Ormat Technologies Reports 2013 First Quarter Results

07 May, 2013, 17:26 ET from Ormat Technologies, Inc.

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.



RELATED LINKS

http://www.ormat.com