RENO, Nev. May 6, 2019, Ormat Technologies, Inc.1 (NYSE: ORA) today
announced financial results for the first quarter ended March 31,
2019.
($ millions,
except per share amounts) |
Q1 2019 |
|
Q1 2018 |
|
% Change |
|
Revenues |
|
|
|
Electricity |
142.9 |
|
132.5 |
|
7.9 |
% |
Product |
52.1 |
|
48.7 |
|
7.1 |
% |
Other |
4.0 |
|
2.9 |
|
39.8 |
% |
Total Revenues |
199.0 |
|
184.0 |
|
8.2 |
% |
Gross margin (%) |
|
|
|
Electricity |
45.7 |
% |
44.5 |
% |
|
Product |
19.2 |
% |
30.7 |
% |
|
Other |
(30.2 |
)% |
(20.3 |
)% |
|
Gross margin (%) |
37.3 |
% |
39.9 |
% |
|
Operating income |
53.7 |
|
54.6 |
|
(1.6 |
)% |
Net income attributable
to the Company’s shareholders2 |
25.9 |
|
69.5 |
|
(62.7 |
)% |
Diluted EPS |
0.51 |
|
1.36 |
|
(62.5 |
)% |
|
|
|
|
Adjusted Net income
attributable to the Company’s stockholders2 |
25.9 |
|
25.1 |
|
3.4 |
% |
Adjusted Diluted
EPS |
0.51 |
|
0.49 |
|
4.1 |
% |
Adjusted
EBITDA1 |
101.8 |
|
98.4 |
|
3.4 |
% |
|
|
|
|
|
|
|
“Ormat delivered another strong quarter, with
continued growth across our diversified portfolio of operations
helping us to overcome the loss of revenue and profit resulting
from the temporary shutdown of our Puna power plant in Hawaii,”
commented Isaac Angel, Chief Executive Officer. “Our Electricity
segment revenue grew 7.9% and generation increased 11.0% in Q1 2019
vs Q1 2018, reflecting the contribution of new and expanded power
plants as well as the continuing growth resulting from our recent
USG acquisition. Gross margin for this segment also expanded
to 45.7%, despite the overhang of Puna’s ongoing fixed expenses,
demonstrating our continuing commitment to expanding the operating
efficiency of our core Electricity generation business.
Furthermore, progress to bring Puna back online is continuing, and
we remain optimistic that this important power plant will be ready
to resume operation by year-end.”
Mr. Angel continued, “Our Product division also
delivered solid revenue growth, and although two larges but
lower-margin Turkish contracts impacted our gross margin in this
segment during the quarter, we expect margin performance in
Products to be stronger for the balance of the year.”
____________________1 Ormat Technologies, Inc.
is also referred to herein as the “Company”, “Ormat”, “we” or “us”2
Reconciliation is set forth below in this release
FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER OF
2019
- Total revenues of $199.0 million,
up 8.2% compared to the first quarter of 2018 despite the
volcano-related shutdown of Ormat’s Puna power plant in
Hawaii;
- Electricity segment revenues of
$142.9 million, up 7.9% compared to Q1 2018, as the growth
resulting from recently expanded operations at McGuinness Hills and
Olkaria, as well as contributions from recently acquired USG,
combined to mitigate the loss of revenues resulting from the
temporary shutdown of the Puna power plant;
- Electricity segment gross margin
was 45.7% compared to 44.5% for Q1 2018. Excluding the impact from
Puna, Electricity segment gross margin would have been 48.2% in Q1
2019 and 44.8% in Q1 2018;
- Product segment backlog was $226.4
million as of May 6, 2019;
- Net income was $28.1 million in Q1
2019 compared to net income of $74.3 million in Q1 2018. Net income
for Q1 2018 included one-time tax income of $44.4 million,
resulting in a net tax benefit of $26.9 million for that quarter,
compared to a provision for income taxes of $14.0 million in Q1
2019;
- Net income attributable to the
Company's stockholders in Q1 2019 was $25.9 million, or $0.51 per
diluted share, compared to $69.5 million, or $1.36 per diluted
share, in Q1 2018; Adjusted Net income attributable to the
Company's stockholders, was $25.9 million, or $0.51 per diluted
share, compared to $25.1 million, or $0.49 per diluted share, Q1
20183 ;
- Adjusted EBITDA increased 3.4% to
$101.8 million, from $98.4 million in Q1 2018. Adjusted
EBITDA includes approximately $1.2 million expense related to Puna,
net of $1.3 million insurance proceeds received for business
interruption; Adjusted EBITDA excluding any impact from Puna was
$103.0 million3;
- Declared a quarterly dividend of
$0.11 per share for the first quarter of 2019.
_______________3 Reconciliation is set forth
below in this release
2019 GUIDANCE
Mr. Angel added, “We expect full-year 2019 total
revenues between $720 million and $742 million with Electricity
segment revenues between $530 million and $540 million, excluding
any impact from Puna during 2019. We expect Product segment
revenues between $180 million and $190 million. Revenues from
energy storage and demand response activity are expected to be
between $10 million and $12 million. We expect 2019 Adjusted EBITDA
between $370 million and $380 million for the full year, with no
Puna-related EBITDA. We expect annual Adjusted EBITDA attributable
to minority interest to be approximately $23 million, assuming no
contribution from Puna during 2019.”
The Company provides a reconciliation of
Adjusted EBITDA, a non-GAAP financial measure for the three months
ended March 31, 2019. However, the Company is unable to provide a
reconciliation for its Adjusted EBITDA guidance range due to high
variability and complexity with respect to estimating forward
looking amounts for impairments and disposition and acquisition of
business interests, income taxes including the tax impact of the
repatriation of proceeds from sales in foreign jurisdictions and
tax benefit or expense related to effects of the still evolving tax
law reform in the United States and other non-cash expenses and
adjusting items which are excluded from the calculation of Adjusted
EBITDA.
FIRST QUARTER 2019 FINANCIAL RESULTS (COMPARING
THE QUARTER ENDED MARCH 31, 2019 TO THE QUARTER ENDED MARCH 31,
2018)
Total revenues for the quarter were $199.0
million, up 8.2% compared to the same quarter last year.
Electricity segment revenues increased 7.9% to $142.9 million, up
from $132.5 million last year. The increase was mainly attributable
to the MGH phase 3 and Olkaria III expansion, which came online in
the second half of 2018, as well as the USG acquisition in April
2018, partially offset by the temporary shutdown of the Puna plant.
Product segment revenues increased 7.1% to $52.1 million, up from
$48.7 in the same quarter last year. Other segment revenues were
$4.0 million compared to $2.9 million.
General and administrative expenses were $15.7
million, or 7.9% of total revenues, compared to $13.8 million, or
7.5% of total revenues. This increase was mainly due to expenses
related to legal settlements, increase in stock-based compensation
and professional fees.
The Company reported net income attributable to
the Company’s shareholders of $25.9 million, or $0.51 per diluted
share, compared to $69.5 million, or $1.36 per diluted share.
Adjusted Net income attributable to the Company's stockholders was
$25.9 million, or $0.51 per diluted share, compared to $25.1
million or, $0.49 per diluted share in the same quarter last year.
In the first quarter of 2018, we recorded a one-time tax income of
$44.4 million for the reduction of the valuation allowance related
to foreign tax credits and production tax credits.
Adjusted EBITDA of $101.8 million, compared to
$98.4 million. The increase in Adjusted EBITDA is mainly related to
the increase in gross profit as a result of higher revenues. The
reconciliation of GAAP net income to EBITDA and Adjusted EBITDA is
set forth below in this release. Adjusted EBITDA excluding any
impact from Puna was $103.0 million.
DIVIDEND
On May 6, 2019, the Company’s Board of Directors
declared, approved and authorized payment of a quarterly dividend
of $0.11 per share pursuant to the Company’s dividend policy. The
dividend will be paid on May 28, 2019 to shareholders of record as
of the close of business on May 20, 2019.
CONFERENCE CALL DETAILS
Ormat will host a conference call to discuss its
financial results and other matters discussed in this press release
on Tuesday, May 7, at 9 a.m. ET. 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 News & Events in the Investor Relations section of
Ormat’s website.
An archive of the webcast will be available
approximately 60 minutes after the conclusion of the live call.
Investors may access the call by dialing:
Participant dial in (toll free): |
|
1-877-511-6790 |
Participant international dial in: |
|
1-412-902-4141 |
|
|
|
Conference replay |
|
|
|
US Toll Free: |
|
1-877-344-7529 |
International Toll: |
|
1-412-317-0088 |
Replay Access Code: |
|
10130752 |
|
|
|
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 584 employees in the United States and 762
overseas. Ormat’s flexible, modular solutions for geothermal power
and REG are ideal for 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 2,900 MW of gross capacity.
Ormat’s current 910 MW generating portfolio is spread globally in
the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe.
Ormat expanded its operations to provide energy storage and energy
management solutions, by leveraging its core capabilities and
global presence as well as through its Viridity Energy Solutions
Inc. subsidiary.
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’s Form 10-K
filed with the Securities and Exchange Commission (“SEC”) on March
1, 2019 and from time to time, in Ormat’s quarterly reports on Form
10-Q that are filed with the SEC.
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 SUBSIDIARIESCondensed Consolidated
Statement of OperationsFor the Three-Month Periods Ended March 31,
2019 and 2018(Unaudited)
|
Three Months Ended March 31 |
|
2019 |
|
2018 |
|
(In thousands, except per share
data) |
Revenues: |
|
|
|
|
|
Electricity |
$ |
142,908 |
|
|
$ |
132,489 |
|
Product |
|
52,128 |
|
|
|
48,672 |
|
Other |
|
4,002 |
|
|
|
2,862 |
|
Total
revenues |
|
199,038 |
|
|
|
184,023 |
|
Cost of revenues: |
|
|
|
|
|
Electricity |
|
77,543 |
|
|
|
73,482 |
|
Product |
|
42,106 |
|
|
|
33,726 |
|
Other |
|
5,210 |
|
|
|
3,443 |
|
Total
cost of revenues |
|
124,859 |
|
|
|
110,651 |
|
Gross
profit |
|
74,179 |
|
|
|
73,372 |
|
Operating
expenses: |
|
|
|
|
|
Research
and development expenses |
|
900 |
|
|
|
1,108 |
|
Selling
and marketing expenses |
|
3,865 |
|
|
|
3,699 |
|
General
and administrative expenses |
|
15,689 |
|
|
|
13,849 |
|
Write-off
of unsuccessful exploration activities |
|
— |
|
|
|
123 |
|
Operating
income |
|
53,725 |
|
|
|
54,593 |
|
Other income
(expense): |
|
|
|
|
|
Interest
income |
|
293 |
|
|
|
113 |
|
Interest
expense, net |
|
(21,223 |
) |
|
|
(14,344 |
) |
Derivatives and foreign currency transaction gains (losses) |
|
472 |
|
|
|
(1,599 |
) |
Income
attributable to sale of tax benefits |
|
7,764 |
|
|
|
7,361 |
|
Other
non-operating expense, net |
|
91 |
|
|
|
(20 |
) |
Income
before income taxes and equity in losses of investees |
|
41,122 |
|
|
|
46,104 |
|
Income tax (provision)
benefit |
|
(14,039 |
) |
|
|
26,942 |
|
Equity in losses of
investees, net |
|
1,047 |
|
|
|
1,210 |
|
|
|
|
|
|
|
Net
income |
|
28,130 |
|
|
|
74,256 |
|
Net
income attributable to noncontrolling interest |
|
(2,184 |
) |
|
|
(4,748 |
) |
Net
income attributable to the Company's stockholders |
$ |
25,946 |
|
|
$ |
69,508 |
|
|
|
|
|
|
|
Earnings
per share attributable to the Company's stockholders - Basic and
diluted: |
Basic: |
|
|
|
|
|
Net
Income |
$ |
0.51 |
|
|
$ |
1.37 |
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
Net
Income |
$ |
0.51 |
|
|
$ |
1.36 |
|
|
|
|
|
|
|
Weighted average number
of shares used in computation of earnings per
share attributable to the Company's stockholders: |
|
|
|
|
|
Basic |
|
50,709 |
|
|
|
50,614 |
|
Diluted |
|
51,012 |
|
|
|
51,051 |
|
|
|
|
|
|
|
|
|
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIESCondensed Consolidated
Balance SheetFor the Periods Ended March 31, 2019 and December 31,
2018(Unaudited)
|
March 31, |
|
December 31, |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
(In thousands) |
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
79,366 |
|
|
$ |
98,802 |
|
Restricted cash, cash equivalents and marketable securities |
|
93,098 |
|
|
|
78,693 |
|
Receivables: |
|
|
|
|
|
Trade |
|
139,870 |
|
|
|
137,581 |
|
Other |
|
18,319 |
|
|
|
19,393 |
|
Inventories |
|
42,982 |
|
|
|
45,024 |
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts...... |
|
29,762 |
|
|
|
42,130 |
|
Prepaid
expenses and other |
|
18,224 |
|
|
|
51,441 |
|
Total
current assets |
|
421,621 |
|
|
|
473,064 |
|
Investment in an
unconsolidated company |
|
71,885 |
|
|
|
71,983 |
|
Deposits and other |
|
18,154 |
|
|
|
18,209 |
|
Deferred income
taxes |
|
109,821 |
|
|
|
113,760 |
|
Property, plant and
equipment, net |
|
1,962,580 |
|
|
|
1,959,578 |
|
Construction-in-process |
|
266,083 |
|
|
|
261,690 |
|
Operating lease right
of use |
|
60,656 |
|
|
|
— |
|
Financing lease right
of use |
|
14,433 |
|
|
|
— |
|
Deferred financing and
lease costs, net |
|
1,733 |
|
|
|
3,242 |
|
Intangible assets,
net |
|
196,125 |
|
|
|
199,874 |
|
Goodwill |
|
20,123 |
|
|
|
19,950 |
|
Total
assets |
$ |
3,143,214 |
|
|
$ |
3,121,350 |
|
LIABILITIES AND EQUITY |
Current
liabilities: |
|
|
|
|
|
Accounts
payable and accrued expenses |
$ |
108,309 |
|
|
$ |
116,362 |
|
Short-term revolving credit lines with banks (full recourse) |
|
60,900 |
|
|
|
159,000 |
|
Billings
in excess of costs and estimated earnings on uncompleted
contracts |
|
15,508 |
|
|
|
18,402 |
|
Current
portion of long-term debt: |
|
|
|
|
|
Limited
and non-recourse: |
|
|
|
|
|
Senior
secured notes |
|
33,639 |
|
|
|
33,493 |
|
Other
loans |
|
29,687 |
|
|
|
29,687 |
|
Full
recourse |
|
9,368 |
|
|
|
5,000 |
|
Operating lease
liabilities |
|
7,532 |
|
|
|
— |
|
Finance lease
liabilities |
|
3,147 |
|
|
|
— |
|
Total
current liabilities |
|
268,090 |
|
|
|
361,944 |
|
Long-term debt, net of
current portion: |
|
|
|
|
|
Limited
and non-recourse: |
|
|
|
|
|
Senior
secured notes |
|
367,142 |
|
|
|
375,337 |
|
Other
loans |
|
312,779 |
|
|
|
320,242 |
|
Full
recourse: |
|
|
|
|
|
Senior
unsecured bonds |
|
353,626 |
|
|
|
303,575 |
|
Other
loans |
|
78,149 |
|
|
|
41,579 |
|
Operating lease
liabilities |
|
17,667 |
|
|
|
— |
|
Finance lease
liabilities |
|
11,954 |
|
|
|
— |
|
Liability associated
with sale of tax benefits |
|
68,852 |
|
|
|
69,893 |
|
Deferred lease
income |
|
47,658 |
|
|
|
48,433 |
|
Deferred income
taxes |
|
68,005 |
|
|
|
61,323 |
|
Liability for
unrecognized tax benefits |
|
12,482 |
|
|
|
11,769 |
|
Liabilities for
severance pay |
|
18,400 |
|
|
|
17,994 |
|
Asset retirement
obligation |
|
41,246 |
|
|
|
39,475 |
|
Other long-term
liabilities |
|
5,464 |
|
|
|
16,087 |
|
Total
liabilities |
|
1,671,514 |
|
|
|
1,667,651 |
|
|
|
|
|
|
|
Redeemable
non-controlling interest |
|
8,705 |
|
|
|
8,603 |
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
The
Company's stockholders' equity: |
|
|
|
|
|
Common
stock |
|
51 |
|
|
|
51 |
|
Additional paid-in capital |
|
903,723 |
|
|
|
901,363 |
|
Retained
earnings (accumulated deficit) |
|
442,531 |
|
|
|
422,222 |
|
Accumulated other comprehensive income (loss) |
|
(5,956 |
) |
|
|
(3,799 |
) |
|
|
1,340,349 |
|
|
|
1,319,837 |
|
Noncontrolling interest |
|
122,646 |
|
|
|
125,259 |
|
Total
equity |
|
1,462,995 |
|
|
|
1,445,096 |
|
Total
liabilities and equity |
$ |
3,143,214 |
|
|
$ |
3,121,350 |
|
|
|
|
|
|
|
|
|
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIESReconciliation of
EBITDA and Adjusted EBITDAFor the Three-Month Periods Ended March
31, 2019 and 2018(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 periods ended March 31, 2019 and
2018.
|
Three Months Ended March 31 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
(in thousands) |
Net income |
$ |
28,130 |
|
|
$ |
74,256 |
|
Adjusted for: |
|
|
|
|
|
Interest expense, net
(including amortization of deferred financing costs) |
|
20,930 |
|
|
|
14,231 |
|
Income tax
provision |
|
14,039 |
|
|
|
(26,942 |
) |
Adjustment to
investment in unconsolidated company: |
|
|
|
|
|
our proportionate share
in interest, tax and depreciation and amortization |
|
2,661 |
|
|
|
3,530 |
|
Depreciation and
amortization |
|
34,866 |
|
|
|
29,437 |
|
EBITDA |
$ |
100,626 |
|
|
$ |
94,512 |
|
|
|
|
|
|
|
Mark-to-market gains or
losses from accounting for derivatives |
|
(1,209 |
) |
|
|
962 |
|
Stock-based
compensation |
|
2,360 |
|
|
|
1,707 |
|
Merger and acquisition
transaction cost |
|
— |
|
|
|
1,095 |
|
Write-off of
unsuccessful exploration activities |
|
— |
|
|
|
123 |
|
Adjusted EBITDA |
$ |
101,777 |
|
|
$ |
98,399 |
|
|
|
|
|
|
|
|
|
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIESReconciliation of
Adjusted Net Income attributable to the Company's stockholdersFor
the Three-Month Periods Ended March 31, 2019 and
2018(Unaudited)
Adjusted net income attributable to the Company's stockholders
and Adjusted EPS are adjusted for one-time expense items that are
not representative of our ongoing business and operations. The use
of Adjusted Net income attributable to the Company's stockholders
and Adjusted EPS is intended to enhance the usefulness of our
financial information by providing measures to assess the overall
performance of our ongoing business.
The following table reconciles Net income attributable to the
Company's stockholders and Adjusted EPS for the three-month periods
ended March 31, 2019 and 2018.
|
Three Months Ended March 31 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
(in thousands) |
Net income attributable
to the Company's stockholders |
$ |
25.9 |
|
|
$ |
69.5 |
|
|
|
|
|
|
|
|
One-time tax
Income |
|
— |
|
|
|
(44.4 |
) |
|
|
|
|
|
|
|
Adjusted Net
income attributable to the Company's stockholders |
$ |
25.9 |
|
|
$ |
25.1 |
|
|
|
|
|
|
|
|
Weighted average number
of shares diluted used in computation of earnings per share
attributable to the Company's stockholders: |
|
51.0 |
|
|
|
51.1 |
|
|
|
|
|
|
|
|
Adjusted
EPS |
|
0.51 |
|
|
|
0.49 |
|
|
|
|
|
|
|
|
|
Ormat Technologies
Contact: Smadar Lavi VP Corporate Finance and Head of Investor
Relations 775-356-9029 (ext. 65726) slavi@ormat.com |
Investor Relations
Agency Contact: Rob Fink Hayden - IR 646-415-8972
rob@haydenir.com |
|
|
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