Odyssey Marine Exploration Reports Third Quarter 2017 Results
November 8, 2017
TAMPA, Fla., Nov. 08, 2017 (GLOBE NEWSWIRE) -- Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the field of deep-ocean exploration, reported results for the third quarter ended September 30, 2017, and provided an operational update.
Odyssey has been assisting its subsidiary, Exploraciones Oceanicos (ExO), in developing plans for the recovery of phosphate sands in the “Don Diego” concession area. The company is under contract to execute a multi-million-dollar, multi-year offshore program in support of detailed mining and environmental management programs to facilitate the project moving into the production stage quickly. This work can begin if and when the environmental approval from SEMARNAT is received. ExO has challenged, through an established process in the Mexican court, SEMARNAT’s denial of the environmental permit for the “Don Diego” project. The Mexican attorneys handling the case for ExO are hopeful that the decision will come before the end of the year. If a favorable outcome is received, SEMARNAT will be required to issue an environmental permit for the project.
Odyssey also continues to develop and partner with other groups on new subsea mineral projects that will require offshore exploration work and resource evaluation by the Odyssey marine operations team.
Currently planned shipwreck and mineral projects are conducted under leveraged contract models whereby Odyssey is paid to perform offshore services while retaining a significant back-end share of the future net proceeds from these projects. At least one major project will commence upon delivery and testing of specialized recovery equipment, which is currently being manufactured. The combined potential cash flows from these projects are expected to fund operations for multiple years while simultaneously increasing the value of projects in which the company has an equity ownership position.
“Work behind the scenes continues at full speed as we identify and develop multiple deep-ocean opportunities, including an upcoming contracted project that is expected to begin generating sufficient cash in 2018 to fund overall company operations and is forecast to produce cash returns for 12-18 months,” said Mark Gordon, Odyssey CEO and President.
“Simultaneously we remain committed to our long-term mission to develop globally significant subsea mineral resources. We are focused on the ‘Don Diego’ project and are expanding and advancing our global pipeline of prospective projects to accomplish our goals in this category. Although the court process in the ‘Don Diego’ environmental permit process appears to be moving slowly, it is following the steps defined by the Mexican legal system and is close to a decision. A back-and-forth series of filings by both ExO and SEMARNAT were completed and received by the Federal Court of Administrative Justice in September. It is now up to an 11-judge panel to render a ruling in the case. In addition, we are in active negotiations and expect to advance one or more new seafloor mineral projects in 2018.
“While we prepare for upcoming projects, we continue to evaluate our operations and identify ways to be more efficient. This discipline has led to a further 19% reduction in general and administrative expenses and a 37% reduction in total operational expenses comparing the first nine months of 2016 and 2017. We also continue to generate cash from operations and expect to secure additional cash generating projects throughout 2018.
“As a company, we are in an excellent position with several opportunities that could unleash significant value for our company and shareholders in the near future. Significant progress has been made on the company transition, and the management team appreciates our shareholders patience as we continue to transform the company.”
Q3 2017 Financial Summary
The net loss in the third quarter of 2017 was $2.3 million or $(0.27) per share as compared to net loss in the third quarter of 2016 of $2.1 million or $(0.28) per share.
Total revenue in the current quarter was $0.0 million, a $2.9 million decrease over the revenue in the same period a year ago. The $2.9 million revenue in the same quarter last year was generated from providing shipwreck exploration services for Magellan.
Marketing, general and administrative expenses primarily include all costs within the following departments: Executive, Finance & Accounting, Legal, Information Technology, Human Resources, Marketing & Communications, Sales and Business Development. Marketing, general and administrative expenses decreased by $0.3 million from $2.2 million in 2016 to $1.9 million in 2017 primarily as a result of (i) a reduction of $0.6 million of personnel compensation and related expenses which includes a reduction in share-based compensation of $0.5 million, (ii) $0.1 million decrease in corporate supportive overhead and (iii) an increase of $0.4 million related to admiralty legal support.
Operations and research expenses primarily include all costs within Archaeology, Conservation, Exhibits, Research, and Marine operations, which include all vessel and charter operations. Operations and research expenses decreased by $2.3 million from 2016 to 2017 as a result of a $2.4 million reduction of marine services costs which include technical crew costs as well as other marine operational costs such as equipment rental, fuel, port fees and consumables, an increase in the gain on sale of marine equipment of $0.9 million and a reduction of $0.8 million of general marine services overhead costs which includes depreciation and insurances.
Consolidated financial statements as well as the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2017, are available on the company's website at www.odysseymarine.com as well as at www.sec.gov.
About Odyssey Marine Exploration
Odyssey Marine Exploration engages in deep-ocean exploration using innovative methods and state-of-the-art technology to provide access to critical resources worldwide. Our core focus is the discovery, development and extraction of deep-ocean minerals. Odyssey also performs marine services for private clients and governments.
We currently have numerous projects in various stages of development around the world from both our own portfolio as well as through third-party contracts. The company operates transparently, documenting its science practices and conducting all work in a responsible manner.
For additional details, please visit www.odysseymarine.com.
Forward Looking Information
Odyssey Marine Exploration believes the information set forth in this Press Release may include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the Securities and Exchange Commission on March 30, 2017. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties, and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.
Cautionary Note to U.S. Investors
The U.S. Securities and Exchange Commission (SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "measured", "indicated," "inferred" and "resources," which the SEC guidelines strictly prohibit us from including in our filings with the SEC. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that part or all of the inferred mineral resource exists, or is economically or legally mineable, and are urged to consider closely the disclosures in our Form 10-K which may be secured from us or from the SEC's website at http://www.sec.gov/edgar.shtml.
Odyssey Marine Exploration, Inc.
(813) 876-1776 x 2335