×

Ormat Technologies Reports 2015 Second Quarter Results

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 Lavi Investor Relations 775-356-9029 slavi@ormat.com Investor Relations Agency Contact: Miri Segal/Brett Maas MS/Hayden - IR 917-607-8654/646-536-7331 msegal@ms-ir.com / brett@haydenir.com

Source:Ormat Technologies, Inc.