Odyssey Marine Exploration Reports Second Quarter 2015 Results
August 7, 2015
Q2 2015 Highlights
- Odyssey stockholders approved all of the proposals described in the company's definitive proxy statement relating to the annual meeting of stockholders on
June 9, 2015, including the proposal to adopt and approve the strategic financing agreement with Minera del Norte S.A. de C.V.(MINOSA), an owner and operator of mines and vertically integrated processing facilities (with worldwide assets of more than $750 millionand net sales of $900 million), to facilitate Odyssey's offshore exploration business.
- MINOSA extended
$14.75 millionin debt financing to Odyssey. In addition, Penelope Mining LLC, a wholly owned subsidiary of MINOSA, has the contractual right to invest up to $144 millionin convertible preferred stock of Odyssey under certain conditions as detailed in an Odyssey proxy statement and related documents available via the investor section of the company's website at www.odysseymarine.com.
- Through active cost management efforts, Odyssey improved consolidated net operating cash flows by 25% (
$4.2 millionimprovement) and reduced total comparable operating expenses by 33% ( $3.0 millioncost reduction) in the second quarter of 2015 as compared to the same quarter a year earlier.
- Exploraciones Oceanicas,
S. De R.L. De C.V.(ExO), a subsidiary of Oceanica, elected to re-submit the Environmental Impact Assessment (EIA) for the proposed dredging and recovery of phosphate sands from the "Don Diego" deposit off the coast of Mexico. The decision to do so was intended to allow additional time so that ExO, in coordination with the technical and environmental team at MINOSA, could brief government officials and community leaders in the region so they thoroughly understand the details of the project and the positive effects it will have on the Mexican agricultural industry, their state and local communities.
- The team aboard the Odyssey Explorer vessel completed search and preliminary inspection operations on the "Olympus" Project, which includes a cluster of five 20th-century shipwrecks believed to be carrying significant cargoes of gold and silver at the time of their sinking in the northern Atlantic. All shipwrecks were located by Odyssey and varying degrees of reconnaissance work was conducted in order to collect data on each wreck. This included multibeam surveys, sub-bottom imaging and visual inspections using a remotely operated vehicle (ROV). The information gathered during this expedition is now being analyzed to determine the financial and technical feasibility of recovery operations on one or more of the shipwrecks in the "Olympus" Project area. Preliminary work to prepare for recovery operations on at least one of the targeted shipwrecks can be performed from the Odyssey Explorer.
- Aboard the Dorado Discovery, Odyssey technicians using Odyssey equipment conducted scientific experiments and cable repair work under contract to Pelagic Research Services. The team successfully completed several complicated deep-ocean tasks in the
Pacific Northwestregion for government and university clients including the National Oceanic and Atmospheric Administration(NOAA) and the University of Victoria.
- A new mineral deposit project is also being developed by Odyssey and an application for rights to the tenement area that it lies in has already been filed. In anticipation of acquiring the mineral rights to this prospective deep-sea mineral deposit, Odyssey has developed an expedition plan designed to assess the potential viability and value of the resource. Odyssey's marine operations team stands ready to execute this program as soon as all necessary permissions are secured. The company plans to provide more details on the project as it develops.
The Marine Management Organisation(MMO) conducted a public consultation in conjunction with the Maritime Heritage Foundation's(MHF) application to proceed with archaeological work on the Victory-1744 shipwreck site. The consultation period is now closed, and MHF expects to soon receive the results of this process. Separately the MHF is awaiting approval from the Ministry of Defence in order to proceed with the recovery of at-risk surface artifacts.
"The strategic financing agreement with Penelope Mining, which received strong stockholder support, has the potential to transform our company and increase stockholder value dramatically," said
"As indicated in the definitive proxy statement, the earliest initial closing date for the equity transaction is 150 days from the date of the agreement, or
"We also have been working closely with the MINOSA team on activities connected to the environmental approval for the ‘Don Diego' deposit and I'm confident that the approval will be forthcoming. Over the past few weeks the MINOSA and Oceanica teams have jointly completed a series of productive meetings with various government officials that have led to increased understanding and support for this project.
"We will continue to focus on strengthening our financial discipline which has been demonstrated by our 25% improvement in net operating cash flows and total comparable operating expense reduction of 33% compared to second quarter of last year."
Q2 2015 Financial Summary
Total revenue in the second quarter was
Marketing, general and administrative expenses increased by
Operations and research expenses increased by
Total operating expenses for the second quarter of 2015 were
The net loss in the first quarter of 2015 was
Cash and cash equivalents totaled
Financial debt of the company increased by
In the first six months of 2015, operating cash flows improved by
Odyssey will hold a conference call to discuss the second quarter results later this morning at
Shareholders may submit questions for management to address on the call by emailing IR@odysseymarine.com.
Dial-in number: 1-888-684-1259
International dial-in number: 1-913-312-1510
Conference ID: 8532076
The conference call will be webcast live and available for replay via the investor section of the company's website at www.odysseymarine.com.
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact
A replay of the call will be available approximately two hours after the call through
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 8532076
Forward Looking Information
Cautionary Note to U.S. Investors
|CONSOLIDATED BALANCE SHEETS|
|Cash and cash equivalents||$||5,624,342||$||3,143,550|
|Accounts receivable and other, net||280,212||6,476,049|
|Other current assets||501,262||655,662|
|Total current assets||6,975,413||11,470,981|
|PROPERTY AND EQUIPMENT|
|Equipment and office fixtures||24,320,000||24,895,343|
|Building and land||3,764,103||3,758,688|
|Building and land held for sale||—||1,024,999|
|Total property and equipment||5,647,916||7,235,538|
|Other non-current assets||1,364,690||1,272,053|
|Total non-current assets||12,640,680||6,383,020|
|LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)|
|Accrued expenses and other||3,482,420||2,387,962|
|Mortgage and loans payable||23,342,488||9,356,724|
|Total current liabilities||32,188,105||19,042,104|
|Mortgage and loans payable||11,828,662||11,808,157|
|Deferred income and revenue participation rights||4,643,750||4,643,750|
|Total long-term liabilities||16,472,412||16,451,907|
|Commitments and contingencies (NOTE H)|
|Preferred stock -
|Preferred stock series D convertible -
|Common stock -
|Additional paid-in capital||202,234,593||198,323,630|
|Total stockholders' equity/(deficit) before non-controlling interest||(16,024,370||)||(4,095,061||)|
|Total stockholders' equity/(deficit)||(23,396,508||)||(10,404,472||)|
|Total liabilities and stockholders' equity/(deficit)||$||25,264,009||$||25,089,539|
|CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited|
|Three Months Ended||Six Months Ended|
|Artifact sales and other||$||226,733||$||323,264||$||321,174||$||887,866|
|Cost of sales - artifacts and other||164,589||57,885||377,465||177,490|
|Marketing, general and administrative||3,354,227||2,394,323||6,370,213||5,408,848|
|Operations and research||2,889,590||2,747,707||6,251,056||9,843,390|
|Common stock issued for subsidiary stock option settlement||—||—||2,520,000||—|
|Total operating expenses||6,408,406||5,199,915||15,518,734||15,429,728|
|INCOME (LOSS) FROM OPERATIONS||(5,964,863||)||(4,851,651||)||(14,959,898||)||(14,515,378||)|
|OTHER INCOME (EXPENSE)|
|Change in derivative liabilities fair value||211,890||553,693||(251,013||)||370,979|
|(Loss) from unconsolidated entity||—||(522,500||)||—||(522,500||)|
|Total other income (expense)||(800,023||)||(70,182||)||(1,943,517||)||(768,768||)|
|(LOSS) BEFORE INCOME TAXES||(6,764,886||)||(4,921,833||)||(16,903,415||)||(15,284,146||)|
|Income tax benefit (provision)||—||481,055||—||481,055|
|NET (LOSS) BEFORE NON-CONTROLLING INTEREST||(6,764,886||)||(4,440,778||)||(16,903,415||)||(14,803,091||)|
|NET (LOSS) PER SHARE|
|Basic and diluted (See NOTE B)||$ (.07)||$ (.05)||$ (.18)||$ (.16)|
|Weighted average number of common shares outstanding with participating securities per the two-class method|
Liz Shows Odyssey Marine Exploration, Inc.(813) 876-1776 x 2335 firstname.lastname@example.org INVESTOR RELATIONS CONTACT: Ron Both Liolios Group, Inc.(949) 574-3860 OMEX@liolios.com
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