William Dezellem: 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 were 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.
William Dezellem: 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 at 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 to be forthcoming, I think that the primary customer base that flows through our contract manufacturing pads is not oil and gas related.
William Dezellem: Great. Thank you for taking another round of questions.
Rick Wheeler: You bet, Bill.
Operator: And we have another follow-up from Scott Bundy with Moors & 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 on. 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 the 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 last question on that is there’s been a component 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. Please disconnect your lines at this time and have a wonderful day.
