Net income attributable to the Company's stockholders increased 27.5% to $16.5 million or $0.36 per share
Adjusted EBITDA grew 14.9% and reached $69.2 million
RENO, Nev., Nov. 5, 2014 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) announced today its financial results for the third quarter of 2014.
Quarterly financial highlights and recent developments:
- Quarterly revenues increased 7.3% to $140.2 million compared to the third quarter of last year;
- Gross margin increased from 30.4% in the third quarter of 2013 to 39.6% in the third quarter 2014;
- Adjusted EBITDA grew 14.9% to $69.2 million in the third quarter 2014;
- Operating income grew 47.0% from $29.8 million in the third quarter of 2013 to $43.8 million;
- Net income attributable to the company's shareholders increased 27.5% compared to the third quarter 2013 and reached $16.5 million, or $0.36 per share;
- Obtained financing of $140 million for the construction of the McGinness Hills Phase 2, which is expected to come online in Q1-2015;
- Signed 25-Year PPA and Steam Supply Agreements for the 35 MW Menengai Geothermal Project in Kenya;
- Signed $22.3 million Contract with the Utah Associated Municipal Power Systems (UAMPS) for a Recovered Energy Generation Project; and
- Declared a dividend of $0.05 per share.
Isaac Angel, Ormat's Chief Executive Officer, stated, "Ormat's strong execution during the third quarter enabled the Company to deliver exceptional results and underscore its reputation as a leader in the geothermal industry. Our focus on expanding and optimizing our power plants combined with the new capacity that came on line in 2013 drove increased generation and improved our margins. The ongoing enhancement of our power plants will enable us to continue these positive trends going forward. In the product segment, the addition of Sarulla has enabled us to reach a robust backlog of approximately $363.0 million. As those orders move through the manufacturing process and are delivered, we expect segment revenues to strengthen again in the fourth quarter."
Mr. Angel concluded, "My transition into the role of CEO has been seamless and I am pleased with the Company's accomplishments during my first full quarter. As a result of our strong performance, we are raising the low end of our 2014 guidance and narrowing the range. We now expect total revenues to be between $550.0 million to $560.0 million with electricity revenues ranging from $375.0 million to $380.0 million and our product segment revenues to be between $175.0 million and $180.0 million."
Financial Summary
For the three months ended September 30, 2014, total revenues increased to $140.2 million from $130.7 million in the third quarter of 2013, an increase of 7.3%. Electricity revenues increased 15.2% to $102.5 million in the three months ended September 30, 2014 from $89.0 million in the three months ended September 30, 2013. Product revenues decreased 9.6% to $37.7 million in the three months ended September 30, 2014 from $41.8 million in the three months ended September 30, 2013.
Operating income for the three months ended September 30, 2014 was $43.8 million, compared to $29.8 million for the three months ended September 30, 2013 an increase of 47%.
For the three months ended September 30, 2014, the company reported net income attributable to the company's shareholders of $16.5 million, or $0.36 per diluted share, compared to $13.0 million, or $0.28 per diluted share, for the three months ended September 30, 2013.
Adjusted EBITDA for the three months ended September 30, 2014 was $69.2 million, compared to $60.3 million for the three months ended September 30, 2013, an increase of 14.9%. Adjusted EBITDA for the nine months ended September 30, 2014 was $199.6 million, compared to $175.7 million for the nine months ended September 30, 2013, an increase of 13.6%. 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.
Net cash provided by operating activities was $178.8 million, in the nine months ended September 30, 2014, compared to $32.2 million in the nine months ended September 30, 2013.
On November 5, 2014, ORMAT's Board of Directors approved a payment of a quarterly dividend of $0.05 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, 2014 to shareholders of record as of closing of business on November 20, 2014.
As of September 30, 2014, cash and cash equivalents were $42.5 million. In addition, as of September 30, 2014, the company had $229.1 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. ET on Thursday, November 6, 2014. The call will be available through a live, listen-only webcast at www.ormat.com. The call also will be available to investors and analysts by dialing 1-877-511-6790 within the U.S. 1-855-669-9657 from Canada or 1-412-902-4141 from abroad. Please ask to be joined into the Ormat Technologies, Inc. call. During the call, management will refer to slides that will be posted on the web site. The slides and accompanying webcast can be accessed through 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 approximately 1,900 MW of gross capacity. Ormat's current generating portfolio of 626 MW (net) is spread globally in the U.S., Guatemala and Kenya.
Learn more about Ormat Technologies by visiting Ormat.com. To download Ormat's investor relations app, which offers access to its SEC filings, press releases, webcast and more, please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.
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 28, 2014.
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 and Nine-Month Periods Ended September 30, 2014 and 2013 | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (In thousands, except per share data) | (In thousands, except per share data) | |||
| Revenues: | ||||
| Electricity | $ 102,506 | $ 88,994 | $ 289,015 | $ 245,005 |
| Product | 37,736 | 41,755 | 121,266 | 157,329 |
| Total revenues | 140,242 | 130,749 | 410,281 | 402,334 |
| Cost of revenues: | ||||
| Electricity | 61,727 | 61,356 | 186,083 | 175,085 |
| Product | 23,040 | 29,637 | 75,307 | 110,335 |
| Total cost of revenues | 84,767 | 90,993 | 261,390 | 285,420 |
| Gross margin | 55,475 | 39,756 | 148,891 | 116,914 |
| Operating expenses: | ||||
| Research and development expenses | 250 | 838 | 395 | 3,446 |
| Selling and marketing expenses | 4,258 | 2,575 | 10,853 | 17,861 |
| General and administrative expenses | 7,179 | 6,546 | 20,847 | 20,264 |
| Write-off of unsuccessful exploration activities | — | — | 8,107 | — |
| Operating income | 43,788 | 29,797 | 108,689 | 75,343 |
| Other income (expense): | ||||
| Interest income | 35 | 742 | 236 | 870 |
| Interest expense, net | (22,494) | (18,459) | (65,084) | (51,826) |
| Foreign currency translation and transaction gains (losses) | (2,946) | 1,258 | (3,639) | 3,844 |
| Income attributable to sale of tax benefits | 5,487 | 5,027 | 18,334 | 14,342 |
| Gain from sale of property, plant and equipment | — | — | 7,628 | — |
| Other non-operating expense, net | 243 | 137 | 649 | 1,583 |
| Income before income taxes and equity in losses of investees | 24,113 | 18,502 | 66,813 | 44,156 |
| Income tax provision | (6,444) | (5,201) | (17,731) | (15,028) |
| Equity in losses of investees, net | (899) | (158) | (1,210) | (149) |
| Income from continuing operations | 16,770 | 13,143 | 47,872 | 28,979 |
| Discontinued operations: | ||||
| Income from discontinued operations | — | — | — | 5,311 |
| Income tax provision | — | — | — | (614) |
| Total income from discontinued operations | — | — | — | 4,697 |
| Net income | 16,770 | 13,143 | 47,872 | 33,676 |
| Net income attributable to noncontrolling interest | (256) | (193) | (670) | (600) |
| Net income attributable to the Company's stockholders | $ 16,514 | $ 12,950 | $ 47,202 | $ 33,076 |
| Earnings per share attributable to the Company's stockholders - Basic and diluted: | ||||
| Basic: | ||||
| Income from continuing operations | $ 0.37 | $ 0.29 | $ 1.04 | $ 0.62 |
| Discontinued operations | -- | -- | -- | 0.10 |
| Net Income | $ 0.37 | $ 0.29 | $ 1.04 | $ 0.72 |
| Diluted: | ||||
| Income from continuing operations | $ 0.36 | $ 0.28 | $ 1.03 | $ 0.62 |
| Discontinued operations | -- | -- | -- | 0.10 |
| Net Income | $ 0.36 | $ 0.28 | $ 1.03 | $ 0.72 |
| Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: | ||||
| Basic | 45,690 | 45,438 | 45,594 | 45,433 |
| Diluted | 46,102 | 45,494 | 45,917 | 45,454 |
| Ormat Technologies, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| As of September 30, 2014 and December 31, 2013 | ||
| (Unaudited) | ||
| September 30, | December 31, | |
| 2014 | 2013 | |
| (In thousands) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 42,451 | $ 57,354 |
| Restricted cash, cash equivalents and marketable securities | 127,452 | 51,065 |
| Receivables: | ||
| Trade | 75,224 | 95,365 |
| Related entity | 506 | 442 |
| Other | 9,165 | 11,049 |
| Due from Parent | 970 | 382 |
| Inventories | 17,337 | 22,289 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | 14,784 | 21,217 |
| Deferred income taxes | 2,613 | 523 |
| Prepaid expenses and other | 36,879 | 29,654 |
| Total current assets | 327,381 | 289,340 |
| Unconsolidated investments | 1,339 | 7,076 |
| Deposits and other | 21,679 | 22,114 |
| Deferred income taxes | — | 891 |
| Deferred charges | 35,399 | 36,738 |
| Property, plant and equipment, net | 1,459,316 | 1,452,336 |
| Construction-in-process | 268,349 | 288,827 |
| Deferred financing and lease costs, net | 28,969 | 30,178 |
| Intangible assets, net | 29,481 | 31,933 |
| Total assets | $ 2,171,913 | $ 2,159,433 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 78,411 | $ 98,047 |
| Billings in excess of costs and estimated earnings on uncompleted contracts | 45,310 | 7,903 |
| Current portion of long-term debt: | ||
| Limited and non-recourse: | ||
| Senior secured notes | 31,211 | 31,137 |
| Other loans | 17,995 | 20,377 |
| Full recourse | 24,116 | 28,875 |
| Total current liabilities | 197,043 | 186,339 |
| Long-term debt, net of current portion: | ||
| Limited and non-recourse: | ||
| Senior secured notes | 379,036 | 270,310 |
| Other loans | 269,123 | 311,078 |
| Full recourse: | ||
| Senior unsecured bonds | 250,366 | 250,596 |
| Other loans | 40,298 | 53,467 |
| Revolving credit lines with banks (full recourse) | 28,100 | 112,017 |
| Liability associated with sale of tax benefits | 44,757 | 60,985 |
| Deferred lease income | 61,294 | 63,496 |
| Deferred income taxes | 67,328 | 55,035 |
| Liability for unrecognized tax benefits | 5,606 | 4,950 |
| Liabilities for severance pay | 21,984 | 23,841 |
| Asset retirement obligation | 19,801 | 18,679 |
| Other long-term liabilities | 3,633 | 3,529 |
| Total liabilities | 1,388,369 | 1,414,322 |
| Equity: | ||
| The Company's stockholders' equity: | ||
| Common stock | 46 | 46 |
| Additional paid-in capital | 740,651 | 735,295 |
| Retained earnings (accumulated deficit) | 36,835 | (3,088) |
| Accumulated other comprehensive income (loss) | (5,710) | 487 |
| 771,822 | 732,740 | |
| Noncontrolling interest | 11,722 | 12,371 |
| Total equity | 783,544 | 745,111 |
| Total liabilities and equity | $ 2,171,913 | $ 2,159,433 |
Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information
For the Three and Nine-Month Periods Ended September 30, 2014 and 2013
(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 operating activities and net income to EBITDA and Adjusted EBITDA for the nine and three-month periods ended September 30, 2014 and 2013:
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (in thousands) | (in thousands) | |||
| Net cash provided by operating activities | $ 75,191 | $ 12,276 | $ 178,770 | $ 32,226 |
| Adjusted for: | ||||
| Interest expense, net (excluding amortization of deferred financing costs) | 20,038 | 17,405 | 59,366 | 47,367 |
| Interest income | (35) | (742) | (236) | (870) |
| Income tax provision | 6,444 | 5,201 | 17,731 | 15,642 |
| Adjustments to reconcile net income or loss to net cash provided by operating activities (excluding depreciation and amortization) | (32,404) | 26,115 | (56,062) | 72,361 |
| EBITDA | $ 69,234 | $ 60,255 | $ 199,569 | $ 166,726 |
| Termination fees | — | — | — | 8,979 |
| Adjusted EBITDA | $ 69,234 | $ 60,255 | $ 199,569 | $ 175,705 |
| Net cash provided by investing activities | $ (106,423) | $ (25,029) | $ (135,435) | $ (128,198) |
| Net cash provided by (used in) financing activities | $ (6,437) | $ 19,295 | $ (58,238) | $ 64,779 |
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (in thousands) | (in thousands) | |||
| Net income | $ 16,770 | $ 13,143 | $ 47,872 | $ 33,676 |
| Adjusted for: | ||||
| Interest expense, net (including amortization of deferred financing costs) | 22,459 | 17,717 | 64,848 | 50,956 |
| Income tax provision | 6,444 | 5,201 | 17,731 | 15,642 |
| Depreciation and amortization | 23,561 | 24,194 | 69,118 | 66,452 |
| EBITDA | $ 69,234 | $ 60,255 | $ 199,569 | $ 166,726 |
| Termination fees | — | — | — | 8,979 |
| Adjusted EBITDA | $ 69,234 | $ 60,255 | $ 199,569 | $ 175,705 |