Ocean Power Technologies, Inc. (OPTT)

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Ocean Power Technologies, Inc (OPTT)

Q4 2011 Earnings Call

July 14, 2011 10:00 am ET


Charles Dunleavy - Chief Executive Officer and Director

Brian Posner - Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer


Jason Feldman - UBS Investment Bank

Aram Fuchs - Fertilemind Capital

Robert Littlehale - Bear Stearns

George Santana



Good day, ladies and gentlemen, and welcome to the Ocean Power Technologies’ Fiscal Year 2011 Fourth Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and webcast. I would now like to turn this conference over to the Chief Financial Officer of Ocean Power Technologies, Mr. Brian Posner. Please proceed.

Brian Posner

Thank you. Welcome to Ocean Power Technologies' Earnings Conference Call for the Fourth Quarter and Fiscal Year Ended April 30, 2011. OPT issued its earnings release earlier today, and later today, we'll file the company's annual report on Form 10-K 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, www.oceanpowertechnologies.com. With me on today's webcast is Charles 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 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'll now turn the call over to Chuck Dunleavy, OPT's CEO.

Charles Dunleavy

Thank you, Brian, and thanks to everyone for being with us today. Brian and I will be available to answer questions following our prepared statement.

Turning to Slide 3. I'd like to note some recent developments of which we're particularly proud. We've accomplished a great deal this past quarter and ended this fiscal year on a high note, with plenty of traction heading into fiscal year 2012.

We deployed our first utility-scale PB150 PowerBuoy off the coast of Scotland on April 15, 2011. Since that time, we've been measuring the performance of the unit, and we've been very pleased by the results. I'll go into this in a little more detail in a moment.

In addition, we have continued to make progress with the construction and land testing of our PB150 unit for Reedsport, Oregon. We've made advances on our next-generation PowerBuoy, the PB500, and also on our Autonomous PowerBuoy for the U.S. Navy's LEAP program. Our grid-connected PowerBuoy in Hawaii continues to be going strong.

Total fiscal 2011 revenue rose over 30% compared to fiscal 2010, and during the year, we brought in $10.3 million of new orders. With a record backlog of $8.9 million at April 30, 2011, we are well positioned for further success in fiscal 2012.

Moving to Slide 4. Let me add some information about the initial deployment of our PB150 off Scotland. This 150-kilowatt-rated device was designed by OPT to generate utility-scale renewable wave energy in arrays of multiple buoys for commercial power stations in locations around the globe. In January 2011, we are very pleased to announce that OPT achieved an independent certification of the PB150 structure and mooring system by the internationally respected Lloyd's Register. This certification confirmed that the PB150 design complies with certain international standards for floating offshore installations.

During recent ocean testing of the PB150, average electrical power of 45 kilowatts was achieved, with wave heights as low as 2 meters, exceeding our performance expectations for the PB150. We believe this capacity factor of 30%, represented by the 45-kilowatt average power, exceeds capacity factors generally seen in other forms of alternative energy, such as wind and solar.

The power take-off system also exceeded expectations with respect to energy conversion efficiency in the irregular ocean wave conditions encountered. Overall, the range of PB150 power outputs we saw at specific operating points during the ocean testing was in line with our model predictions for such wave states. And this means that our confidence in power predictions at other sites is greatly increased, particularly since the performance of the Hawaii PowerBuoy has also agreed with our model. We're, therefore, confident that at sites where wave conditions are higher than those encountered thus far during ocean trials, our use can produce 150 kilowatts on average.

In addition, the environmental conditions experienced by this PB150 off Scotland included storm waves, with electrical-power-generating peaks of over 400 kilowatts. We find all of this very encouraging, and we'll be testing the Scotland PowerBuoy for another 1 to 2 months. The company is seeking a commercial customer for this PB150 after the trial phase is complete.

All in all, our success in this project speaks to just terrific performance by our employees on both sides of the ocean -- the Atlantic Ocean, both within the U.S. as well as in the U.K.

Slide 5 shows the towing of the buoy during the deployment process. A video of the deployment is available on the OPT website at oceanpowertechnologies.com. In addition, the Bloomberg Television program, Inside Track, aired a segmented on OPT and the Scotland PowerBuoy on June 28, which you can also see on our website.

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