Odyssey Marine Exploration issued the following press release today:
Odyssey Marine Exploration Announces 2006 Financial Results
Tampa, FL - March 16, 2007 - Odyssey Marine Exploration (AMEX: OMR), a leader in the field of deep-ocean shipwreck exploration, today reported full year 2006 financial results.
For the full year 2006, Odyssey reported revenues of $5.1 million, compared to $10.0 million in 2005. The Company reported a net loss of $19.1 million for the full year 2006, compared to a net loss of $14.9 million in 2005. The net loss per share for the full year 2006 was $.41, compared to a net loss per share of $.35 in 2005.
While overall expenses increased $3.1 million from $20.6 million in 2005 to $23.7 million in 2006, marketing, general and administrative expenses decreased $.6 million. Vessel operations expenses increased $2.8 million, primarily due to the addition of a new search and inspection vessel as part of Odyssey's strategy to strengthen its core business of locating and excavating shipwrecks. Odyssey attributed the 2006 annual loss to several factors. The revenue decrease of $4.9 million in 2006 is primarily due to a lower availability of high-value numismatic gold coins, sales to fewer independent coin dealers and a shift to a higher volume of lower priced silver coins. New sales and marketing initiatives are being implemented to improve opportunities to increase revenue in 2007. The expense increase is due to higher operations and research costs, the addition of a chartered vessel for the Company's "Atlas" search project, the purchase and operation of a new search and inspection vessel, and an acceleration in estimated useful lives of certain assets and leasehold improvements in 2006 as a result of the Company's lease termination in New Orleans.
"While this year's results fell short of our expectations we continue to focus on strengthening the pillars that our unique industry rests on - research, operational resources and marketing. In 2006 we upgraded our fleet and expanded operational capabilities with an upgraded search and inspection platform, added an additional recovery Remotely Operated Vehicle, and upgraded search technology. We have built up our R&D resources and technological capabilities to meet the increasing sophistication our projects demand. We continue to devote significant efforts to developing and solidifying a variety of channels to market our coins, artifacts, and shipwreck merchandise and are seeing very promising results, including a steadily rising retail price realized in our shipwreck coin sales. The good news is that the marketing channels that we have developed should prove valuable for future finds as well as for the substantial inventory of silver coins that remain in our inventory." said John Morris, Odyssey's Chief Executive Officer.
Revenue
Revenues are generated primarily through the sale of gold and silver coins, but also include other artifacts and merchandise. Revenues for 2006 and 2005 were $5.1 million and $10.0 million, respectively, representing sales volume of gold and silver coins of approximately 2,700 coins in 2006 and 2,500 coins in 2005. The volume mix of gold and silver coins in 2006 was approximately 17% and 83%, respectively, and in 2005 was 53% and 47%, respectively. While Odyssey continues to sell numismatic coins to independent coin dealers, there has been a significant shift beginning in the second quarter 2006 to its direct marketing sales efforts. In 2006, the Company sold through three independent dealers of which two represented 65% of total sales.
Direct sales efforts (inbound and outbound call center and related infrastructure) were outsourced beginning in the second quarter 2006 to an experienced direct marketing partner. The Company has been extremely pleased with the marketing programs and sales efforts of its direct marketing partner where its focus is selling the Company's silver coin inventory directly to consumers at higher unit prices than it was receiving through its indirect wholesale channels. Another benefit of this outsourcing is the significant reduction of overhead costs associated with the Company's direct sales company-operated call center. Odyssey is testing a variety of advertising methods and media that are beginning to show great promise. The Company intends to increase its investment in the advertising programs that are demonstrating positive sales results.
Cost and Expenses
Cost of sales as a percentage of revenue for 2006 and 2005 was 21% and 11%, respectively. Cost of sales consists of shipwreck recovery costs, grading, conservation, packaging and shipping costs associated with artifact, merchandise and book sales. The higher cost of sales percentage in 2006 is attributable to a higher sales mix of silver versus gold coins.
Operations and research expenses were $15.0 million in 2006, compared to $11.3 million in 2005. Of the $3.7 million increase in 2006, $2.8 million was due to vessel operations primarily associated with the purchase of a search and inspection vessel in June 2006. The remaining $.9 million increase pertains to Odyssey's themed attraction segment and the closing of the Company's attraction in New Orleans in September 2006 and subsequent lease termination caused an acceleration of estimated useful lives of certain assets and leasehold improvements.
Marketing, general and administrative expenses were $8.7 million in 2006 as compared to $9.3 million in 2005. Of the $0.6 million decrease, $1.1 million related to reduced sales and marketing expenses primarily due to the closing of our direct sales company-operated call center in May 2006. These expenses were offset by increased share-based compensation costs associated with our annual incentive plan and adoption of FASB 123R in 2006.
Other income and expense generally consists of interest income on investments offset by interest expense on the Company's revolving credit facility and equipment loans. For 2006, $.9 million of other income was recorded due to business interruption insurance proceeds received for Odyssey's themed attraction in New Orleans related to Hurricane Katrina.
About Odyssey Marine Exploration
Odyssey Marine Exploration is an American Stock Exchange listed company with several shipwreck projects in various stages of development throughout the world. Additional information about Odyssey, its projects and archaeological methodologies, is available at www.shipwreck.net.
For additional information, please contact Natja Igney at 813-876-1776 (ext. 2553).
Consolidated Financial Statements (PDF) at http://shipwreck.net/OdysseyMarine10K2006.pdf . You will need Adobe Acrobat to view this file. If you do not have this program, you can download a free Adobe Acrobat Reader at Adobe.com
Odyssey Marine Exploration Announces 2006 Financial Results
Tampa, FL - March 16, 2007 - Odyssey Marine Exploration (AMEX: OMR), a leader in the field of deep-ocean shipwreck exploration, today reported full year 2006 financial results.
For the full year 2006, Odyssey reported revenues of $5.1 million, compared to $10.0 million in 2005. The Company reported a net loss of $19.1 million for the full year 2006, compared to a net loss of $14.9 million in 2005. The net loss per share for the full year 2006 was $.41, compared to a net loss per share of $.35 in 2005.
While overall expenses increased $3.1 million from $20.6 million in 2005 to $23.7 million in 2006, marketing, general and administrative expenses decreased $.6 million. Vessel operations expenses increased $2.8 million, primarily due to the addition of a new search and inspection vessel as part of Odyssey's strategy to strengthen its core business of locating and excavating shipwrecks. Odyssey attributed the 2006 annual loss to several factors. The revenue decrease of $4.9 million in 2006 is primarily due to a lower availability of high-value numismatic gold coins, sales to fewer independent coin dealers and a shift to a higher volume of lower priced silver coins. New sales and marketing initiatives are being implemented to improve opportunities to increase revenue in 2007. The expense increase is due to higher operations and research costs, the addition of a chartered vessel for the Company's "Atlas" search project, the purchase and operation of a new search and inspection vessel, and an acceleration in estimated useful lives of certain assets and leasehold improvements in 2006 as a result of the Company's lease termination in New Orleans.
"While this year's results fell short of our expectations we continue to focus on strengthening the pillars that our unique industry rests on - research, operational resources and marketing. In 2006 we upgraded our fleet and expanded operational capabilities with an upgraded search and inspection platform, added an additional recovery Remotely Operated Vehicle, and upgraded search technology. We have built up our R&D resources and technological capabilities to meet the increasing sophistication our projects demand. We continue to devote significant efforts to developing and solidifying a variety of channels to market our coins, artifacts, and shipwreck merchandise and are seeing very promising results, including a steadily rising retail price realized in our shipwreck coin sales. The good news is that the marketing channels that we have developed should prove valuable for future finds as well as for the substantial inventory of silver coins that remain in our inventory." said John Morris, Odyssey's Chief Executive Officer.
Revenue
Revenues are generated primarily through the sale of gold and silver coins, but also include other artifacts and merchandise. Revenues for 2006 and 2005 were $5.1 million and $10.0 million, respectively, representing sales volume of gold and silver coins of approximately 2,700 coins in 2006 and 2,500 coins in 2005. The volume mix of gold and silver coins in 2006 was approximately 17% and 83%, respectively, and in 2005 was 53% and 47%, respectively. While Odyssey continues to sell numismatic coins to independent coin dealers, there has been a significant shift beginning in the second quarter 2006 to its direct marketing sales efforts. In 2006, the Company sold through three independent dealers of which two represented 65% of total sales.
Direct sales efforts (inbound and outbound call center and related infrastructure) were outsourced beginning in the second quarter 2006 to an experienced direct marketing partner. The Company has been extremely pleased with the marketing programs and sales efforts of its direct marketing partner where its focus is selling the Company's silver coin inventory directly to consumers at higher unit prices than it was receiving through its indirect wholesale channels. Another benefit of this outsourcing is the significant reduction of overhead costs associated with the Company's direct sales company-operated call center. Odyssey is testing a variety of advertising methods and media that are beginning to show great promise. The Company intends to increase its investment in the advertising programs that are demonstrating positive sales results.
Cost and Expenses
Cost of sales as a percentage of revenue for 2006 and 2005 was 21% and 11%, respectively. Cost of sales consists of shipwreck recovery costs, grading, conservation, packaging and shipping costs associated with artifact, merchandise and book sales. The higher cost of sales percentage in 2006 is attributable to a higher sales mix of silver versus gold coins.
Operations and research expenses were $15.0 million in 2006, compared to $11.3 million in 2005. Of the $3.7 million increase in 2006, $2.8 million was due to vessel operations primarily associated with the purchase of a search and inspection vessel in June 2006. The remaining $.9 million increase pertains to Odyssey's themed attraction segment and the closing of the Company's attraction in New Orleans in September 2006 and subsequent lease termination caused an acceleration of estimated useful lives of certain assets and leasehold improvements.
Marketing, general and administrative expenses were $8.7 million in 2006 as compared to $9.3 million in 2005. Of the $0.6 million decrease, $1.1 million related to reduced sales and marketing expenses primarily due to the closing of our direct sales company-operated call center in May 2006. These expenses were offset by increased share-based compensation costs associated with our annual incentive plan and adoption of FASB 123R in 2006.
Other income and expense generally consists of interest income on investments offset by interest expense on the Company's revolving credit facility and equipment loans. For 2006, $.9 million of other income was recorded due to business interruption insurance proceeds received for Odyssey's themed attraction in New Orleans related to Hurricane Katrina.
About Odyssey Marine Exploration
Odyssey Marine Exploration is an American Stock Exchange listed company with several shipwreck projects in various stages of development throughout the world. Additional information about Odyssey, its projects and archaeological methodologies, is available at www.shipwreck.net.
For additional information, please contact Natja Igney at 813-876-1776 (ext. 2553).
Consolidated Financial Statements (PDF) at http://shipwreck.net/OdysseyMarine10K2006.pdf . You will need Adobe Acrobat to view this file. If you do not have this program, you can download a free Adobe Acrobat Reader at Adobe.com
