Ormat Technologies Reports 2012 Third Quarter Results Quarterly revenues increased 23 percent to a record $136.1 million;

RENO, Nev., Nov. 6, 2012 /PRNewswire/ -- Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the third quarter of 2012.

Quarterly highlights and recent developments:

  • Total revenues increased 23 percent to a record $136.1 million
  • Adjusted EBITDA for the quarter amounted to $48.2 million ($150.5 million for the nine months ended September 30, 2012)
  • Product backlog was $191.6 million as of November 6, 2012
  • Received $47.0 million in cash grants for the McGinness Hills power plant
  • $7.3 million non-cash pre-tax impairment charge and $3.8 million loss on put and swap contracts on oil and natural gas prices resulted in a $0.5 million net loss.

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Commenting on the results, Dita Bronicki, chief executive officer of Ormat, stated:  "We are pleased with the progress we made during the third quarter.  Total revenues rose 23 percent, driven by a strong order pipeline in our product segment. Power plant generation grew by almost 12% as new capacity came on line. Operating income excluding impairment charges and the loss on put and swap contracts amounted to $25.3 million.

"We accomplished a number of key objectives during the third quarter. We took proactive steps to reduce our revenue exposure to natural gas and oil through hedging deals that will provide either a fixed or a minimum rate through 2013.  For the long term, we have made progress in the replacement of part of the California SO#4 PPAs with fixed-price PPAs. Additionally, the 30 MW McGinness Hills power plant became fully commercial and received full energy rates through the quarter. We also received $47.0 million in cash grants for McGinness Hills. In Kenya, we signed an agreement for up to $310 million of non-recourse financing for the expansion of our Olkaria III geothermal plant. Out of the first draw under the loan, that is expected shortly, approximately $150 million will be used to refinance corporate loans and therefore replace corporate debt by non-recourse debt."

Financial Summary

Third Quarter Results

For the three months ended September 30, 2012, total revenues increased by 22.8 percent to $136.1 million from $110.8 million in the third quarter of 2011.  Product revenues more than doubled to $54.7 million, from $24.0 million in the three months ended September 30, 2011. Electricity revenues decreased 6.2 percent to $81.5 million, from $86.8 million in the three months ended September 30, 2011.

During the third quarter of 2012, the OREG 4 power plant, which generates electricity using recovered heat and has a carrying value of $10.9 million, was tested for recoverability due to continued low output and was written down to its fair value of $3.6 million, resulting in an  impairment loss of $7.3 million

Operating income for the three months ended September 30, 2012 decreased by $10.0 million to $14.2 million from $24.2 million for the three months ended September 30, 2011. The decrease is principally attributed to the OREG 4 impairment loss, and lower gross margin in our electricity segment resulting mainly from the low gas prices in our SO#4 power purchase agreements in California and $3.8 million loss on put and swap contracts on oil and natural gas prices, offset by the contribution of the new Tuscarora and McGinness power plants and to higher gross margin in our product segment due to the increase in product revenues as a result of new customer orders that were secured in 2011 and 2012.

For the quarter, the company reported net loss of $0.5 million or $0.01 per share (basic and diluted), compared to net income of $1.0 million, or $0.02 per share (basic and diluted), for the same quarter a year ago.

Adjusted EBITDA for the third quarter of 2012 was $48.2 million, compared to $46.7 million for the same quarter last year. Adjusted EBITDA excludes the impairment loss in respect of the OREG 4 power plant.  The reconciliation of GAAP net cash used in operating activities to Adjusted EBITDA and additional cash flows information is set forth below.

As of September 30, 2012, cash, cash equivalents and short-term bank deposit were $40.5 million. In addition, as of September 30, 2012, the company has available, committed lines of credit with commercial banks aggregating $487.2 million, of which $85.4 million is unused.

Commenting on the outlook for 2012, Bronicki said, "We expect our 2012 product revenues to be $175 to $180 million and our electricity revenues to be approximately $325 million."

Nine-Month Results

For the nine months ended September 30, 2012, total revenues increased 27.1 percent to $398.3 million from $313.3 million in the nine months ended September 30, 2011. Net income for the period was $16.2 million, or $0.35 per share (basic and diluted), compared to $0.3 million, or $0.00 per share (basic and diluted), in the same period in 2011. The increase is principally attributable to the $19.2 million increase in operating income and the $9.9 million decrease in interest expense, net of capitalized interest.

Product revenues more than doubled to $149.6 million, from $67.0 million in the nine months ended September 30, 2011.  Electricity revenues slightly increased to $248.7 million, up from $246.3 million in the nine months ended September 30, 2011.

Adjusted EBITDA for the nine months ended September 30, 2012 was $150.5 million, compared to $121.6 million for the same period last year. The reconciliation of GAAP net cash provided by operating activities to Adjusted EBITDA and additional cash flows information is set forth below.

Conference Call Details

Ormat will host a conference call to discuss its financial results and other matters included in this press release at 9 a.m. EST on Wednesday, November 7, 2012.  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.

The webcast will be available approximately two hours after the conclusion of the live call. A replay will be available from 11 a.m. EST on November 7, 2012. Please call: (855) 859-2056 (U.S. and Canada) (404) 537-3406 (International) and enter the replay code: 49596290.

About Ormat Technologies

Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. The company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat's products and systems are covered by 82 U.S. patents. Ormat has engineered and built power plants that it currently owns or has supplied to utilities and developers worldwide, totaling over 1,500 MW of gross capacity.  Ormat's current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States - Brady, Brawley, Heber, Jersey Valley, Mammoth, McGinness Hills, Ormesa, Puna, Steamboat, Tuscarora, OREG 1, OREG 2, OREG 3, and OREG 4; in Guatemala - Zunil and Amatitlan; in Kenya – Olkaria III; and, in Nicaragua - Momotombo.

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 29, 2012.

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 Three and Nine-Month Periods Ended September 30, 2012 and 2011

(Unaudited)

 



 Three Months Ended

September 30, 


 Nine Months Ended

September 30, 


2012


2011


2012


2011














 (In thousands, except per share data) 


 (In thousands, except per share data) 

 Revenues: 












     Electricity

$

81,452


$

86,815


$

248,710


$

246,273

     Product


54,685



24,026



149,616



67,002

          Total revenues


136,137



110,841



398,326



313,275

 Cost of revenues: 












     Electricity


61,466



57,941



177,350



186,090

     Product


42,130



17,137



108,575



43,276

          Total cost of revenues


103,596



75,078



285,925



229,366

          Gross margin


32,541



35,763



112,401



83,909

 Operating expenses: 












     Research and development expenses


1,436



2,346



3,948



7,128

     Selling and marketing expenses


3,445



2,940



13,033



9,325

     General and administrative expenses


6,208



6,269



20,315



20,755

     Impairment of a power plant


7,264





7,264



     Write-off of unsuccessful exploration activities






1,919



          Operating income


14,188



24,208



65,922



46,701

 Other income (expense): 












     Interest income


280



438



1,004



1,289

     Interest expense, net


(15,400)



(23,909)



(44,541)



(54,431)

     Foreign currency translation and transaction gains (losses)


615



(2,659)



(1,127)



(1,546)

     Income attributable to sale of tax benefits


2,311



2,344



7,417



7,624

     Other non-operating income, net


215



347



344



465

           Income, before income taxes and equity in  












             losses of investees


2,209



769



29,019



102

Income tax benefit (provision)


(1,479)



305



(11,245)



726

Equity in losses of investees, net


(1,245)



(71)



(1,542)



(552)

          Net income (loss)


(515)



1,003



16,232



276

          Net income attributable to noncontrolling interest


(67)



(137)



(278)



(252)

          Net income (loss) attributable to the Company's stockholders

$

(582)


$

866


$

15,954


$

24













Earnings (loss) per share attributable to the Company's stockholders — basic and diluted:

$

(0.01)


$

0.02


$

0.35


$

 Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: 












     Basic


45,431



45,431



45,431



45,431

     Diluted


45,431



45,440



45,438



45,442

























 

Ormat Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of September 30, 2012 and December 31, 2011

(Unaudited)










 September 30, 


 December 31, 



2012


2011



 (In thousands) 

 ASSETS 

 Current assets: 







     Cash and cash equivalents


$

37,524


$

99,886

     Marketable securities





18,521

     Short-term bank deposit



3,008



     Restricted cash, cash equivalents and marketable securities



76,296



75,521

      Receivables: 







          Trade



80,166



51,274

          Related entity



351



287

          Other



10,265



9,415

     Due from Parent



196



260

     Inventories



17,786



12,541

     Costs and estimated earnings in excess of billings on uncompleted contracts



7,704



3,966

     Deferred income taxes



1,729



1,842

     Prepaid expenses and other



31,497



18,672

               Total current assets



266,522



292,185

Unconsolidated investments



3,476



3,757

Deposits and other



27,416



22,194

Deferred charges



38,636



40,236

Property, plant and equipment, net



1,491,411



1,518,532

Construction-in-process



367,762



370,551

Deferred financing and lease costs, net



26,821



28,482

Intangible assets, net



36,319



38,781

               Total assets


$

2,258,363


$

2,314,718

 LIABILITIES AND EQUITY 

 Current liabilities: 







     Accounts payable and accrued expenses


$

96,516


$

105,112

     Billings in excess of costs and estimated earnings on uncompleted contracts



32,546



33,104

     Current portion of long-term debt:







       Limited and non-recourse:







          Senior secured notes (non-recourse)



25,609



21,464

          Other loans



13,744



13,547

     Full recourse



20,755



20,543

               Total current liabilities



189,170



193,770

Long-term debt, net of current portion:







   Limited and non-recourse:







     Senior secured notes (non-recourse)



329,000



341,157

     Other loans



93,015



100,585

  Full recourse:







      Senior unsecured bonds



250,982



250,042

      Other loans



49,869



63,623

      Revolving credit lines with banks (full recourse)



187,474



214,049

Liability associated with sale of tax benefits



56,528



69,269

Deferred lease income



67,051



68,955

Deferred income taxes



58,758



54,665

Liability for unrecognized tax benefits



7,139



5,875

Liabilities for severance pay



20,818



20,547

Asset retirement obligation



22,548



21,284

Other long-term liabilities



2,857



4,253

               Total liabilities



1,335,209



1,408,074








 Equity: 







      The Company's stockholders' equity: 







          Common stock



46



46

          Additional paid-in capital



730,583



725,746

          Retained earnings



184,649



172,331

          Accumulated other comprehensive income



697



595




915,975



898,718

     Noncontrolling interest



7,179



7,926

          Total equity



923,154



906,644

          Total liabilities and equity


$

2,258,363


$

2,314,718









Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA and Adjusted EBITDA and Additional Cash Flows Information
For the Three and Nine-Month Periods Ended September 30, 2012 and 2011
(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. EBITDA and adjusted EBITDA are not measurements 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 it is 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 table reconciles net cash provided by or used in operating activities to EBITDA and Adjusted EBITDA for the three and nine-month periods ended September 30, 2012 and 2011:



 Three Months Ended

  September 30, 


 Nine Months Ended

 September 30, 



2012


2011


2012


2011
















 (in thousands) 


 (in thousands) 

Net cash provided by (used in) operating activities


$

(9,695)


$

59,008


$

62,384


$

98,514

Adjusted for:













Interest expense, net (excluding amortization of deferred financing costs)



14,202



23,222



40,931



52,046

Interest income



(280)



(438)



(1,004)



(1,289)

Income tax provision (benefit)



1,479



(305)



11,245



(726)

Adjustments to reconcile net income or loss to net cash provided by operating activities (excluding depreciation and amortization)



35,236



(34,749)



29,661



(26,977)

EBITDA



40,942



46,738



143,217



121,568

Impairment charge



7,264





7,264



Adjusted EBITDA


$

48,206


$

46,738


$

150,481


$

121,568

Net cash provide by (used in) investing activities


$

13,417


$

(102,445)


$

(53,611)


$

(238,186)

Net cash provided by (used in)  financing activities


$

(32,882)


$

58,176


$

(71,135)


$

115,934

Depreciation and amortization


$

26,056


$

23,256


$

75,813


$

71,261














Ormat Technologies Contact: 

 Investor Relations Contact:

Dita Bronicki 

Todd Fromer/Rob Fink

CEO

KCSA Strategic Communications

775-356-9029 

212-896-1215 (Todd) /212-896-1206 (Rob)

dbronicki@ormat.com  

tfromer@kcsa.com / rfink@kcsa.com

 

SOURCE Ormat Technologies, Inc.



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