Top Stories
Top Stories
Press Releases

Ormat Technologies Reports 2015 Second Quarter Results

Globe Newswire

 Total Revenues increase 10.1% to $140.5 million and Net Income attributable to 
the Company's stockholders increased 57.8% to $14.4 million

Company Reiterates Full-Year 2015 Revenue and Adjusted EBITDA Guidance


RENO, Nev., Aug. 03, 2015 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) today announced financial results for the second quarter ended June 30, 2015.

Second Quarter Highlights and Recent Developments:

  • Total revenues of $140.5 million, compared to $127.6 million in the second quarter of 2014;
  • Electricity revenues of $90.9 million, compared to $91.7 million in the second quarter of 2014;
  • Product segment revenues of $49.6 million, compared to $35.9 million in the second quarter of 2014;
  • Operating income increased by 27.0% to $38.6 compared to $30.4 million in the second quarter of 2014 (excluding an $8.1 million write off);
  • Net income attributable to the company's shareholders of $14.4 million or $0.28 per share (diluted), compared to $9.1 million or $0.20 per share in the second quarter of 2014;
  • Adjusted EBITDA of $67.8 million, compared to $61.8 million in the second quarter of 2014;
  • Declared a quarterly dividend of $0.06 per share for the second quarter of 2015;
  • Closed and received $162.3 million cash from Northleaf Capital Partners for a 36.75% equity investment in certain power plants;
  • Closed $42 million loan agreement to refinance the Amatitlan power plant in Guatemala with Banco Industrial S.A. and its affiliate Westrust Bank. Funding is expected shortly; and
  • Signed an approximate $100.0 million EPC contract in Chile;


Isaac Angel, chief executive officer of Ormat, stated, “Our balanced business model enabled Ormat to deliver another quarter of solid, double-digit revenue growth largely driven by 38.0% growth from our Product segment. We essentially matched last year’s revenue in our Electricity segment, mainly due to the McGinness Hills complex performance, overcoming lower oil and natural gas prices, as well as reduced generation at Puna due to last summer’s hurricane, which impacted our revenue in this segment. The enhancements implemented in our power plants that improved the efficiency of our operating portfolio along with the new capacity that came on line increased the margins in the Electricity segment despite the significant impact of the lower oil and natural gas prices on our revenue. Higher revenue and improvements in our consolidated gross margin drove a 27.0% increase in our operating income excluding an $8.1 million write off in the second quarter of 2014, demonstrating again the strength of our balanced business model.”

“We remain confident in the multi-year plan we outlined at our analyst day in March,” continued Mr. Angel. “We are focused on expanding our geographic reach and broadening our technology offering with a vision to position Ormat as a leading provider of renewable energy. We remain excited about the growing number of opportunities before us and believe the tailwinds expected from the potential PTC extension and other regulatory initiatives in the regions we are targeting, will complement our efforts.”
                                                                                                                 
Guidance

Mr. Angel added, “Our guidance assumes the continued impact on our results due to lower oil and natural gas prices, which translates to a $28.6 million reduction in revenues compared to last year. However, we reiterate our 2015 revenue guidance and expect electricity segment revenues to be between $380.0 million and $390.0 million, and product segment revenues to be between $180.0 million and $190.0 million. We reiterate our 2015 Adjusted EBITDA guidance of $280.0 to $290.0 million for the full year, which is also impacted by current oil and natural gas prices. We expect Northleaf’s annual portion of the adjusted EBITDA guidance to be approximately $14.0 million.”

Second Quarter Financial Summary

Total revenues for the three months ended June 30, 2015 were $140.5 million, an increase of 10.1% compared to $127.6 million for the three months ended June 30, 2014. Electricity revenues were $90.9 million for the quarter compared to $91.7 million in the second quarter last year. Product revenues increased 38.0% to $49.6 million for the second quarter of 2015, from $35.9 million in the second quarter last year.

The slight decrease in the electricity segment was primarily attributable to lower generation at the Puna power plant due to well field maintenance and lower energy rates resulting from the decrease in oil prices as well as lower revenues in some of Ormat’s power plants due to lower natural gas prices. The decrease was offset by the commencement of operations of second phase of the McGinness Hills power plant in Nevada, which began commercial operation in February 2015.

The company reported net income attributable to the company’s shareholders of $14.4 million or $0.28 per share (diluted) in the second quarter of 2015 compared to $9.1 million or $0.20 per share for the second quarter of 2014. The net income includes a $1.7 million related loss from extinguishment of a liability resulting from the repurchase of a portion of the  OFC Senior Secured Notes as well as non-recurring and non-operating expenses of $0.4 million associated with due diligence related to a potential M&A transaction that management ultimately decided not to pursue.

Adjusted EBITDA for the three months ended June 30, 2015 was $67.8 million, compared to $61.8 million for the three months ended June 30, 2014 an increase of 9.7%. The reconciliation of GAAP net cash provided by operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flow information is set forth below in this release.

On August 3, 2015, ORMAT’s Board of Directors approved a payment of a quarterly dividend of $0.06 per share. The dividend will be paid on September 2, 2015 to shareholders of record as of the close of business on August 18, 2015. In addition, the company expects to pay quarterly dividends of $0.06 per share in the next quarter.

Webcast Conference Details

Ormat will host a listen-only webcast to discuss its financial results and other matters discussed in this press release at 9 a.m. ET on Tuesday, August 4, 2015. The live, listen-only webcast will be available at www.ormat.com. During the webcast, management will refer to slides that will be posted on the website. The slides and accompanying webcast can be accessed through the Events & Presentations in the Investor Relations section of Ormat's website.

An archive of the webcast will be made available on the website under Events & Presentations in the Investor Relations tab.

Participant Telephone Numbers
Participant Dial In (Toll Free): 1-877-511-6790
Participant International Dial In: 1-412-902-4141
Canada Toll Free1-855-669-9657
  
 Please ask to be joined into the Ormat Technologies, Inc. call. 


CONFERENCE REPLAY
US Toll Free: 1-877-344-7529
International Toll: 1-412-317-0088
Canada Toll Free:1-855-669-9658
Replay Access Code: 10068472


About Ormat Technologies

With five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company currently engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. 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 69 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 470 employees in the United States and over 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 installed to utilities and developers worldwide, totaling over 2,000 MW of gross capacity. Ormat’s current 647 MW generating portfolio 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 February 26, 2015.

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 Six and Three-Month Period Ended June 30, 2015 and 2014
(Unaudited)

             
   Three Months Ended
June 30
 
  Six Months Ended
June 30
 
  2015 2014 2015 2014
             
   (In thousands, except per share data)   (In thousands, except per share data) 
 Revenues:            
 Electricity$ 90,926  $ 91,692   $  180,879  $ 186,509 
 Product  49,561    35,911    79,839    83,530 
 Total revenues  140,487    127,603    260,718    270,039 
 Cost of revenues:            
 Electricity  62,522    67,322    118,103    124,356 
 Product  27,182    20,324    47,807    52,267 
 Total cost of revenues  89,704    87,646    165,910    176,623 
 Gross margin  50,783    39,957    94,808    93,416 
 Operating expenses:            
 Research and development expenses (income)  414    232    777    145 
 Selling and marketing expenses  4,283    3,216    7,716    6,595 
 General and administrative expenses  7,443    6,072    17,647    13,668 
 Write-off of unsuccessful exploration activities      8,107    174    8,107 
 Operating income  38,643    22,330    68,494    64,901 
 Other income (expense):            
 Interest income  44    90    53    201 
 Interest expense, net  (18,859)   (22,072)   (36,687)   (42,590)
 Foreign currency translation and transaction gains (losses)  (571)   (55)   (1,937)   (693)
 Income attributable to sale of tax benefits  4,731    6,130    10,283    12,847 
 Gain from sale of property, plant and equipment      7,628        7,628 
 Other non-operating income (expense), net  (1,675)   343    (1,392)   406 
 Income before income taxes and equity in losses of investees  22,313    14,394    38,814    42,700 
 Income tax provision  (6,056)   (4,967)   (11,515)   (11,287)
 Equity in losses of investees, net  (984)   (114)   (1,759)   (311)
 Net income  15,273    9,313    25,540    31,102 
 Net income attributable to noncontrolling interest  (859)   (177)   (1,094)   (414)
 Net income attributable to the Company's stockholders $  14,414   $  9,136   $  24,446   $  30,688 
             
 Earnings per share attributable to the Company's stockholders - Basic and diluted:            
 Basic:            
 Net Income (loss) $  0.29   $  0.20   $  0.51   $  0.67 
             
 Diluted:            
 Net Income $  0.28   $  0.20   $  0.49   $  0.67 
             
 Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:            
 Basic  48,881    45,606    48,063    45,545 
 Diluted  50,600    45,963    49,444    45,827 
             


Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of June 30, 2015 and December 31, 2014
(Unaudited)

      
    June 30,   December 31, 
   2015 2014
        
     (In thousands) 
  ASSETS 
 Current assets:       
 Cash and cash equivalents   $    137,665   $    40,230 
 Restricted cash, cash equivalents and marketable securities     104,870      93,248 
 Receivables:       
 Trade      58,089      48,609 
 Related entity          451 
 Other      14,066      10,141 
 Due from Parent         1,337 
 Inventories      16,401      16,930 
 Costs and estimated earnings in excess of billings on uncompleted contracts     7,093      27,793 
 Deferred income taxes     186      251 
 Prepaid expenses and other      31,055      34,884 
 Total current assets      369,425      273,874 
 Deposits and other     18,038      20,044 
 Deferred income taxes     1,775     
 Deferred charges     36,512      37,567 
 Property, plant and equipment, net      1,519,945      1,437,637 
 Construction-in-process      277,990      296,722 
 Deferred financing and lease costs, net     25,836      27,057 
 Intangible assets, net     27,029      28,655 
 Total assets  $   2,276,550  $   2,121,556 
  LIABILITIES AND EQUITY 
 Current liabilities:       
 Accounts payable and accrued expenses   $    98,481   $    88,276 
 Deferred income taxes     975      974 
 Short-term revolving credit lines with banks (full recourse)          20,300 
 Billings in excess of costs and estimated earnings on uncompleted contracts     49,731      24,724 
 Current portion of long-term debt:      
 Limited and non-recourse:      
 Senior secured notes      32,981      34,368 
 Other loans      17,995      17,995 
 Full recourse     17,203      19,116 
 Total current liabilities      217,366      205,753 
 Long-term debt, net of current portion:      
 Limited and non-recourse:      
 Senior secured notes      320,235      360,366 
 Other loans      255,627      264,625 
 Full recourse:      
 Senior unsecured bonds     250,136      250,289 
 Other loans      26,737      34,351 
 Unconsolidated investments     5,215      3,617 
 Liability associated with sale of tax benefits      27,298      39,021 
 Deferred lease income      59,070      60,560 
 Deferred income taxes     73,887      66,220 
 Liability for unrecognized tax benefits     7,151      7,511 
 Liabilities for severance pay     19,424      20,399 
 Asset retirement obligation      19,894      19,142 
 Other long-term liabilities      697      2,956 
 Total liabilities      1,282,737      1,334,810 
        
 Equity:       
 The Company's stockholders' equity:       
 Common stock      49      46 
 Additional paid-in capital      845,173      742,006 
 Retained earnings      59,155      41,539 
 Accumulated other comprehensive income      (8,519)     (8,668)
       895,858      774,923 
 Noncontrolling interest      97,955      11,823 
 Total equity      993,813      786,746 
 Total liabilities and equity   $    2,276,550   $    2,121,556 
        

 

Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information
For the Six and Three-Month Period Ended June 30, 2015 and 2014
(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, adjusted for (i) termination fees, (ii) impairment of long-lived assets, (iii) write-off of unsuccessful exploration activities, (iv) any mark-to-market gains or losses from accounting for derivatives, (v) merger and acquisition transaction cost, (vi) stock-based compensation, and (vii) gain from extinguishment of liability. 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 operating activities and net income to EBITDA and Adjusted EBITDA for the six and three-month period ended June 30, 2015 and June 30, 2014:


 
    Three Months Ended June 30   Six Months Ended June 30  
   2015 2014 2015 2014 
               
    (in thousands)   (in thousands)  
 Net cash provided by operating activities   $    29,579   $    35,503   $    112,726   $    103,579  
 Adjusted for:             
 Interest expense, net (excluding amortization             
 of deferred financing costs)      16,355      20,152      32,327      39,328  
 Interest income      (44)     (90)     (53)     (201) 
 Income tax provision      6,056      4,967      11,515      11,287  
 Adjustments to reconcile net income or loss to net cash             
 provided by operating activities (excluding             
 depreciation and amortization)      12,593      (788)     (34,627)     (23,658) 
 EBITDA  $   64,539   $   59,744   $   121,888    $    130,335     
               
 Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices           (527)     4,129      (302) 
 Stock-based compensation     1,029      1,366      2,156      2,806  
 Gain on sale of a subdiary and property, plant and equipment           (7,628)           (7,628) 
 Loss from extinguishment of liability     1,710            1,710        
 Merger and Acquisition transactions costs     400            3,800        
 Write-off of unsuccessful exploration activities           8,107      174      8,107  
 Mark to market on derivatives which represents currency forward contracts     170      759      (690)     1,936  
 Adjusted EBITDA  $   67,848    $    61,821   $   133,167    $    135,254     
 Net cash provided by (used in) investing activities  $   (32,176)  $    6,311  $   (79,433)  $    (29,012) 
 Net cash provided by (used in)  financing activities  $   69,538   $    (9,621) $   64,142   $    (51,801) 
 
                 
               
    Three Months Ended June 30   Six Months Ended June 30  
   2015 2014 2015 2014 
               
    (in thousands)   (in thousands)  
 Net income  $    15,273   $    9,313   $    25,540   $    31,102  
 Adjusted for:             
 Interest expense, net (including amortization             
 of deferred financing costs)     18,815      21,982      36,634      42,389  
 Income tax provision      6,056      4,967      11,515      11,287  
 Depreciation and amortization     24,395      23,482      48,199      45,557  
 EBITDA  $   64,539   $   59,744   $   121,888    $    130,335    
               
 Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices           (527)     4,129      (302) 
 Stock-based compensation     1,029      1,366      2,156      2,806  
 Gain on sale of a subdiary and property, plant and equipment         (7,628)           (7,628) 
 Loss from extinguishment of liability     1,710            1,710        
 Merger and Acquisition transactions costs     400            3,800        
 Write-off of unsuccessful exploration activities           8,107      174      8,107  
 Mark to market on derivatives which represents currency forward contracts     170      759      (690)     1,936  
 Adjusted EBITDA  $   67,848    $    61,821   $   133,167    $    135,254    
 


 

Ormat Technologies Contact:Smadar LaviInvestor Relations775-356-9029slavi@ormat.comInvestor Relations Agency Contact:Miri Segal/Brett MaasMS/Hayden - IR917-607-8654/646-536-7331msegal@ms-ir.com / brett@haydenir.com

Source:Ormat Technologies, Inc.