Operator: Thank you. The floor is now open for questions. [Operator Instructions] We’ll go first to Bill Dezellem with Tieton Capital.
Bill Dezellem: Let’s go with Tieton Capital. Thank you. So let’s start with the rental business, you referenced in the opening remarks and the release that you feel good about rentals in the second half of the year. We haven’t seen any significant announcements about that yet. Would you walk us through kind of what it is that you’re seeing on the OBX and Mariner front for rentals, please?
Rick Wheeler: Yes. Bill. Well, the rentals in the second half are associated with the timing that most of these projects come about. There haven’t really been any real announcements other than those that are associated with the sale and the large rental that originally was a rental contract that turned into that sale most recently. But there are quite a number of different projects out there that have either slipped a little bit in time in terms of when they’re going to be performed, but also new ones are popping up on a daily basis they probably wouldn’t manifest any real rentals until maybe the fourth quarter of this fiscal year. But the ones that we’re talking about are ones that are already out there bids have already been placed and we’ll likely need our OBXs simply, because the capacity can’t really accommodate all of the rental projects that are out there.
Bill Dezellem: So Rick, apologies that I don’t think I comprehended everything that you were saying there. So you have projects that you have already won, but those deliveries or the projects won’t begin, so your rentals won’t begin until the fourth quarter. Is that correct? And then did we also…
Rick Wheeler: Those are new projects. We do have rentals that are underway now. And we also — but again, we mentioned there was a lag in those rentals and some timing differences. But we do have rentals that are scheduled for the third quarter and the fourth quarter that are already in place, and there are new ones that because of the logistics of mobilizing these crews, those new ones probably would not manifest until the fourth quarter. Maybe some of them even in the next fiscal year.
Bill Dezellem: Okay. That’s helpful. So as you think about the rental revenue in Q3 relative to the $4.8 million in should we anticipate a significant step up? Or how are you thinking about that?
Rick Wheeler: We’re certainly seeing as an improved condition over what the second quarter represented. And that’s the message we tried to get across.
Bill Dezellem: And is it enough to bring the rental revenues up to somewhere in that $10 million, $15 million sort of range in a quarter?
Rick Wheeler: Not going to give you any guidance, Bill, as far as that goes, but it’s certainly going to look better than it did in the second quarter where we had these gaps that we had already mentioned.
Bill Dezellem: Great. And then I think another component of what you were saying implied that you don’t have enough OBX nodes to fulfill the rentals that you see in the pipeline. Was that correct? And if so, would you frame that up a bit tighter? And maybe how you solve that problem?
Rick Wheeler: No, that’s an industry-wide capacity issue that is faced. There are occasions where we do have requests for renting our nodes that we do not actually have capacity if you’re just looking at higher inventories. But as we’ve always said and we’ve always — the way we’ve performed in these situations, unless there are significant financial commitments we’re not really inclined to just go build up the rental fleet, even though we do realize there are some capacity shortages within the industry. There has to be a financial commitment there to make that worth our investment.
Bill Dezellem: Okay. Thank you. And then I do want to jump to Quantum for a moment. The reference in the release to, I think, several significant discussions. Would you put more meat on the bone on that for us, please?
Rick Wheeler: Well, most of these are not really things that we can discuss. They’re basically arrangements with various government agencies where they have some security and surveillance concerns. There are certain tensions that are arising throughout different places in the world that our U.S. government and military agencies are concerned about. And so to that extent, special capabilities that our products offer are what’s being discussed with some of these agencies. Of course, we all know about the border patrol and the capabilities that we’ve been able to demonstrate there. Certainly, those are elements that are still likely. And if you read the most recent government, the GAO reports that there will be some additional money spent on some of those projects, too. But those won’t occur until next fiscal year.
Bill Dezellem: So Rick, would you help us with timing in terms of what some of these contracts, I guess maybe what are the fastest that some of these might turn into revenue? And then how long — how far out are we talking that this could extend?
