ORA Ormat Technologies Inc

Record Revenues of $60.3 Million for the First Quarter of 2006, an 11.9% Increase Over Prior Year's Quarter RENO, Nev., May 9 /PRNewswire-FirstCall/ -- ORMAT Technologies, Inc. (NYSE:ORA) today announced financial results for the first quarter ended March 31, 2006. For the first quarter, total revenues were $60.3 million as compared to $53.9 million for the first quarter of 2005, an increase of 11.9%. (Logo: http://www.newscom.com/cgi-bin/prnh/20040422/LATH066LOGO) Electricity segment revenues for the quarter were $43.7 million, an increase of 8.1% as compared to $40.5 million for the same quarter in 2005. The increase in revenues was primarily attributed to revenue generated from the Burdette plant, whose construction was completed in November 2005 and commercial operation was declared on February 28, 2006, and higher energy rates for power supplied under the power purchase agreement of the Puna project. Net income for the quarter ended March 31, 2006 was $7.9 million or $0.25 per share of common stock as compared with net income of $3.9 million or $0.12 per share of common stock for the same quarter in 2005. For the quarter ended March 31, 2006, the Company's gross margin was 38.0% compared to 36.4% for the same quarter in 2005. Operating income for the quarter ended March 31, 2006 was $14.8 million as compared with $13.4 million for the same quarter in 2005. Adjusted EBITDA for the quarter ended March 31, 2006 was $28.5 million as compared with $26.3 million for the same quarter in 2005. Adjusted EBITDA includes consolidated EBITDA and the Company's share in the operating income and depreciation and amortization totaling $4.1 million and $4.0 million for the quarters ended March 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. The reconciliation of GAAP net income to Adjusted EBITDA is set forth below in this release. As of March 31, 2006, the Company had cash, cash equivalents and marketable securities of $28.2 million compared to $70.5 million as of December 31, 2005. The decrease in the Company's cash position was principally due to the combination of funding capital expenditures in the amount of $39.7 million, investment in Orzunil of $15.4 million and repayment of long-term debt. In April 2006, the Company closed the sale of 4,025,000 shares of its common stock, at $35.50 per share in a follow-on public offering (including the exercise of the underwriters' over-allotment option). This resulted in net proceeds of approximately $135.0 million, which the Company will use to pursue its corporate growth strategies. On May 9, 2006, Ormat's Board of Directors approved the payment of a quarterly cash dividend of $0.04 per share, which is a per share increase of $0.01 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 May 30, 2006 to shareholders of record as of the close of business on May 23, 2006. The Company expects to pay a dividend of $0.04 per share, in the next three quarters as well. Commenting on first quarter results, Dita Bronicki, President and Chief Executive Officer of Ormat, said, "Our results this quarter are consistent with our growth plans." Ms. Bronicki continued, "We continue to focus on construction of new projects as well as enhancements to existing projects, which we expect will contribute to a significant increase in total generating capacity in 2006. Specifically, in the second quarter, we expect to add 3 MW to the Heber complex from Heber 1. In addition, we started selling electricity from the Gould 2 plant and are in the commissioning phase of Gould 1, which when complete will increase the generating capacity of the Heber complex by an additional 6 MW. We expect to complete our Desert Peak 2 project in the second quarter, and expect that it will generate approximately 15 MW. Finally, in the second quarter we expect to connect four additional wells to the power plant at the Ormesa project, and expect our enhancement efforts to increase output by an additional 10 MW by the end of the year. In total, we expect to add 113 MW in 2006 and we continue to implement planning that we anticipate will enable growth in 2007 and beyond. "Product backlog was driven by key sales, including an $11.5 million contract with PacifiCorp Energy for a 10 MW Ormat Energy Converter, a $7.7 million contract with Tauropaki Power Company of New Zealand for an air-cooled OEC unit, and the receipt of a notice to proceed in connection with a contract with US Geothermal for their Raft River project in Idaho. In the field of Recovered Energy Generation, we entered into the Sumas Power Purchase Agreement for the supply of 5 MW of power." Commenting on the outlook for 2006, Ms. Bronicki said, "We expect our 2006 electricity segment revenue to increase by $9 million to $204 million, as a result of the consolidation of the Zunil project. We also expect an additional $18 million of revenue from our share of electricity revenue generated by Mammoth and Leyte, which are accounted for under the equity method. With regard to our products segment, we currently expect that our 2006 revenue will be between $60 million and $70 million." 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.S.T. on Wednesday, May 10, 2006. 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 7332731. 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 operates the following geothermal power plants: in the United States -- Brady, Desert Peak, Heber, Mammoth, Ormesa, Puna and Steamboat; in the Philippines -- Leyte; in Guatemala -- Zunil; in Kenya -- Olkaria; and in Nicaragua -- Momotombo. 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 Supplement filed with the Securities and Exchange Commission on April 5, 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. 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 from 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 For the three month periods ended March 31, 2006 and 2005 (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended March 31, 2006 2005 (in thousands, except per share amounts) Revenues: Electricity: Energy and capacity $25,165 $24,509 Lease portion of energy and capacity 17,897 15,943 Lease income 671 -- Total electricity 43,733 40,452 Products: Related party 3,503 -- Other 13,085 13,444 Total products 16,588 13,444 Total revenues 60,321 53,896 Cost of revenues: Electricity: Energy and capacity 17,174 16,273 Lease portion of energy and capacity 8,382 7,339 Lease expense 1,311 -- Total electricity 26,867 23,612 Products 10,532 10,683 Total cost of revenues 37,399 34,295 Gross margin 22,922 19,601 Operating expenses: Research and development expenses 773 380 Selling and marketing expenses 2,695 2,208 General and administrative expenses 4,684 3,627 Operating income 14,770 13,386 Other income (expense): Interest income 1,115 810 Interest expense: Parent (2,226) (2,775) Other (5,227) (7,523) Foreign currency translation and transaction losses (8) (83) Other non-operating income 103 40 Income before income taxes, and equity in income of investees 8,527 3,855 Income tax provision (1,914) (1,480) Equity in income of investees 1,279 1,533 Net income $7,892 $3,908 Earnings per share - basic and diluted $0.25 $0.12 Weighted average number of shares used for computation of earnings per share: Basic 31,563 31,563 Diluted 31,697 31,572 Ormat Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) March 31, December 31, 2006 2005 (in thousands) Assets Current assets: Cash and cash equivalents $19,094 $26,976 Marketable securities 9,070 43,560 Restricted cash, cash equivalents and marketable securities 39,569 36,732 Receivables: Trade 35,079 33,515 Related entities 3,077 524 Other 2,311 2,629 Inventories, net 6,191 5,224 Costs and estimated earnings in excess of billings on uncompleted contracts 1,290 8,883 Deferred income taxes 3,675 1,663 Prepaid expenses and other 3,509 3,256 Total current assets 122,865 162,962 Unconsolidated investments 40,241 47,235 Deposits and other 13,349 13,489 Deferred income taxes 4,685 5,376 Property, plant and equipment, net 541,061 491,835 Construction-in-process 155,778 128,256 Deferred financing and lease costs, net 17,764 17,412 Intangible assets, net 47,210 47,915 Total assets $942,953 $914,480 Liabilities and Stockholders' Equity Current liabilities: Short-term bank credit $-- $3,996 Accounts payable and accrued expenses 58,350 50,048 Billings in excess of costs and estimated earnings on uncompleted contracts 5,198 12,657 Current portion of long-term debt: Limited and non-recourse 8,054 2,888 Full recourse 1,000 1,000 Senior secured notes (non-recourse) 23,754 23,754 Due to Parent, including current portion of notes payable to Parent 33,080 32,003 Total current liabilities 129,436 126,346 Long-term debt, net of current portion: Limited and non-recourse 28,972 11,252 Full recourse 2,000 2,000 Senior secured notes (non-recourse) 324,645 324,645 Notes payable to Parent, net of current portion 133,162 140,162 Other liabilities -- 1,309 Deferred lease income 80,897 81,569 Deferred income taxes 25,403 22,004 Liabilities for severance pay 11,858 11,409 Asset retirement obligation 12,339 11,461 Total liabilities 748,712 732,157 Minority interest in net assets of subsidiaries 4,798 64 Stockholders' equity: Common stock, par value $0.001 per share; 200,000,000 shares authorized; 31,562,496 shares issued and outstanding 31 31 Additional paid-in capital 124,066 124,008 Unearned stock-based compensation -- (153) Retained earnings 62,769 55,824 Accumulated other comprehensive income 2,577 2,549 Total stockholders' equity 189,443 182,259 Total liabilities and stockholders' equity $942,953 $914,480 Ormat Technologies, Inc. and Subsidiaries Reconciliation of adjusted EBITDA (Unaudited) (Dollars in thousands) 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 month periods ended March 31, 2006 and 2005: Three months Three months ended ended March 31, 2006 March 31, 2005 Net income $7,892 $3,908 Adjusted for: Equity in income of investees (1,279) (1,533) Interest expense, net (including amortization of deferred financing costs) 6,338 9,571 Other non-operating income (103) (40) Income tax provision 1,914 1,480 Depreciation and amortization 9,559 8,955 EBITDA 24,321 22,341 Equity in income of Mammoth-Pacific L.P. and Ormat Leyte 1,553 1,325 Depreciation, amortization, interest and taxes attributable to our equity in Mammoth-Pacific L.P. and Ormat Leyte 2,588 2,668 Adjusted EBITDA $28,462 $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, Inc., +1-775-356-9029, ; or 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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