Ocean Power Technologies, Inc (OPTT)
Q1 2012 Earnings Call
September 09, 2011 10:00 am ET
Charles Dunleavy - Chief Executive Officer and Director
Brian Posner - Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer
Unknown Analyst -
Kent Holden - Ham Fund
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Thank you. Welcome to Ocean Power Technologies' Earnings Conference Call for the First Quarter ended July 31, 2011. OPT issued its earnings press release earlier today, and later today we'll file the company's quarterly report on Form 10-Q with the Securities and Exchange Commission. All public filings can be viewed on the SEC website at sec.gov, or you may go to the OPT website, oceanpowertechnologies.com. With me on today's call is Chuck Dunleavy, our Chief Executive Officer.
Please advance to Slide 2 of our presentation. 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 this 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 by such forward-looking statements.
We refer you to the company's Form 10-K and other filings with the Securities and Exchange Commission for a description of these and other risk factors.
I'll now turn the call over to Chuck Dunleavy, OPT's CEO.
Thank you, Brian, and thanks to everyone for being with us today. Brian and I will be available to answer questions following our prepared statements.
Turning to Slide 3. The company reported sales of $1.9 million for the fiscal first quarter ended July 31, 2011, up nearly 40% compared to the first quarter of fiscal 2011. This improvement reflects revenue recognized for the U.S. Navy's LEAP program, as well as for the development of our next-generation PB500. In addition, ocean trials of our PB150 off the coast of Scotland delivered better-than-expected results, and OPT ended the quarter with a backlog of $7.1 million and cash on hand of $43.1 million.
Shortly after the end of the quarter, we announced the successful deployment of our unique autonomous PowerBuoy for the LEAP program. Now let me get into more detail on our major initiatives.
Moving to Slide 4. We have very good news to report on our project under the U.S. Navy's Littoral Expeditionary Autonomous PowerBuoy, or LEAP program. We deployed the LEAP PowerBuoy on August 11, 2011 ahead of schedule. The buoy is stationed about 20 miles off the coast of New Jersey, undergoing testing and analysis in conjunction with Rutgers University's Institute of Marine and Coastal Sciences, which provided the radar network and communications infrastructure.
Our LEAP PowerBuoy can generate power at the lower levels needed for the sophisticated vessel detection and tracking system, enabling maritime surveillance along coasts, harbors and littoral zones worldwide. By contrast, systems currently using remote power at sea are often powered by diesel generators, which require frequent maintenance and fuel replenishments.
The LEAP system has performed extremely well since its launch a month ago, and most notably, was not impacted at all by Hurricane Irene. The buoy not only survived the extreme ocean conditions, but also performed successfully during the entire storm. The PowerBuoy structure withstood wave heights of up to 15 meters or nearly 50 feet. The unit continued to produce consistent power to its communications and radar payload during the storm and stayed in constant communication, allowing continuous on-land monitoring of the buoy. It also dissipated the high amounts of surplus energy it produced. The LEAP PowerBuoy operated automatically on a fully autonomous basis and implemented its proprietary power management system with no need for human intervention.
We at OPT feel this is a great achievement, and that the autonomous PowerBuoy is truly an enabling technology. Despite severe and extreme storm waves, the PowerBuoy operated exactly as it was designed and remained right on station where it was originally deployed, supplying power in all wave conditions.
The LEAP PowerBuoy is integrated with the Rutgers University-operated land-based radar network that also provides ocean current mapping data for the National Oceanographic and Atmospheric Administration and the U.S. Coast Guard's search and rescue operations. The buoy is expected to remain in the ocean for testing through November. We look forward to reporting further details of its performance in the weeks to come.
The achievements of the LEAP PowerBuoy underscore what we believe is a significant market opportunity for our autonomous PowerBuoy or APB product in the areas of maritime security, oil and gas platforms, offshore fish farming and desalination. OPT is actively marketing to these application-driven sectors.
Slide 5 shows an aerial shot of the buoy taken on Monday, August 29, 2011, immediately after Hurricane Irene hit the coast of New Jersey. It's right on station, where it had originally been deployed. It's important to note that 2 days later, we sent a team of divers to inspect the underwater structure, moorings and also the anchor. This substantiated all the data that we've received by satellite, indicating no problems following the storm.