OPT Announces 4Q Results
Ocean Power Technologies, Inc. (Nasdaq: OPTT) announced financial results for its fiscal fourth quarter and year ended April 30, 2011.
• Contract backlog increased to a record $8.9 million as of April 30, 2011. This reflects $10.3 million of new orders brought in during fiscal year 2011, including recent US Department of Energy (“DOE”) awards for the PB150 program in Reedsport, Oregon and for development of the next generation PB500 PowerBuoy.
• Revenue increased by 31% for the twelve months ended April 30, 2011 compared to fiscal 2010, reflecting orders from the US Navy, DOE and the United Kingdom’s Technology Strategy Board.
• Achieved Lloyd’s Register certification for the PB150 PowerBuoy design, providing independent, third-party assurance of its compliance with international standards.
• Successfully deployed the first PB150 PowerBuoy off the coast of Scotland on April 15, 2011, with initial reported power levels for this utility-scale system outperforming expectations. The Company believes the capacity factor represented by these results exceeded that experienced by most other renewable sources.
• First-ever grid connected wave energy device in the US, installed by OPT at the Marine Corps Base in Hawaii, completed 5 million cycles in operation – demonstrating in-ocean performance and survivability.
• Relationship with Mitsui Engineering & Shipbuilding Co. Ltd. strengthened further with the award of a first-stage contract for development of a new PowerBuoy mooring system suitable for Japanese sea conditions.
• On track to build and ocean-test a wave energy conversion system for homeland security under the US Navy’s Littoral Expeditionary Autonomous PowerBuoy (“LEAP”) program during the second half of calendar year 2011.
“Ocean Power Technologies ended fiscal 2011 with the highest backlog in its history as we achieved further progress towards PowerBuoy commercialization,” said Charles F. Dunleavy, Chief Executive Officer of OPT. “We are pleased with the many recent developments, including the successful deployment of our PB150 off Scotland, and we expect the remainder of calendar 2011 to be active as well – with ongoing progress on our PB150 in Oregon and with the planned ocean-test of a LEAP system. We also continue to pursue opportunities in Europe, Australia, the US and Japan, and believe fiscal 2012 will be a year marked by strengthening demand, top line growth and additional operating improvements. Ocean Power Technologies remains at the forefront of making reliable, cost-competitive, clean wave power a commercial reality.”
OPT’s contract backlog at April 30, 2011 was $8.9 million, compared to $5.7 million at April 30, 2010 and $5.8 million at January 31, 2011. The reported backlog at fiscal year end includes two previously announced awards from the DOE totaling $4.8 million for the deployment of one of OPT’s PowerBuoys at Reedsport, Oregon and for the development of the PB500 PowerBuoy. Backlog includes both funded amounts and unfunded amounts that are expected to be funded in the future. Funded backlog at April 30, 2011 and 2010 was $6.9 million and $5.2 million, respectively.
For the three months ended April 30, 2011, OPT reported revenue of $1.9 million as compared to revenue of $2.4 million in the three months ended April 30, 2010. This decrease primarily reflects a reduction in revenue from OPT’s Deep Water Active Detection System (“DWADS”) project with the US Navy as that contract moved toward completion.
The operating loss for the three months ended April 30, 2011 was $5.4 million as compared to a loss of $6.4 million for the three months ended April 30, 2010. The reduction in operating loss in the current fiscal quarter was primarily due to a decrease in product development costs, principally for the PB150 system in Oregon, and an increase in gross profit, which were partially offset by an increase in selling, general and administrative costs. The increase in selling, general and administrative costs was largely due to higher compensation and marketing costs.
The net loss was $5.3 million for the three months ended April 30, 2011 compared to $6.2 million for the same period in the prior year. This decrease in net loss was due primarily to the decrease in operating loss and a decrease in foreign exchange losses, partially offset by a decrease in interest income.
For the fiscal year ended April 30, 2011, OPT reported revenue of $6.7 million, a 31% increase compared to revenue of $5.1 million in the fiscal year ended April 30, 2010. This increase primarily reflects higher revenue from the US Navy under the LEAP program. In addition, there was an increase in revenue from OPT’s PB150 PowerBuoy project in Reedsport, Oregon and the Company’s PB500 development project. The revenue increases in these projects were partially offset by declines in revenue from OPT’s DWADS project with the US Navy, a utility-scale project in Spain, and a utility PowerBuoy project with the US Navy at the Marine Corps Base in Hawaii, as activity for the current phases of these contracts has been completed.
The operating loss for the fiscal year ended April 30, 2011 was $21.3 million, in line with fiscal year 2010. This reflects an increase in product development costs, principally for the PB150 system in Oregon, and a decrease in gross profit, offset by a reduction in selling, general and administrative costs. Gross profit for the twelve months ended April 30, 2011 was negatively impacted by a reduction in revenue of $240,000 due to a change in estimated revenue recognized in connection with the Company’s project in Spain. In addition, gross profit for the 2010 fiscal year was favorably impacted by a reversal of a provision for contract losses, in connection with the Company’s project in Spain, of approximately $400,000. The decrease in selling, general and administrative costs during fiscal 2011 was largely due to lower full-year compensation and recruiting costs.
The net loss was $20.4 million for the fiscal year ended April 30, 2011 compared to $19.2 million for fiscal year 2010. This increase in net loss was due primarily to lower interest income and other income, and an increase in foreign exchange losses, partially offset by an income tax benefit recognized in fiscal year 2011. Other income for the fiscal year ended April 30, 2010 included a one-time gain of $0.6 million from a favorable settlement of a claim against a supplier of engineering services. During the twelve months ended April 30, 2011, OPT recorded an income tax benefit of $0.4 million in connection with the sale of New Jersey net operating tax losses.
Cash and Investments
On April 30, 2011, total cash, cash equivalents, restricted cash and marketable securities were $48.3 million. Net cash used in operating activities was $4.8 million and $18.8 million for the three and twelve months ended April 30, 2011 respectively. OPT expects the rate of its cash outflows to decrease in fiscal 2012, reflecting completion of significant milestones associated with the construction and deployment of its two PB150 systems for Oregon and Scotland.