Coda Octopus Group, Inc. (NASDAQ:CODA) Q4 2022 Earnings Call Transcript

Annmarie Gayle: Well the thing is, when you’re in R&D, you’re still evaluating the technology. When it’s operational, it means it’s in the field for use. And now it’s now up to all of those commands to now purchase the items. When it’s in R&D, then it’s not being purchased. It’s just being evaluated. Now it is operational, it’s now issued to come on at. This is the diving technology that we’re using. And it’s now up to these commands to start putting in their orders.

Brian Kinstlinger: Thank you. And then similar to the question on the products business. Do you look at Colmek, or the entire engineering services business? You’re still a bit below fiscal 2020 of $8 million, and the peak of $12 million in fiscal 2019. So what have been the prohibitive factors in that business? And how should we think about the timing of the recovery to get back to some of those levels?

Annmarie Gayle: Well, it’s the same with I mean, I’m pleased with where the engineering business has got to this year. But if you’ve rightly said that we need to get to that point of where we were in 2019, for example, where I think on a standalone business, that business was trending as a $10 million business on its own. So I think it has to do again, with the, they supply into broader defense programs. And we’ve been found it very, very slow. And really not a lot of visibility on the activities that are going on going with the primes on these programs. So this year, again, we’re quoting, more and hopeful for more than we did last year. But having said that, I think I’m pleased with the progress it has made over 2021. And we anticipate that it will continue in that direction.

Clearly, Brian what, that business got a couple of new programs last year, that are key. And the whole, the business model of the engineering business is to really get on to new programs year-on-year. And our target is to continue to expand the number of programs that we’re supplying proprietary parts to.

Brian Kinstlinger: Right. Last question, you gave us some good insight into kind of two to three year outlook of where the business could be, as things continue to execute well. First of all, the first quarter is basically done tomorrow. So any update on, you’ve been you’ve had a business, it’s very lumpy. Any update on the first quarter trends as the quarters basically closed, or any insight into the lumpiness you might expect in this year in fiscal 23?

Annmarie Gayle: I wish I could talk about the — we’re still evaluating the quarter. But what I can see, we’ve been I see good traction in the level of quotations so far. So you we always measure the business and its progress by the number of proposals we’re putting out or, a number of inquiries and actually writing proposals because by the time that we’re writing a proposal, it’s been really, really qualified that this is our opportunity. It’s a timing issue. And I can say that I see we are definitely writing more proposals than we were this time last year.

Brian Kinstlinger: Okay, thanks so much.

Annmarie Gayle: You’re welcome. And thank you for the questions, Brian.

Operator: Our next question comes from the line of Graham Mattison with Water Tower Research. Please proceed with your question.

Graham Mattison: Hi, good morning. Congratulations on the progress with the Echoscope PIPE. What do you attribute the success you had in that, in that area? Is it more in terms of what’s driving growth? Is it more of cost savings that you are able to provide or in the efficiency? Or is it the technology benefits versus the other solutions out there?