USA: Odyssey Marine Exploration Announces First Quarter Financial Performance

Odyssey Marine Exploration, Inc. pioneers in the field of deep-ocean shipwreck exploration, has reported results for the first quarter ended March 31, 2011. Revenue for the first quarter 2011 was $2.1 million, compared to $2.9 million in the first quarter 2010.

The Company also reported a net loss of $5.2 million, compared to a net loss of $3.1 million in 2010. Included in the net loss was a non-cash expense of $1.3 million, or $0.02 per share, to reflect the change in fair value of the derivatives related to the issuance of Series G convertible preferred stock caused primarily by the increase in Odyssey share price during the period. The net loss per share for the first quarter was $0.09, compared to a net loss of $0.05 per share in the first quarter 2010.

“While our first quarter revenue was down compared to last year, we have made substantial progress during the period and are well positioned for growth in 2011.This is the first year in Odyssey’s history where we have the potential for multiple recoveries. Two of our projects with clients of Robert Fraser & Partners are in the verification phase and evidence suggests that we have located the target shipwreck in at least one of these projects. We’re gearing up to begin operations on the Gairsoppa project this summer and are finalizing plans for additional shipwreck projects. We’ve seen very positive results in the first deep-ocean mineral mining expedition conducted with Dorado and have since added to our deep-ocean clientele by providing services to Neptune Minerals off the coast of New Zealand,” said Greg Stemm, Odyssey Chief Executive Officer.

Revenue

The decrease in total revenue of $.8 million was primarily related to a $1.1 million decrease in expedition charter revenue. The decrease in expedition charter revenue associated with “Enigma I” ($1.5 million) and the ET 409 aircraft recovery project ($1.3 million) in 2010 was partially offset by current year subsea mineral mining work in the waters of New Zealand with Neptune Minerals ($1.2 million) and miscellaneous Odyssey Explorer charter revenue in 2011 ($.5 million). Odyssey is currently working under a charter agreement with Neptune Minerals that will be completed in the second quarter 2011 along with completion of the “Firebrand” Robert Fraser syndicated project.

Odyssey’s exhibit, SHIPWRECK! Pirates & Treasure, was on display for one month in the first quarter 2010 (Discovery Place, Charlotte, NC.) and two months in 2011 (Maryland Science Center & G. WIZ). The exhibit is currently on display at G.WIZ – The Science Center in Sarasota, Florida until August 31, 2011.

During the first quarter 2011 the Company has seen an increase in artifact sales of $.3 million versus 2010 primarily due to the addition of a major new distributor.

Operating Expenses

Marketing, general and administrative expenses were $2.2 million in 2011 as compared to $2.3 million in 2010 primarily represented by a decrease in legal and outside professional services in 2011.

Operations and research expenses were $3.5 million in 2011 as compared to $3.6 million in 2010. The $.1 million decrease was primarily due to lower employee-related and contract labor expenses in the archeology, research and conservation department. Marine operations and vessel expenses were offsetting between the two periods. The Dorado Discovery comprised $1.1 million of the increase in the first quarter 2011 since the ship first came into service beginning in March 2010. These increases in vessel costs were offset by favorable expenses of the Ocean Alert ($1.0 million) which was not working in the first quarter of 2011 and favorable expenses of the Odyssey Explorer ($.1 million) which was primarily related to contract labor expenses. Odyssey is currently considering several options for the Ocean Alert including charter, work on a potential project in the Eastern Mediterranean, and potential sale.

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Source: shipwreck, May 10, 2011; Image: aquaviews