Richard Deitch

Richard Deitch, a private investor, asked about Coda Octopus Group's exposure to China regarding sales opportunities, lost opportunities, and supply chain for critical components. He also questioned why sales haven't expanded faster despite superior technology, asking if Echoscope remains the main short-term revenue driver and identifying market impediments or opportunities. Finally, he inquired about the company's thoughts on a stock buyback program given its M&A strategy and attractiveness as an M&A target.

Answer

Annmarie Gayle, Chair and CEO, clarified that the company has no significant supply chain exposure to China, sourcing components mainly from Europe. She noted that selling to China has been challenging for over five years due to UK export license barriers, making it not a primary target market. Regarding sales growth, Ms. Gayle highlighted a 30.7% increase in marine technology business sales and a 103.6% rise in hardware sales this quarter, driven by Echoscope and DAVD. She attributed slower overall growth to decreased rentals from shifts in offshore renewables funding, emphasizing that scalable growth lies in the defense market, which involves longer evaluation cycles but offers opportunities for multiple, recurring sales, as seen with DAVD. On a stock buyback, Ms. Gayle stated it is a board decision and she would raise the suggestion, reiterating the current focus on M&A for value-accretive, complementary technologies, particularly for the DAVD product line.

Richard Deitch asked about the company's exposure to China regarding sales opportunities, lost opportunities, and supply chain for critical components. He also questioned why Echoscope sales haven't expanded faster, despite technological advances, and inquired about the board's thoughts on a stock buyback program.

Answer

Annmarie Gayle, Chairman & CEO, stated no significant supply chain exposure to China, with components mainly from Europe. She noted that selling to China has been difficult for over five years due to export license barriers, making it not their biggest target market. Regarding Echoscope sales, Annmarie Gayle highlighted a 30.7% increase in marine technology business sales and 103.6% in hardware sales this quarter, acknowledging a decrease in rentals due to shifts in offshore renewables funding. She emphasized that scalable growth lies in the defense space, which is a long process, but progress is being made with technology evaluation and adoption into programs for multiple, recurring sales. For a stock buyback, Annmarie Gayle stated it's a board decision and she would raise it, with the current focus being on M&A for value-accretive, complementary technologies.

Richard Deitch inquired about Coda Octopus Group's exposure to China regarding sales opportunities and supply chain, the reasons for slower overall sales growth despite technological superiority, and the company's stance on a stock buyback program.

Answer

Annmarie Gayle, Chair and CEO, stated there is no significant supply chain exposure to China, with components primarily from Europe. She noted that selling to China has been challenging for over five years due to export license barriers. Regarding sales growth, she highlighted a 30.7% increase in marine technology business sales and a 103.6% increase in hardware sales for the quarter, attributing slower overall growth to decreased rentals from shelved offshore renewables projects. She emphasized that scalable growth is focused on the defense market, which involves longer evaluation cycles but offers recurring sales opportunities. On a stock buyback, Annmarie Gayle indicated it is a board decision and would be raised with them, reiterating the current focus on M&A for value-accretive technologies complementary to DAVD.