AeroVironment, Inc. (NASDAQ:AVAV) Q2 2018 Earnings Conference Call Transcript

Dec 05, 2017 • 04:30 pm ET


AeroVironment, Inc. (NASDAQ:AVAV) Q2 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the AeroVironment Second Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. And later, we will conduct a question-and-answer session after management's remarks. As a reminder, this conference is being recorded for replay purposes. With us today from the Company is President and CEO, Mr. Wahid Nawabi; SVP and CFO, Ms. Teresa Covington; and VP of IR, Mr. Steven Gitlin.

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

Steven Gitlin

Thank you, Victoria, and welcome to our second quarter fiscal 2018 earnings call.

(Forward-Looking Cautionary Statement).

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

Wahid Nawabi

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, 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, and then I will discuss our outlook for the balance of the year. Following this, Teresa, Steve, and I will take your questions.

Today's three 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 are excited and remain focused on executing our strategy to create long-term value.

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. 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 us 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.

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