Ocean Power Technologies, Inc.
just signed an agreement
with Lockheed Martin to enhance its efforts to develop a 19 megawatt
wave power station in Australia. The project will be developed by
Victorian Wave Partners, which is owned by OPTT's Australian
subsidiary, Ocean Power Technologies. OPTT received an AUD 66.5
million grant from Australia for this project, which represents
approximately 30 percent of the cost of the project. The grant is
subject to a funding fee, which has funding milestones requiring
significant additional funding to receive the grant funds and
complete the project. OPTT is actively assessing financing
opportunities for the project and pursuing purchase agreements with
local utilities. Lockheed Martin's presence will give OPTT
credibility in seeking financing. Lockheed will also provide
assistance in design manufacturability of the PowerBuoys, supply
chain and project management. OPTT has begun the permitting and
community consultation for the project.
Ocean Power Technologies also recently completed testing of its new advanced power take-off (PTO) system for its PB150 PowerBuoy in Oregon and is making progress towards deployment of that system later this summer. This PTO was developed to be more durable and involved, have less maintenance and provide better long-term efficiency than OPTT's previous hydraulic design. Lockheed Martin is providing design, manufacturing and supply-chain management expertise on this project as well. The contract with the Department of Energy for the system is 18 months' performance. OPTT believes it can demonstrate strong performance in less than that time to help bring in orders to scale up into multiple deployments. It would want to first see some good performance during severe storm conditions first.
OPTT is continuing to work on
its WavePort project in Spain to provide a PowerBuoy with an advanced
energy conversion system that includes a new wave assessment model.
The new system is designed to assess the characteristics of incoming
waves before they reach the PowerBuoy power station, allowing more
time for OPT's proprietary electronic tuning to react. If
successful, this new system could boost PowerBuoy's output
significantly and reduce the cost per megawatt hour of energy
produced. The PowerBuoy is expected to be installed on an existing
mooring site off Santona, Spain.
Ocean Power Technologies is working with Mitsui Engineering & Shipbuilding on the next phases of development of a PowerBuoy project in Japan. Analysis and design work will likely continue through much of fiscal 2013. After that, a recommendation may be made on final deployment parameters for a PowerBuoy to be built and operated off Japan. The project would have the follow-on potential for a multi-megawatt wave power station.
Ocean Power Technologies is accelerating its efforts to develop business for the autonomous PowerBuoy after its successful operation of the U.S. Navy's Littoral Expeditionary Autonomous PowerBuoy off New Jersey last fall. The buoy is significantly smaller and more compact than OPTT's utility PowerBuoys. It was designed to provide persistent energy for the U.S. Navy's radar and communications payloads, which require continuous power of 150 watts. The buoy exceeded the payload power specifications, producing constant power in excess of 400 watts throughout the entire deployment and produced 8 sustained electrical power of 1,500 watts. The onboard power management storage system allowed the payload to be operational even during extended periods of no wave activity. It was autonomously maintained and withstood Hurricane Irene in August 2011.
Ocean Power Technologies is currently discussing applications of the PowerBuoys with potential commercial customers in the oil and gas industry, oceanographic, data-gathering initiatives and desalination companies. The PowerBuoys could replace diesel generators that are expensive, dirty and must be maintained frequently. In general, it would take about 4 ½ months from an order to deliver an autonomous PowerBuoy, but that timeline would decrease to around 3 months if there were large quantities ordered.
Financials.
Revenues in Q4 were $1.4 million, a decrease of $500,000 year over year. The decrease was primarily the result of lower revenues from the Reedsport, Oregon project and lower revenue from the Navy's LEAP program since that project was successfully completed in Q3.
For fiscal year 2012, OPTT reported revenues of $5.7 million, a decrease of $1 million. This decrease was primarily the result of lower revenues from the U.S. Navy's deepwater active detection system project and the project in Oregon.
OPTT's operating loss was $4.2 million, a decrease of $1.2 million from Q4/2011. The reduction in operating loss was due primarily to a decrease in product development cost, especially for the PB150 system that underwent Ocean trials off the coast of Scotland in 2011. The operating loss for fiscal year 2012 was $16.6 million, a reduction of $4.7 million.
Net loss was $4.1 million, a reduction of $1.2 million from Q4/2011. OPTT's net loss for fiscal year 2012 is $15.2 million, a reduction of $5.3 million.
As of April 30, 2012, cash, cash equivalents, and restricted cash from investments was $33.2 million. The cash burn rate will be decreasing next year. The company believes it has enough cash to get to the point where it will internally generate cash. However, it is also looking at alternatives to bring in more cash, such as talking with strategic partners.
OPT received approximately $1.1 million in connection with the sale of New Jersey net operating tax losses during fiscal year 2012 and $.4 million in fiscal year 2011.
The full transcript of the earnings conference call can be found on Seeking Alpha at the following link:
http://seekingalpha.com/article/719801-ocean-power-technologies-inc-management-discusses-q4-2012-results-earnings-call-transcript?part=single
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