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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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