Ocean Power Technologies, Inc. (Nasdaq:OPTT) announced financial results for its Fiscal 2015 fourth quarter and full year ended April 30, 2015 . These results highlight the struggles of ocean energy companies as they strive to commercialize their technologies.
For the three months ended April 30, 2015, OPT reported revenue of $0.5 million, as compared to revenue of $0.4 million for the three months ended April 30, 2014. Revenue in both periods was primarily related to their project with Mitsui Engineering & Shipbuilding (“MES”).
The net loss was $3.3 million for both the three months ended April 30, 2015 and April 30, 2014. Compared to the prior year quarter, the current year quarter reflected an increase in gross profit due to a change in project costs related to the MES contract. In addition, selling, general and administrative expenses were $1.4 million lower than the prior year primarily due to reduced employee related expenses and the decreased site development expenses related to our terminated project in Australia. This was offset in part due to increased product development as the Company continues to advance its technology and prepares for pending deployments of its PB40 and APB-350 A1 buoys later this summer. In addition, the Company received a refund related to research and development expenditures in Australia. Results in the prior year fourth quarter reflected a favorable adjustment for a change in project loss reserve.
Results for the Year Ended April 30, 2015
For the fiscal year ended April 30, 2015, Ocean Power Technologies reported revenue of $4.1 million, as compared to revenue of $1.5 million for the year ended April 30, 2014. The increase in revenue is primarily related to increased billable work for the removal of anchor and mooring equipment from the seabed off the coast of Oregon, increased billable work under the current phase of our project with MES, and the completion of our WavePort contract with the European Union. These increases were partially offset by decreased revenue on other billable development projects.
The net loss for the fiscal year ended April 30, 2015 was $13.2 million, as compared to a net loss of $11.2 million for the year ended April 30, 2014. The increase in the Company’s net loss year-over-year primarily reflects an increase in estimated project costs associated with our contract with MES, an increase in legal fees, as well as higher consulting and patent amortization costs. These increases were partially offset by decreased product development costs due to the substantial completion of our cost-sharing contract with the US Department of Energy for our Reedsport project in Oregon, net of increased costs associated with other internally funded development. In addition, the Company reduced employee related costs and site development expenses related to our terminated project in Australia, and received a refund related to research and development expenditures in Australia.
Balance Sheet and Available Cash
As of April 30, 2015, total cash, cash equivalents, and marketable securities were $17.4 million, down from $28.4 million on April 30, 2014. On April 30, 2015, restricted cash was $0.5 million, compared with $7.3 million as of April 30, 2014. This significant decrease in restricted cash is primarily due to the return of $4.7 million in customer advance payments that we had received under our former contract with Australian Renewable Energy Agency (“ARENA”) in March 2014, $0.5 million in goods and services tax for the Australian Tax Authorities and $0.8 million for the Oregon Department of State Lands relating to the Oregon project that had been classified as restricted cash. Net cash used in operating activities was $17.2 million and $6.5 million for the years ended April 30, 2015 and 2014, respectively. The increased cash used in operating activities of $17.2 million included the return of the $4.7 million to ARENA, while the prior year included the receipt of funds from ARENA.
George H. Kirby, President and Chief Executive of Ocean Power Technologies, commented, “As we begin fiscal 2016, we continue to aggressively drive the deliverables that we set out earlier this year. In addition to achieving fully permitted status for deployment of our PB40 buoy, we have begun deployment of the mooring system and we are currently monitoring for a suitable weather window for final buoy deployment. We will soon achieve fully permitted status for deployment of our APB-350 A1 buoy, which we also expect to deploy this summer. We are making significant progress toward development of our commercial generation APB-350 A2 buoy, which is being developed with an optimized geometry for improved operating efficiency as well as reduced fabrication, transportation and deployment costs, and recently underwent a successful preliminary design review. We have begun development of our PB10 PowerBuoy which will leverage a scaled-up version of the APB-350 power take-off (“PTO”) and a high efficiency energy storage system for applications requiring higher power output. The PTO design for the PB10 buoy recently passed a stage-gate review with the U.S. Department of Energy, and the detailed design review of the PTO is anticipated to occur by the end of summer 2015.”
“Each of these actions demonstrates our progress toward commercialization, where we believe our cutting edge power solutions are poised to address several applications in the oil & gas, security and defense, ocean observing, and offshore wind markets. Additionally, we continue to increase our technical depth through new engineering and operations hires, and we continue to collaborate with potential PowerBuoy users in our markets of interest as we advance our commercialization efforts.”
Mr. Kirby concluded, “We’re excited about the progress that we’ve made in advancing our PowerBuoy technology. We remain laser-focused on meeting our business commitments, including this year’s successful deployments of the PB40 and the next generations of the APB-350 in order to validate durability and reliability while aggressively seeking new customers and partners as part of our commercialization efforts.”
ST Staff Writers
This post was prepared by Solar Thermal Magazine staff.