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Operator
Welcome to the Geospace Technologies fourth quarter and four-year 2023 earnings conference call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Robert Curta, the company's Chief Financial Officer. 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 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. We ask that you please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance again, please press star 0. It is now my pleasure to turn the floor over to Rick Wheeler so you may begin.
Rick Wheeler
Thanks, Michael. Good morning and welcome to Geospace Technologies conference call for the fourth quarter and year end of fiscal year 2023. As mentioned, I'm Rick Wheeler, the company's president and chief executive officer, and I'm joined by Robert Kurta, the company's chief financial officer. In our prepared remarks, I'll first provide an overview of the fourth quarter and year end, and Robert will then follow up with more in-depth commentary on our financial performance. After some final comments, we'll open the line for questions. Some of today's commentary on markets, revenue recognition, planned operations, and capital expenditures may be considered forward-looking. as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on our present awareness, but actual outcomes are affected by uncertainties we cannot control or predict. Both known and unknown risks can lead to results that differ from what is said or implied today. Some of these risks and uncertainties are discussed in our SEC Form 10-K and 10-Q violence. For convenience, we will link a recording of this call on the Investor Relations page of our geospace.com website. which I hope everyone will visit and browse to learn a little bit about the company and our products. Note that the information recorded today is time sensitive and may not be accurate at the time one listens to the replay. Yesterday, after the market closed, we released our financial results for the fourth quarter and year end of fiscal year 2023, which ended September 30th of 2023. We were incredibly pleased to announce to our shareholders yet another quarter of positive earnings. Combined with the successful quarters earlier in the year, fiscal year 2023 closed with an overall net income of $12.2 million. Moreover, full year revenue of $124.5 million represents the largest figure the company has recorded since 2014. Our improved performance is the result of accelerated efforts by our dedicated employees in reducing costs and streamlining our operations. as well as better market conditions for our products in both the oil and gas and adjacent market segments. Increases in utilization and rentals of our OBX ocean bottom nodes were the largest revenue driver in fiscal year 2023. In fact, the company's total revenue for rentals more than doubled from last year's figure. Our conservative financial management and preservation of a strong debt-free balance sheet have given us essential tools needed to maintain leadership in technology innovations, even in depressed markets. We believe this has strengthened our ability to take advantage of these improving market conditions and will continue to do so in the future. This is strongly evidenced by recent developments in our oil and gas market segment. In the fourth quarter, we announced a $3 million rental agreement. for our highly advanced Mariner product, which is a shallow water seabed seismic data acquisition node. In addition, we announced a $5.7 million contract with an international seismic company for specialized geophones designed for use in their proprietary system. And prior to both of these announcements was our announcement in June of a $20 million rental contract for our Mariner ocean bottom nodes. We expect the delivery of this system to complete in the next few weeks with the rental term commencing thereafter. While we do expect gaps to occur in some of our OBX rental contracts, we anticipate the ocean bottom node market remaining strong over the coming fiscal year. Results from our adjacent market segment proved equally compelling as total revenue for the fourth quarter and full fiscal year ending September 30th, 2023, came in at $10.6 million and $49 million, respectively. The full year amount for this segment sets yet another new company record. Our efforts toward revenue diversification have seen some success in the adjacent market segment, where several new quarterly records were set over the course of fiscal year 2023. The outstanding performance for the year of our industrial products largely stems from the greater demand for our water meter cables and connectors, which was the primary factor pushing the segment's overall revenue growth 25% over last year's results. The company's emerging market segment generated 0.8 million in the fourth quarter and 1.2 million over the full 2023 fiscal year. During the second fiscal quarter, we announced a $1.5 million contract with the Defense Advanced Projects Research Agency, otherwise known as DARPA. This contract is a phase two small business innovative research or SBIR contract to explore a new SADAR capability designed to monitor acoustic energy sources of interest on nearby land, water, and air environments. Revenue over the course of fiscal year 2023 for this segment includes amounts derived from this contract as well as fulfillment of a separate unrelated contract with a major defense contractor. We continue to explore further opportunities for contracts with DARPA and other governmental agencies, as well as new private sector applications for SADAR and Quantum's unique analytics in the energy transition market. Complementing our operational success in fiscal year 2023 were substantive gains on the company's balance sheet. In addition to increasing stockholder equity by more than $11 million, we ended fiscal year 2023 with a total of $33.7 million in cash, cash equivalents, and short-term investments. We further maintained an additional borrowing availability of $13.1 million under an unused bank credit agreement with no borrowings outstanding. As a result, our total liquidity as of September 30, 2023, was $46.8 million. In addition, we own wholly unencumbered properties and real estate in both domestic and international locations. With that, I'll now turn the call over to Robert to give a little bit more financial detail on the fourth quarter and year-end performance.
Michael
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 fourth quarter ended September 30th, 2023, we reported revenue of 29.3 million compared to last year's revenue of 25.9 million. The net income for the quarter was 4.4 million or 33 cents per diluted share compared to last year's net loss of 8 million or 62 cents per diluted share. For the 12 months ended September 30th, 2023, We reported revenue of $124.5 million compared to revenue of $89.3 million last year. Our net income for the 12-month period was $12.2 million or $0.92 per diluted share compared to last year's net loss of $22.9 million or $1.76 per diluted share. The oil and gas market segment produced revenue of $17.8 million for the three months ended September 30, 2023. This compares with revenue of $14.8 million for the same period of the prior fiscal year, an increase of 20%. For the 12-month period, the segment contributed revenue of $74 million versus $49.1 million for the same prior year period. The increase for the three-month period is due to higher utilization of our OBX rental fleet, increased sales of wireless seismic products, and higher demand for our marine products. The 12-month increase in revenue is due to high-level utilization of our OBX rental fleet, increased sales of our seismic sensor, and also of our marine products. Our adjacent market segment revenue is as follows. Our industrial product revenue for the fourth quarter of fiscal year 2023 was $7.6 million compared to $7.2 million for the fourth quarter of 2022. Industrial products 12-month revenue for fiscal year 2023 was $36.9 million, an increase over the same period in 2022 of 44%. Both periods' revenue increases are due to higher sales of our water meter, cable, and connector products. Imaging product revenue for the fourth quarter was $3 million, a decrease of 18% compared to last year's revenue of $3.7 million. The 12-month revenue for imaging products for fiscal year 2023 was $12.1 million versus $13.5 million for the same period in 2022. The decrease in revenue for both periods is due to lower demand for our thermal imaging equipment and consumable film products. Finally, revenue for our emerging market segment for the fourth quarter was $800,000 compared to $100,000 for the same period in 2022. The 12-month revenue for this segment for fiscal year 2023 was $1.2 million compared to $700,000 for the same prior year period. This segment has a backlog of approximately $2 million that will be recognized in fiscal year 2024. Excluding non-cash decreases to the fair value of contingent earn-out liabilities and a non-cash goodwill impairment, both recorded in fiscal year 2022, our operating expenses modestly increased by $500,000 for the fourth quarter and decreased by $200,000 for the 12-month period of 2023. Our 12-month cash investments into our rental fleet was $9.9 million and cash investments into property, plant and equipment was $4 million. In fiscal year 2024, we anticipate to invest approximately $9 million into our rental fleet and $4 million into property, plant and equipment. Our balance sheet at the end of the fourth quarter reflected $34 million of cash in short-term investments, and we have $13 million of additional liquidity from our credit facility. 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. Thank you, Robert.
Rick Wheeler
As we enter the new fiscal year, we're enthusiastic about the plans we set in motion to continue being profitable. As a part of that, we intend to regularly evaluate each business segment with our efforts focused on driving revenue opportunities and assessing additional areas where costs can be reduced. However, it must be noted that time gaps in our performing seismic industry contracts are likely to result in uneven revenue for portions of the coming year. Despite this expected variability, though, we remain encouraged by the volume of planned exploration activity during the year and the resultant demand for our products it should create. In conjunction with an approved market, we believe our strong balance sheet and technological leadership will be pivotal to our success in fiscal year 2024. This concludes our prepared commentary, and now I'll turn the call back over to Michael for any questions from our listeners.
Operator
Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we do ask that while you pose your question that you pick up your handset to provide optimal sound quality.
Donald Collins
And once again, that was star 1 if you had any questions or comments.
Operator
And we do have our first question from Martin Lorenzen, a private investor.
Martin Lorenzen
Good morning, Texas.
Rick Wheeler
Hi, how are you, Martin?
Martin Lorenzen
I'm fine, thank you. Can you please elaborate on the significance of your ITRON-AQUANA collaboration you posted about in, I think, June of this year? To what degree does it drive your revenue volume within that water segment?
Rick Wheeler
Well, that development is very recent, so it really hasn't manifested into hard revenue as of yet, but we certainly anticipate that it will. It's a great partnership. It puts our quanta valves into a distribution environment that should be very healthy. So I can't give you exact numbers on that, but look forward to it.
Martin Lorenzen
Great. That's good to hear that it hasn't materialized yet in the numbers. And I guess on the product side, how long would be the lifecycle of such a water meter?
Rick Wheeler
Actually, these systems are designed for at least 20 years of operation, typically. There is a component that sometimes needs to be replaced after maybe a decade or so, which is a battery that drives some of the electronics in these smart meters, as it were. But they're designed for quite a long duration.
Martin Lorenzen
So would it be safe to assume that the product is relatively sticky and that your customer base won't erode over time once you gain market share there?
Rick Wheeler
Well, there are always dynamics in any sort of market as competition comes up, as processes change and approaches change to a technology such as smart water metering. But our belief is that the smart city expansion that we see really throughout the country, actually throughout the world, with respect to these types of instruments and technologies as well as outside of the water industry. But we expect this to be an ongoing part of our business for some length of time.
Martin Lorenzen
Okay, and so you try to roll it out in certain geographies where you think the market is underpenetrated, or how do you roll out that product?
Rick Wheeler
Well, it's definitely under-penetrated. As it turns out, in the smart meter industry, the water side of that affair, as opposed to electricity and gas, has generally been the lagger in that sort of deployment. The way you roll it out is through market penetration, as in any other market, through your sales efforts, your marketing efforts, and demonstrating the technology.
Martin Lorenzen
Okay.
Operator
Thank you.
Rick Wheeler
You're welcome.
Operator
And just a reminder, that was star one with any questions and or comments. And our next question comes from Bill Deslim with Titan Capital.
Bill Deslim
Thank you. Just quickly following up on the last question, when does the ITRON contract begin producing meaningful revenue?
Rick Wheeler
I'm not going to tell you that, Bill, because there are some things in place there that we're not really privy to reveal as it relates to our partnership with ITRON. But we don't anticipate it's going to be some lengthy period of time. ITRON is a well-known organization and certainly has these contracts already in place that will take place shortly in terms of their deployments.
Bill Deslim
Okay, not to pin you too far into a corner, but fiscal 24, you would anticipate that to begin?
Rick Wheeler
Yes, we do expect to see returns on that in fiscal year 2024, exactly right.
Bill Deslim
Okay, that's helpful. Moving along, if I may, the utilization, I think, Robert, you'd mentioned the utilization for your offshore rental fleet was high. What was the utilization rate in fiscal Q4?
Michael
It's very similar to fiscal year Q4. very similar to Q3. You know, it's not at full capacity, very close to full capacity.
Bill Deslim
And so that may then explain my next question, which you all have been very cautious about the spending that you will have to build out your rental fleet And yet you've talked about, I think, 9 million additions to the rental fleet. So would you talk to what you are seeing in terms of demand that is leading to that?
Michael
Well, those additions are specifically related to the mariners for the contracts we received this fiscal year. So as you know, that's a new type of node we introduced to the market and to fulfill those contracts, we have to add those units to our fleet.
Bill Deslim
And speaking of Mariner, your $20 million contract that you're going to have delivered here shortly, that rental lasts how long with the initial period?
Michael
A year-long rental.
Bill Deslim
And would it be correct to simply take $20 million million divided by four quarters and it's going to be roughly five million a quarter? Or are there some meaningful nuances that make that math completely off base?
Michael
There's some slight nuances that makes that math not work exactly that way. We're going to complete delivery of the units during this quarter. as Rick said, so we're not going to have an entire quarter of rent for that contract. It doesn't really begin until, you know, within our first quarter of 24.
Bill Deslim
And then at that point, it's roughly $5 million per quarter going forward.
Michael
Yeah, I would think so, yes.
Bill Deslim
Yeah, okay. Thank you. And then The $9 million CapEx, how much of that is tied to this contract versus additional business that you anticipate building?
Michael
The majority of it is for this contract.
Bill Deslim
So if over the course of the next year you end up with additional business that that wants to ramp up prior to calendar 25, then you would need to build additional units.
Michael
That's exactly right. We continue our diligence to ensure that this market is growing and can support the additional nodes before we just go and build them. We don't want to build something that's just going to gather dust.
Rick Wheeler
I mean, to add some color to what you're asking, Bill, and what Robert really has answered, we're always very cautious about making these capital investments. And so the numbers as we reported them or a static view of where we are now and forthcoming of exactly where things are, that does not mean that if business does not come to us in the future, that we won't make any, we'll limit ourselves to that investment and miss the opportunity. But this is a correct snapshot of where we are today.
Bill Deslim
Great. OK. That's helpful. So, kind of using that phrase because you're hitting what I'm looking for, kind of a snapshot. Correct me if I'm not summarizing this correctly. The OBX has had full utilization, essentially full utilization Q3 and Q4. And Mariner will have full utilization starting in March. So my question then, if those two statements are accurate, is do you anticipate that OBX will maintain full utilization roughly with the standard disclaimers that go in with contract gaps, et cetera, here in the December quarter and moving forward into the foreseeable future?
Rick Wheeler
No, we do not. That is exactly the reason we mentioned that with respect to some of the OBX equipment that's currently in service, there will be some gaps, and those will be notable, and they will change revenue in different portions of the year as those gaps occur. But we do see the overall market as remaining strong, even though those gaps will occur, that the OBXs will go back into service on those or other contracts that are being booked as we speak.
Bill Deslim
Okay, that is helpful. And then if I may, I'd like to jump to a couple of quantum questions. The first one is the 2 million backlog with the emerging markets. Is that DARPA business or is that something else?
Michael
It's a combination of DARPA business and something else.
Bill Deslim
Would you like to elaborate on the something else?
Michael
I don't think we've announced the something else. It's, you know, it's related to maintenance and assistance, technical assistance on some contracts we performed on in the past.
Bill Deslim
Thank you. And then what opportunities, if any, do you see developing for quantum with the situation in Gaza?
Rick Wheeler
Well, that's yet to be seen. Clearly, there were already some track records with respect to how Israel approached some of its perimeter monitoring and all that. It didn't necessarily work as we now understand and partly, you know, is an element of this intelligence failure that has been pronounced in some of that activity. So we'll have to, you know, it will remain to be seen whether that will have an impact on quantum in the future.
Bill Deslim
And, Rick, that was part of my question. Was it the equipment itself that they had did not work, or was it that the intelligence services did not respond quickly enough? Yes, this is an equipment versus a human misstep question.
Rick Wheeler
That's an excellent question, but unfortunately, it's one I have no answer for.
Bill Deslim
Okay. Thank you both for the time.
Rick Wheeler
You bet, Bill. Thank you, Bill.
Operator
And we have our next question from Dennis Scannell with Rutabaga Capital. Yes. Good morning, gentlemen.
Dennis Scannell
Just a couple of quick things for me. So following on some questions about the rental business, which has really been a standout performer for the year, So one of the things that I did notice was that, you know, boy, real nice improvement in gross margins, really on a sequential basis, looking at a quarter by quarter, starting your fiscal year at like 54.9%, exiting at 76.5%. And so I'm just kind of curious, was that because of different utilizations? Was it because of pricing action taken through the through the course of the year? Yeah, if you could just shed some light on that.
Michael
I think a lot of it has a lot to do with utilization. Units that are out in a customer's hands don't require us to repair them, keep them charged, or do other activities that drag down a unit, drag down the gross profit for items that are out on rent when we have things sitting here on the shelf. So that's part of it. We also had, across the company as a whole, a higher utilization of the factory because we're building these mariners that are going out into this customer's hands. So as a result of that, we have higher utilization out on the factory floor, higher absorption of fixed costs, which improves gross profit also.
Rick Wheeler
I think, too, the move that we made of bringing our landfill facility over into our Pinemont location certainly was a cost-reducing mannerism as well, which is going to contribute to gross margin. That's an excellent point.
Dennis Scannell
Okay. But the overhead absorption from the production and the plant consolidation, wouldn't that be captured in the product gross margin as opposed to the rental gross margin? Well, from a maintenance
Rick Wheeler
From a maintenance point of view, as Robert pointed out, when those units are here, then they require maintenance in terms of keeping charge, touching them. There are various things that go on when they're in our hands and not in the hands of the customers. Those costs were being absorbed by what went on at Langfield. Now they're going on here, and so that gives a little bit better control of them.
Dennis Scannell
Okay, okay. So... And again, looking at just the rental gross margins, you know, exiting the year at 76%. Is that something that we can look for going forward? Or was that kind of an extraordinary performance in the fourth quarter? And, you know, no, mid 60s, 60 to 65% is more, you know, a normal level on a go forward basis.
Michael
You know, there's going to be factors that affect that. You know, obviously utilization is going to affect that. You know, we have these new units coming into the fleet that are going to have fresh depreciation that's going to affect that also. So I think this last quarter just has the benefit of, you know, just really favorable things happening, and I wouldn't expect that going forward.
Rick Wheeler
I think as well, you know, we mentioned that there will be some gaps in some of the OBX rentals. That means they're going to be back here. And so we're going to have some higher expenses in the maintenance of that. So there's going to be some ebb and flow to that that makes it a little bit unpredictable. Absolutely.
Dennis Scannell
Okay. Yeah, no, that's fair. And do you see the Mariner nodes as kind of cannibalizing OBX rentals?
Rick Wheeler
Well, the market is in an expansive mode at this point. I mean, the ocean bottom node in the marine seismic industry is really where most of the activity and any sort of growth seems to be at this point. There is improvements overall in the marine industry, including some of the towed streamer operations, so I don't want to imply that there's nothing going on there, but I do think that The extreme data quality that the library houses and the oil companies have grown now accustomed to from this ocean bottom data really makes them the preferred method whenever possible to do these seismic surveys. So I don't know that there's a cannibalization. I wouldn't really call it that. I think there is an expansion going on in the market. Clearly, the Mariner will serve in the same functional role as the OBX. So it has that capability of displacing it. But it's new technology as well. It has, you know, features that the OBX doesn't have, and that should extend its acceptance further into the market.
Dennis Scannell
Yep. Okay. Fair enough. And then just maybe to push you a little bit on capital allocation. You know, you finished a great year, you know, relative to the recent past. you know, you look like a real company. We've got gap net income, really nice cash flow generation, a very attractive multiple. You're trading above book value now, but you're sitting there with 33 million in cash. And if we're looking at strong market demand and, you know, some spending that we're doing on our rental fleet, is it time to think about repurchasing stock or, you know, just kind of thinking about if you could help us think about your capital allocations strategy going forward?
Rick Wheeler
No, that's certainly something that our board considers on a regular basis. We do want to make sure in our conservative management, which we mentioned before, is something that keeps us where we are, to be debt-free and to be able to fund our operational components as we go forward. So, you know, that doesn't preclude the possibility of a stock buyback, again, similar to what we did before. But we'll be very cautious about that. But the board will be considering that as it always does over the course of time.
Dennis Scannell
Okay. Okay. Fair enough. Good luck. Thanks again.
Operator
All right. Thank you. Appreciate it. Thank you. And we have our next question from Scott Bundy with Moores & Caput.
Scott Bundy
Good morning, guys. A couple questions. Good morning. Are there minimum volume associated with the contract with ITRON?
Rick Wheeler
Minimum volumes? I don't think we have anything, any terms or conditions or anything along that line in these business arrangements.
Scott Bundy
Okay. And Robert, non-current inventories jumped a bunch. Can you explain what non-current inventories are?
Michael
It's inventory that we don't expect to consume within the next 12 months using our historical usage as an indicator of what could happen in the past. And to be frank, what a lot of that Increase in inventory is related to components to build items that are gonna go into our rental fleet, which is a non-current asset to begin with. So we're placing those components that are likely gonna end up as a non-current asset in the non-current inventory.
Scott Bundy
So that would be Mariner, for example?
Michael
For example, yes, sir.
Scott Bundy
Okay, got it. So Rick, last quarter, regarding quantum, you made reference to the fact that there may be more clarity on some of the endeavors in the near future related to perimeter security energy transition carbon geothermal mining etc so what's fascinating to me are the job openings at quantum um can you give us no board allows kind of job openings that you guys are having without some visibility? Can you give us some idea of what's going on there?
Rick Wheeler
Well, I mean, these contracts that we're already working on have certain requirements to it. And we've actually had, you know, some talent that, you know, unfortunately we had someone pass away in one circumstance. So there are some definite technical skills that that we need to reassess and put back in place. I think that's where these are with respect to these technical matters that we need those scientists for.
Scott Bundy
The more clarity part, do we have more clarity about some of these areas?
Rick Wheeler
We do. We do, but it's not something we can yet discuss. I mean, the three months between then and now is just not enough to have that manifest. But, you know, the pipeline of those discussions that we're having for some of these things is definitely deepening. And I know that sounds frustrating, but it's just the way it is. We can't really talk about some of these things at this point.
Scott Bundy
PRM, do we hear anything regarding the outlook regarding PRM?
Rick Wheeler
We do. Those discussions are very active, and in fact, we're even having some more discussions. But the thing is, is none of those are going to generate any revenue in fiscal year 2024, and so that's not anything anyone should anticipate to be the case. There is likely to be some tenders that come out in fiscal year 2024. They're not going to generate any revenue within that year, though. They will be for future deployments, but you likely will hear about some tenders coming out in the next year.
Scott Bundy
And are we talking multiple tenders?
Rick Wheeler
That is certainly the possibility, and we are evaluating our capacities as it relates to that. We feel comfortable at this point in time with the timing of when we think some of those tenders might come out. But yes, it's certainly the case that we anticipate it could be more than one.
Scott Bundy
My last question. So regarding a tender where a contract was made, I think one of the issues with you guys was you weren't comfortable with the risks associated with that particular contract and decided not to play. Are we feeling more comfortable about how we can address some of the issues that maybe going forward, like the one that was outstanding?
Rick Wheeler
I think so. I think that really there's sort of movement on both sides of that equation. There's, I think, better comprehension of what we were presenting as unacceptable risks there. And then I think on top of that, we've sort of evaluated some other business approaches to how we might accommodate that.
Scott Bundy
I'm sorry, I do have one more. So in the event that there was a contract, which is let's call it out to 2025, would we have the current capacity to handle it?
Rick Wheeler
I believe so, yes.
Scott Bundy
Thanks, guys.
Rick Wheeler
Thank you.
Scott Bundy
You bet, Scott.
Operator
And we have our next question from Donald Collins with Ironwood.
Donald Collins
The past few years have been challenging ones for you as the oil and gas industry experienced a downturn. But you persevered, preserved capital, invested in new technologies. Now that the markets have recovered, you're seeing some good profitable results. So congratulations are due to you and the entire GEOS team.
Rick Wheeler
Thank you very much.
Operator
And our next question comes from Michael Melby with Gate City Capital.
Michael Melby
Hey, gentlemen. Yeah, congrats on the good year and the good quarter. Could you comment, do you plan on being free cash flow positive in fiscal 2024?
Donald Collins
Yes.
Michael Melby
And maybe you could expand a little bit, if that's the case, on what you need to see to return capital to shareholders. Looks like you have excess cash now and plan on generating more this year.
Rick Wheeler
Well, we just mentioned there may be some PRM tenders coming out, so we want to make sure that we have operational wherewithal to accommodate any of these sorts of things that come up. Plus, there are some other aspects within our marine ocean bottom node business that could manifest. They will naturally require some commitment on the part of the potential customers, but those will require some additional effort in the way of cash as well. So it's really a business evaluation. So I can't give you an equation that tells you when that will occur and there might be a stock buyback.
Michael Melby
Okay. Yeah, it feels like with the cash balance that it should be sufficient. I think going forward, if you could provide some more color in terms of what criteria you need to do that, it'd be be helpful so we understand kind of the tradeoffs between investing in the business or potentially and returning cash that you've generated to shareholders. That's more of a comment than a question, but yeah, going forward, do you expect Aquana in fiscal 2024 to generate a meaningful amount of revenues for the company?
Rick Wheeler
We think so. We absolutely think so.
Michael Melby
Got it. And any thought on timing, if that's kind of the next quarter or in general when we could expect to see a contribution from that?
Rick Wheeler
I don't think it's going to be late in the year. I don't know if it'll be in the first quarter as far as when we see some of those initial first fruits. But I think it will come relatively soon. Got it. Thanks for your help. Best of luck. You bet, Mike. Thank you.
Operator
And we have a follow-up from Bill Deslim with Titan Capital.
Bill Deslim
Thank you. I actually want to pick up on the Aquana question, first of all. You did, in the industrial products revenue, a total of $37 million of revenue. And I just want to use the language that was just used as significant increase in revenue. Is that what you're referring to as relative to the $37 million you would expect a significant increase in that revenue?
Rick Wheeler
I'm not going to compare it to that because there's such a mixture of products that went into that number, Bill. The industrial products certainly were the driver. Aquana was very little of any contribution to that. It wasn't zero, but it wasn't what you would call meaningful and significant. But there's a mixture of products that went into the overall adjacent markets that pushed it up to be the 25% growth that it was. But we do, a quantum will be notable in our estimation of what we see in this coming year.
Bill Deslim
All right, thank you. And then a follow-up relative to reservoir monitoring. I think this is the first time in many, many years that we have heard that there may be multiple tenders or more than one tender within a year. Would you talk to what you think may be changing within the market space, or if it's just pure random coincidence that there are a couple that might be coming at the same time?
Rick Wheeler
I don't think it's random. I think that there's comprehension within the oil companies that despite some of the ill words shoved in their direction, that oil and gas, when properly managed, is going to be a viable energy source and a required energy source for decades to come as any sort of energy transition begins to manifest. So that being said, I think that some of the fields that they have discovered they know they can better manage with lower carbon footprints if they have a complete assessment of how those reservoirs are changing as they exploit them. So I think largely that just the mindset of the stability of what the market is going to be has made that more tractable for them to consider.
Bill Deslim
Thanks, Rick. And then finally, this may be silly question or it may be insightful for us, but your contract manufacturing revenues were down. Was that because you intentionally reduced that business because you needed space for higher value activities or was that just simply a function of your customers having lower revenue?
Rick Wheeler
I think that It's a timing issue. There's been supply chain issues and inflation issues that have affected our customers in many respects. And so that has been an impact. There has been a certain amount of capacity issue in a few of our areas in manufacturing. We're working on that, by the way. So it does, in fact, have some components of it that are related to exactly what you referred to there. But I think that going forward, we're going to have mitigated most of those circumstances.
Bill Deslim
So it would be fair to say that you are minimizing the contract manufacturing activities in some cases because you need the capacity for the base business.
Rick Wheeler
Only in a strategic way, because those customers that we service in our contract manufacturing are important to us as well. So we don't freeze them out as far as that goes, but there are definitely some capacity issues and constraints that sometimes get in the way, but we address.
Bill Deslim
And Rick, I don't think I've ever asked, but are those customers tending to be in the oil and gas arena and so that their revenues will move up the same time that your energy revenues will move up? Or do they tend to be in completely unrelated industrial businesses?
Rick Wheeler
They tend to be completely unrelated. That's circumstantial. We're more than happy to do contract work for anyone in the oil and gas industry, and there are some. But just, you know, to be forthcoming, I think that the primary customer base that flows through our contract manufacturing paths is not oil and gas related.
Bill Deslim
Great. Thank you for taking another round of questions.
Operator
You bet, Bill. And we have another follow-up from Scott Bundy with Moores & Cabot.
Scott Bundy
Hey guys, is the AVS valve beyond pilot programs and that's why ITRON was interested in what you guys are doing?
Rick Wheeler
I don't think there's a causal relationship there, Scott, although one might try to draw one. It is commercially available and it is still in pilot programs with other municipalities as far as that goes. So those kind of act independently. I think ITRON sees the value of that product in some of the contracts that they're going after and want to service.
Scott Bundy
And so far, the programs that are out there using this valve have done everything that you guys wanted, or have there been any setbacks? And the last question on that is, There have been a component problem in the past for this product. Are there any component problems?
Rick Wheeler
There are not at this point in time. I mean, we've solved that problem by redesigning some of those impossible-to-get components out. So now the technology just falls into the standard issue of ensuring things work and refining any manufacturing processes and that sort of thing.
Scott Bundy
So we're really just seeing small amounts of the AVS valve in the marketplace, call it pilot programs. Is that correct?
Rick Wheeler
To date, that is exactly true.
Scott Bundy
Great. Got it. Thank you.
Operator
And at this time, I'm currently showing no further questions in the queue. I will turn the call back over to Rick Wheeler for any additional closing remarks.
Rick Wheeler
All right. Well, thank you, Michael. And thanks to everybody for listening to the call today and all the great questions you guys have asked. Hopefully we've given you some good answers. At this point, we look forward to speaking with you again on our conference call for the first quarter of fiscal year 2024, which will occur in February. So thanks again and goodbye.
Operator
Thank you. This does conclude today's Geospace Technologies fourth quarter and full year 2023 earnings conference call. And have a wonderful day.
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