ORA Ormat Technologies Inc

Ormat Technologies, Inc. Reports First Quarter 2005 Results Revenues of $53.9 Million for the Quarter Ended March 31, 2005 Net Income of $0.12 Per Share SPARKS, Nev., May 11 /PRNewswire-FirstCall/ -- ORMAT Technologies, Inc. (NYSE:ORA) today announced financial results for the first quarter ended March 31, 2005. For the quarter, total revenues were $53.9 million as compared to $47.6 million for the same period in 2004, an increase of 13.2%. (Logo: http://www.newscom.com/cgi-bin/prnh/20040422/LATH066LOGO ) Electricity segment revenues for the quarter were $40.5 million, an increase of 20.9% as compared to $33.5 million during the same period in 2004. This increase is primarily attributable to revenues from the Steamboat 2/3 project, which was acquired on February 13, 2004, the Steamboat Hills project and the Puna project, which were acquired during the second quarter of 2004. Product segment revenues for the quarter were $13.4 million compared to $14.1 million during the same period in 2004. This decrease reflects fluctuation of the revenues generated from our Products Segment. Net income for the quarter ended March 31, 2005 was $3.9 million or $0.12 per share of common stock as compared with $2.7 million or $0.12 per share of common stock during the same period in 2004. There were 31.6 million weighted average shares outstanding during the first quarter in 2005 and 23.2 million during the same period in 2004. For the quarter ended March 31, 2005, the Company's gross margin was 36.4% compared to 35.5% during the same period in 2004. Operating income for the quarter ended March 31, 2005 was $13.4 million as compared with $12.4 million for the same period in 2004, an increase of 8.0%. Adjusted EBITDA for the first quarter 2005 was $26.3 million. Adjusted EBITDA includes operating income, depreciation and amortization totaling $4.0 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. As of March 31, 2005, the Company had cash, cash equivalents and marketable securities of $73.5 million compared to $125.9 million as of December 31, 2004. The decrease in the Company's cash position was principally due to the repayment of long-term debt and capital expenditures. On May 10, 2005, Ormat's Board of Directors approved the payment of a 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 June 6, 2005 to shareholders of record as of the close of business on May 23, 2005. The Company expects to pay the same dividend, of $0.03 per common share, in the next two quarters as well. Commenting on the results, Dita Bronicki, President and Chief Executive Officer of Ormat said, "During the first quarter we continued to successfully implement our growth strategy, which is reflected by a number of large product orders and commitments. We also made significant progress towards the completion of our projects under construction and enhancement. "We entered into a $25 million contract for the supply of equipment and its construction for a new geothermal power plant on Sao Miguel Island in the Azores. The construction of this plant, our third on the island, characterizes the growing demand for the development of cost-effective, clean and renewable energy sources." With regard to the Company's electricity segment business, Ms. Bronicki said, "We recently started site construction on two geothermal power plants -- the Galena plant which is expected to be complete during the fourth quarter of 2005 and will add 13MW of electricity to our generating portfolio; and the Heber plant which we expect will be complete by the end of 2005 and will add 18MW of electricity." She continued, "We are very excited by the number of successes that we saw in the area of recovered energy which is electricity generated from residual heat from compressor stations along natural gas pipelines. We believe this represents a significant opportunity for the future growth of Ormat. A utility in the Northwestern United States signed a letter of intent to acquire an ORMAT Recovered Energy Generation System facility for approximately $13 million. Separately, we entered into a 25-year Power Purchase Agreement with Basin Electric to supply approximately 22 MW from recovered energy generation power plants. We expect that recovered energy will become an increasingly important component of our activity in both our Electricity and Products segments, allowing Ormat and our prospective customers to benefit from the production of electricity from recovered energy." Commenting on the outlook for 2005, Ms. Bronicki said, "Ormat is in a solid position both with regard to our product backlog and projects under construction. Accordingly, we continue to expect that our 2005 revenues will 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. With regard to our products segment, we currently expect our revenues for 2005 to be between $53 and $60 million." Ms. Bronicki concluded, "As we have seen during the first quarter and to date, Ormat is succeeding in taking advantage of the worldwide opportunity that exists for geothermal and recovered energy. Given Ormat's position as the only pure-play geothermal energy company that provides both, products and electricity as well as our strong financial standing, we are confident in our ability to grow our Company." 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.D.T. on Wednesday, May 11, 2005. The call will be available as a live, listen-only webcast at http://www.ormat.com/ and 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 international callers and utilize code 5993976. 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. It 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. Ormat products and systems are covered by more than 70 patents. Ormat currently has operations in the United States, Israel, the Philippines, Guatemala, Kenya, and Nicaragua. 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 10-KA filed with the Securities and Exchange Commission on April 12, 2005. 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/Todd Fromer CEO and President KCSA Worldwide +1-775-356-9029 212-896-1214/212-896-1215 / Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Statements of Operations Data (Unaudited) Three Months Ended March 31, 2005 2004 (in thousands, except per share amounts) Revenues: Electricity: Energy and capacity $24,509 $23,366 Lease portion of energy and capacity 15,943 10,093 Total electricity 40,452 33,459 Products 13,444 14,146 Total revenues 53,896 47,605 Cost of revenues: Electricity: Energy and capacity 16,273 14,577 Lease portion of energy and capacity 7,339 4,813 Total electricity 23,612 19,390 Products Total cost of revenues 34,295 30,718 Gross margin 19,601 16,887 Operating expenses: Research and development expenses 380 302 Selling and marketing expenses 2,208 1,854 General and administrative expenses 3,627 2,332 Operating income 13,386 12,399 Other income (expense): Interest income 810 244 Interest expense (10,298) (8,523) Foreign currency translation and transaction losses (83) (321) Other non-operating income (expense) 40 (24) Income before income taxes, minority interest, and equity in income of investees 3,855 3,775 Income tax provision (1,480) (1,479) Minority interest in earnings of subsidiaries -- (108) Equity in income of investees 1,533 549 Net income $3,908 $2,737 Basic and diluted income per share: Net income $0.12 $0.12 Weighted average number of shares outstanding 31,563 23,214 Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Balance Sheet Data March 31, December 31, 2005 2004 (Unaudited) (in thousands, except share and per share amounts) Assets Current assets: Cash and cash equivalents $44,447 $36,750 Marketable securities 29,045 89,166 Restricted cash, cash equivalents and marketable securities 21,768 3,676 Receivables: Trade 29,450 26,913 Related entities 2,539 2,413 Other 3,092 1,816 Inventories, net 6,521 6,046 Costs and estimated earnings in excess of billings on uncompleted contracts 5,320 3,164 Deferred income taxes 1,043 1,001 Prepaid expenses and other 1,756 2,377 Total current assets 144,981 173,322 Restricted cash, cash equivalents and marketable securities 12,374 19,339 Unconsolidated investments 50,018 48,818 Deposits and other 13,543 13,759 Deferred income taxes 3,888 3,044 Property, plant and equipment, net 457,790 466,826 Construction-in-process 80,308 60,177 Deferred financing costs, net 17,240 15,873 Intangible assets, net 48,253 48,930 Total assets $828,395 $850,088 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable and accrued expenses $51,183 $37,565 Billings in excess of costs and estimated earnings on uncompleted contracts 6,076 6,139 Current portion of long-term debt: Limited and non-recourse 9,840 8,295 Full recourse 1,021 24,361 Senior secured notes (non-recourse) 6,090 6,090 Due to Parent, including current portion of notes payable to Parent 31,094 40,531 Total current liabilities 105,304 122,981 Long-term debt, net of current portion: Limited and non-recourse 157,103 159,370 Full recourse 3,000 3,000 Senior secured notes (non-recourse) 183,399 183,399 Notes payable to Parent, net of current portion 164,809 171,809 Other liabilities 1,369 1,389 Deferred income taxes 19,759 18,368 Liabilities for severance pay 11,519 11,129 Asset retirement obligation 10,853 10,665 Total liabilities 657,115 682,110 Minority interest in net assets of subsidiaries 64 64 Commitments and contingencies Stockholders' equity: Common stock, par value $0.001 per share; 200,000,000 shares authorized; 31,562,495 shares issued and outstanding 31 31 Additional paid-in capital 124,008 124,008 Unearned stock-based compensation (219) (244) Retained earnings 47,402 44,441 Accumulated other comprehensive loss (6) (322) Total stockholders' equity 171,216 167,914 Total liabilities and stockholders' equity $828,395 $850,088 Ormat Technologies, Inc. and Subsidiaries Reconciliation of adjusted EBITDA (Dollars in thousands) (Unaudited) Reconciliation from net income to adjusted EBITDA: EBITDA represents net income before interest, taxes, depreciation and amortization. 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 three months ended March 31, 2005: Three months ended March 31, 2005 Net income $3,908 Adjusted for: Equity in income of investee (1,533) Financing expenses, net (including amortization of deferred financing costs) 9,571 Other non-operating income (40) Income tax provision 1,480 Minority interest in earnings of subsidiaries 0 Depreciation and amortization 8,955 EBITDA 22,341 Equity in income of investees 1,325 Depreciation, amortization, interest and taxes attributable to our equity in Mammoth-Pacific L.P. and Ormat Leyte 2,668 Adjusted EBITDA 26,334 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, +1-775-356-9029, ; or Investor Relations, Jeff Corbin, +1-212-896-1214, , or Todd Fromer, +1-212-896-1215, , both of KCSA Worldwide, for Ormat Technologies, Inc. Web site: http://www.ormat.com/

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