Ocean Power Technologies, Inc. (Nasdaq:OPTT) ("OPT" or "the
Company") today announced financial results for its Fiscal 2014
fourth quarter and full-year ended April 30, 2014 ("fiscal 2014").
David L. Keller, Interim Chief Executive Officer of OPT, stated,
"There have been several significant events and much change since
the Company last reported financial results. We believe we have
fully disclosed this information in our filings. These events have
caused us to redirect the Company's strategy and advancement of our
technological capabilities. We remain focused on bringing our
developing technology to practical application."
"Over the last several months, we announced the termination of
both the Reedsport, Oregon and Victoria Wave Partners projects.
Additionally, we are deferring our WavePort deployment in the
European Union into calendar 2015, due to a number of logistics
factors, such as the readiness of the proposed deployment site.
Furthermore, the summer 2013 deployment of our APB-350 Autonomous
PowerBuoy led us to determine that several design modifications to
address critical operation and reliability issues were required.
Taken as a whole, these results indicate that our basic technology
needs further advancement before we commit to large-scale utility
projects with typical commercial risk-sharing, even when partially
subsidized by government grants," he noted.
On July 8, 2014, Victorian Wave Partners Pty Ltd ("VWP"), an
indirect consolidated subsidiary of Ocean Power Technologies, Inc.
(the "Company"), tendered a notice (the "Termination Notice") to
the Australian Renewable Energy Agency ("ARENA") of VWP's intent to
terminate the Renewable Energy Demonstration Program Funding Deed,
dated as of September 9, 2010, entered into between VWP and the
Commonwealth of Australia, as amended by a Deed of Variation dated
January 9, 2014 ("the Funding Deed"). Unless agreed otherwise,
pursuant to the terms of the Funding Deed, it will terminate on
October 8, 2014
Mr. Keller continued, "Looking ahead, many companies and funding
agencies recognize that the nascent wave energy segment of the
renewable energy market is worthy of research, development and
continued advancement. We acknowledge that the inherent potential
of wave power energy capture is accompanied by significant
engineering challenges at both the component and system levels.
Nonetheless, we are continuing to advance certain promising
technologies that justify additional development. This includes
advanced controls that would enable an increase in electric power
output and further optimization of our modular, direct-drive Power
Take-Off (PTO) technology."
Strategic Focus on Smaller Scale Devices
The Company has shifted its immediate focus to smaller-scale
devices, such as the PB-40, intended to be deployed off the coast
of Spain, and the utility scale PowerBuoy, under development with
Mitsui Engineering and Shipbuilding, which are suitable for both
autonomous and utility applications. OPT recognizes that
deployments are critical to technology advancement in order to
accumulate successful operating history that demonstrates
durability and reliability at acceptable levels of commercial
risk-taking. The Company has accumulated a significant body of
knowledge through PowerBuoy deployments of varying capabilities
which is now an integral part of its engineering design and
development processes.
Commenting on the strategic shift from large, utility-scale
projects, Mr. Keller noted, "We believe that we can move faster to
optimize our technology on smaller-scale power outputs which are
more economical to manufacture and deploy than larger buoys."
Financial Review
OPT's fully-funded contract backlog as of April 30, 2014 was
$4.9 million compared with $5.6 million as of January 31, 2014 and
$3.8 million as of April 30, 2013. Approximately $1.2 million
of backlog at fiscal year-end was for the Oregon project. OPT
is in discussion with the DOE regarding the necessary steps to
close out the project. Approximately $0.9 million of backlog
was for the WavePort project to be located off the coast of
Spain. This cost-sharing contract expires on July 31, 2014,
and the Company intends to deploy in calendar 2015. Fiscal
2014 year-end backlog excludes approximately $0.5 million to
reflect the impact to backlog of the current expiration. The
Company's contract backlog consists largely of cost-sharing
contracts to support product development.
Fourth Quarter Fiscal 2014
Revenue for the quarter was $0.4 million, unchanged from the
prior-year period. Revenue in the current fiscal fourth quarter
included revenue associated with OPT's project with Mitsui
Engineering & Shipbuilding, which offset the delayed WavePort
project off the coast of Spain. The net loss for the three
months ended April 30, 2014 was $3.3 million as compared with a net
loss of $4.2 million for the three months ended April 30, 2013. The
favorable decrease in the Company's net loss year-over-year
reflects lower product development costs and a favorable change in
a contract loss reserve, offset by higher selling, general and
administrative costs. The decrease in product development costs was
due primarily to a lower level of activity for OPT's project in
Oregon. The favorable change in contract loss reserve was due
to a change in OPT's intent to complete a previous
project. SG&A increased due to employee-related costs and
costs associated with site development related to the VWP project
in Australia.
Fiscal 2014
OPT had revenue of $1.5 million in fiscal 2014 compared with
revenue of $3.6 million in fiscal 2013. The decline reflects the
suspension of the PowerBuoy project off the coast of Oregon,
decreased billable work on PowerBuoy development projects, the
completion of a project with MES in the prior fiscal year and a
decrease in the estimated contract value associated with the
WavePort project off the coast of Spain.
Net loss was $11.2 million compared with $14.8 million in the
prior year. The reduction in net loss was due primarily to a
decline in product development costs associated with OPT's project
in Oregon, a favorable change in contract loss reserves and a
higher income tax benefit due to the sale of New Jersey net
operating tax losses and research and development tax
credits. These improvements were somewhat offset by higher
selling, general and administrative ("SG&A") costs. Higher
SG&A reflects fees associated with the establishment of an
At-The-Market ("ATM") Agreement and site development expenses
related to the VWP project in Australia.
Balance Sheet and Available Cash
As of April 30, 2014, total cash, cash equivalents and
marketable securities were $28.4 million, up from $20.4 million on
April 30, 2013. At fiscal year-end, restricted cash was $7.3
million compared with $1.4 million as of April 30, 2013. Net
cash used in operating activities was $6.5 million and $10.8
million for the twelve months ended April 30, 2014 and 2013,
respectively. The Company raised $20.5 million during the
fiscal 2014 through the sale of stock under its ATM facility and an
underwritten public offering of its common stock.
Conclusion
"On a final note, our Board has been significantly strengthened
over the past two years by the addition of experienced financial
and operating executives. We have actively engaged in
strengthening our corporate governance, our control environment and
our reporting processes. The Board has also actively
participated with management in formulating our current strategy
and will conduct a search for a permanent CEO over the next few
months. When combined with recent employee additions to
various executive, business and engineering functions over the past
several months, I am confident that we are addressing critical
skills and talent that are necessary to help focus the company
strategy and ensure efficient business conduct and execution,"
concluded Mr. Keller.
Conference Call Details
The Company will host a conference call and webcast to review
financial and operating results. The call will be held on
Monday, August 4, 2014, at 10:00 a.m. Eastern Time. Please
call (201) 689-8562; a pass code is not
required. Additionally, the call will be webcast live at the
Company's website at www.oceanpowertechnologies.com. A
telephonic replay will be available from 1:00 p.m. ET the day of
the teleconference until Monday, August 11, 2014. To listen to
the archived call, dial (858) 384-5517 and enter conference ID
number 13587674, or access the webcast replay via the Company
website at www.oceanpowertechnologies.com, where a transcript will
be posted once available.
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, clean and environmentally-beneficial
electricity. OPT has a long track record in the advancement of wave
energy with a proprietary PowerBuoy® system based on modular,
ocean-going buoys that capture and convert predictable wave energy
into electricity. The Company benefits from periodic ocean testing
since 1997. OPT is headquartered in Pennington, New Jersey,
USA with an office in Warwick, UK, and offices 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.
FINANCIAL TABLES FOLLOW. Additional
information may be found in the Company's Annual Report on Form
10-K that has been filed with the U.S. 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
section.
Consolidated Balance
Sheets as of |
April 30, 2014 and
April 30, 2013 |
|
|
|
|
April 30, |
ASSETS |
2014 |
2013 |
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 13,858,659 |
$ 6,372,788 |
Marketable securities |
14,493,881 |
13,996,705 |
Restricted cash |
6,124,960 |
— |
Accounts receivable, net |
308,731 |
796,332 |
Unbilled receivables |
37,410 |
127,598 |
Other current assets |
568,377 |
152,962 |
Total current assets |
35,392,018 |
21,446,385 |
Property and equipment, net |
317,513 |
700,968 |
Patents, net |
828,298 |
1,044,902 |
Restricted cash |
1,221,696 |
1,366,256 |
Other noncurrent assets |
325,310 |
272,548 |
Total assets |
$ 38,084,835 |
$ 24,831,059 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 501,397 |
$ 510,031 |
Accrued expenses |
2,931,239 |
3,900,623 |
Advance payment received from
customer |
4,709,055 |
— |
Unearned revenues |
992,447 |
1,117,115 |
Current portion of long-term debt |
100,000 |
100,000 |
Total current liabilities |
9,234,138 |
5,627,769 |
Long-term debt |
150,000 |
250,000 |
Long-term unearned revenues |
— |
232,033 |
Deferred credits payable-noncurrent |
600,000 |
600,000 |
Total liabilities |
9,984,138 |
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 17,593,637 and 10,403,215
shares, respectively |
17,594 |
10,403 |
Treasury stock, at cost; 37,852 and
33,771 shares, respectively |
(130,707) |
(123,893) |
Additional paid-in capital |
180,454,341 |
159,155,365 |
Accumulated deficit |
(151,640,503) |
(140,671,311) |
Accumulated other comprehensive loss |
(225,733) |
(79,786) |
Total Ocean Power Technologies, Inc.
stockholders' equity |
28,474,992 |
18,290,778 |
Noncontrolling interest in Ocean Power
Technologies (Australasia) Pty Ltd |
(374,295) |
(169,521) |
Total equity |
28,100,697 |
18,121,257 |
Total liabilities and stockholders'
equity |
$ 38,084,835 |
$ 24,831,059 |
|
|
|
Consolidated Statements
of Operations |
For the Three and
Twelve Months Ended April 30, 2014 and 2013 |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
April
30, |
April
30, |
|
2014 |
2013 |
2014 |
2013 |
Revenues |
$ 374,735 |
$ 407,881 |
$ 1,498,892 |
$ 3,616,129 |
Cost of revenues |
394,411 |
364,633 |
1,510,336 |
3,480,821 |
Gross (loss) profit |
(19,676) |
43,248 |
(11,444) |
135,308 |
Operating expenses: |
|
|
|
|
Product development costs |
897,918 |
1,861,024 |
4,564,898 |
7,327,766 |
Change in contract loss reserve |
(785,000) |
-- |
(785,000) |
-- |
Selling, general and administrative
costs |
3,230,756 |
2,269,942 |
9,358,967 |
9,126,757 |
Total operating expenses |
3,343,674 |
4,130,966 |
13,138,865 |
16,454,523 |
Operating loss |
(3,363,350) |
(4,087,718) |
(13,150,309) |
(16,319,215) |
Interest income, net |
23,083 |
14,261 |
29,656 |
126,377 |
Foreign exchange gain (loss) |
31,129 |
(99,612) |
183,704 |
(83,416) |
Loss before income taxes |
(3,309,138) |
(4,173,069) |
(12,936,949) |
(16,276,254) |
Income tax benefit |
-- |
-- |
1,745,895 |
1,453,243 |
Net loss |
(3,309,138) |
(4,173,069) |
(11,191,054) |
(14,823,011) |
Less: Net loss attributable to the
noncontrolling interest in Ocean Power Technologies
(Australasia) Pty Ltd. |
100,263 |
44,596 |
221,862 |
141,174 |
Net loss attributable to Ocean Power
Technologies, Inc. |
$ (3,208,875) |
$ (4,128,473) |
$ (10,969,192.00) |
$ (14,681,837) |
Basic and diluted net loss per share |
$ (0.21) |
$ (0.40) |
$ (0.91) |
$ (1.42) |
Weighted average shares used to compute basic
and diluted net loss per share |
15,286,526 |
10,314,642 |
12,041,824 |
10,304,044 |
|
|
|
|
|
Consolidated Statements
of Cash Flows |
For the Twelve Months
Ended April 30, 2014 and 2013 |
|
|
|
|
Year Ended April
30, |
|
2014 |
2013 |
|
|
|
Cash flows from operating activities: |
|
|
Net loss |
$ (11,191,054) |
$ (14,823,011) |
Adjustments to reconcile net loss to net
cash used in operating activities: |
|
|
Foreign exchange (gain) loss |
(183,704) |
83,416 |
Depreciation and amortization |
421,836 |
502,099 |
Loss on disposals of property, plant and
equipment |
195,977 |
44,067 |
Impairment of long-lived assets |
2,658 |
7,718 |
Provision for doubtful accounts |
(299,958) |
— |
Treasury note discount amortization |
5,391 |
(12,191) |
Compensation expense related to stock
option grants and restricted stock |
771,646 |
858,902 |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable |
787,601 |
264,077 |
Unbilled receivables |
90,188 |
95,451 |
Other current assets |
(413,901) |
685,523 |
Other noncurrent assets |
(34,214) |
(93,700) |
Accounts payable |
(12,363) |
105,036 |
Accrued expenses |
(983,835) |
1,158,481 |
Advance payment received from
customer |
4,709,055 |
— |
Unearned revenues-ST |
(130,368) |
46,451 |
Unearned revenues-LT |
(232,033) |
232,033 |
Net cash used in operating
activities |
(6,497,078) |
(10,845,648) |
Cash flows from investing activities: |
|
|
Purchases of marketable securities |
(23,982,431) |
(16,678,329) |
Maturities of marketable securities |
23,489,021 |
25,055,534 |
Restricted cash |
(5,924,960) |
75,000 |
Purchases of equipment |
(27,268) |
(394,632) |
Net cash (used in) provided by investing
activities |
(6,445,638) |
8,057,573 |
Cash flows from financing activities: |
|
|
Repayment of debt |
(100,000) |
(100,000) |
Proceeds from the exercise of stock
options |
8,533 |
— |
Proceeds from the sale of common stock,
net of costs |
20,525,988 |
— |
Acquisition of treasury stock |
(6,814) |
(21,505) |
Net cash provided by (used in) financing
activities |
20,427,707 |
(121,505) |
Effect of exchange rate changes on cash and
cash equivalents |
880 |
(71,092) |
Net increase (decrease) in cash and cash
equivalents |
7,485,871 |
(2,980,672) |
Cash and cash equivalents, beginning of
period |
6,372,788 |
9,353,460 |
Cash and cash equivalents, end of period |
$ 13,858,659 |
$ 6,372,788 |
|
|
|
CONTACT: Company Contact:
Mark A. Featherstone,
Chief Financial Officer
Phone: 609.730.0400
Investor Relations and Media Contact:
Deborah K. Pawlowski,
Kei Advisors LLC
Phone: 716.843.3908
Email: dpawlowski@keiadvisors.com
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