EX-99.1 2 file002.htm PRESS RELEASE

[ORMAT LOGO OMITTED]

PRESS RELEASE

FOR IMMEDIATE RELEASE
Ormat Technologies Contact: Investor Relations Contact
Dita Bronicki Jeff Corbin/Lee Roth
CEO and President KCSA Worldwide
+1-775-356-9029 212-896-1214/212-896-1209
DBRONICKI@ORMAT.COM JCORBIN@KCSA.COM/LROTH@KCSA.COM

ORMAT TECHNOLOGIES, INC. REPORTS FOURTH QUARTER 2004 AND YEAR-END RESULTS

Record Revenues of $219.2 Million for the year ended December 31, 2004 and
an 83.5% increase over 2003;

Operating Income increases 145% from $25.5 Million in 2003 to $62.4 Million;

Company announces first quarterly cash dividend of $0.03 per share

SPARKS, NEVADA, MARCH 23, 2005 -- ORMAT Technologies, Inc. (NYSE: ORA) today
announced financial results for the fourth quarter and full-year ended December
31, 2004.

For the year ended December 31, 2004, total revenues were $219.2 million as
compared to $119.4 million in 2003, an increase of 83.5%.

Electricity segment revenues for the year ended December 31, 2004 were $158.8
million, an increase of 104.3% as compared with 2003. Product segment revenues
for the year were $60.4 million, an increase of 44.9% compared to 2003.

Net income for the year ended December 31, 2004 was $17.8 million or $0.72 per
share of common stock as compared with $15.5 million or $0.66 per share of
common stock in 2003, an increase of 15.1% in net income. There were 31.6
million shares outstanding at December 31, 2004 and a weighted average number of
24.8 million in 2004 and 23.2 million in 2003.

For the year ended December 31, 2004, the company's gross margin was 37.9%
compared to 36.2% in 2003.

Operating income for the year ended December 31, 2004 was $62.4 million as
compared with $25.5 million in 2003, an increase of 145.0%.

Adjusted EBITDA for the year ended December 31, 2004 was $109.6 million.
Adjusted EBITDA includes operating income, depreciation and amortization
totaling $14.6 million related to the company's unconsolidated investment
interest of 50% in the Mammoth project in California and 80% in the Leyte

project in the Philippines. The reconciliation of GAAP net income to Adjusted
EBITDA is set forth below in this release.

For the fourth quarter of 2004, total revenues were $56.2 million, a 59.0%
increase from revenues of $35.4 million in the fourth quarter of 2003. This
incorporates all power plants, including power plants that the company acquired.

Net income for the fourth quarter was $4.7 million or $0.19 per share of common
stock versus net income of $5.8 million, or $0.25 per share of common stock for
the fourth quarter of 2003. The main reason for the decrease in net income for
the fourth quarter of 2004 as compared to the fourth quarter of 2003 is the
increase in interest expense. The weighted average number of shares outstanding
was 25.0 million in the fourth quarter of 2004 and 23.2 million in the fourth
quarter of 2003.

As of December 31, 2004, the company had cash, cash equivalents and marketable
securities of $125.9 million compared to $8.9 million as of December 31, 2003.
Ormat's cash balance as of December 31, 2004 includes the net proceeds of
approximately $97.0 million from the company's recent initial public offering on
the New York Stock Exchange.

The company announced that on March 22, 2005, its Board of Directors approved
the payment of the company's first quarterly cash dividend of $0.03 per common
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 April 18, 2005 to shareholders of record as of the
close of business on April 4, 2005. The company expects to pay the same
dividend, of $0.03 per common share, in the next three quarters as well.

Commenting on the results, Dita Bronicki, President and Chief Executive Officer
of Ormat said, "2004 was a record year for Ormat. Not only did we complete our
IPO on the New York Stock Exchange, but we also successfully executed on our
business plan and growth strategy and saw our revenues and operating income
reach their highest level in the company's history."

"During 2004 we made three acquisitions: the Steamboat 2 and 3 projects in
Nevada, the Steamboat Yankee geothermal project in Nevada and the Puna
geothermal power plant in Hawaii. These projects have added 60 MW of generating
capacity to our portfolio bringing our total net generating capacity to 302 MW.
In addition, during 2004, we integrated our December 2003 acquisition of our
Heber 1 and 2 projects as well as our 50% ownership interest in the Mammoth
project, thereby increasing our portfolio capacity by 97 MW."

Ms. Bronicki continued, "Ormat's growth strategy involves three components:
completing projects currently under construction, continuing to develop new
projects, and making acquisitions of either existing revenue generating projects
or new resources. In addition, we see a significant market opportunity in
recovered energy projects and over the coming years, we expect to grow in this
new market by designing, manufacturing and selling recovered energy products. "

"During 2005, we look forward to the completion and commercial operation of the
Steamboat/Galena, Heber and Puna projects which, together with Desert Peak 2
which we plan to complete also in 2005, will add 51 MW of capacity or 17% to our
portfolio. As a result, we expect our 2005 revenue to be approximately $170
million in our electricity segment where quarterly revenues are seasonal in
nature. We expect that an additional $18 million of revenues from electricity
will be our share in revenues generated by subsidiaries accounted for by the
equity method. While it is more difficult to predict our future revenues in our
products segment, based on our current backlog, we expect our revenues from such
segment in 2005 to be between $49 and $56 million."

Ms. Bronicki concluded, "We believe that the increasing demand, government
support worldwide for the development of clean renewable energy, and rising fuel
prices will continue to drive the growth of geothermal and other renewable
energy production. Given our current market position as one of the leading
geothermal companies in the world, our technological expertise and our strong
operational cash flow, we believe that Ormat presents a pure-play opportunity to
participate in an environmentally-friendly sector of the power industry. We
believe that Ormat is poised to grow in both the short and long term."

CONFERENCE CALL DETAILS

Ormat will host a conference call to discuss its financial results and other
matters discussed in this press release at 9:00 a.m. U.S. E.S.T. on Wednesday,
March 23, 2005. The call will be available as a live, listen-only webcast at
www.ormat.com or www.kcsa.com. An archive of the webcast and conference call
will be available approximately 2 hours after the conclusion of the live call.
To listen to the replay, please call (877) 519-4471 in the United States and
Canada and +1 (973) 341-3080 for all other international callers and utilize
code 5764745.

ABOUT ORMAT TECHNOLOGIES

Ormat Technologies, Inc. is a vertically integrated company primarily engaged in
the geothermal and recovered energy power business. The company designs,
develops, builds, owns and operates geothermal power plants and also designs,
develops and builds and plans to own and operate recovered energy-based power
plants. Additionally, the company designs, manufactures and sells geothermal and
recovered energy power units and other power generating equipment and provides
related services. Founded in 1994, the company currently has operations in the
United States, Israel, Guatemala, Kenya, Nicaragua and the Philippines.

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 the company's plans, objectives and expectations for future operations and
are based upon 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 the company's Prospectus filed
with the Securities and Exchange Commission on November 12, 2004. An updated
description of such risks and uncertainties will be included in the company's
Annual Report on Form 10-K for the year ended December 31, 2004.

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.

ABOUT NON-GAAP FINANCIAL MEASURES

This press release includes a financial measure defined as a non-GAAP financial
measure by the Securities and Exchange Commission: adjusted EBITDA. This measure
may be different from non-GAAP financial measures used by other companies. The
presentation of this financial information is not intended to be considered in
isolation or as a substitute for the financial information prepared and
presented in accordance with GAAP. Management of Ormat Technologies, Inc.
believes that adjusted EBITDA provides meaningful supplemental information that
both management and investors benefit in assessing Ormat Technologies' ability
to service and/or incur debt.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE-MONTHS PERIODS ENDED DECEMBER 31, 2004 AND 2003
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

-------------------------------------------------------------------------------------------------------------------

THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------- -----------------------
2004 2003 2004 2003
---- ---- ---- ----

Revenues:
Electricity:
Energy and capacity ............................. $ 17,900 $ 20,607 $ 100,281 $ 77,752
Lease portion of energy and capacity ............ 21,913 -- 58,550 --
--------- --------- --------- ---------
Total electricity ............................ 39,813 20,607 158,831 77,752
Products .......................................... 16,428 14,759 60,399 41,688
--------- --------- --------- ---------
Total revenues ............................... 56,241 35,366 219,230 119,440
--------- --------- --------- ---------
Cost of revenues:
Electricity:
Energy and capacity ............................. 16,889 13,724 63,300 46,726
Lease portion of energy and capacity ............ 7,178 -- 26,442 --
--------- --------- --------- ---------
Total electricity ............................ 24,067 13,724 89,742 46,726
Products .......................................... 12,306 10,215 46,336 29,494
--------- --------- --------- ---------
Total cost of revenues ....................... 36,373 23,939 136,078 76,220
--------- --------- --------- ---------
Gross margin ................................. 19,868 11,427 83,152 43,220

Operating expenses (income):
Research and development expenses ................. 622 195 2,175 1,391
Selling and marketing expenses .................... 2,174 2,079 7,769 7,087
General and administrative expenses ............... 3,614 3,567 11,609 9,252
Gain on sale of geothermal resource rights ........ (845) -- (845) --
--------- --------- --------- ---------
Operating income ................................ 14,303 5,586 62,444 25,490

Other income (expense):
Interest income ................................... 821 91 1,316 607
Interest expense .................................. (11,573) (2,008) (42,785) (8,120)
Foreign currency translation and transaction losses 443 (99) (146) (316)
Other non-operating income ........................ (109) 138 112 464
--------- --------- --------- ---------
Income from continuing operations before income
taxes, minority interest, and equity in income
of investees .................................. 3,885 3,708 20,941 18,125
Income tax provision ................................. (455) 1,801 (6,609) (2,506)
Minority interest in earnings of subsidiaries ........ -- 41 (108) (519)
Equity in income of investees ........................ 1,319 265 3,567 559
--------- --------- --------- ---------
Income before cumulative effect of
change in accounting principle ................ 4,749 5,815 17,791 15,659
Cumulative effect of change in accounting principle
(net of tax benefit of $125,000) .................. -- -- -- (205)
--------- --------- --------- ---------
Net income ...................................... 4,749 5,815 17,791 15,454
Basic and diluted income per share:
Income from continuing operations ................. $ 0.19 $ 0.25 $ 0.72 $ 0.66
Weighted average number of shares outstanding ..... 24,969 23,214 24,806 23,214
========= ========= ========= =========

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2004 AND 2003
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

----------------------------------------------------------------------------------------

DECEMBER 31,
-----------------------
2004 2003
---------- ----------

ASSETS
Current assets:
Cash and cash equivalents ................................. $ 36,750 $ 8,873
Marketable securities ..................................... 89,166 --
Restricted cash, cash equivalents and marketable securities 3,676 16,371
Receivables:
Trade ................................................... 26,913 28,689
Related entities ........................................ 2,413 1,939
Other ................................................... 1,816 729
Inventories, net .......................................... 6,046 3,712
Costs and estimated earnings in excess of billings on
uncompleted contracts ................................... 3,164 1,922
Deferred income taxes ..................................... 1,001 --
Prepaid expenses and other ................................ 2,377 2,091
--------- ---------
Total current assets ................................. 173,322 64,326

Restricted cash and cash equivalents ......................... 19,339 --
Unconsolidated investments ................................... 48,818 46,760
Deposits and other ........................................... 13,759 13,071
Deferred income taxes ........................................ 3,044 --
Property, plant and equipment, net ........................... 466,826 344,015
Construction-in-process ...................................... 60,177 35,118
Deferred financing costs, net ................................ 15,873 7,843
Intangible assets, net ....................................... 48,930 32,005
--------- ---------
Total assets ......................................... $ 850,088 $ 543,138
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ..................... $ 37,565 $ 27,479
Billings in excess of costs and estimated earnings on
uncompleted contracts ................................... 6,139 7,843
Current portion of long-term debt:
Limited and non-recourse ................................ 8,295 15,686
Full recourse ........................................... 24,361 10,490
Senior secured notes (non-recourse) ..................... 6,090 --
Due to Parent ............................................. 40,531 151
--------- ---------
Total current liabilities ............................ 122,981 61,649

Long-term debt, net of current portion:
Limited and non-recourse .................................. 159,370 193,251
Full recourse ............................................. 3,000 41,061
Senior secured notes (non-recourse) ....................... 183,399 --
Notes payable to Parent ...................................... 171,809 177,004
Other liabilities ............................................ 1,389 1,469
Deferred income taxes ........................................ 18,368 13,886
Liabilities for severance pay ................................ 11,129 9,993
Asset retirement obligation .................................. 10,665 5,737
--------- ---------
Total liabilities .................................... 682,110 504,050
--------- ---------
Minority interest in net assets of subsidiaries .............. 64 2,113
--------- ---------
Commitments and contingencies

Stockholders' equity:
Common stock .............................................. 31 23
Additional paid-in capital ................................ 124,008 7,002
Divisional deficit ........................................ -- (11,263)
Unearned stock-based compensation ......................... (244) (86)
Retained earnings ......................................... 44,441 41,299
Accumulated other comprehensive loss ...................... (322) --
--------- ---------
Total stockholders' equity ........................... 167,914 36,975
--------- ---------
Total liabilities and stockholders' equity ........... $ 850,088 $ 543,138
========= =========

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------

RECONCILIATION FROM NET INCOME TO ADJUSTED EBITDA:
EBITDA represents net income before interest, taxes, depreciation and
amortization and before equity in income of investee. Adjusted EBITDA includes
operating income, depreciation and amortization of our equity investments in the
Mammoth and Leyte projects. EBITDA and adjusted EBITDA are presented because we
believe it is 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. 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. The following
table reconciles net income to EBITDA and adjusted EBITDA, for the year ended
December 31, 2004:

YEAR ENDED
DECEMBER 31, 2004
Net Income $17,791
Adjusted for:
Equity in income of investee (3,567)
Financing expenses, net (including amortization of
deferred financing costs) 41,615
Other non-operating income (112)
Income tax provision 6,609
Minority interest in earnings of subsidiaries 108
Depreciation and amortization 32,591
--------
EBITDA 95,035
Equity in income of investee 2,897
Depreciation, amortization, interest and taxes
attributable to our equity in Mammoth-Pacific L.P.
and Ormat Leyte 11,698
--------
ADJUSTED EBITDA $109,630