Ocean Power Technologies, Inc. (Nasdaq:OPTT) ("OPT" or "the
Company") today announced financial results for its Fiscal 2014
third quarter and the nine months ended January 31, 2014.
Highlights
- OPT recently announced that an amended grant agreement related
to its planned wave power station project off the coast of
Australia was signed with the Australian Renewable Energy Agency
("ARENA"). This amended agreement is a Deed of Variation to the
original Funding Deed through which a A$66.5 million grant was
previously awarded to Victorian Wave Partners Pty Ltd ("VWP"), a
project-specific operating entity wholly-owned by Ocean Power
Technologies (Australasia) Pty Ltd ("OPTA", which is 88% owned by
OPT). Payments to VWP under the grant require completion of
specific project milestones. VWP has been conducting site surveys
toward meeting the requirements for licenses and approvals. In
addition, it is assessing prospective power purchase agreements
with local industries and utilities and is working with financial
advisors in connection with efforts to raise the required
additional project funding. For this project Lockheed Martin will
provide overall project management.
- During the quarter, the Company began work under a contract
received from Mitsui Engineering & Shipbuilding ("MES") for the
design and delivery of key components of a PowerBuoy for deployment
off the coast of Japan.
- The Autonomous Power group completed ocean testing of a novel
generation system for low power requirements in connection with a
Small Business Innovation Research (SBIR) Phase 1 contract from the
U.S. Department of Defense. Work was also conducted on the
development of advanced control algorithms as part of a U.S.
Department of Energy SBIR Phase 1 contract. This advanced
control work will also support the Utility Power group.
- OPT's contract backlog remained stable at $5.6 million as of
January 31, 2014 compared to $5.8 million as of October 31, 2013.
- During the quarter ended January 31, 2014 and in February 2014,
the Company strengthened its balance sheet through the sale of $6.3
million of common stock under its existing At the Market ("ATM")
offering facility with Ascendiant Capital Markets.
- The Company also announced that it recently received
approximately $1.75 million through the State of New Jersey's
Business Tax Certificate Transfer Program.
- The Company also announced the hiring of two executives during
the quarter.
— David R. Heinz was appointed to the position of
Vice President, Autonomous Power. Mr. Heinz previously held the
position of Vice President and General Manager of the Maritime
Systems division of iRobot Corp., a maker of underwater autonomous
vehicles. Previously Mr. Heinz served as a Major General in the
U.S. Marine Corps, where he ran large acquisition programs,
performed oversight of worldwide military operations, and had tours
with aviation squadrons in combat situations.
— Mark A. Featherstone was appointed to the position
of Chief Financial Officer. Mark brings to the Company significant
experience as a senior finance and accounting officer at private
and public companies, including Heat Transfer Products Group,
Quaker Chemical Corporation, Coty Inc., and Scott Paper
Company.
"We are very grateful for the support of the Australian
Government and ARENA in working with us to make positive
improvements to the funding deed and for their supporting our
unique and game-changing technology," said Charles F. Dunleavy,
Chief Executive Officer of OPT. "This new agreement significantly
improves our ability to attract investors during the early stages
of the project. We also appreciate the involvement of Lockheed
Martin and its continuing efforts as the project enters its next
phase." Dunleavy continued, "During the quarter we have also taken
important steps to improve the Company's execution capability with
the hiring of experienced members of the executive team and
expanding our capital base."
Financial Review
OPT's contract backlog as of January 31, 2014 was $5.6 million,
compared to $5.8 million as of October 31, 2013 and $4.3 million as
of January 31, 2013. We anticipate that a significant portion
of our backlog will be recognized as revenues over a period
exceeding 12 months. Approximately $1.2 million of our backlog at
January 31, 2014, is for our Oregon project; our continuation of
work on this project and the prospective realization of that
backlog as revenues will depend on certain factors, including the
resolution of regulatory matters, the availability of additional
funding to specifically enable completion of this project and the
outcome of discussions with key project stakeholders. Backlog
includes funded amounts and unfunded amounts that are expected to
be funded in the future, but the current backlog is fully funded.
The Company's contract backlog consists largely of cost-sharing
contracts to support product development.
Results for the Fiscal Third Quarter Ended January 31, 2014
For the three months ended January 31, 2014, OPT reported
revenue of $0.2 million as compared to revenue of $0.9 million for
the three months ended January 31, 2013. This decrease related
primarily to a lower level of external funding for the Company's
PowerBuoy development projects, a decline in revenue tied to OPT's
prospective PowerBuoy deployment off Reedsport, Oregon, which has
been suspended pending resolution of regulatory, financial and
other matters, and a decline in revenue from the Company's project
off the coast of Spain. These decreases were partially offset by an
increase in revenue associated with OPT's project with Mitsui
Engineering & Shipbuilding.
The net loss for the three months ended January 31, 2014 was
$0.8 million as compared to a net loss of $1.5 million for the
three months ended January 31, 2013. The favorable decrease in the
Company's net loss year-over-year reflects lower selling, general
and administrative costs, with the decline due primarily to
decreased employee-related costs. In addition, the Company reported
a higher income tax benefit due to the sale of New Jersey net
operating tax losses and research and development tax credits.
Results for the Nine Months Ended January 31, 2014
For the nine months ended January 31, 2014, OPT reported
revenues of $1.1 million as compared to revenues of $3.2 million
for the nine months ended January 31, 2013. This decrease primarily
reflects a decline in revenue related to the suspension of the
Company's project off the coast of Oregon, decreased billable work
for OPT's PowerBuoy development projects, the completion of
specific project work with Mitsui Engineering & Shipbuilding in
the prior fiscal year, and a decrease in revenue related to the
Company's project off the coast of Spain.
The net loss was $7.9 million for the nine months ended January
31, 2014 compared to $10.6 million for the same period in the prior
year. This decrease in net loss was due primarily to a decline in
product development costs associated with OPT's project in Oregon,
a decline in selling, general and administrative expense related
primarily to lower employee-related costs, and to a higher income
tax benefit due to the sale of New Jersey net operating tax losses
and research and development tax credits.
Cash and Investments
On January 31, 2014, total cash, cash equivalents, restricted
cash and marketable securities were $19.6 million, as compared to
$21.7 million as of April 30, 2013. Net cash used in operating
activities was $8.1 million and $8.2 million for the nine months
ended January 31, 2014 and 2013, respectively. Net cash used was
slightly lower in the current nine-month period relative to the
corresponding prior year period due to a reduction in the net loss.
In addition, the Company raised $2.5 million during the Fiscal 2014
third quarter and an additional $3.8 million in February 2014,
through the sale of stock under its ATM facility with Ascendiant
Capital Markets. During Fiscal 2014, the Company has raised
approximately $9.7 million through the sale of stock under its ATM
Facility.
Additional information may be found in the Company's Quarterly
Report on Form 10-Q that will be filed with the U.S. Securities and
Exchange Commission ("SEC"). The Form 10-Q may be accessed at
www.sec.gov or at the Company's website in the Investor Relations
tab.
Conference Call Details
The Company will host a conference call to review these results
at 10:00 a.m. Eastern Time today. The call will be available
by telephone at 877-703-6105 (toll free in the U.S.) or
857-244-7304 (for international callers), using passcode 83002254.
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 38530279,
beginning at 2:00 p.m. Eastern on March 14, 2014.
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 more
than 15 years of in-ocean experience. OPT is headquartered in
Pennington, New Jersey, USA with an office in Warwick, UK, and
operations in Melbourne and Perth, Australia. More information can
be found at www.oceanpowertechnologies.com.
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
strategies, plans, project implementation, fundraising, 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.
|
|
Consolidated Balance
Sheets as of |
January 31, 2014 and
April 30, 2013 |
|
|
ASSETS |
January 31,
2014 |
April 30, 2013 |
|
(Unaudited) |
|
Current assets: |
|
|
Cash and cash equivalents |
$ 5,916,638 |
$ 6,372,788 |
Marketable securities |
11,496,164 |
13,996,705 |
Accounts receivable, net |
8,499 |
796,332 |
Unbilled receivables |
333,139 |
127,598 |
Other current assets |
327,190 |
152,962 |
Total current assets |
18,081,630 |
21,446,385 |
Property and equipment, net |
562,586 |
700,968 |
Patents, net |
884,679 |
1,044,902 |
Accounts receivable |
209,906 |
— |
Restricted cash |
2,149,992 |
1,366,256 |
Other noncurrent assets |
427,736 |
272,548 |
Total assets |
$ 22,316,529 |
$ 24,831,059 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 280,102 |
$ 510,031 |
Accrued expenses |
3,599,451 |
3,900,623 |
Unearned revenues |
667,666 |
1,117,115 |
Current portion of long-term
debt |
100,000 |
100,000 |
Total current liabilities |
4,647,219 |
5,627,769 |
Long-term debt |
175,000 |
250,000 |
Long-term unearned revenues |
252,164 |
232,033 |
Deferred credits |
600,000 |
600,000 |
Total liabilities |
5,674,383 |
6,709,802 |
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 12,741,217 and 10,403,215
shares, respectively |
12,741 |
10,403 |
Treasury stock, at cost; 37,852
and 33,771 shares, respectively |
(130,707) |
(123,893) |
Additional paid-in capital |
165,663,826 |
159,155,365 |
Accumulated deficit |
(148,431,628) |
(140,671,311) |
Accumulated other comprehensive
loss |
(213,697) |
(79,786) |
Total Ocean Power Technologies,
Inc. stockholders' equity |
16,900,535 |
18,290,778 |
Noncontrolling interest in Ocean Power
Technologies (Australasia) Pty Ltd. |
(258,389) |
(169,521) |
Total equity |
16,642,146 |
18,121,257 |
Total liabilities and
stockholders' equity |
$ 22,316,529 |
$ 24,831,059 |
|
|
Consolidated Statements
of Operations |
For the Three and Nine
Months Ended January 31, 2014 and 2013 |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended January 31, |
Nine Months Ended
January 31, |
|
2014 |
2013 |
2014 |
2013 |
Revenues |
$ 199,622 |
865,553 |
$ 1,124,157 |
3,208,248 |
Cost of revenues |
193,213 |
890,051 |
1,115,925 |
3,116,188 |
Gross profit (loss) |
6,409 |
(24,498) |
8,232 |
92,060 |
Operating expenses: |
|
|
|
|
Product development costs |
785,946 |
601,748 |
3,666,980 |
5,466,742 |
Selling, general and
administrative costs |
1,771,560 |
2,367,849 |
6,128,211 |
6,856,815 |
Total operating expenses |
2,557,506 |
2,969,597 |
9,795,191 |
12,323,557 |
Operating loss |
(2,551,097) |
(2,994,095) |
(9,786,959) |
(12,231,497) |
Interest income, net |
3,336 |
21,804 |
6,573 |
112,116 |
Foreign exchange gain |
23,448 |
21,778 |
152,575 |
16,196 |
Loss before income taxes |
(2,524,313) |
(2,950,513) |
(9,627,811) |
(12,103,185) |
Income tax benefit |
1,745,895 |
1,453,243 |
1,745,895 |
1,453,243 |
Net loss |
(778,418) |
(1,497,270) |
(7,881,916) |
(10,649,942) |
Less: Net loss attributable to
the noncontrolling interest in Ocean Power Technologies
(Australasia) Pty Ltd. |
38,628 |
31,499 |
121,599 |
96,578 |
Net loss attributable to Ocean Power
Technologies, Inc. |
$ (739,790) |
(1,465,771) |
$ (7,760,317) |
(10,553,364) |
Basic and diluted net loss per share |
$ (0.06) |
(0.14) |
$ (0.71) |
(1.02) |
Weighted average shares used to compute basic
and diluted net loss per share |
12,163,239 |
10,304,277 |
10,995,525 |
10,300,626 |
|
|
Consolidated Statements
of Cash Flows |
For the Nine Months
Ended January 31, 2014 and 2013 |
(Unaudited) |
|
|
|
|
Nine Months Ended
January 31, |
|
2014 |
2013 |
|
|
|
Cash flows from operating activities: |
|
|
Net loss |
$ (7,881,916) |
$ (10,649,942) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
Foreign exchange gain |
(152,575) |
(16,196) |
Depreciation and
amortization |
321,237 |
376,105 |
Loss on disposals of property,
plant and equipment |
— |
310 |
Treasury note premium
amortization |
5,391 |
27,598 |
Compensation expense related to
stock option grants and restricted stock |
569,540 |
755,570 |
Allowance for doubtful accounts
receivable |
(296,174) |
— |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable |
664,225 |
405,354 |
Long-term receivables |
209,906 |
— |
Unbilled receivables |
(205,541) |
(302,215) |
Other current assets |
(176,254) |
526,232 |
Other noncurrent assets |
(141,788) |
(48,803) |
Accounts payable |
(229,680) |
(32,503) |
Accrued expenses |
(305,655) |
511,490 |
Unearned revenues |
(452,864) |
(608,275) |
Long-term unearned
revenues |
20,131 |
841,524 |
Net cash used in operating
activities |
$ (8,052,017) |
$ (8,213,751) |
Cash flows from investing activities: |
|
|
Purchases of marketable
securities |
(18,494,272) |
(12,680,022) |
Maturities of marketable
securities |
20,989,422 |
20,913,831 |
Restricted cash |
(745,000) |
75,000 |
Purchases of equipment |
(21,191) |
(387,626) |
Net cash provided by investing
activities |
1,728,959 |
7,921,183 |
Cash flows from financing activities: |
|
|
Proceeds from the sale of
common stock, net of issuance costs |
5,933,259 |
— |
Proceeds from the exercise of
stock options |
8,000 |
— |
Repayment of debt |
(75,000) |
(75,000) |
Acquisition of treasury
stock |
(6,814) |
(21,505) |
Net cash provided by (used in)
financing activities |
5,859,445 |
(96,505) |
Effect of exchange rate changes on cash and
cash equivalents |
7,463 |
(9,446) |
Net decrease in cash and cash
equivalents |
(456,150) |
(398,519) |
Cash and cash equivalents, beginning of
period |
6,372,788 |
9,353,460 |
Cash and cash equivalents, end of period |
$ 5,916,638 |
$ 8,954,941 |
|
|
|
Supplemental disclosure of noncash investing
and financing activities: |
|
|
Capitalized purchases of
equipment financed through accounts payable and accrued
expenses |
$ — |
$ 6,681 |
CONTACT: Company Contact:
Mark A. Featherstone, Chief Financial Officer of OPT
Telephone: +1 609 730 0400
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