Ocean Power Technologies, Inc. (OPTT)
F4Q10 (Qtr End 04/30/10) Earnings Call Transcript
July 13, 2010 10:00 am ET
Brian Posner – CFO
Charles Dunleavy – CEO
Previous Statements by OPTT
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Thank you. Good morning and welcome to Ocean Power Technologies’ audio web cast for the fiscal year ended April 30, 2010. Today we issued our year-end earnings press release and tomorrow we will be filing our annual report on Form 10-K with the Securities and Exchange Commission. Our public filings can be viewed on the SEC website at www.sec.gov or you may go to our website www.oceanpowertechnologies.com. It will be joined on today’s web cast by Charles Dunleavy, our Chief Executive Officer.
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-K and other recent filings with the Securities and Exchange Commission for a description of these and other risk factors.
I will now turn the call over to Charles Dunleavy.
Thank you Brian, and thanks to everyone who has joined us for today’s web cast. We are delighted to bring Brian onboard as our new chief financial officer. Brian joins OPT with over 25 years of experience in both public and private companies, encompassing NASDAQ listed companies, as well as early-stage businesses. In addition, he served on the audit staff of PricewaterhouseCoopers, where he had a diverse group of clients in the manufacturing, banking, and natural resources sectors.
Moving to slide three, fiscal 2010 was a pivotal year as OPT continued to step up its commercial activities worldwide, resulting in several key milestones during the period. The company now has more projects in more territories than ever before in its history, underscoring its position as the world leader in harnessing wave power. We successfully deployed and continue to operate a PowerBuoy off the coast of Hawaii, while also completing ocean trials of our unique Undersea Substation Pod in Spain.
Substantial progress was also made on the delivery of our next generation PB150 PowerBuoy. Construction of the first of these is nearly complete, and is scheduled for in ocean testing in Scotland in the second half of this calendar year. Manufacture of the second buoy for Reedsport, Oregon, is well underway. The company’s management team has strengthened and serves to broaden our capability for commercial execution of our business strategy.
OPT’s technology was recognized with significant new funding awards in Australia, the European Union, and in the United States. We also continued to strengthen our relationships with partners, governments and customers at various levels. In the US, these included the US Navy, the Department of Energy, and the State of Oregon. In the UK, we further advanced our commitments to projects in Cornwall, South West England, as well as in Scotland.
In Japan, we entered into a major partnership with three companies including Mitsui Engineering & Shipbuilding to develop Japan’s first utility scale wave power project. The company’s financial performance improved with annual revenues increasing by 26% and cash burn decreasing by nearly 20%. Let me now take you through the highlights in more detail.
Turning to slide four. Much of this year’s operational activity was focused on executing our strategy and demonstrating the potential of our technology in ocean conditions. OPT successfully deployed a PowerBuoy at the Marine Corps base on the island of Oahu, Hawaii. The buoy, which was deployed in December 2009 withstood severe wave conditions and has now achieved over 2 million cycles. It is designed for the specific needs for the US Navy, which has many naval and marine bases worldwide the currently rely heavily on fossil fuel, and could therefore benefit from wave power as a sustainable clean energy alternative.
The PowerBuoy is producing power in line with our expectations and testing protocols. The success of the Hawaii buoy, which is now entering its eight month of on station operation led to an additional $380,000 of funding for the project. We are very grateful for the support which we received from US Navy over several years, as we have developed our technology.
We also successfully completed ocean trials of our Undersea Substation Pod product in Spain. Underwater trials of the USP or Pod included pressure testing, running electrical power to and from the systems, and verification of data communication capabilities. The Pod is based on our proprietary design and is developed to facilitate the collection, networking, and transforming of power and data generated by multiple offshore energy devices. The pod has been built as an open platform and can provide connectivity for the PowerBuoy as well as other offshore energy systems developed by other companies. These operational achievements help to demonstrate the longevity and survivability of OPT’s products as well as the capability of our engineering to meet design expectations. They also highlight the strength of our technical base, which is being leveraged to create valuable intellectual property.