Electricity revenues increased 14.7%
to $89.0 million Company raises revenue guidance for 2013
Ormat Technologies, Inc. (NYSE:ORA) today announced financial
results for the third quarter of 2013.
Quarterly financial highlights compared to the same
quarter last year:
- Electricity revenue increased by 14.7% to $89.0 million;
- Gross margin grew 75 basis points to 30.4%;
- Operating income reached $29.8 million compared to $12.1
million;
- Net income attributable to the Company's shareholders was $13.0
million or $0.28 per share (diluted), compared to a net loss of
$0.6 million or $0.01 per share (diluted);
- Adjusted EBITDA grew 25.0% to $60.3 million; and
- Declared dividend of $0.04 per share
Operational highlights and recent
developments:
- Increased electricity generation by 5.0% to 985,531 MWh, driven
by new capacity coming on line at Olkaria III Plant 2 in Kenya, and
increased generation at the McGuiness Hills plant;
- Successfully completed the world's largest binary geothermal
plant, the 100 MW Ngatamariki in New Zealand, under a $142.0
million EPC contract;
- Secured a 10-year Power Purchase Agreement (PPA) with the
Southern California Public Power Authority to supply power from the
Heber 1 geothermal plant in California beginning December 16, 2015.
The new PPA replaces the Standard Offer Contract No. 4 (SO#4),
which is tied to natural gas prices, with fixed-price contract at a
higher rate;
- Entered into a joint development agreement with eBay
to develop a 5 MW recovered energy generation power plant in Utah
to supply cleaner electricity to eBay's new data center; and
- Signed an agreement for a greenfield development of the Hu'u
Dompu geothermal prospect in Indonesia
Dita Bronicki, Chief Executive Officer of Ormat, stated: "During
the third quarter, we continued to deliver strong financial and
operational results. In the electricity segment, we benefitted from
the first full quarter of commercial operation of the Olkaria III
Plant 2 in Kenya, which helped drive a 5.0% increase in generation.
In addition, gross margin increased in the electricity segment to
31.1% due to the contribution of the new plants added to our
portfolio in the past two years and to our continued focus on
improving operational efficiencies at our existing plants. Looking
ahead, we are poised to continue these positive trends and we aim
to bring new capacity on line and replace legacy PPAs with more
favorable agreements."
"A substantial milestone in the product segment is the
completion of the 100MW Ngatamariki geothermal power plant. The
completion of the plant in less than 24 months from the award with
generation at 104% of its designed output is a further testament to
our execution capability and the suitability of our technology to
large geothermal facilities. Looking forward, our backlog remains
strong as we secured new orders in the third quarter 2013 and
stands at approximately $173.0 million with more than $120.0
million expected to be recognized in 2014."
Ms. Bronicki concluded, "We are raising our 2013 guidance and
expect total revenue to be between $525.0 million to $535.0 million
with electricity segment revenues to be approximately $330.0
million and product segment revenues to be between $195.0 million
and $205.0 million."
Financial Summary
For the three months ended September 30, 2013, total revenues
reached $130.7 million from $132.3 million in the third quarter of
2012, a decrease of 1.2%. Electricity revenues increased 14.7% to
$89.0 million from $77.6 million in the three months ended
September 30, 2012. Product revenues decreased 23.6% to $41.8
million from $54.7 million in the three months ended September 30,
2012.
Operating income for the three months ended September 30, 2013
was $29.8 million, compared to $12.1 million for the three months
ended September 30, 2012. Third quarter 2012 results included a
$7.3 million impairment loss related to the OREG 4 recovered energy
generation power plant.
For the three months ended September 30, 2013, the Company
reported net income attributable to the Company's shareholders of
$13.0 million or $0.28 per share (diluted) compared to net loss of
$0.6 million or $0.01 per share (diluted) for the three months
ended September 30, 2012.
Adjusted EBITDA for the three months ended September 30, 2013
was $60.3 million, compared to $48.2 million for the three months
ended September 30, 2012, an increase of 25.0%. The reconciliation
of GAAP net cash provided by (used in) operating activities and net
income to EBITDA and Adjusted EBITDA and additional cash flows
information is set forth below in this release.
Net cash provided by operating activities was $32.2 million in
the nine months ended September 30, 2013, compared to $62.4 million
in the nine months ended September 30, 2012.
On November 5, 2013, ORMAT's Board of Directors approved a
payment of a quarterly dividend of $0.04 per share pursuant to the
Company's dividend policy, which targets an annual payoff ratio of
at least 20% of the Company's net income. The dividend will be paid
on December 4, 2013 to shareholders of record as of closing of
business on November 20, 2013.
As of September 30, 2013 cash, cash equivalents were $35.4
million. In addition, as of September 30, 2013, the Company had
$145.2 million of unused corporate borrowing capacity under
existing lines of credit with different commercial banks.
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. EST on Wednesday, November 6, 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.
An archive of the webcast will be available approximately 10
minutes after the conclusion of the live call.
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
has over 500 employees in the United States and about 600 overseas.
Ormat's flexible, modular solutions for geothermal power and REG
are ideal for the vast range of resource characteristics. The
company has engineered, manufactured and constructed 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 595 MW (net) is spread
globally in the U.S., Guatemala and Kenya.
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.
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, Inc.
and Subsidiaries |
| Condensed Consolidated
Statements of Operations |
| For the Nine and
Three-Month Periods Ended September 30, 2013 and 2012 |
| (Unaudited) |
| |
|
|
|
|
| |
Three Months
Ended |
Nine Months
Ended |
| |
September 30 |
September 30 |
| |
2013 |
2012 |
2013 |
2012 |
| |
(In thousands,
except |
(In thousands,
except |
| |
per share
data) |
per share
data) |
| Revenues: |
|
|
|
|
| Electricity |
$88,994 |
$77,612 |
$245,005 |
$238,837 |
| Product |
41,755 |
54,685 |
157,329 |
149,616 |
| Total
revenues |
130,749 |
132,297 |
402,334 |
388,453 |
| Cost of revenues: |
|
|
|
|
| Electricity |
61,356 |
59,924 |
175,085 |
172,785 |
| Product |
29,637 |
42,130 |
110,335 |
108,575 |
| Total cost
of revenues |
90,993 |
102,054 |
285,420 |
281,360 |
| Gross
margin |
39,756 |
30,243 |
116,914 |
107,093 |
| Operating expenses: |
|
|
|
|
| Research and development
expenses |
838 |
1,436 |
3,446 |
3,948 |
| Selling and marketing
expenses |
2,575 |
3,346 |
17,861 |
12,752 |
| General and
administrative expenses |
6,546 |
6,132 |
20,264 |
20,163 |
| Impairment charge |
|
7,264 |
-- |
7,264 |
| Write-off of unsuccessful
exploration activities |
-- |
-- |
-- |
1,919 |
| Operating
income |
29,797 |
12,065 |
75,343 |
61,047 |
| Other income (expense): |
|
|
|
|
| Interest income |
742 |
280 |
870 |
1,004 |
| Interest expense,
net |
(18,459) |
(15,400) |
(51,826) |
(44,541) |
| Foreign currency
translation and transaction gains (losses) |
1,258 |
615 |
3,844 |
(1,127) |
| Income attributable to
sale of tax benefits |
5,027 |
2,311 |
14,342 |
7,417 |
| Other non-operating
expense, net |
137 |
215 |
1,583 |
344 |
| Income before
income taxes and equity in losses of investees |
18,502 |
86 |
44,156 |
24,144 |
| * Income tax provision |
(5,201) |
(1,088) |
(15,028) |
(10,148) |
| Equity in losses of investees, net |
(158) |
(1,245) |
(149) |
(1,542) |
| Income (loss) from
continuing operations |
13,143 |
(2,247) |
28,979 |
12,454 |
| Discontinued operations: |
|
|
|
|
| Income from discontinued
operations (including gain on disposal of $3,646, $0, $3,646
and $0, respectively) |
-- |
2,123 |
5,311 |
4,875 |
| Income tax provision |
-- |
(391) |
(614) |
(1,097) |
| Total income from
discontinued operations |
-- |
1,732 |
4,697 |
3,778 |
| |
|
|
|
|
| * Net
income (loss) |
13,143 |
(515) |
33,676 |
16,232 |
| Net income
attributable to noncontrolling interest |
(193) |
(67) |
(600) |
(278) |
| Net
income (loss) attributable to the Company's stockholders |
$12,950 |
$(582) |
$33,076 |
$15,954 |
| |
|
|
|
|
| Earnings (loss) per share attributable
to the Company's stockholders: |
|
|
|
|
| Basic: |
|
|
|
|
| Income (loss) from
continuing operations |
$0.29 |
$(0.05) |
$0.62 |
$0.27 |
| Discontinued
operations |
-- |
0.04 |
0.10 |
0.08 |
| Net Income (loss) |
$0.29 |
$(0.01) |
$0.72 |
$0.35 |
| |
|
|
|
|
| Diluted: |
|
|
|
|
| Income (loss) from
continuing operations |
$0.28 |
$(0.05) |
$0.62 |
$0.27 |
| Discontinued
operations |
-- |
0.04 |
0.10 |
0.08 |
| Net Income (loss) |
$0.28 |
$(0.01) |
$0.72 |
$0.35 |
| |
|
|
|
|
| Weighted average number of shares used
in computation of earnings per share attributable to the Company's
stockholders: |
|
|
|
|
| Basic |
45,438 |
45,431 |
45,433 |
45,431 |
| Diluted |
45,494 |
45,431 |
45,454 |
45,438 |
| * The "income tax provision" for the nine
months ended September 30 2013 includes a correction of $3.1
million (increase) for the three-month period ended March 31, 2013
previously reported by the Company, and a corresponding reduction
in net income. |
| |
| Ormat Technologies, Inc.
and Subsidiaries |
| Condensed Consolidated
Balance Sheets |
| As of September 30, 2013
and December 31, 2012 |
| (Unaudited) |
| |
|
|
| |
September
30, |
December
31, |
| |
2013 |
2012 |
| |
|
As
Revised |
| |
(In
thousands) |
|
ASSETS |
| Current assets: |
|
|
| Cash and cash
equivalents |
$ 35,435 |
$ 66,628 |
| Short-term bank deposit |
-- |
3,010 |
| Restricted cash, cash
equivalents and marketable securities |
84,197 |
76,537 |
| Receivables: |
|
|
| Trade |
60,526 |
55,680 |
| Related
entity |
442 |
373 |
| Other |
24,643 |
8,632 |
| Due from Parent |
373 |
311 |
| Inventories |
20,396 |
20,669 |
| Costs and estimated
earnings in excess of billings on uncompleted contracts |
36,201 |
9,613 |
| Deferred income
taxes |
162 |
637 |
| Prepaid expenses and
other |
36,724 |
34,144 |
| Total
current assets |
299,099 |
276,234 |
| Unconsolidated investments |
5,419 |
2,591 |
| Deposits and other |
31,110 |
36,187 |
| Deferred income taxes |
15,966 |
21,283 |
| Deferred charges |
34,635 |
35,351 |
| Property, plant and equipment, net |
1,383,353 |
1,252,873 |
| Construction-in-process |
335,915 |
396,141 |
| Deferred financing and lease costs, net |
29,806 |
31,371 |
| Intangible assets, net |
33,032 |
35,492 |
| Total assets |
$ 2,168,335 |
$ 2,087,523 |
| LIABILITIES AND
EQUITY |
| Current liabilities: |
|
|
| Accounts payable and
accrued expenses |
$ 83,751 |
$ 98,001 |
| Deferred income
taxes |
20,428 |
20,392 |
| Billings in excess of
costs and estimated earnings on uncompleted contracts |
12,708 |
25,408 |
| Current portion of
long-term debt: |
|
|
| Limited and
non-recourse: |
|
|
|
Senior secured notes |
30,059 |
28,231 |
|
Other loans |
18,288 |
11,453 |
| Full recourse |
28,875 |
28,649 |
| Total
current liabilities |
194,109 |
212,134 |
| Long-term debt, net of current portion: |
|
|
| Limited and
non-recourse: |
|
|
| Senior
secured notes |
286,786 |
312,926 |
| Other
loans |
272,710 |
242,815 |
| Full recourse: |
|
|
| Senior
unsecured bonds |
250,674 |
250,904 |
| Other
loans |
64,414 |
82,344 |
| Revolving credit lines
with banks (full recourse) |
123,288 |
73,606 |
| Liability associated with sale of tax
benefits |
65,402 |
51,126 |
| Deferred lease income |
64,217 |
66,398 |
| Deferred income taxes |
52,233 |
45,059 |
| Liability for unrecognized tax benefits |
8,878 |
7,280 |
| Liabilities for severance pay |
23,642 |
22,887 |
| Asset retirement obligation |
20,436 |
19,289 |
| Other long-term liabilities |
4,576 |
5,148 |
| Total liabilities |
1,431,365 |
1,391,916 |
| |
|
|
| Equity: |
|
|
| The Company's
stockholders' equity: |
|
|
| Common
stock |
46 |
46 |
| Additional
paid-in capital |
737,125 |
732,140 |
| Retained
earnings |
(13,066) |
(44,326) |
| Accumulated
other comprehensive income |
527 |
651 |
| |
724,632 |
688,511 |
| Noncontrolling
interest |
12,338 |
7,096 |
| Total
equity |
736,970 |
695,607 |
| Total
liabilities and equity |
$ 2,168,335 |
$ 2,087,523 |
| |
| |
| Ormat Technologies, Inc. and
Subsidiaries |
| Reconciliation of EBITDA, Adjusted
EBITDA and Additional Cash Flows Information |
| For the Nine and Three-Month Periods
Ended September 30, 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 tables reconcile net cash provided by (used in)
operating activities and net income to EBITDA and Adjusted EBITDA
for the nine and three-month periods ended September 30, 2013 and
2012:
| |
Three Months Ended September 30 |
Nine Months Ended September 30 |
| |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
| |
(in
thousands) |
(in
thousands) |
| Net cash provided by (used in) operating
activities |
$ 12,276 |
$ (9,695) |
$ 32,226 |
$ 62,384 |
| Adjusted for: |
|
|
|
|
| Interest expense, net (excluding amortization
of deferred financing costs) |
17,405 |
14,202 |
47,367 |
40,931 |
| Interest income |
(742) |
(280) |
(870) |
(1,004) |
| Income tax provision |
5,201 |
1,479 |
15,642 |
11,245 |
| Adjustments to reconcile net income or loss
to net cash provided by operating activities
(excluding depreciation and amortization) |
26,115 |
35,236 |
72,361 |
29,661 |
| EBITDA |
$ 60,255 |
$ 40,942 |
$ 166,726 |
$ 143,217 |
| |
|
|
|
|
| Impairment charge |
-- |
7,264 |
-- |
7,264 |
| Termination fee |
-- |
-- |
8,979 |
-- |
| Adjusted EBITDA |
$ 60,255 |
$ 48,206 |
$ 175,705 |
$ 150,481 |
| Net cash provided by (used in) investing
activities |
$ (25,029) |
$ 13,417 |
$ (128,198) |
$ (53,611) |
| Net cash provided by (used in) financing
activities |
$ 19,295 |
$ (32,882) |
$ 64,779 |
$ (71,135) |
| |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended September 30 |
Nine Months Ended September 30 |
| |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
| |
(in
thousands) |
(in
thousands) |
| Net income (loss) |
$ 13,143 |
$ (515) |
$ 33,676 |
$ 16,232 |
| Adjusted for: |
|
|
|
|
| Interest expense, net (including amortization
of deferred financing costs) |
17,717 |
15,120 |
50,956 |
43,537 |
| Income tax provision |
5,201 |
1,479 |
15,642 |
11,245 |
| Depreciation and amortization |
24,194 |
24,858 |
66,452 |
72,203 |
| EBITDA |
$ 60,255 |
$ 40,942 |
$ 166,726 |
$ 143,217 |
| |
|
|
|
|
| Impairment charge |
-- |
7,264 |
-- |
7,264 |
| Termination fee |
-- |
-- |
8,979 |
-- |
| Adjusted EBITDA |
$ 60,255 |
$ 48,206 |
$ 175,705 |
$ 150,481 |
| |
|
|
|
|
CONTACT: Ormat Technologies Contact:
Dita Bronicki
CEO
775-356-9029
dbronicki@ormat.com
Investor Relations Contact:
Todd Fromer/Rob Fink
KCSA Strategic Communications
212-896-1215 (Todd) /212-896-1206 (Rob)
tfromer@kcsa.com / rfink@kcsa.com
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