ORA Ormat Technologies Inc

Record Revenues of $268.9 Million for the Year Ended 2006, Up 13% Over 2005; RENO, Nev., Feb. 27 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. (NYSE:ORA) today announced financial results for the fourth quarter and full year ended December 31, 2006. (Logo: http://www.newscom.com/cgi-bin/prnh/20040422/LATH066LOGO ) Annual Results For the year ended December 31, 2006, total revenues were $268.9 million, a 13.0% increase over total revenues of $238.0 million for the year ended December 31, 2005. Net income for the year ended December 31, 2006 rose to $34.4 million compared with $15.2 million for the year ended December 31, 2005. Dita Bronicki, President and Chief Executive Officer of Ormat, commented: "Our results for 2006 reflect strong growth in both our Products and Electricity Segments as we continue to execute on our business strategy. In 2006, we demonstrated our ability to provide viable solutions in both renewable power, through our geothermal projects, and energy efficiency, through Recovered Energy Generation (REG), a marketplace that we have identified as an additional growth opportunity going forward." Electricity Segment revenues for the year ended December 31, 2006 were $195.5 million, an increase of 10.2% as compared to $177.4 million for the year ended December 31, 2005. Products Segment revenues for the year ended December 31, 2006 were $73.5 million, an increase of 21.2% as compared to $60.6 million for the year ended December 31, 2005. Net income for the year ended December 31, 2006 was $34.4 million ($1.00 per share of common stock - basic; $0.99 - diluted) compared with net income of $15.2 million ($0.48 per share of common stock basic and diluted) for the year ended December 31, 2005, after giving effect to a non-recurring, after-tax charge of $10.3 million relating to the refinancing of the debt relating to the Heber Projects. Net income for the year ended December 31, 2005 was $25.5 million ($0.81 per share of common stock - basic and diluted), excluding the effect of that charge. Net income for the year ended December 31, 2006 includes compensation expenses of $1.6 million, or $0.04 per share of common stock, as a result of our adoption of Statement of Financial Accounting Standards No. 123R. There were 34.7 million and 31.6 million weighted average shares used in the computation of diluted earnings per share in the year ended December 31, 2006 and 2005, respectively. For the year ended December 31, 2006, the Company's gross margin was 34.7% compared to 37.5% for the year ended December 31, 2005. Operating income for the year ended December 31, 2006 was $61.9 million as compared with $63.9 million for the year ended December 31, 2005, a decrease of 3.1%. The reduction in operating income is primarily attributable to unexpected operational issues experienced at some of our power plants, such as the Puna project (which restored its output to 30 MW in the first quarter of 2007) and a delay in the commercial operation of the Desert Peak 2 project. Adjusted EBITDA for the year ended December 31, 2006 was $119.8 million as compared with $114.3 million for the year ended December 31, 2005. Adjusted EBITDA includes operating income and depreciation and amortization totaling $16.0 million and $16.4 million for the years ended December 31, 2006 and 2005, respectively, 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. As of December 31, 2006, the Company had cash, cash equivalents and marketable securities of $116.7 million compared to $70.5 million as of December 31, 2005. The increase in the Company's cash position was due primarily to the combination of the $135.1 million net proceeds from the follow-on offering in April 2006 and the $92.4 million net proceeds from the sale of shares to Lehman Brothers in a block trade in December 2006. During the year ended December 31, 2006, the Company used a substantial amount of its cash resources to fund capital expenditures and acquisitions, and to repay long-term debt. Ms. Bronicki continued: "Looking back on last year, which was a good year for Ormat, we added approximately 51 megawatts to our project portfolio. These additional megawatts include capacity from the first Ormat owned Recovered Energy Generation (REG) project -- the 22 MW OREG 1 Project, which began commercial operation in the fourth quarter of 2006." "Sales in our Product Segment were strong as we received several orders for our Ormat Energy Converters for use in geothermal and recovered energy generation power plants, as well as for our turnkey geothermal solutions. What is especially notable about this increase is that several of these orders were from repeat customers, which we believe speaks well of the quality of our technology and our ability to deliver." "We remain focused on profitable growth, and, as such, we continued to make the investments required to achieve this goal in the years to come. During the year, we increased our inventory of development leases in California, Nevada and Texas. We also signed three new long-term power purchase agreements and an option on others for a total of 80 MW to 100 MW of capacity." Commenting on the outlook for 2007, Ms. Bronicki said, "We are pleased with our achievements in 2006 and we believe in the long-term promise of renewable energy and our ability to increase our participation in this sector. During the first quarter of 2007, projects with a capacity of 57 MW have completed construction and are in start up and testing phases, and we expect them to reach commercial operation during the first half of 2007. We expect our 2007 Electricity Segment revenues to be approximately $220 million based on today's oil prices. We also expect an additional $18 million of revenues from our share of electricity revenue generated by subsidiaries, which are accounted for under the equity method. With regard to our Products Segment, we currently expect that our 2007 revenues will be between $65 million and $72 million." Fourth Quarter Results For the fourth quarter of 2006, total revenues were $66.7 million as compared to $58.8 million for the same period in 2005, an increase of 13.4%. Electricity Segment revenues for the quarter were $46.6 million, an increase of 8.0% as compared to $43.1 million during the same period in 2005. Products Segment revenues for the quarter were $20.1 million, an increase of 28.5% as compared to $15.6 million for the same period in 2005. Net income for the quarter ended December 31, 2006 was $4.2 million, or $0.12 per share of common stock (basic and diluted), including compensation expenses of $0.5 million, or $0.01 per share of common stock (basic and diluted). The net loss for the fourth quarter of 2005 was $5.1 million or $0.16 per share of common stock (basic and diluted), which includes the aforementioned non-recurring, after-tax charge relating to the refinancing of the Beal Bank debt relating to the Heber Projects. There were 36.2 million and 31.6 million weighted average shares used in the computation of diluted earnings per share in the quarters ended December 31, 2006 and 2005, respectively. On February 27, 2007, Ormat's Board of Directors approved the payment of a quarterly cash dividend of $0.07 per 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 March 29, 2007 to shareholders of record as of the close of business on March 21, 2007. The Company expects to pay a dividend of $0.05 per share in the next three quarters. Conference Call Details Ormat will host a conference call to discuss its financial results and other matters discussed in this press release at 10:00 a.m. U.S. E.S.T. on Wednesday, February 28, 2007. The call will be available as a live, listen-only webcast at http://www.ormat.com/. A 30-day archive of the webcast will be available approximately 2 hours after the conclusion of the live call. To listen to a replay, please call 1-877-519-4471 in the United States and Canada and 1-973-341-3080 for international callers and utilize code 8391719. 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. Ormat is a pioneer in Organic Rankine Cycle (ORC) technology and a leader in the manufacture of ORC power equipment. It also designs, develops and builds, and owns and operates, 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 approximately 70 patents. Ormat currently operates the following geothermal power plants: in the United States -- Brady, Heber, Mammoth, Ormesa, Puna and Steamboat; in the Philippines -- Leyte; in Guatemala -- Zunil; in Kenya -- Olkaria; and in Nicaragua -- Momotombo. In the U.S., Ormat owns and operates four OREG1 Recovered Energy Generation plants. 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 28, 2006 and the Prospectus Supplements filed with the Securities and Exchange Commission on April 5 and December 14, 2006. 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 / Marybeth Csaby CEO and President KCSA Worldwide +1-775-356-9029 212-896-1215 / 212-896-1236 / Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Statements of Operations For the three and twelve-months periods Ended December 31, 2006 and 2005 (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 (in thousands, except per share amounts) Revenues: Electricity $46,581 $43,138 $195,483 $177,369 Products 20,101 15,643 73,454 60,623 Total revenues 66,682 58,781 268,937 237,992 Cost of revenues: Electricity 34,234 26,357 124,356 103,615 Products 17,946 11,053 51,215 45,236 Total cost of revenues 52,180 37,410 175,571 148,851 Gross margin 14,502 21,371 93,366 89,141 Operating expenses: Research and development expenses 494 1,165 2,983 3,036 Selling and marketing expenses 2,430 2,083 10,361 7,876 General and administrative expenses 4,736 4,330 18,094 14,320 Gain on sale of geothermal resource rights -- -- -- -- Operating income 6,842 13,793 61,928 63,909 Other income (expense): Interest income 1,655 1,053 6,560 4,308 Interest expense (7,420) (26,506) (30,961) (55,317) Foreign currency translation and transaction losses 306 (374) (704) (439) Other non-operating income 322 347 694 512 Income (loss) before income taxes, minority interest, and equity in income of investees 1,705 (11,687) 37,517 12,973 Income tax (provision) benefit 2,009 4,921 (6,403) (4,690) Minority interest in earnings of subsidiaries -- -- (813) -- Equity in income of investees 507 1,623 4,146 6,894 Net income (loss) $4,221 $(5,143) $34,447 $15,177 Earnings (loss) per share: Basic $0.12 $(0.16) $1.00 $0.48 Diluted $0.12 $(0.16) $0.99 $0.48 Weighted average number of shares used in computation of earnings per share: Basic 36,056 31,563 34,593 31,563 Diluted 36,175 31,563 34,707 31,609 Ormat Technologies, Inc. and Subsidiaries Consolidated Balance Sheets As of December 31, 2006 and December 31, 2005 December 31, 2006 2005 (in thousands) Assets Current assets: Cash and cash equivalents $20,254 $26,976 Marketable securities 96,486 43,560 Restricted cash, cash equivalents and marketable securities 56,425 36,732 Receivables: Trade 36,463 33,515 Related entities 879 524 Other 5,277 2,629 Due to Parent 1,459 -- Inventories, net 7,403 5,224 Costs and estimated earnings in excess of billings on uncompleted contracts 11,216 8,883 Deferred income taxes 1,819 1,663 Prepaid expenses and other 4,911 3,256 Total current assets 242,592 162,962 Unconsolidated investments 37,207 47,235 Deposits and other 15,081 13,489 Deferred income taxes 6,172 5,376 Property, plant and equipment, net 624,089 491,835 Construction-in-process 169,075 128,256 Deferred financing and lease costs, net 15,800 17,412 Intangible assets, net 50,086 47,915 Total assets $1,160,102 $914,480 Liabilities and Stockholders' Equity Current liabilities: Short-term bank credit $-- $3,996 Accounts payable and accrued expenses 70,445 50,048 Billings in excess of costs and estimated earnings on uncompleted contracts 5,803 12,657 Current portion of long-term debt: Limited and non-recourse 8,482 2,888 Full recourse 1,000 1,000 Senior secured notes (non-recourse) 40,054 23,754 Due to Parent, including current portion of notes payable to Parent 82,379 32,003 Total current liabilities 208,163 126,346 Long-term debt, net of current portion: Limited and non-recourse 22,157 11,252 Full recourse 1,000 2,000 Senior secured notes (non-recourse) 299,316 324,645 Notes payable to Parent, net of current portion 57,841 140,162 Other liabilities -- 1,309 Deferred lease income 78,883 81,569 Deferred income taxes 21,674 22,004 Liabilities for severance pay 13,378 11,409 Asset retirement obligation 16,832 11,461 Total liabilities 719,244 732,157 Minority interest in net assets of subsidiaries 64 64 Commitments and contingencies (Notes 5, 6 and 10) Stockholders' equity: Common stock, par value $0.001 per share; 200,000,000 shares authorized; 35,587,496 and 31,562,496 shares issued and outstanding, respectively 38 31 Additional paid-in capital 353,399 124,008 Unearned stock-based compensation -- (153) Retained earnings 85,053 55,824 Accumulated other comprehensive income 2,304 2,549 Total stockholders' equity 440,794 182,259 Total liabilities and stockholders' equity $1,160,102 $914,480 Ormat Technologies, Inc. and Subsidiaries Reconciliation of Adjusted EBITDA (Dollars in thousands) (Unaudited) We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate adjusted EBITDA to include operating income, depreciation and amortization of our equity investments in the Mammoth and Leyte Projects. 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. 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 income to EBITDA and adjusted EBITDA, for the three and twelve-month periods ended December 31, 2006 and 2005: Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 (in thousands) (in thousands) Net income $4,221 $(5,143) $34,447 $15,177 Adjusted for: Equity in income of investees (507) (1,623) (4,146) (6,894) Minority interest in earnings of subsidiaries -- -- 813 -- Interest expense, net (including amortization of deferred financing costs) 5,765 25,453 24,401 51,009 Other non-operating income (628) 27 10 (73) Income tax provision (2,009) (4,921) 6,403 4,690 Depreciation and amortization 11,302 8,164 41,822 34,025 EBITDA 18,144 21,957 103,750 97,934 Equity in income of Mammoth-Pacific L.P. and Ormat Leyte 507 1,844 4,420 6,478 Depreciation, amortization, interest and taxes attributable to the Company's equity in Mammoth-Pacific L.P. and Ormat Leyte 3,881 1,494 11,625 9,922 Adjusted EBITDA $22,532 $25,295 $119,795 $114,334 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, Inc., +1-775-356-9029, ; or Investor Relations, Todd Fromer, +1-212-896-1215, , or Marybeth Csaby, +1-212-896-1236, , both of KCSA Worldwide, for Ormat Technologies, Inc. Web site: http://www.ormat.com/

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