On Wednesday, AeroVironment, Inc. (NASDAQ:AVAV) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.
UAS and EES Split
Michael Lewis – Lazard Capital: So, we have about 70% of revenue at the midpoint, so that’s right now around $250 million according to guidance. I was wondering if you could provide us with a little more detail into the proportion of the split between UAS and EES contained in that visibility that you have right now.
Tim Conver – Chairman and CEO: Mike, we have not made a practice of breaking down the revenue guidance between the two groups. Although, I think we have said that we expect growth this year in our EV product line which is essentially – represents the EES segment at this point.
Jikun Kim – SVP and CFO: Mike, I can provide a little more detail but it’s not by business segment. It’s by how we have categorized it in the Q4 call. It’s $58.7 million of actual revenues, $98.4 million of backlog, $29.4 million of Q2 bookings to-date, $43.5 million of GFY ’12 to go and EES running at flat over last year, $20.9 million, which adds up to about 251 million.
Michael Lewis – Lazard Capital: One more question. Did I read the press release correctly when – it looks like, was it a $3 million actual revenue slip that you saw in the quarter as a result of contract timing and if so, did you already recoup that revenue? Has it already been delivered or are we still waiting for it to ship out in Q2?
Tim Conver – Chairman and CEO: Let me put a little more color on what I intended to say there Mike, we expected, when we went into the quarter that we would have revenue about the same as our first quarter of last year and we ended up with revenue that was about $3 million less than the first quarter of last year and the principal difference between what we expected and what we ended up with came down to a contract that we expected to have in place and deliver on in Q1 that slid out. That has not actually closed yet, but we still are comfortable that it’s within the year and won’t affect our total revenue.
Free Cash Flow
Jeremy Devaney – BB&T Capital Markets: Wanted to quickly touch on free cash flow there is a large single quarter decline since you guys become public and AR’s are running extremely high versus prior Q1. I was wondering if you could give us a little bit of detail on what’s going on the collection side of the business and if you are seeing anything, in particular, that we should be aware of?
Jikun Kim – SVP and CFO: Our free cash flow was down roughly $20 million driven primarily by working capital. Actually the impact was more on the liability side. We had two large accruals that we did at the end of the year, one for taxes and one for bonuses that would drive the accounts payable or the current liability side down. Now, on the AR side, we did bring our receivables down roughly about 10 million so that would put our collections in the quarter at 70 million which is pretty good, but due to the billing and the timing of the shipments our accounts receivable balance at end of the quarter is at roughly $73 million.
Jeremy Devaney – BB&T Capital Markets: During the discussion you guys mentioned that Switchblade was going to grow year-over-year looking at the Q1 $5 million bookings do you expect to see bookings of similar size in each of the remaining 3Qs. Do you think $15 million to $20 million in Switchblade annual run rate is achievable this year?
Tim Conver – Chairman and CEO: We do continue to expect that Switchblade revenue will grow this year over last as it did last year over the prior year. And everything that we see from our customer community that’s interested in this capability continues to support that expectation. We do expect to continue to see more bookings and to ship many of those within this fiscal year. I don’t want to get into predicting particular quarterly revenues, but we are still very bullish on the potential of this new capability.