Financial Data and Key Metrics Changes - In fiscal year 2023, total revenue decreased by 12.9% to 22.2 million in fiscal year 2022 [69] - Marine Technology Business revenue fell by 17.7% to 14.7 million in the previous fiscal year [69] - Gross profit decreased to 2.7 million, with an operating margin of 14.2% compared to 22.5% in the previous year [95] - Net income after taxes was 0.28 per diluted share, down from 0.38 per diluted share in fiscal year 2022 [96] - Cash and cash equivalents increased to 22.9 million in fiscal year 2022, with no debt [73] Business Line Data and Key Metrics Changes - Rental revenues in the Marine Technology Business fell by 31.4%, significantly impacting overall performance [13] - Engineering Services Business did not meet business plan goals due to order take being affected by the war in Ukraine [18] Market Data and Key Metrics Changes - Sales from Asia decreased by 19.5% due to weak demand and macroeconomic factors [17] - The marine industry faced cancellations and postponements of major offshore renewable projects due to inflation and supply chain issues [12] Company Strategy and Development Direction - The company is focused on growth pillars including Echoscope imaging sonar, DAVD systems, and digital audio communication systems [40][60] - Plans to expand growth strategy to include M&A activities to acquire complementary technologies [99] - Emphasis on business development in underwater imaging, defense underwater vehicles, offshore renewables, and underwater construction markets [77] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors have negatively impacted revenue and overall financial performance in fiscal year 2023 [26] - Positive signs of increased contracting and rental projects were observed in the first quarter of fiscal 2024, indicating potential recovery [4][5] - Confidence in the adoption of DAVD technology outside of the U.S. Navy is expected to increase in fiscal year 2024 [53][54] Other Important Information - The company has made progress in advancing the DAVD untethered system customization program and has delivered eight evaluation modified systems [65] - The company is working on a significant project with a major offshore service provider in the Middle East, quoting six Echoscopes for sale [52] Q&A Session Summary Question: What caused the revenue shortfall in the fourth quarter? - Management indicated that the revenue decline was due to postponed projects and weak demand in key markets [80] Question: Is the situation getting worse regarding order intake? - Management confirmed that many projects were stalling and not moving forward due to macroeconomic factors [104] Question: What is the status of the R&D tax credit? - The R&D credits are related to the company's foreign entity and are not expected to change [124] Question: When will technologies be deployed within Navy contracts? - Management stated that evaluation under programs can take several years, but progress is being made [116] Question: What is the outlook for the offshore renewable market? - Management expressed confidence in the offshore renewable market's potential once contractual hurdles are removed [128]
a Octopus (CODA) - 2023 Q4 - Earnings Call Transcript