Odyssey Marine Exploration (AMEX:OMR), a leader in the field of
deep-ocean shipwreck exploration, today filed a quarterly report
with the Securities and Exchange Commission detailing results of
the Company's first quarter 2006. In addition, the Company's Board
of Directors re-appointed Michael V. Barton to serve up to an
additional 90 days as Interim CEO, effective immediately, pending
further evaluation of former CEO John Morris' medical condition.
Morris will continue to serve as Odyssey's Chairman of the Board.
For the first quarter of 2006, Odyssey reported revenue of $.9
million, compared to $3.4 million in the first quarter 2005. The
Company reported a net loss of $3.9 million, compared to a net loss
of $11,900 in 2005. The net loss per share for the first quarter
was $.09, compared to $.00 per share in the first quarter 2005.
"While we're obviously disappointed in our financial performance
this quarter, we are currently implementing new business
development, sales and marketing strategies which we expect to have
a positive impact on revenue later in 2006. A key component of our
business plan is the recovery of additional valuable shipwreck
cargoes and our marine operations team continues to execute an
aggressive shipwreck search and recovery program on multiple
projects," said Michael Barton, Odyssey's Chief Executive Officer.
"Some of our new projects are being selected specifically because
research indicates that they were carrying high-value cargoes that
we believe can be marketed in an expeditious manner." -0- *T First
Quarter 2006 Results REVENUE *T Revenue for the first quarter 2006
was $.9 million, compared to $3.4 million in the first quarter
2005. The decrease of $2.5 million in 2006 is primarily due to a
lower availability of high-value numismatic gold coins and sales to
fewer independent coin dealers. Our experience has shown that many
of these independent dealers are primarily interested in higher
quality numismatic gold coins. As our availability of these higher
quality gold coins diminishes, we expect the number of independent
dealers interested in our coins to be reduced. We continue to
develop additional indirect sales channels to supplement our sales
to independent coin dealers of our non-graded gold coins, shipwreck
effect silver coins and other merchandise. While significant
revenue has not yet been realized from these new indirect sales
channels, we are building additional distribution for Odyssey
shipwreck products, which we believe will begin producing revenue
during 2006. We also continue to develop retail distribution of
coins, artifacts and merchandise in our direct retail sales
channels where gross margins are higher. While these sales
increased in the first quarter 2006 relative to 2005, our overall
expectations have not yet been achieved. After investigating
opportunities to increase revenue and reduce expenses without
compromising the overall strategic business plan, we decided to
restructure our business development and sales functions. Based on
several favorable tests, direct sales (inbound and outbound call
center and related infrastructure) have been outsourced to an
experienced direct marketing call center so the internal business
development team can focus on business to business (wholesale)
sales channels and joint venture opportunities. -0- *T EXPENSES *T
Operations and research expenses were $2.3 million in the first
quarter of 2006, compared to $1.3 million in 2005. Of the $1.0
million increase, $.7 million was due to vessel recovery costs not
being capitalized during 2006, and $.3 million was due to
operations costs of our themed attractions segment, primarily
associated with our New Orleans attraction which re-opened on
February 15, 2006 after being closed by Hurricane Katrina in late
August 2005. Marketing, general and administrative expenses were
$2.4 million in the first quarter 2006, as compared to $1.9 million
in the first quarter 2005. Of the $.5 million increase, $.2 million
resulted from advertising expenses primarily associated with our
direct sales effort. Additionally, $.2 million related to our
themed attractions segment for continuing and additional expenses
associated with the re-opening of our New Orleans attraction. Also,
$.1 million was attributable to general and administration
expenses, information technology and professional services. -0- *T
QUARTERLY OPERATIONAL REVIEW *T For security, competitive and
political reasons, we may not always comment or disclose
information on some projects until they are completed. As the
deep-ocean shipwreck exploration industry grows and becomes more
competitive, and as our relationships with governments become more
complex, it does not benefit the Company (and therefore
shareholders) to disclose ongoing operational details. "Atlas"
Search Project The Company resumed search operations on its "Atlas"
project in April utilizing a ship equipped with Odyssey's advanced
side-scan sonar, magnetometer and other proprietary technology. In
addition, Odyssey's MaxRover ROV, nicknamed "CLIO," has been
relocated to the "Atlas" search area to be used for site
inspections. The 2005 search operations in the "Atlas" area
resulted in the mapping of over 4,600 square miles of the search
area. Results include the discovery of 2,421 anomalies on the sea
floor using an advanced high-resolution side-scan sonar system.
After post-processing data, over 1,100 of those anomalies were
selected for possible further examination. Of those, 577 sites have
been inspected and at least 180 are believed to be manmade or
shipwreck sites. Odyssey's research indicates that a minimum of
five high-value shipwrecks are in the "Atlas" search area. (For
reasons of security and strategic confidentiality, the Company does
not disclose the location of the "Atlas" area.) Odyssey's 251'
deep-ocean archaeological platform, the Odyssey Explorer continues
to work on deep-ocean projects in the Mediterranean. For security
reasons, information relating to these projects may not be
disclosed until completion of recovery operations. HMS Sussex In
March 2006, Odyssey submitted an archaeological plan which
addressed all issues raised by the Autonomous Region of Andalucia
and the central Spanish government in reference to the ongoing HMS
Sussex project. The Company is awaiting final comments and approval
of the plan before continuing operations on that shipwreck. HMS
Sussex was an 80-gun English warship lost in a severe storm in the
western Mediterranean in 1694. Research suggests the Sussex was
carrying a large cargo of coins when she sank. Odyssey believes it
has located the shipwreck of HMS Sussex and as signed an exclusive
partnering agreement with the legal owner of the shipwreck, the
Government of the United Kingdom, for the archaeological excavation
of the shipwreck. Odyssey has completed to the satisfaction of the
Government of the United Kingdom all work detailed in Phase 1A of
the Sussex archaeological project plan. Odyssey has also completed
a portion of Phase 1B. (A public version of the project plan is
available for viewing at http://www.shipwreck.net.) "Bristol"
project Odyssey is reviewing the preliminary data and determining
equipment needs for a recovery operation. This shipwreck lies in an
area that allows us to work year round, so we will probably wait
until winter to begin operations. About Odyssey Marine Exploration
Odyssey Marine Exploration is an American Stock Exchange Company
with several shipwreck projects in various stages of development
throughout the world. Additional information about Odyssey, its
projects, methodologies and technologies, is available at
http://www.shipwreck.net. For additional information, please
contact John McNeilly, Odyssey's Manager of Corporate
Communications, at 813-876-1776. Odyssey Marine Exploration
believes the information set forth in this Press Release may
include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Act of
1934. Certain factors that could cause results to differ materially
from those projected in the forward-looking statements are set
forth in "Risk Factors," and "Business" in the Company's annual
report on Form 10-K for the year ended December 31, 2005, which has
been filed with the Securities and Exchange Commission. -0- *T
ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Unaudited) March 31, December 31, 2006 2005
------------ ------------ ASSETS CURRENT ASSETS Cash and cash
equivalents $ 8,088,341 $ 3,283,331 Accounts receivable, net
983,297 1,527,913 Inventory 4,244,475 4,728,394 Other current
assets 640,417 729,678 ------------ ------------ Total current
assets 13,956,530 10,269,316 PROPERTY AND EQUIPMENT Equipment and
office fixtures 10,909,569 10,745,738 Building and land 4,021,323
3,973,988 Accumulated depreciation (3,232,886) (2,738,572)
------------ ------------ Total property and equipment 11,698,006
11,981,154 OTHER ASSETS Inventory (non current) 6,373,154 5,839,914
Attraction development 1,172,475 1,172,475 Other non current assets
923,232 927,599 ------------ ------------ Total other assets
8,468,861 7,939,988 ------------ ------------ Total assets
$34,123,397 $30,190,458 ============ ============ LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 359,116
$ 601,129 Accrued expenses 834,173 1,843,261 Mortgage and loans
payable 111,250 111,433 Deposits 136,404 103,069 ------------
------------ Total current liabilities 1,440,943 2,658,892 LONG
TERM LIABILITIES Mortgage payable 1,733,333 1,758,333 Deferred
income from Revenue Participation Certificates 887,500 887,500
------------ ------------ Total long term liabilities 2,620,833
2,645,833 ------------ ------------ Total liabilities 4,061,776
5,304,725 ------------ ------------ STOCKHOLDERS' EQUITY Preferred
stock - $.0001 par value; 6,800,000 and 9,300,000 shares
authorized; none outstanding -- -- Preferred stock series A
convertible - $.0001 par value; 510,000 shares authorized; none
issued or outstanding -- -- Preferred stock series D convertible -
$.0001 par value; 2,500,000 and 0 shares authorized, issued and
outstanding 250 -- Common stock - $.0001 par value; 100,000,000
Shares authorized; 46,087,678 and 45,823,224 issued and outstanding
4,609 4,582 Additional paid-in capital 52,974,527 43,870,228
Accumulated deficit (22,917,765) (18,989,077) ------------
------------ Total stockholders' equity 30,061,621 24,885,733
------------ ------------ Total liabilities and stockholders'
equity $34,123,397 $30,190,458 ============ ============ *T -0- *T
ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS - Unaudited Three Months Ended
------------------------- March 31, March 31, 2006 2005
------------ ------------ REVENUE $ 865,179 $ 3,349,516 OPERATING
EXPENSES Cost of sales 114,330 216,282 Marketing, general &
administrative 2,401,361 1,920,927 Operations & research
2,264,055 1,312,461 ------------ ------------ Total operating
expenses 4,779,746 3,449,670 INCOME (LOSS) FROM OPERATIONS
(3,914,567) (100,154) OTHER INCOME (EXPENSE) Interest income 13,703
8,528 Interest expense (42,120) (28,511) Other 14,297 13,511
------------ ------------ Total other income (expense) (14,120)
(6,472) ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES
(3,928,687) (106,626) Income tax benefit (provision) -- 94,720
------------ ------------ NET INCOME (LOSS) (3,928,687) (11,906)
============ ============ EARNINGS (LOSS) PER SHARE Basic and
diluted $ (.09) $ .00 Weighted average number of common shares
outstanding Basic and diluted 45,965,907 39,276,793 *T -0- *T
ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS - Unaudited Three Months Ended
------------------------- March 31, March 31, 2006 2005
------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net
Income (Loss) $(3,928,687) $ (11,906) Adjustments to reconcile net
loss to net cash used by operating activity: Deferred income taxes
-- (116,922) Depreciation and amortization 496,841 227,271 (Gain)
Loss on disposal of equipment -- (14,550) Share based compensation
41,508 -- Tax benefit related to exercise of employee Stock options
-- 22,202 (Increase) decrease in: Accounts receivable 491,080
(223,616) Inventory (49,322) (504,201) Other assets 91,101
(769,221) Increase (decrease) in: Accounts payable (242,010 )
308,862 Customer deposits 33,334 (3,065) Accrued expenses (955,553)
(933,656) ------------ ------------ NET CASH (USED) IN OPERATING
ACTIVITIES (4,021,708) (2,018,802) ------------ ------------ CASH
FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment
(211,167) (552,384) Proceeds from sale of equipment -- 49,647
Attraction development -- (1,677,360) Purchase of building
improvements -- (74,177) ------------ ------------ NET CASH (USED)
IN INVESTING ACTIVITIES (211,167) (2,254,274) ------------
------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from
issuance of common stock 313,068 6,919,750 Proceeds from issuance
of preferred stock 8,750,000 -- Broker commission and fees on
private offering -- (400,000) Loan payable 1,511,250 -- Repayment
of mortgage and loans payable (1,536,433) (25,000) ------------
------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 9,037,885
6,494,750 ------------ ------------ NET INCREASE IN CASH 4,805,010
2,221,674 CASH AT BEGINNING OF PERIOD 3,283,331 3,050,721
------------ ------------ CASH AT END OF PERIOD $ 8,088,341 $
5,272,395 ============ ============ SUPPLEMENTARY INFORMATION:
Interest paid $ 34,045 $ 27,766 Income taxes paid $ -- $ -- NON
CASH TRANSACTIONS: Depreciation reclassified as inventory $ -- $
72,912 Accounts receivable paid by services $ 53,539 $ -- Accrued
compensation paid by common stock $ -- $ 100,000 *T
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