“The offshore renewable energy sector and underwater construction markets were affected by high interest rates, inflation, and supply chain issues, which slowed down the number of projects implemented in FY2023. As a result, there was weak demand for our Echoscope® rental solutions in these markets and our rental revenues decreased by 31.4%, and outright sales in strategic markets such as
“Despite navigating these headwinds in FY2023, management continued to invest in its strategy to accelerate growth and believes that it has made good progress on achieving some of its strategic goals around the Company’s growth pillars, Echoscope PIPE® and DAVD in FY2023.”
FY 2023 Financial Summary
The numbers below have been rounded to one decimal point. The full FY23 financials can be found in CODA’s Form 10-K filed with the
- Total revenue was approximately
$19.4 million compared to$22.2 million in FY2022, representing a reduction of 12.9%. - Revenues from the Marine Technology Business (Products) were
$12.1 million compared to$14.7 million in FY2022, a 17.7% decrease. - Revenues from the Marine Engineering Business (Services) were
$7.3 million compared to$7.5 million in FY2022, a 3.6% decrease. - Gross profit was
$13.0 million compared to$15.2 million in FY2022. Gross margin was 67.3% compared to 68.3% in FY2022. This is largely attributable to changes in the mix of sales and higher commission costs incurred in FY2023. - Operating income was
$2.7 million in FY2023 compared to$5 million in FY2022, a reduction of 45.3%. Operating margin was 14.2% compared to 22.5% in FY2022, driven by the aforementioned reduction in revenues. - Net income before taxes was approximately
$3.4 million in FY2023 compared to$5.1 million in FY2022, representing a reduction of 33.3%. Net income after taxes was$3.1 million in FY2023 compared to$4.3 million in FY2022, a reduction of 27.4%. - Diluted earnings per share was
$0.28 compared to$0.38 in FY2022. - Net income before tax as a percentage of revenues for FY2023 was approximately 17.7% compared to 23.1% in FY2022. Research and Development expenditures for FY2023 were approximately
$2.1 million , a reduction of 6.3%, compared to approximately$2.2 million in FY2022. SG&A in FY2023 was approximately$8.2 million , an increase of 3.1% over$7.9 million in FY2022. - We also continued to strengthen our balance sheet, with a cash balance of
$24.4 million at the end of FY2023. This represents an increase of$1.5 million over FY2022, when this figure was$22.9 million .
Fiscal Year 2023 Operational Summary:
In FY2023, we continued to prioritize investing in our growth strategy. This saw us:
- Increasing the number of Defense Underwater Vehicle Programs which are evaluating our Echoscope PIPE® technology for inclusion and supporting existing programs.
- Increasing the number of opportunities for adoption of the DAVD system outside of the
US Navy , including by commercial offshore service providers and foreign navies. - Advancing the DAVD untethered program by delivering the first eight evaluation systems to our
Navy customer and aForeign Navy , supporting the ongoing evaluation program and continuing to make modifications arising from the evaluation. This is a funded program designed to customize our existing DAVD technology for military application. In FY2023 we received$750,000 and expect to receive a further$1.25 million in the second quarter of FY2024 to cover customization efforts arising from the ongoing evaluation. The untethered variant for the military market is the biggest market opportunity for the product, and we are working closely with our customer in support of their ongoing evaluation, with a view towards adopting this technology. Supporting this evaluation and the untethered variant’s market opportunity is again Management’s priority, and we remain laser-focused on working with our customer at their behest to achieve a positive outcome. - Delivering a fully integrated solution for a diver handheld, high-resolution, real time 3D mapping and inspection platform which is designed around our real-time 3D volumetric imaging sonar, Echoscope PIPE®, and DAVD. This solution is part of an ongoing
Navy program for Ship Hull Mapping and Inspection, an important vertical for the Company. There is momentum around finding solutions for inspecting incoming ship hulls in real time 3D to ensure that these ships are not carrying parasitic cargo attached unlawfully to the hull, such as illegal arms and drugs. This is a multi-year defense program, and it is now at a mature stage of evaluation, as we have performed several trials and achieved proof of concept for the capability of the Echoscope for this application. - Completing two significant Echoscope PIPE® trials with Naval Information Warfare Systems Command (NIWIC). In both trials, we successfully showcased the Echoscope PIPE® series on NIWIC's VideoRay Defender, a small portable underwater vehicle selected by the
US Navy as its preferred vehicle in this category. We are working with NIWIC as they continue to finalize their sensor requirements for this underwater vehicle program. - Launching a new product, our Digital Audio Communications Systems – Voice HUB 4 - (targeting the diving market, diving chamber market and medical decompression market), which is a new and sizable business vertical for the Company. This system was developed at the request of the
US Navy . Voice HUB-4, offers a digital audio communication solution that incorporates AI features such as pitch correction, voice signatures and noise removal. This development moves the technology in the market from analogue audio communication to a much higher-quality and feature-rich digital audio solution. We are excited to be first movers in this market.
“Finally, we continue to believe in the growth prospects for the business, and we do not believe our financial results for FY2023 reflect negatively on our growth strategy, plans, or the competitiveness of our growth pillars. Instead, we believe our performance results from the macroeconomic factors discussed earlier, and we are working to continue our strategic progress even amid these headwinds. Along with advancing our organic growth drivers, we will also start to pursue an active M&A strategy, with the goal of acquiring value accretive complementary technologies into our portfolio and thus accelerating growth. In the FY2024, we will continue to double our efforts to realize increased growth for our stakeholders.”
The Company’s full financial results, including its Annual Report for Fiscal Year 2023, are available at www.nasdaq.com/symbol/coda/sec-filings.
Conference Call
CODA will host a conference call today,
CODA management will provide prepared remarks, followed by a question-and-answer period.
Date:
Time:
International number: 1-201-389-0879
Conference ID: 13743760
The conference call will broadcast live and be 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 contact the Company’s investor relations team at 1-949-574-3860.
A replay of the call will be available after
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Conference ID: 13743760
About
The Company, founded in 1994, is an established supplier to the Underwater/
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
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
Contact:
1-949-574-3860
CODA@gateway-grp.com
Consolidated Balance Sheets
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and Cash Equivalents | $ | 24,448,841 | $ | 22,927,371 | ||||
Accounts Receivable | 2,643,461 | 2,870,600 | ||||||
Inventory | 11,685,525 | 10,027,111 | ||||||
Unbilled Receivables | 894,251 | 602,115 | ||||||
Prepaid Expenses | 181,383 | 240,464 | ||||||
Other Current Assets | 1,034,626 | 343,061 | ||||||
Total Current Assets | 40,888,087 | 37,010,722 | ||||||
FIXED ASSETS | ||||||||
Property and Equipment, net | 6,873,320 | 5,832,532 | ||||||
OTHER ASSETS | ||||||||
3,382,108 | 3,382,108 | |||||||
Intangible Assets, net | 486,615 | 442,286 | ||||||
Deferred Tax Asset | 211,386 | 259,810 | ||||||
Total Other Assets | 4,080,109 | 4,084,204 | ||||||
Total Assets | $ | 51,841,516 | $ | 46,927,458 |
Consolidated Balance Sheets (Continued)
2023 | 2022 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts Payable | $ | 1,308,201 | $ | 793,247 | ||||
Accrued Expenses and Other Current Liabilities | 995,630 | 1,731,706 | ||||||
Deferred Revenue | 975,537 | 943,569 | ||||||
Total Current Liabilities | 3,279,368 | 3,468,522 | ||||||
LONG TERM LIABILITIES | ||||||||
Deferred Revenue, less current portion | 133,382 | 76,127 | ||||||
Total Liabilities | 3,412,750 | 3,544,649 | ||||||
Commitments and contingencies | - | - | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common Stock, | 11,118 | 10,918 | ||||||
Preferred Stock, | - | - | ||||||
Treasury Stock | (46,300 | ) | (28,337 | ) | ||||
62,958,984 | 62,313,988 | |||||||
Accumulated Other Comprehensive Loss | (3,442,549 | ) | (4,737,124 | ) | ||||
Accumulated Deficit | (11,052,487 | ) | (14,176,636 | ) | ||||
Total Stockholders’ Equity | 48,428,766 | 43,382,809 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 51,841,516 | $ | 46,927,458 |
Consolidated Statements of Income and Comprehensive Income
Year Ended | ||||||||
2023 | 2022 | |||||||
Net Revenues | $ | 19,352,088 | $ | 22,225,803 | ||||
Cost of Revenues | 6,321,033 | 7,035,115 | ||||||
Gross Profit | 13,031,055 | 15,190,688 | ||||||
OPERATING EXPENSES | ||||||||
Research & Development | 2,096,467 | 2,237,920 | ||||||
Selling, General & Administrative | 8,195,036 | 7,948,704 | ||||||
Total Operating Expenses | 10,291,503 | 10,186,624 | ||||||
INCOME FROM OPERATIONS | 2,739,552 | 5,004,064 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Other Income | 39,146 | 137,975 | ||||||
Interest Income | 642,530 | - | ||||||
Interest Expense | - | (9,704 | ) | |||||
Total Other Income, net | 681,676 | 128,271 | ||||||
INCOME BEFORE INCOME TAX EXPENSE | 3,421,228 | 5,132,335 | ||||||
INCOME TAX (EXPENSE) BENEFIT | ||||||||
Current Tax Expense | (248,655 | ) | (1,005,140 | ) | ||||
Deferred Tax (Expense) Benefit | (48,424 | ) | 174,026 | |||||
Total Income Tax Expense | (297,079 | ) | (831,114 | ) | ||||
NET INCOME | $ | 3,124,149 | $ | 4,301,221 | ||||
NET INCOME PER SHARE: | ||||||||
Basic | $ | 0.28 | $ | 0.40 | ||||
Diluted | $ | 0.28 | $ | 0.38 | ||||
WEIGHTED AVERAGE SHARES: | ||||||||
Basic | 11,131,469 | 10,863,674 | ||||||
Diluted | 11,323,568 | 11,281,347 | ||||||
NET INCOME | $ | 3,124,149 | $ | 4,301,221 | ||||
Foreign Currency Translation Adjustment | 1,294,575 | (3,070,065 | ) | |||||
Total Other Comprehensive Income (Loss) | $ | 1,294,575 | $ | (3,070,065 | ) | |||
COMPREHENSIVE INCOME | $ | 4,418,724 | $ | 1,231,156 |
Consolidated Statements of Changes in Stockholders’ Equity
For the Years Ended
Accumulated | ||||||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||||||
Common Stock | Paid-in | Comprehensive | Accumulated | |||||||||||||||||||||||||
Shares | Amount | Capital | Income (Loss) | Deficit | Stock | Total | ||||||||||||||||||||||
Balance, | 10,857,195 | $ | 10,858 | $ | 61,183,131 | $ | (1,667,059 | ) | $ | (18,477,857 | ) | $ | - | $ | 41,049,073 | |||||||||||||
Employee stock-based compensation | - | - | 1,130,917 | - | - | - | 1,130,917 | |||||||||||||||||||||
Stock issued for options exercised | 59,658 | 60 | (60 | ) | - | - | (28,337 | ) | (28,337 | ) | ||||||||||||||||||
Foreign currency translation adjustment | - | - | - | (3,070,065 | ) | - | - | (3,070,065 | ) | |||||||||||||||||||
Net Income | - | - | - | - | 4,301,221 | - | 4,301,221 | |||||||||||||||||||||
Balance, | 10,916,853 | $ | 10,918 | $ | 62,313,988 | $ | (4,737,124 | ) | $ | (14,176,636 | ) | $ | (28,337 | ) | $ | 43,382,809 | ||||||||||||
Employee stock-based compensation | - | - | 645,196 | - | - | - | 645,196 | |||||||||||||||||||||
Stock issued for options exercised | 200,842 | 200 | (200 | ) | - | - | (17,963 | ) | (17,963 | ) | ||||||||||||||||||
Foreign currency translation adjustment | - | - | - | 1,294,575 | - | - | 1,294,575 | |||||||||||||||||||||
Net Income | - | - | - | - | 3,124,149 | - | 3,124,149 | |||||||||||||||||||||
Balance, | 11,117,695 | $ | 11,118 | $ | 62,958,984 | $ | (3,442,549 | ) | $ | (11,052,487 | ) | $ | (46,300 | ) | $ | 48,428,766 |
Consolidated Statements of Cash Flows
Year Ended | ||||||||
2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 3,124,149 | $ | 4,301,221 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation of property plant and equipment | 603,467 | 678,652 | ||||||
Amortization of intangible assets | 64,063 | 60,077 | ||||||
Stock-based compensation | 645,196 | 1,130,917 | ||||||
Deferred income taxes | 48,726 | (193,083 | ) | |||||
(Increase) decrease in operating assets: | ||||||||
Accounts receivable | 291,873 | 992,948 | ||||||
Inventory | (1,287,108 | ) | (675,878 | ) | ||||
Unbilled receivables | (281,981 | ) | 447,927 | |||||
Prepaid expenses | 68,836 | 165,010 | ||||||
Other current assets | (330,516 | ) | 275,909 | |||||
Increase (decrease) in operating liabilities: | ||||||||
Accounts payable and other current liabilities | (613,239 | ) | 533,996 | |||||
Deferred revenue | 56,410 | (990,729 | ) | |||||
Net Cash Provided by Operating Activities | 2,389,876 | 6,726,967 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property and equipment | (2,021,948 | ) | (466,471 | ) | ||||
Purchases of other intangible assets | (108,392 | ) | (90,089 | ) | ||||
Proceeds from the sale of property and equipment | 609,565 | - | ||||||
(1,520,775 | ) | (556,560 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Repayment of notes | - | (63,559 | ) | |||||
Purchase of treasury stock | (17,963 | ) | (28,337 | ) | ||||
(17,963 | ) | (91,896 | ) | |||||
EFFECT OF CURRENCY TRANSLATION ON CHANGES IN CASH AND CASH EQUIVALENTS | 670,332 | (898,796 | ) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,521,470 | 5,179,715 | ||||||
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 22,927,371 | 17,747,656 | ||||||
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | $ | 24,448,841 | $ | 22,927,371 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
Cash paid for interest | $ | - | $ | 9,704 | ||||
Cash paid for taxes | $ | 1,406,562 | $ | 74,432 | ||||
SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES | ||||||||
Purchase of property and equipment previously held in escrow, included in prepaid expenses as of | $ | - | $ | 694,664 |
Source:
2024 GlobeNewswire, Inc., source