Ormat Technologies Reports a Double-Digit Growth in Revenues, Net Income, and Adjusted EBITDA in the Second Quarter

Strong First Half Performance Drives Increase in 2016 Adjusted EBITDA Guidance


RENO, Nev., Aug. 02, 2016 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) today announced financial results for the second quarter ended June 30, 2016.

Second Quarter Highlights and Recent Developments:

  • Total revenues of $159.9 million, up 13.8% compared to the second quarter of 2015;

  • Electricity segment revenues of $104.0 million, up 14.4% compared to the second quarter of 2015, mainly due to new power plants commencing operations in the fourth quarter 2015 and early this year;

  • Product segment revenues of $55.9 million, up 12.7% compared to the second quarter of 2015;

  • Electricity generation increased 10.8% to 1.3 million MWh;

  • Gross margin increased to 41.2% of total revenues compared to 36.1% in the second quarter of 2015, mainly as a result of improved operating efficiencies;

  • Operating income grew 34.3% to $51.9 million compared to $38.6 million in the second quarter of 2015;

  • Net income attributable to the company's shareholders of $24.3 million, or $0.49 per diluted share,  compared to $14.4 million, or $0.28 per diluted share, in the second quarter of 2015;

  • Adjusted EBITDA of $81.2 million, up 19.7% compared to $67.8 million in the second quarter of 2015;

  • Declared a quarterly dividend of $0.07 per share for the second quarter of 2016;

  • Secured $36.0 million Supply & EPC Contracts for a geothermal power plant in New Zealand;

  • Completed construction of the Veyo Recovered Energy Generation Project in Southern Utah for UAMPS; and

  • Closed the acquisition of the Bouillante Geothermal Power Plant on the Island of Guadeloupe.

“We continued to efficiently execute in the second quarter and delivered strong top-line growth and margin expansion, enabling us to deliver over 60% increase in net income and over 19% increase in Adjusted EBITDA compared to the second quarter last year,” noted Isaac Angel, Chief Executive Officer. “Our product segment has benefited, and will continue to benefit from higher revenue contribution, from several large contracts, and lower commodity prices, which drove gross margins in the products segment to higher than normal levels in the first half, a trend we expect to moderate through the end of the year. In the electricity segment, the contribution of new projects, and specifically the second phase of our Don Campbell Project in Nevada and Plant 4 of our Olkaria III complex in Kenya, is driving increased generation and revenues, while our focus on efficient utilization of infrastructure and operational enhancements are positively affecting gross margins.

“On the product side, we continued to win orders and strengthen our backlog,” added Mr. Angel. “In May, we signed $36 million Supply and EPC contracts, with Eastland Group for the Te Ahi O Maui geothermal project located near Kawerau, New Zealand. This contract as well as other new contracts that we recently signed increased our backlog to $228 million.”

“Looking forward we continue with the implementation of our strategic plan to expand our geographic presence as well as our footprint in the energy storage market which will further advance our goal of transitioning Ormat from a geothermal company to a recognized leader in the renewable energy industry,” continued Mr. Angel.

Guidance

Mr. Angel added, “The strong first-half performance and better than normal gross margins have enabled us to increase our guidance for full-year Adjusted EBITDA. We reiterate our revenue guidance and expect full-year 2016 total revenue of between $620 million and $640 million, with product segment revenue of between $210 million and $220 million. For the electricity segment, we expect revenues to be between $410 million and $420 million. We now expect 2016 Adjusted EBITDA of between $310 million and $320 million for the full year.” 

Financial Summary

Second Quarter Results

For the three months ended June 30, 2016, total revenues were $159.9 million, up from $140.5 million in the second quarter of 2015, an increase of 13.8%. Electricity Segment revenues increased 14.4% to $104.0 million in the three months ended June 30, 2016, up from $90.9 million in the three months ended June 30, 2015. Product Segment revenues increased 12.7% to $55.9 million in the three months ended June 30, 2016, up from $49.6 million in the three months ended June 30, 2015.

The company reported net income attributable to the company’s shareholders of $24.3 million, or $0.49 per diluted share, compared to net income attributable to the company’s shareholders of $14.4 million, or $0.28 per diluted share, for the same period last year.

Adjusted EBITDA for the three months ended June 30, 2016 was $81.2 million, compared to $67.8 million for the three months ended June 30, 2015, an increase of 19.7%. The reconciliation of GAAP net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flow information is set forth below in this release.

On August 2, 2016, ORMAT’s Board of Directors approved a payment of a quarterly dividend of $0.07 per share pursuant to the company’s dividend policy. The dividend will be paid on August 30, 2016 to shareholders of record as of the close of business on August 16, 2016. In addition, the company expects to pay a quarterly dividend of $0.07 per share in the next quarter.

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. EDT on Wednesday, August 3, 2016. The call will be available as a live, listen-only webcast at investor.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 available approximately 30 minutes after the conclusion of the live call.

Please ask to be joined into the Ormat Technologies, Inc. call. 

PARTICIPANT TELEPHONE NUMBERS
PARTICIPANT DIAL IN (TOLL FREE):  1-877-511-6790
PARTICIPANT INTERNATIONAL DIAL IN:  1-412-902-4141
Canada Toll Free:  1-855-669-9657

CONFERENCE REPLAY
US Toll Free:  1-877-344-7529
International Toll:  1-412-317-0088
Replay Access Code:  10088771

About Ormat Technologies

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company 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 72 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 450 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 over 2,000 MW of gross capacity. Ormat’s current 707 MW generating portfolio is spread globally in the U.S., Guatemala, Guadeloupe 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, 2016.

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 Six and Three-Month Periods Ended June 30, 2016 and 2015
(Unaudited)
 
  Three Months Ended June 30   Six Months Ended June 30 
 2016 2015 2016 2015
            
  (In thousands, except per share data)   (In thousands, except per share data) 
Revenues:           
Electricity$104,001  $ 90,926  $ 211,869  $ 180,879 
Product 55,860    49,561    99,586    79,839 
Total revenues 159,861    140,487    311,455    260,718 
Cost of revenues:           
Electricity 62,243    62,522    125,929    118,103 
Product 31,822    27,182    55,857    47,807 
Total cost of revenues 94,065    89,704    181,786    165,910 
Gross margin 65,796    50,783    129,669    94,808 
Operating expenses:           
Research and development expenses 595    414    944    777 
Selling and marketing expenses 3,668    4,283    7,343    7,716 
General and administrative expenses 8,783    7,443    17,532    17,647 
Write-off of unsuccessful exploration activities 863        1,420    174 
Operating income 51,887    38,643    102,430    68,494 
Other income (expense):           
Interest income 245    44    565    53 
Interest expense, net (18,401)   (18,859)   (34,424)   (36,687)
Derivatives and foreign currency transaction gains (losses) (4,332)   (571)   (2,370)   (1,937)
Income attributable to sale of tax benefits 4,519    4,731    8,917    10,283 
Other non-operating expense, net 49    (1,675)   240    (1,392)
Income before income taxes and equity in           
losses of investees 33,967    22,313    75,358    38,814 
Income tax provision (benefit) (7,890)   (6,056)   (17,399)   (11,515)
Equity in losses of investees, net (1,144)   (984)   (2,081)   (1,759)
            
Net income 24,933    15,273    55,878    25,540 
Net income attributable to noncontrolling interest (584)   (859)   (2,258)   (1,094)
Net income attributable to the Company's stockholders$24,349  $ 14,414  $ 53,620  $ 24,446 
            
Earnings per share attributable to the Company's stockholders - Basic and diluted:           
Basic:           
Net Income$0.49  $ 0.29  $ 1.09  $ 0.51 
            
Diluted:           
Net Income$0.49  $ 0.28  $ 1.07  $ 0.49 
            
Weighted average number of shares used in computation of earnings per share
  attributable to the Company's stockholders:
           
Basic 49,456    48,881    49,314    48,063 
Diluted 50,137    50,600    49,977    49,444 
            


 

Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of June 30, 2016 and December 31, 2015
(Unaudited)
 
   June 30,   December 31, 
  2016 2015
       
    (In thousands) 
 ASSETS 
Current assets:      
Cash and cash equivalents $ 192,556  $ 185,919 
Restricted cash, cash equivalents and marketable securities   38,005    49,503 
Receivables:      
Trade   59,042    55,301 
Other   14,350    7,885 
Inventories   16,690    18,074 
Costs and estimated earnings in excess of billings on uncompleted contracts   15,259    25,120 
Deferred income taxes        
Prepaid expenses and other   44,334    33,334 
Total current assets   380,236    375,136 
Deposits and other   18,487    17,968 
Deferred charges   41,409    42,811 
Property, plant and equipment, net   1,562,315    1,559,335 
Construction-in-process   241,199    248,835 
Deferred financing and lease costs, net   5,131    4,022 
Intangible assets, net   24,236    25,875 
Total assets $ 2,273,013  $ 2,273,982 
 LIABILITIES AND EQUITY 
Current liabilities:      
Accounts payable and accrued expenses $ 87,511  $ 91,955 
Billings in excess of costs and estimated earnings on uncompleted contracts   42,912    33,892 
Current portion of long-term debt:      
Limited and non-recourse:      
Senior secured notes   29,998    29,930 
Other loans   21,495    21,495 
Full recourse   11,229    11,229 
Total current liabilities   193,145    188,501 
Long-term debt, net of current portion:      
Limited and non-recourse:      
Senior secured notes   279,971    294,476 
Other loans   265,696    275,888 
Full recourse:      
Senior unsecured bonds   249,632    249,698 
Other loans   13,161    18,687 
Accumulated losses of unconsolidated company in excess of investment   15,347    8,100 
Liability associated with sale of tax benefits   2,064    11,665 
Deferred lease income   56,925    58,099 
Deferred income taxes   21,907    32,654 
Liability for unrecognized tax benefits   9,974    10,385 
Liabilities for severance pay   19,026    19,323 
Asset retirement obligation   21,677    20,856 
Other long-term liabilities   7,053    1,776 
Total liabilities   1,155,578    1,190,108 
       
Equity:      
The Company's stockholders' equity:      
Common stock   49    49 
Additional paid-in capital   856,827    849,223 
Retained earnings (accumulated deficit)   183,018    148,396 
Accumulated other comprehensive income (loss)   (12,838)   (7,667)
    1,027,056    990,001 
Noncontrolling interest   90,379    93,873 
Total equity   1,117,435    1,083,874 
Total liabilities and equity $ 2,273,013  $ 2,273,982 
 


Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information
For the Six and Three-Month Periods Ended June 30, 2016 and 2015
(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) termination fees, (ii) impairment of long-lived assets, (iii) write-off of unsuccessful exploration activities, (iv) any mark-to-market gains or losses from accounting for derivatives, (v) merger and acquisition transaction costs, (vi) stock-based compensation, (vii) gain or losses from extinguishment of liability and (viii) gain or loss on sale of subsidiary and property, plant and equipment. 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 six and three-month periods ended June 30, 2016 and 2015.

 
   Three Months Ended June 30   Six Months Ended June 30 
  2016 2015 2016 2015
             
   (in thousands)   (in thousands) 
Net cash provided by operating activities $ 92,529  $ 29,579  $ 119,573  $ 112,726 
Adjusted for:            
Interest expense, net (excluding amortization            
of deferred financing costs)   17,165    16,355    31,292    32,327 
Interest income   (245)   (44)   (565)   (53)
Income tax provision   7,890    6,056    17,399    11,515 
Adjustments to reconcile net income or loss to net cash            
provided by operating activities (excluding            
depreciation and amortization)   (42,519)   12,593    (12,437)   (34,627)
EBITDA $   74,820   $   64,539   $   155,262    $    121,888  
             
Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices   2,320        2,494    4,129 
Stock-based compensation   817    1,029    1,659    2,156 
Gain on sale of a subdiary and property, plant and equipment                
Termination fee                
Loss from extinguishment of liability       1,710        1,710 
Merger and acquisition transaction costs   500    400    647    3,800 
Impairment charges                
Write-off of unsuccessful exploration activities   863        1,420    174 
Mark to market on derivatives which represents currency forward contracts   1,920    170        (690)
Adjusted EBITDA $   81,240    $    67,848   $   161,482    $    133,167  
             
             
Net cash used in investing activities $ (10,669) $ (32,176) $ (55,289) $ (79,433)
Net cash provided by (used in) financing activities $ (37,802) $ 69,538  $ (57,647) $ 64,142 
 
             
             
   Three Months Ended June 30   Six Months Ended June 30 
  2016 2015 2016 2015
             
   (in thousands)   (in thousands) 
Net income $ 24,933  $ 15,273  $ 55,878  $ 25,540 
Adjusted for:            
Interest expense, net (including amortization            
of deferred financing costs)   18,156    18,815    33,859    36,634 
Income tax provision   7,890    6,056    17,399    11,515 
Depreciation and amortization   23,841    24,395    48,126    48,199 
EBITDA $   74,820   $   64,539   $   155,262    $    121,888  
             
Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices   2,320        2,494    4,129 
Stock-based compensation   817    1,029    1,659    2,156 
Gain on sale of a subdiary and property, plant and equipment                
Termination fee                
Loss from extinguishment of liability       1,710        1,710 
Merger and acquisition transaction costs   500    400    647    3,800 
Impairment charges                
Write-off of unsuccessful exploration activities   863        1,420    174 
Mark to market on derivatives which represents currency forward contracts   1,920    170        (690)
Adjusted EBITDA $   81,240    $    67,848   $   161,482    $    133,167  
 

 

 


            

Tags


Contact Data