Coda Octopus Group Reports Fiscal Second Quarter 2024 Financial Results
Coda Octopus Group (Nasdaq: CODA) reported its fiscal second quarter 2024 financial results, ending April 30, 2024. The company generated $5.32 million in revenue, consistent with $5.30 million in SQ2023, despite delays in US Defense Program orders. Operating income rose 58% to $1.4 million, attributed to efficiency and higher margin rentals. Gross margin improved to 70.2% from 68.3%. Net income after taxes increased to $1.4 million from $1.0 million, and diluted EPS rose to $0.13 from $0.09. For the six months ending April 30, 2024, revenue decreased 10.2% to $9.8 million, with net income dropping to $2.0 million from $2.4 million. However, gross margin improved to 69.8% from 67.7%. The company reported a cash balance of $23.7 million. Management highlighted challenges from funding gaps in US Defense Programs but noted increased sales outside the US and plan to expand into the Defense market with new technologies.
- Operating income increased by 58% to $1.4 million.
- Gross margin improved to 70.2% from 68.3%.
- Net income after taxes rose to $1.4 million from $1.0 million.
- Diluted EPS increased to $0.13 from $0.09.
- Cash balance of $23.7 million, up by $0.25 million from SQ2023.
- Gross margin for YTD2024 improved to 69.8% compared to 67.7% YTD2023.
- SG&A expenses decreased by 7.5% to $3.9 million for YTD2024.
- Increased sales from Asia by 15.9%.
- Total revenue for YTD2024 decreased by 10.2% to $9.8 million.
- Marine Technology Business segment revenue decreased by 1.6% to $3.5 million.
- Operating income for YTD2024 decreased to $1.9 million from $2.2 million in YTD2023.
- Net income for YTD2024 decreased to $2.0 million from $2.4 million in YTD2023.
- Revenue from US orders fell by $1.1 million due to funding gaps.
Insights
In reviewing Coda Octopus Group's financial results for its fiscal second quarter of 2024, several key financial metrics stand out. Revenue stability is apparent with a slight increase from
The most notable improvement is in operating income, which rose by
Another significant metric is the net income, which increased from
Balance sheet improvements were also notable, with total liabilities and stockholders' equity rising by
Overall, the financial results indicate a robust financial performance with strategic adaptations to external challenges. Continued monitoring of government funding and further diversification outside the US will be essential for sustained growth.
Coda Octopus Group's financial performance presents unique insights from a market research perspective. The company's ability to maintain revenues, despite reduced defense orders due to government delays, underscores its resilience and strategic adaptability. Expanding sales outside the US, particularly with a reported
The shift to high-margin rental services in the commercial marine offshore sector is a strategic move that has positively affected gross margins, rising from
Another critical aspect is the impact of Coda's diversified product portfolio. The Marine Technology Business saw a minor revenue decrease, while the Marine Engineering Business experienced a
Management's commentary on future prospects, particularly in penetrating the Defense market with its Echoscope® and DAVD technology, offers a forward-looking view that aligns with the company's growth strategy. Moreover, the partial award for sub-assembly production and the small pre-production order for the Thermite® related Navy program indicate potential future revenue streams that could solidify long-term growth.
In summary, Coda Octopus Group's financial results showcase its strategic adaptability and market diversification, positioning the company well for future growth despite current challenges. Continuous focus on expanding international sales and leveraging high-margin services will be important moving forward.
ORLANDO, FL, June 12, 2024 (GLOBE NEWSWIRE) -- Coda Octopus Group, Inc. (“CODA” or the “Company”) (Nasdaq: CODA), a global market leader in real-time 4D/5D/6D imaging sonar technology for real-time subsea intelligence and cutting-edge diving technology, today reported its unaudited financial results for its fiscal second quarter ended April 30, 2024 (SQ2024) and the six months then ended (YTD2024).
For SQ2024 we generated revenues of
The numbers below have been rounded to one decimal point (unless 2 decimal places required to differentiate). The full SQ2024 and YTD financials can be found in CODA’s Form 10-Q filed with the SEC.
In the SQ2024 and the SQ2023:
- Total revenue was
$5.32 million compared to$5.30 million , representing an increase in the SQ2024 of0.4% . - Revenues from the Marine Technology Business (Products) were
$3.5 million compared to$3.6 million , representing a1.6% decrease in the SQ2024. - Revenues from the Marine Engineering Business (Services) were
$1.8 million compared to$1.7 million , representing an increase of4.7% in the SQ2024. - The Company generated gross profit of
$3.7 million compared to$3.6 million . Gross margin was70.2% compared to68.3% . The increase in margins is attributable to an increase in rentals and associated services. - Operating income improved and was
$1.4 million compared to$0.9 million . Operating margin was25.4% compared to16.1% . - Income before taxes improved and was
$1.6 million compared to$1.0 million . Net income after taxes was$1.4 million compared to$1.0 million . - Diluted earnings per share increased and was
$0.13 compared to$0.09 in SQ2023. - CODA’s balance sheet continued to strengthen in SQ2024. Total Liabilities and Stockholders Equity improved over the end of fiscal year 2023 by
$2.2 million to$54.0 million . The quarter-end cash balance of$23.7 million represents a$0.25 million increase over SQ2023 and a reduction of$0.7 million over the end of fiscal year 2023 due mainly to timing of outstanding receivables, our purchase of long lead time inventory and capital expenditure investment.
YTD2024 Financial Summary:
In the YTD2024 and the YTD2023:
- Total revenue for the YTD2024 period was
$9.8 million compared to$10.9 million in YTD2023, a decrease of10.2% . - Year to date, the Company generated gross profit of
$6.8 million compared to$7.4 million in YTD2023. Gross margin in YTD2024 was69.8% compared to67.7% in YTD2023. - Operating income in YTD2024 was
$1.9 million compared to$2.2 million in YTD2023 and operating margin was19.5% compared to20.2% in the same period last year. - Income before taxes in the YTD2024 period was
$2.42 million compared to$2.39 million in YTD2023. Net income after taxes was$2.0 million in the YTD2024 compared to$2.4 million in YTD2023 period. - Year to date diluted earnings per share were
$0.18 compared to$0.21 in FY2023. - Net profit before tax as a percentage of revenues for the YTD2024 was
24.8% compared to21.9% for YTD2023. Research and Development expenditures for the YTD2024 were$1.03 million compared to$0.97 million in YTD2023, an increase of6.0% . SG&A for the YTD2024 was$3.9 million compared to$4.2 million , a reduction of7.5% .
Management Commentary
“Management continues to focus on growing the Company while continuing to demonstrate that we run a solid and profitable business year-on-year,” said Annmarie Gayle, CODA’s Chairman and CEO.
“In our SQ2024, order intake from US Defense Programs was down, as a result of funding gaps created by the use of continuing resolutions to fund these programs. Notwithstanding, we were able to increase sales outside the US, and we believe that we have achieved good results with strong gross profit margins, increase in income before taxes and an increase in EPS.
Within the business model of our Marine Technology Business, we have outright sales of our technology and rentals with associated support services. Rentals in the commercial marine offshore sector are a significant part of our growth plans. In SQ2024 rental services increased for this segment and contributed to our gross margin increasing to
We are also pleased to have seen a period of better traction in sales from Asia, which were
Although the engineering segment relies on Defense Programs for funding, and therefore its order intake in the SQ2024 was down, this segment’s revenue in the SQ2024 increased.
Notwithstanding these challenges in the SQ2024, this segment received a partial award of
We also received an order for a new Thermite® related Navy program, comprising a small pre-production order of
As we enter the second half of fiscal year 2024, our priority continues to be making progress with our growth strategy, in particular, to increase our efforts to have more penetration in the Defense market with our Echoscope® and DAVD technology and to return our Engineering Business to a solid
Conference Call
CODA will host a conference call today, June 12, 2024 at 10:00 a.m. Eastern Time (7:00 a.m. Pacific Time) to discuss its results for the second fiscal quarter ended April 30, 2024.
CODA management will provide prepared remarks, followed by a question-and-answer period.
Date: Wednesday, June 12, 2024
Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time)
U.S. dial-in number: 1-877-451-6152
International number: 1-201-389-0879
Conference ID: 13746657
The conference call will broadcast live and available for replay here.
Persons interested in attending are required to call the conference telephone number approximately 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please press *0 and someone from the Company will respond.
A replay of the call will be available after 2:00 p.m. Eastern time on the same day through June 26, 2024.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Conference ID: 13746657
About Coda Octopus Group, Inc.
The Company, founded in 1994, is an established supplier to the Underwater/Subsea market. It supplies a range of hardware and software solutions to this market which includes key proprietary real time 4D/5D/6D imaging sonars, marketed under the name Echoscope® and Echoscope PIPE® addressing the underwater imaging sensor market along with new generation diving technology, Diver Augmented Vision Display (DAVD) system. The Company’s Echoscope PIPE® sonar generates real-time 3D/4D/5D images of moving objects underwater including in zero visibility water conditions. The Echoscope® technology is used globally for numerous applications in both the commercial offshore market and defense underwater markets. Applications for the Echoscope® technology include complex mapping underwater, subsea intervention, subsea asset placements, salvage and recovery, search and rescue, offshore renewables cable installations and surveys, marine construction, subsea infrastructure installation, mining applications, robotics (3D Perception and Depth), breakwater construction and monitoring, decommissioning, diving applications and port and harbor security.
The recently launched new generation of diving technology, DAVD, has the potential to change the way global diving operations are performed (both in the Defense and Commercial space) because it is a fully integrated singular system for topside control and fully connected diver HUD system, allowing both the topside and diver to share a range of critical information and visualize the same underwater scene. Furthermore, the DAVD integrates the Company’s sonar technology, which allows dive operations to be performed in zero visibility conditions, a common problem that besets these operations.
The Company also includes two discrete Defense engineering businesses Coda Octopus Martech Ltd (UK based) and Coda Octopus Colmek, Inc. (US based) whose primary business model is to supply sub-assemblies into broader mission critical programs in the capacity of sub-contractors to the Prime Defense Contractors. Their scope of supply under these programs typically includes concept, design, prototype, manufacturing, and post-sale support. This gives them the opportunity to have repeat orders for these sub-assemblies through the life of these programs.
For further information, please visit http://www.codaoctopusgroup.com or contact us at coda@codaoctopusgroup.com.
Forward Looking Statement
This press release contains forward-looking statements concerning Coda Octopus Group, Inc. within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect”, “assume” and similar expressions are intended to identify forward‐looking statements. Those forward-looking statements include, without limitation, statements regarding the Company's expectations for the growth of the Company's operations and revenue. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, restrictions on our business operations due to the Pandemic, customer demand for our products and market prices; the outcome of our ongoing research and development efforts relating to our products including our patented real time 3D solutions; our ability to develop the sales force required to achieve our development and other examples of forward looking statement set forth in our Annual Report on Form 10-K for the year ended October 31, 2023, filed with the Securities and Exchange Commission on January 29, 2024, and the subsequently filed 10-Qs and 8-Ks. Coda Octopus Group, Inc. does not undertake, and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
Contact:
Geoff Turner
Coda Octopus Group, Inc.
1- 407-768- 0988
coda.ir@codaoctopusgroup.com
CODA OCTOPUS GROUP, INC.
Consolidated Balance Sheets
April 30, 2024 and October 31, 2023
| 2024 | 2023 | |||||||
| Unaudited | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and Cash equivalents | $ | 23,709,676 | $ | 24,448,841 | ||||
| Accounts Receivable, net | 4,402,355 | 2,643,461 | ||||||
| Inventory | 12,645,976 | 11,685,525 | ||||||
| Unbilled Receivables | 1,580,546 | 894,251 | ||||||
| Prepaid Expenses | 786,490 | 181,383 | ||||||
| Other Current Assets | 706,491 | 1,034,626 | ||||||
| Total Current Assets | 43,831,534 | 40,888,087 | ||||||
| FIXED ASSETS | ||||||||
| Property and Equipment, net | 6,261,124 | 6,873,320 | ||||||
| OTHER ASSETS | ||||||||
| Goodwill | 3,382,108 | 3,382,108 | ||||||
| Intangible Assets, net | 522,390 | 486,615 | ||||||
| Deferred Tax Asset | - | 211,386 | ||||||
| Total Other Assets | 3,904,498 | 4,080,109 | ||||||
| Total Assets | $ | 53,997,156 | $ | 51,841,516 | ||||
CODA OCTOPUS GROUP, INC.
Consolidated Balance Sheets (Continued)
April 30, 2024 and October 31, 2023
| 2024 | 2023 | |||||||
| Unaudited | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts Payable | $ | 1,212,484 | $ | 1,308,201 | ||||
| Accrued Expenses and Other Current Liabilities | 884,182 | 995,630 | ||||||
| Deferred Revenue | 721,167 | 975,537 | ||||||
| Total Current Liabilities | 2,817,833 | 3,279,368 | ||||||
| LONG TERM LIABILITIES | ||||||||
| Deferred Tax Liability | 10,589 | - | ||||||
| Deferred Revenue, less current portion | 102,364 | 133,382 | ||||||
| Total Long Term Liabilities | 112,953 | 133,382 | ||||||
| Total Liabilities | 2,930,786 | 3,412,750 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common Stock, $.001 par value; 150,000,000 shares authorized, 11,172,683 issued and outstanding as of April 30, 2024 and 11,117,695 shares issued and outstanding as of October 31, 2023 | 11,173 | 11,118 | ||||||
| Treasury Stock | (61,933 | ) | (46,300 | ) | ||||
| Additional Paid-in Capital | 62,975,143 | 62,958,984 | ||||||
| Accumulated Other Comprehensive Loss | (2,850,652 | ) | (3,442,549 | ) | ||||
| Accumulated Deficit | (9,007,361 | ) | (11,052,487 | ) | ||||
| Total Stockholders’ Equity | 51,066,370 | 48,428,766 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 53,997,156 | $ | 51,841,516 | ||||
CODA OCTOPUS GROUP, INC.
Consolidated Statements of Income and Comprehensive Income
(Unaudited)
| Three Months Ended April 30, | Six Months Ended April 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net Revenues | $ | 5,323,178 | $ | 5,301,509 | $ | 9,784,369 | $ | 10,897,793 | ||||||||
| Cost of Revenues | 1,584,744 | 1,678,268 | 2,959,199 | 3,521,547 | ||||||||||||
| Gross Profit | 3,738,434 | 3,623,241 | 6,825,170 | 7,376,246 | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Research & Development | 542,481 | 525,939 | 1,028,458 | 970,397 | ||||||||||||
| Selling, General & Administrative | 1,845,570 | 2,242,194 | 3,890,945 | 4,204,645 | ||||||||||||
| Total Operating Expenses | 2,388,051 | 2,768,133 | 4,919,403 | 5,175,042 | ||||||||||||
| INCOME FROM OPERATIONS | 1,350,383 | 855,108 | 1,905,767 | 2,201,204 | ||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Other Income | (2,636 | ) | 2,780 | 32,384 | 5,684 | |||||||||||
| Interest Income | 293,468 | 170,596 | 486,008 | 183,457 | ||||||||||||
| Total Other Income | 290,832 | 173,376 | 518,392 | 189,141 | ||||||||||||
| INCOME BEFORE INCOME TAX EXPENSE | 1,641,215 | 1,028,484 | 2,424,159 | 2,390,345 | ||||||||||||
| INCOME TAX (EXPENSE) BENEFIT | ||||||||||||||||
| Current Tax Benefit / (Expense) | (191,073 | ) | (68,773 | ) | (157,058 | ) | (68,784 | ) | ||||||||
| Deferred Tax (Expense)/ Benefit | (34,904 | ) | 48,766 | (221,975 | ) | 84,773 | ||||||||||
| Total Income Tax (Expense)/Benefit | (225,977 | ) | (20,007 | ) | (379,033 | ) | 15,989 | |||||||||
| NET INCOME | $ | 1,415,238 | $ | 1,008,477 | $ | 2,045,126 | $ | 2,406,334 | ||||||||
| NET INCOME PER SHARE: | ||||||||||||||||
| Basic | $ | 0.13 | $ | 0.09 | $ | 0.18 | $ | 0.22 | ||||||||
| Diluted | $ | 0.13 | $ | 0.09 | $ | 0.18 | $ | 0.21 | ||||||||
| WEIGHTED AVERAGE SHARES: | ||||||||||||||||
| Basic | 11,168,493 | 11,010,077 | 11,148,565 | 10,970,806 | ||||||||||||
| Diluted | 11,288,210 | 11,330,754 | 11,268,282 | 11,291,483 | ||||||||||||
| NET INCOME | $ | 1,415,238 | $ | 1,008,477 | $ | 2,045,126 | $ | 2,406,334 | ||||||||
| Foreign Currency Translation Adjustment | (437,683 | ) | 538,373 | 591,897 | 2,146,023 | |||||||||||
| Total Other Comprehensive Income | $ | (437,683 | ) | $ | 538,373 | $ | 591,897 | $ | 2,146,023 | |||||||
| COMPREHENSIVE INCOME / (LOSS) | $ | 977,555 | $ | 1,546,850 | $ | 2,637,023 | $ | 4,552,357 | ||||||||
FAQ
What were Coda Octopus Group's revenues for SQ2024?
How did Coda Octopus Group's operating income change in SQ2024?
What was Coda Octopus Group's net income after taxes for SQ2024?
What was the gross margin for Coda Octopus Group in SQ2024?
How did Coda Octopus Group's YTD2024 revenues compare to YTD2023?
What was Coda Octopus Group's diluted EPS in SQ2024?
How did Coda Octopus Group's Marine Technology Business segment perform in SQ2024?
What was the cash balance for Coda Octopus Group at the end of SQ2024?
What impacted Coda Octopus Group's US order intake in SQ2024?
What new orders did Coda Octopus Group receive in SQ2024?
