OPT Announces 2Q 2012 Financial Results (USA)

Ocean Power Technologies, Inc. (“OPT” or “the Company”) today announces financial results for its fiscal 2012 second quarter ended October 31, 2011.

“We ended the second quarter of fiscal 2012 with further progress on PowerBuoy deployments, and a number of business development initiatives to commercialize our technology are currently underway,” said Charles F. Dunleavy, Chief Executive Officer of OPT. “Given the performance and successful power output of our PB150 off Scotland and the LEAP autonomous PowerBuoy off New Jersey, we are moving forward on a number of fronts. In particular, we expect to advance our energy conversion systems under the WavePort project in Spain. Our collaboration with Lockheed Martin promises to enhance our Reedsport project as well as other potential opportunities. Consistent with our stated strategy, we have also increased our sales efforts regarding our autonomous PowerBuoy product for a variety of market applications. We believe that our prospects for fiscal year 2012 are encouraging, and that we are well-positioned for growth going forward.”

 Financial Review

OPT’s contract backlog as of October 31, 2011 was $8.8 million compared to $7.1 million as of July 31, 2011. Backlog includes funded amounts and unfunded amounts that are expected to be funded in the future. Funded backlog was $6.8 million as of October 31, 2011 and $5.1 million as of July 31, 2011.

 Results for the Fiscal Second Quarter Ended October 31, 2011

For the three months ended October 31, 2011, OPT reported revenues of $1.5 million as compared to revenues of $1.9 million for the three months ended October 31, 2010. This decrease primarily reflects lower revenues related to the Company’s PB150 being prepared for deployment off Reedsport, Oregon as well as lower overall revenues tied to the Navy’s LEAP program and the Navy’s Deep Water Active Detection System (“DWADS”) as these projects neared completion. The revenue decreases in these projects were partially offset by increases in revenues from the Company’s PB500 PowerBuoy development project and the WavePort project off the coast of Spain.

The operating loss for the three months ended October 31, 2011 was $4.0 million as compared to an operating loss of $5.7 million for the three months ended October 31, 2010. The reduction in operating loss year-over-year was due primarily to a decrease in product development costs, principally for the PB150 system.

The net loss was $3.9 million for the three months ended October 31, 2011 compared to $5.5 million for the same period in the prior year. This decrease in net loss was due primarily to the decline in operating loss, partially offset by a decrease in interest income and a lower foreign exchange gain.

 Results for the Six Months Ended October 31, 2011

For the six months ended October 31, 2011, OPT reported revenues of $3.4 million as compared to revenues of $3.2 million for the six months ended October 31, 2010. This increase primarily reflects revenues recorded for the US Navy’s LEAP program, the development of the Company’s next-generation PB500, and commencement of work on the WavePort project in Spain. The revenue increases in these projects were partially offset by decreases in revenue from the Company’s PB150 being prepared for deployment off Reedsport, Oregon and the US Navy’s DWADS program.

The operating loss for the six months ended October 31, 2011 was $9.2 million as compared to an operating loss of $12.0 million for the six months ended October 31, 2010. The reduction in operating loss year-over-year was due primarily to a decrease in product development costs, principally for the PB150 system off the coast of Scotland and the Company’s Hawaii project with the US Navy as these projects neared completion; an increase in gross profit; and lower selling, general, and administrative (SG&A) expenses. Gross profit for the six months ended October 31, 2010 was negatively impacted by a reduction in revenues of $231,000 due to a change in the Company’s estimated revenue recognized in connection with its project off the coast of Spain.

The net loss was $8.9 million for the six months ended October 31, 2011 compared to $11.8 million for the same period in the prior year. This decrease in net loss was due primarily to the decline in operating loss and lower foreign exchange losses, partially offset by a decrease in interest income.

 Cash and Investments

On October 31, 2011, total cash, cash equivalents, restricted cash and investments were $39.9 million. Net cash used in operating activities was $7.9 million for the six months ended October 31, 2011, compared to $9.4 million for the same period last year. As previously stated, OPT expects the rate of its cash outflows to decrease in fiscal 2012, reflecting the completion of ocean trials of the PB150 off the coast of Scotland.

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Offshore WIND staff, December 09, 2011; Image:oceanpowertechnologies