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Ormat Technologies Reports Fourth Quarter and Year-End 2020 Financial Results

/EIN News/ -- NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS FOR THE FOURTH QUARTER INCREASED 64.2% YEAR OVER YEAR

COMPANY INCREASES ITS QUARTERLY DIVIDEND BY 9% TO $0.12 PER SHARE

RENO, Nev., Feb. 24, 2021 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the fourth quarter and full year ended December 31, 2020.

KEY FINANCIAL RESULTS

(Dollars in millions, except per share) Q4 2020 Q4 2019 Change (%) FY 2020 FY 2019 Change (%)
GAAP Measures            
Revenues            
Electricity 146.2   144.4   1.3 % 541.4   540.3   0.2 %
Product 27.4   43.8   (37.5 )% 148.1   191.0   (22.5 )%
Energy Storage 5.8   4.3   36.2 % 15.8   14.7   7.6 %
Total Revenues 179.4   192.4   (6.8 )% 705.3   746.0   (5.5 )%
                         
Gross margin (%)                        
Electricity 45.2 % 43.6 % +160 bps   44.6 % 42.1 % +250 bps  
Product 29.8 % 28.2 % +160 bps   22.4 % 23.6 % -120 bps  
Energy Storage 13.0 % (19.0 )%     11.1 % (21.8 )%    
Gross margin (%) 41.8 % 38.7 % +310 bps   39.2 % 36.1 % +310 bps  
               
Operating income 53.2   54.5   -2.3 % 214.0   193.8   10.4 %
Net income attributable to the Company’s stockholders 20.7   12.6   64.2 % 85.5   88.1   -3.0 %
Diluted EPS ($) 0.39   0.24   62.5 % 1.65   1.72   (4.1 )%
                     
Non-GAAP Measures 1                    
Adjusted Net income attributable to the Company’s stockholders 20.7   12.6   64.2 % 85.5   74.8   14.3 %
Adjusted Diluted EPS ($) 0.39   0.24   62.5 % 1.65   1.46   13.0 %
Adjusted EBITDA1 109.2   102.2   6.9 % 420.2   384.3   9.3 %
                         

“This was a solid end to a strong year for Ormat, despite unprecedented global challenges,” commented Doron Blachar, Chief Executive Officer. “For the year, we met our Adjusted EBITDA guidance, supported by improved gross margin within our electricity and storage segments. Of a particular note, our energy storage segment is growing and is now profitable. We also strengthened our balance sheet through a combination of long-term debt and an equity offering. Finally, in the fourth quarter, we restarted operations at Puna and successfully resolved all pending Kenya tax assessments.”

“Most importantly, this year we laid the foundation to accelerate the growth of our electricity and storage segments,” added Blachar. “With the tail wind of governments’ support around the world for renewable energy, we are increasing our capital expenditures for 2021 as we are confident with our solid growth plans aiming to increase our combined geothermal, energy storage and solar generating portfolio to approximately 1.5 GW by 2023 with a significant contribution coming from our energy storage business. We are targeting to reach an annual run-rate of $500 million in Adjusted EBITDA towards the end of 2022 that we expect to continue to grow as we move forward with our plans in 2023 and onwards.”

FINANCIAL AND RECENT BUSINESS HIGHLIGHTS

  • Net income attributable to the Company's stockholders was $85.5 million, or $1.65 per diluted share, compared to $88.1 million, or $1.72 per diluted share in 2019, representing a decrease of 3% and 4.1%, respectively, mainly impacted by a non-recurring tax benefit recorded in 2019. Excluding this tax benefit, Net income attributable to the Company's stockholders and diluted share in 2020 over 2019 increased by 14.3% and 13%, respectively;
  • Adjusted EBITDA increased 9.3% to $420.2 million, up from $384.3 million in 2019;
  • Electricity segment revenues slightly increased compared to 2019, supported by a contribution from newly added capacity at our Steamboat Complex and partially offset by curtailments in the Olkaria power plant in Kenya due to COVID-19;
  • Product segment backlog stand at $33 million as of February 24, 2021;
  • During the fourth quarter the Puna Geothermal Power Plant resumed operation and partial generation, two and a half years after the eruption of the Kilauea Volcano disrupted operations. The Company continues the field development work and expects to increase the current 13 MW capacity to full operation by mid-2021;
  • In Kenya, the Company concluded an audit related to the three tax assessments totaling approximately to the $200 million issued by the Kenya Revenue Authority (KRA) in 2019 and reached a favorable settlement during the fourth quarter;
  • We completed a public offering of 4,772,500 shares resulting in net proceeds to the Company of approximately $340 million;
  • Completed the acquisition of a shovel-ready energy storage asset in Upton County, Texas. This acquisition follows the acquisition we announced in July of the operating Pomona energy storage facility in California that increased our energy storage portfolio to 73 MW; and
  • We plan to provide further details on our long-term growth plans and targets at an Analyst Day to be conducted in May 2021.

_______________
1 Reconciliation is set forth below in this release

FOURTH QUARTER 2020 FINANCIAL RESULTS (COMPARING THE QUARTER ENDED DECEMBER 31, 2020 TO THE QUARTER ENDED DECEMBER 31, 2019)

Total revenues for the quarter were $179.4 million, down 6.8% compared to the same quarter last year. Electricity segment revenues increased 1.3% to $146.2 million, up from $144.4 million last year. The increase was mainly attributable to Steamboat Hills enhancement and repowering plant in Ormesa offset by curtailments in Olkaria. Product segment revenues decreased 37.5% to $27.4 million, down from $43.8 million in the same quarter last year due to lower backlog impacted mainly by COVID-19. Energy Storage segment revenues were $5.8 million compared to $4.3 million in the same quarter last year. The increase was mainly driven by the addition of the Rabbit Hill project in Texas and the acquired Pomona asset in California.

Net income attributable to the Company’s shareholders was $20.7 million, or $0.39 per diluted share, compared to $12.6 million, or $0.24 per diluted share, an increase of 64.2%.

Adjusted EBITDA was $109.2 million in the fourth quarter of 2020 compared to $102.2 million in the fourth quarter of 2019. The increase in Adjusted EBITDA is mainly related to the improved performance of our Electricity segment. A reconciliation of GAAP net income to EBITDA and Adjusted EBITDA is set forth below in this release.

FULL-YEAR 2020 FINANCIAL RESULTS (COMPARING THE YEAR ENDED DECEMBER 31, 2020 TO THE YEAR ENDED DECEMBER 31, 2019)

For the year ended December 31, 2020, total revenues were $705.3 million, down 5.5% from $746.0 million for the year ended December 31, 2019. Electricity segment revenues increased 0.2% to $541.4 million for the year ended December 31, 2020, up from $540.3 million for 2019. Product segment revenues decreased 22.5% to $148.1 million for the year, down from $191.0 million last year. Energy Storage segment revenues were $15.8 million for the year ended December 31, 2020 compared to $14.7 million in 2019.

Net income attributable to the Company’s stockholders was $85.5 million, or $1.65 per diluted share, compared to $88.1 million, or $1.72 per diluted share, for the same period a year ago.

Adjusted EBITDA for the year ended December 31, 2020 was $420.2 million compared to $384.3 million for 2019, an increase of 9.3%. A reconciliation of GAAP Net income to EBITDA and Adjusted EBITDA is set forth below in this release.

2021 GUIDANCE

  • Total revenues of between $640 million and $675 million
  • Electricity segment revenues between $570 million and $580 million
    • The electricity segment guidance includes $33 million from the Puna power plant in Hawaii, assuming we will meet our plans to bring it close to full operation in mid-2021.
  • Product segment revenues of between $50 million and $70 million
  • Energy Storage revenues of between $20 million and $25 million
  • Adjusted EBITDA to be between $400 million and $410 million
    • Adjusted EBITDA attributable to minority interest of approximately $32 million.

The Company provides a reconciliation of Adjusted EBITDA, a Non-GAAP financial measure for the three months and year ended December 31, 2020. However, the Company is unable to provide a reconciliation for its Adjusted EBITDA guidance range due to high variability and complexity with respect to estimating forward looking amounts for 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 February 24, 2021, 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 March 29, 2021 to stockholders of record as of the close of business on March 11, 2021. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in each of the next three quarters.

CONFERENCE CALL DETAILS

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, February 25th, at 9 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.

An archive of the webcast will be available approximately 60 minutes after the conclusion of the live call.

Investors may access the call by dialing:

Participant dial in (toll free):   1-877-511-6790
Participant international dial-in:   1-412-902-4141
     
Conference replay
   
US Toll Free:   1-877-344-7529
International Toll:   1-412-317-0088
Replay Access Code:   10151868
     

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 plan to accelerate long-term growth in the energy segment market to establish 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 to 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 activity into the energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current 932 MW of geothermal and Solar generating portfolio is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe and its 73 MW energy storage portfolio is located in the U.S.

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’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 2, 2020 and from time to time, in Ormat’s quarterly reports on Form 10-Q that are filed with the SEC.

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 Statement of Operations
For the Three and Twelve-Month Periods Ended December 31, 2020 and 2019

  Three Months Ended December 31, Twelve-Months Ended December 31,
  2020 2019 2020 2019
  (Dollars in thousands, except per share data)
Revenues:        
Electricity 146,192   144,368   541,393   540,333  
Product 27,388   43,814   148,125   191,009  
Energy storage 5,802   4,260   15,824   14,702  
Total revenues 179,382   192,442   705,342   746,044  
Cost of revenues:        
Electricity 80,071   81,393   300,059   312,835  
Product 19,224   31,479   114,948   145,974  
Energy storage 5,046   5,068   14,060   17,912  
Total cost of revenues 104,341   117,940   429,067   476,721  
Gross profit 75,041   74,502   276,275   269,323  
Operating expenses:        
Research and development expenses 1,114   1,875   5,395   4,647  
Selling and marketing expenses 3,660   4,123   17,384   15,047  
General and administrative expenses 17,072   14,032   60,226   55,833  
Business interruption insurance income     (20,743 )  
Operating income 53,195   54,472   214,013   193,796  
Other income (expense):        
Interest income 248   320   1,717   1,515  
Interest expense, net (19,139 ) (17,568 ) (77,953 ) (80,384 )
Derivatives and foreign currency transaction gains (losses) 1,691   (72 ) 3,802   624  
Income attributable to sale of tax benefits 8,902   4,415   25,720   20,872  
Other non-operating income (expense), net 75   (482 ) 1,418   880  
Income from operations before income tax and equity in earnings (losses) of investees 44,972   41,085   168,717   137,303  
Income tax provision (21,728 ) (25,477 ) (67,003 ) (45,613 )
Equity in earnings (losses) of investees, net 288   (1,481 ) 92   1,853  
Net income 23,532   14,127   101,806   93,543  
Net income attributable to noncontrolling interest (2,834 ) (1,521 ) (16,350 ) (5,448 )
Net income attributable to the Company's stockholders 20,698   12,606   85,456   88,095  
Earnings per share attributable to the Company's stockholders:        
Basic:        
Net income 0.39   0.25   1.66   1.73  
Diluted:        
Net income 0.39   0.24   1.65   1.72  
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:        
Basic 53,106   51,017   51,567   50,867  
Diluted 53,551   51,511   51,937   51,227  
                 

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
For the Periods Ended December 31, 2020 and December 31, 2019

  December 31,
2020
  December 31,
2019
  (Dollars in thousands)
ASSETS
Current assets:      
Cash and cash equivalents 448,252     71,173  
Restricted cash and cash equivalents 88,526     81,937  
Receivables:      
Trade 149,170     154,525  
Other 17,987     22,048  
Inventories 35,321     34,949  
Costs and estimated earnings in excess of billings on uncompleted contracts 24,544     38,365  
Prepaid expenses and other 15,354     12,667  
Total current assets 779,154     415,664  
Investment in unconsolidated companies 98,217     81,140  
Deposits and other 66,989     38,284  
Deferred income taxes 119,299     129,510  
Property, plant and equipment, net 2,099,046     1,971,415  
Construction-in-process 479,315     376,555  
Operating leases right of use 16,347     17,405  
Finance leases right of use 11,633     14,161  
Intangible assets, net 194,421     186,220  
Goodwill 24,566     20,140  
Total assets 3,888,987     3,250,494  
       
LIABILITIES AND EQUITY
Current liabilities:      
Accounts payable and accrued expenses 152,763     141,857  
Short term revolving credit lines with banks (full recourse)     40,550  
Commercial paper     50,000  
Billings in excess of costs and estimated earnings on uncompleted contracts 11,179     2,755  
Current portion of long-term debt:      
Senior secured notes 24,949     24,473  
Other loans 35,897     34,458  
Full recourse 17,768     76,572  
Operating lease liabilities 2,922     2,743  
Finance lease liabilities 3,169     3,068  
Total current liabilities 248,647     376,476  
Long-term debt, net of current portion:      
Limited and non-recourse:      
Senior secured notes 315,195     339,336  
Other loans 284,928     317,395  
Senior unsecured bonds 717,534     286,453  
Other loans 59,556     68,747  
Operating lease liabilities 12,897     14,008  
Finance lease liabilities 9,104     11,209  
Liability associated with sale of tax benefits 111,476     123,468  
Deferred income taxes 87,972     97,126  
Liability for unrecognized tax benefits 1,970     14,643  
Liabilities for severance pay 18,749     18,751  
Asset retirement obligation 63,457     50,183  
Other long-term liabilities 6,235     8,039  
Total liabilities 1,937,720     1,725,834  
       
       
Redeemable noncontrolling interest 9,830     9,250  
       
Equity:      
The Company's stockholders' equity:      
Common stock 56     51  
Additional paid-in capital 1,262,446     913,150  
Retained earnings 550,103     487,873  
Accumulated other comprehensive income (loss) (6,620 )   (8,654 )
Total stockholders' equity attributable to Company's stockholders 1,805,985     1,392,420  
Noncontrolling interest 135,452     122,990  
Total equity 1,941,437     1,515,410  
Total liabilities, redeemable noncontrolling interest and equity 3,888,987     3,250,494  
           

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA
For the Three and Twelve-Month Periods Ended December 31, 2020 and 2019

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. Our Board of Directors and senior management use EBITDA and Adjusted EBITDA to evaluate 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 Twelve-Month periods ended December 31, 2020 and 2019.

  Three Months Ended December 31, Twelve-Months Ended December 31,
  2020 2019 2020 2019
  (Dollars in thousands) (Dollars in thousands)
Net income 23,532   14,127   101,806   93,543  
Adjusted for:        
Interest expense, net (including amortization of deferred financing costs) 18,891   17,248   76,236   78,869  
Income tax provision (benefit) 21,728   25,477   67,003   45,613  
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla 1,278   5,205   11,549   13,089  
Depreciation and amortization 39,643   36,260   151,371   143,242  
EBITDA 105,072   98,317   407,965   374,356  
Mark-to-market gains or losses from accounting for derivative 420   507   (1,192 ) (1,402 )
Stock-based compensation 2,770   2,127   9,830   9,358  
Loss from extinguishment of liability   468     468  
Merger and acquisition transaction costs 910   733   2,279   1,483  
Settlement expenses     1,277    
Adjusted EBITDA 109,172   102,152   420,159   384,263  
                 

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of Adjusted Net Income and Adjusted EPS
For the Three and Twelve-Month Periods Ended December 31, 2020 and 2019

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

The following tables reconciles Net income attributable to the Company's stockholders and Adjusted EPS for the three-month and 12-month periods ended December 31, 2020 and 2019.

    Three Months Ended December 31   Twelve Months Ended December 31
    2020 2019   2020   2019
    (Dollars in millions, except per share)
                 
Net income attributable to the Company's stockholders ($ million)   20.7 12.6   $ 85.5   88.1  
One-time tax items ($ million)         (13.3 )
Adjusted Net income attributable to the Company's stockholders ($ million)   20.7 12.6   $ 85.5   74.8  
Weighted average number of shares diluted used in computation of earnings per share attributable to the Company's stockholders (million)   53.6 51.5     51.9   51.2  
Diluted Adjusted EPS ($)   0.39 0.24     1.65   1.46  
                 


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
FNK IR
646-415-8972
rob@FNKIR.com
   

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