Company Reiterates Full-Year Revenue and
Adjusted EBITDA GuidanceProduct Segment Backlog
Reaches a Record $387.0 Million
Ormat Technologies, Inc. (NYSE:ORA) today announced financial
results for the first quarter ended March 31, 2015.
First Quarter Highlights and Recent
Developments:
- Electricity revenues of $90.0 million, compared to $94.8
million in the first quarter of 2014;
- Product Segment revenues of $30.3 million, compared to $47.6
million in the first quarter of 2014;
- Cash flow from operation was $83.1 million, an increase of
22.1% compared to $68.1 million in the first quarter of 2014;
- Adjusted EBITDA of $65.3 million, compared to $73.4 million in
the first quarter of 2014;
- Declared a quarterly dividend of $0.06 per share for the first
quarter of 2015;
- Product segment backlog reached a record $387.0 million as of
May 6, 2015;
- Entered into a 20-year PPA with Southern California Public
Power Authority (SCPPA) for the second phase of Don A. Campbell
project; management expects to complete this project by the
end of 2015, approximately three months earlier than previously
expected;
- Completed the share exchange transaction with Ormat Industries
Ltd, pursuant to the Share Exchange Agreement and Plan of Merger by
and among Ormat Industries and Ormat Systems;
- McGinness Hills complex annual generating capacity increased to
approximately 72MW following the initiation of commercial operation
in February 2015 of the Phase 2 geothermal power plant; and
- Closed and received $162.3 million cash from Northleaf Capital
Partners for a 36.75% equity investment in certain power
plants.
Isaac Angel, chief executive officer of Ormat,
stated, “As expected, this quarter faced headwinds related to lower
oil and natural gas prices and lower generation at Puna due to last
summer’s hurricane that reduced revenues by $6.6 million and $3.1
million, respectively. On the expense side, we had a one-time
expense of $3.4 million associated with our restructuring
transaction. In addition, normal fluctuations in revenue
recognition inherent within our product division resulted in lower
revenues for the quarter compared to last year. We expect revenues
will be stronger during the second half of 2015.”
“During the first quarter we accelerated
construction of the second phase of the Don A. Campbell project,
and as a result, we expect to begin generating electricity towards
the end of 2015, approximately three months ahead of schedule,”
continued Mr. Angel. “Subsequent to the end of the quarter, our
product segment backlog as of May 6, 2015, increased to a record of
approximately $387.0 million.”
“We also began executing a multi-year plan to
set the stage for our next growth phase,” continued Mr. Angel.
“Central to this plan is our focus on expanding our geographic
reach. We are also focused on technology diversification, capturing
a larger share of the high temperature geothermal resource market
with our proven binary system. I am increasingly excited about the
opportunities before us, and believe Ormat is uniquely positioned
to succeed in the evolving renewable energy market.”
Guidance
Mr. Angel added, “We reiterate our 2015 revenue
guidance despite the current oil and natural gas prices, which
translates to a $26.6 million reduction in revenues compared to
last year, and we expect the electricity segment revenues to be
between $380.0 million and $390.0 million, and product segment
revenues to be between $180.0 million and $190.0 million. We
reiterate our 2015 Adjusted EBITDA guidance of $280.0 to $290.0
million for the full year, which is also impacted by current oil
and natural gas prices.”
First Quarter Financial
Summary
Total revenues for the three months ended March
31, 2015 were $120.2 million, compared to $142.4 million for the
three months ended March 31, 2014, which represented a 15.6%
decrease. Electricity revenues decreased 5.1% to $90.0 million in
the three months ended March 31, 2015, from $94.8 million in the
three months ended March 31, 2014. Product revenues decreased 36.4%
to $30.3 million in the three months ended March 31, 2015, from
$47.6 million in the three months ended March 31, 2014.
The revenue decline was primarily attributable
to lower energy rates resulting from the decline in natural gas and
oil prices, lower generation at the company’s Puna power plant due
to the hurricane and the timing of revenue recognition in the
company’s product segment. The lower commodity prices had an
approximate $6.6 million impact on revenues and the lower
generation in Puna had a $3.1 million impact on revenues. The
decrease was partially offset by $3.6 million additional revenues
from the commencement of operations of McGinness Hills phase 2
power plant in Nevada in February 2015 and a reduction in net loss
on derivative contracts on oil and natural gas prices from a net
loss of $2.4 million in the first quarter of 2014 to a net gain of
$0.3 million in the first quarter of 2015.
The company reported net income attributable to
the company’s shareholders of $10.0 million or $0.21 per share in
the first quarter of 2015 compared to $21.6 million or $0.47 per
share for the first quarter of 2014. Net income for the first
quarter of 2015 included approximately $3.4 million in
non-recurring charges related to the share exchange transaction
recorded in general and administrative expenses and $1.4 million
foreign currency translation and transaction losses compared to
$0.6 million in the first quarter of 2014.
Adjusted EBITDA for the three months ended March
31, 2015 was $65.3 million, compared to $73.4 million for the three
months ended March 31, 2014. The reconciliation of GAAP net
cash provided by operating activities and net income to EBITDA and
Adjusted EBITDA and additional cash flows information is set forth
below in this release.
On May 6, 2015, ORMAT’s Board of Directors
approved a payment of a quarterly dividend of $0.06 per share
pursuant to the company’s dividend policy. The dividend will be
paid on May 27, 2015 to shareholders of record as of the close of
business on May 19, 2015. In addition, the company expects to pay
quarterly dividends of $0.06 per share in each of the next two
quarters.
Webcast Conference Details
Ormat will host a listen-only webcast to discuss
its financial results and other matters discussed in this press
release at 9 a.m. ET on Thursday, May 7, 2015. The live,
listen-only webcast will be available 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 Events & Presentations in the Investor Relations
section of Ormat's website.
An archive of the webcast will be made available
on the website under Events & Presentations in the Investor
Relations tab.
Participant Telephone
Numbers
Participant Dial In (Toll Free): |
1-877-511-6790 |
Participant International Dial In: |
1-412-902-4141 |
Canada Toll Free |
18556699657 |
Please ask to be joined into
the Ormat Technologies, Inc. call. |
CONFERENCE REPLAY
US Toll Free: |
1-877-344-7529 |
International Toll: |
1-412-317-0088 |
Canada Toll Free: |
855-669-9658 |
Replay Access Code: |
10064470 |
About Ormat Technologies
With five decades of experience, Ormat
Technologies, Inc. is a leading geothermal company and the only
vertically integrated company currently engaged in geothermal and
recovered energy generation (REG), with the objective of becoming a
leading global provider of renewable energy. 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 69 U.S. patents, Ormat’s power
solutions have been refined and perfected under the most grueling
environmental conditions. Ormat has 470 employees in the United
States and over 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
installed to utilities and developers worldwide, totaling
approximately 2,000 MW of gross capacity. Ormat’s current 647 MW
generating portfolio 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 February 26, 2015.
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
SubsidiariesCondensed Consolidated Statements of
OperationsFor the Three-Month Period Ended March
31, 2015 and 2014(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended March
31 |
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
per share data) |
|
Revenues: |
|
|
|
|
|
|
Electricity |
$ |
|
89,953 |
|
|
$ |
|
94,817 |
|
|
Product |
|
|
30,278 |
|
|
|
|
47,619 |
|
|
Total revenues |
|
|
120,231 |
|
|
|
|
142,436 |
|
|
Cost of
revenues: |
|
|
|
|
|
|
Electricity |
|
|
55,581 |
|
|
|
|
57,034 |
|
|
Product |
|
|
20,625 |
|
|
|
|
31,943 |
|
|
Total cost of revenues |
|
|
76,206 |
|
|
|
|
88,977 |
|
|
Gross margin |
|
|
44,025 |
|
|
|
|
53,459 |
|
|
Operating expenses: |
|
|
|
|
|
|
Research and development expenses
(income) |
|
|
363 |
|
|
|
|
(87 |
) |
|
Selling and marketing expenses |
|
|
3,433 |
|
|
|
|
3,379 |
|
|
General and administrative
expenses |
|
|
10,204 |
|
|
|
|
7,596 |
|
|
Write-off of unsuccessful
exploration activities |
|
|
174 |
|
|
|
|
— |
|
|
Operating income |
|
|
29,851 |
|
|
|
|
42,571 |
|
|
Other
income (expense): |
|
|
|
|
|
|
Interest income |
|
|
9 |
|
|
|
|
111 |
|
|
Interest expense, net |
|
|
(17,828 |
) |
|
|
|
(20,518 |
) |
|
Foreign currency translation and
transaction gains (losses) |
|
|
(1,366 |
) |
|
|
|
(638 |
) |
|
Income attributable to sale of tax
benefits |
|
|
5,552 |
|
|
|
|
6,717 |
|
|
Other non-operating expense,
net |
|
|
283 |
|
|
|
|
63 |
|
|
Income before income taxes and
equity in |
|
|
|
|
|
|
losses of investees |
|
|
16,501 |
|
|
|
|
28,306 |
|
|
Income
tax provision |
|
|
(5,459 |
) |
|
|
|
(6,320 |
) |
|
Equity
in losses of investees, net |
|
|
(775 |
) |
|
|
|
(197 |
) |
|
|
|
|
|
|
|
|
Net income |
|
|
10,267 |
|
|
|
|
21,789 |
|
|
Net income attributable to
noncontrolling interest |
|
|
(235 |
) |
|
|
|
(237 |
) |
|
Net income attributable to the
Company's stockholders |
$ |
|
10,032 |
|
|
$ |
|
21,552 |
|
|
|
|
|
|
|
|
|
Earnings
per share attributable to the Company's stockholders - Basic and
diluted: |
|
|
|
|
|
|
Net Income |
$ |
|
0.21 |
|
|
$ |
|
0.47 |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computation of earnings per share
attributable to the Company's stockholders: |
|
|
|
|
|
|
Basic |
|
|
47,244 |
|
|
|
|
45,479 |
|
|
Diluted |
|
|
48,079 |
|
|
|
|
45,660 |
|
|
|
|
|
|
|
|
Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance SheetsAs
of March 31, 2015 and December 31,
2014(Unaudited)
|
|
|
|
March
31, |
|
December
31, |
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands) |
|
ASSETS |
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
|
70,724 |
|
|
$ |
|
40,230 |
|
|
Restricted cash, cash
equivalents and marketable securities |
|
|
|
115,530 |
|
|
|
|
93,248 |
|
|
Receivables: |
|
|
|
|
|
|
|
Trade |
|
|
|
56,300 |
|
|
|
|
48,609 |
|
|
Related entity |
|
|
— |
|
|
|
451 |
|
|
Other |
|
|
|
9,732 |
|
|
|
|
10,141 |
|
|
Due from Parent |
|
|
— |
|
|
|
1,337 |
|
|
Inventories |
|
|
|
17,286 |
|
|
|
|
16,930 |
|
|
Costs and estimated earnings
in excess of billings on uncompleted contracts |
|
|
|
7,426 |
|
|
|
|
27,793 |
|
|
Deferred income taxes |
|
|
|
496 |
|
|
|
|
251 |
|
|
Prepaid expenses and
other |
|
|
|
29,566 |
|
|
|
|
34,884 |
|
|
Total current assets |
|
|
|
307,060 |
|
|
|
|
273,874 |
|
|
Deposits and other |
|
|
|
17,963 |
|
|
|
|
20,044 |
|
|
Deferred charges |
|
|
|
37,301 |
|
|
|
|
37,567 |
|
|
Property, plant and
equipment, net |
|
|
|
1,535,757 |
|
|
|
|
1,437,637 |
|
|
Construction-in-process |
|
|
|
230,037 |
|
|
|
|
296,722 |
|
|
Deferred financing and
lease costs, net |
|
|
|
27,369 |
|
|
|
|
27,057 |
|
|
Intangible assets,
net |
|
|
|
27,846 |
|
|
|
|
28,655 |
|
|
Total assets |
|
$ |
|
2,183,333 |
|
|
$ |
|
2,121,556 |
|
|
LIABILITIES AND
EQUITY |
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable and accrued
expenses |
|
$ |
|
83,676 |
|
|
$ |
|
88,276 |
|
|
Deferred income taxes |
|
|
|
975 |
|
|
|
|
974 |
|
|
Short-term revolving credit
lines with banks (full recourse) |
|
|
|
30,600 |
|
|
|
|
20,300 |
|
|
Billings in excess of costs
and estimated earnings on uncompleted contracts |
|
|
|
57,861 |
|
|
|
|
24,724 |
|
|
Current portion of long-term
debt: |
|
|
|
|
|
|
|
Limited and
non-recourse: |
|
|
|
|
|
|
|
Senior secured
notes |
|
|
|
36,544 |
|
|
|
|
34,368 |
|
|
Other loans |
|
|
|
17,995 |
|
|
|
|
17,995 |
|
|
Full recourse |
|
|
|
17,203 |
|
|
|
|
19,116 |
|
|
Total current
liabilities |
|
|
|
244,854 |
|
|
|
|
205,753 |
|
|
Long-term debt, net of
current portion: |
|
|
|
|
|
|
|
Limited and
non-recourse: |
|
|
|
|
|
|
|
Senior secured notes |
|
|
|
355,776 |
|
|
|
|
360,366 |
|
|
Other loans |
|
|
|
260,125 |
|
|
|
|
264,625 |
|
|
Full recourse: |
|
|
|
|
|
|
|
Senior unsecured bonds |
|
|
|
250,212 |
|
|
|
|
250,289 |
|
|
Other loans |
|
|
|
32,684 |
|
|
|
|
34,351 |
|
|
Unconsolidated
investments |
|
|
|
7,688 |
|
|
|
|
3,617 |
|
|
Liability associated
with sale of tax benefits |
|
|
|
33,685 |
|
|
|
|
39,021 |
|
|
Deferred lease
income |
|
|
|
59,815 |
|
|
|
|
60,560 |
|
|
Deferred income
taxes |
|
|
|
70,247 |
|
|
|
|
66,220 |
|
|
Liability for
unrecognized tax benefits |
|
|
|
7,190 |
|
|
|
|
7,511 |
|
|
Liabilities for
severance pay |
|
|
|
18,499 |
|
|
|
|
20,399 |
|
|
Asset retirement
obligation |
|
|
|
19,514 |
|
|
|
|
19,142 |
|
|
Other long-term
liabilities |
|
|
|
3,872 |
|
|
|
|
2,956 |
|
|
Total liabilities |
|
|
|
1,364,161 |
|
|
|
|
1,334,810 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
The Company's stockholders'
equity: |
|
|
|
|
|
|
|
Common stock |
|
|
|
49 |
|
|
|
|
46 |
|
|
Additional paid-in
capital |
|
|
|
771,591 |
|
|
|
|
742,006 |
|
|
Retained earnings |
|
|
|
47,673 |
|
|
|
|
41,539 |
|
|
Accumulated other
comprehensive income |
|
|
|
(11,971 |
) |
|
|
|
(8,668 |
) |
|
|
|
|
|
807,342 |
|
|
|
|
774,923 |
|
|
Noncontrolling interest |
|
|
|
11,830 |
|
|
|
|
11,823 |
|
|
Total equity |
|
|
|
819,172 |
|
|
|
|
786,746 |
|
|
Total liabilities and
equity |
|
$ |
|
2,183,333 |
|
|
$ |
|
2,121,556 |
|
|
|
|
|
|
|
|
|
Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA, Adjusted EBITDA and Additional
Cash Flows InformationFor the Three-Month Period
Ended March 31, 2015 and
2014(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, adjusted for (i) write-off of unsuccessful
exploration activities,(ii) any mark-to-market gains or losses from
accounting for derivatives, (iii) merger and acquisition
transaction cost, (iv) stock-based compensation,. 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 operating activities and net income to EBITDA and Adjusted
EBITDA for the three-month period ended March 31, 2015 and March
31, 2014:
|
|
|
|
Three Months Ended March
31 |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
Net cash provided by
operating activities |
|
$ |
|
83,147 |
|
|
$ |
|
68,076 |
|
|
|
Adjusted for: |
|
|
|
|
|
|
|
|
Interest expense, net
(excluding amortization |
|
|
|
|
|
|
|
|
of deferred financing
costs) |
|
|
|
15,972 |
|
|
|
|
19,176 |
|
|
|
Interest income |
|
|
|
(9 |
) |
|
|
|
(111 |
) |
|
|
Income tax
provision |
|
|
|
5,459 |
|
|
|
|
6,320 |
|
|
|
Adjustments to
reconcile net income or loss to net cash |
|
|
|
|
|
|
|
|
provided by operating
activities (excluding |
|
|
|
|
|
|
|
|
depreciation and
amortization). |
|
|
|
(47,220 |
) |
|
|
|
(22,870 |
) |
|
|
EBITDA |
|
$ |
|
57,349 |
|
|
$ |
|
70,591 |
|
|
|
|
|
|
|
|
|
|
|
|
Mark to market on
derivative instruments which represents swap contracts on natural
gas and oil prices |
|
|
|
4,129 |
|
|
|
|
225 |
|
|
|
Stock-based
compensation |
|
|
|
1,127 |
|
|
|
|
1,440 |
|
|
|
Share exchange
transaction costs |
|
|
|
3,400 |
|
|
|
— |
|
|
Write-off of
unsuccessful exploration activities |
|
|
|
174 |
|
|
|
— |
|
|
Mark to market on
derivatives which represents currency forward contracts |
|
|
|
(860 |
) |
|
|
|
1,177 |
|
|
|
Adjusted
EBITDA |
|
$ |
|
65,319 |
|
|
$ |
|
73,433 |
|
|
|
Net cash used in
investing activities |
|
$ |
|
(47,257 |
) |
|
$ |
|
(35,323 |
) |
|
|
Net cash used in
financing activities |
|
$ |
|
(5,396 |
) |
|
$ |
|
(42,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31 |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
Net income |
|
$ |
|
10,267 |
|
|
$ |
|
21,789 |
|
|
|
Adjusted for: |
|
|
|
|
|
|
|
|
Interest expense, net
(including amortization |
|
|
|
|
|
|
|
|
of deferred financing
costs) |
|
|
|
17,819 |
|
|
|
|
20,407 |
|
|
|
Income tax
provision |
|
|
|
5,459 |
|
|
|
|
6,320 |
|
|
|
Depreciation and
amortization |
|
|
|
23,804 |
|
|
|
|
22,075 |
|
|
|
EBITDA |
|
$ |
|
57,349 |
|
|
$ |
|
70,591 |
|
|
|
|
|
|
|
|
|
|
|
|
Mark to market on
derivative instruments which represents swap contracts on natural
gas and oil prices |
|
|
|
4,129 |
|
|
|
|
225 |
|
|
|
Stock-based
compensation |
|
|
|
1,127 |
|
|
|
|
1,440 |
|
|
|
Share exchange
transaction costs |
|
|
|
3,400 |
|
|
|
— |
|
|
Write-off of
unsuccessful exploration activities |
|
|
|
174 |
|
|
|
— |
|
|
Mark to market on
derivatives which represents currency forward contracts |
|
|
|
(860 |
) |
|
|
|
1,177 |
|
|
|
Adjusted
EBITDA |
|
$ |
|
65,319 |
|
|
$ |
|
73,433 |
|
|
|
Ormat Technologies Contact:
Smadar Lavi
Investor Relations
775-356-9029
slavi@ormat.com
Investor Relations Agency Contact:
Miri Segal/Brett Maas
MS/Hayden - IR
917-607-8654/646-536-7331
msegal@ms-ir.com / brett@haydenir.com
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