Ormat Technologies Reports 2013 Third Quarter Results Electricity revenues increased 14.7% to $89.0 million Company raises revenue guidance for 2013 RENO, Nev., Nov. 5, 2013 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) today announced financial results for the third quarter of 2013. Quarterly financial highlights compared to the same quarter last year: oElectricity revenue increased by 14.7% to $89.0 million; oGross margin grew 75 basis points to 30.4%; oOperating income reached $29.8 million compared to $12.1 million; oNet income attributable to the Company's shareholders was $13.0 million or $0.28 per share (diluted), compared to a net loss of $0.6 million or $0.01 per share (diluted); oAdjusted EBITDA grew 25.0% to $60.3 million; and oDeclared dividend of $0.04 per share Operational highlights and recent developments: oIncreased electricity generation by 5.0% to 985,531 MWh, driven by new capacity coming on line at Olkaria III Plant 2 in Kenya, and increased generation at the McGuiness Hills plant; oSuccessfully completed the world's largest binary geothermal plant, the 100 MW Ngatamariki in New Zealand, under a $142.0 million EPC contract; oSecured a 10-year Power Purchase Agreement (PPA) with the Southern California Public Power Authority to supply power from the Heber 1 geothermal plant in California beginning December 16, 2015. The new PPA replaces the Standard Offer Contract No. 4 (SO#4), which is tied to natural gas prices, with fixed-price contract at a higher rate; oEntered into a jointdevelopment agreementwith eBay to develop a 5 MW recovered energy generation power plant in Utah to supply cleaner electricity to eBay's new data center; and oSigned an agreement for a greenfield development of the Hu'u Dompu geothermal prospect in Indonesia Dita Bronicki, Chief Executive Officer of Ormat, stated: "During the third quarter, we continued to deliver strong financial and operational results. In the electricity segment, we benefitted from the first full quarter of commercial operation of the Olkaria III Plant 2 in Kenya, which helped drive a 5.0% increase in generation. In addition, gross margin increased in the electricity segment to 31.1% due to the contribution of the new plants added to our portfolio in the past two years and to our continued focus on improving operational efficiencies at our existing plants. Looking ahead, we are poised to continue these positive trends and we aim to bring new capacity on line and replace legacy PPAs with more favorable agreements." "A substantial milestone in the product segment is the completion of the 100MW Ngatamariki geothermal power plant. The completion of the plant in less than 24 months from the award with generation at 104% of its designed output is a further testament to our execution capability and the suitability of our technology to large geothermal facilities. Looking forward, our backlog remains strong as we secured new orders in the third quarter 2013 and stands at approximately $173.0million with more than $120.0 million expected to be recognized in 2014." Ms. Bronicki concluded, "We are raising our 2013 guidance and expect total revenue to be between $525.0 million to $535.0 million with electricity segment revenues to be approximately $330.0 million and product segment revenues to be between $195.0 million and $205.0 million." Financial Summary For the three months ended September 30, 2013, total revenues reached $130.7 million from $132.3 million in the third quarter of 2012, a decrease of 1.2%. Electricity revenues increased 14.7% to $89.0 million from $77.6 million in the three months ended September 30, 2012. Product revenues decreased 23.6% to $41.8 million from $54.7 million in the three months ended September 30, 2012. Operating income for the three months ended September 30, 2013 was $29.8 million, compared to $12.1 million for the three months ended September 30, 2012. Third quarter 2012 results included a $7.3 million impairment loss related to the OREG 4 recovered energy generation power plant. For the three months ended September 30, 2013, the Company reported net income attributable to the Company's shareholders of $13.0 million or $0.28 per share (diluted) compared to net loss of $0.6 million or $0.01 per share (diluted) for the three months ended September 30, 2012. Adjusted EBITDA for the three months ended September 30, 2013 was $60.3 million, compared to $48.2 million for the three months ended September 30, 2012, an increase of 25.0%. The reconciliation of GAAP net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flows information is set forth below in this release. Net cash provided by operating activities was $32.2 million in the nine months ended September 30, 2013, compared to $62.4 million in the nine months ended September 30, 2012. On November 5, 2013, ORMAT's Board of Directors approved a payment of a quarterly dividend of $0.04 per share pursuant to the Company's dividend policy, which targets an annual payoff ratio of at least 20% of the Company's net income. The dividend will be paid on December 4, 2013 to shareholders of record as of closing of business on November 20, 2013. As of September 30, 2013 cash, cash equivalents were $35.4 million. In addition, as of September 30, 2013, the Company had $145.2 million of unused corporate borrowing capacity under existing lines of credit with different commercial banks. Conference Call Details Ormat will host a conference call to discuss its financial results and other matters discussed in this press release at 9:00 A.M. EST on Wednesday, November 6, 2013. The call will be available as a live, listen-only webcast at www.ormat.com. During the webcast, management will refer to slides that will be posted on the web site. The slides and accompanying webcast can be accessed through the Webcast & Presentations in the Investor Relations section of Ormat's website. An archive of the webcast will be available approximately 10 minutes after the conclusion of the live call. About Ormat Technologies With over four decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company solely engaged in geothermal and recovered energy generation (REG). The company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter—a power generation unit that converts low-, medium- and high-temperature heat into electricity. With over 82 U.S. patents, Ormat's power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has over 500 employees in the United States and about 600 overseas. Ormat's flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1600 MW of gross capacity. Ormat's current generating portfolio of 595 MW (net) is spread globally in the U.S., Guatemala and Kenya. Ormat's Safe Harbor Statement Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2013. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Statements of Operations For the Nine and Three-Month Periods Ended September 30, 2013 and 2012 (Unaudited) Three Months Ended Nine Months Ended September 30 September 30 2013 2012 2013 2012 (In thousands, except (In thousands, except per share data) per share data) Revenues: Electricity $88,994 $77,612 $245,005 $238,837 Product 41,755 54,685 157,329 149,616 Total revenues 130,749 132,297 402,334 388,453 Cost of revenues: Electricity 61,356 59,924 175,085 172,785 Product 29,637 42,130 110,335 108,575 Total cost of revenues 90,993 102,054 285,420 281,360 Gross margin 39,756 30,243 116,914 107,093 Operating expenses: Research and development expenses 838 1,436 3,446 3,948 Selling and marketing expenses 2,575 3,346 17,861 12,752 General and administrative 6,546 6,132 20,264 20,163 expenses Impairment charge 7,264 -- 7,264 Write-off of unsuccessful -- -- -- 1,919 exploration activities Operating income 29,797 12,065 75,343 61,047 Other income (expense): Interest income 742 280 870 1,004 Interest expense, net (18,459) (15,400) (51,826) (44,541) Foreign currency translation and 1,258 615 3,844 (1,127) transaction gains (losses) Income attributable to sale of 5,027 2,311 14,342 7,417 tax benefits Other non-operating expense, net 137 215 1,583 344 Income before income taxes and 18,502 86 44,156 24,144 equity inlosses of investees * Income tax provision (5,201) (1,088) (15,028) (10,148) Equity in losses of investees, net (158) (1,245) (149) (1,542) Income (loss) from continuing 13,143 (2,247) 28,979 12,454 operations Discontinued operations: Income from discontinued operations (including gain on -- 2,123 5,311 4,875 disposal of $3,646,$0, $3,646 and $0, respectively) Income tax provision -- (391) (614) (1,097) Total income from discontinued -- 1,732 4,697 3,778 operations * Net income (loss) 13,143 (515) 33,676 16,232 Net income attributable to (193) (67) (600) (278) noncontrolling interest Net income(loss) attributable to $12,950 $(582) $33,076 $15,954 the Company's stockholders Earnings (loss) per share attributable to the Company's stockholders: Basic: Income (loss)from continuing $0.29 $(0.05) $0.62 $0.27 operations Discontinued operations -- 0.04 0.10 0.08 Net Income (loss) $0.29 $(0.01) $0.72 $0.35 Diluted: Income (loss)from continuing $0.28 $(0.05) $0.62 $0.27 operations Discontinued operations -- 0.04 0.10 0.08 Net Income (loss) $0.28 $(0.01) $0.72 $0.35 Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: Basic 45,438 45,431 45,433 45,431 Diluted 45,494 45,431 45,454 45,438 * The "income tax provision" for the nine months ended September 30 2013 includes a correction of $3.1 million (increase) for the three-month period ended March 31, 2013 previously reported by the Company, and a corresponding reduction in net income. Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Balance Sheets As of September 30, 2013 and December 31, 2012 (Unaudited) September 30, December 31, 2013 2012 As Revised (In thousands) ASSETS Current assets: Cash and cash equivalents $35,435 $66,628 Short-term bank deposit -- 3,010 Restricted cash, cash equivalents and 84,197 76,537 marketable securities Receivables: Trade 60,526 55,680 Related entity 442 373 Other 24,643 8,632 Due from Parent 373 311 Inventories 20,396 20,669 Costs and estimated earnings in excess of 36,201 9,613 billings on uncompleted contracts Deferred income taxes 162 637 Prepaid expenses and other 36,724 34,144 Total current assets 299,099 276,234 Unconsolidated investments 5,419 2,591 Deposits and other 31,110 36,187 Deferred income taxes 15,966 21,283 Deferred charges 34,635 35,351 Property, plant and equipment, net 1,383,353 1,252,873 Construction-in-process 335,915 396,141 Deferred financing and lease costs, net 29,806 31,371 Intangible assets, net 33,032 35,492 Total assets $2,168,335 $2,087,523 LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued expenses $83,751 $98,001 Deferred income taxes 20,428 20,392 Billings in excess of costs and estimated 12,708 25,408 earnings on uncompleted contracts Current portion of long-term debt: Limited and non-recourse: Senior secured notes 30,059 28,231 Other loans 18,288 11,453 Full recourse 28,875 28,649 Total current liabilities 194,109 212,134 Long-term debt, net of current portion: Limited and non-recourse: Senior secured notes 286,786 312,926 Other loans 272,710 242,815 Full recourse: Senior unsecured bonds 250,674 250,904 Other loans 64,414 82,344 Revolving credit lines with banks (full 123,288 73,606 recourse) Liability associated with sale of tax benefits 65,402 51,126 Deferred lease income 64,217 66,398 Deferred income taxes 52,233 45,059 Liability for unrecognized tax benefits 8,878 7,280 Liabilities for severance pay 23,642 22,887 Asset retirement obligation 20,436 19,289 Other long-term liabilities 4,576 5,148 Total liabilities 1,431,365 1,391,916 Equity: The Company's stockholders' equity: Common stock 46 46 Additional paid-in capital 737,125 732,140 Retained earnings (13,066) (44,326) Accumulated other comprehensive income 527 651 724,632 688,511 Noncontrolling interest 12,338 7,096 Total equity 736,970 695,607 Total liabilities and equity $2,168,335 $2,087,523 Ormat Technologies, Inc. and Subsidiaries Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information For the Nine and Three-Month Periods Ended September 30, 2013 and 2012 (Unaudited) We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, excluding impairment of long-lived assets and one-time termination fee. EBITDA and Adjusted EBITDA are not a measurement of financial performance or liquidity under accounting principles generally accepted in the United States of America and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with accounting principles generally accepted in the United States of America. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of a company's ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do. The following tables reconcile net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA for the nine and three-month periods ended September 30, 2013 and 2012: Three Months Ended Nine Months Ended September 30 September 30 2013 2012 2013 2012 (in thousands) (in thousands) Net cash provided by (used $12,276 $(9,695) $32,226 $62,384 in) operating activities Adjusted for: Interest expense, net (excluding amortization of 17,405 14,202 47,367 40,931 deferred financing costs) Interest income (742) (280) (870) (1,004) Income tax provision 5,201 1,479 15,642 11,245 Adjustments to reconcile net income or loss to net cashprovided by operating 26,115 35,236 72,361 29,661 activities (excludingdepreciation and amortization) EBITDA $60,255 $40,942 $166,726 $143,217 Impairment charge -- 7,264 -- 7,264 Termination fee -- -- 8,979 -- Adjusted EBITDA $60,255 $48,206 $175,705 $150,481 Net cash provided by (used $(25,029) $13,417 $(128,198) $(53,611) in) investing activities Net cashprovided by (used $19,295 $(32,882) $64,779 $(71,135) in) financing activities Three Months Ended Nine Months Ended September 30 September 30 2013 2012 2013 2012 (in thousands) (in thousands) Net income (loss) $13,143 $(515) $33,676 $16,232 Adjusted for: Interest expense, net (including amortization of 17,717 15,120 50,956 43,537 deferred financing costs) Income tax provision 5,201 1,479 15,642 11,245 Depreciation and amortization 24,194 24,858 66,452 72,203 EBITDA $60,255 $40,942 $166,726 $143,217 Impairment charge -- 7,264 -- 7,264 Termination fee -- -- 8,979 -- Adjusted EBITDA $60,255 $48,206 $175,705 $150,481 CONTACT: Ormat Technologies Contact: Dita Bronicki CEO 775-356-9029 firstname.lastname@example.org Investor Relations Contact: Todd Fromer/Rob Fink KCSA Strategic Communications 212-896-1215 (Todd) /212-896-1206 (Rob) email@example.com / firstname.lastname@example.org Ormat Technologies logo
Ormat Technologies Reports 2013 Third Quarter Results
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