Ormat Technologies Reports 2013 Fourth Quarter and Year End Results

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| Source: Ormat Technologies, Inc.

Net Income Attributable to Company's Shareholders of $0.91 Per Share for the Full Year

Record Adjusted EBITDA Reached $227M

RENO, Nev., Feb. 25, 2014 (GLOBE NEWSWIRE) -- 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
Ormat Technologies:
Dita Bronicki
CEO
775-356-9029


Investor Relations:
Rob Fink/Brad Nelson
KCSA Strategic Communications
212-896-1206 (Fink) /212-896-1249 (Nelson)
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