AeroVironment Inc Q4 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Wahid, maybe just a follow-up on the previous question. Can you quantify what you expect sort of the supply chain headwinds to be in fiscal '23 from a revenue standpoint?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Okay. No, I would imagine you've effectively or at least tried to derisk the guide for '23 to reflect these headwinds. I guess one other question. What do you expect in terms of timing? And I guess it's related, but as the U.S. looks to rebuild inventories perhaps of the Switchblade 300, do you get a sense that those inventory levels will be completely rebuilt. And is the issue just about your ability to obviously deliver those, and -- or what should you expect in terms of timing of the inventory restocking?

Question: Michael Louie DiPalma - William Blair & Company L.L.C., Research Division - Analyst : For the 20-plus export approvals for the Switchblade, does that cover the Switchblade 600 in addition to the Switchblade 300?

Question: Michael Louie DiPalma - William Blair & Company L.L.C., Research Division - Analyst : Great. And Wahid, can you speak in general about the progress for the Switchblade 600 as the media report seems to suggest that for the shipments that Ukraine, the vast majority have been for the 300. So has there been any limitations in terms of shipping the 600? And is it fully ready? Or do more trials need to be done for it to be fully ready for service?

Question: Michael Louie DiPalma - William Blair & Company L.L.C., Research Division - Analyst : Great. And you referenced how several countries are looking to acquire the Switchblade through a foreign military sales type transaction. I think there was a report last week about France, potentially acquiring the Switchblade. How long do you expect it to take for some of our allies to evaluate Switchblade procurement? I know you just mentioned how -- like the big question is when. But how long does it take allies in general to be comfortable with like doing trials?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Just a quick follow-up. Can you provide any more color on FTUAS? And is there any concern that with delays in timing that this slips further to the right that it could potentially negatively impact the probability of that contract for you or the competitive dynamic?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Okay. That's helpful. If I could, just one quick follow-up as well. There's been a lot of press on other companies that have had success in selling loitering munitions into Ukraine recently. Are you at risk of losing share because of some of the supply chain disruptions? Or how would you characterize the competition now? It seems to be getting -- there seems to be more competition perhaps in this marketplace. And what's the risk that supply chain holds you back as you look at that environment now?

Question: Michael Louie DiPalma - William Blair & Company L.L.C., Research Division - Analyst : Wahid and Kevin, one final quick one. Do you still expect to ship your third Sunglider to SoftBank this calendar year? Or has your focus on Ukraine delayed production of that third aircraft?

Question: Michael Louie DiPalma - William Blair & Company L.L.C., Research Division - Analyst : Okay. And is there any time line on when you expect to potentially receive the FAA certification?

Question: Michael Louie DiPalma - William Blair & Company L.L.C., Research Division - Analyst : Do you need the third aircraft to get that certification? Or are they able to certify the second aircraft and that would also be applicable for the third aircraft?