Ormat Technologies Reports Filing of Its Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2017


No Change to the Operational Results Reported on March 1, 2018

Net Income Attributable to the Company’s Shareholders Was $155.5 Million

RENO, Nev., March 16, 2018 (GLOBE NEWSWIRE) -- 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)Q4
2017
Q4
2016
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 share
attributable 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 Information
For 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 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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