Ormat Technologies Reports Another Year with Record Revenue of $663.0 Million up 11.4% over Prior Year

Continuing Improvements Drive Strong Fourth Quarter and Full-Year 2016 Financial Results with Gross Profit Increasing by 24% over Prior Year


RENO, Nev., Feb. 28, 2017 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) today announced financial results for the fourth quarter and full year ended December 31, 2016.

Financial Summary:

($ millions, except per share amounts)4Q 20164Q 2015Change  2016 2015Change
Revenues       
Electricity 114.6 97.817.2%  436.3 375.916.1%
Product 51.9 73.3(29.2%)  226.3 218.73.5%
Total revenues 166.5 171.1(2.7%)  662.6 594.611.4%
Gross profit 66.6 64.13.9%  270.8 218.324.1%
Operating income 51.2 49.14.4%  201.9 164.123.1%
Net income attributable to the Company’s stockholders 28.2 23.022.6%  93.9 119.6(21.5%)
EPS$0.56$0.4621.8% $1.87$2.43(23.0%)
        
Adjusted Operating income(1) 51.2 49.14.4%  212.9 164.129.7%
Adjusted Net income attributable to the Company’s stockholders (2) 28.2 23.022.6%  109.9 70.955.1%
Adjusted EPS(2)$0.56$0.4621.8% $2.19$1.4452.1%
Adjusted EBITDA 76.9 79.1(2.7%)  323.8 291.311.2%

Financial highlights for the full year:

  • Total revenues of $662.6 million in 2016, an increase of 11.4% from 2015;
  • Electricity segment revenues increased 16.1% to $436.3 million in 2016 from $375.9 million in 2015; 
  • Product segment revenues reached record levels of $226.3 million from $218.7 million in 2015 representing a 3.5% increase;
  • Electricity generation increased 11.6%, compared to the full year 2015, from 4.8 million MWh to 5.4 million MWh;
  • Gross margin increased to 40.9% in 2016 compared to 36.7% for 2015;
  • Operating income increased 23.1% to $201.9 million compared to $164.1 million in the full year of 2015; exclusive of one-time settlement expenses, operating income grew 29.7%;
  • Adjusted EBITDA grew 11.2% to $323.8 million in 2016;
  • Net income attributable to the company's shareholders was $93.9 million or $1.87 per diluted share in 2016, compared to $119.6 million or $2.43 per diluted share in 2015. Adjusted Net income3 attributable to the company's shareholders was $109.9 million or $2.19 per diluted share in 2016 compared to $70.9 million or $1.44 per diluted share in 2015; an increase of 55.1% and 52.1%, respectively;
  • Declared a quarterly dividend of $0.17 per share for the fourth quarter of 2016;
  • Product segment backlog increased to $251.0 million.

1 Annual adjusted operating income excludes $11 million of one-time settlement expenses recorded in the third quarter of 2016.

2 Adjusted EPS excludes $11 million of one-time settlement expenses and $5 million one-time prepayment fees, both recorded in the third quarter of 2016 and $48.7 million tax benefits and related expenses recorded in the third quarter 2015.

3 Adjusted net income attributable to the company’s stockholders excludes $11 million of one-time settlement expenses and $5 million one-time prepayment fees, both recorded in the third quarter of 2016 and $48.7 million tax benefits and related expenses recorded in the third quarter 2015.

Operational and business developments for the full year 2016 and subsequent to year end:

  • Started construction to expand Olkaria III complex in Kenya by additional 10 MW and increase the complex capacity to 150 MW during 2018;
  • Signed an agreement to acquire the business and assets of Viridity Energy, Inc. and enter the growing energy storage and demand response markets;
  • Entered into a partnership transaction with a financial investor to efficiently monetize the federal tax incentives relating to five geothermal power plants located in eastern Nevada for an initial purchase price of $62.1 million and additional future installments totaling up to $21.0 million through 2022;
  • Closed $50.0 million loan facility agreement with Deutsche Investitions-und Entwicklungsgesellschaft Mbh (DEG) to finance our investment in the 29MW plant 4 in the Olkaria III complex, which commenced operation in February 2016;
  • Signed a $36 million engineering, procurement and construction (EPC) contract with Cyrq Energy, Inc. to provide one ORMAT® Energy Converter (OEC) at Cyrq's Soda Lake geothermal power project in northern Nevada;
  • Closed private placement of $92.5 million senior secured notes to refinance the Don A. Campbell Phase I geothermal power project;
  • Signed a 25-year Power Purchase Agreement with Southern California Public Power Authority (SCPPA) to deliver electricity from the company's Ormesa geothermal complex in Imperial Valley, Calif. beginning November 30, 2017;
  • Closed follow-on sale of 36.75% equity interest to Northleaf for $44.2 million to monetize the second phase of the Don A. Campbell geothermal power plant;
  • Raised $204 million of senior unsecured bonds at an average cost of 4.2%; Proceeds, together with other corporate funds, refinanced $250 million of high cost debt;
  • Closed the acquisition of the Bouillante Geothermal Power Plant on the Island of Guadeloupe;
  • Secured $36.0 million Supply & EPC Contracts for a geothermal power plant in New Zealand; and
  • Signed an agreement to jointly build, own, and operate the Rabbit Hill Energy Storage Project located in Georgetown, Texas which moves the company, for the first time, into the energy storage arena.

“This was a strong ending to an excellent year for Ormat, as we delivered another year of record revenue and adjusted EBITDA with double-digit growth and strong execution on all our key metrics,” commented Isaac Angel, Chief Executive Officer. “The new capacity from the fourth plant at our Olkaria III complex and the contribution of the Bouillante geothermal power plant we acquired in 2016, together with the strong performance of the McGinness Hills and Don A. Campbell complexes which came on line during 2015, increased our electricity segment full year revenues and significantly improved our gross profits. The strength of our electricity and our products segment outperformed our estimates. Our efforts to reduce costs and shorten the delivery lead time enabled us to reap the benefits also in the Products segment where we successfully secured new contracts that supported record revenues in 2016 and robust backlog for 2017. During the fourth quarter we finalized several transactions and raised approximately $200 million net that will reduce our overall cost of debt, strengthen our balance sheet and improve our cash position to facilitate our growth plans.”

Mr. Angel continued, “We are particularly excited about the pending acquisition of the business and assets of Viridity Energy, Inc. (VEI), a privately held company with nearly a decade of expertise and leadership in demand response, energy management and storage. This acquisition is scheduled to close shortly, and we intend to leverage Viridity to accelerate long term growth while expanding into new geographies and targeting a broader potential customer base. This acquisition marks one of many achievements we have accomplished as we execute our strategic plan designed to position us as a leading renewable energy provider.”

Guidance

Mr. Angel added, “We expect full-year 2017 total revenues between $680.0 million and $700.0 million with electricity segment revenues between $460.0 million and $470.0 million and product segment revenues between $220.0 million and $230.0 million. We expect 2017 Adjusted EBITDA between $340 million and $350 million for the full year. We expect annual Adjusted EBITDA attributable to minority interest to be approximately $23.0 million.”

Dividend

On February 28, 2017, ORMAT’s Board of Directors approved a payment of a quarterly dividend of $0.17 per share pursuant to the company’s dividend policy. The dividend will be paid on March 29, 2017 to shareholders of record as of the close of business on March 15, 2017. In addition, the company expects to pay quarterly dividends of $0.08 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. ET on Wednesday, March 1, 2017. 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
Canada:      1-855-669-9658
International Toll:      1-412-317-0088
Replay Access Code:      10100684
        

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 73 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 474 employees in the United States and over 700 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 2,200 MW of gross capacity. Ormat’s current 713 MW generating portfolio is spread globally in the U.S., Kenya, Guatemala, and Guadeloupe.

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 Three and Twelve Month Periods Ended December 31, 2016 and 2015
(Unaudited)
 
   Three Months Ended December 31   Twelve Months Ended December 31 
  2016  2015  2016  2015 
             
   (In thousands, except per share data)   (In thousands, except per share data) 
 Revenues:           
 Electricity$114,628  $97,796  $436,292  $375,920 
 Product 51,891   73,278   226,299   218,724 
 Total revenues 166,519   171,074   662,591   594,644 
 Cost of revenues:           
 Electricity 69,163   63,008   261,573   242,612 
 Product 30,719   43,927   130,223   133,753 
 Total cost of revenues 99,882   106,935   391,796   376,365 
 Gross profit 66,637   64,139   270,795   218,279 
 Operating expenses:           
 Research and development expenses 732   668   2,762   1,780 
 Selling and marketing expenses 4,288   3,978   16,424   16,077 
 General and administrative expenses 10,085   9,185   46,710   34,782 
 Write-off of unsuccessful exploration activities 303   1,220   3,017   1,579 
 Operating income 51,229   49,088   201,882   164,061 
 Other income (expense):           
 Interest income 140   191   971   297 
 Interest expense, net (15,828)  (18,142)  (67,389)  (72,577)
 Derivatives and foreign currency transaction gains (losses) (2,942)  (981)  (5,534)  (1,622)
 Income attributable to sale of tax benefits 4,123   6,514   16,503   25,431 
 Other non-operating expense, net (39)  (468)  (5,345)  (1,991)
 Income before income taxes and equity in           
 losses of investees 36,683   36,202   141,088   113,599 
 Income tax provision (benefit) (2,450)  (11,438)  (31,837)  15,258 
 Equity in losses of investees, net (3,001)  (616)  (7,735)  (5,508)
             
 Net income 31,232   24,148   101,516   123,349 
 Net income attributable to noncontrolling interest (3,002)  (1,160)  (7,586)  (3,776)
 Net income attributable to the Company's stockholders$28,230  $22,988  $93,930  $119,573 
             
 Earnings per share attributable to the Company's stockholders - Basic and diluted:           
 Basic:           
 Net Income$0.57  $0.47  $1.90  $2.46 
             
 Diluted:           
 Net Income$0.56  $0.46  $1.87  $2.43 
             
 Weighted average number of shares used in computation of earnings per share
  attributable to the Company's stockholders:
           
 Basic 49,647   49,074   49,469   48,562 
 Diluted 50,293   49,668   50,140   49,187 
             


Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of December 31, 2016 and 2015
(Unaudited)
 
    December 31,   December 31, 
   2016  2015 
        
     (In thousands) 
  ASSETS 
 Current assets:      
 Cash and cash equivalents $230,214  $185,919 
 Restricted cash, cash equivalents and marketable securities  34,262   49,503 
 Receivables:      
 Trade  80,807   55,301 
 Other  17,482   7,885 
 Inventories  12,000   18,074 
 Costs and estimated earnings in excess of billings on uncompleted contracts  52,198   25,120 
 Prepaid expenses and other  45,867   33,334 
 Total current assets  472,830   375,136 
 Deposits and other  18,553   17,968 
 Deferred charges  43,773   42,811 
 Property, plant and equipment, net  1,556,378   1,559,335 
 Construction-in-process  306,709   248,835 
 Deferred financing and lease costs, net  3,923   4,022 
 Intangible assets, net  52,753   25,875 
 Goodwill  6,650    
 Total assets $2,461,569  $2,273,982 
  LIABILITIES AND EQUITY 
 Current liabilities:      
 Accounts payable and accrued expenses $91,650  $91,955 
 Billings in excess of costs and estimated earnings on uncompleted contracts....  31,630   33,892 
 Current portion of long-term debt:      
 Limited and non-recourse:      
 Senior secured notes  32,234   29,930 
 Other loans  21,495   21,495 
 Full recourse  12,242   11,229 
 Total current liabilities  189,251   188,501 
 Long-term debt, net of current portion:      
 Limited and non-recourse:      
 Senior secured notes  350,388   294,476 
 Other loans  261,845   275,888 
 Full recourse:      
 Senior unsecured bonds  203,577   249,698 
 Other loans  57,063   18,687 
 Accumulated losses of unconsolidated company in excess of investment  11,081   8,100 
 Liability associated with sale of tax benefits  54,662   11,665 
 Deferred lease income  54,561   58,099 
 Deferred income taxes  35,382   32,654 
 Liability for unrecognized tax benefits  5,738   10,385 
 Liabilities for severance pay  18,600   19,323 
 Asset retirement obligation  23,348   20,856 
 Other long-term liabilities  21,294   1,776 
 Total liabilities  1,286,790   1,190,108 
        
 Reedemable non-controlling interest  4,772    
        
 Equity:      
 The Company's stockholders' equity:      
 Common stock  50   49 
 Additional paid-in capital  869,463   849,223 
 Retained earnings (accumulated deficit)  216,644   148,396 
 Accumulated other comprehensive income (loss)  (7,732)  (7,667)
    1,078,425   990,001 
 Noncontrolling interest  91,582   93,873 
 Total equity  1,170,007   1,083,874 
 Total liabilities and equity $2,461,569  $2,273,982 
        

Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information
For the Three and Twelve Month Periods Ended December 31, 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 cost, (vi) stock-based compensation, (vii) gain or losses from extinguishment of debt, (viii) gain or losses on sale of subsidiary and property, plant and equipment and (ix) other unusual or non-recurring items. 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 and twelve month periods ended December 31, 2016 and 2015.

 
    Three Months Ended December 31   Twelve Months Ended December 31 
   2016  2015  2016  2015 
              
    (in thousands)   (in thousands) 
 Net cash provided by operating activities $1,258  $67,060  $159,285  $190,025 
 Adjusted for:            
 Interest expense, net (excluding amortization            
 of deferred financing costs)  13,284   16,231   60,553   63,802 
 Interest income  (140)  (191)  (971)  (297)
 Income tax provision  2,450   11,438   31,837   (15,258)
 Adjustments to reconcile net income or loss to net cash            
 provided by operating activities (excluding            
 depreciation and amortization)  58,386   (16,169)  48,208   40,530 
 EBITDA $  75,238   $  78,369   $  298,912    $   278,802  
              
 Mark-to-market gains or losses from accounting for derivatives  (478)  (1,385)  319   1,409 
 Stock-based compensation  1,774   878   5,157   3,955 
 Gains or losses on sale of subsidiary and property, plant and equipment        (686)   
 Gains or losses from extinguishment of debt        5,780   1,710 
 Termination fees            
 Impairment of long-lived assets            
 Merger and acquisition transaction cost  100      335   3,800 
 Settlement expenses        11,000    
 Write-off of unsuccessful exploration activities  303   1,220   3,017   1,579 
 Adjusted EBITDA $  76,937    $   79,082   $  323,834    $   291,255  
              
              
 Net cash used in investing activities $(33,342) $(14,433) $(158,531) $(90,971)
 Net cash provided by (used in) financing activities $172,232  $(38,249) $43,541  $46,635 
 
              
              
    Three Months Ended December 31   Twelve Months Ended December 31 
   2016  2015  2016  2015 
              
    (in thousands)   (in thousands) 
 Net income $31,232  $24,148  $101,516  $123,349 
 Adjusted for:            
 Interest expense, net (including amortization            
 of deferred financing costs)  15,688   17,951   66,418   72,280 
 Income tax provision  2,450   11,438   31,837   (15,258)
 Depreciation and amortization  25,868   24,832   99,141   98,431 
 EBITDA $  75,238   $  78,369   $  298,912    $   278,802  
              
 Mark-to-market gains or losses from accounting for derivatives  (478)  (1,385)  319   1,409 
 Stock-based compensation  1,774   878   5,157   3,955 
 Gains or losses on sale of subsidiary and property, plant and equipment        (686)   
 Gains or losses from extinguishment of debt        5,780   1,710 
 Termination fees            
 Impairment of long-lived assets            
 Merger and acquisition transaction cost  100      335   3,800 
 Settlement expenses        11,000    
 Write-off of unsuccessful exploration activities  303   1,220   3,017   1,579 
 Adjusted EBITDA $  76,937    $   79,082   $  323,834    $   291,255  
 


 

Ormat Technologies, Inc. and Subsidiaries
Reconciliation of EPS as adjusted
For Twelve Month Periods Ended December 31, 2016 and 2015
(Unaudited)
 
  Year Ended December 31 
 2016 2015 
 
  (in thousands) 
 
Net income attributable to the Company's stockholders $93,930 $119,573 
        
One-time settlement expenses 11,000  
    
One-time prepayment fees 5,000  
        
One-time tax benefit  (48,700)
Adjusted net income attributable to the Company's stockholders  $ 109,930   $ 70,873  
        
Weighted average number of shares diluted used in computation of earnings per share
  attributable to the Company's stockholders:
 50,140 49,187 
  
Adjusted earnings per share attributable to the Company's stockholders diluted: 2.19  1.44  
 

 

 


            

Tags


Contact Data