17th Mar 2008 07:01
Ocean Power Technologies Inc17 March 2008 ------------------------------------------------------ NEWS RELEASE------------------------------------------------------ Ocean Power Technologies, Inc. 1590 Reed Road Pennington, New Jersey 08534 USA For Immediate Release March 17, 2008 OCEAN POWER TECHNOLOGIES ANNOUNCES RESULTS FOR THE QUARTER AND NINE MONTHS ENDED JANUARY 31, 2008 Ocean Power Technologies, Inc. (Nasdaq: OPTT and London Stock Exchange AIM: OPT)("OPT" or the "Company") announced today its results for the third quarter andnine months ended January 31, 2008. Highlights of the Third Quarter •Shipment of power take-off and control system from New Jersey production facility to Spain, under contract with an affiliate of Iberdrola •PowerBuoy(R), power take-off and control system completed and will commence cycle testing at New Jersey facility, in advance of shipment to Hawaii under contract with US Navy •PowerBuoy installed off coast of New Jersey has to date completed 18 months of in-ocean deployment •Order backlog at January 31, 2008: $6.5 million (April 30, 2007: $5.2 million) •Revenues for the third quarter ended January 31, 2008 increased by 118% to $1.4 million, up $0.8 million from the third quarter of fiscal 2007 ($0.6 million) •Cash, cash equivalents and certificates of deposit of $106.1 million at January 31, 2008 (April 30, 2007: $115.9 million) •Herbert T. Nock appointed to the position of Vice President, Business Development and Marketing Overview OPT continued to make excellent progress towards the completion of majorcontracts in three countries. Revenues for the quarter ended January 31, 2008 increased by 118% to $1.4million compared to $0.6 million in the quarter ended January 31, 2007. TheCompany incurred a net loss of $4.0 million in the third quarter of fiscal 2008compared to a net loss of $1.5 million in the third quarter of fiscal 2007. Thethird quarter basic and diluted net loss per share was $0.39 in fiscal 2008compared to $0.30 in fiscal 2007. The weighted average number of shares used tocompute basic and diluted net loss per share was 10,210,354 for the thirdquarter of fiscal 2008, compared to 5,176,894 for the third quarter of fiscal2007. The fiscal 2008 number of shares reflects the issuance of 5 million sharesin connection with the Company's U.S. initial public offering completed on April30, 2007. Contract backlog for the Company was $6.5 million as of January 31,2008 compared to $5.2 million as of April 30, 2007. For the nine months ended January 31, 2008, the Company reported revenues of$3.7 million compared to $1.5 million in the nine months ended January 31, 2007,an increase of 142%. OPT reported a net loss of $8.3 million, or $0.81 basic anddiluted net loss per share, for the nine months ended January 31, 2008 comparedto a net loss of $5.5 million, or $1.06 basic and diluted net loss per share,for the nine months ended January 31, 2007. The weighted average number ofshares used to compute basic and diluted net loss per share was 10,197,521 forthe nine months ended January 31, 2008, compared to 5,174,539 for the ninemonths ended January 31, 2007. Commenting on the results, George W. Taylor, Chief Executive Officer of OPT, said "We are pleased that OPT continues to achieve strong revenue growth with a healthy order book as our commercialization strategy gathers momentum. Investment in our technology and selling and marketing activity has expanded as planned. We are also encouraged about the record-breaking accomplishment of our New Jersey PowerBuoy having completed eighteen months of in-ocean deployment, including the weathering of one hurricane and numerous winter storms. We remain focused on product shipments, technology development and expanding our order pipeline, and we are very confident of the progress to be made in these areas." Operational Review During the third quarter ended January 31, 2008, OPT has continued to makesubstantial progress in a number of ongoing projects, including: REEDSPORT, OREGON, US - In August 2007, the Company signed an agreement withPNGC Power under which the electric cooperative will provide funding of $0.5million toward the fabrication and ocean installation of the first 150kW (PB150)PowerBuoy system at the Reedsport OPT Wave Park in Oregon. The first phase ofthe project aims to install an array of PowerBuoy systems generating a total ofup to 2MW. OPT has been issued a preliminary permit by the Federal EnergyRegulatory Commission for up to 50MW at the site, which is 2.5 miles off thecoast of Reedsport. During the third quarter of fiscal 2008, significantprogress has been made to inform and obtain support from local interest groups,natural resource agencies and other stakeholders. HAWAII, US - Work has been completed on the construction of a new PowerBuoysystem to be deployed at a site one mile off the coast of Oahu, in connectionwith the Company's contract with the US Navy. The power take-off and controlsystem has been fully integrated with the buoy, and will commence cycle testingprior to shipment to Hawaii. SPAIN - Construction has been completed by a local supplier of the Company'sPB40 PowerBuoy which will be deployed off the coast of Cantabria for the Spanishutility Iberdrola. The power take-off and control system has been assembled inthe Company's New Jersey plant and has been completed and shipped to Spain, andis now undergoing extended life cycle testing prior to being integrated with thebuoy. FRANCE - Under the current phase of site identification for OPT's contract withTotal and Iberdrola to develop a wave power station off the Atlantic coast ofFrance, the Company is in the process of securing a sub-contractor to performwave data collection. ORKNEY ISLANDS, UK - Design of the PB150 PowerBuoy for deployment at theEuropean Marine Energy Centre off Orkney is now well underway and certainelements of the system are already under construction. CORNWALL, UK - The UK government has received planning approval for the Wave Hubproject and approved funding for the construction of the infrastructure to whichan OPT PowerBuoy wave farm will be connected. The South West RegionalDevelopment Agency (SWRDA), which is responsible for the project, is receivingbids for the infrastructure contracts. NEW JERSEY, US - OPT's PB40 PowerBuoy has been deployed in the Atlantic Oceanabout five miles off the coast of Tuckerton for eighteen (18) months, and thebuoy has performed without incident. The Company believes this to be arecord-breaking achievement for any off-shore wave energy conversion system. U.S. NAVY DEEP OCEAN APPLICATION - In June 2007, OPT was awarded a $1.7 millioncontract by the U.S. Navy to provide autonomous PowerBuoy technology for itsDeep Water Acoustic Detection System (DWADS) for ocean data gathering.Construction and fitting is now underway on the buoy, as well as assembly of thepower take-off and control systems. In an innovative decision, OPT and the U.S.Navy have decided to utilize the PowerBuoy that was tested in Hawaii in June2007 for the DWADS project. This re-usability highlights the flexibility of thecore PowerBuoy design, as well as its modularity. In January 2008, OPT strengthened its management team with the appointment ofHerbert T. Nock as Vice President, Business Development and Marketing. This is anew position that has been created as the Company's commercialization of wavepower is expected to continue gaining momentum in 2008. Reporting to Dr. GeorgeW. Taylor, OPT's Chief Executive Officer, Mr. Nock will be responsible for theCompany's business development, sales and marketing activities. Prior to joiningOPT, Mr. Nock's career included five years as Senior Vice President, Marketingand Sales at Fuel Cell Energy, Inc. ( Nasdaq: FCEL) and 29 years in the PowerSystems Division of General Electric Company (NYSE: GE). Financial review Revenues increased by $0.8 million for the quarter ended January 31, 2008, or118%, to $1.4 million as compared to $0.6 million for the quarter ended January 31, 2007. The increase in revenues was primarily attributable to an increase in on-going work on the first phase of construction of a 1.39MW wave power station off the coast of Spain, work on the design, manufacture and installation of an OPT wave power system consisting of a PB150 (150kW) PowerBuoy device in Orkney, Scotland, and work on the contract with the U.S. Navy to provide our PowerBuoy technology to a program for data gathering in the ocean. Cost of revenues increased by $1.3 million to $2.0 million for the quarter ended January 31, 2008, as compared to $0.7 million for the quarter ended January 31, 2007. This increase in cost of revenues reflected the higher level of activity on revenue-bearing contracts, and also included a charge of $0.4 million recorded in the quarter ended January 31, 2008 in connection with the project in Spain, due to higher expected costs at completion of the project. Net loss for the quarter ended January 31, 2008 was $4.0 million, compared to a net loss of $1.5 million for the quarter ended January 31, 2007. This increase in net loss was attributable to the increase in gross loss, a 63% increase in product development costs primarily reflecting work to increase the power output of the Company's utility PowerBuoy, a 79% increase in selling, general and administrative costs (S,G&A) and a $1.0 million change in foreign exchange gain (loss), net of a $0.7 million increase in interest income. The increase in S,G&A was attributable to higher marketing costs, professional fees and other costs incurred as a result of becoming a public company in the United States, and additional payroll and incentive-based costs related to the Company's growth. The change in foreign exchange gain (loss) was primarily attributable to the change in the value of the British pound versus the U.S. dollar. Revenues increased by $2.2 million in the nine months ended January 31, 2008, or 142%, to $3.7 million as compared to $1.5 million in the nine months ended January 31, 2007. The increase in revenues was primarily attributable to an increase in work on: the Hawaii project for the U.S. Navy, the wave power station off the coast of Spain, the PB150 (150kW) PowerBuoy device in Orkney, Scotland, and the contract with the U.S. Navy to provide our PowerBuoy technology to a program for data gathering in the ocean. Cost of revenues increased by $2.6 million to $4.7 million in the nine months ended January 31, 2008, as compared to $2.1 million in the nine months ended January 31, 2007. This increase in cost of revenues primarily reflected the higher level of activity on revenue-bearing contracts, and also includes a charge of $0.4 million recorded in the nine months ended January 31, 2008 in connection with the project in Spain, due to higher than expected costs at completion of the project. Net loss for the nine months ended January 31, 2008 was $8.3 million compared to a net loss of $5.5 million in the nine months ended January 31, 2007. This increase was primarily attributable to the increased gross loss, a 43% increase in product development costs, a 71% increase in S,G&A costs and a $1.1 million decrease in foreign exchange gains, net of a $2.8 million increase in interest income. The reasons for the increases in product development, S,G&A, and the decrease in foreign exchange gains are noted above in the respective third quarter periods. The Company finished the quarter with continuing strong liquidity. At January 31, 2008, total cash, cash equivalents and certificates of deposit were $106.1 million, compared to $115.9 million at April 30, 2007. Long-term debt of $0.2 million represents amounts due to the State of New Jersey under a non-interest bearing loan which must be repaid no later than January 2012. Stockholders' equity and common shares outstanding reflect the receipt of proceeds on April 30, 2007 from the U.S. initial public offering and listing on the Nasdaq Global Market. The Company raised a net amount of approximately $90 million through the sale of 5 million common shares. **********Additional information may be found in the Company's Quarterly Report on Form10-Q filed with the U.S. Securities and Exchange Commission. The Form 10-Q maybe accessed at www.sec.gov or at the Company's website in the Investor Relationstab. **********Forward-Looking StatementsThis release may contain "forward-looking statements" that are within the safeharbor provisions of the Private Securities Litigation Reform Act of 1995. Theseforward-looking statements reflect the Company's current expectations about itsfuture plans and performance, including statements concerning the impact ofmarketing strategies, new product introductions and innovation, deliveries ofproduct, sales, earnings, and margins. These forward-looking statements rely ona number of assumptions and estimates which could be inaccurate and which aresubject to risks and uncertainties. Actual results could vary materially fromthose anticipated or expressed in any forward-looking statement made by theCompany. Please refer to the Company's most recent Form 10-K and subsequentfilings for a further discussion of these risks and uncertainties. The Companydisclaims any obligation or intent to update the forward-looking statements inorder to reflect events or circumstances after the date of this release. About Ocean Power Technologies Ocean Power Technologies, Inc. develops and is commercializing proprietarysystems that generate electricity by harnessing the renewable energy of oceanwaves. The Company's PowerBuoy(R) system is based on modular, ocean-going buoys,which have been ocean tested for nearly a decade. The waves move the buoy-likestructure, creating mechanical energy that the Company's proprietarytechnologies convert into electricity. For further information, please contact: Ocean Power Technologies, Inc. Dr. George W. Taylor, Chief Executive Officer Telephone: +1 609 730 0400Charles F. Dunleavy, Chief Financial Officer Telephone: +1 609 730 0400 Corfin Communications Martin Sutton, Neil Thapar Telephone: +44 20 7977 0020 Collins Stewart Europe Limited Adrian Hadden Telephone: +44 20 7523 8350 ****** Consolidated Balance Sheets as of January 31, 2007,April 30, 2007 and January 31, 2008 January 31, April 30, January 31, 2007 2007 2008ASSETS $ $ $ (Unaudited) (Unaudited)CURRENT ASSETS:Cash and cash equivalents 19,622,549 107,505,473 106,082,023Certificates of deposit 7,034,603 8,390,146 -Accounts receivable 494,673 865,081 249,580Unbilled receivables 345,418 313,080 1,870,558Other current assets 2,232,443 441,342 1,176,181 Total current assets 29,729,686 117,515,122 109,378,342 Property and equipment, net 439,431 387,923 479,121Patents, net of accumulatedamortization of $172,490, $176,840 and $196,510,respectively 526,443 597,280 659,843Restricted cash - 983,376 1,064,448Other noncurrent assets 230,070 227,845 255,864 TOTAL ASSETS 30,925,630 119,711,546 111,837,618 LIABILITIES AND STOCKHOLDERS'EQUITY CURRENT LIABILITIES:Accounts payable 685,897 1,708,408 1,371,483Accrued expenses 2,724,694 4,593,413 2,869,163Unearned revenues 66,877 - 655,323Other current liabilities 27,496 26,106 26,106 Total current liabilities 3,504,964 6,327,927 4,922,075 LONG-TERM DEBT 233,959 231,585 188,784 DEFERRED RENT 9,472 10,825 14,884 DEFERRED CREDITS 600,000 600,000 600,000 Total liabilities 4,348,395 7,170,337 5,725,743 STOCKHOLDERS' EQUITY:Preferred stock, $0.001 par value; authorized 5,000,000 shares; none issued oroutstanding - - -Common stock, $0.001 parvalue; authorized105,000,000 shares; issuedand outstanding 5,177,219,10,186,254 and 10,210,354shares, respectively 5,177 10,186 10,210Additional paid-in capital 60,731,724 150,842,671 152,739,104Accumulated deficit (34,140,603) (38,270,918) (46,572,539)Accumulated othercomprehensive loss (19,063) (40,730) (64,900) Total stockholders' equity 26,577,235 112,541,209 106,111,875 TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY 30,925,630 119,711,546 111,837,618 Consolidated Statements of OperationsFor the quarter ended January 31, 2007 and 2008 (Unaudited) January 31, January 31, 2007 2008 $ $ REVENUES 652,884 1,421,856COST OF REVENUES 720,478 1,992,524Gross loss (67,594) (570,668)PRODUCT DEVELOPMENT COSTS 1,298,379 2,116,924SELLING, GENERAL AND ADMINISTRATIVE COSTS 1,070,484 1,913,230Operating expenses 2,368,863 4,030,154Operating loss (2,436,457) (4,600,822)INTEREST INCOME 343,895 1,057,850OTHER INCOME 13,744 -FOREIGN EXCHANGE GAIN (LOSS) 538,522 (449,989)NET LOSS (1,540,296) (3,992,961)Basic and diluted net loss per share (0.30) (0.39)Weighted average shares used to compute basic and diluted net loss per share 5,176,894 10,210,354 Consolidated Statements of OperationsFor the nine months ended January 31, 2007 and 2008 (Unaudited) January 31, January 31, 2007 2008 $ $ REVENUES 1,513,631 3,663,772COST OF REVENUES 2,103,108 4,720,712Gross loss (589,477) (1,056,940)PRODUCT DEVELOPMENT COSTS 4,100,418 5,875,371SELLING, GENERAL AND ADMINISTRATIVE COSTS 3,083,621 5,280,992Operating expenses 7,184,039 11,156,363Operating loss (7,773,516) (12,213,303)INTEREST INCOME 1,066,823 3,846,013OTHER INCOME 13,744 -FOREIGN EXCHANGE GAIN 1,184,499 65,669NET LOSS (5,508,450) (8,301,621)Basic and diluted net loss per share (1.06) (0.81)Weighted average shares used to compute basic and diluted net loss per share 5,174,539 10,197,521 Consolidated Statements of Cash FlowsFor the nine months ended January 31, 2007 and 2008 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: January 31, January 31, 2007 2008 $ $ Net loss (5,508,450) (8,301,621)Adjustments to reconcile net loss to net cash usedin operating activities:Foreign exchange gain (1,184,499) (65,669)Depreciation and amortization 199,845 181,105Loss on disposal of equipment 20,344 -Compensation expense related to stock option grants 951,828 1,608,662Deferred rent 9,472 4,059Changes in operating assets and liabilities:Accounts receivable (477,281) 622,877Unbilled receivables (132,737) (1,577,010)Other current assets (1,896,820) (739,304)Accounts payable 433,568 (160,196)Accrued expenses 983,831 (1,103,711)Unearned revenues 50,120 655,323Other current liabilities (85,470) - Net cash used in operating activities (6,636,249) (8,875,485) CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of certificates of deposit (46,889,973) (8,968,170)Maturities of certificates of deposit 40,337,527 17,358,316Purchase of equipment (94,790) (239,840)Payments of patent costs (163,494) (70,752)Investments in joint ventures and other noncurrentassets (125,696) (29,140) Net cash (used in) provided by investing activities (6,936,426) 8,050,414 CASH FLOWS FROM FINANCING ACTIVITIES:Common stock issuance costs - (870,116)Proceeds from exercise of stock options 54,125 287,795 Net cash provided by (used in) financing activities 54,125 (582,321) EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASHEQUIVALENTS 1,183,890 (16,058) NET DECREASE IN CASH AND CASH EQUIVALENTS (12,334,660) (1,423,450) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 31,957,209 107,505,473 CASH AND CASH EQUIVALENTS, END OF PERIOD 19,622,549 106,082,023 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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