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Odyssey Marine Exploration Inc. Reports Operating Results (10-K)

February 28, 2011 | About:
10qk

10qk

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Odyssey Marine Exploration Inc. (OMEX) filed Annual Report for the period ended 2010-12-31.

Odyssey Marine Exploration Inc. has a market cap of $220.34 million; its shares were traded at around $3.3 with and P/S ratio of 50.69. Odyssey Marine Exploration Inc. had an annual average earning growth of 18% over the past 5 years.Mutual Fund and Other Gurus that owns OMEX: Mario Gabelli of GAMCO Investors.
This is the annual revenues and earnings per share of OMEX over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of OMEX.


Highlight of Business Operations:

The availability of raw materials is primarily dependent on the success of finding intrinsically valuable cargoes from shipwrecks (see Item 1A. Risk Factors). We recovered over 51,000 coins (approximately 4,000 $10 and $20 gold coins and 47,000 silver half dollars) and approximately 14,000 non-coin artifacts from the SS Republic. As of December 31, 2010, we have a remaining inventory of approximately 28,500 silver coins. Also, we have recovered more than 500,000 silver coins, hundreds of gold coins, worked gold and other artifacts from a site in the Atlantic Ocean code-named “Black Swan.” However, we will not have the ability to monetize the recovered cargo unless we are awarded title or a salvage award by the U.S. District Court, or negotiate a settlement with other claimants in the case.

During 2008 $1.9 million of expedition revenue represented charter services provided to JWM Productions in connection with the Discovery Channel television series. The agreement was renewed for 2009 in a limited format and revenue was reduced to $ .2 million. In 2009, expedition revenue also included $2 million representing compensation to provide project research and shipwreck search and survey services to Robert Fraser Marine Ltd and client companies of Robert Fraser & Partners LLP (RFP) located in the United Kingdom. Our business plan has shifted to expedition charter services in 2010 with revenues of $20.5 million which were predominantly for RFP syndicated projects and exploration charter services for subsea mineral mining.

In April 2010, we entered into agreements to provide project research and shipwreck search and survey services for a project code-named “Firebrand” to clients of RFP. Under the agreements, Odyssey furnished research related to “Firebrand” and its sinking and agreed to provide a research vessel, equipment and crew to search a specified area and inspect targets in that area. The contracts provided initial cash payments totaling approximately $3.2 million (of which $3.0 has been paid) as well as additional payments upon the sale of coins or artifacts from the “Firebrand” project. After repayment of salvage costs and fees, Odyssey will receive 75% of net revenue in aggregate until an additional £10.5 (approximately $17 million) has been received and then 50% in aggregate of all further net revenue. Search operations have already covered a major portion of the “Firebrand” project area and are expected to resume when weather in the area is appropriate for search operations.

In June 2010, we entered into agreements to provide project research and shipwreck search and survey services for a project code-named “Shantaram” with clients of RFP. Under the agreements, Odyssey furnished research related to “Shantaram” and its sinking and provided a research vessel, equipment and crew to search a specified area and inspect targets in that area. The contract provided for cash payments totaling approximately U.S. $3.4 million representing initial cash payments of $1.7 million and additional payments of approximately $1.5 million within 30 days and $0.2 million upon project completion, plus additional payments upon the sale of coins or artifacts from the “Shantaram” project. After the re-payment of salvage costs and fees, we will receive 75% of net revenue in aggregate until an additional £11.4 million (approximately $18.5 million) has been received and then 50% in aggregate of all further net revenue. The survey of the “Shantaram” search block is complete, and targets of interest have been inspected with a remotely operated vehicle. Of the amount owed to Odyssey, approximately $1.5 million related to the sale of research was not tendered to Odyssey. If not collected, Odyssey has the option to receive an additional percentage up to 11% of the net proceeds assuming the target project is located and monetized. A contract relating to additional operations relating to this project is being negotiated.

In September 2010, we executed agreements to provide supplementary project research and shipwreck search and survey services for a project code-named “Enigma II” with clients of RFP. (Our initial project with RFP, which began in November 2009 code-named “Enigma”, was completed in March 2010. Eight target sites were identified, including two sites that had some of the characteristics of the “Enigma” shipwreck. However, our subsequent analysis indicated that the sites were not the “Enigma.”) As part of the agreements for the “Enigma II” project, Odyssey furnished research related to the anticipated location of the “Enigma II” and agreed to provide the research vessel, equipment and crew to search a specified area and inspect targets in that area. The contract provided for initial cash payments totaling approximately $1.6 million to Odyssey, plus additional payments upon the sale of coins or artifacts from the “Enigma II” project. After the repayment of all recovery costs, Odyssey will receive 75% of net revenue in aggregate until an additional £5.2 million (approximately $8.4 million) has been received and then 60% in aggregate of all further net revenue. Survey operations have been completed and targets of interest have been inspected with a remotely operated vehicle.

In January 2011, Odyssey executed agreements to provide marine archaeological excavation and related services on an existing project to certain client companies of RFP to verify the existence of a target shipwreck. The work will be conducted on a shipwreck site that Odyssey discovered and inspected during a recently completed survey carried out under contract with the RFP client companies. Odyssey is providing the research vessel, equipment, technical and archaeological crew to conduct the operation. The contract provided for cash payments totaling approximately U.S. $2.3 million to Odyssey plus additional payments based upon revenue derived from the project. After the repayment of all recovery costs, Odyssey will receive at least 50% of net revenue until an additional £1.9 Million (approximately U.S. $3.1 million) has been received and then will receive a minimum of 50% of further net revenue in accordance with the search contracts.

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