Ocean Power Technologies, Inc. Announces Third Quarter Fiscal 2024 Results
March 13 2024 - 4:15PM
Ocean Power Technologies, Inc. ("OPT" or "the Company") (NYSE
American: OPTT), today announced financial results for its fiscal
third quarter ended January 31, 2024 (“Q324”), including year
over year revenue, gross profit, and pipeline growth.
Financial Highlights from the third quarter:
- The Company’s pipeline at
January 31, 2024 (“Q324”) was approximately $77 million,
representing a 5.5x year-over-year increase over the pipeline of
approximately $14 million at January 31, 2023. The Company's
pipeline continues to grow, reflecting a significant increase in
defense and security activity as well as an expansion of commercial
opportunities.
- The gross margin rate was 45.4% and
18.5%, for the quarters ended Q324 and Q323, respectively. The
gross margin rate was 49.7% and 21.1%, for the nine months ended
January 31, 2024, and 2023, respectively.
- In December 2023, the Company
received a letter subcontract for up to $6.5 million from a U.S.
based prime contractor for multiple maritime domain awareness buoys
advancing its commitment to national security and intelligence.
This collaboration between OPT and the prime contractor will focus
on providing multidomain marine solutions in support of U.S.
government agencies. OPT believes that its PowerBuoy’s® will play a
pivotal role in enhancing surveillance capabilities above and below
the waterline, contributing significantly to maritime domain
awareness initiatives.
- In conjunction with the Company's
path to profitability, in November 2023, OPT announced that it has
substantially completed its research and development phase and is
primarily focused on commercial activities. This pivot to
commercial activities has enabled a reduction and reallocation of
headcount and a material reduction in third-party expenditures. As
a result, the majority of the Company's employees are now dedicated
to customer delivery.
Recent Operational and Other Highlights:
- In February 2024, the Company
received funding from the Naval Postgraduate School in Monterey,
California, for the deployment of a PowerBuoy® in Monterey Bay,
California. The PowerBuoy®, integrating OPT's Maritime Domain
Awareness System (MDAS) along with cutting-edge Satellite
communication and AT&T 5G technology, will demonstrate its
persistent surveillance and communications capacities in a maritime
environment.
- In February 2024, the Company
received multiple orders for fully integrated WAM-V Unmanned
Surface Vehicles (USVs) totaling over $1.25 million. These recent
commercial orders come from clients in Latin America, highlighting
the wide-ranging capabilities and applications of the WAM-V
USVs.
- In January 2024, the Company was
awarded approximately $1.2 million under the New Jersey Economic
Development Authority (NJEDA) 2023 Technology Business Tax
Certificate Transfer Program, commonly known as the Net Operating
Loss (NOL) Program. This program enables technology and life
sciences businesses in New Jersey to sell a percentage of their New
Jersey net operating losses and unused research and development
(R&D) tax credits to unrelated profitable corporations for
cash. OPT takes part in the NJEDA NOL program annually and this
funding represents a significant resource as the Company continues
to make progress on its previously announced path to profitability.
Payment was received by the Company in March 2024.
Management Commentary – Philipp
Stratmann, OPT's President and Chief Executive Officer
“We continue to make progress on our path
towards profitability as evidenced by the continued growth in our
pipeline, revenues, and gross margin. Our efforts to increase our
backlog and revenues in the defense and national security industry
are paying off. Our recent contract wins with large government
prime contractors enable us to provide autonomous vehicles and
renewable energy buoys to various U.S. Government Agencies. In
addition to these contract wins, we continue to deliver for our
commercial customers, especially in the fields of autonomous survey
operations, enabling them to lower costs and carbon emissions. Our
geographic footprint continues to expand and we are seeing
significant opportunities for growth in Latin America. The
substantial cessation of our R&D efforts earlier in this
quarter, is starting to lead to a reduction in payroll and
engineering related expenditures, and the refocusing of the team
towards execution is supporting our stated revenue growth. We
continue to explore opportunities that will accelerate shareholder
value generation as we execute our stated strategy, including cost
optimization, accelerated revenue growth, partnerships, or other
mechanisms.
FINANCIAL HIGHLIGHTS –
Q324
Income Statement:
- Revenues for Q324
were $1.8 million, compared to $0.7 million in Q323. Revenues for
the nine months ended January 31, 2024, were $4.0 million,
compared to $1.8 million for the nine months ended January 31,
2023. This growth was driven by sales of WAM-V autonomous vehicles,
revenue from our previously announced contract with the Department
of Energy (“DOE”) and strategic consulting services.
- Gross profit for
Q324 was $0.8 million, as compared to a gross profit of $0.1
million in Q323. Gross profit for the nine months ended
January 31, 2024, was $2.0 million, as compared to a gross
profit of $0.4 million for the nine months ended January 31,
2023. The improvement in gross margin has been driven by the
Autonomous Vehicles business, primarily through an increase in our
higher margin WAM-V leasing business, and our strategic consulting
services.
- Operating expenses
were $8.6 million in Q324, materially in-line with the second
quarter of fiscal 2024 from and up from $6.8 million in Q323.
Operating expenses were $24.6 million for the nine months ended
January 31, 2024, up from $19.5 million for the nine months
ended January 31, 2023. The Company has incurred one-time,
non-recurring expenses of approximately $3.2 million year to date
for fiscal 2024 to defend against the actions of Paragon
Technologies, Inc. (“Paragon”) to attain control of the Company
without following applicable legal requirements. Among other
things, Paragon initiated extensive litigation against the Company
in Delaware, challenging the Company’s position that Paragon must
adhere to such requirements, and the Court ruled against Paragon.
In addition, Paragon subsequently attempted to prevent the Company
from achieving the necessary quorum to hold its Annual Meeting of
Stockholders that resulted in further significant costs to the
Company.
- Net loss was $6.5
million for the Q324, as compared to a net loss of $6.1 million for
the Q323. Net loss was $20.8 million for the nine months ended
January 31, 2024, compared to a net loss of $16.8 million for
the nine months ended January 31, 2023. The year over year
increases in net loss were primarily driven by the Paragon expenses
noted above.
Balance Sheet and Cash Flow
- Combined cash, restricted cash,
cash equivalents and short-term investments as of January 31,
2024, was $9.3 million, compared to $41.1 million at
January 31, 2023.
- Bank debt remained at $0 as of
January 31, 2024.
- Net cash used in operating
activities for the nine months ended Q324 was $24.7 million,
compared to $16.1 million for the same period in the prior year.
This reflects the net loss noted above, payment of the earnout
related to our autonomous vehicles business as a result of this
business exceeding our expectations, investment in inventory to
satisfy growing backlog, payment of employment bonuses that were
accrued during fiscal year 2023 and incurrence of Paragon related
expenses as noted above.
Conference Call &
Webcast
As announced on February 21, 2024, a conference
call to discuss OPT’s financial results will be held tomorrow
morning, Thursday, March 14, 2024, at 9:00 a.m. Eastern Standard
Time. Philipp Stratmann, CEO, Bob Powers, CFO, and Joseph DiPietro,
Treasurer and Controller, will host the call.
- The dial-in numbers for the
conference call are 877-407-8291 or 201-689-8345.
- Live Webcast: Webcast | Ocean Power
Technologies FY2024 Q3 Earnings Conference Call
(choruscall.com)
- Call Replay: Will be available by
telephone approximately two hours after the call’s
completion.
- You may access the replay by
dialing 877-660-6853 from the U.S. or 201-612-7415 for
international callers and using the Conference ID 13742581.
About Ocean Power
TechnologiesOPT provides intelligent maritime solutions
and services that enable safer, cleaner, and more productive ocean
operations for the defense and security, oil and gas, science and
research, and offshore wind markets. Our PowerBuoy® platforms
provide clean and reliable electric power and real-time data
communications for remote maritime and subsea applications. We also
provide WAM-V® autonomous surface vessels (ASVs) and marine
robotics services. The Company’s headquarters is located
in Monroe Township, New Jersey and has an additional
office in Richmond, California. To learn more,
visit www.OceanPowerTechnologies.com.
Non-GAAP Measures:
PipelinePipeline is not a term recognized under United
States generally accepted accounting principles; however, it is a
common measurement used in our industry. Our methodology for
determining pipeline may not be comparable to the methodologies
used by other companies. Pipeline is a representation of the
journey potential customers take from the moment they become aware
of our products and service to the moment they become a paying
customer. The sales pipeline is divided into a series of phases,
each representing a different milestone in the customer journey. It
is a tool we use to track sales progress, identify potential
roadblocks, and make data-driven decisions to improve our sales
performance. Revenue estimates derived from our pipeline can be
subject to change due to project accelerations, cancellations or
delays due to various factors. These factors can also cause revenue
amounts to be realized in periods and at levels different than
originally projected.
Forward-Looking StatementsThis
release may contain forward-looking statements that are within the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are identified by certain
words or phrases such as "may", "will", "aim", "will likely
result", "believe", "expect", "will continue", "anticipate",
"estimate", "intend", "plan", "contemplate", "seek to", "future",
"objective", "goal", "project", "should", "will pursue" and similar
expressions or variations of such expressions. These
forward-looking statements reflect the Company's current
expectations about its future plans and performance. These
forward-looking statements rely on a number of assumptions and
estimates that could be inaccurate and 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 U.S. Securities and
Exchange Commission for 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
FollowAdditional information may be found in the Company's
Quarterly Report on Form 10-Q that has been filed with the U.S.
Securities and Exchange Commission. The Form 10-Q is accessible at
www.sec.gov or the Investor Relations section of the Company's
website (www.OceanPowerTechnologies.com/investor-relations).
|
|
|
|
Ocean Power Technologies, Inc., and
SubsidiariesConsolidated Balance
Sheets(in thousands, except share
data) |
|
|
|
|
|
January 31,2024 |
|
April 30,2023 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
4,720 |
|
|
$ |
6,883 |
|
Short term investments |
|
4,377 |
|
|
|
27,790 |
|
Restricted cash, short-term |
|
154 |
|
|
|
65 |
|
Accounts receivable |
|
625 |
|
|
|
745 |
|
Contract assets |
|
281 |
|
|
|
152 |
|
Inventory |
|
3,460 |
|
|
|
1,044 |
|
Other current assets |
|
3,927 |
|
|
|
994 |
|
Total current assets |
|
17,544 |
|
|
|
37,673 |
|
Property and equipment,
net |
|
2,217 |
|
|
|
1,280 |
|
Intangibles, net |
|
3,656 |
|
|
|
3,978 |
|
Right-of-use assets, net |
|
2,610 |
|
|
|
1,751 |
|
Restricted cash,
long-term |
|
— |
|
|
|
155 |
|
Goodwill |
|
8,537 |
|
|
|
8,537 |
|
Total assets |
$ |
34,564 |
|
|
$ |
53,374 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
1,466 |
|
|
$ |
952 |
|
Earnout payable |
|
— |
|
|
|
1,500 |
|
Accrued expenses |
|
2,991 |
|
|
|
2,346 |
|
Contingent liabilities |
|
1,085 |
|
|
|
1,202 |
|
Right-of-use liabilities, current portion |
|
625 |
|
|
|
529 |
|
Contract liabilities |
|
868 |
|
|
|
1,378 |
|
Total current liabilities |
|
7,035 |
|
|
|
7,907 |
|
Deferred tax liability |
|
203 |
|
|
|
203 |
|
Right-of-use liabilities, less
current portion |
|
2,065 |
|
|
|
1,311 |
|
Total liabilities |
|
9,303 |
|
|
|
9,421 |
|
Commitments and contingencies
(Note 14) |
|
|
|
Shareholders’ Equity: |
|
|
|
Preferred stock, $0.001 par value; authorized 5,000,000 shares,
none issued or outstanding; 100,000 designated as Series A |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; authorized 100,000,000 shares,
issued 59,551,090 shares and 56,304,642 shares, respectively;
outstanding 59,463,073 shares and 56,263,728 shares,
respectively |
|
59 |
|
|
|
56 |
|
Treasury stock, at cost; 88,017 shares and 40,914 shares,
respectively |
|
(368 |
) |
|
|
(355 |
) |
Additional paid-in capital |
|
326,472 |
|
|
|
324,393 |
|
Accumulated deficit |
|
(300,857 |
) |
|
|
(280,096 |
) |
Accumulated other comprehensive loss |
|
(45 |
) |
|
|
(45 |
) |
Total shareholders’ equity |
|
25,261 |
|
|
|
43,953 |
|
Total liabilities and shareholders’ equity |
$ |
34,564 |
|
|
$ |
53,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ocean Power Technologies, Inc., and
SubsidiariesConsolidated Statements of
Operations(in thousands, except per share
data) |
|
|
|
|
Three months ended January 31, |
Nine months ended January 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
Revenues |
$ |
1,792 |
|
|
$ |
734 |
|
|
$ |
3,953 |
|
|
$ |
1,752 |
|
Cost of revenues |
|
979 |
|
|
|
598 |
|
|
|
1,989 |
|
|
|
1,382 |
|
Gross margin |
|
813 |
|
|
|
136 |
|
|
|
1,964 |
|
|
|
370 |
|
|
|
|
|
|
|
|
Operating expenses |
|
8,551 |
|
|
|
6,820 |
|
|
|
24,648 |
|
|
|
19,546 |
|
(Gain)/loss from change in
fair value of consideration |
|
(33 |
) |
|
|
373 |
|
|
|
(117 |
) |
|
|
154 |
|
Operating loss |
|
(7,705 |
) |
|
|
(7,057 |
) |
|
|
(22,567 |
) |
|
|
(19,330 |
) |
|
|
|
|
|
|
|
Interest income, net |
|
151 |
|
|
|
229 |
|
|
|
760 |
|
|
|
604 |
|
Other income, proceeds from
insurance claim |
|
— |
|
|
|
458 |
|
|
|
— |
|
|
|
458 |
|
Other income, employee
retention credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,202 |
|
Loss on disposition of
assets |
|
(210 |
) |
|
|
— |
|
|
|
(210 |
) |
|
|
— |
|
Foreign exchange gain |
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
Loss before income taxes |
|
(7,763 |
) |
|
|
(6,368 |
) |
|
|
(22,015 |
) |
|
|
(17,064 |
) |
Income tax benefit |
|
1,254 |
|
|
|
278 |
|
|
|
1,254 |
|
|
|
278 |
|
Net loss |
|
(6,509 |
) |
|
|
(6,090 |
) |
|
|
(20,761 |
) |
|
|
(16,786 |
) |
Basic and diluted net loss per
share |
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.30 |
) |
Weighted average shares used to compute basic and diluted net loss
per common share |
|
58,865,898 |
|
|
|
55,966,672 |
|
|
|
58,790,160 |
|
|
|
55,918,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ocean Power Technologies, Inc., and
SubsidiariesConsolidated Statements of Cash
Flows(in thousands) |
|
|
|
Nine months ended January 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(20,761 |
) |
|
$ |
(16,786 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation of fixed assets |
|
286 |
|
|
|
157 |
|
Foreign exchange gain |
|
2 |
|
|
|
— |
|
Amortization of intangible assets |
|
114 |
|
|
|
119 |
|
Amortization of right of use assets |
|
388 |
|
|
|
230 |
|
(Accretion of discount)/amortization of premium on investments |
|
(277 |
) |
|
|
198 |
|
Change in contingent consideration liability |
|
(117 |
) |
|
|
154 |
|
Stock based compensation |
|
803 |
|
|
|
911 |
|
Loss on disposition of assets |
|
210 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
120 |
|
|
|
(224 |
) |
Contract assets |
|
(129 |
) |
|
|
293 |
|
Inventory |
|
(2,416 |
) |
|
|
(995 |
) |
Other assets |
|
(2,933 |
) |
|
|
(1,530 |
) |
Accounts payable |
|
512 |
|
|
|
(314 |
) |
Earnout payable |
|
(500 |
) |
|
|
— |
|
Accrued expenses |
|
894 |
|
|
|
747 |
|
Right-of-use liabilities |
|
(397 |
) |
|
|
(254 |
) |
Contract liabilities |
|
(510 |
) |
|
|
1,205 |
|
Net cash used in operating activities |
$ |
(24,711 |
) |
|
$ |
(16,089 |
) |
Cash flows from investing
activities: |
|
|
|
Redemptions of short term investments |
|
31,625 |
|
|
|
49,584 |
|
Purchases of short term investments |
|
(7,935 |
) |
|
|
(30,402 |
) |
Purchases of property and equipment |
|
(1,224 |
) |
|
|
(302 |
) |
Net cash provided by investing activities |
$ |
22,466 |
|
|
$ |
18,880 |
|
Cash flows from financing
activities: |
|
|
|
Cash paid for tax withholding related to shares withheld |
|
(13 |
) |
|
|
(14 |
) |
Proceeds from issuance of common stock - Cantor At The Market
offering, net of issuance costs |
$ |
29 |
|
|
$ |
— |
|
Net cash provided by/(used in) financing activities |
$ |
16 |
|
|
$ |
(14 |
) |
Net (decrease) / increase in cash, cash equivalents and restricted
cash |
$ |
(2,229 |
) |
|
$ |
2,777 |
|
Cash, cash equivalents and
restricted cash, beginning of period |
$ |
7,103 |
|
|
$ |
8,362 |
|
Cash, cash equivalents and
restricted cash, end of period |
$ |
4,874 |
|
|
$ |
11,139 |
|
|
|
|
|
Supplemental disclosure of
noncash investing and financing activities: |
|
|
|
Common stock issued related to bonus and earnout payments |
$ |
1,250 |
|
|
$ |
— |
|
Operating right of use asset obtained in exchange for operating
lease liability |
$ |
1,247 |
|
|
$ |
— |
|
Contact Information
Investors: 609-730-0400 x401 or InvestorRelations@oceanpowertech.com
Media: 609-730-0400 x402 or MediaRelations@oceanpowertech.com
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