OPTT - Earnings call 2 2021 | Ocean Power Technologies, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Ocean Power Technologies Second Quarter Fiscal Year 2021 Conference Call. A webcast of this call is also available on the company's website at www.oceanpowertechnologies.com.

As a reminder, this conference call is being recorded and will be available for replay after its completion. Today, on the call are George Kirby, President and Chief Executive Officer; and Matthew Shafer, Chief Financial Officer and Treasurer.

Following prepared remarks, we will open the call to questions. On December 7, 2020, OPT issued its earnings press release and filed its quarterly report on Form 10-Q for the quarter ended October 31, 2020, with the Securities and Exchange Commission. All OPT public filings are available on the SEC website at sec.gov or on the OPT website's Investor Relations section. Please note that the 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.

contemplate, by will or will pursue likely estimate, planned, identified may, such continue, and are objective, intend, aim, future, variations will, result, plan, expressions. similar statements expressions certain should, of phrases, words as anticipate, goal, or Forward-looking project, to, such will seek believe, expect,

may no circumstances, the company that may These forward-looking assumptions actual on other which based cause risks, made by and little implied materially over different or control such to statements are management involving uncertainties regarding results forward-looking statements. differ future any from results have by expressed factors -- or future

growth others, cash in success increased markets, of and factors reduce other sales competition, improve to key Some PowerBuoys, into enter delivery of ability parties, and future deployment review PowerBuoys, financial the and partners the of flow, include, relationships increasing and ability third output performance, with expected among volume, costs these to efficiencies, following: power hiring forward-looking the expected with this relationships. Please We obligation to call. Form to filings cost subsequent and of PowerBuoys these discussion XX-K events and risks discussed order the most or new key to circumstances of any our refer update in uncertainties. and for recent statements further customer SEC in disclaim building employees reflect intent product, or operational

George am I Kirby. Now to introduce Mr. pleased

George Kirby

we'll activities line review I'll Matt And everyone. questions. update and during open that, operations developments operational Then to business XXXX morning, second our fiscal for our today. will good our quarter and and the financials. you, and up year Thank after on the review an of provide

by in solutions remains pandemic. working OPT customers focused worldwide their ever All develop shifting of an COVID-XX to us business the meet to landscape with challenges. on created to continue part navigate

a coast and off deploying PowerBuoy One Sea Chile. Enel for Power of been PBX Open the Green Lab challenges has of those

suitable based that recently in technical this for has International experienced and which deployment, our we're their team deployment. subsea an experienced Louisiana. December working and training was planned travel on planned company with We have installation personnel project restrictions requirements and SeaTrepid, year. a initially working vessel in marine and to crew announced procedures SeaTrepid concerns earlier with solutions advance services and delayed the a Chile, robotics are

This third-party will marine first be OPT solution on personnel, execution on ever into have of positive impact without of and installation in-person can the operators PowerBuoy underway currently a with participation project the work costs as SeaTrepid, tapping a risk. such hands

related or defense PowerBuoy One & contractor, OPT Engineering a Communication recently PBX X is with signed Adams contracts. Technology important ACET.

The solution other with needs establishing have technologies ACET Chevron, ExxonMobil, in communications Naval is PowerBuoy Military Navy's subsea Postgraduate aerial that secure School XG support believe for applications. its our integration far-reaching U.S. meet XG the will Research Land an platform and with the advancing Occidental, and defense Initiative. Total. The of PBX consortium We oil of industry the offshore maritime drone work include companies can to Sea autonomous Air a connectivity such on which a communication evaluate and of DeepStar, members, with as gas Shell focused

recently Jorge as the have gas And based industry further PowerBuoy our the joined surveillance and X,XXX New Our Spain. representative of utilizing at of demonstration autonomous, expanding deployed a PBX our equipment of advance both water meters. We're OPT's OPT production we're Jersey. and the work the and with Total will sponsor gas and subsea up as products batteries new of with carbon sales DeepStar off in commercialization to examine of hybrid who Franco, operational coast addition European presence been the solution, OPT's requirements continuing PowerBuoys X and our our to power veteran, depths oil marine and of with regional to for which provide subsea oil control

During $XX.X This agreement XX stock the up on a in with purchase cost-effective Capital Aspire to flexibility to a common basis. to common agreement to provides capital sell OPT of quarter, a million months. term also access new Aspire stock executed Capital over

filed to $XX our and of part sell growth as entered strategy, the under that, capability X in at the with SEC, the years. With with next Form common call worth And November, SX on discuss registration of facility, which, providing shelf a us we me we to a new financials. into the stock market statement the offer million over up over turn Matt to to let the OPT's

Matthew Shafer

good and George, morning, you, everyone. Thank

recorded a decrease We same the second compared XXXX, year. quarter. $XXX,XXX to as the quarter for Now prior period of turn the fiscal I'll in of revenue of $XXX,XXX was to which the

Revenue for derived prior the XX, the XXXX, Premier from X revenue same project, Enel the from projects was Power Green the ended U.S. the in October year and Navy. mainly with months while for primarily was Oil period

mainly derived the period the Power project, XXXX of for projects Premier mainly ended from oil the to by of quarter revenue as as the the product in decreased the XXXX, first and October same decrease for on the compared Revenue revenue XXXX, for recorded to prior period XX, net spending to $XXX,XXX X second fiscal was of was year months of $XXX,XXX in with XXXX, of which fiscal a U.S. fiscal compared The $XXX,XXX for from was the the while Enel prior decreased first the year. months same development. We primarily loss X was Green Navy. attributable quarter which

which partly offset of first for general months X fiscal X net product development. $XXX,XXX and to by decreased administrative XXXX, The the loss increased fiscal XXXX by attributable of costs, selling, increased on first spending to as was mainly months compared the

year customer projects to the fiscal and both XXXX on fiscal XXXX, cash, cash and existing million, product to to result $XX.X shares $XXX,XXX period. And mainly in of Net balances compared equivalents during the restricted company's the activities primarily quarter equivalents development sales the end a of as the operating cash of and cash sheet. XX decreased second was lastly, to least the cash of XX, now increased company's in as second Total the look in total as lower costs million OPT common second delivering to since anticipated used Turning through to cash for at months. in balance next on the the quarter, $XX.X restricted XXXX. million its spending then quarter forward confidently October increased ATM. This by due demand cash capital cash, stock market $X.X of current of allows

it that, to George. I'll With turn back

George Kirby

ready Thanks, we're to Matt. open the Operator, line for questions. up

Operator

question Robert first from is [Operator from & R.E. coming Instructions] Silvera Silvera Our Associates. today

Robert Silvera

solution footprint, OPT positions the to demand. say cash product anticipated the be balance coupled market with suite sales and In your statement here, you to able on expanded deliver

the say, demand, broaden Could you the you of mean next by anticipated months? XX what description market within

George Kirby

Sure. we're past, we've my In the pursuing. do of best. talked gestation opportunities about that any I'll period the for the one

customers, So of take these speaking time. a potential with lot

the instance, fruition. speaking that we studies For while, for X have they customers came to secured, been to those a we and quite

Likewise, We've we be we able talked that past. pretty a on about different pipeline. And the in have to items that pipeline. robust have close expectations to

be we multisolution such to go position at opportunities, advance able for So to to to knew as or multiproduct opportunities customers. needed strategy deliver our our in we in that after looking

these the happy that imagine. and it the the really pretty effective than talent sales world connect been great help especially lot with proud makes to pandemic. us trying customers, and able parts fact to to Jersey, New more we've It you in find as of a during So of we're different run easier from can

it to we to having likewise, well, that's if just simply only need our makes feel not It and order. when feel customers capital, access confident, confident deliver important. us and prospective a large And on as makes

Robert Silvera

within you have some next year? might projections? a with it amount Sure. But that can You you frame dollar the anticipate

George Kirby

be Yes, do to that unable a forward-looking would that. I'm statement.

Robert Silvera

That's have dollar vary framework have think kind okay. sales close actual realize We what with can number? color different you you some a George. might of they Perhaps you and some of on greatly, on opportunities involved, those sort that, must that could an but that risk statements

George Kirby

do absolutely we Robert, that Yes, internally. framework have

going idea to we be what closing. have In good a fact, pretty we're of

are that and of you tell our all will marketing I we solutions. products

not system. It marine subsea PowerBuoy, that's PBX the the the batteries. hybrid, includes surveillance also the So but just it's also

great you our we're And into further to I'll or sell selling attempting that also a diversifying job that into. markets team the really done has tell

not just it's So and oil gas.

defense We are within which you really with the see making community, can footprint ACET. from this agreement an effort expand to our

fishing And illegal also, we're as looking if at other focus market or areas, would. you such the industry

Robert Silvera

for right? one coming one? been that How Asia, in was with a at are you while curious, I you've that

George Kirby

Correct.

Robert Silvera

does look How progress that? on

George Kirby

solutions Coast fishing internally, with we're for can that priority Asia. with relationships, illegal not seeing, think focused moving the and globally on a a We're not the on just it's demand progress U.S. Homeland countries the from real ahead Southeast especially in that are money directly Indonesia. throughout There focused We're region, help fisheries. Recently, with sales own -- there's is correlates Guard. I we're with become studies just that Indonesia. We're directly, illegal Security. Coast back also associated in and actually trafficking fishing on market happening. our our to And rep Homeland ground expanding building, protect Security, connected, but Guard for seeing our U.S.

industries what defense, So it's connection They're all going have fishing, likewise, areas, we're that seeing you. marine these we're protected between a whether illegal after, interconnected.

Robert Silvera

issues. they are not It's with actually talking interest, And on just they communicating have to us us. these are they but that

George Kirby

are communicating. They

discussing project did there. you a that you opportunities different of something have add? activity in area. lot are We on Matt, to there's say going would I want

Matthew Shafer

Robert, our in sales now releases. on I we've wanted -- say, Yes, We've there. to ground we've the we on team, brought feet expanded some just press as have out mentioned

lot wanted where that, and have street. add now, we're on there opportunities out We we I of increased need the just feet a too. seeing to Gilar

Robert Silvera

a Gilar, individual? When said company is that an or you

George Kirby

of background, type located you talent want to at and Indonesian into look having just because a press but is bringing with him in on and capacities, markets, sales the Gilar also comes for that the customers he know we We with mainly our representative the vendors worked yes. and really the Gilar, capital release everyone put different the in Government we're our organization. When Jakarta, fisheries. our out a not

well very in So from educated the Day productive. he's very And connected. plugged He's X, States. very United in he's

for lot our instance, located Italy, of And America. Europe. Franco customers not South Jorge of in existing recent in announcement has Southern only into plugged of but likewise, all a He's experience also our in with

soon hit bringing the that company. we're are feet into people their our the in productive organization So as ground as

Robert Silvera

particularly company is I him same reason industry And the not shipping that thing, Golar. is they're about an LNG are The they? because asked there the is in

George Kirby

No. No.

Robert Silvera

I why questioned That's it.

is person, transportation, cetera. et another with dealing in involved LNG, that You're a company not

George Kirby

That's right.

Operator

Dawson [Operator from coming from Ruggiere Instructions] James. Our Peter is next question

Peter Ruggiere

dealing been with you. Got stuff about talking informative them a That battery questions you to like with of of just Microsoft or centers, couple you data lot systems a about. spoke underwater for was these charge up? Have

George Kirby

centers that there. not I can't that we to. to only speaking very data discussions forth. require but well run as data specific market speak so burgeoning the a familiar, are we're lines subsea and and about have as that power had companies There's yes, But

Peter Ruggiere

Right. they system of that be was to moved? going -- On representative multiple maybe planning that -- worked build COVID? guess, with the you Italy before a the whole at, is a supposed hired are to in system in order process there handling that this new there buoys? that deployed are and Halliburton, Or Is to you being I new possibly

George Kirby

now, speak that can't Peter. right to I Yes.

Peter Ruggiere

much. like cash that I'd up see Okay. to the position

on much that does cash a Based how that PBX. had haven't cost in make it cash, a while. to You much

George Kirby

between PBX sell make anywhere where to $XXX,XXX $XXX,XXX price. is to A

Matthew Shafer

Yes. PBX. standard the for for on base Yes, this that, the be would Matt. And is cost Peter, that

add-on describing was that, and addition solutions, there's is surveillance as marine of In that solution earlier, George different one we ancillary to them. our components

can So PBX of cost. be vary. payload And base there's to on those features different that that added prices top the

Peter Ruggiere

-- on go phase feasibility going next that green was have forward does of December. stand? that We're Where ago. Right. guess the last light you And study I that Gulf when in you with to a X.X the years Mexico over that year the had

George Kirby

in talk surveillance Peter. that with exclusion to the particular about the we study in was discussions of only fruition COVID-XX, zone of have changed Mexico, with that in an continue but Naturally, are still not opportunities, other announced things Gulf The for them to that customer. opportunity but April monitoring, we

Peter Ruggiere

question I had. Okay. There's another

when wells, me, oil to it there a time when do done? where to is deadline a you has Someone them, frame decommission that, be you asked decommission

George Kirby

really depends It about. world deadline. a is the you're there of Oftentimes, the speaking part in that

If you're the about North to more requirements. talking regulators about tend strict be Sea,

number is Also, seeing the and wells process. If properly of about the around be you're different plugged abandoned of Sea. during there's that some Brazil activity monitored talking requirements and a Gulf regulator to that Mexico, than North need

well -- immediate, is that what down, could depending once years, take could way from all the to take to anywhere on shut the that the the X whole process X anywhere So strategy operator. of is

Peter Ruggiere

with on understand many How -- that And be XG the I I'm the What buoys that doesn't systems XG this know Okay. would plan. far. -- how Navy, project to would many that, go trying work? how and --

George Kirby

Understood.

So communicate. It's range you around that can more XG bandwidth, isn't about the more necessarily it's around latency.

executed. it when when So very in drone and the pause the trying very to And devices send drone called causes is the drone those latency subsea operating when command from between or aerial difficult. an world, have something a either an command there's actually them control land makes to of that remote a to operator parts they is a

significant what that's believe very So why also the different it bandwidth up. and that control latency, School of and it system devices it amount a the does autonomous an we land. Naval are has these order to that interested eliminates And in XG on from in opens XG Postgraduate Navy is

those could order these would range, what systems order would multiple scenarios Navy look to have back about, is with XG mission the There's in system. -- in a create and on that particular for what they a a you that's look steps really different repeater next to at be? like to mind. report What configuration buoys determine to have of is buoys In extend part to study the multiple

Operator

end any question-and-answer our for We've like session. reached over I'd the back to further floor or turn to closing management comments. of the

George Kirby

operator. you, Thank

in the moment challenging call, some take the world by Before a existence. we only just pandemic, our to coronavirus to year. everyone around conclude in also I been want been do but affected a the not on reflect Literally, way has what's business day-to-day in

personal my and grow OPT's We've the face business adjustments. challenges. in And to the profound all team, made who of give continued community. appreciation and want express operate most continue back we've to to unforeseen I resilience remarkable to staff, display a as our to professional and

operator. months quite succeed the Thank that remain through and persevere we'll you, New into Year. confident the and I upcoming

Operator

Thank That you. conclude today's does teleconference.

this You may a time today. you disconnect thank at and day. your have for your lines participation wonderful We

Ocean Power (OPTT) 8 Dec 202021 Q2 Earnings call transcript