Executive Summary

Q4 2014 showed minimal revenue due to no monetization of SS Central America cargo, driving a net loss of $(5.24)M and EPS of $(0.06); gross profit was $0.25M on $0.29M revenue .
Operating discipline improved: Q4 marketing, general & administrative fell >50% YoY by $2.2M and operations & research fell >30% YoY by $2.1M; full-year operating expenses down 28% ($11M) .
Management expects SS Central America monetization in 2015 following court rulings; HMS Victory work was delayed pending renewed UK MOD consent; Oceanica (Don Diego) EIA response filed, awaiting SEMARNAT decision .
Strategic financing announced: $14.75M bridge loan, commitment to purchase ~$101M AA‑1 preferred through 2018, and AA‑2 option contingent on stock trading ≥$1.26 for 20 days—providing multi‑year capital and potential control stake .
Near-term stock catalysts: appellate decision enabling SS Central America monetization, UK MOD consent on HMS Victory, and SEMARNAT EIA outcome for Don Diego .

What Went Well and What Went Wrong

What Went Well
- Cost discipline: “For the fourth quarter of 2014 our marketing, general, and administrative expenses decreased by over 50%… and operations and research expenses decreased by over 30%” .
- Project execution: Recovered >15,500 coins and 45 gold bars from SS Central America; “worth tens of millions” of cargo and high‑resolution surveys completed .
- Strategic capital: CEO emphasized the long‑run runway and active investor support; AA‑1 schedule and terms at a premium to market were detailed .
- Quote: “I’ve never been more excited about the potential of this Company” (Mark Gordon) .
- Quote: “We expect to monetize the SS Central America shipwreck cargo in 2015” (CFO) .
What Went Wrong
- No revenue recognition from SS Central America in 2014 (including Q4); monetization deferred pending court action, contributing to the quarterly net loss .
- HMS Victory delay: MOD withdrew consent in March 2015 to address judicial review; timing pushed back .
- Liquidity tight into year‑end: cash ended at $3.14M; accounts receivable rose by $6.3M tied to priority cost recoupment; going‑concern disclosure and NASDAQ bid‑price deficiency noted .

Financial Results

Quarterly progression (Q2–Q4 2014)

Metric	Q2 2014	Q3 2014	Q4 2014
Revenue ($USD)	$348,264	$120,046	$288,486
Gross Profit ($USD)	$290,379	$93,020	$245,915
Gross Margin (%)	83.4% (computed from )	77.5% (computed from )	85.2% (computed from )
Net Income (Loss) ($USD)	$(4,015,881)	$(7,415,124)	$(5,243,352)
Basic/Diluted EPS ($USD)	$(0.05)	$(0.09)	$(0.06)

YoY comparison (Q4 2013 vs Q4 2014)

Metric	Q4 2013	Q4 2014
Revenue ($USD)	$17,242,672	$288,486
Gross Profit ($USD)	$16,958,243	$245,915
Gross Margin (%)	98.4% (computed from )	85.2% (computed from )
Net Income (Loss) ($USD)	$10,751,476	$(5,243,352)
Basic/Diluted EPS ($USD)	$0.13	$(0.06)

Narrative drivers:

No SS Central America monetization in 2014 explains revenue collapse vs Q4 2013 (which monetized Gairsoppa silver) .
Quarterly gross margin held ~85% despite low scale, with minimal cost of goods; the loss reflects operating costs above gross profit .
Operating expenses were actively reduced, but not enough to offset absent cargo sales .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
SS Central America monetization	FY 2015	Historically monetized same year as recovery (2012–2013)	Expect monetization in 2015 post appellate ruling; priority recoupment assured	Deferred, then targeted for 2015
HMS Victory operations	Q1–Q2 2015	MOD consent Oct 24, 2014 to proceed	MOD withdrew permission in Mar 2015; MHF expects renewed consent; MMO permit pending decision late Q1/early Q2 2015	Delayed (awaiting new consent)
Cost discipline (MG&A, Ops & Research)	Q4 2014 and FY 2014	Higher spend in 2013	Q4 MG&A down >50% ($2.2M) YoY; Ops & Research down >30% ($2.1M); full‑year operating expenses down 28% ($11M)	Lowered
Strategic financing	2015–2018	Episodic, short‑term financings	$14.75M 8% secured loan; staged AA‑1 preferred purchases ($35M initial, then $21.7M Sep ’16, $18.2M Mar ’17, $4.5M Mar ’18); AA‑2 option at $0.50 subject to stock price ≥$1.26 for 20 consecutive days	Raised, multi‑year capital plan

Earnings Call Themes & Trends

Topic	Q2 2014 (Prior-2)	Q3 2014 (Prior-1)	Q4 2014 (Current)	Trend
Financial discipline & cost reduction	Strategy shift to reduce OpEx, terminate Dorado charter; monthly cash use context	Reinforced discipline; expect 25% OpEx savings starting Q4/Q1	Q4 MG&A down >50%, Ops & Research down >30% YoY	Improving
SS Central America monetization	Priority recoupment credited; monetization timing post court; auction vs staged sales discussed	Court processes progressed; receiver updates monthly; strong numismatic demand	Monetization targeted 2015 after appellate ruling	Approaching monetization
HMS Victory approvals	Planning and MMO license process; MOD greenlight then operational plans	Economics asked; NDA limits; MOD consent noted	MOD consent withdrawn; expect renewed consent; deployment aligned to ROI	Delayed, pending
Oceanica Don Diego (SEMARNAT)	EIA filing timing; 60‑business‑day statutory review post filing	Public hearing feedback; strategic investor interest	SEMARNAT questions answered; response filed Mar 2015; awaiting decision and potential additional review period	Advancing permitting
Strategic financing	Not present	Not present	$14.75M bridge + ~$101M AA‑1 preferred + AA‑2 option; active investor, board seats	New, transformative
Ship deployment ROI focus	Utilization vs lease economics	Focus on highest return projects	Deploy ships to highest near‑term ROI; Victory commitments	Consistent discipline

Management Commentary

Strategic pivot and confidence: “This much longer runway will enable us to lay out business plans that transcend years instead of just months… fully capitalize on the portfolio of seafloor mineral and shipwreck opportunities” (Mark Gordon) .
SS Central America: “We expect to monetize the SS Central America shipwreck cargo in 2015” (Philip Devine) ; “Once the appellate court rules, we expect a prompt resolution… and award of title to RLP” (Mark Gordon) .
Cost actions: “Our total operating expenses for the full-year decreased by 28%… thanks to increased financial discipline” (Philip Devine) .
Financing terms: “$35 million of Series AA‑1… at $1.00 per share… 59% premium… schedule to reach control stake by Mar 2018; AA‑2 option at $0.50 subject to stock ≥$1.26 for 20 trading days” (Mark Gordon) .
Operating focus: “Ships are going to be deployed against the projects that demonstrate the best return in the near term” (Mark Gordon) .

Q&A Highlights

Liquidity and loan: $14.75M loan “fixes your liquidity issue until this deal is done” and funds Victory operations and business plan through shareholder vote (June) .
Management continuity: No anticipated management changes under new board; investor values the team’s unique capabilities .
HMS Victory: MOD consent withdrawal addressed; MHF expects approvals; operations to begin when in place .
SEMARNAT timing: Awaiting response; SEMARNAT may elect an additional 60 business‑day review; responses exceeded 1,000 pages .
AA‑2 trigger: $1.26 pre‑split threshold equates to $7.56 post‑split; liquidation preference accretes at 8% but dilution does not accrete .
Deployment: Return to SS Central America possible subject to schedule and Victory priority .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2014 EPS and revenue was unavailable/limited for OMEX at the time of this analysis; actual reported results are shown above. Values retrieved from S&P Global.*

Where estimates may need to adjust:

Analysts (if any) should reflect zero revenue in Q4 2014 and delayed monetization into 2015, with cost reductions partially offsetting fixed operating costs .

Key Takeaways for Investors

Near‑term revenue catalyst is binary on court ruling and receiver monetization; 2015 SS Central America sales could materially change cash and P&L trajectory .
Operating discipline is credible and continuing; expense reductions sustained through Q4 and FY14 mitigate burn ahead of monetization .
Strategic financing (bridge + staged preferred) reduces financing risk and aligns investor for operational involvement; watch shareholder approval and tranche timing .
Regulatory milestones drive optionality: UK MOD consent for Victory and SEMARNAT EIA for Don Diego are key non‑financial catalysts affecting project execution and future cash flows .
Liquidity tight at YE ($3.14M cash) with working capital deficit and NASDAQ bid‑price notice; financing and monetization must execute to alleviate going‑concern risk .
Trading setup: stock likely sensitive to legal/regulatory headlines and financing votes; consider position sizing around catalyst windows (appellate oral arguments early May; proxy/vote in June) .

Citations:
Quarterly and YoY financials and EPS .
Cost reductions and operating expense commentary .
SS Central America recovery, monetization timing, court process .
HMS Victory consent withdrawal and expectations .
Strategic financing terms and schedule .
Liquidity, cash, receivables, going‑concern, NASDAQ notice .

Disclaimer: Values retrieved from S&P Global.

ODYSSEY MARINE EXPLORATION INC (OMEX)·Q4 2014 Earnings Summary