Q4 2020 Ocean Power Technologies Inc Earnings Call

This call is being webcast on the company's website at Www Dot Ocean power technologies Dot com.

As a reminder of this conference call is being recorded and will be available for replay after its completion.

On the call today, our George Kirby, President and Chief Executive Officer, and Nike, <unk>, Chief Financial Officer and Treasurer.

Are you prepared remarks, well open the call to question.

On June 29, 2020, Oh P.T. issued its earnings press release filed its annual report on form 10-K for this fiscal year ended April 32020, well the Securities and Exchange Commission.

Oh P.T. public filings can be viewed on the FCC website at <unk> Dot Gov already Investor Relations section of the O.P.T. Web site.

Please note that management's prepared remarks may contain forward looking statements that are within the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Forward looking statements are identified by certain words or phrases such as they will aim will likely result believe expect will continue anticipate estimate intend plan contemplates seek to future objective gold project should we'll pursue and similar expressions.

<unk> of such expression.

These forward looking statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks 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.

Some of these factors include among others. The following future financial performance expected cash flow ability to reduce cost and improve operational efficiencies revenue growth and increased sales volume success in key markets competition ability to encourage your relationships with partners and other third parties livery and deployment powerbuoys increasing.

The power output of Powerbuoys hiring new key employees expected cost the powerbuoys product and building customer relationships. Please refer to our most recent forms 10-Q, and 10-K and subsequent filings with the FCC for further discussion on these risks and uncertainties.

We disclaim any obligation to or intent to update the forward looking statements in order to reflect events or circumstances discussed in this call.

No I am pleased to introduce Mr. George Kirby.

Thank you and good morning, everyone.

I'm going to review our business operations and provide an update on our commercialization activities and developments during the fourth quarter fiscal year 2020 and up to today.

And Matt will provide a review of our financials.

And after that we'll open the line for questions.

I'm happy to report that Oh, PC continued its commercial progress from fiscal 2020 with a sale of a P.B. three powerbuoy.

The conclusion up our first autonomous powerbuoy deployments in the North sea with Premier oil.

In an 18 month Powerbuoy lease extension for our project with any any Adriatic C and the completed construction of Oki Tees hybrid power Barry.

The hybrid complements our PB three powerbuoy by providing customers with a quick deployment option and flexible power generation across a myriad of see states, including low to no wave conditions.

We recently conducted in water tests of our hybrid Powerbuoy and coastal New Jersey waters that included towing and stability measurements in power generation through the operation up at solar panels, and it's certainly Andrew we were happy with our results were excited to offer this new product to customers that are seeking and easily deployable economic.

Michael unreliable source about short power in communications.

Applications and solutions for our powder Powerbuoys includes sub sea power and battery charging.

Surface surveillance sub sea monitoring.

And connectivity for offshore oil and gas defense and security Science and research and other offshore markets. We're very excited about this new product and we've aligned our powerbuoy products with these market driven solutions that we believe will provide long term value for our existing and future customers.

Our passion for innovation quality safety and outstanding service has led us to these commercial successes over the past year like many companies, we've had to be flexible and to adopt a new ways of working given the challenges of the global put cobot 19 pandemic.

Given the pandemic earlier this year old P.T. quickly pivoted to embrace distance working for office staff, while our production staff safely capped internal and customer projects on schedule at our New Jersey production facility.

We've been participating in virtual conferences to continue to market, our solutions and like us our current and future customers have embraced video conferencing to maintain momentum of existing projects. Some potential new projects. We're very excited to carry this momentum through this new fiscal year to continue to grow BT.

Now, let me turn the call over to Matt to discuss the financials.

Thank you George and good morning, everyone.

We recorded revenue of 600000 for the fourth quarter of fiscal 2020, an increase of $400000 over the prior year period, which is mainly attributable to a new contract signed with and now Green power. The net loss for the fourth quarter of fiscal 2020 decreased by.

By 1.3 million, which was mainly attributable to the decrease in general and administrative costs.

And the receipt of the New Jersey net operating loss proceeds in the current year quarter, which offset expenses.

We recorded revenue of 1.7 million for the full year of fiscal 2020 and improvement over fiscal 2019, primarily due to a new contract signed with an L. Green power.

The fiscal 2020 net loss decreased by $1.8 million to $10.4 million, primarily due to lower spending on general and administrative related expenses.

Turning now to the balance sheet total cash cash equivalents restricted cash and marketable securities with $10.9 million as of.

April Thirtyth 2020.

Net cash used in operating activities decreased by $1.5 million from the fiscal year ended April Thirtyth 2000, $19 million to $10.6 million, which is primarily related to lower spending and general and administrative expenses with that I'll turn it back to George.

Thanks, Matt Operator, we're now ready to open the call up for questions.

Thank you we will now be conducting a question and answer session.

I would like to be placed into the question Q. Please press star one on your telephone keypad a confirmation from the indicate that your line is in the question Q.

You May press star to what you would like to remove your question from the Q.

For participants you can speak or equipment, it may be necessary to pick up your hands that before pressing the star <unk> once again that star wanting to ask a question at this time one moment. Please let me pull for questions.

Thank you. Our first question comes from the line as Peter <unk> with Dawson James. Please proceed your question.

Good morning.

Hey, good morning, Peter.

Good I heard several questions I saw in the 10-K, you. This year units than 14 million, which is going to be up from well pretty much last year I'm wondering.

Why.

Turning to cells or.

Matt.

Any thoughts.

Yeah, Peter can you be more specific yeah.

Well, usually you guys are sentiments and a 1 million a month.

That's usually 12 million a year and if that's the guidance to the following years more modern so I'm wondering if it's because.

A lot more workers or something like that in nature.

Yeah, No Peter are spending for the current fiscal year that we just completed was actually lower our net cash used in operating activities.

Last year was $12.1 million and this year.

It was $10.6 million.

Right in the guidance, you're giving forward as 14, which I.

You asked the merits of that's usually no are you more money or Peter Peter we haven't given any guidance or not in the K or.

Really any place.

Well, that's all it somewhere.

All right and we are really I read something correct.

I was wondering where we see that we're standing on orders across the board when there's got to bring other Asian Islands.

Government funding for Q1 with what motors in subsea <unk>.

You know, what's premier while doing that.

And <unk> the company in the Gulf of Mexico, where does that stands.

I'm wondering about any in the while the cost of Italy, selling a buyer bill we could you they extended the one for 18 months and the major on it so.

Right all good questions. The one thing that I will say is with regards to premier oil they have actually a publicly said that they want to move forward.

With future work with L.P.T. so.

We're aggressively moving forward in that direction with regards to any other commercial activity as much as I would like to share where we are and what we're working on right. Now we as you know we can't talk about that until it actually materializes.

Right, that's something interesting with this Q that any is producing or they take this cubit stood at the bottom of the ocean and the Pvthree powers Adnan I guess.

The.

Gases excrete from.

What they're doing down there you got one do that because I saw that on there.

Well it out there a couple of months ago.

What's great about any as a partner is they have a number of different applications that they're looking at us for this deployment any Adriatic is a continuation to prove out for the ASV applications while.

They're working too.

Basically implement.

Our technologies and into their operations. That's a that's an ongoing discussion, but there are there are a number of opportunities with any of that we're looking at.

Good good call you had a couple of weeks back in the Washington Square Ocean week, the chemicals very well.

Thank you know who's dimension partners I'm good possible partners.

I was waiting for auto sales from you guys persist.

Yeah, and we understand that all shareholders are waiting on that and that's why we're we're working so aggressively towards that.

<unk>.

Okay.

That's a couple of questions.

Thank you Peter Thank you. Thank you Peter.

Thank you. Our next question comes from the line of Robert So there are each other and associates. Please proceed with your question.

Good morning, George and congratulations on a good job.

You are in a.

Very difficult phase, obviously going from development to production [noise].

And that's a difficult transition for any company I know because I've been through it my own company.

Two years ago.

My question deals with your applications.

You are selling a single Boise most of the time for an application to a customer or do you see multiple buoys in use so to speak in series in the application.

That's a great question as as a matter of.

Of course.

Commercial activities, we're seeing more and more multi buoy opportunities whether it be for emergency power on an umbilical that's failing for a and oil and gas operator, we're seeing that.

Or whether it's for a surface surveillance for governments.

To be able to provide multiple buoys that actually talk within each other.

While there surveil in the the oceans and providing that data back to land, we're seeing more and more multi buoy opportunities and we recognize that our lowest transaction cost. If you will are the lowest cost in order to get to an order.

We'll be multi buoys, we need.

We need more multi buoy orders right now and that's what we're incredibly focused on the entire organization not just our expanded sales team, but our engineering team as well that's job number one is two to help a secure these types of orders.

Okay. So most of the applications then would you say the majority of them would if built out completely would be using multiple buoys as opposed to a single boy.

I can tell you this that we.

We're seeing more and more multi buoy opportunities and we are pursuing them.

And many of these single buoy opportunities start off single, but have the ability to expand to multi buoy opportunities and future phases.

And that particular location.

Great Okay [noise].

That's that's all I keep up the good work I can see that you're working under difficult circumstances simply by.

Dealing with the pandemic communications and all the rest of the problems that exist out there and you're doing a wonderful job to grow as you've grown and keep your costs in line. Thanks for that could efforts. Yeah. Thank you very much Robert will a will continue to aggressively pursue sales.

<unk>.

Thank you. Our next question comes from Keith Smith, a private Investor. Please proceed with your question.

Good morning.

Good morning.

Hi, I'm I'm, a big fan of company and the concept.

Your technologies I think it is revolutionary and.

And I think it oh to sustain.

Our environment for the future I do I have I think it's what I have asked a question and the comp.

Hi, I'm the Investor also electronic vehicle.

And that there is a company that.

Recently.

Finally to produce.

You'd be vehicles that rely on hydrogen powered.

And.

From what I'm, Dan hydrogen power would be the claim it.

Renewable energy out there once that are if this happens, but the problem with hydro power that.

In order to accumulate it your it needs a power plant separate the hydrogen atoms from oxygen Adam.

And so these these power plant they produce a lot of carbon emissions. So is it.

It's a counterproductive to use a powerpoint that.

Well potentially make a product.

Would be a renewal route renewable and sustainable so I was looking at a you tube video and.

There is a man that live in Europe, and he said that.

There is potential that wave power could be the alternative.

Energy source too.

Supply power plant with energy. So then yes, the hydrogen power for the <unk> vehicle.

So my question is how or where you are or how it where are you have this concept and how interest it would you be and pursuing such adventure if you haven't already.

But that's a great question, Sir and and our entire team is very aware of.

Hydrogen power and its efficiencies and so forth right now the markets that we're pursuing for autonomous power are acutely focused on electrification of their operations.

So right now we are likewise focused on a with our pvthree using wave power to convert that to electricity to contribute to this a this movement within our industries.

As well as our new hybrid Powerbuoy, which uses primarily solar with a a sterling engine backup Sterling engines. As you know can be run off multiple fuel sources, but right now we're very focused on generating.

Generating electricity using those means we're keeping an eye on that industry.

Because it is still somewhat nascent due to the reasons that that you outlined and it's a really good point, but right. Now we are we're staying very very focused on where we see the biggest opportunities in front of us to get to revenues.

Okay, Yeah I.

I I appreciate the back Kurt I think definitely a.

The long term.

Yes.

Pursue.

And be very profitable and and I appreciate your feedback and <unk>.

Insight. Thank thank you for your question.

Thank you once again, ladies and gentlemen kick you a question at this time. Please press star one on your telephone keypad.

Our next question comes from the line of Robert Littlehale with JP Morgan. Please proceed with your question.

Good morning.

George could you could you bring it up to date, given what's been going on in the oil markets or what the trends or in terms of offshore oil well de commissioning could you give us a little better perspective in terms of what you see going on there.

Sure and that's a great question, specifically with regards to decommissioning, where there are regulatory requirements to decommission within a certain time frame those must and are moving forward and examples of that are in the north sea such as some of the work that we've done in the past with Premier oil and I hope to do in the future.

Sure.

Areas, such as the Gulf of Mexico, or may be slowing down somewhat with decommissioning because the regulations are less stringent than what we've seen in the north sea. So I think overall, it's pretty mixed what we're also just to add on to that what we're seeing is there's a there continues to be expenditure in.

Areas of production producing wells today.

But you know again, where decommissioning is slowing down or I'm, sorry, where decommissioning is less regulated it's slowing down a bit as well as exploration is obviously signed down a bit.

Thank you.

Sure.

Thank you I would like she's going back over to management for any further or closing comments.

Thank you operator, and thank you everyone for joining todays call.

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Thank you for your participation today. This concludes today's teleconference and webcast you may disconnect your lines at this time.