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spk05: Welcome to the Geospace Technologies second quarter 2021 earnings conference call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Robert Kurta, the company's Chief Financial Officer, and Mark Tinker, CEO of Geospace Subsidiary Quantum Technology Services. Today's call is being recorded and will be available on the Geospace Technologies Investor Relations website following the call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star and 1 on your touchstone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We ask that you please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, press star 0. It is now my pleasure to turn the floor over to Rick Wheeler. Sir, you may begin.
spk02: Thank you, Brittany. Good morning, and welcome to Geospace Technology's conference call for the second quarter of our 2021 fiscal year. I'm Rick Wheeler, the company's president and chief executive officer, and I'm joined by Robert Curta, the company's chief financial officer. And also with us this morning is Dr. Mark Tinker, CEO of our Quantum Technology Sciences subsidiary. I'll first give an overview of the second quarter, and Robert will follow with an in-depth commentary on our financial performance. After a few last remarks, we'll open the line for questions that hopefully Robert, Mark, and I can answer. Some of today's statements may be considered forward-looking, as defined in the Private Securities Litigation Reform Act of 1995. This includes comments about product markets, revenue recognition, planned operations, and capital expenditures. Such statements are based on our present awareness while actual outcomes are affected by factors and uncertainties we cannot predict or control. Both known and unknown risks can lead to differing performance or results from what we say or imply today. These risks and uncertainties include those discussed in our SEC Form 10-K and 10-Q filings. As a convenience, We will link a recording of this call on the investor relations page of our geospace.com website, and I encourage everyone to visit and browse that site to learn more about GeoSpace and its products. Note that the information discussed and recorded this morning is time sensitive and may not be accurate at the time one listens to the replay. Yesterday, after the market closed, we released financial results for our second quarter of fiscal year 2021, which ended March 31st, 2021. Just as the COVID-19 plague worsened in some locations while improving in others, our business segments reflected similar divergence in the second fiscal quarter. Yet, despite the challenges the pandemic has thrust upon us, there are signs of recovery for the overall economy as well as the businesses we serve. In many places, COVID-19 restrictions are being lifted, air travel is ramping up, and businesses are reopening and returning to work. Nonetheless, the pandemic's severe impact is evidenced in the three- and six-month periods ended March 31, 2021. In our oil and gas market segment, gaps in demand for our OBX marine nodal systems continued through the second quarter. This led to much lower rental revenue throughout the first six months of the fiscal year compared to last year. Moreover, as earlier OBX rental contracts ran to completion, many of the planned contracts for follow-on work and new surveys could not be started due to COVID-19 lockdowns and travel restrictions. In consolation, we believe much of this work will resume as COVID-19 vaccines are broadly distributed and recovery from the pandemic gains momentum. Even now, requests for quotes on future OBX system rentals have increased, and some new contracts are already underway or about to begin. On another positive note, lower rental revenue from our oil and gas market segment was largely offset by revenue recognized from the sale of a large GCL land recording system that was delivered a year ago. Since that time, the initial down payment and monthly promissory note payments we've received toward the purchase have been accumulating on our balance sheet as deferred revenue. However, our ongoing due diligence review of this customer, including recent audited financial information, has determined that completion of all remaining payments is probable and that revenue from this sale should be recognized. Despite the negative effects of COVID-19 and in contrast to the oil and gas market segment, second quarter revenue in our adjacent market segment experienced growth of 7% compared to the same three months a year ago. with that growth expanding to almost 10% over last year's first six months. The improvement is mostly attributed to even larger growth from our industrial products and services, which includes our smart water meter cables and connectors and our contract manufacturing. Notably, however, a portion of this growth was partially offset by reductions in revenue from our graphic imaging products, where many of our customers continue to be negatively impacted by COVID-19. But as the pandemic abates, we believe demand will increase for these products as promotions and merchandising for schools, sporting events, and other social gatherings resume. The vast majority of revenue from our emerging market segment was recorded in our first fiscal quarter and is thus reflected in the six-month period ended March 31, 2021, with very little contribution in the second quarter. This revenue is affiliated with the contract awarded by the Department of Homeland Security to our quantum subsidiary in April of 2020. The contract called for providing the Customs and Border Protection U.S. Border Patrol with a novel border and perimeter security solution comprising our unique technological advances in sensors, systems, and data analytics. We're very pleased that the deployment and installation of this advanced border and perimeter security solution proceeded on course. This accomplished expansion and diversification of products and services in our emerging market segment serves as a demonstration that Geospace is, first and foremost, an innovative technology company. Our focus strategy is to push highly engineered-for-purpose products into the hands of customers in other markets as well as in our oil and gas market, and we see even more of this occurring in our future. Before turning the call over to Robert, I'd also like to highlight that as of March 31st, 2021, we have purchased over 275,000 shares of our common stock as part of the stock repurchase plan we announced in November of 2020. This is just yet more evidence of our returning value to shareholders. At this point, I'd like to turn the call over to Robert for more financial detail.
spk00: Thanks, Rick, and good morning. Before I begin, I'd like to remind everyone that we will not provide any specific revenue or earnings guidance during our call this morning. In yesterday's press release for our second quarter ended March 31st, 2021, we reported revenue of $23.9 million compared to last year's revenue of $25.9 million. The net loss for the quarter was $7.2 million or 53 cents per diluted share compared to last year's net loss a $3.8 million or $0.28 per diluted share. For the six months ended March 31, 2021, we reported revenue of $52.3 million compared to revenue of $43.6 million last year. Our net loss for the six-month period was $8.2 million or $0.61 per diluted share compared to last year's net loss of $13.1 million or $0.97 per diluted share. Our oil and gas markets revenue is as follows. Our traditional seismic product revenue for the second quarter was $789,000, a decrease of 61% compared to revenue of $2 million last year. Revenue for the six months of 2021 was $1.8 million, a decrease of 59% compared to revenue of $4.4 million for the same prior year period. The reduction of revenue in both comparable periods is due to lower demand for traditional sensor products and marine seismic products. Our wireless product revenue for the quarter was $14.8 million, a decrease of 8% compared to revenue of $16.1 million last year. Wireless product revenues for the six months was $26.5 million, an increase of 6% compared to revenue of $25 million for the same period last fiscal year. The three-month and six-month periods both benefited from the recognition of $12.5 million in revenue from the sale of land wireless system delivered to our customer in the second quarter of fiscal year 2020. Excluding this sale, revenue from wireless products for the three and six-month periods was $2.3 million and $14 million, an 85% and 44% decrease in revenue for the same periods of fiscal year 2020. The six-month period is partially offset by the $9.9 million sale of used OBX rental equipment. The decrease in revenue is a result of selling a portion of our OBX rental fleet and lower utilization of the remaining OBX rental fleet caused by COVID-19-related lockdown and travel restrictions globally. We believe as COVID-19 restrictions are lifted or expired, seismic surveys using our equipment will resume or commence, resulting in a higher level of utilization of our OBX rental fleet. We believe the shift has begun. Our reservoir product revenue for the second quarter was 571,000, an increase of 69% compared to revenue of 337,000 last year. Reservoir product revenue for the six months period was 600,000, an increase of 8% compared to revenue of $55,000 last year. The increase for the three-month and six-month periods reflect a higher level of demand for our engineering services. We do not expect meaningful revenue from these products until we are engaged in a contract for the delivery of a permanent reservoir monitoring system. We continue to discuss PRM products with multiple customers but do not expect any significant PRM-related revenue to be recognized in fiscal year 2021. We believe a global recovery from the COVID-19 pandemic will increase energy demands. Increased energy demands will re-inflate demand for oil and gas, and our PRM systems provide the preeminent tool for oil and gas companies to maximize production from existing assets at lower cost and a reduced carbon footprint. Moving to our adjacent market segments. Our industrial product revenue for the second quarter of fiscal year 2021 was $5 million, an increase of 19% over the second quarter of 2020. Industrial product six-month revenue for fiscal year 2021 is $9.4 million, an increase over the same period in 2020 of 21%. Both periods revenue increases are due to higher sales of our water meter cable and connector products and higher demand for our contract manufacturing services. Imaging product revenue for the second quarter was $2.6 million, a decrease of 10% compared to last year's revenue of $2.9 million. The six-month revenue for imaging products for fiscal year 2021 is 5.1 million, a 6% decrease when compared to the same period in 2020. The decrease in revenue for both periods is due to lower demand for our products due to COVID-19 related restrictions on social gathering. We believe when these gatherings resume, demand for these products will increase. Finally, revenue from our emerging market segment totaled $165,000 for the three months and $9 million for the six-month period ending March 31st, 2021. Prior year revenue was $372,000 for the second quarter and $469,000 for the six-month period ending March 31st, 2020. The decrease in revenue for the three-month period over the prior year is due to fewer sales of our specialty border and perimeter security products. The increase in revenue for the six-month period is due to the partial completion of the contract awarded in April 2020 with Customs and Border Protection U.S. Border Patrol. We expect to complete this contract within fiscal year 2021. Our second quarter fiscal year 2021 operating expenses decreased by 2.4 million, or 21%, compared to the second quarter of 2020. The six-month operating expenses decreased by 4.5 million, or 21%, when compared to the same prior year period. The decrease in operating expenses for the three-month and six-month periods is due to reduced personnel costs related to our cost reduction program that began in fiscal year 2020, a non-cash decrease to the fair value of contingent earn-out liabilities for our quantum and opti-size acquisitions, a decrease in research and development project costs, and a reduction in general business expenses related to our business operations. Our six-month cash investments into property, plant, and equipment is $1.7 million. Depending on demand for our OBX Marine Rental Equipment, we expect fiscal year 2021 cash investments into our rental fleet to be approximately $2 million. And investments into our property plant equipment could be as much as $3 million. Our balance sheet at the end of the second quarter reflected $35.1 million of cash in short-term investments. We have no long-term debt outstanding. and the available borrowings under our credit agreement is $18.5 million. In addition, we own numerous real estate holdings in Houston and around the world that are owned free and clear without any leverage. That concludes my discussion, and I'll turn the call back to Rick.
spk02: Thank you, Robert. COVID-19 has not yet gone away, but fortunately, nor has our resolve to overcome the challenges it created. Many people continue to be impacted, but relief seems to be in sight, especially as vaccines are more broadly distributed throughout the world. In parts of the U.S., more than 40% of the population has been fully vaccinated, and in some countries, even higher rates have been achieved. As economic conditions improve, the engines of commerce everywhere will accelerate. We firmly believe this will translate into higher demand for our products and services, including a further upward climb for those products that have seen growing demand despite the pandemic. In the broader landscape, the world will need energy to fuel its rebounding economies, and it will need even more energy to raise the quality of life for those portions of society continuing their journey out of poverty toward a higher standard of living. It must be remembered that oil and gas will remain the primary means of supplying this energy for some time to come. As we look back over the course of time, Geospace has navigated a continuum of cyclical industry ups and downs, and it appears that a viral pandemic will now be added to that list of overcome challenges. In steering our course, we have exercised conservative management and consistently maintained a strong balance sheet with zero debt and ample liquidity. All the while, and without interruption, we have steadfastly advanced our technologies to new levels across multiple products and have diversified our interests into new markets. We believe this measurable success will continue, and I'd like to personally thank all of our hardworking employees, valued clients, and trusted shareholders for their help and support as we strive to accomplish even more. This concludes our prepared statements, and I'll now turn the call back over to Brittany for questions.
spk05: The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your touchtone phone. If at any point your question is answered, you may remove yourself from the queue by pressing the pound key. Again, we do ask that while you pose your question that you pick up your handset to provide optimal sound quality. And thank you. We will take our first question from Bill Deslam with Titan Capital. Your line is now open.
spk01: Good morning and thank you. Let's start, if we could, with OBX. And your comments infer that you're starting to see some green shoots once again in that segment. So the question is, when do you expect the OBX rentals to to return to the prior peak quarterly run rate levels?
spk02: That's a very good question, Bill, and thanks for calling in. I don't know that we could actually go so far as to say they'll reach prior levels that they were. I mean, that remains to be seen. I certainly think the opportunity is there for that to occur. But as far as the green shoots, we are already seeing that. We have contracts that are underway now, new contracts, and ones that are about to begin. And we're certainly answering quotes for those that some of them even extending into the next fiscal year. So, I mean, it's a good question, but I don't really have an answer for you. I think this is going to be contingent on how the recovery, you know, takes place and how these projects get scheduled. There's certainly been some disruption actually within the actual service providers, as it were, so some of that has to get sorted out as well.
spk01: Is it your sense that from this point forward that, at least for the foreseeable future, you will have sequential increases in revenue from the OBX rentals?
spk02: I think that we believe that demand is going to increase. So to what extent that would lead to, in your mind, sequential increases in revenue, then there's certainly likelihood that's the way it will manifest.
spk01: Right, understood. Okay, thank you. Let me shift to PRM, and then we can make sure that Mark has an opportunity to participate too.
spk00: Okay.
spk01: So relative to the, I'm going to call it the no-bid tender, the tender that was out and that you chose not to bid on, would you please give us an update on that? And is it still the... PRM system that is number one, I guess, in the lead in terms of potential opportunities?
spk02: Discussions with that company are ongoing and continuing. There are other oil companies that we are also talking to, so which one would manifest first, I really couldn't say, because this interest is pervasive, and I think Oil companies are realizing that to maximize these resources, which they've already learned to do, that PRM is again going to continue to provide a good way of doing that. That being said, I can't tell you which of those companies that we're currently in discussions with would manifest into a first system. But we think we can accommodate any and all of them as they would come on board. As we said, we don't expect any of that to translate into any sort of revenue in this fiscal year, certainly. But nonetheless, discussions keep going.
spk01: Let me take this a step further. Your comments just in answering the question seem more favorable than maybe what we've heard in the past and certainly more favorable that if someone were new, to the company and heard that you hadn't sold a system since 2012, it sounds like something different is unfolding. Would you maybe expand upon that or just correct me if I'm wrong?
spk02: No, I think things are unfolding differently, and it's certainly with more interest that's being expressed. You know, if you think about it, the oil companies, they're – Their reactions have had to deal with a destruction of demand in the last year. So the focus on oil companies has been how to navigate that particular circumstance, and with the economy shutting down, air travel, just demand in general. What they're now grappling with is the recovery and the demands that that will now place on their existing resources. They've already learned that there is a lot of success gained in being able to leverage existing resources. OBX is a part of that as they are exploring and examining reservoirs near their existing platforms and infrastructure. And to this extent, as I've mentioned before, there's interest now extending into the deepwater as we have a lot of OBX, our deepwater version of that product in play. So I certainly believe that With that new focus on being able to adjust to an increasing demand, I think that brings new attention to PRM, especially in light of maximizing their existing resources.
spk01: Rick, one more question, please, and this is from a point of ignorance. If an oil company were to install a PRM system around a platform that they otherwise would would use OBX to do a shoot to identify new reserves, would they be able to use the PRM instead? And I'm asking the question because I think of PRM as more that the whole 4D being able to watch over time, but it seems like maybe it would also be able to do the work of what the OBX would otherwise be doing with its initial shoot also.
spk02: No, I think your original perspective is actually the more correct one. The PRM systems, generally speaking, are located above a reservoir. They can be quite large, as you well imagine. But the OBX, it's more utilized in examining nearby potential resources. So, you know, where there's a reservoir, oftentimes there are other reservoirs that are very near that one. To that extent, I think the OBX is extending beyond the imaging capability of the PRM systems. To some extent, they can see out and beyond the geologies that they're centered over, but for the most part, that requires the additional exploration effort.
spk01: Great. Thank you. Let's switch to quantum and border security, please. Mark, I have a few questions, but how about if we just start with having you give us an update in terms of what you are seeing and where – maybe just let's just start there just with an update and just kind of open it up for us, if you would, please.
spk04: Bill, I've never known you to ask such a specific question before. I'd be delighted to. The update is contract performance has gone very well on the revenue that everyone is aware of. I'm very, very, very pleased with what we have been able to accomplish from the architecture, design, the manufacturing, and the deployment of our system. It's a one-in-a-kind system, and we now have it in the ground and operational. and we're now being able to reference that system in going forward. So as we look to the future, we're going to see where we are going to be able to apply its capabilities for other customers who are interested in similar solutions of such a scale. It's kind of like a PRM type of model. We expect it with more frequency, but where we are looking at larger scale opportunities. So quarters will bounce around on the low end and then we'll have a big quarter like we did last one. So I'm pretty pleased with where we're sitting right now and the fact that we can go forward and use this as a reference system.
spk01: And in Robert's opening remarks, he referenced that the system should be completed this year. My sense was that it would have been done would have been done by the end of March. Was there something that extended, or did I just misinterpret the opening remarks?
spk04: Both of you are right. To be honest, the system's in the ground doing its job. There's just nuances on the end of the contract that we have to tie up, and right now we have a COVID scenario and we have an immigration scenario that is taking our customers' resources. So there's a few loose ends that we clean up contractually. That's always part of the contract. And we're just going to put those off for about a month or so. But it's nothing that's of any substantial nature.
spk01: Understood. So I'm going to ask you to characterize what disruption, if any, you have experienced from the administration transitioning. And I'm not trying to get you to bash the administration. I think there's There's disruption that takes place any time that there is administration change, but hoping that you can characterize it and to what degree it's creating challenges and or opportunities for quantum.
spk04: I don't think the landscape has changed from our perspective around the administration change. The Border Patrol remains the Border Patrol under Customs and Border Protection within the Department of Homeland Security. And whether you were under the prior administration or this one, putting people in place of stability is the biggest factor. And that is happening. And I wouldn't label it as a boundary between prior and now. Now, overall, what's happened, not with so much the administration, but what we see on the Hill remains also the same, which is we have bipartisan support for the types of capabilities that we provide. because we are doing a job that is a security function. And so it enjoys that bipartisan support, and that hasn't changed either.
spk02: I think also, Bill, it's important to sort of make everyone aware that we're not building or we're not a part of building a wall or any of that sort of thing. So, I mean, clearly... there has been a withdrawal of funds and other work and effort towards that end. Where that goes, who knows? That's something that I guess will unfold over the course of time. But that's not what we were involved in or are involved in. Our technology is advanced in a different way. And if you'll remember, even in Biden's recent address to Congress. You know, he mentioned the fact that even his administration is interested in deploying technology solutions on the border for our security. So that's the area that we really sponsor and employ ourselves doing.
spk01: Great. That's helpful. And the SBIR Phase 3 program, approval that you have, does this apply to government contractors or is it just the Border Patrol? And I'm asking this question in the spirit of a prior conference call you had referenced some interaction with contractors.
spk04: It is not bound to Homeland Security at all. It goes across the federal space.
spk01: And would that include when working with a government contractor or would you really need to be operating under whatever level that they have?
spk04: No, it is not bound by whether we are the prime or the sub. We can still receive a sole source for the procurement of our systems.
spk01: That is helpful. You may have partially answered this question earlier, but I have been pondering why a sector of the Border Patrol wouldn't just on their own order additional equipment to deploy in areas that they see that are high risk rather than coming from the I guess I'll say from corporate, for lack of a better phrase, because I thought the SBIR Phase 3 would allow for any sector to do such a thing. Would you talk to that point and how you are viewing that?
spk04: Well, remember, the headwaters for funding within the government start on the Hill, where they're authorized and appropriated by Congress. And then as they trickle down into the various departments, each department does it somewhat differently. Homeland Security has more open buckets, if you will, for funds, whereas Department of Defense is far more assigned. So it remains in D.C. at that level within the Border Patrol, and that's how they then choose to go forward with where they deploy because they view all borders, not just our southern borders, holistically to decide where best to apply those resources.
spk01: Great. Thank you all for taking so many questions. You're welcome.
spk05: And once again, if you would like to ask a question, please press the star and 1 on your touchtone phone at this time. And it appears, oh, I apologize. We do have a question from Glenn Kluca with Kluca Capital.
spk03: Hi, guys. Good morning.
spk02: Hi, Glenn.
spk03: Wanted to dive into a couple topics. First of all, pleased, again, that the cash is ever-growing. It's great for the balance sheet. Using it to repurchase stock gives us a lot of confidence. I wanted to ask about the GCL contract that seems to be performing well. What do you think would trigger reclassifying that from deferred revenue to another line item on the balance sheet, such as unrestricted cash, et cetera?
spk00: We actually recognize that sale in this quarter, so we no longer have that recorded as deferred revenue. It's actually revenue now.
spk01: Okay.
spk02: Right. And, I mean, you know, as it was the entire story, I mean, there was a case where the through the public financial statements of S.A. Exploration, they had in times past indicated in their filings that they were under risk of not remaining a going concern. So that sale was to them prior to that filing. And that prompted us that we needed to hold that as a you know, a reserve on revenue. So that's what ended up putting it on our balance sheet over the course of time. But since then, you know, they've gone through a bankruptcy, emerged from that bankruptcy, and more recently we've gotten audited financial statements, all of which indicated that, as we've mentioned in the press release, that Probability of full payment on this is high, so it made sense to go ahead and recognize that revenue now that they've emerged.
spk03: Great. I appreciate your conservative classification of that in prior quarters and appreciate your instincts on their viability as eventually coming through to pay that. It's great to see. Did those payments, once they were reclassified from deferred Did they flow through and add to the unrestricted cash number?
spk02: I think they were already in the cash statement on the balance sheet. Yep, that's correct.
spk03: Okay, great. Moving on to other sales like that, do you expect – so you had a good OBX sale, you had a good GSL sale. Do you expect more like that consistently, or do you think it will be more of a lumpy pipeline in the next couple of years?
spk02: Glenn, it's going to be lumpy. It always really has been. So I think your instinct on that is accurate. That's how it's likely going to manifest in the course of time.
spk03: Okay, great. Then flipping over to a new investment, Robert, could you repeat, I didn't quite catch the amount you're expecting to project and invest in new equipment and PP&E?
spk00: Yeah, so we think we could invest as much as $3 million towards PP&E. Plant property and equipment, we've already put almost $2 million towards that this fiscal year. And then on our rental fleet, depending on what kind of demand we see throughout the rest of the year, we expect to spend as much as $2 million. That could change, though, depending on if things that we don't have visibility to today come up.
spk03: Great. That's encouraging. That may portend some of the green shoots that Bill DeZellum was asking about. To me, that's a sign that you're expecting some activity there. Of course, you can't commit because we don't know, but it's encouraging.
spk00: It is encouraging. I was worried.
spk03: So to kind of dovetail to that, if there is no significant PRM award in the next couple years, if that doesn't contribute significantly What do you think, and you can speak in very general terms and not looking for specific guidance, but what segment or subsegment do you think would then be the best contributor to top line and bottom line?
spk02: Well, I think our wireless portion of the oil and gas markets has historically been the other main producer, and I suspect that will remain to be the case. The traditional products, which typically are the sensors and that sort of thing, those sort of manifest as consumable items as exploration takes place, primarily on land. Land exploration is still very much in a depressed state compared to prior norms. So we don't have evidence that that's going to change right away. But to what extent it does, we believe our GCL, which is a part of our wireless product line within the oil and gas, we believe that would be one that would continue to contribute because it's an easier deployment, less weight, all that. It just makes the seismic survey capabilities easier.
spk00: I mean, further to Rick's comments, though, in the land seismic world, there's a huge amount of stacked equipment that our customers have. So, recovery, it would take a lot of recovery for us to see anything significant within that line of product.
spk02: Yeah, the one thing that might accelerate some of that, to Robert's point, is, you know, with this stacked equipment, much of it is older legacy type equipment, not all of it, but some of it is. And to the extent that those are much less efficient and costly to operate than the newer technologies such as we offer today, then they may be abandoned in some sense. So we'll just have to see how that turns out.
spk03: Okay. Great. Thanks for the color on that. One last question, flipping back to PRM. Just in general, can you walk us through the lag between if you were, if GISTX did get an award, what is typically the lag between the award and when the first chunk of revenue gets recognized?
spk00: Typically, you know, that depends a lot on the size of the contract, the amount of cable we're providing. You know, that depends That has a big factor in that. It also could have some factors based upon weather windows and where this equipment needs to be installed that could affect when that happens. Typically, it could be as long as six months out or up to a year or even more.
spk02: It also amounts to sifting through all the revenue recognition rules. which do not necessarily represent cash flow as those types of contracts manifest.
spk03: Fair enough. Great. Carbon sequestration is, and I know Dr. Tinker has, I've heard excitement in his voice on some past calls, but do we see that as anything that might contribute create business, or has there been any interest in that, or is that just more of a way long-term opportunity?
spk02: No, it definitely has potential as future business. It is a rather infant market with respect to how all that might manifest. I think most focus these days is on the actual capture and storage aspects. Where we would fit in mostly is in the monitoring aspects of a reservoir for But keep in mind too that PRM systems really fall into utilization of carbon capture because oftentimes they inject CO2, flood these reservoirs with CO2 to enhance their oil recovery. And they learn where and how to do that oftentimes by monitoring the reservoir and its changes. with the PRM. So the PRM actually becomes a carbon sequestration management tool in those situations where they are actually using CO2 for that enhanced oil recovery.
spk03: Great. Well, Rick, that sounds like it's also a good sales pitch to coach your sales team with. I think I'm a believer.
spk02: Well, it's all true. Great.
spk03: That's all I have for today. You guys take care.
spk02: All right. Thanks, Glenn.
spk05: And we have no further questions at this time. I will turn the floor back over to Rick Wheeler for any additional or closing remarks.
spk02: All right. Well, thank you, Brittany. And I'd like to thank everybody that joined our call today. And we'll look forward to speaking with you again on our conference call for the third quarter of fiscal year 2021, which will occur in August. So thanks and goodbye.
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