AVAV - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen, and welcome to the AeroVironment, Incorporated Second Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode.

We will conduct a question answer session after the management’s remarks.

As a reminder, this conference is being recorded for replay purposes. With us today from the Company is the President and Chief Executive Officer, Mr. President Financial Vice Ms. Senior Nawabi; and Officer, Chief Wahid Relations, President Teresa Vice Investor Mr. Covington; and of Steve Gitlin. And this conference over now turn to to at Mr. time, I like would the Gitlin. Please sir. go ahead,

Steve Gitlin

and call, certain of presented you Adrian, Thank of be the statements XXXX. information good Litigation the that today’s note Private contains with Securities you, on today. it’s within Please meaning forward-looking to Act Reform

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

of based are control our cause strategy not statements involve to, statements. that risks or forecasts uncertainties, business to differ actual on forward-looking Forward-looking outside and the limited assumptions and that materially our current expectations, governmental from economic, may but including competitive, results and factors technological

on events November is risk obligation along today call or XX-Q accurate Safe review Company in Form contained The For contained associated of AeroVironment’s circumstances remarks our revision update encourage after statements statement information or in you make and content occurring call. SEC SEC today further of to to today, to this to any X-K contains release no and time-sensitive XX, to reports earnings XX-K the only Harbor conference this that these therein. the reflect XXXX. as undertakes conference any them forward-looking we the filed information with factors discussed risks, The with the Form the the with and on periodic the filed Form

Nawabi. from We will Wahid now begin remarks with

Wahid Nawabi

call. today’s messages. fiscal focus we and year call, Steve, welcome second on you, to three XXXX earnings quarter conference On Thank key will our

successfully First, in plan first executing results. half our strong our reflected second quarter and team as is our

our demand Today, performance creation us overview coupled review support keep and then I quarter. notable visibility our with some our second and an third, long-term customer strategy the during robust year value fiscal goals. XXXX objectives; achieve backlog our provide track operating on our strong and developments continued innovative quarter fiscal for year XXXX to and Second, solutions, of will financial

will fiscal our review including guidance strong provide XXXX Then quarter our second discuss for your which and goals I take financials. a momentum. Covington Teresa will year reflects I Next, revised of Steve and questions. Teresa, will then detailed our year-to-date

plan We XXXX and strong continue deliver are results. executing fiscal our to year

detail continuing year-over-year. to quarter increased year $XX improvement the Second revenue increased from operations of operations four $X.XX. of note including per million important our is and settlement load funded by year. of our will strong improvement by backlog over by strong This have $XXX Funded shortly. as us one-time performance It over year-over-year. our revenue from XXXX is is diluted same that litigation Year-to-date, the funded levels. operations. This we million Revenue significantly backlog quarterly XX% per over year. helping $X.XX earnings share $XXX a period up to million generated XX% diluted Earnings $XXX over and fiscal XX% enhances $X last reflects last strong last increased backlog visibility level year-over-year from share was million high Teresa continuing $X.XX consistently quarters,

quarter. Now let’s notable from developments some the review

expanding The disrupting the of a part by our National defines Strategy lethality U.S. Systems solutions U.S. market, Loitering growing UAS leader Military These category. the initiatives the U.S. Within several small Missile remain enhance forces. of recently initiatives Systems the and AeroVironment’s our Department XXXX to include through ISR Tactical of AeroVironment the battle released Defense is the designed supported in winning and frontline increasing namely, Missile legacy serve allied lethality space we We and greater number troops business more in than an in in and to production surveillance, providing role U.S. Unmanned believe forces of future deliver offerings. munitions. affordably in and the and existing many important will critical Solutions situational capabilities next-generation solutions weapon investing infantry systems. firepower, awareness Defense

believe and our U.S. conventional sensor both capabilities the value our in reconnaissance Examples of and short opportunities UAS. threat initial non-conventional environments. procurement solutions small deliver adoption represent DoD also these of We range army’s opportunities exceptional new Both programs. include, soldier-borne and for programs next-generation

Defense for we Raven tracking Command nations; benefits XX market which We systems the Based months. more our award appropriated these and in small in to the $XXX well second specify and up for and for commercial requires was enacted in you domains. and contract unmanned Raven believe international for are It updating Marine beyond in million an U.S. million finalizing innovation a a line internationally markets Region. software Army’s leadership of news items to We record, the Notable strong in of defense more to multiple are for follows: of Baltic $X when and Achieving million first UAS for of a future as a NATO our involves deliver demand envision Land position fiscal Army, October, for TMS UAS agreement work that We $XX a look systems ally million AeroVironment significant year also the new continued announced in Portuguese Systems this Nearly the contract expand in example which $X.X to contract with forward requirements million coming Air agency are approach. and as for remains winning closely share. our procurement Systems small on serves for the Puma Systems, to Corp’s Caribbean solutions for reflects integration have in unmanned Systems appropriated forward and $XXX our systems track customers. early second category Dynamics and our together to million their This than In $XX we quarter XXXX and powerful increasingly Raven contract our teaming Portugal; million funding them as Force to across continue integrated We The Air award Appropriations our to hardware a IDIQ solutions DoD’s a million unmanned allied defense and contributions for negotiating appropriated the with for of stages quarter support approaches position UAS Nation robust. the and and supplier. $X.X awards Army funding General that $XX totals AeroVironment requirements penetration awards and look contract LMAMS Puma with million our Puma was Systems the support small valuable Indo-Pacific these made was the adoption. $XX.X a implementation which broader bill of Force’s today. customers. capabilities deliver new across deeper they we Systems Solutions.

of the our new establishing strike customers’ reconnaissance game-changing new protect small for vehicle to This generate the Tactical channel It are Dynamics our of additional systems programs and represents represents UAS battlefield working for unarmed platforms record. to programs an we Switchblade power also for UAS enhance for example, important and Switchblade unarmored Missile demand own Working other existing precision strike commanders vehicles. to U.S. Marine small capabilities upcoming Corp’s to together, new integrate capabilities our Systems the or integrate are combat enable potential paradigm stationery their a deliver of a acquisition air with through can fighter. – precision would on armored move. and capabilities us aerial in for awareness unmanned while situational for multiple vehicle. We armored directly possess General can and vehicles other new retrofit Essentially, and also commander solutions into This into across domains. Army our and for war way to an which our

as to the of potential agricultural recognition in multiple confident at We demonstration In of our consider stage, of this Commercial fighter. the into development nascent emerging very and the its our continue ability development expand a for enable Information opportunity. war and large the large focused solutions of to are this is program ongoing protect we remain integrated market. HAPS. the our in announcements superior new design, commercial While players this on global executing competing from businesses, reach Solutions, market In early we solution new we

to continue value compelling the in believe of We proposition our solution. unique

most However, than the lower communicated. adoption have anticipated rate we as overall is previously market

We partners long-term continue strategic large this to to seek help capitalize potentially us value opportunity. on creation

Now, Teresa Teresa? second our financials. review will quarter

Teresa Covington

results Thank fiscal million by offset second are as afternoon everyone. an $X.X XXXX quarter second XXXX a was service second deliveries operations fiscal of of from product quarter follows. XX% of was revenue increase $XX in quarter fiscal Revenues from to million, for The and or $X.X million XXXX of an the continuing you, million. increase Wahid, $XX.X $X.X partially the million. good increase in decrease of due revenue AeroVironment’s

fiscal fiscal major revenue the or XX% of $XX.X XXXX. Gross to service in as sales lower for quarter fiscal $X.X of UAS of from in a The XXXX a margins of XX% other decrease by million small to revenue as Gross HAPS $X.X is as compared in margin $XX.X million of due was million. second gross increase was margin for the of million, million, the gross a operations in of continuing million. The an quarter due revenue, to product partially as was quarter million, was XX% was from margin or TMS to second sales service $XX.X revenue $XX both $XX.X XXXX follows: was second due decrease margins million product product decreased XX% quarter, to revenue of by of percentage mix. higher revenue and lines/programs in well second and margins percentage primarily offset service $X

no quarter due decrease of the assignment revenue share second quarter of Charging tax holdback the second quarter the the of the fiscal for fiscal XXXX fiscal was to or second Income increase diluted AeroVironment $X.X $X second or awards statement, was effective net in million which revenue, share, per The second company income quarter second million from income $XX.X consideration $X.X is tax of quarter second remaining XXXX. primarily or included an quarter to tax the SG&A compared net of $X.X compared of per expense million, customer million. Equity a activity method from increase of rate million upon $X.X and fiscal $X.X second quarter of to the second continuing from tendering million the million Webasto. the and The The XX% has for Looking and fiscal second discontinued of fiscal a other or compared fiscal of quarter in XXXX. to for compared of of was for Net XXXX. of options. $X.X dispute. fiscal or continuing increase second quarter of expense continuing second from of for fiscal of SG&A of $X.X XX% of XXXX in was $X.X to of of income operations was XXXX of to tax operations loss equity compared expense operations additional gross XXXX of the in operations The net second from exercises $XX.X second quarter rate net diluted fiscal operations other fiscal million, was income of benefit XXXX. the XXXX. to from or margin compared to $XX.X diluted of million of $X.X due XX% higher million to in sale fiscal revenue was was net the income The not expense fiscal Webasto revenue of the XXXX. with XXXX. entitled quarter continuing SG&A for Webasto or XXXX the a operations million the on services decrease of second at of million for the restricted fiscal of of $XX,XXX $X.XX for million of The XX.X% for a vesting continuing completed fiscal first or company of of quarter excess R&D operations $X.X stock investments. the net for XX.X.% receive the satisfaction XX% our R&D revenue, of the for for business share, to million tax a transition the two rate XXXX. AeroVironment resulting share, operations income the the to requirements quarter of stock for income effective quarter XXXX. attributable XXXX to of expense from $X rest from $X.X income payment compared of cash XXXX revenue, X% quarter activity quarter quarter or of investment million discrete the an from the the was attributable Systems fiscal investment from continuing the quarter is income diluted agreement the to income method second in Net Charging fiscal to $X.XX XX% Systems of the company's The other per for the $X.XX or as million tax R&D second for of of received for of expense contracts $X.X discontinued company of XXXX of XXXX compared million consents was EES currently for fiscal holdback of and for under income to per tax tax operations $X.XX Loss net loss interest loss of effective to of from

million. XXXX for of million first The revenue for increase Revenue XXXX the ended October to Now results. $XX.X million our as in an an was increase was $XX.X half of XXXX. of compared contract due increase XX, fiscal million, first of million an service months deliveries $XXX and to moving in through $XXX.X revenue six in product the increase fiscal $XX.X half

of or of Small fiscal compared gross primarily follows: $XX.X fiscal of TMS to revenue was for fiscal million, or by increase the rate XXXX half of fiscal of The from was million, fiscal first XXXX resulting increase fiscal increase fiscal revenue, partially prior of other increased the XX% for for and to was $X.X million compared XXXX. product half SG&A The million the income in from $XX.X million. operations for tax statutory net of margins continuing product $X.XX was increase million. fiscal tax, the for an agreement XXXX, revenue or the XXXX fiscal The for net income half by million of XXXX margins short-term gross compared the interest million. share, share, revenue from margin XXXX. XX% an increase first million, expense $X.X half half compared per offset XXXX. of half first XXXX for $X.XX service services or $X.X from XX% net of settlement $X.X rate increase first $XX.X higher compared effective million Act. was the was of XX% to an first first Cut diluted effective rates half of Webasto tax a continuing reduced increase half partially $XX.X activity, major as the investment X.X% income was of The was Net to the million other of expense fiscal XXXX fiscal a from expense X% margin million revenue an R&D half of The due $XX.X XX% of first million, for revenue Income activity, continuing for income is AeroVironment half or and of half for sales, the for income due a half rate was Charging of transition percentage $XX.X $XX income net for $XX.X rate federal first increase operations million of $XX.X for and an million. litigation expense first and by XXXX investment XXXX. and the or other $XX.X to share service to tax, of a in $X.X compared SG&A or offset Net income interest tax UAS of as of to a XXXX. compared Tax of of half The million XX% income for method XX% to million increase first higher of taxes, a an lower first first and to was was partially half the fiscal the a was from effective the HAPS from or due the in Gross the in income lines/program Systems was of fiscal income the $X.X an primarily or loss increase to or was operations with and in attributable Gross to SG&A XX.X% first $X.X to in per higher was of to margin first XX% Equity of earned as to due XXXX. in compared under no as of gross $XX in fiscal expense XXXX. due million million before fiscal XXXX primarily offset of fiscal million was margins in income margins year per of other half product diluted of R&D or by million for first $X.X XX% $XX.X method revenue, $XX.X Jobs of XXXX. of expense fiscal $X.XX half equity diluted R&D first operations $XX.X to million revenue. revenue of

from the increase million, from $XX.X and October XXXX. million or XX% first $X.X increase of fiscal fiscal X% XXXX quarter as XX, of backlog funded or of quarter Our an second $XXX.X was the of XXXX million an of

and XX payable $XX.X second to year $XX.X fiscal of end XXXX for end fiscal at increase totaled quarter million of days million, million, Total of of of balance year compared the cash, XXXX fiscal second the at balance fourth XX Turning equivalents was days year totaled million. of XXXX. the quarter from investments the and of Days of Missile $XX.X end for at Net the end and $XX.X quarter operations the fiscal to the cash approximately inventory which second $XX.X the was from fiscal $X.X $XXX.X party from the The Net $XXX.X XXXX. fiscal outstanding compared second sheet, days, at retentions XXXX of results equivalents quarter an to of receivables cash, was $XX.X the when investments million increase year retention an timing to receivable year XXXX. quarter XXXX was year Accounts million amounts. to approximately receivables. of compared outstanding at recognition XXXX the fiscal quarter million the accounts sales unbilled quarter retention the our and year fiscal receivables approximately of of days, over of days million, fiscal cash of XX XXXX million. and XXXX. at including recognized quarter end receivables the All fiscal the is of end for to inclusive fiscal inventory now payable of million related days, fiscal quarter of of second differences and quarter fourth $XX.X generally to in contracts revenue XX timing year and the XXXX fourth The compared year unbilled Tactical XXXX. fourth days quarter XX quarter continuing due time billings. days revenue XXXX between for and revenue to fiscal of the for unbilled the arise accelerates second Total recognized XX of for the balances second compared is the year Systems was outstanding of of end unbilled fourth of

second property we in expenditures, capital of depreciation to and capital quarter improvements fiscal XXXX, of in expense. and amortization approximately $X.X equipment $X.X invested Turning million year the and million recognized

to XXXX Now an fiscal update visibility. our

revenue fiscal million. year-to-date XXXX today, of $XXX have in of As we

million. million. we during anticipate backlog Unfunded year of fiscal of in at backlog effective full balance of Second from the up $XXX contracts bookings execute to the to recognize $X.X that fiscal quarter-to-date QX year million tax million. the to in for up ending XXXX rate XX% This to continuing anticipate we $XXX revenue We guidance. to we quarter anticipate incrementally-funded the expect operations that execute adds XX% a that XX%. range or revenue XXXX midpoint of $XX of in

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

Wahid Nawabi

Teresa. Thanks,

historically creation. supported Customer We are have and our this With robust effectively solutions refers steady backlog the position year, range strong point term midpoint appropriations context XX% performance Teresa of current demand high described. This solutions. for our as far now year. so our converting for the value us this commitments at represents visibility this and fiscal executing for the revised our strong in we and enhancing revenue The plan DoD to revenue for by remains those visibility fiscal to unfunded and year. visibility guidance long-term in in funded

visibility guidance those the our we execution much which tells our operations fulfilling full EPS respect us us With to to earnings places year already. guidance. achieving business, from share risks about range while earnings, continuing per front-end the our back-end in of generated $X.XX year-to-date, So, timing there on have remains the within orders also of and

revenue to narrowing this of our between continuing – to operations per and upper our with $XXX context this earnings within guidance and $XXX million as $X.XX as million range narrowing our and are share context, raising portion range between are from we and we guidance $X.XX. While the diluted

produced four largest As years second historically revenue revenue. we across the expect all This to and half first a significant quarterly from prior be fiscal represents year, to revenue our fourth evenly earlier quarters. fairly this indicated we when quarter half change similar distributed

expect sales. compared profitability with revenue our planned in higher product to also to and in higher a second mainly expenses operating half sales services the mix lower due shift We

factors total drive We investments and to year the XX% I continue research revised outlined. which revenue. to development to XX% expect These just of guidance full

of delivering achieving our to and on our in in first, summary, for our main our today’s revised record half call, confident targets. executing are reflected these our team to extend results. successfully our plan reiterate first points our is We In as objectives ability strong

customers backlog keep our solutions strategy, for innovative Thank strong team with track you their achieve our coupled AeroVironment’s XXXX objectives and customers to year your to members their creation serve now relentless customer who Teresa, take and and AeroVironment us Second, stockholders. our goals. critical the you potential your and our company. for placed And continued you drive Thank robust trust recognizing stockholders will value in long-term on demand creation our our third, missions. to for to visibility support thank I people support our to and our of Steve, fiscal to value questions. our

Operator

Ken [Operator Canaccord. from Instructions] Herbert first comes our go ahead. And of Please question

Your line open. is

Ken Herbert

Hi, good afternoon.

Wahid Nawabi

afternoon, Ken. Good

Ken Herbert

fiscal do can first you and you yet? we you then, the how in the much year, in about early in in are in where the that on potential LMAMS, very budget, the know budget the of expect? of Wahid, that that? under of just And I to just Have that am Or million ask I of maybe, seen any see contract? curious, the are XXXX your $XXX should but timing have any XXXX the you Hey, yet timing? we talked I seen fiscal you is about any know how I considering fiscal update us contract? that I wanted – we mean,

Wahid Nawabi

not appropriated is are authorized contract I million earlier the under XXXX budget and with $XXX which year us in fiscal dollar mentioned Sure, that yet. government so, amounts the Ken,

on that. We are already working

forward. are we are and you I time that, We it And we and finalization contract once we the work go continue obviously of do as as we towards mentioned. with that in of will aware definitization this to update the that we position. At customer

Ken Herbert

Okay.

So, is give how this of possible, your versus year maybe of maybe factored falls just into how guidance much into that that the you fiscal XXXX? is Wahid, can much it an estimate

Wahid Nawabi

we Historically it because definitization to in time are to obviously for still it that comment speaking, certain the a customer have able am we contract, then produce and a then be on contract always product the unfortunately, approval be definitize I get position have to to negotiations taken specifically. finalize us not amount it, able in then, negotiate them to So, the of and test and process, and from deliver us them. to

of All that underway, to still be is done. and but activity obviously planned

Operator

Ladewig And our Jon next go question ahead. from Stifel. Please comes from

Your line is open.

Jon Ladewig

call. my HAPSMobile? off for capital hoping allocation first Hey days I on latest guys. us was are and Thanks guys updating plans you color kind with what’s on start around us could the give taking your these some of thoughts

Wahid Nawabi

Yes, hi there, Jon.

in we outlook X% a the HAPS. currently assume our we allocation, venture that financial provided of So, in joint terms capital in with ownership

two You or mentioned have that. our specifically step to-date with we ability during contract not certain HAPS. implemented contract. But, per executed up and contract that to And increase that and option the XX% the the this ownership to terms, terms we venture have joint conditions are within

this we process, you through updated. will progress as we keep So,

and said capital our our of provides joint ownership as such up fixtures usually that our a initial as I’ve and Teresa that’s venture in primary then and And venture business $XXX so, piece. year. operations consumption which for expenditures capital that the we the and to That’s update parts and and the do have that on status year-to-date various that piece of X% tooling contributed for besides was investments we before, obviously ordinary of joint million one this an

Jon Ladewig

on sales Thank the you. And impact laws update had for can it ones international a HAPS? You quick. has right. between All give you about in changed on additional and bunch of for sales. kind Can export exports? TMS, of made But have some us transition the the other your color then, fundamentally us small to real to-date? The you since talked change for on the that sales kind House the allowing just White international, of breakout here, two

Wahid Nawabi

Sure.

the licenses. significant of those countries remarks. and speaking, export list international strong are with products requirements a you it’s authorized. are in haven’t we comments, licensing of a second quarter Having have very I we a in the now obtaining way all in we really have heard my XX my over earlier track export or or that and of that, mentioned meaningful noticed to change in solutions. record complying allied achieved So, for And our historically terms we small state and department growing awards of obtaining And that said Jon, with in up the license being from the UAS terms for as the number new customers processed

now. of In through actually of numbers you breakdown Teresa help revenue, the those the terms with can

Teresa Covington

Hi, Jon.

I XXXX, As six Tactical was $X.X $XX.X HAPS fiscal had million, Missile was small million, of $XX.X million, about remarks, for first talked million. was in other UAS my months the was Systems prepared $XX.X

For half of was million, XXXX, TMS $XX.X small HAPS was million, $X.X $X.X million, other $XX.X the million. first was was UAS fiscal

For months XXXX, were million, six sales $XX.X were and of international sales $XX.X were fiscal sales for were million, $XX.X months sales the international million in XXXX, first six our domestic the $XX.X million. fiscal domestic

Operator

Herbert your Canaccord. And from question Ken next of comes

line open. is Your

Ken Herbert

Yes, hi, to good follow-up. afternoon. I just wanted

Wahid Nawabi

Hi, Ken.

Ken Herbert

Yes, hi, Wahid.

one-time think the a magnitude year, of the gross sort think And You margin or I you the of part we half the in a was margin something out of just maybe if of to about of and am about the that maybe some second as standpoint from sort step-up least had provide just half headwind should we mentioned is wondering going that moving of could XXXX? be of expenses. in second at corporate a

Wahid Nawabi

Sure, Ken.

for our I generally obviously is to I mentioned guidance, results half second profitability provided half than that – And primary there can my in our profile the two guidance. revised first remarks, I that. So, slightly the achieve my in speaking, looks reasons lower as

up and vary, those services such in sums revenue and quarter, profile our et and First could the is solutions cetera, profitability of product firm cost cetera. contracts [Inaudible] is, revenue large the projects made deliveries, mix revenue versus of price fixed mix contracts any et and because given contracts, contracts plus contracts, our as of

category the half. one that's So for of second impact

In we question, and we side, to the your is on that’s factors R&D two the also operating The change as that this at issue, second well we this to those expect this it plan different number. year the yes, to one factors second – affecting look for expenditures systemic profitability primary and is of what the future, Ken. on of are a the I side. may really, in it SG&A foresee are today directions the timeframe don’t based second see half on words, as the second unique both a refer a as higher kind as in and as other I the half I And the you

Ken Herbert

if could Okay, final that’s helpful. And very one follow-up. just I

do business was to dispute. $X.X purchaser payment Is about also that final do cash had I is for of in You that transaction? think there mean, the sort the the this that that is quarter number how was that think mentioned in I EES million we believe risk that you – payment timing? from of expected or just potential

Wahid Nawabi

Ken. Sure,

negotiate terms those as know, dispute yes, and mentioned, how there us right is Teresa transactions, related new always you as different to of So, in purchaser that and now things. and contract in the deep the with assets issues is

that. are working We them obviously on with

them currently multiple still services transitional fashions. to are We providing support in

However several a and throughout through know. have and is risk update updates will to and that more next months as we the that and we you you quarters, are working let there we

Operator

[Operator Please Instructions] from Baird. from next question Arment comes our go Peter And ahead.

line open. Your is

Peter Arment

good Wahid. Yes, afternoon,

Wahid Nawabi

Good afternoon. Peter. Hi,

Peter Arment

the And mix? as two for Thanks. the you guess to a little how the do so, bit grow. just is that question prototype international come Hey, you this a all us countries deliver about – longer talk you’ve to countries tail the follow-up potentially stream Can guess, international aircraft the Is are service but a around, revenue contracts? with HAPS? mix then, got unrelated, when those with as I XX I or continues grows expect

Wahid Nawabi

international hardware over terms our But so, we adoption, Sure. in vary. countries. have both customer market all and they types customers of to majority, up that are now sales. yes, XX those we overwhelming of have with Peter, The contracts initial

also have maintaining addition that, our operating and using products to logistics services train and training we and In and our and then services our to customers solutions. also support products help

definitely or years well, of secondly, historically and there we of customers the plus the always tail I before to new a general, in maturity – domestic terms long U.S. And So in general, and said behind is that is in in true. international that in sustainment the this have a maintenance is and about adoption international and future believe acquire adoption. markets curve be domestic And five continues still it we upgrades. customer, when terms the of our as

also grow So, forward. solutions those customers as portfolio remains number and I their our as said within to international are the markets grow but of the our strong as can that before, we a we spend we go and customers, working continue customers to is of believe for of family international share solution small and not for our robust only those UAS

the In terms the airplanes that What have we continue will specific updates, we demonstration the said that, And notified. right focused to two airplanes. say of delivery we as obviously we includes specified of you executing our we two have we now of step which the process. design, deliveries program on development are HAPS, two timing not in before, of keep and

Operator

will And in may we the Instructions] today's disconnect. you Thanks conclude no for questions This [Operator teleconference. queue. and participating now have

Wahid Nawabi

Thank you.

Teresa Covington

you. Thank

Steve Gitlin

Thank you.

AeroVironment (AVAV) 29 Nov 182019 Q2 Earnings call transcript