17th Dec 2007 07:01
Ocean Power Technologies Inc17 December 2007 ------------------------------------------------------ NEWS RELEASE------------------------------------------------------ Ocean Power Technologies, Inc. 1590 Reed Road Pennington, New Jersey 08534 USA For Immediate Release December 17, 2007 OCEAN POWER TECHNOLOGIES ANNOUNCES RESULTS FOR THE QUARTER AND SIX MONTHS ENDED OCTOBER 31, 2007 Ocean Power Technologies, Inc. (Nasdaq: OPTT and London Stock Exchange AIM: OPT)("OPT" or the "Company") announced today its results for the second quarter andsix months of its fiscal year ending April 30, 2008. Revenues for the three months ended October 31, 2007 increased by 204% to $1.7million compared to $0.6 million in the three months ended October 31, 2006. TheCompany incurred a net loss of $1.9 million in the second quarter of fiscal 2008compared to a net loss of $2.3 million in the second quarter of fiscal 2007. Thesecond quarter basic and diluted net loss per share was $0.18 in fiscal 2008compared to $0.45 in fiscal 2007. The weighted average number of shares used tocompute basic and diluted net loss per share was 10,192,854 for the secondquarter of fiscal 2008, compared to 5,175,194 for the second 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 $7.9 million as of October 31,2007 compared to $5.2 million as of April 30, 2007. For the six months ended October 31, 2007, the Company reported revenues of $2.2million compared to $0.9 million in the six months ended October 31, 2006. OPTreported a net loss of $4.3 million, or $0.42 per basic and diluted share, forthe six months ended October 31, 2007 compared to a net loss of $4.0 million, or$0.77 per basic and diluted share, for the six months ended October 31, 2006.The weighted average number of shares used to compute basic and diluted net lossper share was 10,191,104 for the six months ended October 31, 2007, compared to5,173,361 for the six months ended October 31, 2006. The fiscal 2008 number ofshares reflects the issuance of 5 million shares in connection with theCompany's U.S. initial public offering completed on April 30, 2007. Highlights of the Second Quarter •Signed $0.5 million contract with PNGC Power for an Oregon wave energy project •Awarded $1.9 million of additional funding for the contract with the U.S. Navy in Hawaii •Agreement signed with Converteam (formerly known as Alstom Power Conversion) for the development of advanced linear generators for use in OPT PowerBuoys(R) •Order backlog at October 31, 2007: $7.9 million (April 30, 2007: $5.2 million) •Revenues for the second quarter ended October 31, 2007 increased by 204% to $1.7 million, up $1.1million from the second quarter of fiscal 2007 ($0.6 million) •Cash, cash equivalents and certificates of deposit of $109.7 million at October 31, 2007 (April 30, 2007: $115.9 million) •Paul F. Lozier elected to the Board of Directors Commenting on the results, George W. Taylor, Chief Executive Officer of OPT, said "The second quarter has been a period of significant progress for OPT. The Company achieved a substantial increase in revenues compared to the prior periods. The contract we won with PNGC Power in Oregon and the additional funding from the U.S. Navy for our Hawaii project provide further validation of our technology and move us closer to our ambition of providing commercial wave energy systems. Our projects elsewhere are advancing well and we are confident that we will continue to make strong progress in the second half." Operational Review During the second quarter ended October 31, 2007, OPT has continued to buildsignificant momentum, and has made substantial progress in a number of ongoingprojects, 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 PowerBuoysystem at the Reedsport OPT Wave Park in Oregon. Under the terms of the contractOPT will build and deploy a 150kW (PB150) PowerBuoy, which will be used todemonstrate the potential of the ocean as an energy resource. This representsthe first phase of the project, which aims to install PowerBuoy systemsgenerating a total of up to 2MW. OPT has been issued a preliminary permit by theFederal Energy Regulatory Commission for up to 50MW at the site, which is 2.5miles off the coast of Reedsport. Surveys of the wave power park site have now been completed and significantprogress is being made in the necessary consultation and consent process withlocal interest groups, individuals and regulatory agencies. HAWAII, US - In October 2007, the Company strengthened its long-standing tieswith the U.S. Navy when it was awarded a further $1.9 million in funding for itsongoing contract to install PowerBuoys off the island of Oahu in Hawaii. Thisadditional contract award will primarily support the testing and monitoring ofthe next PowerBuoy system to be deployed at a site one mile off the coast at adepth of 100 feet. Manufacturing of the PowerBuoy is nearing completion, and thepower take-off and control system are now under test. SPAIN - The construction of the Company's PB40 PowerBuoy system being builtlocally for the Spanish utility Iberdrola, for deployment off the coast ofCantabria is nearing completion. The power take-off and control system, which isbeing tested in the Company's New Jersey plant, is expected to be completed andshipped to Spain by the end of this month, and the logistics for final buoysystems integration, assembly and testing have been arranged. FRANCE - OPT received further funding of €0.1 million for the current phase ofsite identification for its contract with Total and Iberdrola to develop a wavepower station off the Atlantic coast of France. The Company is also in theprocess of securing a sub-contractor to perform wave 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 now given planning approval for the WaveHub project and approved funding for the construction of the infrastructure towhich four wave energy systems, including an OPT PowerBuoy wave farm, will beconnected. The South West Regional Development Agency (SWRDA), which isresponsible for the project, is now seeking bids for the infrastructurecontracts. NEW JERSEY, US - OPT's PB40 PowerBuoy has been re-deployed in the Atlantic Oceanabout five miles off the coast of Tuckerton, following maintenance and testingon the system. Since redeployment the buoy has performed without incident. TheNBC Nightly News featured a segment on wave power and OPT in a recent broadcast,which included video footage of the PowerBuoy in operation. 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. Thedesign of this system continues and construction of certain elements hascommenced under this contract's eighteen-month period of performance. During the period ended October 31, 2007, OPT also signed an exclusivecooperation agreement with Converteam, the UK-based power conversion engineeringgroup, under which the two parties will develop High Temperature Superconductor(HTS) Linear Generators for use in OPT's PowerBuoy wave energy converters. TheCompany believes that the use of HTS generators in OPT PowerBuoys has thepotential to deliver significant reductions in the cost of wave generatedelectricity, and therefore could accelerate the market penetration of PowerBuoysystems in the future. In November 2007, OPT strengthened its Board of Directors with the election ofPaul F. Lozier as a non-executive director. Mr. Lozier, who is 60, is a privateinvestor, provides corporate finance counsel to a variety of medium-sizedcorporations, and is a director of Somerset Hills Bancorp (Nasdaq: SOMH) andcurrently serves on its audit committee. Previously, Mr. Lozier was a ManagingDirector and senior investment banker specializing in energy finance withMerrill Lynch & Co. (NYSE: MER). Financial review Revenues increased by $1.1 million in the three months ended October 31, 2007, or 204%, to $1.7 million as compared to $0.6 million in the three months ended October 31, 2006. The increase in revenues was primarily attributable to an increase in on-going work on the Company's Hawaii project for the U.S. Navy, 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 station consisting of a single 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 ocean data gathering. Cost of revenues increased by $0.7 million to $1.9 million in the three months ended October 31, 2007, as compared to $1.2 million in the three months ended October 31, 2006. This increase in cost of revenues primarily reflected the higher level of activity on revenue-bearing contracts. The decrease in gross loss in the three months ended October 31, 2007 also reflected a charge of approximately $0.5 million recorded in the three months ended October 31, 2006 in connection with the project in Spain, due to higher expected costs at completion of the project. Net loss for the three months ended October 31, 2007 was $1.9 million, compared to a net loss of $2.3 million in the quarter ended October 31, 2006. This decrease in net loss was attributable to the reduction in gross loss and a $1.0 million increase in interest income, net of an 11% increase in product development costs primarily reflecting work to increase the power output of the Company's utility PowerBuoy, and a 119% increase in selling, general and administrative costs (S, G & A). 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. Revenues increased by $1.3 million in the six months ended October 31, 2007, or 160%, to $2.2 million as compared to $0.9 million in the six months ended October 31, 2006. 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 ocean data gathering. Cost of revenues increased by $1.3 million to $2.7 million in the six months ended October 31, 2007, as compared to $1.4 million in the six months ended October 31, 2006. This increase in cost of revenues primarily reflected the higher level of activity on revenue-bearing contracts., The decrease in gross loss in the six months ended October 31, 2007 also reflected a charge of approximately $0.5 million recorded in the six months ended October 31, 2006 in connection with the project in Spain, due to higher than expected costs at completion of the project. Net loss for the six months ended October 31, 2007 was $4.3 million compared to a net loss of $4.0 million in the six months ended October 31, 2006. This increase was primarily attributable to the reduction in gross loss and a $2.1 million increase in interest income, net of a 34% increase in product development costs and 67% increase in S, G & A costs. The reasons for these increases in product development and S, G & A are noted above in the respective second quarter periods. The Company finished the quarter with continuing strong liquidity. At October 31, 2007, total cash, cash equivalents and certificates of deposit were $109.7 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" for the purposes of thesafe harbor provisions of the Private Securities Litigation Reform Act of 1995.These forward-looking statements reflect the Company's current expectationsabout its future plans and performance, including statements concerning theimpact of marketing strategies, new product introductions and innovation,deliveries of product, sales, earnings, and margins. These forward-lookingstatements rely on a number of assumptions and estimates which could beinaccurate and which are subject to risks and uncertainties. Actual resultscould vary materially from those anticipated or expressed in any forward-lookingstatement made by the Company. Please refer to the Company's most recent Form10-K and subsequent filings for a further discussion of these risks anduncertainties. The Company disclaims any obligation or intent to update theforward-looking statements in order to reflect events or circumstances after thedate 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. Telephone: +1 609 730 0400Dr. George W. Taylor, Chief Executive Officer Telephone: +1 609 730 0400Charles F. Dunleavy, Chief Financial Officer Corfin Communications Telephone: +44 20 7977 0020Ben Hunt, Neil Thapar Collins Stewart Europe Limited Telephone: +44 20 7523 8353Adrian Hadden ****** Consolidated Balance Sheets as of October 31, 2006,April 30, 2007 and October 31, 2007 October 31, April 30, October 31, 2006 2007 2007 $ $ $ (Unaudited) (Unaudited) ASSETS Cash and cash equivalents 18,250,604 107,505,473 109,681,072 Certificates of deposit 10,927,992 8,390,146 - Accounts receivable 383,869 865,081 572,732 Unbilled receivables 368,671 313,080 1,146,265 Other current assets 1,512,924 441,342 1,123,122 Total current assets 31,444,060 117,515,122 112,523,191 Property and equipment, net 446,963 387,923 396,301 Patents, net of accumulatedamortization 515,137 597,280 639,369of $167,077, $176,840 and $189,298,respectivelyRestricted cash - 983,376 1,037,592 Other noncurrent assets 278,944 227,845 250,946 TOTAL ASSETS 32,685,104 119,711,546 114,847,399 LIABILITIES AND STOCKHOLDERS'EQUITY CURRENT LIABILITIES: Accounts payable 1,167,263 1,708,408 1,285,301 Accrued expenses 2,671,965 4,593,413 2,680,004 Unearned revenues 108,791 - 601,082 Other current liabilities 50,526 26,106 26,106 Total current liabilities 3,998,545 6,327,927 4,592,493 LONG-TERM DEBT 233,959 231,585 188,784 DEFERRED RENT 8,118 10,825 13,531 DEFERRED CREDITS 600,000 600,000 600,000 Total liabilities 4,840,622 7,170,337 5,394,808 STOCKHOLDERS' EQUITY: Preferred stock, $0.001 par value; - - -authorized5,000,000 shares; none issued oroutstandingCommon stock, $0.001 parvalue; authorized105,000,000 shares; issuedand outstanding 5,176,694,10,186,254 and 10,192,854shares, respectively 5,177 10,186 10,193Additional paid-in capital 60,483,247 150,842,671 152,050,476 Accumulated deficit (32,600,307) (38,270,918) (42,579,578) Accumulated othercomprehensive loss (43,635) (40,730) (28,500) Total stockholders' equity 27,844,482 112,541,209 109,452,591 TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY 32,685,104 119,711,546 114,847,399 Consolidated Statements of OperationsFor the three months ended October 31, 2006 and 2007 (Unaudited) October 31, October 31, 2006 2007 $ $ REVENUES 555,561 1,686,212COST OF REVENUES 1,156,665 1,923,196Gross loss (601,104) (236,984)PRODUCT DEVELOPMENT COSTS 1,749,913 1,942,713SELLING, GENERAL AND ADMINISTRATIVE COSTS 625,092 1,371,160Operating expenses 2,375,005 3,313,873Operating loss (2,976,109) (3,550,857)INTEREST INCOME 360,561 1,343,877FOREIGN EXCHANGE GAIN 308,348 336,164NET LOSS (2,307,200) (1,870,816)Basic and diluted net loss per share (0.45) (0.18)Weighted average shares used to compute 5,175,194 10,192,854basic and diluted net loss per share Consolidated Statements of OperationsFor the six months ended October 31, 2006 and 2007 (Unaudited) October 31, October 31, 2006 2007 $ $ REVENUES 860,747 2,241,916COST OF REVENUES 1,382,630 2,728,188Gross loss (521,883) (486,272)PRODUCT DEVELOPMENT COSTS 2,802,039 3,758,447SELLING, GENERAL AND ADMINISTRATIVE COSTS 2,013,137 3,367,762Operating expenses 4,815,176 7,126,209Operating loss (5,337,059) (7,612,481)INTEREST INCOME 722,928 2,788,163FOREIGN EXCHANGE GAIN 645,977 515,658NET LOSS (3,968,154) (4,308,660)Basic and diluted net loss per share (0.77) (0.42)Weighted average shares used to compute 5,173,361 10,191,104basic and diluted net loss per share Consolidated Statements of Cash FlowsFor the six months ended October 31, 2006 and 2007 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: October 31, October 31, 2006 2007 $ $ Net loss (3,968,154) (4,308,660)Adjustments to reconcile net loss to net cash usedin operating activities:Foreign Exchange Gain (645,977) (515,658)Depreciation and amortization 131,340 121,135Loss on disposal of equipment 20,344 -Compensation expense related to stock option grants 709,951 1,154,516Deferred rent 8,118 2,706Changes in operating assets and liabilities:Accounts receivable (378,228) 298,673Unbilled receivables (157,311) (810,042)Other current assets (1,179,849) (673,999)Accounts payable 843,332 (285,200)Accrued expenses 930,928 (1,295,886)Unearned revenues 92,727 601,082Other current liabilities (61,050) - Net cash used in operating activities (3,653,829) (5,711,333) CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of certificates of deposit (39,890,009) (8,968,170)Maturities of certificates of deposit 29,444,173 17,358,316Purchase of equipment (44,736) (98,271)Payments of patent costs (73,202) (36,376)Investments in joint ventures and other noncurrentassets (178,161) (16,739) Net cash (used in) provided by investing activities (10,741,935) 8,238,760 CASH FLOWS FROM FINANCING ACTIVITIES:Common stock issuance costs - (870,116)Proceeds from exercise of stock options 47,525 53,296 Net cash provided by (used in) financing activities 47,525 (816,820) EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASHEQUIVALENTS 641,634 464,992 NET (DECREASE) INCREASE IN CASH AND CASHEQUIVALENTS (13,706,605) 2,175,599 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 31,957,209 107,505,473 CASH AND CASH EQUIVALENTS, END OF PERIOD 18,250,604 109,681,072 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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