Coda Octopus Group, Inc.

Good morning. Welcome to Coda Octopus's 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 31st, 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, Anne-Marie Gale, its interim CFO, Gail Jardine. Following their remarks, we will open the call for questions. Before we begin, Jeff Turner will make a brief introductory statement. Mr. Turner, please proceed.

Thank you, operator. Good morning, everyone, and welcome to Coda Octopus third quarter fiscal 2024 Earnings Conference Call. Before management begins their formal remarks, we'd 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 statement. For more detailed risks, uncertainties and assumptions relating to our forward-looking statement, please see the disclosures in our earnings release and public filing 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 dates the forward-looking statements are made except as may be required by law. We refer you to our filings 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 risks and uncertainties identified in our Form 10-K for the year October 31, 2023 and Forms 10-Q for the first, second and third quarters of this fiscal year. You may get Coder 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 Coder Octopus website. Now, I will turn the call over to the company's chair and CEO, Anne-Marie Gale. Anne-Marie?

Thanks, Jeff, and good morning, everyone. Thank you for joining us for our third quarter 2024 earnings call. Our revenue in the third quarter 2024 increased by 12% over the third quarter 2023 revenue, and we have delivered a solid set of results, including increasing our gross profit margin, operating income, net income, and earnings per share. During the second and third quarters fiscal year 2024, there was a notable slowdown in the pace of placing orders concerning U.S. defense programs. We believe that this is attributed to the funding gap created by the upcoming election, which is not unusual in a presidential election year. This has resulted in lower order intake from U.S. defense programs in the second and third quarters of fiscal year 2024, an area critical for our growth strategy. Notwithstanding these temporary challenges, I am very pleased with our overall results, including increasing revenue by 12%. In the third quarter 2024, the marine technology business revenue increased by 6.5% over the third quarter 2023. I am particularly pleased with the increased utilization of our rental assets so far in fiscal year 2024, including during the third quarter, resulting in an increase in our gross profit margin to 82.9% in the third quarter 2024, compared to 82.1% in the third quarter 2023. As stated previously in the year, we expected that the revenue of our engineering business would be backloaded. And indeed, in the third quarter, the engineering business saw an increase in revenue of 19.8% over the third quarter 2023 and an increase in gross profit margin from 50% in the third quarter 2023 to 62.6%. Moving to our third quarter 2024 overview. During the third quarter of 2024, we continued to make progress against our key growth drivers and we participated in some high-profile and high-impact events. To recap, our strategy is to work to include our technologies into defense and other programs which have an opportunity profile for multiple-year purchases of multiple systems. We have been performing business development focused on achieving this. The DABED program is a good example of this, where we're seeing funding allocated onto the program for repeat annual purchases, including pull-through ecosystem sales. This model is critical for the success of our growth strategy. Bearing this in mind, in the third quarter, we continue to execute against the strategy outlined. A short summary of some of the highlights in the third quarter are we completed a successful demonstration of the Ecoscope Pipe sonar technology for a new major U.S. defense contractor for multiple on-the-sea applications. Following this very successful demonstration, we're now going through this contractor's vetting process. We are very excited and pleased with the growing interest and realization of the power and added imaging capability that our real-time 3D microscope sonar uniquely provides over the traditional sonar system. Based on the ship hull scanning platform, which we developed and delivered to our Navy customer in fiscal year 2023, We have now completed several new ship hull scanning trials with different US Navy groups and for different applications. Again, we're particularly pleased with the momentum and level of interest we're seeing in this area of ship hull scanning applications for which there is a real requirement to find a global solution. Although this application is challenging, largely due to the complex geometry and features on the ship hull, we have developed a solid understanding and capability and are supporting several Navy groups with their ongoing evaluation of our custom-designed ship hull scanning solution, which has been developed under a multi-year U.S. Navy program. We provided pre-mission support and training on the David to two Navy commands in preparation for their field deployment on critical missions. The utilization of the David in operations is vital for the continued adoption within the fleet, and we're happy that these teams are now actively using the technology and realizing the benefits for their live operations. We also continue to see that these commands are submitting funding requests for further investment in the technology. This again is exciting because we're seeing pull through sales of the Ecoscope from the DAVID program as we continue to build upon these relationships which we're establishing. We provided support to a major defense technical demonstration event The Rim of Pacific Exercise, the Rim Pack, held biannually in Pearl Harbor, Hawaii, is the world's largest international maritime warfare exercise. At this event, we supported the Navy's MOTSU-1 Division to actively demonstrate the combined DAVID and ECOSCOPE solution to multiple dive teams from many visiting countries who specifically attended in order to dive the DAVID system. Subsequent to the event, we have engagements with several allied navies for local trials of the DAVID and the Ecoscope systems. We supported NIWIC in their demonstration of the Ecoscope technology at the capability demonstration events for the Coastal Trident for undersea vehicles applications. The Ecoscope was mounted on the BIDIARAY defender platform. We were able to demonstrate the capability of the Ecoscope to many potential users who we believe were able to witness the power of the technology and its applicability to their undersea defense applications. Let me now turn the call over to our interim CFO, Gail Jardine, to take you through our financials before I provide our closing remarks.