Ormat Technologies Reports Filing of Its Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2017
March 16 2018 - 4:11PM
No Change to the Operational Results Reported on
March 1, 2018
Ormat Technologies, Inc. (NYSE:ORA) today filed its 2017 Annual
Report on Form 10-K (“Form 10-K”) with the US Securities and
Exchange Commission (the “SEC”).
The financial statements contained in the Form
10-K reflect no changes to the operational results we reported in
our March 1, 2018 earnings release. That earnings release, however,
did not include certain financial information affected by our tax
accounts which we normally include in our year-end earnings
release. That additional information is reflected in the chart
below:
($ millions, except per share amounts) |
Q42017 |
Q42016 |
Change |
|
|
2017 |
|
|
2016 |
|
Change |
Revenues |
|
|
|
|
|
|
|
Electricity |
$ |
128.5 |
|
$ |
114.6 |
|
12.1 |
% |
|
$ |
468.3 |
|
$ |
436.3 |
|
7.3 |
% |
Product |
$ |
37.9 |
|
$ |
51.9 |
|
-27.0 |
% |
|
$ |
224.5 |
|
$ |
226.3 |
|
-0.8 |
% |
Total
Revenues |
$ |
166.4 |
|
$ |
166.5 |
|
-0.1 |
% |
|
$ |
692.8 |
|
$ |
662.6 |
|
4.6 |
% |
Gross
margin (%) |
|
|
|
|
|
|
|
Electricity (1) |
|
41.6 |
% |
|
39.7 |
% |
|
|
|
41.9 |
% |
|
40.0 |
% |
|
Product |
|
28.7 |
% |
|
40.8 |
% |
|
|
|
32.2 |
% |
|
42.5 |
% |
|
Gross
margin (%) |
|
38.7 |
% |
|
40.0 |
% |
|
|
|
38.7 |
% |
|
40.9 |
% |
|
Operating income |
$ |
48.4 |
|
$ |
51.2 |
|
-5.5 |
% |
|
$ |
205.0 |
|
$ |
201.9 |
|
1.6 |
% |
Income before income taxes and equity in losses of investees |
$ |
40.0 |
|
$ |
36.7 |
|
9.1 |
% |
|
$ |
170.7 |
|
$ |
141.1 |
|
21.0 |
% |
|
|
|
|
|
|
|
|
Net
income attributable to the Company’s shareholders |
$ |
66.0 |
|
$ |
28.2 |
|
133.7 |
% |
|
$ |
155.5 |
|
$ |
93.9 |
|
65.5 |
% |
Diluted EPS |
$ |
1.29 |
|
$ |
0.56 |
|
|
|
$ |
3.06 |
|
$ |
1.87 |
|
|
Adjusted Net income attributable to the Company’s stockholders
(2) |
$ |
66.0 |
|
$ |
28.2 |
|
133.7 |
% |
|
$ |
151.9 |
|
$ |
109.9 |
|
38.2 |
% |
Adjusted Diluted EPS |
$ |
1.29 |
|
$ |
0.56 |
|
|
|
$ |
2.99 |
|
$ |
2.19 |
|
|
Adjusted EBITDA (3) |
$ |
87.4 |
|
$ |
76.9 |
|
13.6 |
% |
|
$ |
343.8 |
|
$ |
323.8 |
|
6.2 |
% |
|
1 Electricity revenues for the full year ended
December 31, 2017 includes $2.7 million of revenues and $5.4
million cost of revenues from Viridity. Electricity revenues for
the fourth quarter of 2017 includes $0.5 million of revenues and
$1.9 million cost of revenues from Viridity. |
2 Adjusted Net income attributable to the Company’s
shareholders for the full year 2017 excludes a net of $3.6 million
related to; (1) a $5.5 million of a one-time benefit related to tax
restructuring recorded in the second quarter of 2017, and (2) a
$1.9 million expense attributable to a one-time make whole premium
paid in connection with the prepayment of OFC Senior Secured Notes
and DEG loan, recorded in the third quarter of 2017. Adjusted Net
income attributable to the Company’s shareholders for the full year
2016 excludes $16 million related to: (1) $11.0 million of one-time
settlement expenses and (2) $5.0 million of one-time prepayment
fees, both recorded in the third quarter of 2016. |
3 The way we compute Adjusted EBITDA and a
reconciliation of GAAP net income to EBITDA and Adjusted EBITDA is
set forth below in this release. |
|
We have completed the additional review
procedures related to accounting for income tax and financial
reporting referenced in our March 1, 2018 press release, and the
Form 10-K discloses the results of that review and the related
remediation plan that we are in the process of implementing.
You can obtain copies of the Form 10-K, which
contains our audited financial statements, as well as any of our
other SEC filings from the SEC’s website (www.sec.gov).
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 77 U.S. patents, Ormat’s power solutions have
been refined and perfected under the most grueling environmental
conditions. Ormat has 530 employees in the United States and 770
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 2,500 MW of gross capacity.
Ormat’s current approximately 800 MW generating portfolio is spread
globally in the U.S., Guatemala, Guadeloupe, Honduras, Indonesia
and Kenya. Ormat also intends to expand its operations and provide
energy management and energy storage solutions, by leveraging its
core capabilities and global presence as well as through its
Viridity Energy Solutions Inc. subsidiary, a Philadelphia-based
Company with nearly a decade of expertise and leadership in demand
response, energy management and storage.
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 Form 10-K filed with the SEC on March 16,
2018.
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, 2017 and
2016 |
(Unaudited) |
|
|
Three Months Ended
December 31 |
|
Year Ended December
31 |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
per share data) |
|
(In thousands, except
per share data) |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Electricity |
$ |
128,503 |
|
|
$ |
114,628 |
|
|
$ |
468,329 |
|
|
$ |
436,292 |
|
Product |
|
37,862 |
|
|
|
51,891 |
|
|
|
224,483 |
|
|
|
226,299 |
|
Total
revenues |
|
166,365 |
|
|
|
166,519 |
|
|
|
692,812 |
|
|
|
662,591 |
|
Cost of
revenues: |
|
|
|
|
|
|
|
|
|
|
|
Electricity |
|
75,017 |
|
|
|
69,163 |
|
|
|
272,266 |
|
|
|
261,573 |
|
Product |
|
26,992 |
|
|
|
30,719 |
|
|
|
152,094 |
|
|
|
130,223 |
|
Total
cost of revenues |
|
102,009 |
|
|
|
99,882 |
|
|
|
424,360 |
|
|
|
391,796 |
|
Gross
profit |
|
64,356 |
|
|
|
66,637 |
|
|
|
268,452 |
|
|
|
270,795 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research
and development expenses |
|
789 |
|
|
|
732 |
|
|
|
3,157 |
|
|
|
2,762 |
|
Selling
and marketing expenses |
|
3,517 |
|
|
|
4,288 |
|
|
|
15,600 |
|
|
|
16,424 |
|
General
and administrative expenses |
|
9,854 |
|
|
|
10,085 |
|
|
|
42,881 |
|
|
|
46,710 |
|
Write-off
of unsuccessful exploration activities |
|
1,796 |
|
|
|
303 |
|
|
|
1,796 |
|
|
|
3,017 |
|
Operating
income |
|
48,400 |
|
|
|
51,229 |
|
|
|
205,018 |
|
|
|
201,882 |
|
Other
income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
127 |
|
|
|
140 |
|
|
|
988 |
|
|
|
971 |
|
Interest
expense, net |
|
(12,987 |
) |
|
|
(15,828 |
) |
|
|
(54,142 |
) |
|
|
(67,389 |
) |
Derivatives and foreign currency transaction gains
(losses) |
614 |
|
|
|
(2,942 |
) |
|
|
2,654 |
|
|
|
(5,534 |
) |
Income
attributable to sale of tax benefits |
|
3,859 |
|
|
|
4,123 |
|
|
|
17,878 |
|
|
|
16,503 |
|
Other
non-operating expense, net |
|
12 |
|
|
|
(39 |
) |
|
|
(1,666 |
) |
|
|
(5,345 |
) |
Income
before income taxes and equity in |
|
|
|
|
|
|
|
|
|
|
|
losses of
investees |
|
40,025 |
|
|
|
36,683 |
|
|
|
170,730 |
|
|
|
141,088 |
|
Income
tax (provision) benefit |
|
29,669 |
|
|
|
(2,450 |
) |
|
|
1,411 |
|
|
|
(31,837 |
) |
Equity
in losses of investees, net |
|
(267 |
) |
|
|
(3,001 |
) |
|
|
(1,957 |
) |
|
|
(7,735 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
69,427 |
|
|
|
31,232 |
|
|
|
170,184 |
|
|
|
101,516 |
|
Net
income attributable to noncontrolling interest |
|
(3,467 |
) |
|
|
(3,002 |
) |
|
|
(14,695 |
) |
|
|
(7,586 |
) |
Net
income attributable to the Company's stockholders |
$ |
65,960 |
|
|
$ |
28,230 |
|
|
$ |
155,489 |
|
|
$ |
93,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to the Company's stockholders -
Basic and diluted: |
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
1.30 |
|
|
$ |
0.57 |
|
|
$ |
3.10 |
|
|
$ |
1.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
1.29 |
|
|
$ |
0.56 |
|
|
$ |
3.06 |
|
|
$ |
1.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computation of earnings per
shareattributable to the Company's stockholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
50,607 |
|
|
|
49,647 |
|
|
|
50,110 |
|
|
|
49,469 |
|
Diluted |
|
51,053 |
|
|
|
50,293 |
|
|
|
50,769 |
|
|
|
50,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES |
Condensed
Consolidated Balance Sheet |
As of
December 31, 2017, and 2016 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
(In
thousands) |
ASSETS |
Current
assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
47,818 |
|
|
$ |
230,214 |
|
Restricted cash, cash equivalents and marketable securities |
|
|
48,825 |
|
|
|
34,262 |
|
Receivables: |
|
|
|
|
|
|
Trade |
|
|
110,410 |
|
|
|
80,807 |
|
Other |
|
|
13,828 |
|
|
|
17,482 |
|
Inventories |
|
|
19,551 |
|
|
|
12,000 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
|
40,945 |
|
|
|
52,198 |
|
Prepaid
expenses and other |
|
|
40,269 |
|
|
|
45,867 |
|
Total
current assets |
|
|
321,646 |
|
|
|
472,830 |
|
Investment in an
unconsolidated company |
|
|
34,084 |
|
|
|
— |
|
Deposits and other |
|
|
21,599 |
|
|
|
18,553 |
|
Deferred income
taxes |
|
|
20,135 |
|
|
|
— |
|
Deferred charges |
|
|
49,834 |
|
|
|
43,773 |
|
Property, plant and
equipment, net |
|
|
1,734,691 |
|
|
|
1,556,378 |
|
Construction-in-process |
|
|
293,542 |
|
|
|
306,709 |
|
Deferred financing and
lease costs, net |
|
|
4,674 |
|
|
|
3,923 |
|
Intangible assets,
net |
|
|
85,420 |
|
|
|
52,753 |
|
Goodwill |
|
|
21,037 |
|
|
|
6,650 |
|
Total
assets |
|
$ |
2,586,662 |
|
|
$ |
2,461,569 |
|
LIABILITIES AND
EQUITY |
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
153,796 |
|
|
$ |
91,650 |
|
Short-term revolving credit lines with banks (full recourse) |
|
|
51,500 |
|
|
|
— |
|
Billings
in excess of costs and estimated earnings on uncompleted
contracts |
|
|
20,241 |
|
|
|
31,630 |
|
Current
portion of long-term debt: |
|
|
|
|
|
|
Limited
and non-recourse: |
|
|
|
|
|
|
Senior secured notes |
|
|
33,226 |
|
|
|
32,234 |
|
Other
loans |
|
|
21,495 |
|
|
|
21,495 |
|
Full
recourse |
|
|
3,087 |
|
|
|
12,242 |
|
Total
current liabilities |
|
|
283,345 |
|
|
|
189,251 |
|
Long-term debt, net of
current portion: |
|
|
|
|
|
|
Limited
and non-recourse: |
|
|
|
|
|
|
Senior
secured notes |
|
|
311,668 |
|
|
|
350,388 |
|
Other
loans |
|
|
242,385 |
|
|
|
261,845 |
|
Full
recourse: |
|
|
|
|
|
|
Senior
unsecured bonds |
|
|
203,752 |
|
|
|
203,577 |
|
Other
loans |
|
|
46,489 |
|
|
|
57,063 |
|
Accumulated losses of
unconsolidated company in excess of investment |
|
|
— |
|
|
|
11,081 |
|
Liability associated
with sale of tax benefits |
|
|
44,634 |
|
|
|
54,662 |
|
Deferred lease
income |
|
|
51,520 |
|
|
|
54,561 |
|
Deferred income
taxes |
|
|
— |
|
|
|
35,382 |
|
Liability for
unrecognized tax benefits |
|
|
8,890 |
|
|
|
5,738 |
|
Liabilities for
severance pay |
|
|
21,141 |
|
|
|
18,600 |
|
Asset retirement
obligation |
|
|
27,110 |
|
|
|
23,348 |
|
Other long-term
liabilities |
|
|
18,853 |
|
|
|
21,294 |
|
Total
liabilities |
|
|
1,259,787 |
|
|
|
1,286,790 |
|
|
|
|
|
|
|
|
Redeemable
non-controlling interest |
|
|
6,416 |
|
|
|
4,772 |
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
The
Company's stockholders' equity: |
|
|
|
|
|
|
Common
stock |
|
|
51 |
|
|
|
50 |
|
Additional paid-in capital |
|
|
888,778 |
|
|
|
869,463 |
|
Retained
earnings (accumulated deficit) |
|
|
351,622 |
|
|
|
216,644 |
|
Accumulated other comprehensive income (loss) |
|
|
(4,314 |
) |
|
|
(7,732 |
) |
|
|
|
1,236,137 |
|
|
|
1,078,425 |
|
Noncontrolling interest |
|
|
84,322 |
|
|
|
91,582 |
|
Total
equity |
|
|
1,320,459 |
|
|
|
1,170,007 |
|
Total
liabilities and equity |
|
$ |
2,586,662 |
|
|
$ |
2,461,569 |
|
|
|
|
|
|
|
|
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows
InformationFor the Three and Twelve-Month Periods Ended December
31, 2017 and 2016(Unaudited)
We calculate EBITDA as net income before
interest, taxes, depreciation and amortization. We calculate
Adjusted EBITDA as net income before interest, taxes, depreciation
and amortization, adjusted for (i) termination fees, (ii)
impairment of long-lived assets, (iii) write-off of unsuccessful
exploration activities, (iv) any mark-to-market gains or losses
from accounting for derivatives, (v) merger and acquisition
transaction costs, (vi) stock-based compensation, (vii) gain 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 table reconciles net income to
EBITDA and Adjusted EBITDA for the three-month and twelve-month
periods ended December 31, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31 |
|
Year Ended December 31 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
(in thousands) |
Net income |
|
$ |
69,427 |
|
|
$ |
31,232 |
|
|
$ |
170,184 |
|
|
$ |
101,516 |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
(including amortization |
|
|
|
|
|
|
|
|
|
|
|
|
of deferred
financing costs) |
|
|
12,860 |
|
|
|
15,688 |
|
|
|
53,154 |
|
|
|
66,418 |
|
Income tax
provision |
|
|
(29,669 |
) |
|
|
2,450 |
|
|
|
(1,411 |
) |
|
|
31,837 |
|
Adjustment to
investment in unconsolidated company: |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
our proportionate share
in interest, tax and depreciation and amortization |
|
|
(265 |
) |
|
|
|
|
|
(265 |
) |
|
|
|
Depreciation and
amortization |
|
|
31,652 |
|
|
|
25,868 |
|
|
|
108,693 |
|
|
|
99,141 |
|
EBITDA |
|
$ |
84,005 |
|
|
$ |
75,238 |
|
|
$ |
330,355 |
|
|
$ |
298,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market on
derivatives instruments |
|
|
(700 |
) |
|
|
(478 |
) |
|
|
(1,500 |
) |
|
|
319 |
|
Stock-based
compensation |
|
|
1,556 |
|
|
|
1,774 |
|
|
|
8,760 |
|
|
|
5,157 |
|
Gain on sale of
subsidiary and property, plant and equipment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(686 |
) |
Loss from
extinguishment of liability |
|
|
— |
|
|
|
— |
|
|
|
1,950 |
|
|
|
5,780 |
|
Settlement
expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,000 |
|
Merger and acquisition
transaction cost |
|
|
760 |
|
|
|
100 |
|
|
|
2,460 |
|
|
|
335 |
|
Write-off of
unsuccessful exploration activities |
|
|
1,796 |
|
|
|
303 |
|
|
|
1,796 |
|
|
|
3,017 |
|
Adjusted EBITDA |
|
$ |
87,417 |
|
|
$ |
76,937 |
|
|
$ |
343,821 |
|
|
$ |
323,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ormat Technologies Contact:
Smadar LaviVP Corporate Finance and Head of Investor
Relations775-356-9029 (ext. 65726)slavi@ormat.com
Investor Relations Agency Contact:Rob FinkHayden -
IR646-415-8972rob@haydenir.com
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