Ocean Power Technologies, Inc. (Nasdaq:OPTT) announced financial results for its Fiscal 2016 second quarter ended October 31, 2015.
George H. Kirby, President and Chief Executive Officer of OPT, stated, “I am pleased with our second quarter results as we executed on our objectives and achieved considerable progress on both the technical and commercial fronts. During the second quarter, we deployed the APB350 (A1) and initiated Accelerated Life Testing (ALT) on our redesigned APB350 PowerTakeoff system. We formed a Technical Advisory Panel (TAP) to provide critical industry feedback on market applications and requirements to increase our speed to market. Furthermore, we signed a Memorandum of Understanding (“MOU”) with Gardline Environmental, Ltd, one of our TAP members, to jointly investigate innovative metocean monitoring and maritime security systems for prospective customers.”
Mr. Kirby continued, “Consistent with our strategic pivot away from large grid-connected systems to smaller autonomous PowerBuoys, we have made considerable progress toward our next-generation APB350, which we are moving to commercialization. We expect the APB350 will feature an enhanced electrical storage system, a higher efficiency power management system, and “plug and play” capability, making it end-user payload agnostic. I am excited to announce this next-generation buoy has undergone a critical design review, and we expect the APB350 to undergo significant in-ocean and accelerated life testing in the next year. We currently project that in calendar year 2016, it will achieve a maturity level that will allow us to proceed with a commercial launch of our product.”
Results for the Second Fiscal Quarter Ended October 31, 2015
For the three months ended October 31, 2015, Ocean Power Technologies reported revenue of $0.5 million, as compared to revenue of $1.7 million for the three months ended October 31, 2014. The decrease in revenues compared with the prior year was primarily related to decreased billable costs on our project with Mitsui Engineering & Shipbuilding (“MES”) and with our contract with the U.S. Department of Energy (“DOE”). The MES project is currently undergoing a stage-gate review as discussed more fully in the MD&A section of our quarterly report.
The net loss for the three months ended October 31, 2015 was $3.0 million as compared to a net loss of $4.4 million for the three months ended October 31, 2014. The decrease in net loss is primarily due to lower selling, general and administrative expenses including reduced third party consulting, site development and patent amortization costs. During the three months ended October 31, 2015, we recovered product development costs from prior periods under our cost-sharing contract with the European Union for our WavePort project. In addition, the prior year included $0.3 million of gross loss due to a change in project cost estimates related to the MES contract.
Results for the Six Months Ended October 31, 2015
For the six months ended October 31, 2015, Ocean Power Technologies reported revenue of $0.6 million, as compared to revenue of $3.3 million for the six months ended October 31, 2014. The decrease in revenue is primarily related to decreased billable work for the DOE, WavePort and MES contracts.
The net loss for the six months ended October 31, 2015 was $7.1 million, as compared to a net loss of $7.7 million for the six months ended October 31, 2014. The decrease in the Company’s net loss year-over-year primarily reflects increased estimated project costs associated with our contract with MES in the prior year period as well as reduced legal, third party consulting, site development costs and patent amortization expenses compared with the prior year period. These decreases were partially offset in part by higher product development costs related to our APB350 and PB40 projects.
Balance Sheet and Available Cash
As of October 31, 2015, total cash, cash equivalents, and marketable securities were $10.4 million, down from $17.4 million on April 30, 2015. As of October 31, 2015 and April 30, 2015, restricted cash was $0.4 million and $0.5 million, respectively. Net cash used in operating activities was $7.0 million during the six months ended October 31, 2015, compared with $12.1 million for the six months quarter ended October 31, 2014. The prior year reflects the return of $4.7 million related to an advance payment received from ARENA while the current year reflects costs related to increased deployment activity.
Mr. Kirby concluded, “We are especially encouraged by A1’s performance, particularly power generation to date, which has generated positive market feedback. We continue to believe that our PowerBuoys will be cost-effective alternatives to incumbent solutions that generally use less reliable and more costly sources of power, as well as enable new applications. Further, we remain focused on discussing new opportunities for joint development and projects with potential partners and customers as part of our commercialization efforts. Overall, we are excited about the growth opportunities in front of us, and we look forward to achieving further progress in the near future.”