Net Income Attributable to Company's Shareholders
of $0.91 Per Share for the Full Year Record Adjusted EBITDA Reached
$227M
Ormat Technologies, Inc. (NYSE:ORA) today announced financial
results for the fourth quarter and full year ended December 31,
2013.
Highlights for the year and recent
developments:
- Total revenues for the year increased 6.3% to $533.2
million;
- Record revenues in the product segment: 8.9% increase to $203.5
million;
- Record adjusted EBITDA for the year: 22.3% increase to $227.1
million; Fourth quarter adjusted EBITDA increased 45.8% to $51.4
million
- Gross margin increased from 25.7% to 30.0%;
- Electricity generation increased 7.9% to 4.3 million MWh,
driven by contributions from Olkaria III Plant 2, McGinness Hills,
Jersey Valley and Tuscarora;
- Net income attributable to the company's shareholders of $41.2
million or $0.91 per share;
- Declared dividend of $0.06 per share for fourth quarter
2013;
- Completed 58 MW expansion of the Olkaria III geothermal complex
in Kenya bringing the complex's total generating capacity to 110
MW;
- Completed the 16 MW Don A. Campbell geothermal power plant in
Nevada;
- Completed the acquisition of the Platanares project in Honduras
and released McGinness Hills phase 2 for construction; and,
- Secured Purchase Agreements (PPAs) for Heber 1 in California
and for Mammoth G1 and G3 to replace the Standard Offer Contract
No. 4 (SO#4), which are tied to natural gas prices, with
fixed-price contracts;
Dita Bronicki, chief executive officer of Ormat, stated: "We are
very pleased to deliver strong financial results marking our return
to earnings growth while making significant progress developing a
geographically balanced portfolio of geothermal projects. During
2013 and early 2014, we added 70 MW of new generating capacity from
three new geothermal power plants bringing our total portfolio to
626 MW.
"In the product segment, we've received a robust flow of orders
for our unique power solutions resulting in record revenues of
$203.5 million. During 2013 and the first part of 2014, we
successfully completed nine power plants with approximately 270 MW
of gross generating capacity. The plants, which we completed for
our clients and for our own portfolio, significantly contributed to
the growth of the geothermal industry. Our strength in the market
and appetite for continued growth will continue to support our
backlog currently standing at $165.0 million, excluding the Sarulla
project supply contract. With growing demand for geothermal energy
across the globe and financial incentives in place to foster its
development, we continue to be optimistic about Ormat's future
growth."
Bronicki added, "We expect our 2014 electricity revenues to be
between $370 million and $380 million and our product segment
revenues to be between $170 million and $180 million, including $36
million revenue from the Sarulla project."
Financial Summary
Annual Results
For the year ended December 31, 2013, total revenues increased
6.3% from $501.8 million in 2012 to $533.2 million in 2013. Product
revenues increased 8.9% to $203.5 million, up from $186.9 million
in the year ended December 31, 2012. The increase in product
revenues reflects the increase in new customer orders that we
secured in 2012 and 2013. Electricity revenues increased 4.7% from
$314.9 million in 2012 to $329.7 in 2013. The increase in
electricity revenues was primarily due to a revenue contribution of
$37.3 million from Olkaira III Plant 2, McGinness Hills and
Tuscarora. The increase was offset by an $11.0 million decrease
resulting from the natural gas prices; a $2.8 million mark to
market loss compared to a $2.3 million mark to market gain on
derivative contracts on oil and natural gas prices; reduced
generation in some power plants; and a reduction in energy rates at
Puna and Amatitlan power plants.
Operating income for the year ended December 31, 2013 was $97.0
million, compared to an operating loss of $159.9 million for the
year ended December 31, 2012.
For the year ended December 31, 2013, the company reported net
income attributable to the company's shareholders of $41.2 million
or $0.91 per share compared to net loss of $213.0 million or $4.69
per share which included an impairment charge of $236.4 million for
the year ended December 31, 2012.
Adjusted EBITDA for the year ended December 31, 2013 was $227.1
million, compared to $185.7 million for the year ended December 31,
2012. 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 $86.8 million in
the year ended December 31, 2013, compared to $89.5 million in the
year ended December 31, 2012.
As of December 31, 2013 cash, cash equivalents were $57.4
million. In addition, as of December 31, 2013, the company had
$160.0 million of unused corporate borrowing capacity under
existing lines of credit with different commercial banks.
Fourth Quarter Results
For the three months ended December 31, 2013, total revenues
reached $130.9 million from $113.3 million in the fourth quarter of
2012, an increase of 15.5%. Electricity revenues increased 11.4% to
$84.7 million from $76.1 million in the three months ended December
31, 2012. Product revenues increased 23.9% to $46.2 million from
$37.3 million in the three months ended December 31, 2012.
For the three months ended December 31, 2013, the company
reported net income attributable to the company's shareholders of
$8.2 million or $0.18 per share compared to net loss of $229.0
million or $5.04 per share which included an impairment charge of
$229.1 million for the three months ended December 31, 2012.
Adjusted EBITDA for the three months ended December 31, 2013 was
$51.4 million, compared to $35.2 million for the three months ended
December 31, 2012. 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.
On February 25, 2014, ORMAT's Board of Directors approved a
payment of a quarterly dividend of $0.06 per share which is in
addition to a payment of $0.08 per share paid in 2013, 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 March 27, 2014 to shareholders of record as of closing of
business on March 13, 2014. The dividend payment was resumed in the
second quarter of 2013 after satisfying the clawback provision
resulted from 2012 dividend payment, in compliance with the
requirement of the covenants in our financing documents. In
addition, the company expects to pay dividends 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
a.m. EST on Wednesday, February 26, 2014. 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 website. 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 77
U.S. patents, Ormat's power solutions have been refined and
perfected under the most grueling environmental conditions. Ormat
has 480 employees in the United States and about 640 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 over 1,750 MW of gross capacity. Ormat's
current generating portfolio of 626 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 Three-Month
Periods and Years Ended December 31, 2013 and 2012 |
(Unaudited) |
|
|
|
|
|
|
Three
Months Ended December 31 |
Year Ended
December 31 |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
As Revised |
|
(In thousands,
except per share data) |
(In thousands,
except per share data) |
Revenues: |
|
|
|
|
Electricity |
$ 84,742 |
$ 76,057 |
$ 329,747 |
$ 314,894 |
Product |
46,163 |
37,263 |
203,492 |
186,879 |
Total revenues |
130,905 |
113,320 |
533,239 |
501,773 |
Cost of revenues: |
|
|
|
|
Electricity |
57,789 |
64,630 |
232,874 |
237,415 |
Product |
30,212 |
26,771 |
140,547 |
135,346 |
Total cost of revenues |
88,001 |
91,401 |
373,421 |
372,761 |
Gross margin |
42,904 |
21,919 |
159,818 |
129,012 |
Operating expenses: |
|
|
|
|
Research and development
expenses |
1,519 |
2,160 |
4,965 |
6,108 |
Selling and marketing expenses |
6,752 |
2,966 |
24,613 |
15,718 |
General and administrative
expenses |
8,924 |
7,903 |
29,188 |
28,066 |
Impairment charge |
|
229,113 |
— |
236,377 |
Write-off of unsuccessful
exploration activities |
4,094 |
720 |
4,094 |
2,639 |
Operating income (loss) |
21,615 |
(220,943) |
96,958 |
(159,896) |
Other income (expense): |
|
|
|
|
Interest income |
462 |
197 |
1,332 |
1,201 |
Interest expense, net |
(21,950) |
(19,528) |
(73,776) |
(64,069) |
Foreign currency translation and
transaction gains |
1,241 |
1,369 |
5,085 |
242 |
Income attributable to sale of tax
benefits |
5,603 |
2,710 |
19,945 |
10,127 |
Other non-operating income,
net |
9 |
246 |
1,592 |
590 |
Income (loss), before income
taxes and equity in losses of investees |
6,980 |
(235,949) |
51,136 |
(211,805) |
Income tax benefit (provision) |
1,476 |
8,321 |
(13,552) |
(1,827) |
Equity in losses of investees, net |
(101) |
(980) |
(250) |
(2,522) |
Income (loss) from continuing
operations |
8,355 |
(228,608) |
37,334 |
(216,154) |
Discontinued operations: |
|
|
|
|
Income (loss) from discontinued
operations (including gain on disposal of $3,646, $0, $3,646 and
$0, respectively) |
— |
(64) |
5,311 |
4,811 |
Income tax provision |
— |
(167) |
(614) |
(1,264) |
Total income (loss) from discontinued
operations |
— |
(231) |
4,697 |
3,547 |
|
|
|
|
|
Net income (loss) |
8,355 |
(228,839) |
42,031 |
(212,607) |
Net income attributable to
noncontrolling interest |
(193) |
(136) |
(793) |
(414) |
Net income (loss) attributable to
the Company's stockholders |
$ 8,162 |
$ (228,975) |
$ 41,238 |
$ (213,021) |
|
|
|
|
|
Earnings (losses) per share
attributable to the Company's stockholders: |
|
|
|
|
Basic: |
|
|
|
|
Income (loss) from continuing
operations |
$ 0.18 |
$ (5.03) |
$ 0.81 |
$ (4.77) |
Discontinued operations |
-- |
(0.01) |
0.10 |
0.08 |
Net Income (loss) |
$ 0.18 |
$ (5.04) |
$ 0.91 |
$ (4.69) |
|
|
|
|
|
Diluted: |
|
|
|
|
Income (loss) from continuing
operations |
$ 0.18 |
$ (5.03) |
$ 0.81 |
$ (4.77) |
Discontinued operations |
-- |
(0.01) |
0.10 |
0.08 |
Net Income (loss) |
$ 0.18 |
$ (5.04) |
$ 0.91 |
$ (4.69) |
|
|
|
|
|
Weighted average number of shares used
in computation of earnings (losses) per share attributable to
the Company's stockholders: |
|
|
|
|
Basic |
45,461 |
45,431 |
45,440 |
45,431 |
Diluted |
45,610 |
45,431 |
45,475 |
45,431 |
|
|
Ormat Technologies, Inc.
and Subsidiaries |
Condensed Consolidated
Balance Sheets |
As of December 31, 2013
and December 31, 2012 |
(Unaudited) |
|
|
|
|
December
31, |
December
31, |
|
2013 |
2012 |
|
|
As Revised |
|
(In
thousands) |
ASSETS |
Current assets: |
|
|
Cash and cash equivalents |
$ 57,354 |
$ 66,628 |
Short-term bank deposit |
— |
3,010 |
Restricted cash, cash equivalents
and marketable securities |
51,065 |
76,537 |
Receivables: |
|
|
Trade |
95,365 |
55,680 |
Related entity |
442 |
373 |
Other |
11,049 |
8,632 |
Due from Parent |
382 |
311 |
Inventories |
22,289 |
20,669 |
Costs and estimated earnings in
excess of billings on uncompleted contracts |
21,217 |
9,613 |
Deferred income taxes |
523 |
637 |
Prepaid expenses and other |
29,654 |
34,144 |
Total current assets |
289,340 |
276,234 |
Unconsolidated investments |
7,076 |
2,591 |
Deposits and other |
22,114 |
36,187 |
Deferred income taxes |
891 |
21,283 |
Deferred charges |
36,738 |
35,351 |
Property, plant and equipment, net |
1,452,336 |
1,252,873 |
Construction-in-process |
288,827 |
396,141 |
Deferred financing and lease costs, net |
30,178 |
31,371 |
Intangible assets, net |
31,933 |
35,492 |
Total assets |
$ 2,159,433 |
$ 2,087,523 |
LIABILITIES AND
EQUITY |
Current liabilities: |
|
|
Accounts payable and accrued
expenses |
$ 98,047 |
$ 98,001 |
Deferred income taxes |
— |
20,392 |
Billings in excess of costs and
estimated earnings on uncompleted contracts |
7,903 |
25,408 |
Current portion of long-term
debt: |
|
|
Limited and non-recourse: |
|
|
Senior secured notes |
31,137 |
28,231 |
Other loans |
20,377 |
11,453 |
Full recourse |
28,875 |
28,649 |
Total current liabilities |
186,339 |
212,134 |
Long-term debt, net of current portion: |
|
|
Limited and non-recourse: |
|
|
Senior secured notes |
270,310 |
312,926 |
Other loans |
311,078 |
242,815 |
Full recourse: |
|
|
Senior unsecured bonds |
250,596 |
250,904 |
Other loans |
53,467 |
82,344 |
Revolving credit lines with banks
(full recourse) |
112,017 |
73,606 |
Liability associated with sale of tax
benefits |
60,985 |
51,126 |
Deferred lease income |
63,496 |
66,398 |
Deferred income taxes |
55,035 |
45,059 |
Liability for unrecognized tax benefits |
4,950 |
7,280 |
Liabilities for severance pay |
23,841 |
22,887 |
Asset retirement obligation |
18,679 |
19,289 |
Other long-term liabilities |
3,529 |
5,148 |
Total liabilities |
1,414,322 |
1,391,916 |
|
|
|
Equity: |
|
|
The Company's stockholders'
equity: |
|
|
Common stock |
46 |
46 |
Additional paid-in capital |
738,929 |
732,140 |
Retained earnings |
(6,722) |
(44,326) |
Accumulated other comprehensive
income |
487 |
651 |
|
732,740 |
688,511 |
Noncontrolling interest |
12,371 |
7,096 |
Total equity |
745,111 |
695,607 |
Total liabilities and equity |
$ 2,159,433 |
$ 2,087,523 |
Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA, Adjusted EBITDA and Additional
Cash Flows Information For the Three-Month Periods
and Years Ended December 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 tables reconcile net cash provided by (used in)
operating activities and net income to EBITDA and Adjusted EBITDA
for the three-month periods and years ended December 31, 2013 and
2012:
|
Three
Months Ended December 31 |
Year Ended
December 31 |
|
2013 |
2012 |
2013 |
2012 As
revised |
|
(in
thousands) |
(in
thousands) |
|
|
|
Net cash provided by operating
activities |
$ 54,534 |
$ 27,087 |
$ 86,760 |
$ 89,471 |
Adjusted for: |
|
|
|
|
Interest expense, net (excluding amortization
of deferred financing costs) |
20,310 |
16,780 |
67,677 |
57,711 |
Interest income |
(462) |
(197) |
(1,332) |
(1,201) |
Income tax provision |
(1,476) |
(8,154) |
14,166 |
3,091 |
Adjustments to reconcile net income or loss
to net cash provided by (used in) operating activities
(excluding depreciation and amortization) |
(24,158) |
(229,399) |
48,203 |
(199,738) |
EBITDA |
$ 48,748 |
$ (193,883) |
$ 215,474 |
$ (50,666) |
|
|
|
|
|
Impairment charge |
— |
229,113 |
— |
236,377 |
Termination fees |
2,625 |
— |
11,604 |
— |
Adjusted EBITDA |
$ 51,373 |
$ 35,230 |
$ 227,078 |
$ 185,711 |
Net cash used in investing activities |
$ (28,955) |
$ (47,179) |
$ (157,153) |
$ (100,790) |
Net cash (used in) provided by financing
activities |
$ (3,660) |
$ 49,196 |
$ 61,119 |
$ (21,939) |
|
|
|
|
Three
Months Ended December 31 |
Year Ended
December 31 |
|
2013 |
2012 |
2013 |
2012 As
revised |
|
(in
thousands) |
(in
thousands) |
Net income (loss) |
$ 8,355 |
$ (228,839) |
$ 42,031 |
$ (212,607) |
Adjusted for: |
|
|
|
|
Interest expense, net (including
amortization of deferred financing costs) |
21,488 |
19,331 |
72,444 |
62,868 |
Income tax provision (benefit) |
(1,476) |
(8,154) |
14,166 |
3,091 |
Depreciation and amortization |
20,381 |
23,779 |
86,833 |
95,982 |
EBITDA |
$ 48,748 |
$ (193,883) |
$ 215,474 |
$ (50,666) |
|
|
|
|
|
Impairment charge |
— |
229,113 |
— |
236,377 |
Termination fees |
2,625 |
— |
11,604 |
— |
Adjusted EBITDA |
$ 51,373 |
$ 35,230 |
$ 227,078 |
$ 185,711 |
CONTACT: Ormat Technologies:
Dita Bronicki
CEO
775-356-9029
dbronicki@ormat.com
Investor Relations:
Rob Fink/Brad Nelson
KCSA Strategic Communications
212-896-1206 (Fink) /212-896-1249 (Nelson)
rfink@kcsa.com / bnelson@kcsa.com
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