Coda Octopus (CODA) 16 Sep 242024 Q3 Earnings call transcript

Good morning. Welcome to Coda Octopus Group's Third Quarter 2024 Earnings Conference Call. My name is Sherry, and I will be your operator today.

Before the call, Coda Octopus issued its financial results for the third quarter 2024 ended July 31, 2024, including a press release, a copy of which will be furnished in a report filed with the SEC and will be available in the Investor Relations section of the company's website.

Joining us on today's call from Coda Octopus are its Chair and CEO, Annmarie Gayle; its interim CFO, Gayle Jardine.

will call we questions. remarks, their open for the Following

a Turner statement. Before Geoff make brief we begin, proceed. will introductory please Mr. Turner,

you, Earnings everyone, Third Thank morning, to Good Octopus' Coda and Quarter Call. Conference welcome XXXX Fiscal operator.

Before a remind that management and number may considered of some to securities under today everyone forward-looking making risks begins statements remarks, we're law like formal be their we'd statements and uncertainties. involve

beyond in you caution many a there control, a number cause we factors results from are statements. As of differ of which actual are that our could the which materially result, to those forward-looking described

to the uncertainties detailed Exchange year. XXXX, as For disclosures risks identified see Form law. We We refer of or limited obligation assumptions to the the more for relating Exchange circumstances, occur disclaim and circumstances of update but and our well descriptions undertaking Forms as the for fiscal XX, not are please in this our and date second Securities you for forward-looking be the in and that uncertainties and forward-looking statements, required including, business release except earnings events XX-K forward-looking first, with statements Commission. detailed disclosures to, our other and made, year, made Commission variable and uncertainties October by after and may public or the any with to and to our filings XX-Q third quarters risks, reflect statements filings our Securities as the

call a Relations in at and replay remind like www.sec.gov. I made and visiting Coda free SEC Coda website. You everyone is website section link by via will recorded to Securities Octopus for Octopus' be filings also Investor Commission being available get the of may that this Exchange would the

the call company's Annmarie? Annmarie CEO, Gayle. turn Chair will the to and over I Now

everyone. for for Thank and joining call. our Thanks, XXXX quarter you earnings morning, us Geoff, good third

profit quarter third per over including delivered margin, income, we XXXX share. and XXXX the of operating have increased third gross the revenue by a quarter in income solid our revenue, net Our results XX% set and increasing earnings

I third including year rental margin year We to During the second programs. so XXXX, in the not this defense profit far the of increased the is revenue notable in programs am am our increased a This gross strategy. the results second and Technology was challenges, from has assets believe is lower critical an defense a our fiscal XX%. In and placing our pleased quarter growth intake quarter, unusual temporary third quarter third with in U.S. the third funding area increasing during to presidential pace in concerning by our utilization the of XX.X% upcoming XXXX. XXXX. XXXX in that X.X% orders fiscal overall compared the resulting the very of third year. third gap in U.S. with Notwithstanding quarter quarter in created attributed slowdown the pleased election I quarters Marine XXXX, XXXX, third these order particularly quarter the to in which the including XXXX, election, Business in increase XX.X% by there revenue an by for over year fiscal resulted

from increase quarter, XX% XXXX As over quarter third XX.X% saw the stated And backloaded. previously in profit would in margin an that to XXXX quarter engineering indeed, the Business of an in increase be the year, business in of XX.X%. Engineering in revenue third we the third revenue expected gross our and the the

Moving to our overview. third quarter XXXX

which in into drivers strategy some against recap, high-impact have progress multiple-year work technologies is purchases other include profile systems. and participated quarter an continue third multiple we the our opportunity our to we to programs, events. of of our XXXX, growth During and make high-profile or to key defense To and

of focused mind, on-the-sea of in we're successful of completed Echoscope been the of is third pull-through quarter development A continue performing execute The on defense the Echoscope critical DAVD major example a highlights for the good the quarter, model PIPE against a U.S. have of the new program growth purchases, repeat outlined. is in for business in sales. seeing this. where for This are, our program strategy strategy. Bearing funding we success including the technology for applications. we short third to this, contractor sonar this summary achieving annual multiple a We allocated some the under demonstration

contracted we are successful very this Following now through process. going demonstration betting this

are interest and in Echoscope traditional sonar delivered are Ship scanning the XD U.S. we scanning that groups excited power uniquely We Navy capability real-time the find pleased solution. global which the seeing now of added Sonar applications. very to and and we customer fiscal pleased over the for which are for completed growing Hull area hull this on and of ship we our different ship system. Based Navy health Again, to with is a of and provide have with momentum XXXX, there requirement different platform, realization and developed scanning we real our several interest particularly in level imaging applications with new the trials a year

the and developed largely features field and design we're are now DAVD developed a custom preparation and the multiyear operations we support within their with deployment and of is have due Ship Hull training vital solution, teams in the premission the the challenging, fleet, benefits on a is and of using program. We which understanding several supporting their on on complex continued to live happy that been U.S. and application the missions. the our technology ship the Navy critical Navy under in geometry scanning capability are ongoing adoption for DAVD these their has to for actively operations. realizing solid X commands utilization The for provided hull, groups Navy evaluation this Although

a with we demonstration attended NIWIC DAVD dive trials relationships, rim these demonstration the we're to Echoscope specifically seeing a event, allied order demonstration who DAVD to have annually system. for local the the capability upon the see several the because navies Echoscope their supported continue exercise the [ in demonstrate countries Harbor, coastal teams DAVD engagements Echoscope exciting of which from again, visiting for Echoscope submitting The impact systems. We trident warfare technology sales further this technology. provided these the X Pacific Subsequent maritime and that to multiple the of in ] continue able in the applications. the commands capability event the applicability for many event, This, were and technical to in we exercise. requests Pearl of as held technology Echoscope program defense from of also the We uses believe dive At to is of to Echoscope largest is on-the-sea are Navy's [ we [ many as to vehicles major witness who to for establishing. We was on-the-sea bear funding applications. world's the to support Hawaii power on defense The demonstrate pull-through to its actively the DAVD event. are were we We the and platform. potential build of we division by Defender ] mounted international ] Matsu [indiscernible] combined to investment solution the the able supported

I to you take over our CFO, Gayle turn through now before closing call Jardine our the interim to provide financials me our Let remarks.

Annmarie, good you, Thank and morning, everyone.

million the XXXX, compared take quarter XXXX. in Let $X.X starting third revenue. to third XX%. The a the million third Technology of business an X.X% of compared $X.X recorded $X.X Marine of to quarter our total representing million, products Business, with the increase XXXX quarter of over you revenue increase our $X.X XXXX, third of results, generated of me through million In financial we've quarter revenue

Engineering Services million $X.X XX.X% quarter million, business of of over third Marine $X XXXX. or Our Business increase to the compared representing revenue a generated

revenue consolidated the As XX%. an discussed quarter. quarter Engineering increase Technology in the revenue third by Marine the earlier, Both increased third saw in our Business and in total

relates We the after America on to convention of presidential the were is the is down. election to where acquisitions U.S. believe defense North election that decisions outcome this to sales decided. make However, the

of gross in third This In XX.X% XXXX. our million Technology Moving to to versus quarter on In and XX.X% the utilization the our gross we quarter of quarter Marine of assets mix the included was quarter high in associated compared profit rental XXXX Consolidated changes which of and sales gross this margin reflected in margin XXXX. the million $X.X compared XX.X% of of to last generated profit XXXX, third the of third of increased XX.X% to gross Business, in quarter same margin. third a quarter $X services. in year. the

XXXX. quarter current during third quarter of I point again, quarter must Our increased projects to trend of Marine XX.X% [ the XX.X% of Engineering gross versus third margin margin gross is not viewed ] the XXXX and out the engineering to be persist. reflecting in in of that atypical of quarter in upward as the Engineering an the will that Business XXXX, the Business mix third the

largely for to of on which $X.X expenses. $X.X third general third increased moving administrative increases Total million Now quarter costs. quarter our the and is operating the due XXXX to expenses million XXXX, in operating to selling, in to of compared

quarter third in of $X.X of $X.X million Our increase XXXX SG&A the XX.X% from costs million, third an the of totaled quarter in XXXX.

quarter in $X.X business ] marketing. In towards of recalibrate and compared to This XXXX for revenue, Accordingly, development taxes the or us XX.X% salaries, third in XXXX, hired $X.XX area. Operating marketing assist expenses quarter of of R&D we we strategy, a taxes the $X [indiscernible] due of compared before of an the the [ to of were diluted in third The income million Income for office focus the buys the third third group of costs was compared marketing relating the As the and in of in our ] to XXXX. quarter million [ SG&A quarter to to fees million $X.XX was wages and business a working increase appointment percentage the accordance or XXX%. quarter to U.S. approximately this the our in continue quarter share increased XX.X% quarter third costs XXXX. quarter third Net development increase capital SG&A mainly third in have is of in per to XXXX included [indiscernible] income third with after $X.X from million our and our in in $X.X in activities. XXXX XXXX

Moving sheet. now balance to our

cash, [in] As of would [indiscernible] [indiscernible] year. [indiscernible] this fund use of acquisition in an the fiscal XXXX

closing our have conclusion call XXXX. Thank remarks. XX, October a this you. of identified for diligence. to this due going fiscal the turn this through we ends will close Subject I intend process, target on over are We within to actively a which and satisfactory to year, back Annmarie now

I Gayle. very you, third per saw revenue, gross increase an results, with our and Thank which in am profit pleased earnings quarter share.

technologies We number continue to shareholder work strategy the recurring against programs long-term our programs. in embedded securing multiple and to of these units with defense goal stable value the of under sales that create are of to executing our increase

XXXX, the to we model XXXX, some $XX against job DAVD superior We started returning Our the marine profits over as thank conclude, continuing add shareholders and the we product revenue our maintaining to would outstanding of aim aim with Business profile progress the of in set a defense for in capabilities the by margins strategy, candidates pipeline for line. To time, business our focus good model Through early and our scope to Engineering complementary business. we with the our capabilities, of shareholders team being strategy. And grow to forces to in are tightly see rollout our our untethered sustainably goals to the our including track to under while we DAVD strategy, M&A technology, compromising million a multi-sale which of multiyear and adoption special through is the program and record broaden of will the paper seeking their profitable we for continued have doing advancing believe of our that DAVD the its that making like pre-COVID on to revenue applications. supporting technology an develop ourselves we opportunities for a run M&A without support.

We questions. any are now to Operator? happy answer

from Instructions] first question Our Alliance Kinstlinger [Operator Partners. Global is with Brian

I'm orders release, began election and at is, fairly this in delays press your And stage first that's XX-Q to for question for CR prepared typical of we're the headed going with My you another comments that are the begin October. in certain cycle. the

how July governments commercial near-term do to Or do as the long offset you have well that you just quarter result, if think will business expect, opportunity last? do as both of So business you reported? And with as pressure? enough segments foreign can you your so, will that a you pressure this compared experience think

you Brian, thank much for well-considered questions. very your

said Brian, year, year-to-date really $X.X sales to this Americas have we that mean, last you this when was as actually, compared from XX.X% can you $X.X by So down million time, I million our look see were we at or year. results, thereabout.

business. But where budgets. you our it of always really is strategy requirements, new therefore, is focus that the been what market means certainly programs established elections. increase And requirements reflection really programs the funded the are this really is commercial revenue, ongoing that but are the we in really because So sustenance the really, our the has in until real advance outcome U.S. I mean, a defense could market, see of in being by revenues And growth is well despite is XX%, of that demonstrated of our see, really, the we've the our revenue case most The am had of of strong and that's falling marine have resilience the market. for from our you from marine elections. What pleased commercial to the what I We're Americas from outside it revenues. and in

that defense broader our we funding U.S. Of strategy. for course, growth I see would like dependent to are on program from

quarter, U.S., be with inspection on of Okay. DAVD provider said, that happening given important. to you potentially last government commercial project. what's for a the first then the U.S. going was And the the using side that's mentioned service tunnel

near-term commercial. Pearl demonstration. And adoption more function of for the the DAVD now Harbor comment sorry, you discuss can because pipeline that -- -- you is hoping I'm or on So right the foreign a government? Is

Well, yes.

] turnout really really really RimPac we the event, untethered [ good about there. system it's And had the all So there. a

I as a which is already our have is U.S. really, this for quality the said, technology. ongoing event, mobile we've that's was and ], diving very we're [ there with the pivotal its of event superb for of was the are that variant really, the what unit a some turnout focus it's is now, is we untethered the lot a and variants. very, excited but forward by it's And seeing, led but by we to the seeing was championing requisitions said, we've had tethered slow, being because DAVD. Yes, event they for good the acquisitions Division And where that X. is technology. on We commands follow-up, got as salvage are really And put Matsu what that and technology different

on won't are We're strategy. and acquisitions but I've because that is, Echoscope. it those excited about And seeing mean I'm budget really of it doesn't also what of seeing we're also All the once hold, happen pull-through they available. said, our validates sales is

pull-through would real-time it and And sales, sure we would we weren't system? sonar when seeing excited adopt DAVD our our the this the So started we're XD seeing Or that pulled about technology. technology. program, how they're Would the Navy also through. we indeed, being just be Echoscope see we're

quite that's so And exciting.

into the but diving active we discussions how major ] to with commercial slower we the technology commercial have opportunities those are DAVD adoption providers. integrate have analog would DAVD are offshore the like, [ bell. complexities But still than it and you the there their In wholesale for discussions if about are their, offshore X the for all of of itself, terms like, we the ongoing,

of to don't bell Ethernet prework, systems have offshore and the that Ethernet one transfer from for example, their engineering on data the over is provider. their commercial actually impossibility. first needs project analog capabilities it an on because, when that having they part the So diving service working We're such of conversion

barriers technology also said, the falls system, critical We absolutely largely still are see mission. the We seeing really I But technology So adoption were we commands didn't and it asking using seeing we that dive event Navy, we those its are the seeing not They the DAVD as to threat of there impact. I'm technology, into more. a the some out. the about is I use. the nonetheless quite because now on around is envisage. seeing, those quite sold now different in -- said, that. DAVD. excited excitement And we're using biggest as the the We're see this fleet was for were to definitely We're excited capabilities.

feel So about we for is than all signal the program for like. and ] excited DAVD we it's ], But the business. I'm in to [ nonetheless, ] [ our a be lower all, DAVD going the prospect this would [

to talk where from impacted? quarter, were seeing advancing? last program, a orders the is the any then this And And this you there on talked program you about Navy. is you program Thermite election how preproduction that Could are about Okay. impact

we order said preproduction No, I as first in not that's my all. got ongoing. last But at call, quantity the low still

in production the a also for an the opportunity program, be to second us. don't also for order impacted. There's aircraft big expect expect that's and We that opportunity XXXX, I

order and terms still there We we're And and negotiating to we and barrier us conditions The we is we expected are that bit a terms the have order. that that and they've viable little is their put are the biggest the that there earlier, don't to before our we but want for conditions sure to that signing right up order. now terms the accept be business. order forward

and So another Thermite could the negotiations hurdles that's we the overcome the program be for would itself. that contractual are if ongoing, significant

questions more for Two Great. me.

hull market near the feasibility the well how the ship sales and on being study done, cycle the opportunity First, about as there? as you term in think scanning pipeline touched the should we

Yes.

for were a forward to because this a on are it's a but space solution. which if hodgepodge -- we've not the only program had of things. and ], We like, hull call but now not it's several put a heads-up we funded which different system. display So I no white I there solutions There And of our solution, what you sled a on scanning. [ delivered absolute platform, think embeds Echoscope ship number an with diver's is stakeholders. our trials are

think I we are close.

think we in I like least the at what are market. could solution to a the closest look

different are hull, -- is are attachments What there lots So on ship we are -- market and the of global addressable what's problem. it's problem. a a and because there, stakeholders. The

close we introduce. model are I to features but of us real the think So of more I really a and adopted, things to our still being am it and and the But requirement, go trials have this one is opportunities. through more it's excited we we and I'm to think program. is to more about helping group understand do focus --

So I we're And if solution understanding that be is as market global market choice. of more. supposed the the were the to said, we

Great. discussion. around is My question last the

way You a products. guys it about target Can small size? on talked would M&A sounded has that touch larger, Is you any anything you can complementary helpful. a in tuck-in, provide something like be

this expanding really product the segment capabilities. engineering said, or is I've Well, what the the capabilities. not target about Notice group's the but group's

The very, for it. extent, we excited price you about So I'm that mind $X.X cash acquisition that very ] [ this. to using about have of in million in seized

in I this talk to well Brian nauseam I it So see can and If time, can that's ] plan about what goes ad stage. at [ X this. weeks' goes

Our Sutter Deutsch from with Richard Securities. next question is

to now, knowledge it's nice this history into somebody have commercial for having running hard all work And several your this followed see to years to and vast show. comfort a such it's Annmarie, starting the with reality. come business

Brian or as you things bunch acquisition like So you a crew go couple part and appreciate here. mostly the it work any being all see the of into shares but a of acquisition, Coda, shares offered cash? all questions, this of be the have would the of hard on do I'd to done. asked really

in say, It's in clarify, employees plan, of incentive all to that will just cash But but on what the that in participating cash. our group's terms It's time we clarify we've over all be eligible participate to key be the they key is offered. would integration cash. -- just those stock incentive do the for of stock business, table employees future, we're in It's not plan. to the to in not once some that

Sure, sure.

So are software an hardware this line? acquiring existing engineering acquisition? Or be you R&D mostly would

not I'll Richard, this as we're able to call. be [ else. discuss they this to just I ] weeks' plan, sorry. said, target, do prepared about to In X or time, I'm think close. it's... the on if more talk what goes anything this I'm I

missed it, any on Digital And potential? your have product, I tremendous think update did on understand. I I Audio call your which today, you has unless

it actually opportunities. and do, and quite -- a lot that of didn't had think I just too, You

be lower So going but funding, not started think I level this the anticipate, from the Richard, Audio expect, I -- to of purchase buying, start Digital September. the in There's another round stuff. purchase at quantities, they for September. think, they'll orders but but It's in September in I be orders that going additional we Navy in have I to expect

all assessments. now to So that purchase And the safety for the forward. it's about passed come really orders waiting

there Is is it the great. That's Or underwater? for Okay. Digital just all water Audio? above application any

big medical don't with it's into Well, massive. them. because have like communicate the could to a theme we think Audio that I medical Digital bay have use same going there's of you the a someone It's but one, chambers

chamber, that. So something like for compression deep like a

So System the we that there is that Audio medical Communication application had. Digital for

ones just X here. And quick Okay.

scanning, close On technology how winner round are this of would the another approved? being we of further the development? to Or ship be a just

massive budgets, we the thing a terms [ have where budgets but think from. and development, it's don't coming I of in the is ] the Well, pop-up

people behind with understand going said, working group who our are program. very closely I As the the focus come that to where we budget and from, to the is are

still So being understood. that's

then the Navy. have global their start broader as So the global solution. off sign as are will safety we start program, done, now, the But say have the safety more targeting we working information, that as have we the also we Right as soon thing just marketing will assessments we but for under U.S. don't market. to with soon the I

exposure China, Okay. currently question or any have situation? do is, My final that sales considering we to

to China is biggest the course, we for Yes, have technology were again, thing they the do, offshore using that main for. our renewables. of I That's market China, say global

So components impossible to means used to And on finding are that address increasingly the to like list. exposure have really this of Bureau means a do of ] the security I'd China. And of to is lot that outside there's that extent, of becoming also you selling can't And China, also by a themselves the where to us also broader that we what sales companies, call, its like problem security, on black [ Investigation buy costs. anymore. additional it those reengineering components lot

but situation the a a sales when from component be available may you and know then is never suddenly So no fraught black quite be not it's because it's longer on that with component, innocuous major. not also anything could China just that It and cycle, list.

of kind but China also components. from the buying to -- China selling So it beyond expands

a little that. go into Well, I to further just see.

from you tell generating quarter, this can we China? revenue how During us much recent that were

-- can [ $XXX,XXX, something give you that. tell pounds I think that's ], about proximate was number, that can't you like would I I in on a

Instructions]. [Operator

Scott Our next Group question with is from XXX [ Andrew ].

quarter. great Annmarie,

Your enthusiasm strong call. this very on is

question. financial just good. your us about management heard the more lot ROE, hopeful a I heard acquisition. great. results is one had were ratio on return about very the The I potential defense making it's your equity, So contractors. I effective

outlook Coda are seeing? little in turn election, little you're have seeing know market great a down a you on How Have adoption? of penetration? about are overall perspective, Octopus the started macro more things adoption an but with give or North America lot come. with slowed sounds the bit things bit more it Can the products? like on market presidential So multitude see you I you greater what a a of of to to a

million particularly to saw as million services, just see really X and [ from ] year-to-date, I the you utilization of the year-to-date associated [ what is Well, ]. I'm -- which could increased went rental our up X.X think excited about that you

years seeing actually placing breakwater most whenever a like think rentals just when striking a cable, and cable solution we me where application It's Coda Octopus. the this is year, application. around point. few patent our ago which about you what's laying patent tracking automating what And with I think can have we've algorithm, really, this is is laying truly What of And also the had it's an is of really had in it -- that cable I we the the been cable breakwater, it think the touchdown are predict for of success the laying. where am technology is case a around that a really you Coda particular Octopus. through major Echoscope called actually

costs and that out, breaker. that's of money. a see gets ] you cable and a thing all, the it massive Now lay of because [ tangled, paying it can't then is lot that you're first then a deal It stops

solution also point say, standard be. where Europe, touchdown can to we definitely the is the for And have going that. specs, precisely our through to solution we're let's the I Within And cable know laying. engineering have, the cable say in you conquered and

profitability up because rentals I the because of think like particularly about I'm rentals broader, said, our that their going particularly I -- for I So as excited and business.

sense that actual getting opportunities the as I seeing have the we that, slow So that working debit, several for customers line. the very the and said, getting I'm we're excited very, we're on through of details over although on still broader DAVD, the the order the purchase about

see real-time do threat still those real-time throughout the obstacle ahead. singled anything that, for going forward-looking markets and Echoscope to I don't So competition the Echoscope any for detection, feel the with avoidance, of we Echoscope broader acceptance And out for monitoring, is the that's for that,

think we your job. Yes, quarter. Great Yes. Great are best. products the

you. Thank

Emerson final Group. our is question from Emerson Investment with And Steve

out in I'd market. great great, call I not bit and like be model. didn't my a in to particular, attachment into a like -- has a without opportunities. [ little robot? flesh ] whole live the insight and work diver, to sounds Annmarie, appreciate great this greatly quarter It that

scanning, you're -- of think you Ship right? hull think the that thinking When about Steve, I is

Yes.

Yes.

biggest have the we're to robot do water you working the the still that's look, turbidity, to like challenge working is real-time is you on give the some actually, because thing of But current in visualization robot a a water on going something of you conditions. think need on you water have all that's [ Echoscope turbidity, and the really that there with when the zero ] customers where even Echoscope applications real we if into barrier So the conditions, is embedding the the visibility the robot, water.

could means as thing. a a It's first a diver just not platform. by So like of that's platform, the deploying robot a be replaced robot, the a but handheld technology

So limitations with of dealing where of that not how hull is you're we also looking, what really The call some -- area. scanning look the a when geometry GPS-denied is and a hull. in you're ship under only I do is it's thing the you're

you position some the I I can I don't not means data systems solution, your position accurate embed heading, semblance is that what the where that stitch So our heading and that Echoscope, of know are, [ derive so I water am. platform, where you're have for only don't really is of navigation do has on ] how you if on together it it but and things this like the does

through some with are the these through customers. have challenges and worked work to continue we So of our

much it employed takes received out? these a this What for wondering in of out in as wondering R&D how you in in or port, it, maybe go ] ports an in funding or huge need question, I'm just scan number maybe application? and funding long of I'm be hull? in, add-on and particular call to And as Okay. have a to systems convoy, have a zones. many a ships [ they so they how going have how Can Or is these conflict

funding. with start the I'll

was in move just if what's X-year The bread away big I this your I I hull bread that's stuff. butter program. think was the do way over think, let's Look, question stuff ports. the were a of know think funded, the also coming about. The a me multiyear, delivering thing, butter situation, And need do to life we from million, and and ship scanning. Steve, asking you big, your which that I conflict you're solution. includes $X.X the Steve, program,

port an So hostile it that port. all the could drugs things. up the be could blow subject be thing It's the or those ship your of -- whether into attachment, that are some

], go need combat be for words, -- the anything in for The viable. entering [ application a to So application it's to too don't other you water. to is viable your that's

we're So application right at looking that's the now. of kind humble

So available billion what out of come ranges of penciled do have it market, kind When you units you sounds or available the with? up like market. $X number total

to discuss I that I'm Steve, prepared would that. not say

in addressable getting in thing dare not safety on do about the we numbers global, get got excited do have The around as but to would but fact, we've is out events ] I to solution. throwing to I where have would the the getting mean We're closer. I the application. we get market close say, that had the scanning have it. to understand focused is said we solution, But say the I successful point assessment, the thing for ship we the need the Navy, are mislead this to markets if first have quarter, we start the it's to and is hull I solution, and again as we want the [ we to audience. solution still third to the And about and

the year this any timing them Are we Okay. Are what are project, evaluate, contract of or for estimates give you we? this we waiting to X-year -- on end close are? can we where R&D to

completed we project. So the have

delivered we're with year. supporting their As doing, trials, the we said, now platform trials. last Navy ongoing we're what we And the have

supporting funding we fiscal delivered deliverable more our their then, final since that's XXXX. we on their to have have have we with any in don't So And because where We been them stakeholders. trials own are. --

Okay.

we or evaluation at So point, a our orders? R&D and for waiting complete waiting with to potential we're their this follow-on are

evaluation. They're doing their

trial, there order outside So from ongoing, what's is which on side support come support. we them the when -- ongoing nothing that's of and our get the we to an

time it as system now know but evaluation. U.S. I program, Navy time. I map is as a I to said, the does the and a then don't take So have good is This -- in

shall idea -- to acquisition can to what Got us of we a area some And give possible acquisition augment? negotiation, this you would it. your as business, regards say,

group it's that prepared Well, to what capabilities, Steve, it complementary the business. I'm call, to and highly expands say this our on is

Okay. is Is business? marine this aerospace this the business? Or

And the is we It that group expansion segment it but specifically extends. said that at a I capabilities weren't looking group a expansion.

for Okay. Excuse you help your great thank again, progress. and me,

much. for always you, your you insightful Steve, Thank very Thank questions.

conference I to our like remarks. turn back Gayle to will this for the question-and-answer conclude over Annmarie And closing would session.

attending call a very Have Thank earnings for you you. Thank great the much day. today.

conference Thank conclude Coda you. Octopus' This call. will

at disconnect may You time. this