EX-99.1 2 y01213exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
Exhibit 99.1
(ORMAT LOGO)
PRESS RELEASE
     
For Immediate Release
    
Ormat Technologies Contact:
  Investor Relations Contact
Dita Bronicki
  Todd Fromer / Marybeth Csaby
CEO
  KCSA Strategic Communications
775-356-9029
  212-896-1215 / 212-896-1236
dbronicki@ormat.com
  tfromer@kcsa.com / mcsaby@kcsa.com
ORMAT TECHNOLOGIES REPORTS RECORD FOURTH QUARTER 2008 AND YEAR-END
RESULTS
RENO, Nevada, February 24, 2009 — Ormat Technologies, Inc. (NYSE: ORA) today announced results for the fourth quarter and full year ended December 31, 2008.
Highlights of the company performance include:
•   Revenues increased 35.2% for the quarter to $95.5 million and 16.5% for the year to $344.8 million.
•   Net income increased 31.3% to $11.7 million in the quarter and 82.0% to $49.8 million for the year.
•   Earnings per share increased 18.2 % to $0.26 in the quarter and 60% to $1.12 for the year.
•   Product backlog reached a record high of $194.0 million.
•   Ormat-owned generating capacity increased by 109 MW, an increase of over 25% during 2008.
Commenting on the results, Dita Bronicki, Chief Executive Officer of Ormat, stated: “It was a good year and quarter for Ormat, as reflected in our financial results. The fundamental business of the Company is in excellent condition and the benefits of the new Stimulus Act will further improve our future results. We substantially grew and improved the profitability of our Electricity and Products Segments, significantly increased the generating capacity in our Electricity Segment and ended the year with a record backlog in the Products Segment.
In our Electricity Segment, we have substantially completed the construction of several projects that have increased our generating portfolio by 109 MW to 505 MW. This organic growth includes:
•   phase II of the Olkaria III project in Kenya, which was completed during the fourth quarter of 2008 and is now in commercial operation;
•   the 50 MW North Brawley project, which reached the start up phase and will ramp up gradually with full capacity expected in the second quarter of 2009;
•   18 MW in 2 different geothermal projects; and
•   5.5 MW in the first of four OREG 2 recovered energy generation (REG) projects.”
Ms. Bronicki continued, “Looking ahead to 2009, in our Electricity Segment we expect to add approximately 34 MW to our generating portfolio. We had hoped to complete the 30 MW East Brawley project in 2009, but this project has been pushed back to 2010 due to permitting delays.”

 

 

“In support of future growth we have added 150,000 acres of new leases to our development inventory during 2008, a large acreage for future exploration activity. We have in place the capital resources to fund our CapEx requirement of about $250 million for our present growth plans in 2009”, Ms. Bronicki concluded.
Electricity revenues for the fourth quarter of 2008 were $62.1 million, an increase of 11.8%, compared to $55.5 million in the fourth quarter of 2007. The increase in electricity revenues is primarily attributable to a net increase in domestic electricity generation to 645,826 MWh for the quarter, up from 533,110 MWh in the same period of 2007 as a result of new plants coming on line and enhanced performance of existing plants. In addition, increased energy rates at the Puna project due to higher oil prices also helped boost electricity revenues. Current lower oil prices will reduce our revenues from the Puna project in 2009.
Revenues from the Products Segment for the three-month period ended December 31, 2008 were $33.4 million, compared to $15.1 million in the same period in 2007, an increase of 120.9%. Most of the increase in revenues was derived from two large geothermal projects, the Blue Mountain project in Nevada and the Centennial Binary Plant in New Zealand.
Adjusted EBITDA for the fourth quarter of 2008 was $31.5 million, compared to $25.2 million in the same quarter last year. Adjusted EBITDA includes operating income and depreciation and amortization totaling $1.3 million and $2.0 million for the quarters ended December 31, 2008 and 2007, respectively, related to the Company’s unconsolidated investments. The reconciliation of GAAP net income to Adjusted EBITDA is set forth below in this release.
Cash, cash equivalents and marketable securities as of December 31, 2008 decreased to $34.4 million from $60.7 million as of December 31, 2007. In addition, we have unutilized committed bank lines of credits aggregating $222.5 million.
On February 24, 2009, Ormat’s Board of Directors approved the payment of a quarterly cash dividend of $0.07 per share pursuant to the Company’s dividend policy, which targets an annual payout ratio of at least 20% of the Company’s net income, subject to Board approval. The dividend will be paid on March 26, 2009, to shareholders of record as of the close of business on March 16, 2009. The Company expects to pay a dividend of $0.06 per share in the next three quarters, compared to $0.05 per quarter in 2008.
Annual Results
For the year ended December 31, 2008, total revenues were $344.8 million, an increase of 16.5% from $296.0 million for the year ended December 31, 2007. Net income for the year ended December 31, 2008 was $49.8 million, or $1.12 per share (diluted), compared to $27.4 million, or $0.70 per share (diluted), for the year ended December 31, 2007. There were 44.3 million weighted average shares used in the computation of diluted earnings per share in the year ended December 31, 2008 and 38.9 million weighted average shares in the year ended December 31, 2007.
Electricity Segment revenues for the year ended December 31, 2008, were $252.3 million, an increase of 16.8% from $216.0 million for the year ended December 31, 2007. Products Segment revenues for the year ended December 31, 2008 were $92.6 million, an increase of 15.8% from $80.0 million in the year ended December 31, 2007.
For the year ended December 31, 2008, the Company’s gross margin was 29.6%, compared to 26.8% for the year ended December 31, 2007. Operating income for the year ended December 31, 2008 was $60.6 million, compared with $43.5 million for the year ended December 31, 2007, an increase of 39.5%. The

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increase in operating income is primarily attributable to increased revenues in both our Electricity and Products Segments as well as increased gross margins.
Adjusted EBITDA for the year ended December 31, 2008, was $124.7 million dollars, compared to $107.2 million for the year ended December 31, 2007. Adjusted EBITDA includes consolidated EBITDA and the Company’s share in the operating income and depreciation and amortization totaling $5.4 million and $14.6 million for the year ended December 31, 2008 and 2007, respectively, related to the Company’s unconsolidated investments.
Commenting on the outlook for 2009, Ms. Bronicki said, “We expect our 2009 Electricity Segment revenues to be between $280 million and $290 million. We also expect an additional $9 million of revenues from our share of electricity revenue generated by a subsidiary, which is accounted for under the equity method. With regard to our Products Segment, we expect that our 2009 revenues will be between $100 million and $120 million.”
Conference Call Details
Ormat will host a conference call to discuss its financial results and other matters discussed in this press release at 10:00 a.m. U.S. EST. on Wednesday, February 25, 2009. The call will be available as a live, listen-only webcast at www.ormat.com. During the webcast, management will refer to slides that will be posted on the web site. The slides and accompanying webcast can be accessed through the Event Calendar in the Investor Relations section of Ormat’s website.
A 30-day archive of the webcast will be available approximately 2 hours after the conclusion of the live call. A replay will be available from 12:00 p.m. EST on February 25, 2009 through 11:59 p.m. EST, March 1, 2009. Please call: (800) 642-1687 (U.S. and Canada) or (706) 645-9291 (International) and enter the code 82882042.
About Ormat Technologies
Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. The Company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat products and systems are covered by more than 75 patents. Ormat currently operates the following geothermal and recovered energy-based power plants: in the United States — Brady, Heber, Mammoth, Ormesa, Puna, Steamboat and OREG 1; in Guatemala — Zunil and Amatitlan; in Kenya — Olkaria; in Nicaragua – Momotombo; and in New Zealand — GDL.
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 March 5, 2008 and on Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2008.

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Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three and Twelve-months periods Ended December 31, 2008 and 2007
(Unaudited)
                                 
    Three Months Ended December 31,     Year Ended December 31,  
    2008     2007     2008     2007  
    (in thousands, except per share amounts)  
Revenues:
                                
Electricity
   $ 62,126     $ 55,545     $ 252,256     $ 215,969  
Products
     33,373       15,108       92,577       79,950  
 
                        
Total revenues
     95,499       70,653       344,833       295,919  
 
                        
 
                                
Cost of revenues:
                                
Electricity
     45,129       38,193       170,053       148,698  
Products
     25,271       12,852       72,755       68,036  
 
                        
 
Total cost of revenues
     70,400       51,045       242,808       216,734  
 
                        
 
Gross margin
     25,099       19,608       102,025       79,185  
 
                                
Operating expenses:
                                
Research and development expenses
     1,220       946       4,595       3,663  
Selling and marketing expenses
     2,699       2,794       10,885       10,645  
General and administrative expenses
     6,399       5,528       25,938       21,416  
 
                        
 
Operating income
     14,781       10,340       60,607       43,461  
 
                                
Other income (expense):
                                
Interest income
     383       2,358       3,118       6,565  
Interest expense
     (348 )     (5,147 )     (7,677 )     (26,983 )
Foreign currency translation and transaction losses
     (5,151 )     (568 )     (7,721 )     (1,339 )
Impairment of auction rate securities
     (1,822 )     (2,020 )     (4,195 )     (2,020 )
Other non-operating income
     443       295       771       890  
 
                        
Income before income taxes, minority interest, and equity in income of investees
     8,286       5,258       44,903       20,574  
 
                                
Income tax provision (benefit)
     (91 )     475       (7,962 )     (1,822 )
Minority interest
     3,095       2,297       11,166       3,882  
Equity in income of investees
     406       878       1,725       4,742  
 
                        
Net income
   $ 11,696     $ 8,908     $ 49,832     $ 27,376  
 
                        
Earnings per share:
                                
Basic
   $ 0.26     $ 0.22     $ 1.13     $ 0.71  
 
                        
Diluted
   $ 0.26     $ 0.22     $ 1.12     $ 0.70  
 
                        
 
                                
Weighted average number of shares used in computation of earnings per share:
                                
Basic
     45,347       40,670       44,182       38,762  
 
                        
Diluted
     45,423       40,852       44,298       38,880  
 
                        

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Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of December 31, 2008 and December 31, 2007
(Unaudited)
                 
    December 31,  
    2008     2007  
    (in thousands)  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 34,393     $ 47,227  
Marketable securities
     —       13,489  
Restricted cash, cash equivalents and marketable securities
     24,439       29,236  
Receivables:
                
Trade
     49,839       46,519  
Related entities
     338       385  
Other
     15,654       9,008  
Due from Parent
     1,085       253  
Inventories, net
     13,724       10,312  
Costs and estimated earnings in excess of billings on uncompleted contracts
     6,982       3,608  
Deferred income taxes
     3,003       1,732  
Prepaid expenses and other
     16,222       7,059  
 
            
Total current assets
     165,679       168,828  
Long-term marketable securities
     1,994       2,762  
Restricted cash, cash equivalents and marketable securities
     2,951       5,605  
Unconsolidated investments
     30,559       30,560  
Deposits and other
     16,876       15,294  
Deferred income taxes
     13,965       12,427  
Property, plant and equipment, net
     958,186       743,386  
Construction-in-process
     386,501       234,014  
Deferred financing and lease costs, net
     16,127       14,044  
Intangible assets, net
     44,853       47,989  
 
            
Total assets
   $ 1,637,691     $ 1,274,909  
 
            
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable and accrued expenses
   $ 103,336     $ 75,836  
Billings in excess of costs and estimated earnings on uncompleted contracts
     15,670       4,818  
Current portion of long-term debt:
                
Limited and non-recourse
     6,676       7,667  
Full recourse
     —       1,000  
Senior secured notes (non-recourse)
     20,085       25,475  
Due to Parent, including current portion of notes payable to Parent
     16,616       31,695  
 
            
Total current liabilities
     162,383       146,491  
Long-term debt, net of current portion:
                
Limited and non-recourse
     7,814       14,490  
Revolving credit line with banks
     100,000       —  
Senior secured notes (non-recourse)
     252,060       273,840  
Notes payable to Parent, net of current portion
     9,600       26,200  
Deferred lease income
     74,427       76,198  
Deferred income taxes
     33,231       20,680  
Liability for unrecognized tax benefits
     3,425       5,330  
Liabilities for severance pay
     17,640       15,201  
Asset retirement obligation
     13,438       13,014  
 
            
Total liabilities
     674,018       591,444  
 
            
Minority interest
     117,245       65,382  
 
            
Commitments and contingencies
               
Stockholders’ equity:
                
Common stock
     45       41  
Additional paid-in capital
     701,273       513,109  
Retained earnings
     144,465       103,545  
Accumulated other comprehensive income
     645       1,388  
 
            
Total stockholders’ equity
     846,428       618,083  
 
            
Total liabilities and stockholders’ equity
   $ 1,637,691     $ 1,274,909  
 
            

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Ormat Technologies, Inc. and Subsidiaries
Reconciliation of adjusted EBITDA
(Unaudited)
We calculate EBITDA as net income before interest, taxes, depreciation and amortization, equity income of investees, minority interest and other non-operating expense (income). We calculate adjusted EBITDA to include operating income, depreciation and amortization, interest and taxes attributable to our equity investments in the Mammoth and Leyte Projects. EBITDA and adjusted EBITDA are not measurements of financial performance 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 and twelve month periods ended December 31, 2008 and 2007:
                                 
    Three Months Ended December 31,     Year Ended December 31,  
    2008     2007     2008     2007  
    (in thousands)     (in thousands)  
Net income
   $ 11,696     $ 8,908     $ 49,832     $ 27,376  
Adjusted for:
                                
Equity in income of investees
     (406 )     (878 )     (1,725 )     (4,742 )
Minority interest
     (3,095 )     (2,297 )     (11,166 )     (3,882 )
Interest expense, net (including amortization of deferred financing costs)
     1,787       4,809       8,754       22,438  
Other non-operating expense
     4,708       273       6,950       449  
Income tax provision (benefit)
     91       (475 )     7,962       1,822  
Depreciation and amortization
     15,368       12,917       58,773       49,111  
 
                        
EBITDA
     30,149       23,257       119,380       92,572  
Equity in income of Mammoth-Pacific L.P. and Ormat Leyte
     406       878       1,725       4,742  
Depreciation, amortization, interest and taxes attributable to the Company’s equity in Mammoth-Pacific L.P. and Ormat Leyte
     900       1,105       3,636       9,881  
 
                        
Adjusted EBITDA
   $ 31,455     $ 25,240     $ 124,741     $ 107,195  
 
                        

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