AeroVironment Earnings Call Nuggets: Switchblade and IDIQ
Josephine Millward – The Benchmark Company: Tim, I wanted to ask you, the army issued an intent to fill source the Switchblade from you guys back in March. Can you give us an update on that? Have you received the first (indiscernible) systems and when do you anticipate the additional – the follow-on. I think it’s over 600 systems for each year for two option years?
Tim Conver – Chairman and CEO: Well, what I can tell you Josephine, is the contract that we had I said previously that we were anticipating in the second quarter of last year had its initial funding placed in the fourth quarter of last year. As I mentioned in the previous comments and we received additional funding on that contract the first quarter this year. I don’t know that that is the specific requirement that you are mentioning or not, I further expanded on Switchblade in my earlier comments to say that we continue to believe there is an emerging requirement of that capability and that we are optimistic that we will see continued growth this year. But I don’t know that I can talk about any specific contracts beyond what I’ve just said.
Josephine Millward – The Benchmark Company: Can you give us a sense of what Switchblade’s contribution was in fiscal year ’13? Because it seems like in your guidance you are assuming this is a going to be a key driver, right?
Jikun Kim – SVP and CFO: Well, Switchblade grew about 24% in revenue last year over the prior year. We think it’s possible that it will continue to grow beyond that this year, where we have an expectation that there is significant long-term growth beyond that in front of us. So, it’s clearly an important program and an emerging new business area that we’re very focused on.
Tim Conver – Chairman and CEO: Josephine, I think you’re originally referring to the announcement in (indiscernible) U.S. Army’s intention to issue a sole source order to AeroVironment, is that correct? So the answer to that question is we have not announced such an order to date.
Andrea James – Dougherty & Company: The first is, can you impact the $248 million contract, how much of that is in the guidance and how much is remaining on that contract, and how much I guess go to AV relative to the other four winners on that?
Jikun Kim – SVP and CFO: I think you’re talking about the IDIQ, is that correct?
Andrea James – Dougherty & Company: That is right.
Jikun Kim – SVP and CFO: So we’ve received several past quarters relative to the IDIQ, and we’ve booked that in Q1, but I think from a data wise, about 90% of those have gone to AV versus our competitors.
Andrea James – Dougherty & Company: Then going back to the state department, my sense is that they took a look at what was out there and decided that it didn’t exist in the iteration that they wanted it, could you give us some more color on maybe what you expect them to do, and if you think you’ll be even better positioned maybe the next time around.
Tim Conver – Chairman and CEO: We believe that (indiscernible) offer that was compliant with the government’s requirements obviously. I think that government concluded to their rigorous evaluation process that no offer provided a solution that met all of their needs for both the Tier 1 and the Tier 2 solutions. We haven’t received any specific feedback, quality briefing process yet from the government, so we’re not prepared to talk about next steps. We can tell you that in that same announcement where the government cancelled the initial requirement that they reaffirm their need for these capabilities and to proceed we believe with both Tier 1 and Tier 2 requirements. I do think Andrea that we are confident that we have the leading small UAS capability in the world to bring to this requirement and we are focused on delivering that level of performance to this customer.
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