Ocean Power Technologies Announces Results for the Fiscal Third Quarter Ended January 31, 2013

Ocean Power Technologies Announces Results for the Fiscal Third Quarter Ended
January 31, 2013

PENNINGTON, N.J., March 14, 2013 (GLOBE NEWSWIRE) -- Ocean Power Technologies,
Inc. (Nasdaq:OPTT) ("OPT" or "the Company") today announced financial results
for its fiscal 2013 third quarter and the nine months ended January 31, 2013.

Highlights

  * OPT reported a decreased net loss of $10.6 million for the nine months
    ended January 31, 2013, versus $11.1 million from the comparable period in
    fiscal 2012.
     
  * The Company announced that it received approximately $1.5 million under
    the State of New Jersey's Business Tax Certificate Transfer Program. The
    Program enables companies to raise cash to finance their growth and
    operations and is administered by the New Jersey Economic Development
    Authority (NJEDA) and the New Jersey Department of the Treasury's Division
    of Taxation. Under the Program, New Jersey-based technology or
    biotechnology companies with fewer than 225 US employees may be eligible
    to sell NJ state net tax operating losses and research and development tax
    credits to unaffiliated corporations.
     
  * To focus its on-going efforts to target new opportunities in the
    autonomous market, OPT established a new business unit to assess, target
    and develop opportunities in the large potential markets for OPT's
    non-grid connected PowerBuoys. OPT's products for this sector have been
    developed for off-grid applications such as defense and homeland security,
    offshore oil and gas operations and oceanographic data gathering. The
    Company believes that the Autonomous PowerBuoy market represents an
    important opportunity for profitable growth.
     
  * Efforts continued under the award of a ¥70 million (approximately US $0.8
    million) contract from Mitsui Engineering & Shipbuilding ("MES"). OPT is
    teaming with MES to develop PowerBuoy technology enhancements for
    application in Japanese sea conditions. This analysis and design work is
    expected to be completed by the end of OPT's fiscal year ending April 30,
    2013 after which a decision will be made on the next steps toward ocean
    trials of a demonstration PowerBuoy system. This would provide the basis
    for a prospective build-out of a commercial-scale OPT wave power station
    in Japan.
     
  * OPT and Lockheed Martin ("LM") are continuing to develop a planned 19MW
    wave energy project at Portland, Victoria, Australia, which would be one
    of the largest wave energy projects in the world. LM is assisting with the
    design of OPT's PowerBuoy and will lead the production and system
    integration and support overall program management. Funding for this
    project includes a grant from the Commonwealth of Australia. The grant is
    subject to certain terms, including achievement of significant external
    funding milestones. OPT recently retained Brookfield Financial Australia
    Securities Limited as financial advisor to assist in structuring and
    securing the power purchase agreements and appropriate financing for the
    project. In addition, OPT is working with the Australian Renewable Energy
    Agency, the Commonwealth's agency that manages the grant, regarding the
    project.
     
  * The Company announced the appointment of Dr. Mike Mekhiche to the position
    of Vice President, Engineering. Dr. Mekhiche joins OPT from BAE Systems,
    where he most recently held the position of Director of Programs. Dr.
    Mekhiche will be responsible for the Company's engineering and advance
    technology development. This will include technology delivery, continuing
    enhancements and development of OPT's wave energy technology portfolio,
    and the development of the next generation of PowerBuoy systems.
     
  * OPT has changed the nomenclature of its Utility and Autonomous PowerBuoy
    products to focus on product classes. Among the utility PowerBuoy
    products, the PB150, which will be called the Mark 3 PowerBuoy, currently
    drives a peak rated generator with a maximum power output of 0.86MW. The
    PB500, which will be called the Mark 4 PowerBuoy, currently drives a peak
    rated generator with a maximum power output of 2.4MW. This method of power
    rating is more closely aligned with that utilized by other renewable
    energy sources such as wind and solar. Among the Autonomous PowerBuoy
    products, the LEAP system will be called the APB 350, and the OPT
    MicroBuoy will be called the APB 10.
     
  * The Company is planning for deployment of a Mark 3 PowerBuoy off the coast
    of Oregon. However, deployment and commissioning of this PowerBuoy must
    take into consideration various regulatory, business, and financial
    factors, including requirements of regulatory agencies and a significant
    use of funds. In February 2013, OPT received notification from the staff
    of the Federal Energy Regulatory Commission (FERC) that it now considers
    our first Oregon PowerBuoy to be subject to its jurisdiction. If FERC is
    ultimately determined to have such jurisdiction, significant reporting and
    other procedures will be necessary to comply with FERC requirements, which
    will require us to make additional expenditures. These factors may delay
    deployment of the Oregon PowerBuoy beyond calendar 2013.

Charles F. Dunleavy, Chief Executive Officer of OPT, stated, "Ocean Power
Technologies continues to make progress in its utility PowerBuoy markets under
contracts with Mitsui Engineering & Shipbuilding, and the European Union. In
addition, based on our market outreach, OPT remains optimistic about the
potential for the Autonomous PowerBuoy to be a contributor to future growth.
We are talking to prospective customers for the Autonomous PowerBuoy primarily
in two key sectors – Oil and Gas, as well as defense and government. This
marketing and selling activity must address the technology and
application-specific needs of the customers. In this dialogue, our product
offerings bring to these and other industries the prospect of longer-term,
continuous renewable power at higher levels than they had previously
envisioned. Despite the macro-economic backdrop, we continue to see strong
interest in the core PowerBuoy technology. The Company is actively pursuing a
number of opportunities to expand our business within both the utility and
autonomous markets." Dunleavy continued, "Finally, during our third quarter we
received $1.5 million under the New Jersey's Business Tax Certificate Transfer
Program. We greatly appreciate the New Jersey Economic Development Authority's
decision to approve our application."

Financial Review

OPT's contract backlog as of January 31, 2013 was $4.3 million, compared to
$5.2 million as of October 31, 2012 and $7.8 million as of January 31, 2012.
OPT anticipates that the majority of its backlog will be recognized as revenue
over a period exceeding 12 months. A portion of OPT's backlog at January 31,
2013 is for its Oregon project, and the Company intends to seek additional
funding to complete this project.

Results for the Fiscal Third Quarter Ended January 31, 2013

For the three months ended January 31, 2013 and January 31, 2012, OPT reported
revenues of $0.9 million. There was a slight decrease in revenue related to
our Mark 4 PowerBuoy project, partially offset by an increase in revenue
related to our project with Mitsui Engineering & Shipbuilding.

The net loss for the three months ended January 31, 2013 was $1.5 million as
compared to a net loss of $2.2 million for the three months ended January 31,
2012. The decrease in net loss year-over-year was due primarily to lower
product development costs relating to a lower level of activity for OPT's
project in Oregon and the project in Hawaii, which was completed in FY2012. In
addition, there was a gain on foreign currency transactions and a higher
recorded income tax benefit due to the sale of New Jersey state net tax
operating losses. These decreases in net loss were offset by an increase in
selling, general and administrative (SG&A) expenses due primarily to an
increase in legal fees, site development expenses related to the planned
project in Australia and certain employee-related costs.

Results for the Nine Months Ended January 31, 2013

For the nine months ended January 31, 2013, OPT reported revenues of $3.2
million as compared to revenues of $4.3 million for the nine months ended
January 31, 2012. This decrease primarily reflects the completion in the prior
fiscal year of the Littoral Expeditionary Autonomous PowerBuoy ("LEAP")
project for coastal security and maritime surveillance with the US Navy, in
addition to a decrease in billable work related to the Mark 4 PowerBuoy
development project. These declines were partially offset by an increase in
revenue from the Company's WavePort project in Spain, the project in Oregon
and the MES project.

The net loss was $10.6 million for the nine months ended January 31, 2013
compared to $11.1 million for the same period in the prior year. This decrease
in net loss was due primarily to lower product development costs relating to
the completion of our project in Scotland in the prior fiscal period, a gain
on foreign currency transactions and a higher recorded income tax benefit due
to the sale of New Jersey state net tax operating losses. These decreases in
net loss were offset by an increase in selling, general and administrative
(SG&A) expenses due to an increase in legal fees and in site development
expenses related to the planned project in Australia.

Cash and Investments

On January 31, 2013, total cash, cash equivalents, restricted cash and
investments were $24.5 million, as compared to $26.4 million as of October 31,
2012. The net decrease in cash and investments was $1.9 million for the three
months ended January 31, 2013, compared to $2.1 million for the three months
ended January 31, 2012. OPT received approximately $1.5 million and $1.1
million from the sale of New Jersey state net tax operating losses for the
three months ended January 31, 2013 and 2012, respectively.

Additional information may be found in the Company's Quarterly Report on Form
10-Q that will be filed with the US Securities and Exchange Commission
("SEC"). The Form 10-Q may be accessed at www.sec.gov or at the Company's
website in the Investor Relations tab.

Conference Call Details

The Company will host a conference call to review these results at 10:00 a.m.
Eastern Time today. The call will be available by telephone at 800.561.2693
(toll free in the U.S.) or + 617.614.3523 (for international callers), using
passcode 95501750. Investors may also access a webcast by visiting the
Company's website at www.oceanpowertechnologies.com and clicking on the
Investor Relations tab, then Webcasts & Presentations. Recorded replays of the
conference call will be available on the Company's website and by telephone at
888.286.8010 (toll free in the U.S.) or 617.801.6888 (for international
callers), replay passcode 42256362, beginning at 1:00 p.m. Eastern Time on
March 14, 2013.

Forward-Looking Statements

This release may contain "forward-looking statements" that are within the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect the Company's current expectations
about its future plans and performance, including statements concerning the
impact of marketing strategies, new product introductions and innovation,
deliveries of product, sales, earnings and margins. These forward-looking
statements rely on a number of assumptions and estimates which could be
inaccurate and which are subject to risks and uncertainties. Actual results
could vary materially from those anticipated or expressed in any
forward-looking statement made by the Company. Please refer to the Company's
most recent Forms 10-Q and 10-K and subsequent filings with the SEC for a
further discussion of these risks and uncertainties. The Company disclaims any
obligation or intent to update the forward-looking statements in order to
reflect events or circumstances after the date of this release.

About Ocean Power Technologies

Ocean Power Technologies, Inc. (Nasdaq:OPTT) is a pioneer in wave-energy
technology that harnesses ocean wave resources to generate reliable and clean
and environmentally-beneficial electricity. OPT has a strong track record in
the advancement of wave energy and participates in an estimated $150 billion
annual power generation equipment market. OPT's proprietary PowerBuoy® system
is based on modular, ocean-going buoys that capture and convert predictable
wave energy into clean electricity. The Company is widely recognized as a
leading developer of on-grid and autonomous wave-energy generation systems,
benefiting from more than 15 years of in-ocean experience. OPT is
headquartered in Pennington, New Jersey, USA with an office in Warwick, UK,
and operations in Melbourne and Perth, Australia. More information can be
found at www.oceanpowertechnologies.com.

The Ocean Power Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=15989

 
 
Consolidated Balance Sheets as of
January 31, 2013 and April 30, 2012
                                                                 
                                                                 
                                                
ASSETS                                         January 31, 2013 April 30, 2012
                                               (Unaudited)       
Current assets:                                                  
Cash and cash equivalents                      $ 8,954,941      9,353,460
Marketable securities                          14,101,205       22,369,484
Accounts receivable                            655,254          1,064,796
Unbilled receivables                           525,266          223,050
Other current assets                           314,533          842,820
Total current assets                           24,551,199       33,853,610
Property and equipment, net                    815,384          682,933
Patents, net                                   1,106,830        1,269,457
Restricted cash                                1,398,656        1,453,712
Other noncurrent assets                        229,038          181,925
Total assets                                   $ 28,101,107     37,441,637
LIABILITIES AND STOCKHOLDERS' EQUITY                             
Current liabilities:                                             
Accounts payable                               $ 375,570        440,773
Accrued expenses                               3,261,245        2,770,094
Deferred credits payable                       —                600,000
Unearned revenues                              463,677          1,073,389
Current portion of long-term debt              100,000          100,000
Total current liabilities                      4,200,492        4,984,256
Long-term debt                                 275,000          350,000
Long-term unearned revenues                    841,524          —
Deferred credits                               600,000          —
Total liabilities                              5,917,016        5,334,256
Commitments and contingencies (note 9)                           
Ocean Power Technologies, Inc. stockholders'                     
equity:
Preferred stock, $0.001 par value; authorized  —                —
5,000,000 shares, none issued or outstanding
Common stock, $0.001 par value; authorized
105,000,000 shares, issued 10,406,548 and      10,407           10,407
10,407,389 shares, respectively
Treasury stock, at cost; 33,771 and 23,544     (123,893)        (102,388)
shares, respectively
Additional paid-in capital                     159,052,026      158,296,458
Accumulated deficit                            (136,542,838)    (125,989,474)
Accumulated other comprehensive loss           (85,167)         (78,990)
Total Ocean Power Technologies, Inc.           22,310,535       32,136,013
stockholders' equity
Noncontrolling interest in Ocean Power         (126,444)        (28,632)
Technologies (Australasia) Pty Ltd.
Total equity                                   22,184,091       32,107,381
Total liabilities and stockholders' equity     $ 28,101,107     37,441,637

                                                                              
                                                                              
Consolidated Statements of Operations                                         
For the Three and Nine Months Ended January 31, 2013 and 2012                 
(Unaudited)                                                                   
                                                                              
                                                                              
                         Three Months Ended        Nine Months Ended
                         January 31,               January 31,
                         2013          2012        2013         2012          
Revenues                 $ 865,553     923,619     3,208,248    4,349,908     
Cost of revenues         890,051       934,142     3,116,188    4,319,634     
Gross (loss) profit      (24,498)      (10,523)    92,060       30,274        
Operating expenses:                                                           
Product development      601,748       1,388,380   5,466,742    6,551,507     
costs
Selling, general and     2,367,849     1,822,806   6,856,815    5,857,656     
administrative costs
Total operating expenses 2,969,597     3,211,186   12,323,557   12,409,163    
Operating loss           (2,994,095)   (3,221,709) (12,231,497) (12,378,889)  
Interest income, net     21,804        95,261      112,116      341,631       
Foreign exchange gain    21,778        (113,373)   16,196       (93,080)      
(loss)
Loss before income taxes (2,950,513)   (3,239,821) (12,103,185) (12,130,338)  
Income tax benefit       1,453,243     1,053,427   1,453,243    1,053,427     
Net loss                 (1,497,270)   (2,186,394) (10,649,942) (11,076,911)  
Less: Net loss
attributable to the
noncontrolling           31,499        19,708      96,578       32,804        
interest in Ocean Power
Technologies
(Australasia) Pty Ltd.
Net loss attributable to
Ocean Power              $ (1,465,771) (2,166,686) (10,553,364) (11,044,107)  
Technologies, Inc.
Basic and diluted net    $ (0.14)      (0.21)      (1.02)       (1.07)        
loss per share
Weighted average shares
used to compute basic    10,304,277    10,276,788  10,300,626   10,273,636    
and diluted net loss per
share

 
 
 Consolidated Statements of Cash Flows
For the Nine Months Ended January 31, 2013 and 2012
(Unaudited)
                                                                  
                                                                  
                                                 Nine Months Ended January 31,
                                                 2013            2012
                                                                  
Cash flows from operating activities:                             
Net loss                                         $ (10,649,942)  (11,076,911)
Adjustments to reconcile net loss to net cash                     
used in operating activities:
Foreign exchange (gain) loss                     (16,196)        93,080
Depreciation and amortization                    376,105         294,820
Loss on disposals of property, plant and         310             9,715
equipment
Treasury note premium amortization               27,598          (31,633)
Compensation expense related to stock option     755,570         935,370
grants and restricted stock
Changes in operating assets and liabilities:                      
Accounts receivable                              405,354         334,946
Unbilled receivables                             (302,215)       316,084
Other current assets                             526,232         20,340
Other noncurrent assets                          (48,803)        54,183
Accounts payable                                 (32,503)        (761,241)
Accrued expenses                                 511,490         (860,101)
Unearned revenues                                (608,275)       928,016
Long-term unearned revenues                      841,524         —
Net cash used in operating activities            (8,213,751)     (9,743,332)
Cash flows from investing activities:                             
Purchases of marketable securities               (12,680,022)    (12,849,207)
Maturities of marketable securities              20,913,831      26,727,857
Restricted cash                                  75,000          53,936
Purchases of equipment                           (387,626)       (210,316)
Payments of patent costs                         —               (138,889)
Net cash provided by investing activities        7,921,183       13,583,381
Cash flows from financing activities:                             
Repayment of debt                                (75,000)        (114,378)
Acquisition of treasury stock                    (21,505)        (55,783)
Net cash used in financing activities            (96,505)        (170,161)
Effect of exchange rate changes on cash and cash (9,446)         (216,273)
equivalents
Net (decrease) increase in cash and cash         (398,519)       3,453,615
equivalents
Cash and cash equivalents, beginning of period   9,353,460       4,376,136
Cash and cash equivalents, end of period         $ 8,954,941     7,829,751

CONTACT: Brian M. Posner
         Chief Financial Officer
         Telephone: +1 609 730 0400

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