Ormat Technologies, Inc. Reports Fourth Quarter 2006 and Year-End Results
Wednesday February 28, 3:19 am ET
Record Revenues of $268.9 Million for the Year Ended 2006, Up 13% Over 2005;
Net Income Increased to $34.4 Million;
Company Announces Quarterly Cash Dividend of $0.07 Per Share
RENO, Nev., Feb. 27 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. (NYSE: ORA - News) today announced financial results for the fourth quarter and full year ended December 31, 2006.
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Annual Results
For the year ended December 31, 2006, total revenues were $268.9 million, a 13.0% increase over total revenues of $238.0 million for the year ended December 31, 2005. Net income for the year ended December 31, 2006 rose to $34.4 million compared with $15.2 million for the year ended December 31, 2005.
Dita Bronicki, President and Chief Executive Officer of Ormat, commented: "Our results for 2006 reflect strong growth in both our Products and Electricity Segments as we continue to execute on our business strategy. In 2006, we demonstrated our ability to provide viable solutions in both renewable power, through our geothermal projects, and energy efficiency, through Recovered Energy Generation (REG), a marketplace that we have identified as an additional growth opportunity going forward."
Electricity Segment revenues for the year ended December 31, 2006 were $195.5 million, an increase of 10.2% as compared to $177.4 million for the year ended December 31, 2005. Products Segment revenues for the year ended December 31, 2006 were $73.5 million, an increase of 21.2% as compared to $60.6 million for the year ended December 31, 2005.
Net income for the year ended December 31, 2006 was $34.4 million ($1.00 per share of common stock - basic; $0.99 - diluted) compared with net income of $15.2 million ($0.48 per share of common stock basic and diluted) for the year ended December 31, 2005, after giving effect to a non-recurring, after-tax charge of $10.3 million relating to the refinancing of the debt relating to the Heber Projects. Net income for the year ended December 31, 2005 was $25.5 million ($0.81 per share of common stock - basic and diluted), excluding the effect of that charge. Net income for the year ended December 31, 2006 includes compensation expenses of $1.6 million, or $0.04 per share of common stock, as a result of our adoption of Statement of Financial Accounting Standards No. 123R. There were 34.7 million and 31.6 million weighted average shares used in the computation of diluted earnings per share in the year ended December 31, 2006 and 2005, respectively.
For the year ended December 31, 2006, the Company's gross margin was 34.7% compared to 37.5% for the year ended December 31, 2005. Operating income for the year ended December 31, 2006 was $61.9 million as compared with $63.9 million for the year ended December 31, 2005, a decrease of 3.1%. The reduction in operating income is primarily attributable to unexpected operational issues experienced at some of our power plants, such as the Puna project (which restored its output to 30 MW in the first quarter of 2007) and a delay in the commercial operation of the Desert Peak 2 project.
Adjusted EBITDA for the year ended December 31, 2006 was $119.8 million as compared with $114.3 million for the year ended December 31, 2005. Adjusted EBITDA includes operating income and depreciation and amortization totaling $16.0 million and $16.4 million for the years ended December 31, 2006 and 2005, respectively, 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.
As of December 31, 2006, the Company had cash, cash equivalents and marketable securities of $116.7 million compared to $70.5 million as of December 31, 2005. The increase in the Company's cash position was due primarily to the combination of the $135.1 million net proceeds from the follow-on offering in April 2006 and the $92.4 million net proceeds from the sale of shares to Lehman Brothers in a block trade in December 2006. During the year ended December 31, 2006, the Company used a substantial amount of its cash resources to fund capital expenditures and acquisitions, and to repay long-term debt.
Ms. Bronicki continued: "Looking back on last year, which was a good year for Ormat, we added approximately 51 megawatts to our project portfolio. These additional megawatts include capacity from the first Ormat owned Recovered Energy Generation (REG) project -- the 22 MW OREG 1 Project, which began commercial operation in the fourth quarter of 2006."
"Sales in our Product Segment were strong as we received several orders for our Ormat Energy Converters for use in geothermal and recovered energy generation power plants, as well as for our turnkey geothermal solutions. What is especially notable about this increase is that several of these orders were from repeat customers, which we believe speaks well of the quality of our technology and our ability to deliver."
"We remain focused on profitable growth, and, as such, we continued to make the investments required to achieve this goal in the years to come. During the year, we increased our inventory of development leases in California, Nevada and Texas. We also signed three new long-term power purchase agreements and an option on others for a total of 80 MW to 100 MW of capacity."
Commenting on the outlook for 2007, Ms. Bronicki said, "We are pleased with our achievements in 2006 and we believe in the long-term promise of renewable energy and our ability to increase our participation in this sector. During the first quarter of 2007, projects with a capacity of 57 MW have completed construction and are in start up and testing phases, and we expect them to reach commercial operation during the first half of 2007. We expect our 2007 Electricity Segment revenues to be approximately $220 million based on today's oil prices. We also expect an additional $18 million of revenues from our share of electricity revenue generated by subsidiaries, which are accounted for under the equity method. With regard to our Products Segment, we currently expect that our 2007 revenues will be between $65 million and $72 million."
Fourth Quarter Results
For the fourth quarter of 2006, total revenues were $66.7 million as compared to $58.8 million for the same period in 2005, an increase of 13.4%. Electricity Segment revenues for the quarter were $46.6 million, an increase of 8.0% as compared to $43.1 million during the same period in 2005. Products Segment revenues for the quarter were $20.1 million, an increase of 28.5% as compared to $15.6 million for the same period in 2005.
Net income for the quarter ended December 31, 2006 was $4.2 million, or $0.12 per share of common stock (basic and diluted), including compensation expenses of $0.5 million, or $0.01 per share of common stock (basic and diluted). The net loss for the fourth quarter of 2005 was $5.1 million or $0.16 per share of common stock (basic and diluted), which includes the aforementioned non-recurring, after-tax charge relating to the refinancing of the Beal Bank debt relating to the Heber Projects. There were 36.2 million and 31.6 million weighted average shares used in the computation of diluted earnings per share in the quarters ended December 31, 2006 and 2005, respectively.
On February 27, 2007, 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 29, 2007 to shareholders of record as of the close of business on March 21, 2007. The Company expects to pay a dividend of $0.05 per share in 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 at 10:00 a.m. U.S. E.S.T. on Wednesday, February 28, 2007. The call will be available as a live, listen-only webcast at www.ormat.com. A 30-day archive of the webcast will be available approximately 2 hours after the conclusion of the live call. To listen to a replay, please call 1-877-519-4471 in the United States and Canada and 1-973-341-3080 for international callers and utilize code 8391719.
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