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AeroVironment, Inc. AVAV
Q3 2013 Earnings Call Transcript

Transcript Call Date 03/05/2013

Operator: Good day, ladies and gentlemen. Welcome to the AeroVironment, Incorporated Third Quarter Fiscal 2013 Earnings Conference Call. At this time all participants are in a listen-only mode. 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 the Chairman and Chief Executive Officer, Mr. Tim Conver; the Chief Financial Officer, Mr. Jikun Kim; Chief Operating Officer, Mr. Tom Herring; and Vice President of Investor Relations, Mr. Steven Gitlin.

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

Steven A. Gitlin - IR: Thank you, Karen and welcome to AeroVironment's third quarter fiscal 2013 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 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.

For a list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We do not intend and undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

The content of this conference call contains time-sensitive information that is accurate only as of today, March 5, 2013. The Company undertakes no obligation to make any revisions to the statements contained in our remarks or to update them to reflect the events or circumstances occurring after this conference call.

We will now begin with remarks from Tim Conver. Tim?

Tim Conver - Chairman and CEO: Thank you, Steve. Our size and our business model have always made our financial performance susceptible to lumpy results, but amidst the environment of unprecedented government budget uncertainty, our Q3 results represents the greatest variation to plan that we've experienced since becoming a public company. Q3 revenue was $47.1 million, close to half what we had planned for and fully diluted earnings per share were $0.17.

Like you, I'm unhappy with these results and their effect on our current fiscal year, but it's important to know that we believe we are seeing delays in order timing, not lost orders. We've seen no change in our market leadership positions across the business. I continue to believe that succeeding in the multiple new developments across multiple different market segments that our team is focused on, should delivery high compounded long-term growth.

Today, I'll focus my comments on three key points. First, delays in the government procurements, we expected during the quarter that were the primary cause of realizing only about half of the revenue that we planned for Q3. At this point, we expect most of that revenue to be realized over the next few quarters.

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