EX-99.1 2 ex_442438.htm EXHIBIT 99.1 ex_442438.htm

Exhibit 99.1

 

 ormatlogo.jpg

 

Ormat Technologies Contact:
Smadar Lavi
VP Head of IR and ESG Planning & Reporting
775-356-9029 (ext. 65726)
slavi@ormat.com

 

Investor Relations Agency Contact:
Sam Cohen or Joseph Caminiti
Alpha IR Group
312-445-2870
ORA@alpha-ir.com

 

 

ORMAT TECHNOLOGIES REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS

 

NEW POWER PLANTS AND STRONG ENERGY PRICES DRIVE SIGNIFICANT TOP LINE AND OPERATING INCOME EXPANSION

 

 

HIGHLIGHTS

 

 

TOTAL REVENUES FOR THE THIRD QUARTER INCREASED BY 10.7% YEAR OVER YEAR DRIVEN BY CONTINUED GROWTH IN LEADING ELECTRICITY SEGMENT

 

 

OPERATING INCOME INCREASED 8.1% YEAR OVER YEAR

 

 

RENO, Nev. November 2, 2022, Ormat Technologies, Inc. (NYSE: ORA), a leading geothermal, energy storage, solar PV and recovered energy power company, today announced financial results for the third quarter ended September 30, 2022.

 

KEY FINANCIAL RESULTS

 

   

Q3 2022

   

Q3 2021

   

Change

(%)

   

9-months

2022

   

9-months

2021

   

Change

(%)

 

GAAP Measures

                                               

Revenues ($ millions)

                                               

Electricity

    152.8       142.7       7.1 %     466.5       421.5       10.7 %

Product

    14.2       10.5       35.1 %     39.2       26.6       47.6 %

Energy Storage

    8.8       5.7       56.2 %     22.9       24.0       (4.6) %

Total Revenues

    175.9       158.8       10.7 %     528.7       472.1       12.0 %
                                                 

Gross Profit ($ millions)

    61.1       63.1       -3.2 %     188.6       188.8       (0.1) %
                                                 

Gross margin (%)

                                               

Electricity

    36.5 %     42.8 %             38.5 %     41.8 %        

Product

    18.0 %     12.8 %             9.2 %     12.8 %        

Energy Storage

    31.5 %     12.2 %             24.3 %     37.5 %        

Gross margin (%)

    34.7 %     39.8 %             35.7 %     40.0 %        
                                                 

Operating income ($ millions)

    38.9       36.0       8.1 %     122.6       114.5       7.1 %

Net income attributable to the Company’s stockholders ($ millions)

    18.1       14.9       21.5 %     47.8       43.2       10.7 %

Diluted EPS ($)

    0.32       0.26       23.1 %     0.85       0.77       10.4 %
                                                 

Non-GAAP Measures

                                               

Adjusted Net income attributable to the Company’s stockholders ($ millions)

    18.8       17.8       5.3 %     50.8       55.7       (8.8) %

Adjusted Diluted EPS ($)

    0.33       0.32       2.5 %     0.90       0.99       (9.3) %

Adjusted EBITDA1 ($ millions)

    102.2       101.6       0.6 %     310.8       285.4       8.9 %

 

 

 

“Ormat’s third quarter financial performance demonstrated strong growth to our consolidated top-line, driven by continued momentum in our Electricity and Energy Storage Segments along with a notable improvement in our Product Segment,” said Doron Blachar, Ormat’s Chief Executive Officer. “Our fourth consecutive quarter of top-line growth drove expansion in both our Operating income and Net income. Adjusted EBITDA was flat year-over-year driven by the absence of $15.8 million of insurance proceeds received in relation to the Puna power plant in Hawaii during the third quarter of last year. Also, gross margin of the Electricity segment was impacted by the insurance proceeds related to Puna, and excluding that, gross margin in the third quarter 2022 increased by 4.5% compared to last year. The continued growth in our Electricity segment was supported by CD4 and Tungsten 2, which commenced commercial operation in the last quarter, as well as increased operations and higher electricity rates at Puna in the third quarter. In the Product segment, newly negotiated and signed contracts have improved our margins while strengthening our backlog. Additionally, the increase in energy prices has boosted energy storage revenues.”

 

“We remain on track with the commercial operation of most of our geothermal projects. Despite a short-term delay for some of our energy storage assets that will not contribute revenues in 2022, we benefited from the increase in energy prices for our energy storage operating assets. We continue to see strong global tailwinds for renewables, specifically in the USA and Indonesia. The elevated global price environment for fossil fuels and increased focus on energy security supports our long-term plans to increase our combined geothermal, energy storage and solar generating portfolio to approximately 1.5 GW by 2023 and to deliver an annual Adjusted EBITDA of approximately $500 million on a run-rate basis towards the end of 2022,” Blachar added.

 

 

FINANCIAL AND RECENT BUSINESS HIGHLIGHTS

 

 

Net income attributable to the Company's stockholders and diluted EPS for the third quarter of 2022 increased 21.5% and 23.1%, respectively, versus the prior year period. This was a result of the increase in operating income driven by all operating segments.

 

 

Adjusted Net income attributable to the Company's stockholders and adjusted diluted EPS for the third quarter of 2022 increased 5.3% and 2.5%, respectively, compared to last year.

 

 

Adjusted EBITDA for the third quarter of 2022 was $102.2 million, an increase of 0.6% compared to $101.6 million in 2021, supported by an 8.1% increase in operating income driven mainly by the reduction in G&A expenses due to lower legal expenses. This increase was offset by the absence of $15.8 million in insurance proceeds received in the third quarter last year.

 

 

 

 

Electricity segment revenues increased 7.1% for the third quarter of 2022, compared to 2021, driven by the Tungsten and CD4 plants each reaching their respective CODs and the Puna plant garnering higher capacity along with improved energy rates. The segment revenue was partially offset by the shutdown of the Heber 1 power plant due to fire.

 

 

Electricity segment gross margin decreased to 36.5%. This decrease was driven by one-off business interruption insurance proceeds of $15.5 million in relation to the Puna power plant in Hawaii, recorded in the third quarter last year, causing a higher-than-normal gross margin of 42.8% in the third quarter of 2021. Excluding these business interruption proceeds, gross margin was 32.0%, an increase of 4.5% compared to last year.

 

 

We recorded in the third quarter of 2022 $4.0 million of insurance proceeds related to Heber 1 and a total of $7.4 million in the nine months of 2022 as a reduction of the electricity cost of revenues.

 

 

Product segment revenues increased 35.1% to $14.2 million due to new contracts signed in 2022.

 

 

Product segment backlog grew this quarter by approximately 150% compared to the second quarter of 2022 driven by the $100 million in contracts signed in the third quarter. Backlog stands at $137.1 million as of November 3, 2022.

 

 

Energy storage segment revenues increased 56.2% to $8.8 million, primarily driven by the increase in merchant prices in our main markets.

 

IN ADDITION, THE COMPANY:

 

 

Signed a 15-year power purchase agreement (tolling agreement) with California utility for the 80MW/320MWh Bottleneck Battery Energy Storage System located in California, subject to CPUC approval. The Bottleneck project is the largest energy storage project currently under construction and we expect to complete its construction by year end 2023 and start selling services under the Energy Storage PPA in early 2024.

 

 

Commenced commercial operation of the 30MW CD4 geothermal project.

 

 

Secured $100 million of Supply and EPC Contracts in New Zealand and Indonesia.

 

2022 GUIDANCE

 

 

Total revenues of between $720 million and $735 million.

 

 

Electricity segment revenues between $630 million and $638 million.

 

 

Product segment revenues of between $60 million and $67 million.

 

 

Energy Storage revenues of $30 million.

 

 

Adjusted EBITDA to be between $430 million and $442 million, including $15 million for business interruption insurance proceeds, of which $10 million were recorded in the nine months ended September 30, 2022.

 

 

Adjusted EBITDA attributable to minority interest of approximately $35 million.

 

 

 

The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three months ended September 30, 2022. However, the Company does not provide guidance on net income and is unable to provide a reconciliation for its Adjusted EBITDA guidance range to net income without unreasonable efforts due to high variability and complexity with respect to estimating certain forward-looking amounts. These include impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.

 

DIVIDEND

 

On November 2, 2022, the Company’s Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share pursuant to the Company’s dividend policy. The dividend will be paid on November 30, 2022, to stockholders of record as of the close of business on November 16, 2022.

 

CONFERENCE CALL DETAILS

 

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, November 3 at 9:00 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. A replay of the webcast will be available approximately 120 minutes after the conclusion of the live call and will be archived for 12 months.

 

Investors may access the call by dialing:

 

Canadian participant dial in (toll free):

1-833-950-0062

United States participant international dial-in:

1-844-200-6205

All other locations:

+1-929-526-1599

Access code:

299253

 

Conference replay

US Toll Free:

1-866-813-9403

Canada:

1-226-828-7578

International Toll:

+44-204-525-0658

Replay Access Code:

042163

 

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 robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. 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. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1,173 MW with a 1,085 MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and an 88 MW energy storage portfolio that is located in the U.S.

 

 

 

ORMATS 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. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. 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. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under "Risk Factors" as described in Ormat’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 25, 2022, and in Ormat’s subsequent quarterly reports on Form 10-Q and annual reports on Form 10-K that are filed from time to time with the SEC.

 

These forward-looking statements are made only as of the date hereof, and, except as legally required, 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 Statement of Operations

For the Three and Nine-Month Periods Ended September 30, 2022, and 2021

 

   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
   

2022

   

2021

   

2022

   

2021

 
   

(Dollars in thousands, except per share data)

 

Revenues:

                               

Electricity

    152,820       142,651       466,540       421,503  

Product

    14,217       10,527       39,237       26,580  

Energy storage

    8,848       5,664       22,896       24,012  

Total revenues

    175,885       158,842       528,673       472,095  

Cost of revenues:

                               

Electricity

    97,053       81,549       287,091       245,136  

Product

    11,664       9,182       35,644       23,180  

Energy storage

    6,060       4,971       17,324       15,017  

Total cost of revenues

    114,777       95,702       340,059       283,333  

Gross profit

    61,108       63,140       188,614       188,762  

Operating expenses:

                               

Research and development expenses

    1,238       1,175       3,690       3,179  

Selling and marketing expenses

    4,093       2,671       12,410       10,935  

General and administrative expenses

    16,057       23,554       47,155       60,400  

Business interruption insurance income

          (248 )           (248 )

Impairment charge

                1,954        

Write-off of unsuccessful exploration activities

    827             827        

Operating income

    38,893       35,988       122,578       114,496  

Other income (expense):

                               

Interest income

    1,659       519       2,180       1,590  

Interest expense, net

    (22,403 )     (22,230 )     (63,902 )     (59,872 )

Derivatives and foreign currency transaction gains (losses)

    (293 )     (21 )     (4,031 )     (16,229 )

Income attributable to sale of tax benefits

    9,113       7,879       26,345       21,654  

Other non-operating income (expense), net

    673       44       (512 )     (308 )

Income from operations before income tax and equity in earnings (losses) of investees

    27,642       22,179       82,658       61,331  

Income tax (provision) benefit

    (7,227 )     (2,048 )     (23,520 )     (9,323 )

Equity in earnings (losses) of investees, net

    (589 )     649       (1,574 )     1,796  

Net income

    19,826       20,780       57,564       53,804  

Net income attributable to noncontrolling interest

    (1,716 )     (5,878 )     (9,764 )     (10,617 )

Net income attributable to the Company's stockholders

    18,110       14,902       47,800       43,187  

Earnings per share attributable to the Company's stockholders:

                               

Basic:

    0.32       0.27       0.85       0.77  

Diluted:

    0.32       0.26       0.85       0.77  

Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:

                               

Basic

    55,999       56,003       56,058       55,995  

Diluted

    56,457       56,298       56,479       56,413  

 

 

 

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Condensed Consolidated Balance Sheet

For the Periods Ended September 30, 2022, and December 31, 2021

 

   

September

30, 2022

   

December 31,

2021

 

ASSETS

 

Current assets:

               

Cash and cash equivalents

    154,633       239,278  

Marketable securities at fair value

          43,343  

Restricted cash and cash equivalents

    98,402       104,166  

Receivables:

               

Trade

    117,277       122,944  

Other

    20,646       18,144  

Inventories

    29,805       28,445  

Costs and estimated earnings in excess of billings on uncompleted contracts

    17,354       9,692  

Prepaid expenses and other

    36,858       35,920  

Total current assets

    474,975       601,932  

Investment in unconsolidated companies

    117,182       105,886  

Deposits and other

    38,250       78,915  

Deferred income taxes

    134,585       143,450  

Property, plant and equipment, net

    2,509,932       2,294,973  

Construction-in-process

    795,891       721,483  

Operating leases right of use

    20,958       19,357  

Finance leases right of use

    3,974       6,414  

Intangible assets, net

    339,042       363,314  

Goodwill

    89,742       89,954  

Total assets

    4,524,531       4,425,678  
                 

LIABILITIES AND EQUITY

 

Current liabilities:

               

Accounts payable and accrued expenses

    159,637       143,186  

Billings in excess of costs and estimated earnings on uncompleted contracts

    14,034       9,248  

Current portion of long-term debt:

               

Limited and non-recourse (primarily related to VIEs):

    76,668       61,695  

Full recourse

    101,268       313,846  

Financing Liability

    16,270       10,835  

Operating lease liabilities

    2,291       2,564  

Finance lease liabilities

    1,860       2,782  

Total current liabilities

    372,028       544,156  

Long-term debt, net of current portion:

               

Limited and non-recourse:

    478,941       539,664  

Full recourse:

    693,159       740,335  

Convertible senior notes

    420,250        

Financing liability

    225,759       242,029  

Operating lease liabilities

    18,302       16,462  

Finance lease liabilities

    2,202       4,361  

Liability associated with sale of tax benefits

    117,113       134,953  

Deferred income taxes

    77,787       84,662  

Liability for unrecognized tax benefits

    6,572       5,730  

Liabilities for severance pay

    13,601       15,694  

Asset retirement obligation

    92,426       84,891  

Other long-term liabilities

    5,682       4,951  

Total liabilities

    2,523,822       2,417,888  
                 

Commitments and contingencies

               

Redeemable noncontrolling interest

    8,433       9,329  
                 

Equity:

               

The Company's stockholders' equity:

               

Common stock

    56       56  

Additional paid-in capital

    1,256,058       1,271,925  

Treasury stock, at cost

    (17,964 )     0  

Retained earnings

    612,832       585,209  

Accumulated other comprehensive income (loss)

    (4,477 )     (2,191 )

Total stockholders' equity attributable to Company's stockholders

    1,846,505       1,854,999  

Noncontrolling interest

    145,771       143,462  

Total equity

    1,992,276       1,998,461  

Total liabilities, redeemable noncontrolling interest and equity

    4,524,531       4,425,678  

 

 

 

 

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Reconciliation of EBITDA and Adjusted EBITDA

For the Three- and Nine-Month Periods Ended September 30, 2022, and 2021

 

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 or loss from extinguishment of liabilities, (viii) gain or loss on sale of subsidiary and property, plant and equipment and (ix) other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, 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 U.S. GAAP. We use EBITDA and Adjusted EBITDA as a performance metric because it is a metric used by our Board of Directors and senior management in evaluating our financial performance. 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 nine-month periods ended September 30, 2022, and 2021.

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2022

 
 
 
 

2021

   

2022

   

2021

 
   

(Dollars in thousands)

   

(Dollars in thousands)

 

Net income

  $ 19,826     $ 20,780     $ 57,564     $ 53,804  

Adjusted for:

                               

Interest expense, net (including amortization of deferred financing costs)

    20,744       21,711       61,722       58,282  

Income tax provision (benefit)

    7,227       2,048       23,520       9,323  

Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla

    3,150       2,889       9,441       8,253  

Depreciation and amortization

    48,863       47,548       142,966       130,503  

EBITDA

  $ 99,810     $ 94,976     $ 295,213     $ 260,165  
                                 

Mark-to-market (gains) or losses from accounting for derivative

    (1,234 )           2,677       1,096  

Stock-based compensation

    2,816       2,120       8,629       6,840  

Make-whole premium related to long-term debt prepayment

                1,102        

Reversal of a contingent liability

                      (418 )

Allowance for bad debts

                115       2,980  

Hedge losses resulting from February power crisis in Texas

                      9,133  

Write-off related to Storage projects and activity

                1,953        

Merger and acquisition transaction costs

          4,539       249       5,497  

Other write-off

                      134  

Write-off of unsuccessful exploration activities

    827             827        

Adjusted EBITDA

  $ 102,219     $ 101,635     $ 310,765     $ 285,427  

 

 

 

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Diluted Adjusted EPS for the three- and nine-month periods ended September 30, 2022, and 2021

 

 

Adjusted Net Income attributable to the Company’s stockholders and Diluted 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 Diluted Adjusted EPS is intended to enhance the usefulness of our financial information by providing measures to assess the overall performance of our ongoing business.

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2022

   

2021

   

2022

   

2021

 
                                 

GAAP Net income attributable to the Company's stockholders

    18.1       14.9       47.8       43.2  

One-time net expense related to February power crisis in Texas, net of taxes

                      8.8  

Write-off of Energy Storage projects and assets

                1.5        

Exploration w/o

    0.7               0.7          

M&A costs

          2.9             3.7  

Make-whole premium related to repayment of long-term debt

                0.8        

Adjusted Net income attributable to the Company's stockholders

    18.8       17.8       50.8       55.7  

GAAP diluted EPS

    0.32       0.26       0.85       0.77  

One-time net expense related to February power crisis in Texas, net of taxes

                      0.16  

Write-off of Energy Storage projects and assets

                0.03        

Exploration w/o

    0.01               0.01          

M&A costs

          0.06             0.07  

Make-whole premium related to repayment of long-term debt

                0.01        

Diluted Adjusted EPS ($)

    0.33       0.32       0.90       0.99