Q4 2021 Ocean Power Technologies Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the Ocean power technologies fourth quarter fiscal year, 'twenty 'twenty 1 conference call.
A webcast of this call is also available on the company's website at Www Dot Ocean power technologies Dot com.
As a reminder, this conference call is being recorded and will be available for replay after its completion.
Good day, Philip strap, and President and Chief Executive Officer, and Matthew Shafer, Senior Vice President and Chief Financial Officer, and Treasurer are on the call.
Following prepared remarks, we will open the call to questions.
On July 19, 2021 O P. T issued its earnings press release and filed its quarterly report on form 10-K for the quarter and fiscal year ended April 30th 'twenty 'twenty, 1 with the Securities and Exchange Commission.
All O P. T public filings are available on the S. E C website.
S E C dot gov, or and the O P T websites Investor Relations section.
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 and 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 materially differ from any future results expressed or.
Slide by such forward looking statements.
For a further discussion of these risks and uncertainties. Please refer to our most recent form 10-K and subsequent filings with the SEC.
We disclaim any update any obligation or intent to update the forward looking statements and order to reflect events or circumstances discussed in this call.
Now I'd like to introduce Dr. Philip scrapping and thank you you may begin.
Thank you and good morning today, I will review <unk> business operations and provide an update on activities and developments during fiscal year 'twenty 'twenty, 1 and up to today and then Mark will review our financials before we open the line for questions.
Off the top I would like to take a moment to introduce myself I joined RPT and 2019 as vice President of global business development with noble energy industry experience and leadership positions with the lawsuit interval and <unk>.
And with company and.
In addition to experience with Vinci shipbuilding and Michelle.
I was born and Germany, studying and England and hold a doctorate and engineering management and a masters degree and shipped science from the United Kingdom University of Southampton, especially in the German Navy and I've worked worldwide and in many of the regions <unk> is working to sell its solution.
Until recently I have worked and our Houston office and I am now and the process of moving my family closer to Apt's, New Jersey headquarters I am proud that the board of Directors has chosen me to the next chapter of Eqt's development and I'm excited to execute the company's ambitious plans for Grace.
Despite the challenges of the COVID-19 pandemic during fiscal year 2021, <unk> continued to progress and H, but he successfully acquiring Sweden technology.
The additional freedom to all present, and Houston and opened up new avenues for strategic consulting services, providing engineering and design services for offshore energy customers, including oil and gas contract. This offshore wind and wave energy and marine construction and service companies.
Fiscal year also saw EBT delivering studies for defense contractor Adams communication and engineering and technology for the U S. Navy Naval postgraduate school summer initiatives and oil and gas consortium deep store and subsea oil production applications for the PV 3 Palo Verde.
He also deploy the PV 3 Palo Verde, and CIT achieved a PV 3 operational milestone and the Adriatic Sea and launched 2 new products hybrid power buoy and subsea battery.
The company had a key goal of improving its financial position and reducing capital risk and fiscal year 2020.1.
I'm going to ask Matt to expand on that now as he discusses a P T financials.
Thank you Philip and good morning, everyone.
We're all very excited to have Philip in this capacity and are all very much looking forward to working together I want to highlight that during fiscal year, 2020, 1 O P. T significantly improved its cash position generating more than $80 million and net proceeds through utilization of its at the market facilities.
And equity line common stock purchase agreements also recently O P. T changed its listing from the NASDAQ capital market to the NYSE American stock exchange, we believe this transition and enhances the visibility of the company and like our recent addition to the Russell Microcap Index.
Not only benefits our existing shareholders, but will also lead to greater exposure to potential investors.
With that now turning to the <unk> financials.
Revenue for the fourth quarter of fiscal year 2021, with $600000 that was essentially flat compared to the same period in the prior year.
Revenue for the full year full fiscal year, 2021 was $1.2 million, reflecting a 28% decrease from fiscal 2020.
The decline in revenue for the full year was mainly attributable to COVID-19 pandemic related project delays.
The net loss for the fourth quarter and fiscal year, 2021 was $5.2 million and $14.8 million respectively, representing.
Representing increases over the prior year comparable periods, primarily attributable to higher costs incurred due to COVID-19 pandemic delays.
Higher engineering product development, and general and administrative costs and the impact of art and arbitration settlement.
On the balance sheet total cash cash equivalents and restricted cash was $83.6 million as of April 32021, net cash used in operating activities increased by $1.1 million compared to the 12 months ended April 32020 with that.
Matt I'll turn it back to Philip.
Thanks, Matt.
Going forward I P. T will continue to develop and commercialize our proprietary systems that generate electricity harnessing the renewable energy of ocean waves and solar power.
And as noted in our 10-K and our strategy includes developing holistic solutions and services, including cloud based delivery systems and data and predictive analytics using ocean and third party data to provide actionable intelligence.
We believe there is an increasing need for our products and solutions and markets, such especially protection offshore wind farm support and maritime domain awareness applications.
We continue to build upon our mission of connecting the ocean with those who operate day based on our proprietary renewable power platform and engineering skills.
Solutions focus on 3 major services.
And as I said this supported and enabled by power service and all underpinned by our strategic consulting services, which we broadened with the acquisition of freedom and technology.
Throughout fiscal 2020, 2 we fully intend to continue developing evolving and strengthening our offerings as we solidify our position as a leader in March and power and data solutions, operator, we're ready to open up the call for questions.
Thank you we will now be conducting a question and answer session to join the question queue. Please press star 1 on your telephone keypad.
Confirmation tone will indicate your line is and the question queue.
You May press star 2 if you'd like to remove your question from the Q4 participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 to ask a question at this time 1 moment. Please while we poll for questions.
Our first question comes from Robert Silveira with severe of Associates. Please proceed with your question.
Okay.
Hi, and good job guys and.
Could you give me a picture of your current cash burn rate.
And so the next quarter, so to speak as opposed to as less basically $3 million and the last quarter.
Yeah.
Robert how are you and this is Matt I know you called in a couple of quarters ago Hope you have been doing well thanks for calling.
And again good.
Good questions.
Yeah, our cash burn rate is slightly higher than it historically has and it's been around the 1 mill.
So it's slightly higher with the.
The.
Slight pivot we've done that we've talked about.
And yeah. So that's what we're looking at going forward.
Approximately 3 million per quarter, then sell.
That's correct yeah.
Okay.
How would you say and it looks for the next 3 to 6 months on pending sales.
Yeah.
Well, Hello, Hi, Robert.
Nice to talk to you.
As much as I'd love to be able to share details on it and I believe you know that's not something I can do and any great detail.
And what we're working very hard with a number of different customers are in and in a range of geographies.
We see the global pandemic hasn't helped by curtailing travel and slowing the cycle of projects be raised in the and the in the in the and the private market or related to government, but we're optimistic that will soon be able to travel more freely and the cycle of projects will pick up but we're not able to say anything and detailed about now.
Okay.
And you did not elaborate on the installation and the T V boy and filling and how it now that it's in and how is it going.
How does the customer feel about it.
And a feedback on that.
And in <unk>.
April we did deploy the PV 3 powdery and journey and we continue to work with our customers for any follow up that may be required on that.
But have they given your own question has 2 yeah. It is it function all at this point and doing a particular job.
And are they happy with it you know there was a little bit of feedback on and on the results there because that may translate to bragging rights to other customers et cetera.
The the Boonies B and installed I cant comment on the internal matters and therefore the company.
Oh, it's still in the process of installation and then.
And it's being deployed.
And so okay.
And the 1 that's over in Europe that 1 now has gone long service duty and.
Hum.
What is the impressions on that and the customer.
The PV brewery I presume, you're referring to the 1 that was in the Adriatic for Eni.
That was back in New Jersey, and following the slowdowns and related due to COVID-19, and it will be refurbished after the long deployment ready for the next mission.
I see and it was very successful on the personnel from.
And we successfully deployed from nearly 2 years.
Wonderful great.
Okay on the balance sheet and got you.
And you have Oh.
Item and not all.
Like you expand on a little bit when it says litigation and payable.
I presume that's 1 another 1 and 224000.
And what is what is that about and when is it you know yeah. Robert This is Matt again that relates to and it's all disclosed in our 10-K that we just filed yesterday as well that's from the former President and CEO of the company that was and litigation matter that started back and I want to say 2014.
And that's all day.
Payment has been made.
Yes.
So that's in other words that is now settled and.
That's correct me and the number that's going out of the day that you had this.
Got it.
And so all litigation is now free and clear.
Right.
Wonderful.
Okay.
And for me. Thank you very much and keep working out of guys and thank you everyone got great ideas and let's get some sales.
Yeah.
Thanks Robert.
And as a reminder, if you'd like to ask a question. Please press star 1 on your telephone keypad 1 moment, please while we poll for questions.
Our next question comes from Joe George a private Investor. Please proceed with your question.
Hello, gentlemen, hey question on the debt.
And we have any.
Information on the day Star project.
Number 1 and number 2 is that was a pretty really really vague answer on the Chile.
Bowie.
I mean for April May June July to get deployed.
<unk> deployed that's the only answer that we have.
And you've kind of got or would like a little more elaboration on that and what kind of feedback or anything.
Okay.
Hi, Joe and thanks for the question and he.
He asked about about deep store, specifically and deep star.
Same as a C E T.
And 2 studies are complete and with any study that we are contracted to complete and anywhere where we're working towards next steps which include could include a sale and lease up the solutions.
Very excited about the studies.
Deep start gives us visibility to several large oil and gas operators and the consumption and it's the there's more to come.
And is there anything more you can say about the Chile deployment, I mean that debt gets deployed and it's sitting out there or is it operations.
Uh huh.
The information that we can give is as we said the bogie is being deployed in the water.
And we call them comment on and turned the matters relating to 2 other companies.
And that's where it sits right now.
Great. Thanks, guys, good good year and Theyre.
Thank you Jeff.
There are no further questions at this time at this point I'd like to turn the call back over to Philip strap and for clothing, Oh, excuse me someone jumped into the queue.
We.
And we do have a question from Peter Bush era with Dawson James.
How're you doing that.
Good theater, how are you.
I'm good.
A lot of questions and I don't know where to start but sure about George why would why did he what happened there.
Okay.
Yes sure.
George Kirby deposits apta to pursue other endeavors.
Okay.
Okay.
And just wondering because he was in line up for a while but.
And.
The thing was adding and the Adriatic sea the stuff with Shelley.
It was never really answer, but there's others, who are as far as I was understanding was $2.1 million you guys would get for the deployment and from the sale of the building I havent seen that corn from a balance sheet and revenue yet with a whole core and.
On the debt for notes with the Navy.
But you are working with the illegal fishing, there's stuff going on in Asia, and then the thing and France, Youre doing something there my questions a couple of quarters ago about Microsoft.
Underwater data centers, where does everything stand and this.
Really kind of a little bit confused myself, so I'm and bought I've been here for over 4 years. So.
Yes.
And Peter I'll, I'll start off answering and.
And then turn it over and Philip on the latter part with regards to E. G. P. <unk> showing up on the financials, you said balance sheet, we recognized revenue on our contracts over time using the percentage of completion accounting and under the new accounting rules for revenue recognition right you have performance obligations I won't get into how all that works but.
And the revenue has been being recognized over time as we have been working on that contract and deploying that asset.
In Chile with regard to.
The Navy and illegal fishing, that's 1 of our.
Revised strategies that bill can talk a little bit more about and then maybe we can touch upon your question that you had last quarter and I believe youre, referring to Microsoft's underwater data centers.
And if I.
And I recall correctly, you had asked a question have we had any conversations with them.
And I can't fully speaks to that so I'll turn it over to Philip on on those 2 on the Navy and that.
Okay.
Yeah, sorry.
As Matt said, yeah, and maritime domain awareness and he's 1 of the key aspects of any defense and security operations indication and.
And we're developing a system that will work with other participants of the MDA space and it might be which include satellite providers and the vessel shore base station and so on and so forth and in order to provide additional gateway nodes edge computing capabilities and upload things into the cloud in order to speed up the gathering of actionable.
<unk>.
And to your question on illegal fishing and.
And in order to mitigate are you fishing illegal and reported the unregulated fishing you here and you have 2 options weighted either you need to be there.
And the president and stop it and there and now and that requires you to spend millions of dollars and larger vessels train crews and health.
And then go out that all of which while they're burning fuel to be there, where you can deploy autonomous systems, such as all duties, which and the incident and it cuz might not be able to prevent that specific day of illegal fishing, but generate the data that you can then use to go and prosecute fishing vessels owners and carried out and transgressions and then.
And as a year of activity taking place.
Okay on a different.
Different node.
3 years ago and July was a deadline for.
Believe it was and the Doctor, which is Barbara I actually don't know you wouldn't do a project and the Gulf of Mexico, and then you opened an office in Houston.
And any projects stand with the commissioning of oil and the Gulf of Mexico.
We continue to have discussions with the various operators, particularly through the connections that we've recently made with the deep Star consortium and.
And I and I'm sure, you're well aware and we see Anadarko is now part of Occidental petroleum.
Our current conversations down here in Houston with the Marine operations.
And on the oil and gas companies and it is it is all plentiful.
Okay and with all this cash because since I've been involved with your comfort and you've never had this much cash and the balance sheet ive ever saying what are you are you planning and they possibly doing some type of acquisition.
What's your plans because that's all plenty of money to.
And I was sitting there.
So just prudent acquisition.
First opportunity within Opt's <unk> long term growth strategy to expand market value proposition wows building revenues.
We are continuing to look.
And the opportunities that add value to our company as we execute our growth strategy.
Okay.
And if they always do you have so far.
The P P threes at this point.
Yes.
Yeah, I think and we've got serial number 6.
And the warehouse undergoing final oxitec.
Okay.
Is there anything further growing with premier oil.
Suddenly Arroyo Harbour energy, obviously from you all.
Edged with Chrysler energy and.
Late last year and this year I think it was completed and approved and the United Kingdom.
So we as with any of our other customers.
<unk> is looking at its next opportunities we continue to have discussions with them around various opportunities.
Okay.
All right.
Thank you.
Peter Thank you very much I appreciate it always.
Hearing from you and your good questions.
And thank you.
Our next question comes from Robert Silveira with suburban and Associates. Please proceed with your question.
Hey, Robert your life with our speakers.
Are you muted.
Yeah, I guess how's that and you gave me that now yes, we can thank you okay.
Hi.
And.
I would like you to elaborate from me a little bit about what you required when you got 3 debt like knowledge as far as capabilities and how the more with the existing business can you elaborate a little on that.
And.
Oh sure of course.
And it's Sweden, and technology says and have set the offshore oil and gas industry, we aspire to move into offshore wind and a dedicated team of engineers and nave and architecture will allow us to do that.
Well as enables us and expands our ability to provide comprehensive solutions to customers operating and rapidly evolving markets.
Sweet and as being a strategic partner and developing our hybrid power buoy, and subsea battery products and having them onboard strengthens our value propositions and expertise and the form of offshore engineers and naval architect that we have not had in the past.
And we see suite and there's not any big.
Uh huh.
Okay.
Okay, I understand and butter and now. Thank you. So you can even coupled in with wind power.
With 3 then we can provide and offshore engineering services to wind farm developers. So that we can start having discussions across the lifecycle with them.
Gotcha. Okay. Thank you that's all I have thank you very much.
As a reminder, if you'd like to ask a question. Please press star 1 on your telephone keypad 1 moment, please while we poll for questions.
There are no further questions at this time I'd like to turn the call back over to Philip strap and for closing comments.
Thank you as we've discussed here today, despite the impact of the global pandemic fiscal year 2021 was the parent and of course, sorry P. J.
Continue to develop and commercialized solutions into high growth market.
And well capitalized.
Continuously expanding our expertise and capabilities, allowing us to bring additional value to our customers and.
And we are energized and excited for the year ahead, and our plans to grow our business to benefit our shareholders. Thank you for joining us today.
This concludes today's teleconference and webcast. Thank you for your participation today you may disconnect. Your lines at this time. Thank you.