Ocean Power Technologies, Inc (OPTT)
Q2 2012 Earnings Call
December 09, 2011 10:00 am ET
Charles Frederick Dunleavy - Chief Executive Officer and Director
Brian M. Posner - Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer
Robert W. Stone - Cowen and Company, LLC, Research Division
Previous Statements by OPTT
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Brian M. Posner
Thank you. Welcome to Ocean Power Technologies' earnings conference call for the second quarter ended October 31, 2011. OPT issued its earnings press release earlier today, and this coming Monday we will 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 recent 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.
Charles Frederick Dunleavy
Thank you, Brian, and thanks to everyone for being with us today.
First, turning to Slide 3. Let me briefly review our major accomplishments of recent months. It's been a very active period. We deployed our unique autonomous PowerBuoy for the Navy's Littoral Expeditionary Autonomous PowerBuoy or LEAP program off the coast of New Jersey in August. Having performed very well, including surviving Hurricane Irene, the LEAP PowerBuoy represents an exciting stage in the development and delivery of our autonomous PowerBuoys. The ocean trials of our PB150 PowerBuoy in Scotland came to a successful conclusion in October as planned. As previously discussed on our conference calls, we are very pleased with the performance of the PB150 and are now speaking with various potential customers and government entities, who may wish to utilize the PowerBuoy for commercial applications in the future.
Most recently, we announced an important collaboration with Lockheed Martin, plus significant progress in Spain as I'll review further momentarily. OPT will shortly retrieve its PB40 PowerBuoy device, which has been deployed at the test site of the U.S. Marine Corps Base at Oahu, Hawaii, following the successful completion of this demonstration project. During its 2-year period of deployment, the buoy became the first-ever wave energy device to be connected to the U.S. grid, survived tsunami wave conditions and achieved over 5.5 million cycles in operation.
In addition, the system features our new direct drive power take-off system, which is a major technology upgrade from our previous hydraulic power take-off. The U.S. Navy remains a valued OPT partner, and we are in discussions regarding the next stage of prospective commercial-scale wave power stations in Hawaii.
We ended the quarter with a backlog of nearly $9 million as compared to $7 million at July 31, 2011, and also with cash-on-hand of approximately $40 million. We are very optimistic about the future of Ocean Power Technologies and what 2012 will bring. But now let me go into a little more detail on our major initiatives.
Turning to Slide 4. I'm happy to say that our LEAP autonomous PowerBuoy performed well during its ocean demonstration, providing persistent power in all wave conditions, withstanding the 50-foot high waves of Hurricane Irene. The LEAP PowerBuoy which was taken out of water several weeks ago at the completion of its ocean trials, as provided under our contract with the U.S. Navy. We're very encouraged by the potential market for our autonomous PowerBuoy product.
As a reminder, the autonomous PowerBuoy operates totally independently and can generate power in all wave conditions using OPT's proprietary power management system. This includes persistent power generation in the ranges needed for sophisticated vessel detection and tracking systems for maritime surveillance along coasts. Systems currently being used for remote power is the often utilized diesel generators, which require frequent maintenance and fuel replenishment and can be very noisy.
The autonomous PowerBuoy is also appropriate for oil and gas platforms, offshore fish farming and desalination. Consider the number of oil and gas platforms worldwide that could benefit from a clean, quiet and persistent source of power right from the waves where they operate. Given its smaller size and variety of applications, the autonomous PowerBuoy is seeing increasing interest and we're marketing it aggressively. We believe there's a bright future for such buoys across a multitude of markets.
Turning to Slide 5. I'd now like to provide an update on our project in Reedsport, Oregon, and the latest on our collaboration with Lockheed Martin. This agreement with Lockheed is an important step for the commercialization of our PowerBuoys. Working on the Reedsport project, Lockheed will provide their expertise in the areas of design for manufacturing and systems integration to enhance our proprietary technology. We're committed to improving power conversion efficiency, reliability, manufacturability and lowering the cost of marine operations and maintenance. Lockheed's expertise in large-scale manufacturing and supply chain management will greatly assist us in reaching these goals in a timely manner thus making our applications more attractive to our potential partners and customers.