Attached files
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| 8-K - 8-K - ORMAT TECHNOLOGIES, INC. | zk1312698.htm |
Exhibit 99.1
PRESS RELEASE
For Immediate Release
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Ormat Technologies Contact:
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Investor Relations Contact:
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Dita Bronicki
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Todd Fromer/Rob Fink
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CEO
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KCSA Strategic Communications
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775-356-9029
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212-896-1215 (Todd) /212-896-1206 (Rob)
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dbronicki@ormat.com
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tfromer@kcsa.com / rfink@kcsa.com
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ORMAT TECHNOLOGIES REPORTS 2012 FOURTH
QUARTER AND YEAR END RESULTS
(RENO, Nev.) February 27, 2013 -- Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the fourth quarter and full year ended December 31, 2012.
The highlights for the year and recent 2013 developments:
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Total revenues increased 17.7 percent for the year to $514.4 million;
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Product segment revenues increased 65.1 percent to a record of $186.9 million with a record backlog of $262.0 million as of February 15, 2013, 9 percent over last year;
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Electricity generation increased by 7.3 percent with the addition of 51 MW from Tuscarora and McGinness Hills which became commercial in January 2012 and July 2012, respectively;
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Adjusted EBITDA increased 11.5 percent to $185.8 million;
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Obtained favorable financing for Olkaria III Plant 1 and Plant 2 currently under construction and secured financing for the expected construction of Plant 3;
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Received $35.7 million in a tax equity transaction; and
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Recorded an impairment charge of $229.1 million relating to the North Brawley power plant which resulted in a net loss of $206.7 million in the year.
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Commenting on the results, Dita Bronicki, Chief Executive Officer of Ormat, stated: “2012 was highlighted by total revenue growth of 17.7 percent as a result of the continued strong performance of our product segment and the steady, consistent growth in our electricity segment. New capacity, and project enhancement implemented during the course of the year enabled us to maintain margins in our electricity segment despite the influence of low natural gas prices on the rates that we get from some of our older PPAs.
“The demand for new geothermal power plants and other power generating units continues to drive significant growth in our product segment. 2013 as well, started with a strong order flow.
“While net income was substantially affected by the non-cash impairment charges of $236.4 million related to the North Brawley and OREG 4 power plants, adjusted EBITDA increased 11.5 percent to $185.8 million with operating cash flow of $93.2 million.
“Our long-term goal remains to develop projects where both resource and markets allow them to be successful and to deliver the best possible products to our customers. We will also continue to look for technical and commercial ways to improve operations as a way to maximize value to our shareholders.
Ms. Bronicki added, “We expect our 2013 electricity revenues to be between $335 million and $345 million and our product segment revenues to be between $180 million and $190 million.”
Financial Summary
Annual Results
For the year ended December 31, 2012, total revenues increased 17.7 percent from $437.0 million in 2011 to $514.4 million in 2012. Product revenues increased 65.1 percent to $186.9 million, up from $113.2 million in the year ended December 31, 2011. The increase in product revenues reflects the increase in new customer orders that we secured mainly in 2011. Electricity revenues increased slightly to $327.5 million up from $323.8 million in the year ended December 31, 2011. The increase in electricity revenues was primarily due to the following:
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Revenue contribution of $23.5 million from our Tuscarora and McGinness Hills power plant;
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Additional net revenue contribution of $3.2 million from other power plants in our portfolio; and
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Net gain of $2.2 million on derivative contracts on oil and natural gas prices.
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This increase was substantially offset by a $25.2 million reduction in revenues due to the transition to short run avoided cost (SRAC) pricing under our SO#4 contracts in California.
Operating loss for the year ended December 31, 2012 was $155.1 million, compared to operating income of $64.0 million for the year ended December 31, 2011. The operating loss in 2012 was primarily attributable to the non-cash impairment charges of $236.4 million taken at North Brawley and OREG 4.
For the year ended December 31, 2012, the company reported a net loss of $206.7 million, or $4.56 per share, compared to $42.7 million or $0.95 per share for the year ended December 31, 2011.
Adjusted EBITDA for the year ended December 31, 2011 was $185.8 million, compared to $166.7 million for the year ended December 31, 2011. Adjusted EBITDA excludes the impairment charges for the North Brawley and OREG 4 power plants. The reconciliation of GAAP net cash provided by operating activities to Adjusted EBITDA and additional cash flows information is set forth below in this release.
Net cash provided by operating activities was $93.2 million in the year ended December 31, 2012, compared to $132.7 million in the year ended December 31, 2011. The decrease in cash provided by operating activity is mainly due to a substantial change in working capital as a result of decrease in advance payments on project under construction in the product segment.
As of December 31, 2012 cash, cash equivalents and a short-term bank deposit were $69.6 million. In addition, as of December 31, 2012, the company had available committed lines of credit with commercial banks aggregating $445.8 million, of which $184.9 million is unused.
Although the company has completed substantially all of its work on its tax provision, certain review procedures are still to be completed prior to the filing of its annual report on Form 10-K. As a result, while the company believes the results contained in this release are materially correct, certain amounts could be revised when the company files its annual report on Form 10-K.
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Fourth Quarter Results
For the three-month period ended December 31, 2012, total revenues decreased 6.2 percent from $123.7 million in the fourth quarter of 2011 to $116.1 million in the fourth quarter of 2012. Electricity revenues increased 1.6 percent to $78.8 million from $77.6 million in the fourth quarter of 2011. Product revenues decreased 19.3 percent to $37.3 million from $46.2 million in the fourth quarter of 2011. This decrease is principally attributable to the timing of revenue recognition in accordance with the percentage of completion method for each of our products.
For the quarter, the company reported a net loss of $222.9 million or $4.91 per share, compared to $43.0 million, or $0.95 per share for the same period in 2011.
Adjusted EBITDA for the fourth quarter of 2012 was $35.3 million, compared to $45.1 million for the same period last year. The adjusted EBITDA was impacted by various factors including timing of recognition of product segment revenue, reduction in the electricity revenues associated with the SO#4 PPAs and a mining tax in the amount of $3.3 million in respect of the years 2008 – 2010 that we have appealed. Adjusted EBITDA excludes the impairment charge for the North Brawley power plant. The reconciliation of GAAP net cash provided by operating activities to Adjusted EBITDA and additional cash flows information is set forth below in this release.
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. EST on Wednesday, February 27, 2013. 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.
A webcast will be available approximately two hours after the conclusion of the live call. A replay of the call will be available beginning approximately at 1 p.m. EST on February 27, 2013 until 11:59 p.m. EST on March 6, 2013. To access the replay, interested investors should call: (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) and enter the Reply code: 94897605.
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 82 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered and built power plants, which it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1600 MW of gross capacity. Ormat’s current generating portfolio of 575 MW (net) includes Brady, Brawley, Heber, Jersey Valley, Mammoth, McGinness Hills, Ormesa, Puna, Steamboat, Tuscarora, OREG 1, OREG 2, OREG 3 and OREG 4 in the U.S.; Zunil and Amatitlan in Guatemala; Olkaria III in Kenya; and, Momotombo in Nicaragua.
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 29, 2012 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2012.
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.
3
Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three and Twelve-Month Periods Ended December 31, 2012 and 2011
(Unaudited)
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Three Months Ended
December 31,
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Year Ended
December 31,
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
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except per share data)
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(In thousands,
except per share data)
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Revenues:
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Electricity
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$ | 78,819 | $ | 77,576 | $ | 327,529 | $ | 323,849 | ||||||||
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Product
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37,263 | 46,158 | 186,879 | 113,160 | ||||||||||||
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Total revenues
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116,082 | 123,734 | 514,408 | 437,009 | ||||||||||||
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Cost of revenues:
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Electricity
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67,284 | 57,947 | 244,634 | 244,037 | ||||||||||||
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Product
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26,771 | 32,796 | 135,346 | 76,072 | ||||||||||||
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Total cost of revenues
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94,055 | 90,743 | 379,980 | 320,109 | ||||||||||||
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Gross margin
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22,027 | 32,991 | 134,428 | 116,900 | ||||||||||||
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Operating expenses:
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Research and development expenses
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2,160 | 1,673 | 6,108 | 8,801 | ||||||||||||
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Selling and marketing expenses
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3,089 | 6,882 | 16,122 | 16,207 | ||||||||||||
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General and administrative expenses
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7,952 | 7,130 | 28,267 | 27,885 | ||||||||||||
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Impairment Charges
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229,113 | — | 236,377 | — | ||||||||||||
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Write-off of unsuccessful exploration activities
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720 | — | 2,639 | — | ||||||||||||
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Operating income (loss)
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(221,007 | ) | 17,306 | (155,085 | ) | 64,007 | ||||||||||
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Other income (expense):
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Interest income
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197 | 138 | 1,201 | 1,427 | ||||||||||||
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Interest expense, net
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(19,528 | ) | (15,028 | ) | (64,069 | ) | (69,459 | ) | ||||||||
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Foreign currency translation and transaction gains (losses)
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1,369 | 196 | 242 | (1,350 | ) | |||||||||||
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Income attributable to sale of tax benefits
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2,710 | 3,850 | 10,127 | 11,474 | ||||||||||||
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Other non-operating income (expense), net
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246 | 206 | 590 | 671 | ||||||||||||
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Income (loss), before income taxes and equity in
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losses of investees
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(236,013 | ) | 6,668 | (206,994 | ) | 6,770 | ||||||||||
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Income tax benefit (expense)
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14,108 | (49,261 | ) | 2,863 | (48,535 | ) | ||||||||||
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Equity in losses of investees, net
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(980 | ) | (407 | ) | (2,522 | ) | (959 | ) | ||||||||
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Net loss
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(222,885 | ) | (43,000 | ) | (206,653 | ) | (42,724 | ) | ||||||||
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Net income attributable to noncontrolling interest
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(136 | ) | (80 | ) | (414 | ) | (332 | ) | ||||||||
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Net loss attributable to the Company's stockholders
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$ | (223,021 | ) | $ | (43,080 | ) | $ | (207,067 | ) | $ | (43,056 | ) | ||||
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Loss per share attributable to the Company's stockholders --
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basic and diluted
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$ | (4.91 | ) | $ | (0.95 | ) | $ | (4.56 | ) | $ | (0.95 | ) | ||||
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Weighted average number of shares used in computation of loss per
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share attributable to the Company's stockholders - basic and diluted
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45,431 | 45,431 | 45,431 | 45,431 | ||||||||||||
4
Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of December 31, 2012 and 2011
(Unaudited)
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December 31,
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2012
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2011
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(In thousands)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 66,628 | $ | 99,886 | ||||
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Marketable securities
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— | 18,521 | ||||||
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Short-term bank deposit
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3,010 | — | ||||||
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Restricted cash, cash equivalents and marketable securities
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76,537 | 75,521 | ||||||
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Receivables:
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Trade
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55,680 | 51,274 | ||||||
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Related entity
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373 | 287 | ||||||
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Other
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8,632 | 9,415 | ||||||
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Due from Parent
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311 | 260 | ||||||
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Inventories
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20,669 | 12,541 | ||||||
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Costs and estimated earnings in excess of billings on uncompleted contracts
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9,613 | 3,966 | ||||||
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Deferred income taxes
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1,241 | 1,842 | ||||||
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Prepaid expenses and other
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34,144 | 18,672 | ||||||
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Total current assets
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276,838 | 292,185 | ||||||
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Unconsolidated investments
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2,591 | 3,757 | ||||||
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Deposits and other
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36,187 | 22,194 | ||||||
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Deferred charges
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36,521 | 40,236 | ||||||
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Property, plant and equipment, net
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1,226,758 | 1,518,532 | ||||||
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Construction-in-process
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396,141 | 370,551 | ||||||
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Deferred financing and lease costs, net
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31,371 | 28,482 | ||||||
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Intangible assets, net
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35,492 | 38,781 | ||||||
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Total assets
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$ | 2,041,899 | $ | 2,314,718 | ||||
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$ | 98,001 | $ | 105,112 | ||||
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Billings in excess of costs and estimated earnings on uncompleted contracts
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25,408 | 33,104 | ||||||
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Current portion of long-term debt:
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Limited and non-recourse
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11,453 | 13,547 | ||||||
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Full recourse
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28,649 | 20,543 | ||||||
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Senior secured notes (non-recourse)
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28,231 | 21,464 | ||||||
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Total current liabilities
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191,742 | 193,770 | ||||||
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Long-term debt, net of current portion:
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Limited and non-recourse
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242,815 | 100,585 | ||||||
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Full recourse:
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Senior unsecured bonds
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250,904 | 250,042 | ||||||
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Other
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82,344 | 63,623 | ||||||
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Revolving credit lines with banks
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73,606 | 214,049 | ||||||
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Senior secured notes (non-recourse)
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312,926 | 341,157 | ||||||
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Liability associated with sale of tax benefits
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51,126 | 69,269 | ||||||
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Deferred lease income
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66,398 | 68,955 | ||||||
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Deferred income taxes
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13,873 | 54,665 | ||||||
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Liability for unrecognized tax benefits
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7,280 | 5,875 | ||||||
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Liabilities for severance pay
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22,887 | 20,547 | ||||||
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Asset retirement obligation
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19,289 | 21,284 | ||||||
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Other long-term liabilities
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5,148 | 4,253 | ||||||
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Total liabilities
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1,340,338 | 1,408,074 | ||||||
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Equity:
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The Company's stockholders' equity:
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Common stock
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46 | 46 | ||||||
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Additional paid-in capital
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732,140 | 725,746 | ||||||
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Retained earnings (accumulated deficit)
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(38,372 | ) | 172,331 | |||||
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Accumulated other comprehensive income
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651 | 595 | ||||||
| 694,465 | 898,718 | |||||||
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Noncontrolling interest
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7,096 | 7,926 | ||||||
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Total equity
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701,561 | 906,644 | ||||||
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Total liabilities and equity
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$ | 2,041,899 | $ | 2,314,718 | ||||
5
Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA and Adjusted EBITDA and Additional Cash Flows Information
For the Three and Twelve-Month Periods Ended December 31, 2012 and 2011
(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. EBITDA and adjusted EBITDA are not measurements 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 it is 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 table reconciles net cash provided by or used in operating activities to EBITDA and Adjusted EBITDA for the three and twelve-month periods ended December 31, 2012 and 2011:
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Three Months Ended December 31,
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Year Ended December 31,
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2012
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2011
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2012
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2011
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(in thousands)
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(in thousands)
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Net cash provided by operating activities
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$ | 30,835 | $ | 34,220 | $ | 93,219 | $ | 132,734 | ||||||||
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Adjusted for:
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Interest expense, net (excluding amortization
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of deferred financing costs)
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16,780 | 13,874 | 57,711 | 65,920 | ||||||||||||
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Interest income
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(197 | ) | (138 | ) | (1,201 | ) | (1,427 | ) | ||||||||
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Income tax provision (benefit)
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(14,108 | ) | 49,261 | (2,863 | ) | 48,535 | ||||||||||
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Adjustments to reconcile net income to net cash
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provided by operating activities (excluding
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depreciation and amortization)
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(227,080 | ) | (52,083 | ) | (197,419 | ) | (79,060 | ) | ||||||||
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EBITDA
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(193,770 | ) | 45,134 | (50,553 | ) | 166,702 | ||||||||||
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Impairment charges
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229,113 | — | 236,377 | — | ||||||||||||
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Adjusted EBITDA
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$ | 35,343 | $ | 45,134 | $ | 185,824 | $ | 166,702 | ||||||||
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Net cash used in investing activities
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$ | (50,926 | ) | $ | (102,816 | ) | $ | (104,537 | ) | $ | (341,002 | ) | ||||
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Net cash provided by (used in) financing activities
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$ | 49,196 | $ | 109,405 | $ | (21,939 | ) | $ | 225,339 | |||||||
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Depreciation and amortization
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$ | 26,641 | $ | 25,137 | $ | 102,453 | $ | 96,398 | ||||||||
6