Ocean Power Technologies Announces Results For The Fiscal Fourth Quarter And Year Ended April 30, 2012

Ocean Power Technologies, Inc. (Nasdaq: OPTT) (“OPT” or “the Company”) today announces financial results for its fiscal 2012 fourth quarter and the year ended April 30, 2012.

Highlights
  • Operating loss was $16.6 million for the twelve months ended April 30, 2012 versus $21.3 million for the twelve months ended April 30, 2011, primarily reflecting a 37% decrease in product development costs.
  • On track to complete construction of OPT’s first PB150 PowerBuoy for the project at Reedsport, Oregon. Factory testing of the device’s power take-off (“PTO”) has been completed and it has been shipped to Oregon Iron Works, where it is now being integrated into the spar of the buoy in preparation for ocean testing. The buoy is expected to be ready for deployment late this summer.
  • Signed an agreement with Lockheed Martin Corporation (NYSE: LMT) to develop a proposed 19 megawatt wave energy project in Victoria, Australia. For the project, Lockheed Martin will assist with the design of OPT’s PowerBuoy® technology, lead the production and system integration of the wave-energy converters, and support overall project management.
  • Additional milestones reached during fiscal 2012 include successful deployment of the U.S. Navy’s Littoral Expeditionary Autonomous PowerBuoy (“LEAP”) off the coast of New Jersey, and completion of ocean testing of OPT’s first utility-scale PB150 off Scotland.
  • Work commenced under the Company’s €2.2 million WavePort project in Spain, which will showcase advancements in OPT’s energy conversion technology.

“As we begin fiscal 2013, Ocean Power Technologies is taking strides on a number of fronts that we expect will enhance our growth in the quarters to come,” said Charles F. Dunleavy, Chief Executive Officer of OPT. “As expected, we lowered our cash burn this past year and plan to reduce this further in the current fiscal year. Management remains focused on our core technology as well as converting several business development opportunities around the globe into revenue-generating orders. In Australia, Lockheed Martin’s involvement has provided renewed momentum for our project in Victoria. Excellent progress is being made in Oregon and we are also seeing increased activity in other locations internationally. As a result, we believe 2013 will be a year of achievements in our drive to commercialize our PowerBuoys in both the utility and autonomous power markets. These opportunities follow from the hard work and dedication of our employees and the steadfast support of our commercial partners.”

Financial Review

OPT’s contract backlog as of April 30, 2012 was $6.8 million, compared to $7.8 million as of January 31, 2012 and $8.9 million as of April 30, 2011. Backlog includes funded amounts and unfunded amounts that are expected to be funded in the future. Funded backlog was $4.8 million, $5.8 million, and $6.9 million as of April 30, 2012, January 31, 2012, and April 30, 2011, respectively. The Company’s contract backlog consists largely of orders to support its product development.

Results for the Fiscal Fourth Quarter Ended April 30, 2012

For the three months ended April 30, 2012, OPT reported revenues of $1.4 million as compared to revenues of $1.9 million for the three months ended April 30, 2011. This decrease primarily reflects lower revenues related to the Company’s PB150 being prepared for deployment off Reedsport, Oregon, as well as lower revenue tied to the US Navy’s LEAP program on a year-over-year basis, as that project was successfully completed in the third quarter of fiscal 2012. These revenue declines were partially offset by an increase in revenue from the Company’s WavePort project in Spain and from PB500 development work.

The operating loss for the three months ended April 30, 2012 was $4.2 million as compared to an operating loss of $5.4 million for the three months ended April 30, 2011. The reduction in operating loss year-over-year was due primarily to a decrease in product development costs, principally for the PB150 system that underwent successful ocean trials off the coast of Scotland in 2011, in addition to lower costs related to the PB150 PowerBuoy in Reedsport, Oregon. These decreases in product development costs were partially offset by increased investment in advanced technology development. Selling, general and administrative costs for the three months ended April 30, 2012 included expenses of approximately $600,000 related to the impairment of certain assets in connection with a previous project.

The net loss was $4.1 million for the three months ended April 30, 2012 compared to $5.3 million for the same period in the prior year. This decrease in net loss was due primarily to the decline in operating loss.

Results for the Fiscal Year Ended April 30, 2012

For the twelve months ended April 30, 2012, OPT reported revenues of $5.7 million as compared to revenues of $6.7 million for the twelve months ended April 30, 2011. This decrease primarily reflects lower revenues associated with the US Navy’s Deep Water Active Detection System project and declines in revenue tied to the Company’s LEAP program as well as the PB150 being prepared for deployment off Reedsport, Oregon. The fiscal 2012 revenue decline was partially offset by work on the Company’s WavePort project and by the funded development of the PB500 PowerBuoy.

The operating loss for the twelve months ended April 30, 2012 was $16.6 million as compared to an operating loss of $21.3 million for the twelve months ended April 30, 2011. The reduction in operating loss year-over-year was due primarily to a decrease in product development costs, principally for the PB150 system off the coast of Scotland, in addition to lower costs related to the PB150 PowerBuoy in Reedsport, Oregon and the Company’s Hawaii project with the US Navy as this project neared completion during fiscal 2012. Selling, general and administrative costs for the twelve months ended April 30, 2012 included expenses of approximately $600,000 related to the impairment of certain assets in connection with a previous project. Gross profit for the year ended April 30, 2011 was negatively impacted by a reduction in revenues of $240,000 due to a change in the Company’s estimated revenue recognized in connection with its project off the coast of Spain.

The net loss was $15.2 million for the twelve months ended April 30, 2012 compared to $20.5 million for the same period in the prior year. This decrease in net loss was due primarily to the decline in operating loss and a higher recorded income tax benefit.

Cash and Investments

On April 30, 2012, total cash, cash equivalents, restricted cash and investments were $33.2 million. The net decrease in cash and investments was $15.2 million for the twelve months ended April 30, 2012, compared to $18.5 million for fiscal 2011. OPT received approximately $1.1 million and $0.4 million in connection with the sale of New Jersey net operating tax losses during the twelve months ended April 30, 2012 and 2011, respectively. The net decrease in cash and investments was lower in fiscal 2012 relative to fiscal 2011, primarily due to the completion of ocean trials of the PB150 off the coast of Scotland. OPT expects its net cash used to continue to decrease in fiscal year 2013.

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Additional information may be found in the Company’s Annual Report on Form 10-K that will be filed with the US Securities and Exchange Commission (“SEC”). The Form 10-K may be accessed at www.sec.gov or at the Company’s website in the Investor Relations tab.

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Conference Call Details

The Company will host a conference call to review these results at 10:00 a.m. Eastern Time today. Charles F. Dunleavy, Chief Executive Officer, and Brian M. Posner, Chief Financial Officer, will lead the call and webcast.

The call will be available by telephone at 800.638.4817 (toll free in the U.S.) or + 617.614.3943 (for international callers), using passcode 34969253. Investors may also access a webcast by visiting the Company's website at www.oceanpowertechnologies.com and clicking on the Investor Relations tab, then Webcasts & Presentations. Recorded replays of the conference call will be available on the Company’s website and by telephone at 888.286.8010 (toll free in the U.S.) or 617.801.6888 (for international callers), replay passcode 69012176, beginning at 1:00 p.m. Eastern on July 13, 2012.

Forward-Looking Statements

This release may contain "forward-looking statements" that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company's current expectations about its future plans and performance, including statements concerning the impact of marketing strategies, new product introductions and innovation, deliveries of product, sales, earnings and margins. These forward-looking statements rely on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties. Actual results could vary materially from those anticipated or expressed in any forward-looking statement made by the Company. Please refer to the Company's most recent Forms 10-Q and 10-K and subsequent filings with the SEC for a further discussion of these risks and uncertainties. The Company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release.

About Ocean Power Technologies

Ocean Power Technologies, Inc. (Nasdaq: OPTT) is a pioneer in wave-energy technology that harnesses ocean wave resources to generate reliable and clean and environmentally-beneficial electricity. OPT has a strong track record in the advancement of wave energy and participates in an estimated $150 billion annual power generation equipment market. OPT’s proprietary PowerBuoy® system is based on modular, ocean-going buoys that capture and convert predictable wave energy into clean electricity. The Company is widely recognized as a leading developer of on-grid and autonomous wave-energy generation systems, benefiting from 15 years of in-ocean experience. OPT is headquartered in Pennington, New Jersey, USA with an office in Warwick, UK. More information can be found at www.oceanpowertechnologies.com.

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Consolidated Balance Sheets as of

April 30, 2012 and April 30, 2011
        April 30, 2012       April 30, 2011
 
ASSETS
Current assets:
Cash and cash equivalents $ 9,353,460 4,376,136
Marketable securities 22,369,484 26,018,594
Accounts receivable 1,064,796 1,285,000
Unbilled receivables 223,050 456,316
Other current assets 842,820 832,142
 
Total current assets 33,853,610 32,968,188
 
Property and equipment, net 682,933 792,092
Patents, net 1,269,457 1,222,368
Restricted cash 1,453,712 1,624,669
Marketable securities 16,323,016
Other noncurrent assets 181,925 622,245
 
Total assets $ 37,441,637 53,552,578
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable $ 440,773 1,224,728
Accrued expenses 2,770,094 4,302,952
Deferred credits payable 600,000
Unearned revenues 1,073,389 344,022
Current portion of long-term debt 100,000 139,378
 
Total current liabilities 4,984,256 6,011,080
 
Long-term debt 350,000 450,000
Deferred credits 600,000
 
Total liabilities 5,334,256 7,061,080
 
Ocean Power Technologies, Inc. Stockholders’ equity:
Preferred stock, $0.001 par value; authorized

5,000,000 shares, none issued or outstanding

Common stock, $0.001 par value; authorized 105,000,000

shares, issued 10,407,389 and 10,419,183 shares, respectively

10,407

10,419

Treasury stock, at cost; 23,544 and 7,685 shares, respectively

(102,388)

 

(42,734)
Additional paid-in capital 158,296,458 157,174,930
Accumulated deficit (125,989,474) (110,848,972)
Accumulated other comprehensive (loss) income (78,990) 175,907
 
Total Ocean Power Technologies, Inc. stockholders' equity 32,136,013 46,469,550
 
Noncontrolling interest in Ocean Power Technologies (Australasia) Pty, Ltd (28,632) 21,948
 
Total equity 32,107,381 46,491,498
 
Total liabilities and stockholders’ equity $ 37,441,637 53,552,578

Consolidated Statements of Operations

For the Three and Twelve Months Ended April 30, 2012 and 2011
Three Months Ended April 30,   Twelve Months Ended April 30,
2012   2011 2012   2011
 
Revenues $ 1,388,598 1,928,667 5,738,506 6,691,082
Cost of revenues 1,364,097 1,436,814 5,683,731 6,255,437
 
Gross profit 24,501 491,853 54,775 435,645
 
Operating expenses:
Product development costs 1,785,917 3,587,518 8,337,424 13,319,110
Selling, general and administrative costs 2,416,440 2,338,620 8,274,096 8,399,325
 
Total operating expenses 4,202,357 5,926,138 16,611,520 21,718,435
 
Operating loss (4,177,856) (5,434,285) (16,556,745) (21,282,790)
 
Interest income, net 76,421 142,447 418,052 689,276
Foreign exchange loss (11,659) (23,591) (104,739) (229,415)
Loss before income taxes (4,113,094) (5,315,429) (16,243,432) (20,822,929)
Income tax benefit 1,053,427 364,105
 
Net loss (4,113,094) (5,315,429) (15,190,005) (20,458,824)
 
Less: Net loss attributable

to the noncontrolling interest in

Ocean Power Technologies

(Australasia) Pty, Ltd.
16,699 8,158 49,503 22,950
 
Net loss attributable to Ocean Power Technologies, Inc.

$

(4,096,395)

(5,307,271)

(15,140,502)

(20,435,874)
 
Basic and diluted net loss per share $ (0.40) (0.52) (1.47) (1.99)
 
Weighted average shares used to compute basic and diluted net loss per share

 

10,290,005

 

10,260,545

 

10,277,661

 

10,246,921

Consolidated Statements of Cash Flows

For the Twelve Months Ended April 30, 2012 and 2011
Twelve Months Ended April 30,
2012   2011
Cash flows from operating activities:
Net Loss $ (15,190,005) (20,458,824)

Adjustments to reconcile net loss to net cash used in operating activities:
Foreign exchange loss 104,739 229,415
Depreciation and amortization 436,062 358,722
Loss on disposals of property, plant and equipment 52,128 5,293
Impairment of long-lived assets` 358,447
Provision for doubtful accounts receivable 298,534
Treasury note (discount) premium amortization (33,353) 71,236
Compensation expense related to stock option grants and restricted stock 1,121,528 1,448,286
Changes in operating assets and liabilities:
Accounts receivable (126,722) 277,115
Unbilled receivables 226,840 1,396
Other current assets (17,291) 198,569
Other noncurrent assets 43,504 903,729
Accounts payable (546,709) (891,417)
Accrued expenses (1,371,912) (7,923)
Unearned revenues 729,367 (761,473)
Other noncurrent liabilities (144,226)
 
Net cash used in operating activities (13,914,843) (18,770,102)
 
Cash flows from investing activities:
Purchases of marketable securities (18,574,454) (7,993,642)
Maturities of marketable securities 38,559,110 27,059,601
Restricted cash 53,936 (302,871)
Purchases of equipment (547,252) (72,998)
Payments of patent costs (180,011) (258,732)
 
Net cash provided by investing activities 19,311,329 18,431,358
 
Cash flows from financing activities:
Proceeds from long-term debt 250,000
Repayment of debt (139,378) (6,008)
Acquisition of treasury stock (59,654) (36,291)
 
Net cash (used in) provided by financing activities (199,032) 207,701
 
Effect of exchange rate changes on cash and cash equivalents (220,130) 270,582
 
Net increase in cash and cash equivalents 4,977,324 139,539
 
Cash and cash equivalents, beginning of period 4,376,136 4,236,597
 
Cash and cash equivalents, end of period $ 9,353,460 4,376,136

Copyright Business Wire 2010

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