Ocean Power Technologies, Inc.

Good morning and welcome to the Ocean Power Technologies fourth quarter and full fiscal year 2023 earnings conference call. A webcast of this call is also available and can be accessed by link on the company's website at www.oceanpowertechnologies.com. This conference call is being recorded and will be available for replay shortly after its completion. On the call today are Dr. Philip Stratman, President and Chief Executive Officer, Bob Powers, Senior Vice President and Chief Financial Officer, and Joseph DiPietro, Controller Treasurer and Principal Accounting Officer. Following the prepared remarks, there will be a question and answer session. Now I'm pleased to introduce Joseph DiPietro.

Sir, please go ahead. Thank you and good morning. After the market closed yesterday, we issued our earnings press release for the period ended April 30th, 2023. Our public filings are available on the SEC website and within the investor relations section of the OPT website. During this call, we will make forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include financial projections or other statements of the company's plans, objectives, expectations, or intentions. These statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. The company disclaims any obligation or intention to update the forward-looking statements made on this call. Now I am pleased to introduce Dr. Philip Stratman.

Thank you, Joe, and good morning. We appreciate you joining us. Fiscal 2023 was a great year and another step towards positive cash flow for our company. The two top highlights were that we had our best year of revenue generation since fiscal 2015, and we generated our best gross profit since fiscal 2011. We're also entering fiscal 2024 with over 4 million of contracted backlog. Those are nice wins for us as we continue executing on our growth strategy. I will focus my comments on two areas, our order pipeline and an update on our key projects. Both are critical to our near-term success. As you know, we serve two main customer groups, the US government and the commercial ocean technology industry. Both view our company as critical to finding cost-effective ways to use and monitor the world's oceans and waterways. We see this in our order pipeline, which continues to grow and now stands at approximately 68 million of various projects in various stages of negotiation. The average order size varies across the product lines, with buoy-based orders typically several million dollars and vehicle-based orders closer to the hundreds of thousands of dollars. Decision timing by new and current customers is influenced by budget cycles and offshore installation seasons. I would like to unpack this for you since it is critically important to understand how these orders will get booked, converted to revenue, and ultimately generate cash to cover our recent OPEX investment and bring us to sustained profitability. Approximately 60 to 70% of our order activity is with government agencies, and another 20 to 25% is with energy companies. The remaining orders are related to a variety of customers, such as wind farms and strategic consulting projects across a wide range of businesses that use water in some ways. This past fiscal year, we had a 9 million order target all year with a pipeline that hovered between 20 and 30 million. We closed the year at 6 million of closed orders, which is a strong performance compared to recent years, but reflects the significant time it takes to get a deal signed, especially in these challenging macroeconomic times where it seems everyone is cautious and moving slow. The important point I want to make is that none of the potential orders that we have not yet closed went away. They continue to proceed at various speeds, and we have a high degree of confidence they will eventually be booked. Another way to look at our order pipeline is by type of project. 30 to 40% of our pipeline is related to WAMVs. Generally speaking, the entities we are talking to want multiple WAMVs, and we see a steady stream of repeat activity as customers realize how effective the WAMVs are to covering massive area and minimizing costs. This acquisition continues to be a great deal for us. 50 to 60% of our pipeline is used of power buoys and our new MDAS to provide coverage for mainly governmental reasons. This includes monitoring of various activities like illegal fishing, border protection, and other classified activities. 5 to 10% is related to strategic consulting. We are one of the few experts governments and businesses can turn to when it comes to optimizing the use of ocean-going assets. This gives us an unfair advantage with potential customers calling us first with their needs. Fiscal 2023 was the year we significantly invested in our sales organization, for really the first time in our company's history. I appreciate our investors' patience as the team ramps its activity as fast as possible. With the recent onboarding of retired Admiral Joe DiGuardia and several other defense experts, we have a great complement to our sales engine. We are confident that with the right resources to drive activity of 1V sales and leases, feasibility studies, demonstrations, and future orders. we now just need to execute. For fiscal 2024, our target for contracted orders is 15 million. Based on the pipeline I just outlined for you, we have a high degree of confidence we will hit this target and we're working hard to create a sense of urgency with our customers so we can get these booked more timely. Our operations teams are ready and are scalable as we close our open deals. I will now move to an update for our key active projects. First is the Digital Horizon exercise for the US Navy. We're currently in our second deployment in Bahrain for use of unmanned surface vehicles with WAMVs to support the International Maritime Exercise 2023. Next is the U.S. Department of Energy for the development of a next-generation wave energy converter program award. Over the next 18 months, we'll complete Phase 2 by developing and testing a modular and scalable Masson Spring wave energy converter power buoy for reliable powering of autonomous ocean monitoring systems, bringing an entirely new power buoy into our offerings. The first offshore demonstration was deployed off the coast of New Jersey in April. And as always, we have several ongoing government-related projects which are classified, so we cannot share details. We believe we're a great partner with many government entities and expect that to continue. We had a nice year, but the best is yet to come. We have the team and the product portfolio to grow OPT to levels it has not been, but is certainly capable of achieving. With that, I'll turn over to Bob for more details on our financials.