Net income for the second quarter of $9.1 million or $0.20 per share attributable to company's shareholders
Product segment backlog increased to a record $376.0 million
Company maintains 2014 annual revenue guidance
RENO, Nev., Aug. 5, 2014 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE: ORA ) announced today its financial results for the second quarter of 2014.
Quarterly financial and operational highlights:
- Quarterly revenues were $127.6 million, a 16.4% decrease from the second quarter of 2013 as a result of an expected reduction in Product Segment revenues. For the first six months of 2014, total revenues decreased slightly from the prior year by 0.6%;
- Electricity segment revenue increase of 4.5% year over year;
- Quarterly gross margins reached 31.3% for the second quarter and 34.6% for the first half of the year;
- Adjusted EBITDA for the quarter reached $59.7 million and $130.3 million for the first half of the year;
- Net income attributable to the company's shareholders of $9.1 million, or $0.20 per share for the second quarter and $30.7 million, or $0.67 per share for the first six months of 2014;
- Sarulla Consortium closed a $1.17 Billion financing agreement;
- Product backlog grew to a record of $376.0 million primarily with the addition of the Sarulla $254.0 million supply contract; and
- Isaac Angel became CEO on July 1, 2014.
"We are pleased with the results for the second quarter, which reflect the continued success of our business and contributed to strong financial results in the first half of 2014," said Ormat's CEO Isaac Angel. "In our Electricity Segment, we continued to enhance our power plants, which will drive improvements in the segment. Even with the expected and scheduled outage of Heber 1, Electricity Segment revenues increased 4.5% compared to the prior year, and increased 19.5% for the first six months of 2014. In our Product Segment, we grew our backlog to a record $376.0 million with the addition of our $254.0 million supply contract at Sarulla."
Mr. Angel concluded, "Overall, we are well positioned to continue to execute on our growth strategy. We reaffirm our 2014 guidance and expect total revenues to be between $540.0 million to $560.0 million with electricity revenues ranging $370.0 million to $380.0 million and our product segment revenues to be between $170.0 million and $180.0 million."
Financial Summary
For the three months ended June 30, 2014, total revenues decreased to $127.6 million from $152.7 million in the second quarter of 2013, a decrease of 16.4%. Electricity revenues increased 4.5% to $91.7 million in the three months ended June 30, 2014. Product revenues decreased 44.7% to $35.9 million in the three months ended June 30, 2014. By reaffirming our Product Segment guidance, we expect the second half of 2014 to be stronger than the first half with a strong fourth quarter.
Operating income for the three months ended June 30, 2014 was $22.3 million, compared to $37.9 million for the three months ended June 30, 2013. Operating income includes an $8.1 million write-off of our Wister site in California off-set by a $7.6 million pre-tax profit from the sale of the Heber Solar project in California.
For the three months ended June 30, 2014, the company reported net income attributable to the company's shareholders of $9.1 million, or $0.20 per share, compared to $25.2 million, or $0.55 per share, for the three months ended June 30, 2013. For the six months ended June 30, 2014, the company reported net income attributable to the company's shareholders of $30.7 million, or $0.67 per share, compared to $20.1 million, or $0.44 per share, for the six months ended June 30, 2013 and increase of 52.7%.
Adjusted EBITDA for the three months ended June 30, 2014 was $59.7 million, compared to $69.7 million for the three months ended June 30, 2013, a decrease of 14.3%. Adjusted EBITDA for the six months ended June 30, 2014 was $130.3 million, compared to $115.5 million for the six months ended June 30, 2013, an increase of 12.9%. 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 $103.6 million in the six months ended June 30, 2014, compared to $20.0 million in the six months ended June 30, 2013.
On August 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. The dividend will be paid on August 28, 2014 to shareholders of record as of closing of business on August 19, 2014.
As of June 30, 2014, cash and cash equivalents were $80.1 million. In addition, as of June 30, 2014, the company had $168.4 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 10:00 A.M. ET on Wednesday, August 6, 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 web site. 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 installed to utilities and developers worldwide, totaling over 1,800 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 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 Six and Three-Month Periods Ended June 30, 2014 and 2013 | ||||
| (Unaudited) | ||||
| Three Months Ended June 30 | Six Months Ended June 30 | |||
| 2014 | 2013 | 2014 | 2013 | |
| (In thousands, except per share data) | (In thousands, except per share data) | |||
| Revenues: | ||||
| Electricity | $ 91,692 | $ 87,713 | $ 186,509 | $ 156,011 |
| Product | 35,911 | 64,966 | 83,530 | 115,574 |
| Total revenues | 127,603 | 152,679 | 270,039 | 271,585 |
| Cost of revenues: | ||||
| Electricity | 67,322 | 58,641 | 124,356 | 113,729 |
| Product | 20,324 | 43,657 | 52,267 | 80,698 |
| Total cost of revenues | 87,646 | 102,298 | 176,623 | 194,427 |
| Gross margin | 39,957 | 50,381 | 93,416 | 77,158 |
| Operating expenses: | ||||
| Research and development expenses | 232 | 1,608 | 145 | 2,608 |
| Selling and marketing expenses | 3,216 | 3,777 | 6,595 | 15,286 |
| General and administrative expenses | 6,072 | 7,134 | 13,668 | 13,718 |
| Write-off of unsuccessful exploration activities | 8,107 | — | 8,107 | — |
| Operating income | 22,330 | 37,862 | 64,901 | 45,546 |
| Other income (expense): | ||||
| Interest income | 90 | 87 | 201 | 128 |
| Interest expense, net | (22,072) | (17,504) | (42,590) | (33,367) |
| Foreign currency translation and transaction gains (losses) | (55) | 904 | (693) | 2,586 |
| Income attributable to sale of tax benefits | 6,130 | 5,783 | 12,847 | 9,315 |
| Gain from sale of property, plant and equipment | 7,628 | — | 7,628 | — |
| Other non-operating expense, net | 343 | 29 | 406 | 1,446 |
| Income before income taxes and equity in income losses of investees | 14,394 | 27,161 | 42,700 | 25,654 |
| Income tax provision | (4,967) | (5,780) | (11,287) | (9,827) |
| Equity in income (losses) of investees, net | (114) | 9 | (311) | 9 |
| Income from continuing operations | 9,313 | 21,390 | 31,102 | 15,836 |
| Discontinued operations: | ||||
| Income from discontinued operations | — | 4,480 | — | 5,311 |
| Income tax provision | — | (363) | — | (614) |
| Total income from discontinued operations | — | 4,117 | — | 4,697 |
| Net income | 9,313 | 25,507 | 31,102 | 20,533 |
| Net income attributable to noncontrolling interest | (177) | (322) | (414) | (407) |
| Net income attributable to the Company's stockholders | $ 9,136 | $ 25,185 | $ 30,688 | $ 20,126 |
| Earnings per share attributable to the Company's stockholders - Basic and diluted: | ||||
| Income from continuing operations | $ 0.20 | $ 0.46 | $ 0.67 | $ 0.34 |
| Discontinued operations | -- | 0.09 | -- | 0.10 |
| Net Income | $ 0.20 | $ 0.55 | $ 0.67 | $ 0.44 |
| Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: | ||||
| Basic | 45,606 | 45,431 | 45,545 | 45,431 |
| Diluted | 45,963 | 45,448 | 45,827 | 45,443 |
| Ormat Technologies, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| As of June 30, 2014 and December 31, 2013 | ||
| (Unaudited) | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| (In thousands) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 80,120 | $ 57,354 |
| Restricted cash, cash equivalents and marketable securities | 54,077 | 51,065 |
| Receivables: | ||
| Trade | 78,764 | 95,365 |
| Related entity | 442 | 442 |
| Other | 7,963 | 11,049 |
| Due from Parent | 607 | 382 |
| Inventories | 18,292 | 22,289 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | 25,918 | 21,217 |
| Deferred income taxes | 2,484 | 523 |
| Prepaid expenses and other | 38,156 | 29,654 |
| Total current assets | 306,823 | 289,340 |
| Unconsolidated investments | 3,308 | 7,076 |
| Deposits and other | 23,480 | 22,114 |
| Deferred income taxes | — | 891 |
| Deferred charges | 35,674 | 36,738 |
| Property, plant and equipment, net | 1,468,012 | 1,452,336 |
| Construction-in-process | 247,901 | 288,827 |
| Deferred financing and lease costs, net | 29,429 | 30,178 |
| Intangible assets, net | 30,302 | 31,933 |
| Total assets | $ 2,144,929 | $ 2,159,433 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 79,800 | $ 98,047 |
| Short-term revolving credit lines with banks (full recourse) | 42,600 | — |
| Billings in excess of costs and estimated earnings on uncompleted contracts | 28,185 | 7,903 |
| Current portion of long-term debt: | ||
| Limited and non-recourse: | ||
| Senior secured notes | 30,208 | 31,137 |
| Other loans | 21,207 | 20,377 |
| Full recourse | 23,994 | 28,875 |
| Total current liabilities | 225,994 | 186,339 |
| Long-term debt, net of current portion: | ||
| Limited and non-recourse: | ||
| Senior secured notes | 241,146 | 270,310 |
| Other loans | 300,429 | 311,078 |
| Full recourse: | ||
| Senior unsecured bonds | 250,443 | 250,596 |
| Other loans | 43,940 | 53,467 |
| Revolving credit lines with banks (full recourse) | 82,000 | 112,017 |
| Liability associated with sale of tax benefits | 50,829 | 60,985 |
| Deferred lease income | 62,029 | 63,496 |
| Deferred income taxes | 63,884 | 55,035 |
| Liability for unrecognized tax benefits | 5,589 | 4,950 |
| Liabilities for severance pay | 23,794 | 23,841 |
| Asset retirement obligation | 19,422 | 18,679 |
| Other long-term liabilities | 4,830 | 3,529 |
| Total liabilities | 1,374,329 | 1,414,322 |
| Equity: | ||
| The Company's stockholders' equity: | ||
| Common stock | 46 | 46 |
| Additional paid-in capital | 738,842 | 738,929 |
| Retained earnings | 22,597 | (6,722) |
| Accumulated other comprehensive income | (3,673) | 487 |
| 757,812 | 732,740 | |
| Noncontrolling interest | 12,788 | 12,371 |
| Total equity | 770,600 | 745,111 |
| Total liabilities and equity | $ 2,144,929 | $ 2,159,433 |
| 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, 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 six and three-month periods ended June 30, 2014 and 2013:
| Three Months Ended June 30 | Six Months Ended June 30 | |||
| 2014 | 2013 | 2014 | 2013 | |
| (in thousands) | (in thousands) | |||
| Net cash provided by operating activities | $ 35,503 | $ 1,734 | $ 103,579 | $ 19,950 |
| Adjusted for: | ||||
| Interest expense, net (excluding amortization of deferred financing costs) | 20,152 | 15,626 | 39,328 | 29,962 |
| Interest income | (90) | (87) | (201) | (128) |
| Income tax provision | 4,967 | 6,143 | 11,287 | 10,441 |
| Adjustments to reconcile net income or loss to net cash provided by operating activities (excluding depreciation and amortization) | (788) | 46,303 | (23,658) | 46,246 |
| EBITDA | $ 59,744 | $ 69,719 | $ 130,335 | $ 106,471 |
| Termination fees | — | — | — | 8,979 |
| Adjusted EBITDA | $ 59,744 | $ 69,719 | $ 130,335 | $ 115,450 |
| Net cash provided by (used in) investing activities | $ 6,311 | $ (4,925) | $ (29,012) | $ (103,169) |
| Net cash provided by (used in) financing activities | $ (9,621) | $ (25,543) | $ (51,801) | $ 45,484 |
| Three Months Ended June 30 | Six Months Ended June 30 | |||
| 2014 | 2013 | 2014 | 2013 | |
| (in thousands) | (in thousands) | |||
| Net income | $ 9,313 | $ 25,507 | $ 31,102 | $ 20,533 |
| Adjusted for: | ||||
| Interest expense, net (including amortization of deferred financing costs) | 21,982 | 17,417 | 42,389 | 33,239 |
| Income tax provision | 4,967 | 6,143 | 11,287 | 10,441 |
| Depreciation and amortization | 23,482 | 20,652 | 45,557 | 42,258 |
| EBITDA | $ 59,744 | $ 69,719 | $ 130,335 | $ 106,471 |
| Termination fees | — | — | — | 8,979 |
| Adjusted EBITDA | $ 59,744 | $ 69,719 | $ 130,335 | $ 115,450 |
Ormat Technologies Contact: Smadar Lavi Investor Relations 775-356-9029 Investor Relations Contact: Rob Fink/Brad Nelson KCSA Strategic Communications 212-896-1206 / 212-896-1217 /
