February 23, 2016 - 5:34 PM EST
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Ormat Technologies Reports All-Time Record Annual Revenue of $595 Million and Adjusted EBITDA of $291 Million

Higher Product Segment Revenue and Continued Margin Improvements Drive Annual Results Past 2015 Guidance

Total Book Equity Exceeds $1 Billion

RENO, Nev., Feb. 23, 2016 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) today announced record financial results for the fourth quarter and full year ended December 31, 2015.

Financial highlights for the full year:

  • Total revenues of  $594.6 million in 2015, an increase of 6.3% from 2014;
  • Product segment revenues reached record levels of $218.7 million in 2015 from $177.2 million in 2014 representing a 23.4% increase;
  • Electricity segment revenues decreased 1.7% to $375.9 million in 2015 from $382.3 million in 2014, mainly related to lower oil and natural gas prices; 
  • Electricity generation increased 8.6% to 4.8 million MWh;
  • Gross margin increased to 36.7% in 2015 compared to 36.4% in 2014;
  • Operating income grew 14.3% to $164.1 million in 2015 from $143.5 million in 2014; 
  • Adjusted EBITDA grew 6.8% to $291.3 million in 2015;
  • Net income attributable to the company's shareholders, increased 120.7% compared to 2014 and reached $119.6 million, or $2.43 per diluted share in 2015 ([1]);
  • Net income attributable to the company's shareholders excluding the non-recurring tax benefit recorded in the third quarter (1), was $70.9 million, or $1.44 per diluted share in 2015; 
  • Total book equity exceeded $1 billion; and 
  • Declared a quarterly dividend of $0.31 per share for the fourth quarter of 2015.

(1) In the third quarter of 2015, the Company recorded income tax benefit that includes deferred tax asset and related expenses of $48.7 million relating to a new tax law in Kenya, which extended the period of utilizing investment deductions for the Olkaria 3 power plant from five years to 10 years.

Operational and business developments for the full year:

  • Commenced commercial operation of three new power plants with an aggregate capacity of over 90 MW. All three plants were constructed and started operating ahead of planned schedule, including:
    • Plant 4 in Olkaria III in Kenya, expanding complex capacity to nearly 140 MW in January 2016;  
    • Phase 2 of Don A. Campbell geothermal power plant in Nevada came on line in September 2015. The complex annual generating capacity increased to approximately 41 MW following the commencement of Phase 2; and
    • Phase 2 of the McGinness Hills geothermal power plant in Nevada came on line February 2015 and increased the complex’s generating capacity to approximately 83 MW;
  • Heber 1 geothermal power plant started selling power under a new PPA with an average fixed energy price of $85.62, reducing our portfolio exposure to natural gas price fluctuations to approximately 90 MW; 
  • Commenced construction of the 35 MW Platanares geothermal project in Honduras;
  • Signed MOU to acquire 85% of the Bouillante geothermal power plant in the Island of Guadeloupe;
  • Signed a strategic collaboration agreement with Toshiba Corporation to develop opportunities in the areas of geothermal power generation systems and related equipment;
  • Closed and received $162.3 million cash from Northleaf Capital Partners for a 36.75% equity investment in certain power plants;
  • Closed $42 million loan agreement for the Amatitlan power plant in Guatemala;
  • Signed an approximate $100.0 million EPC contract in Chile; and
  • Completed a share exchange transaction with Ormat Industries Ltd.

“We executed well in 2015, delivered strong financial results and made significant progress on our long-term growth strategy positioning us well for continued success in 2016 and beyond,” noted Isaac Angel, Chief Executive Officer. “Our methodical efforts to improve operational efficiency, expand profit margins, and diversify revenue are progressing well and driving record financial results. During 2015, our product segment grew significantly, balancing headwinds in our electricity segment mainly related to lower oil and natural gas prices. We entered 2016 with strong momentum and we believe we are well positioned for continued success and expect to achieve profitable growth as well as expand opportunities around the world for both our operating segments, including as a result of our collaboration with Toshiba.”

“We have a plan to add 160 to 190 megawatts by the end of 2018 by bringing new plants online, expanding existing plants as well as adding capacity from the recent acquisition,” continued Mr. Angel. “As part of this expansion plan, we recently began development efforts in two sites in Nevada. These two projects, Tungsten Mountain and Dixie Meadows, are each expected to generate 25 to 35 MW once they come online in 2017 or 2018. We have drilled several exploration wells at both sites, and while drilling activity is ongoing, we are making progress towards securing PPAs. We believe that these projects may qualify for production tax credits.”

“In 2015, we took action to increase shareholder value by completing the Northleaf and restructuring transactions,” continued Mr. Angel. “We continue to enhance all aspects of Ormat’s value chain to improve our performance as well as to progress with near and long-term initiatives in our core geothermal business and in new activities to provide long-term sustainable growth. I am encouraged by our progress in the last year, and as we progress in each of our key initiatives, we are setting our intermediate and long-term strategies.”

Guidance

Mr. Angel added, “We 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. The Electricity segment revenue guidance assumes current oil and natural gas prices. We expect 2016 Adjusted EBITDA of $300 to $310 million for the full year. This estimate includes approximately $9 million of expected income related to tax equity transactions compared to $25 million in 2015. We expect annual adjusted EBITDA attributable to minority’s interest to be approximately $17 million. This amount assumes the inclusion of the second phase of the Don A. Campbell power plant in the joint venture with Northleaf.”

Financial Summary

Annual Results

For the year ended December 31, 2015, total revenues increased 6.3% from $559.5 million in 2014 to $594.6 million in 2015. Electricity segment revenues decreased 1.7% from $382.3 million in 2014 to $375.9 million in 2015. This decrease was primarily due to the impact of lower commodity prices and the hurricane-related damage at the Puna plant in Hawaii last year. Product segment revenues increased by 23.4% to $218.7 million in 2015 compared to $177.2 million in 2014.

Operating income for the full year 2015 was $164.1 million, up 14.3% compared to $143.5 million in 2014.

The company reported that net income attributable to the company’s shareholders increased 120.7% to $119.6 million, or $2.43 per share diluted, for 2015 compared to $54.2 million or $1.18 per share diluted, last year. Full-year profitability included a non-recurring, non-cash income tax benefit of $48.7 million relating to a new tax law in Kenya which extended the period of utilizing investment deductions from five years to ten years for the Olkaria 3 power plant recorded in the third quarter of 2015. The net income attributable to the company's shareholders excluding the non-recurring tax benefit, was $70.9 million, or $1.44 per share diluted in 2015;

Adjusted EBITDA for the year ended December 31, 2015 was $291.3 million, compared to $272.7 million for the year ended December 31, 2014. 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 $190.0 million in the year ended December 31, 2015, compared to $213.2 million in the year ended December 31, 2014.

As of December 31, 2015, cash and cash equivalents were $185.9 million. In addition, as of December 31, 2015, the company had $145.3 million of unused corporate borrowing capacity under existing lines of credit.

Fourth Quarter Results

For the three months ended December 31, 2015, total revenues reached $171.1 million from $149.2 million in the fourth quarter of 2014, an increase of 14.6%. Electricity revenues increased 4.8% to $97.8 million in the three months ended December 31, 2015, from $93.3 million in the three months ended December 31, 2014. Product revenues increased 31.0% to $73.3 million in the three months ended December 31, 2015, from $56.0 million in the three months ended December 31, 2014.

The company reported net income attributable to the company’s shareholders of $23.0 million or $0.46 per share diluted compared to net income attributable to the company’s shareholders of $7.0 million or $0.15 per share for the same period last year.

Adjusted EBITDA for the three months ended December 31, 2015 was $79.1 million, compared to $68.3 million for the three months ended December 31, 2014. 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 23, 2016, Ormat's Board of Directors approved a payment of a quarterly dividend of $0.31 per share pursuant to the company’s dividend policy. The dividend will be paid on March 29, 2016 to shareholders of record as of closing of business on March 15, 2016. In addition, the company expects to pay quarterly dividends of $0.07 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 24, 2016. 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 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 Free1-855-669-9657
   
CONFERENCE REPLAY
US Toll Free:1-877-344-7529
International Toll:1-412-317-0088
Replay Access Code:10077988
  

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 69 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 470 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 697 MW generating portfolio 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 26, 2015.

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, 2015 and 2014
(Unaudited)
    
 Three Months Ended
December 31
 Year Months Ended
December 31
 2015 2014 2015 2014
            
 (In thousands, except per
share data)
 (In thousands, except per
share data)
Revenues:           
Electricity$ 97,796  $ 93,286  $ 375,920  $ 382,301 
Product  73,278    55,957    218,724    177,223 
Total revenues  171,074    149,243    594,644    559,524 
Cost of revenues:                   
Electricity  63,008    60,547    242,612    246,630 
Product  43,927    33,836    133,753    109,143 
Total cost of revenues  106,935    94,383    376,365    355,773 
Gross margin  64,139    54,860    218,279    203,751 
Operating expenses:           
Research and development expenses  668    388    1,780    783 
Selling and marketing expenses  3,978    4,572    16,077    15,425 
General and administrative expenses  9,185    7,767    34,782    28,614 
Write-off of unsuccessful exploration activities  1,220    7,332    1,579    15,439 
Operating income   49,088    34,801    164,061    143,490 
Other income (expense):           
Interest income  191    76    297    312 
Interest expense, net  (18,142)   (19,570)   (72,577)   (84,654)
Foreign currency translation and transaction gains (losses)   (981)   (2,200)   (1,622)   (5,839)
Income attributable to sale of tax benefits  6,514    5,809    25,431    24,143 
Gain from sale of property, plant and equipment              7,628 
Other non-operating expense, net  (468)   107    (1,991)   756 
Income before income taxes and equity in                   
losses of investees  36,202    19,023    113,599    85,836 
Income tax provision (benefit)  (11,438)   (9,877)   15,258    (27,608)
Equity in losses of investees, net  (616)   (2,003)   (5,508)   (3,213)
                    
Net income   24,148    7,143    123,349    55,015 
Net income attributable to noncontrolling interest  (1,160)   (163)   (3,776)   (833)
Net income attributable to the Company's stockholders$ 22,988  $ 6,980  $ 119,573  $ 54,182 
                    
Earnings per share attributable to the Company's stockholders - Basic and diluted:           
Basic:           
Income from continuing operations $ 0.47  $ 0.15  $ 2.46  $ 1.19 
Discontinued operations  -    -    -    - 
Net Income$ 0.47  $ 0.15  $ 2.46  $ 1.19 
                    
Diluted:                   
Income from continuing operations $ 0.46  $ 0.15  $ 2.43  $ 1.18 
Discontinued operations  -    -    -    - 
Net Income $ 0.46  $ 0.15  $ 2.43  $ 1.18 
                    
Weighted average number of shares used in computation of earnings per share
  attributable to the Company's stockholders:
                   
Basic  49,074    45,537    48,562    45,508 
Diluted  49,668    46,018    49,187    45,859 
                    


Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of December 31, 2015 and December 31, 2014
(Unaudited)
     
  December 31, December 31,
  2015 2014
       
   (In thousands)
ASSETS          
Current assets:      
Cash and cash equivalents  $ 185,919  $ 40,230 
Restricted cash, cash equivalents and marketable securities   49,503    93,248 
Receivables:      
Trade   55,301    48,609 
Related entity       451 
Other   7,885    10,141 
Due from Parent       1,337 
Inventories   18,074    16,930 
Costs and estimated earnings in excess of billings on uncompleted contracts   25,120    27,793 
Deferred income taxes       251 
Prepaid expenses and other   33,334    34,884 
Total current assets   375,136    273,874 
Deposits and other   17,968    20,044 
Deferred charges   42,811    37,567 
Property, plant and equipment, net    1,559,335    1,437,637 
Construction-in-process   248,835    296,722 
Deferred financing and lease costs, net   23,084    27,057 
Intangible assets, net   25,875    28,655 
Total assets $ 2,293,044  $ 2,121,556 
LIABILITIES AND EQUITY          
Current liabilities:      
Accounts payable and accrued expenses $ 91,955  $ 88,276 
Deferred income taxes       974 
Short term revolving credit lines with banks (full recourse)       20,300 
Billings in excess of costs and estimated earnings on uncompleted contracts   33,892    24,724 
Current portion of long-term debt:      
Limited and non-recourse:      
Senior secured notes    29,930    34,368 
Other loans   21,495    17,995 
Full recourse   11,229    19,116 
Total current liabilities   188,501    205,753 
Long-term debt, net of current portion:      
Limited and non-recourse:      
Senior secured notes    305,328    360,366 
Other loans   283,380    264,625 
Full recourse:      
Senior unsecured bonds   249,981    250,289 
Other loans   19,122    34,351 
Unconsolidated investments   8,100    3,617 
Liability associated with sale of tax benefits   11,665    39,021 
Deferred lease income   58,099    60,560 
Deferred income taxes   32,654    66,220 
Liability for unrecognized tax benefits   10,385    7,511 
Liabilities for severance pay   19,323    20,399 
Asset retirement obligation   20,856    19,142 
Other long-term liabilities   1,776    2,956 
Total liabilities   1,209,170    1,334,810 
           
Equity:          
The Company's stockholders' equity:      
Common stock   49    46 
Additional paid-in capital   849,223    742,006 
Retained earnings (accumulated deficit)   148,396    41,539 
Accumulated other comprehensive income (loss)   (7,667)   (8,668)
    990,001    774,923 
Noncontrolling interest   93,873    11,823 
Total equity   1,083,874    786,746 
Total liabilities and equity $ 2,293,044  $ 2,121,556 



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, 2015 and 2014
(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 cost, (vi) stock-based compensation, (vii) gain from extinguishment of liability, and (viii) gain 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 three-month periods and years ended December 31, 2015 and 2014: the quarterly table is not correct – there should be an M&A line and not share exchange, the M&A line is should be write off of exploration

  Three Months Ended December 31 Year Ended December 31
  2015 2014 2015 2014
             
  (in thousands) (in thousands)
Net cash provided by operating activities $ 67,060  $ 34,465  $ 190,025  $ 213,235 
Adjusted for:            
Interest expense, net (excluding amortization            
of deferred financing costs)   16,231    17,604    63,802    76,970 
Interest income   (191)   (76)   (297)   (312)
Income tax provision   11,438    9,877    (15,258)   27,608 
Adjustments to reconcile net income or loss to net cash            
provided by operating activities (excluding            
depreciation and amortization)   (16,169)   (1,360)   40,530    (57,422)
EBITDA $ 78,369  $ 60,510  $ 278,802  $ 260,079 
                     
Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices       (2,493)   4,129    (6,960)
Stock-based compensation   878    1,263    3,955    5,571 
Gain on sale of a subsidiary and property, plant and equipment               (7,628)
Loss from extinguishment of liability           1,710     
Merger and acquisition transaction costs       1,000    3,800    1,000 
Write-off of unsuccessful exploration activities   1,220    7,332    1,579    15,439 
Mark to market on derivatives which represents currency forward contracts   (1,385)   699    (2,720)   5,172 
Adjusted EBITDA $ 79,082  $ 68,311  $ 291,255  $ 272,673 
                     
             
Net cash provided by investing activities $ (14,433) $ 6,273  $ (90,971) $ (129,162)
Net cash provided by (used in) financing activities $ (38,249) $ (42,959) $ 46,635  $ (101,197)
                     
             
  Three Months Ended December 31 Year Ended December 31
  2015 2014 2015 2014
             
  (in thousands) (in thousands)
Net income $ 24,148  $ 7,143  $ 123,349  $ 55,015 
Adjusted for:            
Interest expense, net (including amortization            
of deferred financing costs)   17,951    19,494    72,280    84,342 
Income tax provision   11,438    9,877    (15,258)   27,608 
Depreciation and amortization   24,832    23,996    98,431    93,114 
EBITDA $ 78,369  $ 60,510  $ 278,802  $ 260,079 
                     
Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices       (2,493)   4,129    (6,960)
Stock-based compensation   878    1,263    3,955    5,571 
Gain on sale of a subsidiary and property, plant and equipment               (7,628)
Loss from extinguishment of liability           1,710     
Merger and acquisition transaction costs       1,000    3,800    1,000 
Write-off of unsuccessful exploration activities   1,220    7,332    1,579    15,439 
Mark to market on derivatives which represents currency forward contracts   (1,385)   699    (2,720)   5,172 
Adjusted EBITDA $ 79,082  $ 68,311  $ 291,255  $ 272,673 
                     
Ormat Technologies Contact:
Smadar Lavi
Investor Relations
775-356-9029 (ext. 65726)
[email protected]

Investor Relations Agency Contact:	
Rob Fink/Brett Maas
Hayden - IR
646-415-8972/646-536-7331
[email protected] / [email protected]

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Source: GlobeNewswire (February 23, 2016 - 5:34 PM EST)

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