Ocean Power Technologies Inc (OPTT, Financial) filed Quarterly Report for the period ended 2012-07-31.
Ocean Power Technologies Inc has a market cap of $29 million; its shares were traded at around $3.45 with and P/S ratio of 5.1.
For the three months ended July 31, 2012, we generated revenues of $1.0 million and incurred a net loss attributable to Ocean Power Technologies, Inc. of $4.3 million, compared to revenues of $1.9 million and a net loss attributable to Ocean Power Technologies, Inc. of $5.0 million for the three months ended July 31, 2011. As of July 31, 2012, our accumulated deficit was $130.3 million. We have not been profitable since inception, and we do not know whether or when we will become profitable because of the significant uncertainties with respect to our ability to successfully commercialize our PowerBuoy systems in the emerging renewable energy market.
Revenues decreased by $0.9 million, or 49%, to $1.0 million in the three months ended July 31, 2012, as compared to $1.9 million in the three months ended July 31, 2011. The change in revenues was attributable to the following factors:
Cost of revenues decreased by $0.9 million, or 48%, to $1.0 million in the three months ended July 31, 2012, as compared to $1.9 million in the three months ended July 31, 2011. This decrease in the cost of revenues reflected the decreased activity related to our LEAP project with the US Navy. This was partially offset by the increased activity on our WavePort project off the coast of Spain.
We operated at an approximate break-even gross profit in the three month periods ended July 31, 2012 and 2011. Most of our projects in the three month periods ended July 31, 2012 and 2011 were under cost-sharing contracts. Under cost-sharing contracts, we receive a fixed amount agreed upon with the customer that is only intended to fund a portion of the costs on a specific project. We fund the remainder of the costs primarily as part of our product development efforts. Revenue is typically recorded using the percentage-of-completion method applied to the contractual amount agreed upon with the customer. An equal amount corresponding to the revenue is recorded in cost of revenues resulting in gross profit on these contracts of zero. Our share of the costs is considered to be product development expense. Our ability to generate a gross profit will depend on the nature of future contracts, our success at increasing sales of our PowerBuoy systems and on our ability to manage costs incurred on our fixed price contracts. Product development costs Product development costs decreased by $1.2 million, or 38%, to $1.9 million in the three months ended July 31, 2012, as compared to $3.1 million in the three months ended July 31, 2011. Product development costs were attributable primarily to our efforts to increase the power output and reliability of our utility PowerBuoy system, especially for our utility-scale PowerBuoy system. The decrease in product development costs was related primarily to a decrease in activity related to our PowerBuoy projects off the coast of Oregon and off the coast of Scotland. The Oregon project is in the final assembly stage and the Scotland project was completed in fiscal 2012. As we progress to deployment and commissioning of the Oregon PowerBuoy, our product development costs may increase. Over the next several years, it is our intent to fund the majority of our research and development expenses, including cost-sharing arrangements, with sources of external funding. If we are unable to obtain external funding, we may curtail our research and development expenses or we may decide to self-fund significant research and development expenses, in which case our product development costs may increase. During the three months ended July 31, 2012, the majority of funding for our PB500 PowerBuoy development project was from external sources. Selling, general and administrative costs Selling, general and administrative costs increased by $0.4 million, or 18%, to $2.4 million for the three months ended July 31, 2012 as compared to $2.0 million for the three months ended July 31, 2011. The increase was due primarily to an increase in site development expenses related to our potential project in Australia and recruiting fees. Interest income Interest income decreased approximately 54% to $55,000 for the three months ended July 31, 2012, as compared to $121,000 in the three months ended July 31, 2011, due to a decrease in cash, cash equivalents and marketable securities and a decrease in average yield. Foreign exchange loss Foreign exchange loss was $108,000 for the three months ended July 31, 2012, compared to a foreign exchange loss of $9,000 for the three months ended July 31, 2011. The difference was attributable primarily to the relative change in value of the British pound sterling, Euro and Australian dollar compared to the US dollar during the two periods. 24
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Ocean Power Technologies Inc has a market cap of $29 million; its shares were traded at around $3.45 with and P/S ratio of 5.1.
Highlight of Business Operations:
For the three months ended July 31, 2012, we generated revenues of $1.0 million and incurred a net loss attributable to Ocean Power Technologies, Inc. of $4.3 million, compared to revenues of $1.9 million and a net loss attributable to Ocean Power Technologies, Inc. of $5.0 million for the three months ended July 31, 2011. As of July 31, 2012, our accumulated deficit was $130.3 million. We have not been profitable since inception, and we do not know whether or when we will become profitable because of the significant uncertainties with respect to our ability to successfully commercialize our PowerBuoy systems in the emerging renewable energy market.For the three months ended July 31, 2012, we generated revenues of $1.0 million and incurred a net loss attributable to Ocean Power Technologies, Inc. of $4.3 million, compared to revenues of $1.9 million and a net loss attributable to Ocean Power Technologies, Inc. of $5.0 million for the three months ended July 31, 2011. As of July 31, 2012, our accumulated deficit was $130.3 million. We have not been profitable since inception, and we do not know whether or when we will become profitable because of the significant uncertainties with respect to our ability to successfully commercialize our PowerBuoy systems in the emerging renewable energy market.
Revenues decreased by $0.9 million, or 49%, to $1.0 million in the three months ended July 31, 2012, as compared to $1.9 million in the three months ended July 31, 2011. The change in revenues was attributable to the following factors:
Cost of revenues decreased by $0.9 million, or 48%, to $1.0 million in the three months ended July 31, 2012, as compared to $1.9 million in the three months ended July 31, 2011. This decrease in the cost of revenues reflected the decreased activity related to our LEAP project with the US Navy. This was partially offset by the increased activity on our WavePort project off the coast of Spain.
We operated at an approximate break-even gross profit in the three month periods ended July 31, 2012 and 2011. Most of our projects in the three month periods ended July 31, 2012 and 2011 were under cost-sharing contracts. Under cost-sharing contracts, we receive a fixed amount agreed upon with the customer that is only intended to fund a portion of the costs on a specific project. We fund the remainder of the costs primarily as part of our product development efforts. Revenue is typically recorded using the percentage-of-completion method applied to the contractual amount agreed upon with the customer. An equal amount corresponding to the revenue is recorded in cost of revenues resulting in gross profit on these contracts of zero. Our share of the costs is considered to be product development expense. Our ability to generate a gross profit will depend on the nature of future contracts, our success at increasing sales of our PowerBuoy systems and on our ability to manage costs incurred on our fixed price contracts. Product development costs Product development costs decreased by $1.2 million, or 38%, to $1.9 million in the three months ended July 31, 2012, as compared to $3.1 million in the three months ended July 31, 2011. Product development costs were attributable primarily to our efforts to increase the power output and reliability of our utility PowerBuoy system, especially for our utility-scale PowerBuoy system. The decrease in product development costs was related primarily to a decrease in activity related to our PowerBuoy projects off the coast of Oregon and off the coast of Scotland. The Oregon project is in the final assembly stage and the Scotland project was completed in fiscal 2012. As we progress to deployment and commissioning of the Oregon PowerBuoy, our product development costs may increase. Over the next several years, it is our intent to fund the majority of our research and development expenses, including cost-sharing arrangements, with sources of external funding. If we are unable to obtain external funding, we may curtail our research and development expenses or we may decide to self-fund significant research and development expenses, in which case our product development costs may increase. During the three months ended July 31, 2012, the majority of funding for our PB500 PowerBuoy development project was from external sources. Selling, general and administrative costs Selling, general and administrative costs increased by $0.4 million, or 18%, to $2.4 million for the three months ended July 31, 2012 as compared to $2.0 million for the three months ended July 31, 2011. The increase was due primarily to an increase in site development expenses related to our potential project in Australia and recruiting fees. Interest income Interest income decreased approximately 54% to $55,000 for the three months ended July 31, 2012, as compared to $121,000 in the three months ended July 31, 2011, due to a decrease in cash, cash equivalents and marketable securities and a decrease in average yield. Foreign exchange loss Foreign exchange loss was $108,000 for the three months ended July 31, 2012, compared to a foreign exchange loss of $9,000 for the three months ended July 31, 2011. The difference was attributable primarily to the relative change in value of the British pound sterling, Euro and Australian dollar compared to the US dollar during the two periods. 24
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