TDY
#Thank you.
I think in the Digital Imaging, it was 6.3%, <UNK>.
Yes.
<UNK>, I think you should look at that segment with one thing in mind.
There's a part of Digital Imaging, which is our research lab, which is about $30 million, $35 million of revenue.
There, we take no profit.
So ---+ and that, if you look at it that way, that comprises approximately 10% of Imaging.
Having said that, the improvement in margin are coming from DALSA, our large operations, and they will continue to improve the remainder of the year, perhaps another 100 basis points or so.
I think next quarter, next couple of quarters, we ought to see maybe [300] basis points improvement in the margins in that segment, primarily because we won't have the onetime restructuring charges that we took in the marine businesses.
And so, I think we've structured the business, as I mentioned before, to start having meaningful margin improvement even at the current level.
If and ---+ when I should say ---+ when the oil and gas market comes back, coming back, there's no question it's going to come back and the reason for that is very simple: the existing wells all across, whether its land-based or ocean-based, they've be been depleting, the reserves are depleting.
People can estimate anywhere between 4 billion and 5 billion barrels a day per year.
And also, there's some continuing change in demand that's positive.
But the depletion is more significant.
And we have to have new sources of energy to just offset depletion.
And so I think this business will come back and when it comes back, I expect our margins to go back up in the 15%.
Yes, it's a cash tax benefit of about $7.7 million, $7.6 million.
So it's not affecting the rate.
That will ---+ it will make the right 1031 exchange.
We did not make an election.
No.
<UNK>, the way this works is very simple.
The fact that you sell a building for a gain, especially a building that we're hoping to replace with a similar building, the tax benefit will reduce the cash that we will be paying for the new building, because otherwise, if we don't, we'll have to pay the $7.7 million in taxes.
But it doesn't affect our current tax rate, our earnings or anything else.
There's no book impact.
It's a contingency.
If you don't use it, you'll have to cope up the cash in the future.
First, as you know, <UNK>, we have a whole range of vehicles going from gliders to remotely operated vehicles to automated underwater vehicles and of course, we have the largest vehicles for the special forces.
Having said that, the advantages that we enjoy over others are that we also have a very strong suite of sensors that we incorporate in our vehicles, whether it's a glider or its an AUV or an ROV.
And what that does is it gives us the ability to offer customers vehicles with completely integrated solutions from us.
Now we sell our sensors to other people.
But of course, we have the advantage of cost benefits when we use them in our own vehicles.
Just to give you an example, we have produced some deep tool vehicles specifically for the Chinese.
This has to do with trying to find the Malaysian airline that disappeared.
And we've sold three of those already, just under $1 million each.
But those contain about 10 of our different sensors in them all in the vehicle.
Finally, we just say that we not only are working with our vehicles in the commercial domain, but we have remotely operated vehicles that are now being used by the Navy for mine explosive ordinance disposal and we have underwater vehicles for the special forces.
So I think our ---+ as you said, other people are entering the market, some have been in there for a while.
I think the important thing for us is to continue to improve our range of our offerings and integrate our sensors into them.
Yes.
There are two parts to that.
Under laser-based mapping, we have a whole sequence of new products that are enabling operators to do the mapping without having someone direct instrument, so they're totally automated.
And our ---+ that comes out of our Optech businesses that are part of DALSA.
We have a significant increase there, just small business, but nevertheless year-over-year, we had about 25% increase from new products.
The other area, the geospatial software, that is a business that we just acquired that's called CARIS.
It's also part of DALSA.
It's in Canada.
And what they do is they use hydrographic sensors, those are acoustic sensors primarily, that do surveys of oceans floors.
And they provide all the data the software for people to convert all of that data into useful information and maps.
And nine countries around the world use those systems.
And that's an increasing business for us because it not only occupies a space that it predominates in, but it's also very complementary to our existing other marine businesses including the aerial surveying, the Optech business where we do near-shore and offshore surveying.
Thank you <UNK>.
Thank you very much, operator, Justin.
What I'd like to do now is I'd like to ask <UNK> to please conclude our conference call.
Thank you, everyone, for joining us this morning and if you have any follow-up questions, please feel free to call me at the number on the earnings release.
Justin, if you could give the replay information right now, that would be ideal.
Thanks, everyone.
