Ocean Power Technologies, Inc. (OPPT)
F2Q10 (Qtr End 10/31/09) Earnings Call
December 10, 2009 10:00 am ET
Mark Draper – Chief Executive Officer
Charles Dunleavy – Chief Financial Officer
Previous Statements by OPTT
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Good morning and welcome to Ocean Power Technologies audio webcast for the second quarter ended October 31, 2009. Today we issued our second quarter earnings press release and we will be filing our quarterly report on Form 10-Q with the Securities and Exchange Commission. Our public filings can be viewed on the SEC website at sec.gov or you may go to our website, oceanpowertechnolgies.com. I’ll be joined on today’s webcast by Mark Draper, our Chief Executive Officer.
Please advance to Slide 2. During the course of this conference call, management may make projections or other forward-looking statements regarding future events or financial performance of the company within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.
As indicated in the slide, these forward-looking statements are subject to numerous assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks and uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied in such forward-looking statements.
We refer you to the company’s Form 10-Q and other recent filings with the Securities and Exchange Commission for a further description of these and other risk factors. I’ll now turn the call over to Mark Draper, our Chief Executive Officer.
Moving to Slide 3, Thank you Chuck and thank you everyone for joining today’s webcast. OPT maintained strong operational momentum during the second quarter of fiscal 2010 with several notable achievements that have increased the company’s commercial activities to the highest level in our history.
We also remained focused on our near term goal to complete construction of the first of our latest wave generation devices, the PB150, which will be deployed in the Orkney Islands off the coast of Scotland in mid calendar year, 2010.
We strengthened our relationship with Lockheed Martin by entering into a commercial services agreement to develop OPT’s wave energy systems for future utility scale power generation projects in North America.
Lockheed has outstanding experience in applying new technology and managing volume manufacturing across a wide variety of sectors and it has also been increasing its involvement with renewable energy.
We also had a major breakthrough in Japan by teaming up with three leading Japanese companies to kick start the country’s first commercial scale wave power station and OPT’s first project in Asia.
Our contract order backlog increased compared to the previous quarter. We also made a gross profit for the second consecutive quarter as well as a gross profit for the six months compared to a gross loss for the corresponding period last year. That helped reduce our net loss for the three and six months periods ended October 31, 2009.
In addition, construction of the steel structure for the PB150 PowerBuoy for our project at Reedsport, Oregon has been started by Oregon Iron Works a private company, and this week we’re delighted to announce the signing of a memorandum of understanding with the government of Oregon to explore development of new wave power projects in the State’s coastal waters.
Chuck will go through the financials in more detail shortly, but first I’ll take a few minutes to update you with more information about our activities during the quarter and since the end of that period.
Turning to Slide 4, as part of our global strategy, we made two major breakthroughs recently, reinforcing OPT’s position as one of the world’s leading wave power companies. As a result we are now engaged in projects in Oregon and Hawaii in the U.S.A., Scotland and Southwest England, Spain, Australia and Japan.
In early October we expanded our global presence by signing an exclusive memorandum of understanding with a consortium of three leading Japanese companies to develop and demonstrate a wave power station in Japan.
The companies are: [Ebitmitsu Cosa], a leading Japanese energy company, [Mitsui Engineering Ship Building] a major industrial business focused on machinery and ship building and Japan Wind Development which primarily develops and operates wind power stations.
As one of the world’s largest economies, with a dense urban population and an extensive coastline, Japan plays a significant regional role in promoting technical innovation and clean energy and we are delighted to be involved in this project.
In addition, OPT has been invited to become a member of the Tokyo wave power initiative, a committee including the City of Tokyo, regional governments and national agencies involved in the promotion of new energy sources.
The initial phase of the project will be for OPT and our partners to work with the Japanese government to increase the recognition of wave power in Japanese energy policy and to identify favorable sites for OPT power stations and assess their commercial prospects.
Subject to the successful identification of a project site and completion of economic assessments, OPT and our partners intend to enter into an agreement to build a demonstration plant with up to three of our PowerBuoy’s. This trial plant should provide the basis for the expected building of a commercial scale OPT power station with an initial capacity of ten megawatts or more.