018 as compared to an effective income tax rate of 1.1% for the second quarter of fiscal 2017. The effective income tax rate for the second quarter fiscal 2018 included a discrete excess tax benefit of $0.4 million, resulting from the vesting of restricted stock awards and exercises of stock options.

2018 會計年度第二季的其他淨收益為 40 萬美元，較前一年度的其他淨收益 30 萬美元增加。2018 會計年度第二季的有效所得稅率為 29.3%，相較之下，2017 會計年度第二季的有效所得稅率為 1.1%。2018 會計年度第二季的有效所得稅率包含 40 萬美元的一次性超額稅務利益，係因限制性股票獎勵歸屬及員工行使股票選擇權所致。

Net income attributable to AeroVironment for the second quarter of fiscal 2018 was $7 million or a $0.29 earnings per diluted share compared to a net loss attributable to AeroVironment of $4.2 million or an $0.18 loss per share for the second quarter of fiscal 2017.

2018 會計年度第二季歸屬於 AeroVironment 的淨利為 700 萬美元，稀釋後每股盈餘為 0.29 美元；相較之下，2017 會計年度第二季歸屬於 AeroVironment 的淨損為 420 萬美元，每股虧損為 0.18 美元。

Now moving to our first half fiscal 2018 results. Revenue for the first half of fiscal 2018 was $117.6 million, an increase of $31.3 million. That's compared to $86.3 million for the 6 months ended October 29, 2016. The increase in revenue was due to an increase in product delivery of $38.9 million, partially offset by a decrease in contract service revenue of $7.7 million.

接著說明 2018 會計年度上半年的業績。2018 會計年度上半年營收為 1.176 億美元，增加 3,130 萬美元。相較之下，截至 2016 年 10 月 29 日止 6 個月的營收為 8,630 萬美元。營收增加主要係產品交付增加 3,890 萬美元所致，惟部分被合約服務營收減少 770 萬美元所抵銷。

UAS revenue increased $28.9 million to $100.2 million for the first half of fiscal 2018, primarily due to an increase in product delivery of $36.6 million, an increase in service revenue of $1.5 million, partially offset by a decrease in customer-funded R&D work of $9.2 million. EES revenue increased $2.3 million to $17.4 million for the first half of fiscal 2018, primarily due to an increase in product deliveries of PosiCharge industrial electric vehicle charging systems and passenger electric vehicle charging systems. Gross margin for the first half of fiscal 2018 was $42.6 million or 36%. That's compared to $24.1 million or 28% for the first half of fiscal 2017. The increase was primarily due to an increase in product margins of $19.1 million, partially offset by a decrease in service margins of $0.6 million.

2018 會計年度上半年 UAS 營收增加 2,890 萬美元至 1.002 億美元，主要係產品交付增加 3,660 萬美元、服務營收增加 150 萬美元所致，惟部分被客戶出資研發（R&D）工作減少 920 萬美元所抵銷。2018 會計年度上半年 EES 營收增加 230 萬美元至 1,740 萬美元，主要係 PosiCharge 工業電動車充電系統及乘用電動車充電系統的產品交付增加所致。2018 會計年度上半年毛利為 4,260 萬美元（毛利率 36%），相較之下，2017 會計年度上半年毛利為 2,410 萬美元（毛利率 28%）。增加主要係產品毛利增加 1,910 萬美元所致，惟部分被服務毛利減少 60 萬美元所抵銷。

UAS gross margin increased to $38 million for the first half of fiscal 2018 from $20.3 million. As a percentage of revenue, gross margin for UAS increased from 28% to 38%, primarily due to the increased sales volume and an increase in the proportion of product sales to total revenue.

2018 會計年度上半年 UAS 毛利由 2,030 萬美元增加至 3,800 萬美元。以營收百分比計，UAS 毛利率由 28% 提升至 38%，主要係銷售量增加，以及產品銷售占總營收比重提高所致。

EES gross margin increased $0.8 million to $4.6 million for the first half of fiscal 2018. As a percentage of revenue, gross margin for EES increased from 25% to 27%, primarily due to the increased sales volume.

2018 會計年度上半年 EES 毛利增加 80 萬美元至 460 萬美元。以營收百分比計，EES 毛利率由 25% 提升至 27%，主要係銷售量增加所致。

SG&A expense for the first half of fiscal 2018 was $27.8 million or 24% of revenue compared to SG&A expense of $27 million or 31% of revenue for the first half of fiscal 2017. The increase in SG&A expense was primarily due to the impairment charges totaling $1 million related to our Turkish majority-owned subsidiary. R&D expense for the first half of fiscal 2018 was $13.7 million or 12% of revenue compared to R&D expense of $17.1 million or 20% of revenue for the first half of fiscal 2017.

2018 會計年度上半年銷售、一般及行政（SG&A）費用為 2,780 萬美元，占營收 24%；相較之下，2017 會計年度上半年 SG&A 費用為 2,700 萬美元，占營收 31%。SG&A 費用增加主要係與我們在土耳其的多數持股子公司相關之減損費用合計 100 萬美元所致。2018 會計年度上半年研發（R&D）費用為 1,370 萬美元，占營收 12%；相較之下，2017 會計年度上半年 R&D 費用為 1,710 萬美元，占營收 20%。

Net other income for the first half of fiscal 2018 was $0.9 million compared to the prior year net other income of $0.3 million. The net other income increase was primarily due to a foreign exchange loss in the prior year and higher short-term interest rates in fiscal 2018. Benefit from income taxes for the first half of fiscal 2018 was $0.4 million compared to a benefit for income taxes of $3.9 million for the first half of fiscal 2017. The effective income tax rate was minus 17.6% for the first half of fiscal 2018, as compared to an effective income tax rate of 19.8% for the first half of fiscal 2017.

2018 會計年度上半年其他淨收益為 90 萬美元，較前一年度的其他淨收益 30 萬美元增加。其他淨收益增加主要係前一年度發生外匯損失，以及 2018 會計年度短期利率較高所致。2018 會計年度上半年所得稅利益為 40 萬美元，相較之下，2017 會計年度上半年所得稅利益為 390 萬美元。2018 會計年度上半年的有效所得稅率為負 17.6%，相較之下，2017 會計年度上半年的有效所得稅率為 19.8%。

The effective income tax rate for the first half fiscal 2018 included a discrete excess tax benefit of $1.4 million, resulting from the vesting of restricted stock awards and exercises of stock options. Net income attributable to AeroVironment for the first half of fiscal 2018 was $2.6 million or an $0.11 earnings per diluted share compared to a net loss attributable to AeroVironment of $15.8 million or a $0.69 loss per share for the first half of fiscal 2017.

2018 會計年度上半年的有效所得稅率包含 140 萬美元的一次性超額稅務利益，係因限制性股票獎勵歸屬及員工行使股票選擇權所致。2018 會計年度上半年歸屬於 AeroVironment 的淨利為 260 萬美元，稀釋後每股盈餘為 0.11 美元；相較之下，2017 會計年度上半年歸屬於 AeroVironment 的淨損為 1,580 萬美元，每股虧損為 0.69 美元。

Our final backlog as of October 28, 2017, was $127.1 million, an increase of $41.8 million or 49% from the first quarter of fiscal 2018 and an increase of $7.5 million or 6% from the second quarter of fiscal 2017.

截至 2017 年 10 月 28 日，我們的期末在手訂單（backlog）為 1.271 億美元，較 2018 會計年度第一季增加 4,180 萬美元（49%），亦較 2017 會計年度第二季增加 750 萬美元（6%）。

Turning to our balance sheet. Cash, cash equivalents and investments at the end of the second quarter fiscal 2018 totaled $260.9 million, a decrease of $0.2 million from the end of the first quarter fiscal 2018, and an increase of $18.9 million from the end of fiscal 2017.

接著看資產負債表。2018 會計年度第二季期末現金、約當現金及投資合計 2.609 億美元，較 2018 會計年度第一季期末減少 20 萬美元，並較 2017 會計年度期末增加 1,890 萬美元。

Accounts receivable, including unbilled and retention receivables at the end of the second quarter fiscal 2018, totaled $48.6 million, an increase of $7.2 million from the end of the first quarter fiscal year 2018. Total day sales outstanding for the second quarter fiscal 2018 was approximately 55 days compared to 134 days of the prior quarter and 81 days from the second quarter of fiscal 2017. Net inventory at the end of the second quarter fiscal year 2018 was $76 million compared to $72 million at the end of the prior quarter. Days in inventory for the second quarter fiscal 2018 were approximately 156 days compared to 185 days in the prior quarter and 137 days for the second quarter fiscal 2017.

2018 會計年度第二季期末應收帳款（包含未開立帳單及保留款應收帳款）合計 4,860 萬美元，較 2018 會計年度第一季期末增加 720 萬美元。2018 會計年度第二季的應收帳款週轉天數（DSO）約為 55 天，相較之下，前一季為 134 天，2017 會計年度第二季為 81 天。2018 會計年度第二季期末淨存貨為 7,600 萬美元，相較之下，前一季期末為 7,200 萬美元。2018 會計年度第二季的存貨天數約為 156 天，相較之下，前一季為 185 天，2017 會計年度第二季為 137 天。

Turning to capital expenditures. In the second quarter fiscal year 2018, we invested approximately $3 million in property improvements and capital equipment, and recognized $1.8 million of depreciation and amortization expense. For the first half of fiscal year 2018, we invested approximately $6 million in property improvements and capital equipment and recognized $3.7 million of depreciation and amortization expense.

接著談資本支出。2018 會計年度第二季，我們在不動產改善及資本設備方面投資約 300 萬美元，並認列折舊與攤銷費用 180 萬美元。2018 會計年度上半年，我們在不動產改善及資本設備方面投資約 600 萬美元，並認列折舊與攤銷費用 370 萬美元。

Now an update to our fiscal 2018 visibility. As of today, we have year-to-date revenue in fiscal 2018 of $118 million; second quarter ending backlog that we expect to execute in fiscal 2018 of $91 million; Q3 quarter-to-date bookings that we anticipate to execute in fiscal 2018 of $5 million; unfunded backlog from incrementally funded contracts that we anticipate to recognize revenue during the balance of the year of $0.2 million; revenues needed to hold EES revenues flat relative to last year of $11 million. This adds up to $225 million or 78% at the midpoint of revenue guidance.

接著更新我們對 2018 會計年度的可視性（visibility）。截至今日，我們在 2018 會計年度的年初至今營收為 1.18 億美元；第二季期末在手訂單中預期於 2018 會計年度執行的金額為 9,100 萬美元；第三季截至目前的接單（bookings）中預期於 2018 會計年度執行的金額為 500 萬美元；來自逐步撥款合約的未撥款在手訂單（unfunded backlog）中，預期於本年度剩餘期間認列營收的金額為 20 萬美元；以及為使 EES 營收相較去年持平所需的營收為 1,100 萬美元。合計為 2.25 億美元，約占營收指引中點的 78%。

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

接下來我想把時間交還給 Wahid，請他說明 AV 對 2018 會計年度的展望。

Thanks, Teresa. We've been successfully delivering on our plans this fiscal year, and have significantly enhanced our visibility into achieving our full year results. We've also made significant progress positioning our business for long-term value creation. Our products are recognized throughout our target markets as the solutions of choice for mission-critical applications. Our innovation engine continues to develop and deliver compelling and differentiated capabilities. And most importantly, a growing list of customers around the world are choosing AeroVironment to supply them with solutions that help them proceed with certainty.

謝謝你，Teresa。我們在本會計年度一直成功地按計畫交付成果，並已大幅提升我們對達成全年業績的可視性。我們也在為長期價值創造而布局方面取得重大進展。我們的產品在目標市場中被公認為關鍵任務應用的首選解決方案。我們的創新引擎持續開發並交付具吸引力且差異化的能力。最重要的是，全球越來越多的客戶選擇 AeroVironment 來為其提供解決方案，協助他們更有把握地推進。

To become our customer's first choice, we must do more than provide outstanding products. We must provide service and support that ensures their success when they use our solutions.

要成為客戶的第一選擇，我們必須做的不僅是提供卓越的產品。我們必須提供服務與支援，確保客戶在使用我們的解決方案時能夠成功。

In our military markets, customers demand and rightfully expect their suppliers to deliver the right solutions on time and according to contractual obligations. The U.S. Army, for example, thoroughly and systematically evaluate its suppliers every year based on numerous criteria. These criteria include cost control, schedule, technical performance, management and regulatory compliance.

在我們的軍事市場中，客戶要求並且理所當然地期待其供應商能按時交付正確的解決方案，並依照合約義務履行。例如，美國陸軍每年都會依據多項標準，徹底且系統性地評估其供應商。這些標準包括成本控制、進度、技術表現、管理以及法規遵循。

As part of its Superior Supplier Incentive Program, the Army then ranks suppliers and groups them into 3 tiers, with tier 1 being the highest ranking or Superior Supplier status. The 2017 rankings, announced this past August, revealed that AeroVironment had achieved tier 1 ranking, a testament to the hard work and dedication of our team. This ranking is based on procurement of small UAS and tactical missile systems, and places us in the company of other much larger Tier 1 companies such as Boeing, Lockheed Martin, Raytheon and Textron. It also places us above many other companies that are much larger than AeroVironment.

作為其「優良供應商獎勵計畫」的一部分，陸軍接著會對供應商進行排名，並分為3個等級，其中第1級為最高排名，即「優良供應商」資格。於今年8月公布的2017年排名顯示，AeroVironment 已取得第1級排名，這證明了我們團隊的辛勤付出與投入。此排名係基於小型無人機系統（small UAS）與戰術飛彈系統的採購表現，並使我們與其他規模更大的第1級公司為伍，例如波音（Boeing）、洛克希德馬丁（Lockheed Martin）、雷神（Raytheon）與德事隆（Textron）。同時，這也使我們的排名高於許多規模遠大於 AeroVironment 的公司。

In our EES business, our B2B and B2C customer and channel partner satisfaction scores measured routinely at our own e-commerce website and other web portals, such as Amazon, remain amongst the highest in the EV charging industry. These measures continue to serve as strong indicators of AeroVironment's unmatched track record of performance in the industry. I'm extremely proud of our team's performance, as we continue to work so hard in exceeding our customer's expectations and creating delighted customer experiences, which they all deserve.

在我們的 EES 業務中，透過我們自有的電子商務網站以及其他網路入口（例如 Amazon）例行衡量的 B2B 與 B2C 客戶及通路夥伴滿意度分數，仍位居電動車充電產業的最高水準之列。這些衡量指標持續作為 AeroVironment 在產業中無可匹敵的績效紀錄之強力佐證。我對團隊的表現感到非常自豪，因為我們持續努力超越客戶期望、創造令客戶滿意的體驗，而這正是他們應得的。

As we survey our business, the 3 strategic growth initiatives, which we accelerated investments to advance in fiscal 2015 are all developing well toward market adoption and value creation. Our TMS business includes Switchblade, which is the de facto LMAMS solution for the Army. We have grown this business considerably over the past several years, and our family of Switchblade variants is moving forward with advanced development, customer evaluation and initial production.

綜觀我們的業務，我們在2015會計年度加速投資以推進的3項策略性成長計畫，皆正朝向市場採用與價值創造良好發展。我們的 TMS 業務包含 Switchblade，這是陸軍事實上的 LMAMS 解決方案。過去幾年我們大幅成長此業務，而我們的 Switchblade 系列變體正持續推進先進研發、客戶評估與初期量產。

Our innovative Commercial Information Solution offers a uniquely compelling value proposition and is poised for launch after a careful and deliberate development process. And we're still engaged with interested potential customers and strategic partners to pursue market opportunities with our stratospheric satellite platforms. Based on our strong performance, which translates into healthy visibility of 78% to the midpoint of our revenue guidance range, we reiterate our annual guidance of $280 million to $300 million, with fully diluted earnings per share of $0.45 to $0.65.

我們創新的商用資訊解決方案（Commercial Information Solution）提供獨特且極具吸引力的價值主張，並在審慎且有計畫的開發流程後，已蓄勢待發準備上市。同時，我們仍與有興趣的潛在客戶與策略夥伴合作，藉由我們的平流層衛星平台追求市場機會。基於我們的強勁表現（換言之，我們對營收指引區間中點的可見度達78%），我們重申全年指引為2.8億至3.0億美元，完全稀釋後每股盈餘為0.45至0.65美元。

We continue to expect the mix of revenue, meaning the blend of higher margin product revenue and fixed price contracts versus lower margin services revenue and cost plus contracts, to result in lower gross margin this year than last year. We also continue to expect internal R&D investments of 9% to 10% of revenue for the full year.

我們仍預期營收組合（亦即高毛利產品營收與固定價格合約，相對於低毛利服務營收與成本加成合約的搭配）將使今年的毛利率低於去年。我們也仍預期全年內部研發（R&D）投資將占營收的9%至10%。

Once again, today's 3 main messages are as follows: We successfully executed our plan in the second quarter and delivered strong results; strong order flow in the quarter, which was the fourth highest in AV's history increased our visibility into full year revenue objectives; and we're excited and remain focused on executing our strategy to create long-term value.

再次重申，今天的3項主要訊息如下：我們在第二季成功執行計畫並交出強勁成果；本季強勁的訂單流入（為 AV 歷史第四高）提升了我們對全年營收目標的可見度；以及我們對執行策略以創造長期價值感到振奮並將持續專注。

I thank all of our employees for their exceptional dedication to creating and delivering innovative solutions that provide unique value to our customers. Thank you to our outstanding and demanding customers, whose high expectations drive us to improve our execution continuously and who trust us to help them succeed. And thank you to our stockholders for their continued confidence and support. We're excited about the future here at AeroVironment and look forward to capitalizing on the many opportunities that lie ahead for us.

我感謝所有員工以卓越的投入，創造並交付能為客戶帶來獨特價值的創新解決方案。也感謝我們優秀且要求嚴格的客戶，他們的高標準驅使我們持續精進執行力，並信任我們協助他們成功。同時也感謝股東持續的信心與支持。我們對 AeroVironment 的未來充滿期待，並期盼把握前方眾多機會。

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 Ken Herbert from Canaccord.

（接線員指示）我們的第一個問題來自 Canaccord 的 Ken Herbert。

Wahid or Teresa, I'm just -- wondered if you could provide a little more detail on the strong gross margins within UAS in the quarter, and maybe any specific color on within the mix of either TMS versus the legacy systems or international versus domestic sales. I know you don't typically give the exact percentages, but any color just to help put some more granularity on the strong gross margins in that segment in the quarter would be appreciated.

Wahid 或 Teresa，我想請問你們是否能就本季 UAS 業務強勁的毛利率提供更多細節，並且就組合面向提供一些具體說明，例如 TMS 相對於既有系統的占比，或國際相對於國內銷售的占比。我知道你們通常不會提供精確百分比，但若能提供一些補充資訊，協助更細緻地理解該部門本季強勁毛利率的原因，將不勝感激。

Sure. Ken, so as you know, on any given quarter, our revenue mix of products versus services, cost-plus contracts versus fixed price contracts, domestic customer orders versus international customer orders all attribute to the gross margin percentage of that quarter. And so throughout our business across our entire portfolio, as I mentioned in my remarks, we saw strong, healthy demand, and we made strong progress across all of our products.

當然可以。Ken，如你所知，在任何一個季度，我們產品相對於服務的營收組合、成本加成合約相對於固定價格合約、國內客戶訂單相對於國際客戶訂單等因素，都會影響該季度的毛利率百分比。因此，在我們整體業務與完整產品組合中，正如我在發言中提到的，我們看到強勁且健康的需求，並且在所有產品上都取得了良好進展。

We don't typically, as you know, break the product revenue or gross margin percentages by product line, primarily because we feel that it could lead to sales conclusions based on very short quarterly results. So therefore, we're very pleased with the results of this quarter across all of our businesses and our product lines and we're focused on long-term value creation, and we're on track to achieve our objective for the fiscal year '18.

如你所知，我們通常不會按產品線拆分揭露產品營收或毛利率百分比，主要是因為我們認為這可能導致外界基於非常短期的季度結果做出銷售推論。因此，我們對本季在所有業務與產品線的成果都非常滿意，並專注於長期價值創造；我們也正按計畫達成2018會計年度的目標。

Can you provide any detail on what kind of growth you saw just within international demand or international market, specifically for UAS?

你能否就國際需求或國際市場的成長提供一些細節，特別是針對 UAS？

Sure. So we respect our customers' confidentiality in terms of providing any specifics on -- about customer details. In general, we saw, as I said, strong demand across all of our product portfolios. We continue to see demand in our international markets. We've been growing that business over the past several years at very healthy pace. There's also strong demand for our tactical missile systems business, as I mentioned in my remarks. So across the board, Ken, we saw very healthy progress, and we also established our logistics -- repair and logistics facility in Australia for the competition that we won and the products that we will be delivering in the years to come in Australia. So across the board, very healthy, and we're very pleased with our results and focused on execution for the remainder of the year.

當然可以。我們尊重客戶的保密要求，因此無法就客戶細節提供任何具體資訊。整體而言，正如我所說，我們在所有產品組合上都看到強勁需求。我們在國際市場仍持續看到需求，且過去幾年以非常健康的速度成長。正如我在發言中提到的，我們的戰術飛彈系統業務也有強勁需求。因此整體來看，Ken，我們看到非常健康的進展；此外，我們也在澳洲建立了維修與後勤（repair and logistics）設施，以支援我們贏得的競標以及未來幾年將在澳洲交付的產品。總體而言表現非常健康，我們對結果非常滿意，並將在今年剩餘期間持續專注於執行。

Okay. Just one final question then. You've highlighted again the $100 million opportunity over several years for the TOGA and the FCS opportunity combined. Based on your current visibility, how much of that would you potentially see coming in as part of fiscal '18 versus perhaps fiscal '19 and '20? And what are some of the key variables around the timing on that aside from, I guess, just the obvious, which would be timing of the sort of the fiscal '18 budget?

好的。最後一個問題。你們再次強調 TOGA 與 FCS 兩項機會合計在數年內有1億美元的機會。以你們目前的可見度來看，其中有多少可能會在2018會計年度入帳，而不是在2019與2020會計年度？除了顯而易見的因素（例如2018會計年度預算時程）之外，影響時點的關鍵變數有哪些？

Sure. So Ken, that is a really difficult question to answer, primarily due to the timing and the predictability of how these opportunities and programs progress through the U.S. DoD and the government approval process and budgeting process. We, as I mentioned on my remarks, we do expect that to keep moving; it has made progress, although slowly, but progressively over the last several months and year. We believe that we're positioned quite well. We do anticipate the customer has obviously shared with us the details that I mentioned in my remarks, but there's obviously never a guarantee as to whether that's going to happen exactly the timeframe that we mentioned. Overall, we believe that we're positioned quite well, and overall, it's roughly about $100 million worth of opportunity for us to compete and win.

當然。Ken，這個問題非常難回答，主要是因為這些機會與計畫在美國國防部（DoD）以及政府核准流程與預算流程中推進的時點與可預測性。我在發言中提到，我們確實預期它會持續推進；雖然進展緩慢，但在過去幾個月與一年中仍是逐步前進。我們相信自身處於相當有利的位置。我們也預期客戶已與我們分享我在發言中提到的細節，但顯然無法保證是否會在我們提及的確切時間範圍內發生。整體而言，我們相信自身定位良好；總體來說，這大約是我們可競爭並爭取贏得的1億美元機會。

Our next question comes from Joseph DeNardi from Stifel.

我們的下一個問題來自 Stifel 的 Joseph DeNardi。

Nice quarter. Wahid, on a scale of 1 to 10, with 1 being really disappointed and 10 being really happy, if CIS does $10 million in revenue in calendar year '18, where would your emotions fall on that scale?

這一季表現不錯。Wahid，如果用1到10分來衡量，1代表非常失望、10代表非常開心；若 CIS 在2018曆年創造1,000萬美元營收，你的感受會落在哪個分數？

Thanks, Joe. So that is a very difficult question to answer at this time, because we are really focused on the execution of launching this solution to the market. As I mentioned on my remarks, Joe, we have a 3 phased approach of launching and introducing this product and our capability to the market. We have completed Phase I and II in the process of -- and very soon, we will be shipping this product and making it available for the markets in North America as well as in Brazil.

謝謝你，Joe。這個問題在目前階段非常難回答，因為我們真正專注的是把這個解決方案成功推向市場並落實執行。正如我在發言中提到的，Joe，我們採取三階段的方法來推出並向市場導入這項產品與我們的能力。我們已完成第一與第二階段；在接下來的流程中——很快——我們將開始出貨，並讓這項產品在北美以及巴西市場上市供應。

We don't have any more data to give us any indicator, whether the adoption is going to be fast or slow or to what pace and to what trajectory. And for that reason, we do not provide any more details that we don't feel confident about the prospects. At the same time, we're excited about the solution. The response from the customer in the market so far has been extremely positive. We still believe that our solution has a very compelling differentiated value proposition that we believe is unmatched in the industry. And once we ship the product in the larger scale to the market and make it available, we'll have more information that we can inform you, and we'll be pleased to provide you a progress report at that time, and at the same time, we're very focused on execution.

我們沒有更多數據可以提供任何指標，來判斷採用會是快速或緩慢，或其節奏與發展軌跡。因此，我們不會提供更多我們對前景尚無把握的細節。同時，我們對這項解決方案感到振奮。迄今為止，市場客戶的反應極為正面。我們仍然相信，我們的解決方案具備非常有說服力且差異化的價值主張，我們認為在業界無可匹敵。一旦我們以更大規模向市場出貨並使其可供取得，我們將掌握更多資訊可與各位分享，屆時也很樂意提供進度報告；同時，我們也非常專注於執行。

Yes, fair enough. I guess the way that I think about the UAS business, and I know this is kind of rough order of magnitude, but 1/3 of it is GMS, 1/3 is international and then 1/3 is core small UAS domestic. International and TMS seem to be doing pretty well growing, domestic UAS a little less clear. So can you just talk about that aspect of the business, the core domestic UAS side and just the $100 million TOGA opportunity, is that just the frequency relocation and then the SPS and border patrol are additional opportunities for that business?

是的，這樣說也合理。我想我看待 UAS 業務的方式是——我知道這只是很粗略的量級——大約 1/3 是 GMS，1/3 是國際業務，另外 1/3 是核心的美國國內小型 UAS。國際業務和 TMS 似乎表現不錯、成長良好；國內 UAS 則比較不明朗。所以你能否談談業務的這一面：核心國內 UAS 這一塊，以及 1 億美元的 TOGA 機會——那是否只是頻率搬遷，然後 SPS 與邊境巡防則是該業務的額外機會？

That's right. So the $100 million approximate number that I provided is a number that our customer has, essentially budgeted for the frequency relocation and I referred to as the TOGA hand controller ground station or future control station. And so that total opportunity for that particular project or program is roughly about $100 million, which we, by the way, as I've mentioned on my remarks, won a small contract upfront that we delivered, and we are advancing quite positively. In addition to that, we also are pursuing a bit multiple other opportunities with the U.S. Coast Guard, as well as I mentioned, with the Department of Homeland Security and specifically for the U.S. Customs and border patrol. Those are separate opportunities, in addition to that $100 million that I mentioned.

沒錯。我所提到約 1 億美元的數字，基本上是我們客戶為頻率搬遷所編列的預算；我將其稱為 TOGA 手持控制器地面站或未來控制站。因此，該特定專案或計畫的總機會大約是 1 億美元。順帶一提，如我在發言中提到的，我們已先行贏得一份小型前期合約並已交付，目前進展相當正面。除此之外，我們也在追求多個其他機會，包括與美國海岸防衛隊，以及如我所提到的國土安全部，特別是美國海關與邊境保護局（Customs and Border Patrol）。這些都是獨立的機會，另外加在我提到的那 1 億美元之上。

And obviously, on top of that, we are pursuing this SBS program with our Snipe UAV, which our customer has indicated that they are planning on eventually taking it to a program of record, the timing of which is uncertain, and hard to predict even from our customer's perspective. And so we have multiple opportunities. And to your broader question of demand and various products in marked parts of our business, we, as a leadership team, are encouraged and quite positive, the prospects of our business across all of our product portfolio. We're very focused on execution, it's still the first half and we still have another second half of the year to complete or execute and deliver, and we're very pleased with our results so far.

而且，除此之外，我們也正在以 Snipe UAV 追求這個 SBS 計畫；我們的客戶表示，他們計畫最終將其納入正式採購計畫（program of record），但其時程仍不確定，即使從客戶角度也難以預測。因此我們有多項機會。至於你更廣泛的問題——關於需求以及我們業務中不同產品與市場區塊——作為管理團隊，我們受到鼓舞，並對我們在整體產品組合上的業務前景相當正面。我們非常專注於執行；目前仍在上半年，我們還有下半年需要完成、執行並交付，我們對目前的成果也非常滿意。

(Operator Instructions) And we have another question from Joseph.

（接線員指示）我們還有一個來自 Joseph 的問題。

So I guess, Wahid, the guidance for the year implies revenues are kind of down, it looks like, in the back half of the fiscal year. So can you just talk about what would be driving that or is it just some conservatism around timing of the budgets getting passed? Just a little bit more color there.

我想問一下，Wahid，全年指引似乎意味著在本財年下半年營收看起來有點下滑。所以你能否談談是什麼因素在驅動？還是只是對預算通過時點的一些保守假設？希望能多給一點說明。

Sure, Joe. So Joe, as we mentioned on our fourth quarter earnings call, we expected the revenue breakup to be between 40% to 60% between the first half and the second half of the year. And as you saw from our results so far, we're very much on track and on target with those expectations and predictions that we made. So we're very pleased with that. In terms of the second half, you're absolutely correct that we're still living in a continuing resolution environment in terms of the DoD budgeting. That could be good or bad for us, of course. So there's pluses and minuses to that. We've always generated the majority of our revenue from unplanned programs and historically speaking.

當然可以，Joe。Joe，如我們在第四季財報電話會議中提到的，我們預期全年營收在上半年與下半年之間的分布約為 40% 對 60%。從目前的結果你也看到，我們非常符合並達成當時的預期與預測，我們對此非常滿意。至於下半年，你說得完全正確，我們在國防部（DoD）預算方面仍處於「持續決議」（continuing resolution）的環境中。這對我們可能是好也可能是壞，當然有利有弊。從歷史來看，我們的大部分營收一直來自非計畫性（unplanned）的專案。

And we expect, given our results and given what our model and our indicators tell us, that we're looking forward to executing the second half of the year, and it's going to roughly equal to about 60% as we mentioned before. And we also expect R&D to be between 9% to 10% of revenue, as we projected at the beginning of this fiscal year, and we're on track on that metric and that measure as well. So overall, we're very pleased with our results. We're focused on our execution for the second half. We still have 2 more quarters to go, and we will obviously provide you updates as we progress throughout the year. And generally, we're focused on creating value for our key stakeholders, short and long term.

而且我們預期，基於我們的結果以及我們的模型與指標所顯示的情況，我們有信心在下半年執行推進，並且如先前所提，大致會占約 60%。我們也預期研發費用將占營收的 9% 到 10%，正如我們在本財年開始時所預測的；在這項指標與衡量上我們也在軌道上。整體而言，我們對成果非常滿意。我們專注於下半年的執行；我們還有 2 個季度要走，並且會在全年推進過程中持續向各位提供更新。總體來說，我們專注於為關鍵利害關係人創造價值，兼顧短期與長期。

Okay. And then just on the distribution strategy for the Commercial business. I guess, you talked, I guess, at a very high level of what you're going to do. Is there going to be a time in the near future where you're going to feel comfortable providing a little bit more detail?

好的。接著關於商業業務的通路策略。我想你之前只是很高層次地談到你們要做什麼。近期是否會有一個時間點，你們會覺得可以更放心地提供更多細節？

Of course. As we progress through our market introduction and the third phase, Joe, we are very, ourselves, very curious and very interested in learning of what is the -- how this is going to progress and what is it going to take for us to be successful in this market, and at what pace and to what level. We do already have plans, as I mentioned on my remarks, that the products will be available from our own website, as well as through precision ag dealers across the country, and we are in that process and engagement in that process. We're signing up the dealers as we go. And as we get more traction in the market, we'll be able to provide you with, hopefully, a lot more clarity and details as we're informed as well.

當然。Joe，隨著我們推進市場導入與第三階段，我們自己也非常好奇、也很有興趣了解——這將如何發展、我們要如何才能在這個市場成功，以及需要以什麼速度、達到什麼程度。我們確實已有計畫，如我在發言中提到的，產品將可透過我們自家網站，以及全國各地的精準農業經銷商取得；我們正在推進並投入這個流程。我們會一邊進行一邊簽約經銷商。隨著我們在市場上取得更多動能，我們也將能夠在我們獲得更多資訊後，為你提供希望更清楚、更多細節的說明。

I'm showing no further questions at this time.

目前顯示沒有其他問題。

Okay. Right. So thank you, Victoria and thank you, all, for your attention and for your interest in AeroVironment. An archived version of this call, all SEC filings and relevant company and industry news can be found on our website, avinc.com. We wish you a healthy and happy holiday season and New Year, and we look forward to speaking with you again following next quarter's results. Good day.

好的。那麼，謝謝 Victoria，也謝謝各位對 AeroVironment 的關注與興趣。本次電話會議的存檔版本、所有 SEC 申報文件以及相關公司與產業新聞，都可在我們的網站 avinc.com 查閱。祝各位假期與新年健康愉快，我們期待在下季財報結果公布後再次與各位交流。祝好。

Thank you, ladies and gentlemen. This concludes today's call. Thank you for participating. You may now disconnect.

謝謝各位女士先生。今天的電話會議到此結束。感謝各位參與。您現在可以掛線。