Ocean Power Technologies, Inc.

Good morning, and welcome to the Ocean Power Technologies third quarter of fiscal year 2024 earnings conference call. A webcast of this call is also available and can be accessed by a 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 today's call 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 prepared remarks, there will be a question and answer session. It's now my pleasure to introduce Joseph DiPietro. Please go ahead, sir.

Thank you and good morning. After the market closed yesterday, we issued our earnings press release and filed our report on Form 10-Q for the quarter ended January 31st, 2024. 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. Additional information about these risks and uncertainties can be found in the company's Form 10-K and subsequent filings with the SEC. The company disclaims any obligation or intention to update the forward-looking statements made on this call. Finally, we posted an updated investor presentation on our IR website. Please take a moment to review it as it provides a nice overview of our company and strategy. Now I am pleased to introduce Dr. Philip Stratman.

Thank you, Joe, and good morning, everyone. We're pleased to have you join us on this call, and your continued support is greatly valued as we advance with our plans to enhance shareholder value. Before we delve into the numbers, on February 28th, we conducted our 2023 Annual General Meeting. I am pleased to announce that all of the resolutions proposed at the Annual General Meeting were duly passed by our shareholders, including the re-election of all of our board members by a strong majority of the votes cast. I'd like to thank you for this vote of confidence. The management team we have put together over the past two years has the right skills to take advantage of the market demand, which is clear. Our customers are procuring autonomous resident and roaming assets that protect marine environments, collect essential ocean data, and enhance national security. We continue building our pipeline and are converting opportunities into backlog and revenues, as seen with wins like the recently announced vehicle order from a Latin American customer and the latest subcontract from a U.S.-based prime contractor from multiple maritime domain awareness buoys. We believe we're well positioned to reward your confidence and turn this momentum into profitable growth and deliver value for our shareholders. Let's talk about some recent developments. We continue to make progress on our path to profitability in line with our November 2023 announcement that we have substantially completed our research and development phase and are primarily focused on commercial activities. This pivot to commercial activities has enabled reallocation of headcount, resulting in approximately $4.5 million in annual run rate savings on a go-forward basis and a material reduction in third-party expenditures. The majority of our employees are now dedicated to customer delivery, which includes manufacturing, vehicle operations, and marine deployments. We have built a suite of products and solutions that we believe will be the basis for our current and future commercial success and is driving meaningful progress in backlog, revenue, and profitability, with our pipeline of $77 million increasing over 5x year over year. We expect that recent meaningful contract wins, which I will describe more fully in a moment, The growth in our commercial pipeline and the expense savings noted will enable us to reach profitability during calendar year 2025. In February 2024, we received multiple orders for fully integrated WAM-V and MAN surface vehicles, also known as USVs, from clients in Latin America, highlighting the wide-ranging capabilities and applications of the WAM-V USVs and heightened interest and trust in our WAM-V technology from clients across the globe. These orders underscore the growing demand for OPT's advanced marine technologies and their applications in maritime surveillance, environmental monitoring, and ocean data collection. Also in February 2024, we received funding from the Naval Postgraduate School in Monterey, California for a year-long deployment of a power buoy in Monterey Bay. The power buoy integrating OPT's maritime domain awareness system along with cutting-edge satellite communication and AT&T 5G technology will demonstrate its persistent surveillance and communications capacities in a maritime environment. This advancement is a testament to the ongoing collaboration between OPT and AT&T. In December 2023, we secured our first multi-buoy letter contract. This is a planned subcontract with a U.S.-based prime contractor to deliver maritime domain awareness solutions for U.S. government agencies. We are currently working on the conversion of the letter contract to a firm order. In addition to these contracts, we also completed several deployments with our OMVs and delivered additional vehicles from our facilities in New Jersey and California. In addition to the aforementioned activities, we continue to see increased levels of commercial demand. The company is positioned well to deliver to our customers in the defense and national security space, and over 20% of our workforce are military veterans. Our opportunity pipeline continues to grow. In addition to the orders I just discussed, we have also continued to enter the top of the pipeline. We're continuing to grow our revenues, and our gross profit margins are increasing. Our strategy is working, and we see additional opportunities for multi-system orders, vehicles, and buoys on the horizon. Now, before we dive into the financial highlights, I'd like to introduce our CFO, Bob Powers. Bob will provide you with more detailed information about our financial performance in Q3 2024.