Ocean Power Technologies Management Discusses Q1 2013 Results - Earnings Call Transcript

Ocean Power Technologies (OPTT)

Q1 2013 Earnings Call

September 14, 2012 10:00 am ET


Chris Witty

Brian M. Posner - Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer

Phil Hart - Chief Technology Officer


Robert W. Stone - Cowen and Company, LLC, Research Division

Michael Frederick Legg - Roth Capital Partners, LLC, Research Division

George Santana - Ascendiant Capital Markets LLC, Research Division

George Santana - New Earth Capital Group



Good morning, ladies and gentlemen, and welcome to the Ocean Power Technologies Fiscal 2013 First Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and webcast. I would now like to turn the conference over to Mr. Chris Witty of the company's investment relations firm, Darrow Associates. Please go ahead, sir.

Chris Witty

Thank you. Welcome to Ocean Power Technologies earnings conference call for the first quarter ended July 31, 2012. OPT issued its earnings press release earlier today and the company will soon file its quarterly report on Form 10-Q with the Securities and Exchange Commission. All public filings can be viewed on the SEC website at www.sec.gov or you may go to the OPT website at oceanpowertechnologies.com.

With me on today's call from the company is Brian Posner, our Chief Financial Officer; and Phil Hart, Chief Technology Officer. Chuck Dunleavy, OPT's Chief Executive Officer, could not be here today due to business travel overseas.

Advancing to Slide 2 of our presentation. During the course of this conference call, management may make projections or other forward-looking statements regarding future events or financial performance of the company within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. As indicated in this slide, these forward-looking statements are subject to numerous assumptions made by management regarding future circumstances over which the company may have little or no control or involve risks and uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. We refer you to the company's Form 10-K and other recent filings with the Securities and Exchange Commission for a description of these and other risk factors.

Now let me turn the call over to Brian Posner. Brian?

Brian M. Posner

Thanks, Chris, and good morning, everyone. I'll briefly review our quarterly results, and then Phil will discuss our ongoing technology initiatives and latest developments related to our Autonomous PowerBuoy business. Phil and I will be available to answer questions following our prepared remarks.

Turning to Slide 3, let me briefly provide an update of OPT's recent accomplishments. OPT got off to a strong start in fiscal 2013, making progress with both our utility and our Autonomous PowerBuoy. We are very pleased to have signed a teaming agreement with Lockheed Martin for the development of a proposed 19-megawatt energy project in Australia, and we are working actively with them to this end.

In August, we also announced that the U.S. Federal Energy Regulatory Commission approved a full buildout of OPT's proposed 1.5 megawatt grid-connected wave power station off Reedsport, Oregon. Importantly, this is the first such license to be issued for a wave power station in the U.S. OPT is in the process of final assembly and inland testing of the initial PowerBuoy to be installed at the Reedsport site.

In addition, we've made progress with our Autonomous PowerBuoy, entering into a Cooperative Research and Development Agreement or CRADA with the U.S. Department of Homeland Security to enhance the technology for ocean surveillance. In conjunction with the CRADA, OPT was awarded a grant from the Maryland Technology Development Corporation to demonstrate how the APB can be used with multiple surveillance technology. We also reported a reduction in our net loss and cash earned during the first quarter of fiscal 2013 as compared to the first quarter of fiscal 2012.

Now, let me go into detail on some of our latest developments. As noted on Slide 4, OPT reported revenue of $1 million for the first quarter as compared to revenue of $1.9 million for the 3 months ended July 31, 2011. This decrease primarily reflects lower revenue related to the U.S. Navy's Littoral Expeditionary Autonomous PowerBuoy program as that program was successfully completed in fiscal 2012. This revenue decline was partially offset by an increase in revenue from the company's WavePort project under funding from the European Union. The net loss for the 3 months ended July 31, 2012, was $4.4 million as compared to a net loss of $5 million for the 3 months ended July 31, 2011. A favorable reduction in net loss year-over-year was due primarily to a decrease in product development cost, principally for the PB150 successfully deployed off Scotland in 2011 as well as lower cost related to the PowerBuoy now being prepared for deployment in Reedsport, Oregon.

Turning to Slide 5. On July 31, 2012, total cash, cash equivalents, restricted cash and investment were $29.4 million as compared to $33.2 million as of April 30, 2012. The net decrease in cash and investment was $3.8 million for the 3 months ended July 31, 2012, compared to $5.2 million for the 3 months ended July 31, 2011. Our quarterly cash outflow from operating activities may vary significantly in future periods, depending on the success of our business development initiative and also on expenditures related to our project in Oregon.

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