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

November 09, 2009 | About:
10qk

10qk

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Odyssey Marine Exploration Inc. (OMEX) filed Quarterly Report for the period ended 2009-09-30.

Odyssey Marine is in the field of deep ocean shipwreck exploration. Odyssey Marine Exploration Inc. has a market cap of $86.77 million; its shares were traded at around $1.48 with and P/S ratio of 21.14.

Highlight of Business Operations:

Operations and research expenses primarily include all costs within the following departments: Archaeology, Conservation, Research, and Marine Operations which include all vessel operations. Operations and research expenses were $2.9 million in 2009 as compared to $6.1 million in 2008. The $3.2 million decrease was primarily due to lower vessel operating expenses in 2009 versus 2008 ($3.1 million) and lower exhibit expenses ($.1 million). The lower vessel operating expenses were primarily attributable to not chartering additional vessels in 2009 ($1.7 million) and other favorable expenses including repairs and maintenance expenses for existing vessels ($.7 million), fuel costs ($.4 million) and other vessel operating expenses ($.3 million).

Marketing, general and administrative expenses were $6.9 million in 2009 as compared to $8.2 million in 2008. The decrease of $1.3 million was primarily attributable to lower employee-related expenses ($.9 million) including contract labor and bonus accruals, lower outside professional services and legal expenses ($.2 million) and lower depreciation expenses ($.2 million).

Operations and research expenses were $8.9 million in 2009 as compared to $13.8 million in 2008. The $4.9 million decrease was primarily due to lower vessel operating expenses in 2009 versus 2008 primarily attributable to not chartering additional vessels in 2009 ($2.0 million) and other favorable expenses including repairs and maintenance expenses for existing vessels ($1.4 million), fuel costs ($.6 million) and other vessel operating expenses ($.9 million).

Net cash used in operating activities for the first nine months of 2009 was $11.8 million. This amount primarily reflected an operating loss of $14.7 million and non-cash items including depreciation and amortization ($1.7 million) and share-based compensation ($1.6 million), a decrease in inventory, accounts receivable and other assets ($.9 million), offset in part by a decrease in accounts payable and accrued expenses ($1.3 million). Net cash used in operating activities for the first nine months of 2008 was $17.0 million. This amount primarily reflected an operating loss of $18.8 million offset in part by non-cash items including depreciation and amortization ($2.0 million) and share-based compensation ($1.5 million), a decrease in accrued expenses ($1.4 million) and inventory ($.5 million) and an increase in restricted cash ($.9 million) required by our credit facility and building mortgage with Fifth Third Bank.

Cash flows used in investing activities was $.5 million for the first nine months in 2009 which primarily reflected the purchase of property and equipment for our marine operations group which included extensive capitalized upgrades to the Ocean Alert ($.3 million). Cash used in investing activities in 2008 of $1.2 million primarily reflected purchase of property and equipment which included capitalized maintenance for extensive engine repairs and upgrades to the Ocean Alert ($.5 million), the purchase of a building (used primarily as a conservation lab and storage facility) for $1.0 million of which we financed $.8 million (net $.2 million), and $.5 million for property and equipment primarily vessel-related.

$.2 million. Cash flows provided by financing activities for the first nine months of 2008 were $10.2 million which primarily included $10.8 million from the issuance of common stock and exercise of warrants offset by net loan repayments of $.6 million. Loan proceeds of $5.0 million included $2.5 million from our line of credit and $2.5 million due to refinancing our corporate building with Fifth Third Bank in July 2008. The loan proceeds were offset by $5.6 million loan repayments which included $3.1 million for the prior building mortgage and equipment loan with Mercantile Bank in February 2008, and $2.5 million repayment of our line of credit.

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