Q2 2024 Geospace Technologies Corp Earnings Call

Please standby we're about to begin.

Operator: Please stand by; we're about to begin. Welcome to the Geospace Technologies 2nd Quarter 2020 Earnings Conference Call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Robert Curda, the company's Chief Financial Officer.

Welcome to the Geo space Technology second quarter 2024 earnings Conference call.

Hosting the call today from G. O space is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Robert Kurt <unk>, The company's Chief Financial Officer.

Operator: Today's call is being recorded and will be available on the Geospace Technologies Investor Relations website following the call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, you may press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2.

Today's call is being recorded and will be available on the geospatial technologies Investor Relations website following the call.

At this time, all participants have been placed in a listen only mode and the floor will be opened for your questions. Following the presentation.

If you would like to ask a question at that time, you May Press star one on your telephone keypad.

At any point. Your question has been answered you may remove yourself from the queue by pressing star two.

Operator: We ask that you please pick up your handset to allow optimal sound quality. Lastly, should you require operator assistance, you may press star zero. It is now my pleasure to turn the floor over to Rick Wheeler. Sir, you may begin.

We ask that you please pickup your handset to allow optimal sound quality.

Lastly, you should you require operator assistance you May press Star zero.

It is now my pleasure to turn the floor over to Rick Wheeler, Sir you may begin.

Walter Richard Wheeler: Thanks, Jamie.

Walter Richard Wheeler: Good morning and welcome to Geospace Technology's conference call for the second quarter of fiscal year 2024. As mentioned, I'm Rick Wheeler, the company's President and Chief Executive Officer, and I'm joined by Robert Curda, the company's Chief Financial Officer. In our prepared remarks, I'll first provide an overview of the second quarter, and Robert will then follow up with more in-depth commentary on our financial performance. After some final comments, we'll open the line for questions.

Walter Richard Wheeler: Good morning, and welcome to Geospatial Technologies Conference call for the second quarter of fiscal year 2024, as mentioned I'm, Rick Wheeler, the company's President and Chief Executive Officer, and I'm joined by Robert Kurt is the company's Chief Financial Officer.

Robert Martin: Our prepared remarks, I'll first provide an overview of the second quarter and Robert will then follow up with more in depth commentary on our financial performance. After some final comments, we'll open the line for questions today's commentary on markets revenue planned operations and capital expenditures may be considered forward looking as defined in the private Securities Litigation reform.

Walter Richard Wheeler: Today's commentary on markets, revenue, planned operations, and capital expenditures may be considered forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on what we know now, but actual outcomes are affected by uncertainties beyond our control or prediction. Both known and unknown risks can lead to results that differ from what is said or implied.

Robert: Act of 1995.

Robert: These statements are based on what we know now but actual outcomes are affected by uncertainties beyond our control or predictions.

Known and unknown risks can lead to results that differ from what is said or implied today some.

Robert: Some of these risks and uncertainties are discussed in our SEC Form 10-K, and 10-Q filings.

Walter Richard Wheeler: Some of these risks and uncertainties are discussed in our SEC Form 10-K and 10-Q filings. For convenience, as mentioned, we will link a recording of this call to the Investor Relations page of our Geospace.com website, which I invite everyone to browse through and learn more about Geospace, our subsidiaries, and our products. However, note that today's recorded information is time-sensitive and may not be accurate at the time one listens to the report.

Robert: For convenience as was mentioned we will link a recording of this call on the Investor Relations page of our Geo space Dot Com website, which I invite everyone to browse through and learn more about your space, our subsidiaries and our products.

Robert: Note that today recorded information is time sensitive and may not be accurate at the time, one listens to the replay.

Walter Richard Wheeler: Yesterday, after the market closed, we released our financial results for the second quarter and first six months of fiscal year 2024, which ended March 31, 2024. After reaching the halfway mark of the fiscal year, the company recorded positive net income of $8.4 million, or $0.62 per share. Following the profitable results of last year, the first half of fiscal year 2024 serves as a strong indication that our strategic efforts towards sustained profitability are working.

Robert: Yesterday after the market closed we released our financial results for the second quarter and first six months of fiscal year 2024, which ended March 31st 2024.

Robert: After reaching the halfway mark of the fiscal year. The company has recorded positive net income of $8 $4 million or 62 cents per share.

Robert: Following the profitable results of last year. The first half of fiscal year 2024 serves as a strong indication that our strategic efforts towards sustained profitability are at work. Furthermore, the long standing strength of our balance sheet remains firmly intact with no debt and over $51 million in cash and short term investments.

Walter Richard Wheeler: Furthermore, the long-standing strength of our balance sheet remains firmly intact, with no debt and over $51 million in cash and short-term investments. However, low utilization of our OVX and Mariner ocean bottom nodes did have an unfavorable impact on our oil and gas market segment, where second quarter revenue fell short of the previous six quarters. This led to an overall net loss for the isolated second quarter of $4.3 million.

Robert: However, low utilization of our Ob X and Mariner Ocean bottom nodes did have an unfavorable impact on our oil and gas market segment, where second quarter revenue fell short of the previous six quarters.

Robert: This led to an overall net loss for the isolated second quarter at $4 $3 million.

Walter Richard Wheeler: Although no specific guidance was provided, we did mention in our first quarter conference call that some gaps in our OBX rental contracts were expected, which became a driving factor in lowering second quarter revenue. Additionally, revenue originally set to be received in the second quarter was actually brought forward into the first quarter when a rental contract for our new Mariner Ocean Bottom nodes was converted to a $30 million sale. Despite these circumstances affecting the second quarter, we do believe the second half of the fiscal year will see better utilization of our ocean bottom nodes, which should bolster performance in our oil and gas markets.

Robert: Although no specific guidance was provided we did mentioned in our first quarter conference call that some gaps in our obs rental contracts were expected, which became a driving factor in lowering second quarter revenue.

Robert: Additionally, revenue originally set to be received in the second quarter was actually brought forward into the first quarter when our rental contracts for our new Mariner Ocean bottom nodes was converted to a $30 million saved.

Robert: Despite these circumstances affecting the second quarter, we do believe the second half of the fiscal year, we will see better utilization of our ocean bottom nodes, which should bolster performance of our oil and gas market segment.

Walter Richard Wheeler: Our adjacent market segment showed strong performance in the second quarter, generating revenue of $12.2 million. This figure represents the third-highest quarterly revenue from this segment in the company's history, coming close to matching the record-setting amount of last year's second quarter. We believe these results demonstrate that our long-standing strategy of creating an increasing, stable source of revenue from the adjacent market segment through expanded product lines and nurtured growth is working, while offering less volatility than our oil and gas market segment.

Robert: Our adjacent market segment showed strong performance in the second quarter generating revenue of $12 $2 million. This figure represents the third highest quarterly revenue from this segment in the company's history coming close to matching the record setting them out of last year's second quarter.

Robert: We believe these results demonstrate that our long standing strategy of creating an increasing stable source of revenue from the adjacent market segment your expanded product lines and nurture grow as working while offering less volatility than our oil and gas market is sick.

Walter Richard Wheeler: Our emerging market segment also made a meaningful contribution to revenue in the second quarter, adding $1.1 million to the three-month total. The largest portion came from fulfilling major aspects of the nearly completed DARPA contract that we announced last year. Several significant discussions and engagements mentioned in the last quarter for utilizing Quantum SADAR Array Monitoring System and other analytics do remain underway. These include multiple government agencies' security and surveillance projects, as well as advanced monitoring projects in the energy and energy transition areas.

Robert: Our emerging market segment also made a meaningful contribution to revenue in the second quarter, adding $1 1 billion to the three months total.

Robert: The largest portion came from finfet fulfilling major aspects of the nearly completed DARPA contract that we announced last year.

Robert: Several significant discussions and engagements mentioned in the last quarter for utilizing quantum say to our array monitoring system and other analytics do remain underway. These include multiple government agencies security and surveillance projects as well as advanced monitoring projects in the energy and energy transition areas.

Walter Richard Wheeler: Each of these demonstrate opportunities where our technology could be uniquely applied. However, while these discussions continue to be very productive, they are somewhat slow-going. As such, contributions to revenue this fiscal year from this segment may be meaningful but will likely remain relatively small, leaving the potential for larger revenue contributions in the next fiscal year. With that, I'll now turn the call over to Robert to give a little more detail on our financial performance for the second quarter in six months.

Robert: Each of these demonstrate opportunities where our technology could be uniquely applied and while these discussions continue to be very productive. They are somewhat slow going as such can talk contributions to revenue. This fiscal year from this segment may be meaningful, but will likely remain relatively small, leaving the potential for larger revenue contribution.

Robert: And the next fiscal year.

Robert: With that I'll now turn the call over to Robert to give a little more detail on our financial performance of the second quarter and six months.

Robert L. Curda: Thanks Rick and good morning. Before I begin, I'd like to remind everyone that we will not provide any specific revenue or earnings guidance during our call this morning. In yesterday's press release for our second quarter ended March 31st, 2024, we reported revenue of $24.3 million compared to last year's revenue of $31.4 million. The net loss for the quarter was $4.3 million, or $0.32 per diluted share, compared to last year's net income of $4.6 million, or $0.35 per diluted share.

Robert: Thanks, Rick and good morning, before I begin I'd like to remind everyone that we will not provide any specific revenue or earnings guidance during our call. This morning.

Robert: In yesterday's press release for our second quarter ended March 31, 2024, we reported revenue of 23, $24 3 million compared to last year's revenue of 31 point for the NIM.

Robert: Net loss for the quarter was $44 3 million or 32 cents per diluted share compared to last year's net income of $4 6 million or 35 cents per diluted share.

Robert L. Curda: For the six months that ended March 31, 2024, we reported revenue of $74.3 million compared to revenue of $62.5 million last year. Our net income for the six-month period was $8.4 million, or $0.62 per diluted share, compared to last year's net income of $4.5 million, or $0.35 per diluted share. Our oil and gas market segment produced revenue of $10.8 million for the three months ended March 31st, 2024.

Robert: For the six months ended March 31, 2024, we reported revenue of $74 3 million compared to revenue of $62 5 million last year.

Robert: Our net income for the six month period was $8 4 million or 62 cents per diluted share compared to last year's net income of $4 5 million or <unk> 35 cents per diluted share.

Robert: Our oil and gas market segment produced revenue of $10 8 million for the three months ended March 31 2020 for.

Robert L. Curda: This compares with revenue of $18.4 million for the same period of the prior fiscal year, a decrease of 41%. For the six-month period, the segment contributed revenue of $50.8 million versus $38.6 million, an increase of 32%. The decrease in revenue for the three-month period was due to lower utilization of our OBX rental fleet. And the increase in revenue for the six-month period is due to the $30 million sale of our Mariner Ocean Bottom Nodes, which occurred in the first quarter of this fiscal year, partially offset by lower utilization of our OBX rental fund.

Robert: This compares with revenue of $18 4 million for the same period of the prowler fix prior fiscal year, a decrease of 41%.

Robert: For the six month period. The segment contributed revenue of $50 8 million versus $38 6 million an increase of 32%. The decrease in revenue for the three months period was due to lower utilization of our Ob extra rental.

Robert: <unk>.

Robert: And the increase in revenue for the six months period is due to the $30 million sale of our Mariner Ocean bottom nodes, which occurred in the first quarter of this fiscal year, partially offset by lower utilization of our Ob extra long sleep.

Robert L. Curda: Our adjacent market segment revenue is as follows. Our industrial product revenue for the second quarter of fiscal year 2024 was $9 million, compared to $9.6 million for the same prior year period. Industrial product six-month revenue for the fiscal year was $15.5 million, a decrease over the same period in 2023 of 12%. The decrease for both periods was primarily due to lower demand for our water meter, cable, and connector products and industrial sensor products, partially offset by an increase in demand for our contract manufacturing services.

Robert: Our adjacent markets segment revenue is as follows.

Robert: Our industrial product revenue for the second quarter of fiscal year, 2024 was 9 million compared to $9 6 million for the same prior year period industrial products six months revenue for the fiscal year is $15 5 million a decrease over the same period in 2023 of 12%.

Robert: The decrease for both periods was primarily due to lower demand of our water meter cable and connector products and industrial sensor products, partially offset by an increase in demand for our contract manufacturing services.

Robert L. Curda: Imaging product revenue for the second quarter was $3.2 million, compared to last year's revenue of $3.1 million. The six-month revenue for imaging products for fiscal year 2024 is $6.6 million, compared with $6 million, a 10% increase when compared to the same period in 2020. Finally, revenue for our emerging markets for the second quarter was $1.1 million compared to $191,000 for the same period in 2023. The six-month revenue for the segment for the fiscal year was $1.3 million compared to $284,000 for the same period in 2023.

Robert: Imaging product revenue for the second quarter was $3 2 million compared to last year's revenue of $3 1 billion to six month revenue for an imaging products for fiscal year, 2024 is $6 6 million compared with $6 million.

Robert: 10% increase going through when.

Robert: Compared to the same period in 2023.

Robert: Finally revenue for emerging markets for the second quarter was $1 1 million compared to 191000 for the same period in 2023.

Robert: The six month, rather revenue for this segment for the fiscal year was $1 3 million compared to 284000 for the same period in 2023 the increase in both in revenue for both periods is due to revenue recognized from a DARPA contract we announced in 2023.

Robert L. Curda: The increase in revenue for both periods is due to revenue recognized from a DARPA contract we announced in 2023. Our operating expenses increased by $500,000, or 5%, for the second quarter of 2024, while they decreased by $900,000, or 4%, for the six-month period ended March 31st, 2024. The increase for the three-month period is primarily due to higher research and development expenses, mostly related to ongoing project expenditures.

Robert: Yeah.

Robert: Our operating expenses increased by 500000 or 5% for the second quarter of 2024, while they decreased by 900000 or 4% for the six month period ended March 31 2020.

Robert: The increase for the three months period is primarily due to higher research and development expenses, mostly related to ongoing project expenses expenditures.

Robert L. Curda: The decrease in operating expenses for the six-month period is primarily due to lower personnel costs as a result of our workforce reduction in the first quarter of fiscal year 2020. Our six-month cash investments into the rental fleets were $3.9 million, and property, plant, and equipment investments were $3.2 million. For fiscal year 2024, we expect to invest $7 million in additional equipment for our rental fleet and $5 million for plant and equipment.

The decrease in operating expenses for the six month period is primarily due to lower personnel costs as a result of our workforce reduction in the first quarter of fiscal year 2023.

Robert: Our six month cash investments into the rental fleets was $3 9 million in property plant and equipment investments were $3 2 million for fiscal year 2024, we expect to invest 7 million in additional equipment to our rental fleet and $5 million for plant and equipment.

Robert L. Curda: Our balance sheet at the end of the second quarter reflected $51.2 million of cash in short-term investments, and our credit facility had available borrowings of $11.3 million. Thus, our total liquidity is $62.5 million as of March 31st, 2025. Lastly, we own real estate holdings in Houston and around the world that are owned free and clear without any leverage. This concludes my discussion. I will turn the call back to Rick.

Robert: Our balance sheet at the end of the second quarter reflected $51 2 million of cash and short terms investments and our credit facility has available borrowings of $11 3 million. That's our total liquidity of $62 5 million as of March 31, 2020, Lastly, we own the real estate holdings.

Robert: In Houston and around the world there.

Robert: Free and clear without any leverage.

Robert: This concludes my discussion I will turn the call back to Rick.

Walter Richard Wheeler: Thanks, Robert. Now I'd also like to draw attention to two other notable announcements in our press. First, we are very fortunate to welcome Rich Kelly to our Geospace Management Team as Executive Vice President and Chief Operating Officer. Rich comes to us with an extensive executive background, serving for the most recent seven years as president of Surcell Incorporated. His accomplishments and experience bring a wealth of knowledge and leadership to geospace that is keenly aligned with all facets of our technology-focused engineering, manufacturing, business development, and operations.

Walter Richard Wheeler: Thanks Robert.

Walter Richard Wheeler: Now I'd also like to draw attention to two other notable announcements in our press release first we are very fortunate to welcome Rich Kelly Girard G space management team as executive Vice President and Chief operating Officer.

Walter Richard Wheeler: Rich comes to us with an extensive executive background serving in the most recent seven years as president of <unk> incorporated.

Walter Richard Wheeler: His accomplishments and experience bring a wealth of knowledge and leadership the Geo space that is keenly aligned with all facets of our technology focused engineering manufacturing business development and operations.

Walter Richard Wheeler: I sincerely believe Rich's contributions will enhance our strategic plans and goals for advancing the company to its next level. Secondly, I'm very pleased to highlight our announcement of the Stock Repurchase Program authorized by our Board of Directors. Under this program, the company has been authorized to make discretionary purchases through open market block trades of up to $5 million in total, with actual purchases depending on a variety of factors including stock price, trading volume, and our general business and market conditions.

Walter Richard Wheeler: I sincerely believe richest contributions will enhance our strategic plans and goals and advancing the company to its next level.

Walter Richard Wheeler: Secondly, I'm very pleased to highlight our announcement of the stock repurchase program authorized by our board of directors under this program. The company has been authorized to make discretionary purchases through open market block trades are up to $5 million in total with actual purchases depending on a variety of factors, including stock price trading volume and our general.

Walter Richard Wheeler: Business and market conditions.

Walter Richard Wheeler: With that, that concludes our prepared commentary. And now I'll turn the call back over to Jamie for any questions from our listeners. Thank you.

Walter Richard Wheeler: With that that concludes our prepared commentary and now I'll turn the call back over to Jamie for any questions from our listeners.

Operator: Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Once again, that is Star 1, and we will pause for just a moment. We'll go first to Bill Dezellem with Tiam Capital.

Jamie: Thank you the floor is now open for questions. At this time, if you have a question or comment. Please press star one on your telephone keypad. If at any point. Your question is answered you may remove yourself from the queue by pressing star queue.

Jamie: Again, we do ask that while you pose your question that you pick up your handset to provide optimal sound quality.

Jamie: Once again that is star one and we will pause for just a moment.

Bill Allen: Well go first to Bill does Allen with tie it Kim <unk> capital.

Jamie: Capital.

Operator: Let's go with Tyaton Capital. Thank you.

Bill Allen: Let's go with Titan capital Fine. Thank you.

Bill Allen: So let's start with the rental business you referenced in the opening remarks in the release that you I feel good about about rentals in the second half of the year, we haven't seen any any significant announcements about about that yet.

Bill Allen: Would you walk us through kind of what it is that you're seeing on the Ob accent Mehringer front for rentals plays.

Walter Richard Wheeler: So let's start with the rental business. You mentioned in the opening remarks and in the release that you feel good about rentals in the second half of the year. We haven't seen any significant announcements about that yet. Would you walk us through what it is that you're seeing on the OBX and Mariner front for rentals, please?

Speaker Change: Yeah, Hi, Bill well the rentals in the second half you know are associated with the timing that most of these projects come about there haven't really been any real announcements other than those that are associated with the sale and the large rental that.

Walter Richard Wheeler: Yeah, hi Bill. Well, the rental in the second half, you know, are associated with the timing that most of these projects come about. There haven't really been any real announcements other than those that are associated with the sale and the large rental that was originally a rental contract that turned into that sale most recently. But there are quite a number of different projects out there that have either slipped a little bit in time in terms of when they're going to be completed, but also new ones are popping up on a daily basis that probably wouldn't manifest any real rental income until maybe the fourth quarter of this fiscal year.

Bill Allen: Originally it was a rental contract that turned into that sales are most recently, but there are quite a number of different projects out there that have either slipped a little bit in time in terms of when theyre going to be performed but also new ones are popping up on a daily basis, they probably wouldnt manifest.

Bill Allen: Any any real rentals until maybe the fourth quarter of this fiscal year, but the ones that we're talking about are ones that are already out there had bids have already been placed and and will likely need.

Walter Richard Wheeler: But the ones that we're talking about are ones that are already out there, bids have already been placed, and will likely need our OVXs simply because the capacity can't really accommodate all of the rental op projects that are out there.

Bill Allen: Oh, the X is simply because of the capacity can't really accommodate all of the rent a lot projects that are out there.

Bill Allen: Okay.

Walter Richard Wheeler: So Rick, apologies, I don't think I understood everything that you were saying there. So you have projects that you have already won, but those deliveries or the projects won't begin, so your rentals won't begin until the fourth quarter. Is that correct? Those are new projects. Those are new projects. We do have rental properties that are underway now, but again, we mentioned there was a lag in those rental properties and some timing issues. But we do have rental cars that are scheduled for the third quarter and the fourth quarter that are already in place, and there are new ones that, because of the logistics of mobilizing these crews.

Speaker Change: So Rick I'm apologies and I don't think I I don't think I comprehended everything that you were saying there. So you have projects that you have have already won.

Walter Richard Wheeler: Those new ones probably will not manifest until the fourth quarter, maybe some of them even in the next fiscal year. Okay, that's helpful. So as you think about the rental revenue in Q3 relative to the $4.8 million in Q4, should we anticipate a significant step up, or how are you thinking about that?

Speaker Change: But those deliveries or that the projects won't begin to your rentals won't begin until the fourth quarter.

Speaker Change: Is that correct and then did we also do projects those are new projects, we do have.

Speaker Change: Rentals that are underway now and we all but you know again, we mentioned there were it was a lagging those rentals and some timing differences but.

Speaker Change: But we do have rentals that are scheduled for the third quarter and the fourth quarter that are already in place and there are new ones that are because of the the the logistics are mobilizing these crews.

Speaker Change: Those new ones, probably would not manifest until the fourth quarter, maybe some of them even in the next fiscal year.

Speaker Change: Okay. That's helpful. So as you think about the rental revenue in Q3 relative to the $4 8 million in Q4.

Speaker Change: Should we anticipate a significant test a step up or how are you thinking about that.

Walter Richard Wheeler: We're certainly seeing this as an improved condition over what this second quarter represented, and that's the message we tried to get across.

Speaker Change: We're certainly seeing as an improved condition over what the second quarter represented and that's the message we tried to get across.

Walter Richard Wheeler: And is it enough to bring rental revenues up to somewhere in that $10-$15 million sort of range in a quarter?

Speaker Change: And is it enough to bring the to bring their rental revenues up to somewhere in that 10 to 15 million sort of range in a in a quarter I'm going to give you any guidance Phil as far as that goes but it certainly going to look better than it did this second quarter, where we had these gaps that we had already mentioned.

Walter Richard Wheeler: I'm not going to give you any guidance, Bill, as far as that goes, but it's certainly going to, you know, look better than it did in this second quarter, where we had these gaps that we had already had.

Walter Richard Wheeler: Great. And then I think another component of what you were saying implied that you don't have enough OBX nodes to fulfill the rentals that you see in the pipeline. Was that correct? And if so, would you frame that up a bit tighter, and maybe how would you solve that problem?

Phil: Okay great.

Phil: And then and then I think another component of what you were saying it implied that you don't have enough Ob X nodes to fulfill their rental the rentals that you see in the in the pipeline was that correct and if so would you would you frame that up a bit tighter.

Phil: And maybe how you how you solve that problem.

Walter Richard Wheeler: No, that's an industry-wide capacity issue that is faced. There are occasions where we do have requests for renting our nodes when we do not actually have capacity if you're just looking at our inventories. But as we've always said, and we've always, the way we've performed in these situations, unless there are significant financial commitments, we're not really inclined to just build up the rental fleet even though we do realize there are some capacity shortages within the industry. There has to be a financial commitment there to make that worth our investment.

Phil: No that's an industry wide capacity issue that has faced there are occasions, where we do have request for renting or nodes that we do not actually have capacity if you're just looking at our inventories, but as we've always said and we've always said the way we performed in these situations.

Phil: Unless there are significant financial commitments.

Phil: When we're not really inclined to just go build up the rental fleet, even though we do realize there are some capacity shortages within the industry. There has to be a financial commitment there to make that worth our investment.

Walter Richard Wheeler: Okay, thank you. And then, I do want to jump to Quantum for a moment. The reference in the release to, I think, several significant discussions. Would you please give more meat on the bone on that for us?

Speaker Change: Okay. Thank you and and then I do want to jump to a quantum for a moment.

Speaker Change: The reference in the release to US I think are several significant discussions with would you where would you put more meat on the bone on that for us. Please.

Walter Richard Wheeler: Well, most of these are not really things that we can discuss. They're basically arrangements with various government agencies where they have some security and surveillance concerns. There are certain tensions that are arising in different places in the world that our U.S. government and military agencies are concerned about. And so to that extent, the special capabilities that our products offer are what's being discussed with some of these agencies. Of course, we all know about the Border Patrol and the capabilities that we've been able to demonstrate there.

Speaker Change: Well most of these or not really.

Speaker Change: Things that we can discuss they're there they're basically arrangements with various government agencies, where they have some security and surveillance concerns are there are certain tensions that are arising.

Through at different places in the world that our U S government and military agencies are concerned about and so to that extent the.

Speaker Change: The special capabilities that our products offer or what's being discussed with some of these agencies of course, we all know about the border patrol and the capabilities that we've been able to demonstrate there.

Walter Richard Wheeler: Certainly, those are elements that are still likely, and if you read the most recent government reports, the GAO reports that there will be some additional money spent on some of those projects too, but those won't occur until next fiscal year.

Speaker Change: Certainly those are elements that are still likely and if you read the most recent government Oh reports are that they there will be some additional money spent on some of those projects too, but those won't occur until next fiscal year.

Walter Richard Wheeler: So Rick, would you help us with timing in terms of some of these contracts, I guess maybe the fastest that some of these might turn into revenue, and then how far out are we talking about that this could extend?

Speaker Change: So Rick would you would you help us with with timing in terms of of <unk>.

Walter Richard Wheeler: What some of these contracts I guess, maybe what are the the fastest that some of these might turn into revenue and then how.

Walter Richard Wheeler: How long how far out are we talking that this could could extend.

Walter Richard Wheeler: Well, as mentioned, we don't expect these to turn into significant revenue, or larger revenue opportunities this fiscal year. So any of the larger opportunities are not going to manifest until at least fiscal year 2025. As far as timing goes, I mean, this is related to government budgetary cycles, things that are way out of our control and that, you know, have other factors that are playing into that. Some of the others that are ongoing in the energy space involve using technology that is brand new to the extent that, you know, these capabilities have not existed in those areas before, so there's still a lot of discussion about bringing, you know, those technical people on board with what the technology can do.

Walter Richard Wheeler: Well as mentioned, we don't expect these to turn into significant revenue a larger revenue opportunities. This fiscal year. So any of the larger opportunities are not going to manifest until at the earliest fiscal year 2025.

Walter Richard Wheeler: As far as timing goes I mean, this is related to the government budgetary cycles are things that are way out of our control and that you know have other factors that are that are playing into that.

Walter Richard Wheeler: Some of the others that are that are ongoing with the energy space represent us using technology that is brand new to the extent that these capabilities have not existed in those areas before so there's still a lot of discussion and bringing those technical people on board with what the.

Walter Richard Wheeler: What the technology can do.

Walter Richard Wheeler: And then picking up on that, if I may, relative to the energy arena, would the passive monitoring that quantum provides actually create revenue for the energy companies, or are these conversations really more centered around carbon capture, which, I mean, the challenge there, of course, is that it's an expense as opposed to revenue-generating.

Walter Richard Wheeler: And then picking up on that on that if I may the relative to the energy arena.

Walter Richard Wheeler: Good.

Walter Richard Wheeler: The passive monitoring the quantum it provides.

Walter Richard Wheeler: Create revenue for our the energy companies or are we are these conversations really more centered around carbon capture which I mean the challenge. There of course is is that it's an expense as opposed to a revenue generating.

Walter Richard Wheeler: That's an excellent point, and, in fact, it applies to both categories. Certainly, carbon capture is one that is an ongoing discussion, and you'll perhaps see some movements there sooner than later, but many of these other uses of the passive monitoring technologies are in fact related to the revenue side of the energy business, but we really can't discuss how they would be applied because there's significant intellectual property involved in what we're trying to do there.

Speaker Change: That's an excellent point and in fact, they apply to both categories certainly the carbon capture is one that is an ongoing discussion and you know you you'll you'll perhaps see some movements there sooner than later, but many of these other uses of the passive monitoring technologies are in fact related to the Rev.

Speaker Change: New side of the energy business.

But we really can't discuss you know how they would be applied because there's significant intellectual property involved and what we're trying to do there.

Speaker Change: Okay, great. Thank you I appreciate the time.

Operator: Okay, great. Thank you. I appreciate the time. As a reminder, ladies and gentlemen, that is Star...

Operator: As a reminder, ladies and gentlemen, that is star number one if you would like to ask a question. At this time, we have no additional questions. I'd like to turn the call over to Rick Wheeler for a closing remark.

Speaker Change: As a reminder, ladies and gentlemen that is star one if you would like to ask a question.

Speaker Change: Yeah.

Speaker Change: At this time, we have no additional questions I'd like to turn the call over to Rick Wheeler for closing remarks.

Walter Richard Wheeler: All right. Well, thank you, Jamie. And thanks to all of you who joined our call today. And we look forward to speaking with you again on our conference call for the third quarter of fiscal year 2024. And that will be in August. So, thanks everyone, and goodbye.

Walter Richard Wheeler: Alright, well, thank you Jamie and thanks to all of you who joined our call today and we look forward to speaking with you again on our conference call for the third quarter of fiscal year 2024, and that will be in August. So thanks, everyone and goodbye.

Operator: Thank you. This does conclude today's Geospace Technology second quarter 2020 earnings conference call. Please disconnect your line at this time and have a wonderful day. Go to Beadaholique.com for all of your beading supply needs! Beading supplies and tools need not be replaced.

Walter Richard Wheeler: Thank you. This does conclude today's Geos based technologies second quarter 2024 earnings Conference call. Please disconnect. Your line at this time and have a wonderful day.

Walter Richard Wheeler: [music].

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Walter Richard Wheeler: Hum.

Walter Richard Wheeler: [music].

Walter Richard Wheeler: Hum.

Walter Richard Wheeler: [music].

Walter Richard Wheeler: Uh huh.

Walter Richard Wheeler: [music].