Ormat Technologies Reports 2013 First Quarter Results

RENO, Nevada, May 7, 2013 /PRNewswire/ -- Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the first quarter of 2013.

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Financial highlights & Recent Developments:

  • Total revenues amounted to $121.7 million; a 8.0% decrease from the first quarter of 2012, mainly due to a reduction in the electricity segment revenues of $9.3 million related to our SO#4 PPAs in California and a net loss of $4.6 million related to derivative instruments;
  • Product segment strength continues with a Backlog of $224 million as of May 7, 2013.
  • Replaced two SO#4 PPAs tied to natural gas at the Mammoth complex with up to 21.5 MW of new long-term fixed price PPAs, with higher rates.
  • Net loss amounted to $1.9 million or $0.04 per share compare to net income of $8.0 million or $0.17 per share; net income excluding one-time termination fee of $9.0 million related to the replacement of Mammoth PPAs and a $4.6 million loss related to oil and gas derivative instruments was $11.6 million or $0.26 per share;
  • Received $35.7 million in cash as a result of the ORTP tax equity transaction.
  • Reached commercial operation for the 36 MW Olkaria III Plant 2 in Kenya; increasing our worldwide generating capacity to 611 MW;
  • Signed the Sarulla agreements and secured our role as a supplier for approximately $254 million;
  • Signed a 20-year PPA with Southern California Public Power Authority (SCPPA) for our 16 MW Wild Rose project in Nevada;

Commenting on the results, Dita Bronicki, Chief Executive Officer of Ormat, stated:  "Since the beginning of the year, we have achieved significant milestones that will further improve both segments performance. Our 2013 organic growth plan to reach 637 MW is on schedule. The 36 MW Plant 2 in the Olkaria III complex in Kenya reached commercial operation bringing the total capacity of our portfolio to 611 MW, and we are progressing with the construction of Heber Solar and Wild Rose projects that we expect to complete by the end of 2013. In 2014, we plan to bring on line plant 3 at the Olkaria III complex increasing its capacity to approximately 100 MW."

"The power generation rose 4.2% over the same period last year, driven mainly by our McGinness Hills power plant, which began operations in July 2012.  Additionally, we continue to take action to increase earnings and reduce the effect that natural gas prices have on our financial performance. We replaced two of the SO#4 PPAs with new long-term fixed price PPAs for our Mammoth complex in California. The improved energy rates under the new PPAs are secured until 2033 and will significantly improve the Mammoth complex profitability."

"Our product segment continued to benefit from strong demand for new geothermal power plants and other power generating units.  The strong backlog coupled with recent positive development in the Sarulla project provide enhanced visibility on our product revenue for the coming few years."

Ms. Bronicki added, "We reaffirm our 2013 guidance and expect total revenues to be between $515 million to $535 million with electricity revenues between $335 million and $345 million and product segment revenues between $180 million and $190 million."

Financial Summary

For the three months ended March 31, 2013, total revenues decreased 8.0 percent to $121.7 million from $132.4 million in the first quarter of 2012.  Product revenues increased slightly to $50.6 million from $50.1 million in the three months ended March 31, 2012. Electricity revenues decreased 13.6 percent to $71.1 million from $82.2 million in the three months ended March 31, 2012. The decrease was mainly due to a reduction of $9.3 million in revenues due to the transition to short run avoided cost pricing linked to natural gas prices in our SO#4 PPAs in California and a net loss of $4.6 million loss related to derivative instruments; this decrease was offset by revenue contribution from Tuscarora and McGinness power plants.

Operating income for the three months ended March 31, 2013 was $8.5 million, compared to operating income of $25.7 million for the three months ended March 31, 2012. The decrease was primarily due to a decrease in our gross margin as a result of the reduction in the electricity revenues and a one-time termination fee related to the replacement of two Mammoth SO#4 PPAs included in the selling and marketing expenses.

For the three months ended March 31, 2013, the company reported a net loss of $1.9 million, or $0.04 per share, compared to net income of $8.0 million or $0.17 per share for the three months ended March 31, 2012. Net income excluding a one-time termination fee of $9.0 million related to the replacement of two Mammoth PPAs and $4.6 million loss related to derivative instruments was $11.6 million or $0.26 per share;

Adjusted EBITDA for the three months ended March 31, 2013 was $45.7 million, compared to $51.5 million for the three months ended March 31, 2012.  The reconciliation of GAAP net cash provided by operating activities to Adjusted EBITDA and additional cash flows information is set forth below in this release.

Net cash provided by operating activities was $18.2 million in the three months ended March 31, 2013, compared to $41.9 million in the three months ended March 31, 2012.

As of March 31, 2013, cash, cash equivalents and a short-term bank deposit were $60.6 million. In addition, as of March 31, 2013, the company had available committed lines of credit with commercial banks aggregating $440.9 million, of which $152.9 million was unused.

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. EDT on Wednesday, May 8, 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.

A webcast will be available approximately two hours after the conclusion of the live call. A replay of the call will be available beginning approximately at 1 p.m. EDT on May 8, 2013 through 11:59 p.m. EDT, May 15, 2013. To access the replay, interested investors should call: (800) 585-8367 (U.S. and Canada) or (404) 537-3406 (International) and enter the Reply code: 55307557.

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's flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered and built 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 611 MW (net) includes in the U.S.; in Guatemala; in Kenya; and, in Nicaragua.

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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 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 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

 

 


 

Ormat Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three-Month Periods Ended March 31, 2013 and 2012

(Unaudited)








 Three Months Ended March 31, 


2013


2012








 (In thousands, except per share data) 

 Revenues: 






     Electricity

$

71,102


$

82,247

     Product


50,608



50,105

          Total revenues


121,710



132,352

 Cost of revenues: 






     Electricity


56,937



57,931

     Product


37,041



34,627

          Total cost of revenues


93,978



92,558

          Gross margin


27,732



39,794

 Operating expenses: 






     Research and development expenses


1,000



1,048

     Selling and marketing expenses


11,571



4,922

     General and administrative expenses


6,650



7,314

     Write-off of unsuccessful exploration activities




768

          Operating income


8,511



25,742

 Other income (expense): 






     Interest income


41



388

     Interest expense, net


(15,863)



(14,878)

     Foreign currency translation and transaction gains (losses)


1,682



14

     Income attributable to sale of tax benefits


3,532



2,517

     Other non-operating expense, net


1,417



(161)

           Income (loss), before income taxes and equity in  






             losses of investees


(680)



13,622

Income tax provision


(1,217)



(5,457)

Equity in losses of investees, net




(140)

          Net income (loss)


(1,897)



8,025

          Net income attributable to noncontrolling interest


(85)



(130)

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

$

(1,982)


$

7,895







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

$

(0.04)


$

0.17

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






     Basic


45,431



45,431

     Diluted


45,431



45,437

 

 

Ormat Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of March 31, 2013 and December 31, 2012

(Unaudited)










 March 31, 


 December 31, 



2013


2012




 (In thousands) 

 ASSETS 


 Current assets: 







     Cash and cash equivalents


$

57,627


$

66,628

 Short-term bank deposit 



3,015



3,010

     Restricted cash, cash equivalents and marketable securities



124,887



76,537

      Receivables: 







          Trade



42,779



55,680

          Related entity



397



373

          Other



10,962



8,632

     Due from Parent



364



311

     Inventories



18,258



20,669

     Costs and estimated earnings in excess of billings on uncompleted contracts



10,135



9,613

     Deferred income taxes



1,238



637

     Prepaid expenses and other



30,151



34,144

               Total current assets



299,813



276,234

Unconsolidated investments



2,789



2,591

Deposits and other



39,670



36,187

Deferred income taxes



52,939



53,989

Deferred charges



35,217



35,351

Property, plant and equipment, net



1,207,410



1,226,758

Construction-in-process



439,301



396,141

Deferred financing and lease costs, net



31,748



31,371

Intangible assets, net



34,681



35,492

               Total assets


$

2,143,568


$

2,094,114

 LIABILITIES AND EQUITY 


 Current liabilities: 







     Accounts payable and accrued expenses


$

78,406


$

98,001

     Deferred income taxes



20,392



20,392

     Billings in excess of costs and estimated earnings on uncompleted contracts



21,749



25,408

     Current portion of long-term debt:







       Limited and non-recourse:







              Senior secured notes 



29,408



28,231

              Other 



15,494



11,453

              Full recourse 



28,760



28,649

               Total current liabilities



194,209



212,134

Long-term debt, net of current portion:







   Limited and non-recourse:







     Senior secured notes



298,944



312,926

     Other loans



281,930



242,815

  Full recourse:







      Senior unsecured bonds



250,827



250,904

      Other loans



78,882



82,344

      Revolving credit lines with banks (full recourse)



88,349



73,606

Liability associated with sale of tax benefits



77,216



51,126

Deferred lease income



65,696



66,398

Deferred income taxes



45,118



45,059

Liability for unrecognized tax benefits



7,795



7,280

Liabilities for severance pay



23,501



22,887

Asset retirement obligation



19,665



19,289

Other long-term liabilities



4,917



5,148

               Total liabilities



1,437,049



1,391,916








 Equity: 







      The Company's stockholders' equity: 







          Common stock



46



46

          Additional paid-in capital



733,683



732,140

          Retained earnings



(39,717)



(37,735)

          Accumulated other comprehensive income



609



651




694,621



695,102

     Noncontrolling interest



11,898



7,096

          Total equity



706,519



702,198

          Total liabilities and equity


$

2,143,568


$

2,094,114

 

 


Ormat Technologies, Inc. and Subsidiaries

Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information

For the Three-Month Periods Ended March 31, 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 table reconciles net cash provided by operating activities to EBITDA and Adjusted EBITDA for the three-month periods ended March 31, 2013 and 2012:




 Three Months Ended March 31, 



2013


2012










 (in thousands) 

Net cash provided by operating activities


$

18,216


$

41,874

Adjusted for:







Interest expense, net (excluding amortization







      of deferred financing costs)



14,336



13,647

Interest income



(41)



(388)

Income tax provision (benefit)



1,217



5,457

Adjustments to reconcile net income or loss to net cash 







  provided by operating activities (excluding 







  depreciation and amortization)



3,024



(9,105)

EBITDA



36,752



51,485

Termination fee



8,979



Adjusted EBITDA


$

45,731


$

51,485

Net cash used in investing activities


$

(98,244)


$

(62,333)

Net cash provided by  financing activities


$

71,027


$

5,153

Depreciation and amortization


$

23,137


$

24,744

 

SOURCE Ormat Technologies, Inc.



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