ORA Ormat Technologies Inc

Ormat Technologies, Inc. Reports Fourth Quarter 2004 and Year-End Results Record Revenues of $219.2 Million for the Year Ended December 31, 2004 and an 83.5% Increase Over 2003; SPARKS, Nev., March 23 /PRNewswire-FirstCall/ -- ORMAT Technologies, Inc. (NYSE:ORA) today announced financial results for the fourth quarter and full-year ended December 31, 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20040422/LATH066LOGO) For the year ended December 31, 2004, total revenues were $219.2 million as compared to $119.4 million in 2003, an increase of 83.5%. Electricity segment revenues for the year ended December 31, 2004 were $158.8 million, an increase of 104.3% as compared with 2003. Product segment revenues for the year were $60.4 million, an increase of 44.9% compared to 2003. Net income for the year ended December 31, 2004 was $17.8 million or $0.72 per share of common stock as compared with $15.5 million or $0.66 per share of common stock in 2003, an increase of 15.1% in net income. There were 31.6 million shares outstanding at December 31, 2004 and a weighted average number of 24.8 million in 2004 and 23.2 million in 2003. For the year ended December 31, 2004, the company's gross margin was 37.9% compared to 36.2% in 2003. Operating income for the year ended December 31, 2004 was $62.4 million as compared with $25.5 million in 2003, an increase of 145.0%. Adjusted EBITDA for the year ended December 31, 2004 was $109.6 million. Adjusted EBITDA includes operating income, depreciation and amortization totaling $14.6 million related to the company's unconsolidated investment interest of 50% in the Mammoth project in California and 80% in the Leyte project in the Philippines. The reconciliation of GAAP net income to Adjusted EBITDA is set forth below in this release. For the fourth quarter of 2004, total revenues were $56.2 million, a 59.0% increase from revenues of $35.4 million in the fourth quarter of 2003. This incorporates all power plants, including power plants that the company acquired. Net income for the fourth quarter was $4.7 million or $0.19 per share of common stock versus net income of $5.8 million, or $0.25 per share of common stock for the fourth quarter of 2003. The main reason for the decrease in net income for the fourth quarter of 2004 as compared to the fourth quarter of 2003 is the increase in interest expense. The weighted average number of shares outstanding was 25.0 million in the fourth quarter of 2004 and 23.2 million in the fourth quarter of 2003 As of December 31, 2004, the company had cash, cash equivalents and marketable securities of $125.9 million compared to $8.9 million as of December 31, 2003. Ormat's cash balance as of December 31, 2004 includes the net proceeds of approximately $97.0 million from the company's recent initial public offering on the New York Stock Exchange. The company announced that on March 22, 2005, its Board of Directors approved the payment of the company's first quarterly cash dividend of $0.03 per common share pursuant to the company's dividend policy which targets an annual payout ratio of at least 20% of the company's net income, subject to Board approval. The dividend will be paid on April 18, 2005 to shareholders of record as of the close of business on April 4, 2005. The company expects to pay the same dividend, of $0.03 per common share, in the next three quarters as well. Commenting on the results, Dita Bronicki, President and Chief Executive Officer of Ormat said, "2004 was a record year for Ormat. Not only did we complete our IPO on the New York Stock Exchange, but we also successfully executed on our business plan and growth strategy and saw our revenues and operating income reach their highest level in the company's history." "During 2004 we made three acquisitions: the Steamboat 2 and 3 projects in Nevada, the Steamboat Yankee geothermal project in Nevada and the Puna geothermal power plant in Hawaii. These projects have added 60 MW of generating capacity to our portfolio bringing our total net generating capacity to 302 MW. In addition, during 2004, we integrated our December 2003 acquisition of our Heber 1 and 2 projects as well as our 50% ownership interest in the Mammoth project, thereby increasing our portfolio capacity by 97 MW." Ms. Bronicki continued, "Ormat's growth strategy involves three components: completing projects currently under construction, continuing to develop new projects, and making acquisitions of either existing revenue generating projects or new resources. In addition, we see a significant market opportunity in recovered energy projects and over the coming years, we expect to grow in this new market by designing, manufacturing and selling recovered energy products." "During 2005, we look forward to the completion and commercial operation of the Steamboat/Galena, Heber and Puna projects which, together with Desert Peak 2 which we plan to complete also in 2005, will add 51 MW of capacity or 17% to our portfolio. As a result, we expect our 2005 revenue to be approximately $170 million in our electricity segment where quarterly revenues are seasonal in nature. We expect that an additional $18 million of revenues from electricity will be our share in revenues generated by subsidiaries accounted for by the equity method. While it is more difficult to predict our future revenues in our products segment, based on our current backlog, we expect our revenues from such segment in 2005 to be between $49 and $56 million." Ms. Bronicki concluded, "We believe that the increasing demand, government support worldwide for the development of clean renewable energy, and rising fuel prices will continue to drive the growth of geothermal and other renewable energy production. Given our current market position as one of the leading geothermal companies in the world, our technological expertise and our strong operational cash flow, we believe that Ormat presents a pure-play opportunity to participate in an environmentally-friendly sector of the power industry. We believe that Ormat is poised to grow in both the short and long term." 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. U.S. E.S.T. on Wednesday, March 23, 2005. The call will be available as a live, listen-only webcast at http://www.ormat.com/ or http://www.kcsa.com/. An archive of the webcast and conference call will be available approximately 2 hours after the conclusion of the live call. To listen to the replay, please call (877) 519-4471 in the United States and Canada and +1 (973) 341-3080 for all other international callers and utilize code 5764745. About Ormat Technologies Ormat Technologies, Inc. is a vertically integrated company primarily engaged in the geothermal and recovered energy power business. The company designs, develops, builds, owns and operates geothermal power plants and also designs, develops and builds and plans to own and operate recovered energy-based power plants. Additionally, the company designs, manufactures and sells geothermal and recovered energy power units and other power generating equipment and provides related services. Founded in 1994, the company currently has operations in the United States, Israel, Guatemala, Kenya, Nicaragua and the Philippines. 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 the company's plans, objectives and expectations for future operations and are based upon 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 the company's Prospectus filed with the Securities and Exchange Commission on November 12, 2004. An updated description of such risks and uncertainties will be included in the company's Annual Report on Form 10-K for the year ended December 31, 2004. 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. About non - GAAP financial measures This press release includes a financial measure defined as a non-GAAP financial measure by the Securities and Exchange Commission: adjusted EBITDA. This measure may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management of Ormat Technologies, Inc. believes that adjusted EBITDA provides meaningful supplemental information that both management and investors benefit in assessing Ormat Technologies' ability to service and/or incur debt. Ormat Technologies Contact: Investor Relations Contact: Dita Bronicki Jeff Corbin/Lee Roth CEO and President KCSA Worldwide +1-775-356-9029 212-896-1214/212-896-1209 / Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Statements of Operations For the three and twelve-months periods ended December 31, 2004 and 2003 (Dollars in thousands, except per share amounts) Three Months Ended December 31, Year Ended December 31, 2004 2003 2004 2003 Revenues: Electricity: Energy and capacity $17,900 $20,607 $100,281 $77,752 Lease portion of energy and capacity 21,913 -- 58,550 -- Total electricity 39,813 20,607 158,831 77,752 Products 16,428 14,759 60,399 41,688 Total revenues 56,241 35,366 219,230 119,440 Cost of revenues: Electricity: Energy and capacity 16,889 13,724 63,300 46,726 Lease portion of energy and capacity 7,178 -- 26,442 -- Total electricity 24,067 13,724 89,742 46,726 Products 12,306 10,215 46,336 29,494 Total cost of revenues 36,373 23,939 136,078 76,220 Gross margin 19,868 11,427 83,152 43,220 Operating expenses (income): Research and development expenses 622 195 2,175 1,391 Selling and marketing expenses 2,174 2,079 7,769 7,087 General and administrative expenses 3,614 3,567 11,609 9,252 Gain on sale of geothermal resource rights (845) -- (845) -- Operating income 14,303 5,586 62,444 25,490 Other income (expense): Interest income 821 91 1,316 607 Interest expense (11,573) (2,008) (42,785) (8,120) Foreign currency translation and transaction losses 443 (99) (146) (316) Other non-operating income (109) 138 112 464 Income from continuing operations before income taxes, minority interest, and equity in income of investees 3,885 3,708 20,941 18,125 Income tax provision (455) 1,801 (6,609) (2,506) Minority interest in earnings of subsidiaries -- 41 (108) (519) Equity in income of investees 1,319 265 3,567 559 Income before cumulative effect of change in accounting principle 4,749 5,815 17,791 15,659 Cumulative effect of change in accounting principle (net of tax benefit of $125,000) -- -- -- (205) Net income 4,749 5,815 17,791 15,454 Basic and diluted income per share: Income from continuing operations $0.19 $0.25 $0.72 $0.66 Weighted average number of shares outstanding 24,969 23,214 24,806 23,214 Ormat Technologies, Inc. and Subsidiaries Consolidated Balance Sheets As of December 31, 2004 and 2003 (Dollars in thousands, except per share amounts) December 31, 2004 2003 Assets Current assets: Cash and cash equivalents $36,750 $8,873 Marketable securities 89,166 -- Restricted cash, cash equivalents and marketable securities 3,676 16,371 Receivables: Trade 26,913 28,689 Related entities 2,413 1,939 Other 1,816 729 Inventories, net 6,046 3,712 Costs and estimated earnings in excess of billings on uncompleted contracts 3,164 1,922 Deferred income taxes 1,001 -- Prepaid expenses and other 2,377 2,091 Total current assets 173,322 64,326 Restricted cash and cash equivalents 19,339 -- Unconsolidated investments 48,818 46,760 Deposits and other 13,759 13,071 Deferred income taxes 3,044 -- Property, plant and equipment, net 466,826 344,015 Construction-in-process 60,177 35,118 Deferred financing costs, net 15,873 7,843 Intangible assets, net 48,930 32,005 Total assets $850,088 $543,138 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $37,565 $27,479 Billings in excess of costs and estimated earnings on uncompleted contracts 6,139 7,843 Current portion of long-term debt: Limited and non-recourse 8,295 15,686 Full recourse 24,361 10,490 Senior secured notes (non-recourse) 6,090 -- Due to Parent 40,531 151 Total current liabilities 122,981 61,649 Long-term debt, net of current portion: Limited and non-recourse 159,370 193,251 Full recourse 3,000 41,061 Senior secured notes (non-recourse) 183,399 -- Notes payable to Parent 171,809 177,004 Other liabilities 1,389 1,469 Deferred income taxes 18,368 13,886 Liabilities for severance pay 11,129 9,993 Asset retirement obligation 10,665 5,737 Total liabilities 682,110 504,050 Minority interest in net assets of subsidiaries 64 2,113 Commitments and contingencies Stockholders' equity: Common stock 31 23 Additional paid-in capital 124,008 7,002 Divisional deficit -- (11,263) Unearned stock-based compensation (244) (86) Retained earnings 44,441 41,299 Accumulated other comprehensive loss (322) -- Total stockholders' equity 167,914 36,975 Total liabilities and stockholders' equity $850,088 $543,138 Ormat Technologies, Inc. and Subsidiaries Reconciliation of adjusted EBITDA (Dollars in thousands) Reconciliation from net income to adjusted EBITDA: EBITDA represents net income before interest, taxes, depreciation and amortization and before equity in income of investee. Adjusted EBITDA includes operating income, depreciation and amortization of our equity investments in the Mammoth and Leyte projects. 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. EBITDA and adjusted EBITDA are not measurements of financial performance 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. The following table reconciles net income to EBITDA and adjusted EBITDA, for the year ended December 31, 2004: Year Ended December 31, 2004 Net Income $17,791 Adjusted for: Equity in income of investee (3,567) Financing expenses, net (including amortization of deferred financing costs) 41,615 Other non-operating income (112) Income tax provision 6,609 Minority interest in earnings of subsidiaries 108 Depreciation and amortization 32,591 ------ EBITDA 95,035 Equity in income of investee 2,897 Depreciation, amortization, interest and taxes attributable to our equity in Mammoth-Pacific L.P. and Ormat Leyte 11,698 ------ Adjusted EBITDA $109,630 http://www.newscom.com/cgi-bin/prnh/20040422/LATH066LOGO http://photoarchive.ap.org/ DATASOURCE: Ormat Technologies, Inc. CONTACT: Dita Bronicki, CEO and President of Ormat Technologies, Inc., +1-775-356-9029, ; or Investor Relations, Jeff Corbin, +1-212-896-1214, , or Lee Roth, +1-212-896-1209, , both of KCSA Worldwide, for Ormat Technologies, Inc. Web site: http://www.kcsa.com/ Web site: http://www.ormat.com/

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