News & Media
Odyssey Marine Exploration Reports Fourth Quarter and Full Year 2011 Financial Results
Company Provides First Quarter Operational Update
Tampa, FL – March 12, 2012 - Odyssey Marine Exploration, Inc. (NasdaqCM: OMEX), a leader in the field of deep-ocean exploration, today reported results for the fourth quarter and year ended December 31, 2011. In addition, the Company provided an update on its operational progress since the beginning of 2012.
For the fourth quarter of 2011, Odyssey generated revenue of $.09 million, compared to $3.9 million in the fourth quarter of 2010. The net loss for the period was $4.0 million or $0.05 per share, as compared to a net loss of $15.4 million, or $0.24 per share for the fourth quarter of the prior year. For the year, Odyssey reported revenue of $15.7 million versus $21.0 million for 2010. The net loss for the year was $16.2 million or $0.28 per share, as compared to a net loss of $23.3 million, or $0.36 per share for 2010.
“Our team is focused on near term recovery of what is expected to be up to 7.6 million ounces of silver on board the Gairsoppa and Mantola,” said Greg Stemm, Chief Executive Officer of Odyssey. “To execute these recoveries, we have secured one of the most sophisticated ships and suites of deep-ocean recovery equipment ever assembled. We expect to conduct reconnaissance dives on the sites this month, weather permitting. At today’s prices, the market value of the silver believed to be within the hulls of these ships could be up to $250 million. Under our agreement with the government of the United Kingdom, we will retain 80% of the net salved value from which we would owe approximately $15 million under the Galt agreement. Obviously, if we are successful with these two recoveries, Odyssey will be a transformed company from a financial perspective with over $150 million dollars in potential net recovery value from these projects alone.”
“Meanwhile, our team is looking forward to the final approval of our Archaeological Project Design for the HMS Victory project. The Maritime Heritage Foundation has approved the Project Design and has submitted it to the Advisory Group chaired by the UK MOD for review and advice on the Project Design’s consistency with the archaeological principles of the Rules of the UNESCO Convention. We recently completed an extensive non-intrusive preliminary survey of the Victory site, using several new advanced technologies that have provided a detailed three-dimensional inspection of both the surface and sub-sedimentary portions of the site, as well as differentiated deposits of both ferrous and non-ferrous metals. This survey has confirmed a minimum of 75 identifiable cannon on the site and will be used to guide the preliminary excavation of the site,” continued Stemm. “To fund all our recoveries this year, we are planning to rely on cash flow from our various projects or, if necessary, project financing that would avoid or minimizes dilution to our shareholders while providing us with the resources needed to maximize shareholder value.”
The majority of the $15.7 million in revenue (earned in 2011) was generated through expedition charters with $11.3 million representing two separate charters with Neptune Minerals, Inc. (NMI) for deep ocean mineral exploration.
Expedition charter revenue was $14.7 million in 2011 versus $20.5 million in 2010. In 2011, $2.9 million related to syndicated projects with the clients of Robert Fraser Partners LLP (RFP) that included two separate projects (Firebrand and Shantaram). In 2010, $9.0 million related to our syndicated projects with clients of RFP that included four separate projects (Enigma I and II, Firebrand and Shantaram). In 2011, revenue included $11.3 million which represented two separate charters with Neptune Minerals Inc. (NMI) for deep ocean mineral mining exploration. In 2010, $7.9 million represented charter services sold to Dorado Ocean Resources for deep ocean mineral mining exploration. RFP and NMI represented 97% of our expedition charter revenue in 2011. Other projects for 2011 included $.5 million for other miscellaneous commercial charters. In 2010, other miscellaneous charters included the ET 409 aircraft recovery and photomosaic project ($2.9 million) and $.7 million from other charter services.
Artifact sales and other revenues primarily include coin sales, but also include other artifacts, merchandise, commissions, and other miscellaneous revenue. Artifact and other revenues for 2011 and 2010 were $.9 million and $.4 million, respectively. The increase of $.5 million in artifact sales and other in 2011 was primarily due to several factors including the addition of a major new distributor in the first quarter 2011 and new marketing programs leveraging the 150th Anniversary of the Civil War. Additionally, authorized distributors invested in promoting the SS Republic product as it continued to be a collectible in high demand. Our artifact and other and exhibit revenue for 2011 and 2010 was predominantly U.S. domestic-based.
Exhibit revenue was $.2 million and $.1 million in 2011 and 2010, respectively.
Operations and research expenses primarily include all costs within Archaeology, Conservation, Research, and Marine Operations, which include all vessel and charter operations. Operations and research expenses were $21.3 million in 2011, compared to $19.6 million in 2010. The unfavorable variance of $1.7 million was primarily due to vessel operations. The unfavorable variance of $2.5 million for the Dorado Discovery was the vessel only worked six months in 2010, but worked twelve months in 2011. The Odyssey Explorer was unfavorable $.6 million primarily due to repairs and maintenance. The Ocean Alert was favorable $.9 million (which is net of the $.6 million loss on the disposal of the asset) since it was not working in 2011 and was sold in September. The remaining favorable variance of $.5 million was due to the timing of project ship charters. In 2010, we chartered the Kommandor Stuart for seven months which worked on various shipwreck and commercial projects. In 2011, the Russian search vessel RV Yuzhmorgeologiya was chartered for approximately 70 days for work on the Gairsoppa and Mantola projects.
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 were $9.4 million in 2011 versus $9.2 million in 2010. The increase was primarily attributable to bank fees associated with renewal of our term loan in May 2011.
For consolidated financial statements as well as the full filing, please go to: http://www.sec.gov/Archives/edgar/data/798528/000119312512109723/d258164d10k.htm
About Odyssey Marine Exploration, Inc.
Odyssey Marine Exploration, Inc. is engaged in deep-ocean exploration using innovative methods and state-of-the-art technology. The Company is a world leader in shipwreck exploration, conducting extensive search and archaeological recovery operations on deep-ocean shipwrecks around the world. Odyssey also has a minority ownership stake in Neptune Minerals, a company focused on discovering and commercializing high-value mineral deposits from the ocean floor. Odyssey also provides contracting services, including proprietary deep-ocean expertise and equipment, to governments and companies around the world.
For details on Odyssey’s activities and its commitment to the preservation of maritime heritage, please visit www.shipwreck.net. Consolidated financial statements, as well as the Annual Report on Form 10-k, are also available at www.shipwreck.net and click on Investors.
Odyssey Marine Exploration believes the information set forth in this News Release may including “forward-looking statements” within the meaning of the Private Securities Litigation Report Act of 1995, Section 27A of the Securities Act of 1993 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, 2011, which has been filed with the Securities and Exchange Commission.
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