Q2 2024 Coda Octopus Group Inc Earnings Call
Good morning, welcome to coda Octopus. This group's second quarter 2024 earnings call. My name is Sherry and I will be your operator today before this call CDR octopus issued its financial results for the second quarter 'twenty 'twenty four ended April 30th 2020.
Operator: Good morning. Welcome to Coda Octopus Group's second quarter 2024 earnings call. My name is Sherry, and I will be your operator today. Before this call, Coda Octopus issued its financial results for the second quarter of 2024, ended April 30, 2024, including a press release, a copy of which will be furnished in a report filed with the SEC. It will be available in the investor relations section of the company's website. Joining us on today's call from Coda Octopus are its chairperson, its CEO, Annmarie Gayle, and its interim CFO, Gayle Jardine.
Sure.
Speaker Change: A press release, a copy of which will be furnished in the report filed with the FCC. It will be available in the Investor Relations section of the company's website.
Speaker Change: Joining us on today's call from coda octopus or its chair at C. O N Murray yeah. Its interim CFO Cal Cherokee following their remarks, we will open up the call for questions before we begin Jeff Targa will make a brief introductory statement. Mr Park turnaround. Please proceed.
Operator: Following their remarks, we will open up the call for questions. Before we begin, Jeff Turner will make a brief introductory statement. Mr. Turner, please proceed. Thank you.
Jeff Turner: Thank you, operator. Good morning, everyone.
Jeff Targa: Thank you operator, good morning, everyone well coupe.
Jeff Targa: Second quarter fiscal 2024.
Jeff Targa: This conference call.
Jeff Turner: Welcome to Coda Octopus' second quarter fiscal 2024 earnings conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements.
Speaker Change: Before management begins their formal remarks, we would like to remind everyone. Some statements. We're making today may be considered forward looking statements under the securities law.
Speaker Change: The number of risks and uncertainty.
Speaker Change: As a result, we caution you that there are a number of factors many of which are beyond our control, which could cause actual results and debate.
Speaker Change: The material.
Speaker Change: As described before were looking statement.
Speaker Change: For more detailed risks.
Jeff Turner: For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as may be required by law. We refer you to our filing with the Securities and Exchange Commission for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including, but not limited to, the risks and uncertainties identified in our Form 10-K for the year ended October 31, 2023, and Forms 10-Q for the first and second quarters of this fiscal year.
Speaker Change: And the assumption relating to our forward looking statements. Please see the disclosures.
Speaker Change: <unk> public filings.
Speaker Change: With the Securities and Exchange Commission.
Speaker Change: We disclaim any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur. After the date. The forward looking statements are made except as may be required bundle.
Speaker Change: We refer you to that filing Securities and exchange Commission for detailed disclosures and descriptions about business.
Speaker Change: But the variables there.
Speaker Change: Including but not limited to risks.
Speaker Change: Hi, Dan to file Form 10-K for the year ended October 31, 2023 and forms 10-Q.
Speaker Change: The first and second quarter of this fiscal year.
Jeff Turner: You may get Coda Octopus Securities and Exchange Commission filings free by visiting the SEC website at www.sec.gov. I would also like to remind everyone that this call is being recorded and will be made available for replay via a link in the investor relations section of the Coda Octopus website. Now, I will turn the call over to the company's chair and CEO, Annmarie Gayle.
Speaker Change: You may get it wrong.
Speaker Change: It was just an exchange commission filings pretty I would think the.
The SEC website at Www SEC Gov.
Speaker Change: I would also like to remind everyone. This call is being recorded and will be made available for replay via a link in the Investor Relations section.
Speaker Change: This website.
Speaker Change: Now I will turn the call over to the company's CEO.
Marie: Hi Marie.
Marie: Murray.
Annmarie Gayle: Thanks, Jeff, and good morning, everyone. Thank you for joining us for our second quarter 2024 earnings call. Our revenue in the second quarter 2024 was in line with our second quarter 2023 revenue. Despite various challenges in the second quarter, we delivered a solid set of results, including increasing our operating income, net income, and earnings per share. During the second quarter, we observed a slowdown in the pace of placing orders relating to U.S. defense sector programs caused by the funding gaps created by the use of continuing resolutions to fund defense programs instead of a fully funded federal budget. This is not unusual where there is an upcoming presidential election.
Marie Murray: Thanks, Jack and good morning, everyone.
Marie Murray: Thank you for joining us for our second quarter 'twenty 'twenty four earnings call.
Revenue in the second quarter 'twenty 'twenty four was in line with our second quarter 'twenty to 'twenty three revenue.
Marie Murray: Despite these challenges in the second quarter, we delivered a solid set of results, including increasing our operating income net income and earnings per share.
Speaker Change: During the second quarter, we observed a slowdown in the pace of placing orders relating to U S defense programs caused by the funding gaps.
Speaker Change: <unk> by the use of continuing resolution, it's funny just defense programs instead of a fully funded federal budget.
Speaker Change: It's just not unusual where there is an upcoming presidential election.
Annmarie Gayle: Notwithstanding these temporary constraints, I am very pleased that we were able to increase our revenue generation outside of the U.S.C., which shows the diversity and resilience in our revenue stream. The marine technology business revenue in the second quarter 2024 was broadly in alignment with the second quarter 2023 revenue. I am particularly pleased with the increased utilization of our rental assets during the second quarter and, therefore, the improved gross profit margins of 80.2% in the second quarter 2024 compared to 75.3% in the second quarter 2023.
Speaker Change: Notwithstanding these temporary constraints I am very pleased that we were able to increase our rapid new generation outside of the U S C, which shows the diversity and resilience in our revenue stream.
Speaker Change: The marine technology basis revenue in the second quarter 'twenty 'twenty four.
Speaker Change: Broadly in alignment with the second quarter 'twenty 'twenty when you wrap in U.
Speaker Change: I am, particularly pleased with the increased utilization of our rental assets during the second quarter and therefore, the improved gross profit margin of 18, 2% in the second quarter 'twenty 'twenty four.
Speaker Change: Care to 75 points, 3% in the second quarter 'twenty to 'twenty three.
Speaker Change: We are also very pleased to see.
Annmarie Gayle: We're also very pleased to see better traction in sales emanating from Asia, which was 15.9% higher in the quarter. However, sales for this segment from the USA fell from $1.8 million to $0.6 million as a result of funding gaps created by the use of continuing resolutions to fund defense programs. This means that without a federal budget, there is limited funding for these programs, and many of these are currently only partially funded.
Speaker Change: Traction in stages emanating from Asia, which was 15.9% higher in the quarter.
Speaker Change: Sales for this segment from the USD fell from 1.8 million, Yeah, Kiva point 6 million as a result of funding gaps created by the use of continuing resolutions if someone just defense.
Speaker Change: Brokerage.
Speaker Change: This means that without a federal budget. There is limited funding for these programs and many of these are currently only partially funded.
Speaker Change: Our engineering basically saw an increase in revenue and it's making good progress in key areas.
Annmarie Gayle: Our engineering business saw an increase in revenue and is making good progress in key areas. However, this business was also impacted by a reduction in order intake relating to their ongoing defense programs, and sales from USA Defense Programs for this segment fell from $1.1 million to $0.8 million. This is due to the funding gaps I touched on earlier. Moving on, to our second quarter 2024 overview. During the second quarter of 2024, we continued to make progress against our key growth drivers. As I mentioned, we saw increased traction for our ex-co-parental services. This resulted in an increase in gross profit margins.
Speaker Change: Basically it was also impacted by a reduction in order intake relating to their ongoing defense programs and scale from USD defense brokers sports. This segment fell from 1.1 million to 0.8 million.
Speaker Change: This is due to the funding gaps I touched on earlier.
Speaker Change: Moving to our second quarter 'twenty 'twenty four overview.
Speaker Change: During the second quarter of 'twenty 'twenty four we continued to make progress against our key growth drivers.
Speaker Change: As I mentioned, we saw increased traction for our physical branches surface space.
Speaker Change: This resulted in an increase in gross profit margin.
Speaker Change: Although sales in the U S. C were significantly down due to the funding gaps relating to defense programs. Our team was able to recover some sales in other geographies.
Annmarie Gayle: Although sales in the U.S.A. were significantly down due to the funding gaps relating to defense programs, our team was able to recover some sales in other geographies. I'm particularly pleased with this as it shows the diversification and resilience within our revenue streams. Of great importance, we also provided extensive support for the ongoing operations relating to the Francis Scott Key Bridge collapse. The circumstances surrounding the collapse were tragic, and we are pleased that we could have assisted in some small way.
Speaker Change: I'm, particularly pleased with this as it shows the diversification and resilience with it now revenue streams.
Speaker Change: Of great importance. We also provided extensive supports the ongoing operations relating to the franking call key bridge collapse.
Speaker Change: The circumstances surrounding the collapse, we're tracking and we are pleased that we could have assisted in some small way.
Annmarie Gayle: This high-profile engagement has reinforced the importance of our technology for these sorts of applications and has marketed the ECOSCOPE to other customers around the world, including in North America. The X-scope technology has been the primary sensor used for a broad range of activities relating to recovery, salvage, and real-time inspection. This high-profile project again highlighted the importance of the capability of the ECOSCOPE technology, a single sensor for multiple real-time 3D imaging applications, including disaster recovery programs. Over the years, the ECOSCOPE has been used globally in many disaster recovery programs, including in South Korea, Japan, and Europe.
Speaker Change: This high profile engagement has reinforced the importance of our technology because these sorts of applications and has marketed the after school to other customers around the world, including in North America.
Speaker Change: The <unk> technology has been the primary sensor.
Speaker Change: Used for a broad scope of activities relating to recovery South Beach and real time inspection.
Speaker Change: High profile project again highlighted the importance of the capability of the ethical technology.
Speaker Change: A single sensor for multiple real time, three D imaging applications, including in disaster recovery Brooklyn.
Speaker Change: Over the years the extra scoop has been used globally in many disaster recovery programs, including in South Korea, Japan and Europe.
Speaker Change: We made further progress with needle information warfare sensor Nite wake and supply owing to a lease agreement two of our compact and cause groups. So north for their ongoing evaluation of our technology.
Annmarie Gayle: We made further progress with the Naval Information Warfare Center, NIWIC, and supplied, under a lease agreement, two of our compact X-Scope sonars for their ongoing evaluation of our technology for the Vigiri Defender Platform. We also continue to work with an allied foreign navy, which has selected the video ray platform for integrating our Ecoscope on their vehicles, and we have begun to provide training on the Ecoscope to their personnel. This is a good indication that the Ecoscope technology is included in their census selection program.
Speaker Change: The theory defend the castle.
Speaker Change: We also continue to work with and Allied Foreign Navy, which has selected the <unk> platform on integrating our active scope on their vehicles and we have begun to provide training on the extra scoop did their parents now this is a good.
Speaker Change: Indication that the <unk> technology is included in their sensor election proven.
Speaker Change: We also made progress on the ship hold scanning program, which we have been pursuing with our navy customers and in the second quarter, we completed successful trials.
Annmarie Gayle: We also made progress on the ship hull scanning program, which we have been pursuing with our Navy customers, and in the second quarter, we completed successful trials. This ship hull scanning platform, which we will deliver to the Navy in our third quarter of 2023, includes both the Etoscope and DAVID capabilities. This is an important step forward under this program, which has been carried out over a three-year period and for which we received $1 million in funding over this period. We're not aware of any effective solutions in the market for ship hull scanning.
Speaker Change: Ship, how scanning platform, which we deliver to the Navy in our third quarter of 2023 includes both the after school and tap it capabilities.
Speaker Change: This is an important step for what on the desk, Brooklyn, which has been executed over a three year period and for which we received a $1 million in funding the disparity.
Speaker Change: We're not aware of any effective solutions in the market for Shithouse Academy and if the companies developed solution is accepted by the Navy as meeting the requirements of this program they could be significant for our business.
Annmarie Gayle: And if the company's developed solution is accepted by the Navy as meeting the requirements of this program, this could be significant for our business. [inaudible] There are many different Navy commands that are interested in the solution we have put forward. We also continue to make progress in the adoption of the David Heavitt system, and in the second quarter, we partnered with a U.S. service provider to complete a tunnel inspection project using the David system and our ECOSCOPE.
Speaker Change: Well that's a more.
Speaker Change: There are many different navy commands that are interested in the solution we have put forward.
Speaker Change: We also continue to make progress in the adoption of the DAP it.
Speaker Change: The system and in the second quarter, we partnered with a U S service provider to complete a tunnel inspection project using a tablet system and our <unk> is actually scoot.
Speaker Change: We believe this was a resounding success as we were able to shoot the second Nash of the DAP It an extra scope solution disease application.
Annmarie Gayle: We believe this was a resounding success as we were able to show the effectiveness of the DAVID and ECOSCOPE solutions for these applications, particularly the return on investment for customers and the superior deliverables achievable with this solution. We're discussing adoption of the technology with this U.S. commercial service provider. We also made good progress in advancing the David on Tevitt system customization and hardening program and received partial funding of $250,000. We anticipate the remaining $1 million will be released as the budgetary constraints mentioned earlier are removed.
Speaker Change: Particularly the return on investment for customers and superior the labor both achievable with this solution.
Speaker Change: Discussing our adoption of the technology with this U S commercial service provider.
Speaker Change: We also made good progress in advancing the damage on turbine system customization and hardening program and received partial funding of $250000.
Speaker Change: We anticipate the remaining $1 million will be released as the budgetary constraints mentioned earlier are removed.
Annmarie Gayle: Despite this, the program of hardening David on the Tethys system is proceeding, and we are doing everything within our remit to move this program to a successful conclusion for the company and its shareholders. We continue to believe that this is the biggest opportunity for David technology. Our newly launched AI-based digital audio underwater communication system has been undergoing Navy evaluation, and we have now received overridingly positive feedback on the technology. From a survey conducted by the Navy of its divers involved in this evaluation, 100 percent of those involved believe that this product increased their diving capability and level of safety by providing clearer and crisper communications.
Speaker Change: Right there the program of hardening the DAP it on Ted's assisted is proceeding.
Speaker Change: And we are doing everything within our remit to move this program to a successful conclusion for the company and its shareholders.
Speaker Change: We continue to believe that this is the biggest opportunity for the tablet technology.
Speaker Change: Our newly launched AI D digital audio on the water communication system.
Speaker Change: It's been undergoing knee the evaluation.
We have now received all for writing Lee positive feedback on the technology front.
Speaker Change: Our survey conducted by the Navy of its diapers in Pauls is they said valuation 100% of those involved the leaves that based products increased their dialing capability and NAFTA or safety by providing player and.
Speaker Change: For communications.
Gayle Jardine: They all said they would use the product on a mission if it was available and thought that it was superior to existing analog communication systems. We continue to make good progress with our goal of creating the conditions for returning the engineering business to its pre-COVID $10 million revenue profile. To achieve this, we will need to increase the number of new defense programs that we're supplying proprietary subassemblies to. We have now seen some new programs materializing, and I'm excited about this.
Speaker Change: All said they would use the product on a mission if available and thought that it was superior to existing analog communications system.
Speaker Change: We continue to make good progress with our goal of creating the conditions for returning the engineering business.
Speaker Change: Pre COVID-19.
Speaker Change: $10 million revenue profile.
Speaker Change: To achieve stage, we will need to increase the number of new defense programs that were supplying proprietary sub assemblies into.
Speaker Change: We have now seen some new programs materialize me and I'm excited about this.
Gayle Jardine: In the second quarter, we received a partial award of $771,000 for production units for a new subassembly for an existing program of record, which is being upgraded due to the obsolescence of some of the components. We had anticipated an initial award of $1.5 million under this program, but due to the funding gaps mentioned earlier, we received a partial award and expect the remainder when funding becomes available. We are excited about this program of upgrade as there are many existing systems in the field that will need to be upgraded with a new part that we have designed, and this will generate meaningful revenue for this program over time.
Speaker Change: In the second quarter, we received a partial award of $771000 for production units for a new sub assemblies for this thing program of record, which is being upgraded due to obsolescence of some of the comp.
Speaker Change: <unk>.
Speaker Change: We had anticipated an initial award of $1.5 million or did this program, but due to the funding gaps mentioned earlier, we received a partial award and expect the remainder when funding becomes available.
Speaker Change: We are excited about this program of upgrade as there are many existing systems in the field that will need to be upgraded with the new part, which we have designed and this will generate meaningful revenue on this program over time.
Speaker Change: We also received a new order for Sarah My mission computers, which relates to our new Navy program.
Gayle Jardine: We also received a new order for Thermite mission computers, which relates to a new Navy program. This is for an initial pre-production quantity of eight systems for a contract value of $280,000. We expect larger production orders for this program in early 2025. Finally, we also continue to perform quality business development activities, including working with our newly appointed business development focus group in the U.S. We can already see the promise of the success of this engagement. Let me now turn the call over to our interim CFO, Gayle Jardine, to take you through our financials before I provide my closing remarks.
Speaker Change: This is for an initial three production quantity of each system.
Speaker Change: Or a contract value of $280000.
Speaker Change: We expect the large or production or does this program in early 'twenty 'twenty five.
Finally, we also continue to perform quality business development activities, including working with our newly appointed business development focus group in the U S. We can already see the.
Speaker Change: Most of the success of this engagement.
interim CFO: Let me now turn the call over to our interim CFO gain or charge you need to take you through our financials.
Four I provide my closing remarks.
Speaker Change: Thank you Anthony and good morning, everyone let.
Gayle Jardine: Thank you, Annmarie, and good morning, everyone.
interim CFO: Let me take you through our second quarter 2024 financial results.
Gayle Jardine: Let me take you through our second quarter 2024 financial results, starting with revenue. In the second quarter of 2024, we recorded total revenue of $5.32 million, compared to $5.30 million in the second quarter of 2023, an increase of 0.4%. The marine technology business, or products business, generated revenue of $3.52 million compared to $3.58 million, a 1.6% decrease from the second quarter of 2023. Our marine engineering business, or services business, generated revenue of $1.8 million compared to $1.7 million, an increase of 4.7% from the second quarter of 2023.
Speaker Change: Starting with revenue.
Anthony: In the second quarter of 'twenty 'twenty four we recorded total revenue of five point see $2 million compared to five plant C. O a million dollars in the second quarter of 2023, an increase of 0.4%.
Speaker Change: The marine technology business, our products business generated revenue of $3.52 million compared to see 0.5 $8 million or one 6% decrease from the second quarter of 2023.
Speaker Change: And Marine engineering business, our surfaces business generated revenue of $1.8 million compared to $1 $7 million, an increase of four 7% from the second quarter of 2023.
Speaker Change: As discussed earlier, our total consolidated revenue increased in the second quarter of 0.4%.
Gayle Jardine: As discussed earlier, our total consolidated revenue increased in the second quarter by 0.4%. Our engineering segment revenue increased in the second quarter, and the product segment saw an increase in rentals, rental-related support services, and an increase in sales outside of the U.S. region, including in our strategic market area of Asia, where outright sales increased by 15.9%. Sales from North America were down due to the reduction in the Defense Programme funding for the reasons Annmarie explained earlier.
Speaker Change: Our engineering segment revenue increased in the second quarter and the product segment saw an increase in rentals trying to relate to support services and an increase in sales outside of the U S region, including in a strategic market area all of Asia.
Speaker Change: Re sales increased by 15, 9%.
Speaker Change: Sales from North America were down due to the reduction in the defense program funding for the reasons I've already explained earlier.
Speaker Change: Moving onto gross profit and margin.
Gayle Jardine: Moving on to gross profit and margin, in the second quarter of 2024, we generated a gross profit of $3.7 million, compared to $3.6 million in the second quarter of 2023. Consolidated gross margin was 70.2% versus 68.3% in the second quarter of last year. In our marine technology business, gross margin increased to 80.2% in the second quarter of 2024, compared to 75.3% in 2023, reflecting changes in the mix of sales, primarily due to the increase in rental and the associated support service sales, which have a higher gross margin. Our marine engineering business gross margin decreased to 50.7% in the second quarter of 2024 versus 53.9% in the second quarter of 2023, again reflecting the mix of engineering projects during the second quarter of 2024.
Speaker Change: In the second quarter of 'twenty 'twenty four we generated gross profit of $3.7 million compared to see point $6 million in the second quarter of 2023.
Speaker Change: Consolidated gross margin was 70.2%.
Speaker Change: They're 668.3% in the second quarter of last year.
And then moving technology business gross margin increased to 18.2% in the second quarter of 2024 compared to 75 point steep for St. In 2020 fee, reflecting changes in the mix of sales primarily due to the increase in rental and the associated support service sales, which have a higher.
Speaker Change: Our gross margin.
Speaker Change: And Marine Engineering business gross margin decreased to 57% in the second quarter of 2024.
Speaker Change: She's 53, 9% in the second quarter of 2023.
Speaker Change: Again, reflecting the mix of engineering projects during the second quarter of 2024.
Speaker Change: Now moving to our operating expenses.
Gayle Jardine: Now moving to our operating expenses. Total operating expenses for the second quarter of 2024 decreased to $2.4 million compared to $2.8 million in the second quarter of 2023, which is largely due to the reduction in our stock compensation charges during the period. Our selling, general, and administrative costs in the second quarter of 2024 totaled $1.8 million, a decrease of 17.7% from $2.2 million in the second quarter of 2023. As a percentage of revenue, our selling, general, and administrative costs for the second quarter of 2024 were 34.7%, compared to 42.3% in the second quarter of 2023.
Speaker Change: Total operating expenses for the second quarter of 'twenty, 'twenty, four decreased $2.4 million compared to $2 $8 million in the second quarter of 2020 fee.
Speaker Change: Which is largely due to the reduction in our stock compensation charges in the period.
Speaker Change: Our selling general and administrative costs in the second quarter of 'twenty 'twenty four totaled $1.8 million a decrease of 17, 7% from $2 $2 million in the second quarter of 2020 fee.
Speaker Change: As a percentage of anything you are selling general and administrative costs for the second quarter of 2024 or 34, 7%.
Speaker Change: Appeared to 42.3% in second quarter of 2020 fee.
Gayle Jardine: The reduction is mainly due to a decrease in stock compensation charges. In accordance with our strategy, we continue to recalibrate our working capital towards business development and marketing activities. Accordingly, in our second quarter, marketing expenses increased by approximately 52%. This included the fees relating to the appointment of a business development focus group we have hired in the U.S. to assist in this area.
Speaker Change: The reduction is mainly due to a decrease in stock compensation charges.
Speaker Change: In accordance with our strategy, we continue to recalibrate, our Washington capsule towards business development and marketing activities.
Speaker Change: Accordingly in our second quarter marketing expenses increased by approximately 52%.
Speaker Change: This included the fees relating to the appointment of a business development focus group, we have hired in the U S to assist in this area.
Speaker Change: Operating income in the second quarter of 2024 was $1.4 million compared to zero point $9 million in the second quarter of 2020 see an increase 57, 9%.
Gayle Jardine: Operating income in the second quarter of 2024 was $1.4 million, compared to $0.9 million in the second quarter of 2023, an increase of 57.9%. Operating margin was 25.4%, compared to 16.1% in the second quarter of 2023, primarily due to an increase in gross profit margin combined with a reduction in total operating expenses. Income before taxes in the second quarter of 2024 was $1.6 million, compared to $1 million in the second quarter of 2023.
Speaker Change: Operating margin was 25.4% compared to 16.1% in the second quarter of 2023.
Speaker Change: Primarily due to the increase in gross profit margin combined with a reduction in total operating expenses.
Speaker Change: Income before taxes in the second quarter of 2024 was $1.6 million compared to $1 million in the second quarter of 2023.
Gayle Jardine: Net income after taxes in the second quarter of 2024 was $1.4 million, or $0.13 per diluted share, compared to $1.0 million, or $0.09 per diluted share, in the second quarter of 2023. Moving now to our balance sheet. As of April 30, 2024, we were $23.7 million in cash and cash equivalents on hand, and no debt. This represents a decrease of $0.7 million from October 31, 2023, where the comparable figure was $24.4 million.
Speaker Change: Net income after taxes in the second quarter of 'twenty 'twenty, four it was $1.4 million or fashion cents per diluted share.
Speaker Change: Two $1.0 million are nine cents per diluted share in the second quarter of 2023.
Speaker Change: Moving now to our balance sheet.
Gayle Jardine: This was mostly due to the purchase of long lead time items into inventory, so you will see that this line item has increased accordingly. Our working capital increased to $41.0 million from $37.6 million at October 31, 2023. Now I will turn the call back over to Annmarie for closing remarks. Thank you.
Speaker Change: As of April 30 of 'twenty, 'twenty, four 'twenty $3.7 million in cash and cash equivalents on hand and no debt.
Speaker Change: This represents a decrease of zero point $7 million from October 31st 2020 fee for the comparable figure was $24.4 million.
Speaker Change: This was mostly due to the purchase of long lead time items into inventory. So youll see that line item has increased accordingly.
Speaker Change: Our working capital increased to $1.0 million from $57.6 million attic tool for 31st 2023.
Speaker Change: No I will turn the call back over to Anne Marie for closing remarks. Thank you.
Annmarie Gayle: Thank you, Gayle. I want to close by emphasizing that we continue to work to create stable, long-term shareholder value. I want to remind everyone that growth is a process and not an event. Think of it like a puzzle, and we're putting the pieces together.
Annmarie Gayle: Thank you Gail I want to close by emphasizing that we continue to work every day.
Annmarie Gayle: People long term shareholder value.
I want to remind everyone that gross is a process and not an event.
Speaker Change: [noise] of it like a puzzle and we're putting the pieces together.
Annmarie Gayle: In the meantime, we're running a profitable business. Our team is doing an outstanding job of maintaining superior margins and profits for our shareholders while, all the time, seeking to grow sustainably without compromising our track record of a tightly run profitable business. In the 2024 fiscal year, there are a number of key management goals for the business to achieve with a focus on growth. We have a compelling calendar of prestigious business development activities in 2024 with a focus on defense applications.
Annmarie Gayle: In the meantime, we're running a profitable business. Our team is doing an outstanding job in maintaining superior margins and profits for our shareholders. While all the time seeking to grow sustainably without compromising our.
Speaker Change: <unk> record of a tightly run profitable business.
Speaker Change: In the 'twenty 'twenty four fiscal year, there are a number of key management goals for our business to achieve with a focus on growth.
Speaker Change: We have a compelling talent to off for stickier business development activities in 2024 with a focus on the defense applications.
Speaker Change: Some of our goals include continuing to seek to increase the number of programs that are after school technology is embedded in.
Annmarie Gayle: Some of our goals include continuing to seek to increase the number of programs that our ECOSCOPE technology is embedded in, further prioritize and engage in the David on Tethered System customization and hardening program with a goal of securing the technology's adoption by the Special Forces community in early 2025, supporting the rollout and adoption of the David-Tethered system to the market both in the defense and commercial space, supporting the rollout and adoption of Expanding the group's management team and capabilities; this is ongoing, continuing to develop our pipeline of candidates under our M&A strategy with a goal of acquiring complementary value-accretive technologies into our portfolio.
Speaker Change: Further prior to rise and engage in the debate on tablet system customization and hardening program with the goal of securing the technologies adoption by the special forces community in early 2025.
Speaker Change: Supporting the rollout and adoption of the debate tepid switch them to the market both in the defense and commercial space.
Speaker Change: Supporting the rollout and adoption of the digital audio communications solutions.
Speaker Change: We built the engineering basically stewarts pre Covid 10 million dollar revenue profile, and we're seeing traction with new programs, which will assist in achieving this goal.
Speaker Change: Expanding the group's management team and capabilities. This is ongoing.
Speaker Change: Continuing to develop our pipeline of candidates onto our M&A strategy with the goal of acquiring complementary value accretive technologies into our portfolio.
Annmarie Gayle: We continue to believe in the growth prospects and strategy built around our disruptive technologies. By adopting this strategy, it pivots the revenue model of the marine technology business to a multi-year and multiple sale model, as we have started to see with the David product line. Though it could take several years for these programs to mature, we continue to believe this is the best strategy for our businesses' growth prospects. Therefore, we believe that our near-term growth will be incremental but solid. To conclude, we would like to thank our shareholders for their continued support. We're now happy to answer your questions. Operator.
Speaker Change: We continue to believe in the growth prospects and strategy built around our disruptive technologies by.
Speaker Change: By adopting the strategy it taper the revenue model of the Marine technology based NASA, who are multi year and multi multiple sale module as we have started to eat with adopted product line.
Speaker Change: It could take several years for these programs to mature we continue to believe this is the best.
Speaker Change: Got you see for our business this growth prospect.
Speaker Change: Therefore, we believe that our near term growth will be incremental but solid.
Speaker Change: Conclude we would like to thank our shareholders for their continued support.
Speaker Change: We're now happy to answer your questions operator.
Operator: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question is from Brian Kinstlinger with Alliance Global Partners. Please proceed.
Speaker Change: Thank you if he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue and for participants using speaker equipment. It may be necessary to pick up your handset before a press.
Speaker Change: The Star Keys.
Speaker Change: Our first question is from Brian Kinsinger with Alliance Global Partners. Please proceed.
Brian David Kinstlinger: Great, thanks for taking my questions. I've got a laundry list.
Brian David Kinstlinger: Great. Thanks for taking my questions I've got a laundry list N Murray two quarters ago, you discussed the challenges in both offshore renewables and under water construction markets that was leading to delays some of it was pricing challenges due to inflation can you update us as to the state of these markets and how the environment is the same or <unk>.
Annmarie Gayle: Annmarie, two quarters ago, you discussed the challenges in both the offshore renewables and underwater construction markets that were leading to delays. Some of it was pricing challenges due to inflation. Can you update us as to the state of these markets and how the environment is the same or different today?
Brian David Kinstlinger: Today.
Brian David Kinstlinger: Thank you Brian very much to that question until I actually saw in the second quarter. We saw really increase in the utilization of our rail assets and that's largely being driven by offshore renewables renewables programs and projects actually.
Annmarie Gayle: Thank you, Brian, very much for that question. So as we saw in the second quarter, we saw a really increase in the utilization of our rental assets, and that's largely being driven by offshore renewable energy programs and projects, actually, and also underwater construction activities. So what we're seeing is increased demand for our rental solutions for underwater construction, some of which includes offshore renewable energy.
Speaker Change: And also on the water.
Speaker Change: Construction activities. So what we see is an increased demand for our rental solutions for on the water construction some of which.
Speaker Change: Includes offshore renewables great.
unknown: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host.
Speaker Change: Great.
Speaker Change: And then the work you did with the Francis Scott Key bridge and the headlines of that disaster. How if at all have you been able to use that to drive awareness or increased adoption of your technology.
Annmarie Gayle: Well, that drove awareness, Brian. Also, it was a good reinforcement of the capability of our technology and the uniqueness of our technology and what it could deliver. So that was really a good marketing awareness campaign for the business globally, and we've seen traction coming from that exposure that we had. So, you know, all these things will take time to percolate into firm orders, but we certainly have had some new contacts from that event.
Speaker Change: Well that drove awareness Brian also I mean, it's also was a good reinforcement of the capability of our technology and the uniqueness of our technology and what it can deliver so that was really a good marketing.
Speaker Change: Our next campaign for the business globally, and we've seen traction come in from that exposure that we've had so.
Speaker Change: All of these things will take time to percolate into firm orders, but we certainly have had some new contacts from vacuum bags angry, including also what I'd like to emphasize though too Brian is that including some of the programs.
Annmarie Gayle: And also, what I'd like to emphasize also, Brian, is that including some of the programs, the defense programs that we've been working on in the U.S., this just reinforces, really, their findings and what they're doing and helping to galvanize outcomes on some of these programs. So all in all, really, really good piece of marketing for our business.
Speaker Change: Defense programs that we've been working on in the US This is just reinforce really they're finding and what they're doing and helping to thousand nice outcomes on some of these programs. So all in all really really good piece of marketing for our business.
Annmarie Gayle: Great. And then in terms of the dabs and the great news on the tunnel program that you discussed, I'm curious if you see an inflection point in orders for either tethered or untethered systems in the next 12 to 18 months based on this progress you're making?
Speaker Change: Great and then in terms of the Dab some great news on the tunnel program that you've discussed I'm curious if you see an inflection point in orders for either tethered or untethered systems. The next 12 to 18 months based on this progress you're making.
Annmarie Gayle: Oh yeah, so certainly let's take the Tethered system, which as you know is in the market, it's on the approved Navy use list, and there what we're seeing is new commands putting in requests or requisitions for acquiring the technology. We know several commands are trying to get budget to do this, but the barrier in this quarter and possibly the next quarter is really where we see defense programs' budgets are really limited at the moment, but certainly, we could see strong interest in DABIT technology.
Speaker Change: Oh, yes so.
Speaker Change: Searching the let's take the <unk>.
Speaker Change: <unk> system, which as you know is in the market. It's on the approved Navy use items and there. What we are seeing is new commands put in putting in request or acquisitions for us.
Speaker Change: Acquiring the technology, we know several commands are trying to get budget to do that so.
Speaker Change: But the barrier in this quarter and possibly the next quarter, it's really where we see defense programs budgets are really limited at the moment, but certainly we could see strong interest in adopting technology and more importantly, Brian when we.
Speaker Change: Started when we did the initial rollout of the adapted to the Navy one of the key things we Werent sure off was how they would buy the technology would it be just adapted or what they buy the extra scope also and I'm pleased to say that the deaths that you signed the.
Annmarie Gayle: Would it be just the DABIT, or would they buy the Exascope also? And I'm pleased to say that they definitely find the Exascope, along with the DABIT, game-changing, so that will be sold or purchased by them as a pair.
Speaker Change: After school along with adopted game changing so that will be sold or purchased by them as a pair. So that is very exciting for our our business because that is an established group room now and to a large extent adapted tepid system is.
Speaker Change: Pass it seems now within the U S Navy because it's an approved navy use item what well. This business has to do is to continue providing training working with a different commands working with the navy to heighten awareness and its community for the debt the babbitt capability and thereafter I think.
Annmarie Gayle: What this business has to do is to continue providing training, working with the different commands, working with the Navy to heighten awareness in its community about the DABIT capability, and thereafter, I think, you know, it will sell itself. And even though we have actually been affected by limited funding at the moment, the program continues to work at a pace. We continue with the hardening and turning over revisions to the product to the Navy.
Speaker Change: You know it will sell itself. So I'm excited about that for the Diavik temperatures up to test the system for the only tepid system really there that that work is ongoing as you know we had eight systems fielded with both.
Speaker Change: Both the U S Navy and foreign Navy and they are working together to evaluate the system and even though we have actually been affected by limited funding at the moment. The program continues to work its pace, we continue with a hardening and turn.
Speaker Change: Turning off or revisions to the product to the Navy. So although there is a gap in funding. It is not at all affecting the progress that we're making on to these programs. So coming back therefore to the inflection point I really think that we're seeing good and solid.
Speaker Change: Action in the market for the Das technology, all round and I think it will take time for people to adopt the technology, but we are getting close and seeing that a tunnel program that we did in the U S really really important.
Speaker Change: We also in the last quarters, you know sold our first debit system in South Korea, I think that they were very very pleased also another very high profile project.
Speaker Change: Project that they have to use the technology on and they themselves are on the road to adoption. We have several major offshore surface providers in Europe, who are still going through their own internal process for the tablet. So I feel very much that there is that we're getting.
Speaker Change: Closer they recognitions.
Speaker Change: Off what the technology is capable off that's growing and really it's about now getting people over the line to start putting in their budgets for the technology. So I think that we'll probably see much more increase.
Speaker Change: <unk> for the system coming from the U S. Once the budgetary constraints are removed and also I am excited about the the joint program that we have boost with the U S Navy and with the foreign Navy. Because then I think that that is going very very well.
Annmarie Gayle: So although there is a gap in funding, it is not at all affecting the progress that we're making on these programs. And also, I am excited about the joint program that we have, both with the U.S. Navy and with foreignnavies, because I think that that is going very, very well, and we certainly want to get the system in the hands of the special forces using it. They have big budgets, and we're really excited about that.
Speaker Change: And we certainly want to get the system in the hands of the special forces using it they have big budgets and really we're excited about that.
Annmarie Gayle: Great, now I think an actual follow-up to that, I heard you mention there may be one more quarter on the budget side, but if I'm not mistaken, the CR ended at the end of June. Have you begun to see a recovery, yet slow, or no recovery at all yet on the budget side? Just maybe take us through on the marine and or engineering services what's happened since the CR ended.
Speaker Change: Great now I think the natural follow up to that.
Speaker Change: Heard you mentioned it may be one more quarter on the budget side, but if I'm not mistaken. The shear ended at the end of June have you begun to see a recovery yet slow down of recovery at all yet on the budget side, just maybe take us through on the marine and or engineering services, what's happened since the C or ended.
Annmarie Gayle: No, I think it's really the appropriations now, and I think that what we're seeing with programs is that appropriations have not been made to their programs, so many programs are still only getting a partial budget. I think the next point where we will see funding released is in July. That's my understanding.
Speaker Change: No I think it's really the appropriations now and I think that what we're seeing on programs is that.
Speaker Change: Appropriations have not been made to their program. So many programs are still only getting partial pace I think the next point, where we will see funds.
Annmarie Gayle: In any event, for the programs we're working on, July is critical because there's going to be a new tranche of funding for various programs. So, I think, Brian, this is not really unusual in an election year. There's all this political environment that it brings, and so this is not a big surprise for business. However, as I said, I expect in July there will be some funding being released. What I certainly don't have visibility of is the extent of this funding round for programs like the David program, programs like for engineering businesses that we're waiting for a number of key orders. So, I don't have visibility, but what we have consistently seen is partial funding as opposed to full funding.
Speaker Change #103: Funding released in July that's my understanding in anything for the programs. We're working on July is critical because theres going to be new tranche of funding to various programs. So.
Speaker Change #100: It's it's I think Bryan. It is this is not really unusual in an election year. There's all this political environment, that's fraught and so I I did say this is not a big surprise for business. However, as I said I expect in July there.
Speaker Change #104: It'll be some funding being released what I don't certainly have disability off is the extent of this funding round for programs like the DAP. It proven programs life for engineering business that we're waiting for a number of key orders so I didn't have visibility.
Speaker Change #100: But what we have consistently seen a partial funding as opposed to full funding.
Annmarie Gayle: Last question for me, then I'll get back in the queue. You mentioned the pre-production order for the Thermite program, which is great to see. I know you've been hoping that Thermite demand would start to pick up. You mentioned production could begin in the first quarter of 2025. Can you estimate the size of the opportunity for you on that production program?
Speaker Change #101: Last question for me then I'll get back in the queue. You mentioned the preproduction order for the firm might program, which is great to see I know you've been hoping that throw Mike demand would start to pick up.
Speaker Change #102: You mentioned the production could begin in the first quarter of 2025, I think can you estimate the size of the opportunity for you on that production program.
Annmarie Gayle: Well, the one that we where we've got a small initial evaluation order evaluation system order. My understanding is that potentially, there'll be 200 units under the program for our purchase order, so we wait to see, but that's the number we are working towards.
Speaker Change #105: Well the the one that we where we've got a small initiative evaluation or the evaluation system order my understanding is that potentially.
Speaker Change #106: Potentially there'll be 200 units under the program for all purchase order. So we wait to see but that's the number we're working towards and.
Brian David Kinstlinger: And can I look at the eight units delivered for $250,000 as an ARPU, or is that not accurate?
Speaker Change #107: And can I look at the eight units delivered in $250000.
Speaker Change #108: Eh is in our pool or is that not accurate.
Annmarie Gayle: It's not that's accurate. That's okay. Great. Great. Thanks so much, Annmarie.
Speaker Change #108: No that's accurate that's great great great. Thanks, so much Anne Marie.
Brian David Kinstlinger: Great. Thanks so much, Annmarie.
Annmarie Gayle: Thank you bye.
Annmarie Gayle: Yeah.
Annmarie Gayle: As a reminder, it is star one on your telephone keypad, if he would like to ask a question. Our next question is from Fernando Canto with private Investor. Please proceed.
Operator: As a reminder, it is star one on your telephone keypad if you would like to ask a question. Our next question is from Fernando Canto with Private Investor. Please proceed.
Fernando Canto: Hi Annmarie, congratulations on a very good quarter. I just have a question. I see in the first quarter that the own bill receivables were $763,000, and they went up this quarter to $1.580 million. Is there any explanation for that, please?
Annmarie Gayle: Hi, Anna Murray, congratulations on already with quarter.
Speaker Change #109: You'll have a question I see on the first quarter.
Speaker Change #110: The one bill receivables were $763000.
Fernando Canto: They went up this quarter to 158 million and an explanation for that please.
Annmarie Gayle: Did you say receivables?
Speaker Change #112: Did you say receivables.
Speaker Change #112: Bill Unbilled receivables homebuilders Unbilled receivables Gail can you take that question for us. Please.
Operator: Sure, can you hear me, Fernando?
Gail: Sure can you hear me yes.
Gail: Yes, we can hear you okay.
Fernando Canto: Yes, you can hear me okay. Thank you. Yeah, basically, it's...
Gail: Yeah basically the it's went up from one six to one place. This 1.6 million from 0.9 billion and that reflects the increase in our accumulated projects expand expenses incurred incurred on uncompleted contracts. So it's work that we have done so we've invested a lot of time and materials.
Speaker Change #114: Some projects that haven't yet built so that's why they are on the balance sheet as contracts and progress of our Unbilled receivables right, that's possibly putting the third quarter.
unknown: And that's Spotsy D for your third quarter.
Speaker Change #114: Yeah, Yes, I feel that.
Annmarie Gayle: Yes, I think that just as we said, we saw an increase in our engineering projects in the second quarter. And in the first quarter, it was really, really off plan. We're seeing that business coming back on plan. And as I mentioned in my first quarter earnings call, we expect a lot of the engineering businesses' revenues to be backloaded. And we're seeing that coming through.
Speaker Change #115: It's just it's what we said.
Speaker Change #117: We saw an increase in our engineering.
Speaker Change #115: Projects in in the second quarter and in the first quarter. It was really really after and we're seeing that business come in back on time and.
Speaker Change #115: Mention in my first quarter earnings call, we expect a lot of the engineering businesses revenues to be back loaded and we're seeing that coming through.
Annmarie Gayle: All right, well, thank you very much and congratulations again, Annmarie.
Speaker Change #116: Right right well, thank you very much and congratulation again I'm sorry.
Annmarie Gayle: And thank you very much. Thank you, Fernandez. Thank you, Fernandez.
Speaker Change #116: And thank you very much thank you Fernando.
Speaker Change #116: Thank you.
Operator: Our next question is from Andrew Scott with SLF. Please proceed.
Our next question is from Andrew Scott with S. L. F. Please proceed.
Speaker Change #116: Oh, Hi, Anne Marie Great quarter.
Andrew Scott: Hi, Annmarie, great quarter. I know you're probably a little bit frustrated with growth, but I just wanted to remind everybody that you're doing a great job managing your business. I had a chance to calculate your ROA, your ROE, your return on shareholder equity, and I'd like to challenge everybody else to run the same numbers with other marine-related companies, and you guys are at the top of your peer group. So, great job running a business. The comments that I had have been answered.
Speaker Change #118: I know, you're probably a little bit frustrated with growth, but I just want to remind everybody that youre doing a great job in managing your business.
Speaker Change #119: Had a chance to calculate your R. L a U or L E.
Andrew Scott: It turned on shareholder equity and I'd like to challenge everybody else to run the same numbers with other marine related companies and you guys are at the top of your peer group.
Speaker Change #121: So great job in running a business I heard some of the questions before so a lot of.
Speaker Change #122: The comments that I had have been answered, but you have a great balance sheet.
Annmarie Gayle: But you have a great balance sheet. You've got ingredient sufficiency to grow the company through acquisitions. Are there any verticals, any markets that you're specifically looking at? But again, just a great job running the business. Very exciting.
Speaker Change #123: Ingredients sufficiency to grow the company through acquisitions.
Any verticals or markets that you're specifically looking at but again just great job in running the business very exciting.
Speaker Change #124: Thank you very much and you were also very very thank you for that I'm really excited about the business and it is correct. I mean it is I think also what was after me I'm very very positive in the quarter is that you know we saw a challenge is it was a very very.
Annmarie Gayle: Thank you very much, Andrew. We're also very, very grateful for that. I'm really excited about the business, and it is correct. I mean, it is also, I think, what was for me very, very positive in the quarter was that, you know, we saw challenges. It was a very, very challenging environment for defense programs, but the team was able to pivot and really make up revenues from other jurisdictions and geographies. And, you know, Asia is up by 15.6 percent.
Speaker Change #125: Challenging environment for defense programs, but the team was able to pivot and really make up revenues from other jurisdictions and geographies and you know Asia is up by 15, 6%.
Annmarie Gayle: I'm really excited about that because that is the key market for us. So also, you know, we've launched our digital audio communication system. And while that's not a big ticket item, the market is considerable for that technology, and we now know the Navy is moving forward with that product. I'm also excited because then this is further diversification of our revenues, and it also is a good entry point because it's the same customer base for David.
Speaker Change #126: Really excited about that because that is a key market for us. So also you know we've we've launched our digital audio communication system and whilst that's not a big ticket item, but the market is considerable for that technology and we.
Speaker Change #126: No no. The Navy is moving forward with that product I'm also excited because then there's further diversification of our revenues and it also is a good entry point because it's the same customer base for the damage. So when we're talking to our customers about digital.
Annmarie Gayle: So when we're talking to our customers about digital audio and they buy into that technology cheap and cheap at the bottom end, I mean, that is really the entry point to get them to think about David. So I'm really excited about where we are with the business and, of course, deeply frustrated about the slowdown in government funding. But we're still all the programs that we have, the defense programs; they're moving forward. And I am really, really excited about the prospects for the business in the long term.
Speaker Change #127: The audio and the tie in to that technology cheap and cheerful was at the bottom end I mean that is really the entry point to get them to think about the DAP. It. So I'm really excited about where we are with the business and of course deeply frustrated about the slow down in government.
Speaker Change #128: Funding, but we're still all the programs that we have the defense group and they're moving forward and I am really really excited about the prospects for the business Hum in the long term.
Speaker Change #129: Yeah, that's a big deal that diversified revenue model, you know you're shifting away from the traditional and you're diversifying.
Andrew Scott: Yeah, that's a big deal. That diversified revenue model, you know, you're shifting away from your traditional business, and you're diversifying different countries in your revenue group. I think that's an overlooked fact, and I think that's really going to help your business going forward. Yeah, I think the next 12 months are going to be very exciting for Coda.
Speaker Change #130: Different countries and the revenue group I think that's a that's a really overlooked fact that I think that's really going to help your business growing going forward.
Speaker Change #130: Yeah, I think the next 12 months are going to be very exciting for coda again, great job in running the business I know the margins went up the profits went up and while you're struggling to get the growth going again I heard you say before.
Annmarie Gayle: Again, great job running the business. I know the margins went up, your profits went up, and while you're struggling, you know, to get the growth going again, I heard you say before, it's, you know, it's a process, not an event. I think you're right, but you and your team are doing a great job. I'm driving bigger numbers to the bottom line. So, as a shareholder, we really appreciate that.
Speaker Change #131: It's you know it's a process not an event I think you're right, but you and your team are doing a great job.
Speaker Change #132: Driving bigger numbers to the bottom line so as a shareholder we'd really appreciate that thank you. Thank.
Andrew Scott: Thank you. Thank you. Thank you very much.
Annmarie Gayle: Thank you. Thank you very much, Andrew. Thank you.
Speaker Change #132: Thank you. Thank you very much Andrew Thank you.
Speaker Change #133: It's got a great job guys.
Speaker Change #133: Our next question is from William Bremer with Vanquish capital Partners. Please proceed.
Operator: Our next question is from William Bremer with Vanquish Capital Partners. Please proceed.
Speaker Change #134: Good morning, how are you Anne Marie.
William Bremer: Good morning. How are you, Annmarie?
Annmarie Gayle: Very well. Very well. How are you doing?
Annmarie Gayle: Yeah, I'm, sorry, well, so well how are you doing.
William Bremer: Fantastic quarter given many variables that you really can't control with the budgets. Going back to Brian's commentary on the thermite, if my math is correct, the 200 units would equate to about a $7 million order. Is that correct?
Speaker Change #135: Fantastic quarter, given many variables that are really.
William Bremer: But you really can't control the budgets are going back to Brian's commentary on the thermite. If my math is correct. The 200 that would equate to about a $7 million order is that correct.
Annmarie Gayle: over time, over time.
Speaker Change #137: Over time over time.
William Bremer: Wow, that's fantastic to hear, fantastic. Also, I wanted you to give us just a little history. You have been utilizing AI for quite some time. Can you give us a little more granularity in terms of how many of your products you've embedded AI technology in, and you've been such an early adopter of this technology, going back, if I may be mistaken, probably to four or five years. Is that correct
Speaker Change #138: Wow. So that's that's fantastic to hear Fantastic also I wanted you to give us just a little history, you have been utilizing AI for quite some time.
Speaker Change #138: Hum.
Speaker Change #139: You give us a.
Speaker Change #140: Little more.
Speaker Change #141: Granularity in terms of.
Speaker Change #142: How many of your products, you've embedded AI technology to when you've been such an early adopter in this technology going back if I may be mistaken, probably a four or five years is that correct.
Annmarie Gayle: Well, I think our first AI product was in, where are we now, 2024. I think around 2019, actually, was our first AI product, actually, where, well, that was on our geophysical software range, and really what we've done there, and we've really changed the market, actually. Geophysicists can take quite a long time just tagging the boulders in the boulder field, and what we've done, we've absolutely used AI to automate that, and our boulder detection product will do, a geophysicist will probably spend four days on something that we have down to two hours.
Speaker Change #143: Well I think the first AI product was in where we know 2024 I think around 2019 actually was our first AI product actually we're well that was on our geophysical software range and really what we've done there.
Speaker Change #144: And we have really changed the market actually and that product that we have in school seat up and what it really does I mean, when you go for an oil and gas installation and collecting sites can data really the pre stage of pre development stage feeling what youre looking at.
Speaker Change #145: See bottom, you're saying what's on the seabed how many bold is it theyre geophysicists can take quite a long time just tagging the boulders.
Speaker Change #146: In the both the field and what we've done with absolutely use AI to automate that and our Boulder. The text detection product will do a geophysicist with property spent four days on something that we have down to two hours. So that's the leading product in the market.
Annmarie Gayle: So that's the leading product in the market, actually, and we've then also pivoted now to our digital audio solution, where we're using AI technology, mainly in a sort of helium environment for speech correction of the diver's speech. So when you're in sort of a helium environment, your voice gets all squeaky, so we're really using AI technology to clean that up completely.
Speaker Change #147: And we've been also pivoted now to our digital audio solution, where we're using AI technology, namely on the in the sorts of helium environment for speech correction of the diaper speech. So when you.
Speaker Change #148: You are in sort of like helium environment. Your voice get all squeaky, So we really using AI technology being able to clean that up completely.
William Bremer: Fantastic; fantastic to hear! One thing I'd like you to consider, and I know how busy your team is with all the different end markets that you are addressing, and I really appreciate the commentary that you just made. Would you and your team be open to having an investor day, a portfolio management day, an analyst day, maybe down in Florida where you have a subsidiary to showcase to the capital markets your underlying technology?
Unknown Attendee: Fantastic. Fantastic to hear.
Speaker Change #149: Fantastic Fantastic.
Speaker Change #150: One thing I'd like you to consider.
Brian Kinstlinger: One thing I like you to consider, and I know how busy your team is with all the different and markets that you are addressing, and I really appreciate the commentary that you just made. Would it be, would you and your team be open to having an investor day, a portfolio management day, an analyst day? Maybe down in Florida where you have a subsidiary to showcase to the capital markets, you're underlying technology. I think that would help you with the word out even better that for some of us that have been invested in this company for over five years to finally come to a position, maybe a nice offering, just something to you in the end.
Speaker Change #151: I know how busy you are a senior moves with all the different end markets that you are addressing and I really appreciate the commentary that you just made.
Speaker Change #152: Would it be would you be open to having an investor day your portfolio management day, an analyst day, maybe down in Florida, where your where you have a subsidiary to.
Speaker Change #153: Showcase to the capital markets your underlying technology, I think that would help get the word out even better that for some of us that have been invested in this company for over five years to finally see to come to fruition, maybe a nice offering just something.
William Bremer: I think that would help get the word out even better that for some of us that have been invested in this company for over five years, to finally go to a physician may be a nice offering, just something for you and me. Great idea, Brian, great, great idea, and we'll certainly look at that, but great idea. Thank you, but this is William. I appreciate it. Thank you, Annmarie.
Speaker Change #153: Great idea, Brian Great Great idea, and we'll certainly look at that but a great idea.
William Bremer: Great idea, Brian. Great idea, and we're searching to look at that, but great idea.
William Bremer: Thank you, but this is William. I appreciate it.
William Bremer: Thank you, but this is William I appreciate it thank you Anne Marie.
Amber: Thank you, Amber. Thank you.
Annmarie Gayle: Thank you. Thank you.
Speaker Change #154: Thank you. Thank you.
Operator: At this time, this concludes our question and answer session. I would now like to turn the call back over to Annmarie Gayle for closing remarks.
Annmarie Gayle: At this time. This concludes our question and answer session I would now like to turn the call back over to Anne Marie <unk> for closing remarks.
Emery Yelp: At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Emery Yelp for closing remarks.
Cuda Octopus: Thank you very much for your interest in Cuda Octopus have a great day and thank you for joining our call today.
Annmarie Gayle: Thank you very much for your interest in Coda octopus. Have a great day, and thank you for joining us on our call today.
Emery Yelp: Thank you very much for your interest in CUDA Octopus. Have a great day, and thank you for joining our call today.
Operator: Thank you. This will conclude today's conference. Thank you for joining us on Coda Octopus's conference call. You may now disconnect.
Speaker Change #156: Thank you. This will conclude today's conference. Thank you for joining us for Coda Octopuses Conference call you may now disconnect.
Unknown Attendee: Thank you.
Unknown Attendee: This will conclude today's conference. Thank you for joining us CUDA Octopus's conference call.
Unknown Attendee: You may not.
Speaker Change #156: Okay.