Ocean Power Technologies, Inc. (OPTT)
F3Q10 (Qtr End 01/31/10) Earnings Call
March 12, 2010 10:00 am ET
Charles Dunleavy – CEO
Previous Statements by OPTT
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Thank you. Good morning and welcome to Ocean Power Technologies’ audio webcast for the third quarter ended January 31, 2010. Today we issued our third quarter earnings press release and we will be filing our quarterly report on Form 10-Q with Securities and Exchange Commission. Our public filings can be viewed on the SEC website at sec.gov or you may go to our website oceanpowertechnologies.com.
Please advance to slide two. 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 by 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 description of these and other risk factors.
Moving to slide three, I’d now like to take you through some of the key developments during this quarter before discussing the financials and our strategy for growth. I’m delighted to have been appointed by the Board of Directors as the Chief Executive to execute OPT’s commercialization strategy and maximize new growth opportunities as they arise. I intend to appoint a new Chief Financial Officer in due course, and we are already reviewing a list of strong candidates.
OPT has a highly talented and experienced team, great technical depth, and unique intellectual property as well as excellent partners and customers globally. I’m very grateful for the good wishes over the few months. With their support, OPT has established a very strong platform on which to leverage the increasing global interest and commitment from both governments and industry to harnessing wave energy.
It is our goal not only to focus on OPT’s current flagship projects within the utility power market, but also to accelerate growth by leveraging our technology in existing activities that have the potential to broaden our revenue base, such as our autonomous PowerBuoys, infrastructure development capability and our unique underwater substation pod products.
During the third quarter, OPT attained some major successes while making steady progress with its existing projects, we shall cover more detail later. In particular, our strength has been recognized with significant awards of funding from major proposed projects. In Australia, our partnership with the large infrastructure company Leighton Contractors was awarded a grant of AUS $66.5 million or approximately US $60 million from the Federal Government of Australia.
Last week, we announced that we’ve received an award of EUR 2.2 million about US$3 million under the European Commission’s seventh framework program for the development of an enhanced wave power device on the North Coast of Spain. Construction commenced on the steel structure for our PB150 PowerBuoy for OPT’s project at Reedsport, Oregon.
Also in Oregon we signed a Memorandum of Understanding with the state government to explore the development of new wave power projects in Oregon’s coastal waters. This landmark agreement underscores the productive and collaborative approach we take as a company in our business development activities.
We have also sharpened our focus on existing projects. We deployed and have operated an enhanced PowerBuoy for the Marine Corps Base at Oahu under our long-term project with the US Navy in Hawaii. This project was recently featured in a CNN international broadcast worldwide. At the same time, we remain on track to complete the construction of the first PB150 PowerBuoy for deployment and ocean trials off the coast of Scotland in the middle of this calendar year.
Revenues increased 47% compared with the immediately preceding quarter while our contact order backlog remained strong at $6.6 million. We also made a gross profit for the third consecutive quarter as well as a gross profit on our contracts for the full nine months as compared to a gross loss in the corresponding period of last year.
Let me take you through some of these activities in more detail in the next few slides. Slide number four shows you the re-deployment of the PowerBuoy at the Marine Corps Base in Hawaii. Turning to slide number five. OPT continues to broaden its activities globally and is currently engaged in projects in Oregon and Hawaii in the USA, Scotland in Southwest England, Spain and Australia.
In the US a number of state governments including the State of Oregon have become increasingly involved in supporting wave energy as part of the renewable energy mix. These efforts have also gained much momentum at the federal level where significant funds have been set aside to encourage the development of wave energy technology and specific related projects. OPT is actively allocating business development resources to address these opportunities at the same time as we are advancing our two utility scale projects in Oregon.