Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the third quarter ended September 30, 2021.
KEY FINANCIAL RESULTS
Q3 2021 | Q3 2020 | Change (%) | YTD 2021 | YTD 2020 | Change (%) | |||||||||||||||||||||
GAAP Measures | ||||||||||||||||||||||||||
Revenues ($ millions) | ||||||||||||||||||||||||||
Electricity | 142.7 | 123.7 | 15.4 | % | 421.5 | 395.2 | 6.7 | % | ||||||||||||||||||
Product | 10.5 | 29.6 | (64.5 | ) | % | 26.6 | 120.7 | (78.0 | ) | % | ||||||||||||||||
Energy Storage | 5.7 | 5.7 | - | % | 24.0 | 10.0 | 139.6 | % | ||||||||||||||||||
Total Revenues | 158.8 | 158.9 | (0.1 | ) | % | 472.1 | 526.0 | (10.2 | ) | % | ||||||||||||||||
Gross margin (%) | ||||||||||||||||||||||||||
Electricity | 42.8 | % | 38.0 | % | 41.8 | % | 44.3 | % | ||||||||||||||||||
Product | 12.8 | % | 18.9 | % | 12.8 | % | 20.7 | % | ||||||||||||||||||
Energy Storage | 12.2 | % | 25.6 | % | 37.5 | % | 10.1 | % | ||||||||||||||||||
Gross margin (%) | 39.8 | % | 34.0 | % | 40.0 | % | 38.3 | % | ||||||||||||||||||
Operating income ($ millions) | 36.0 | 51.7 | (30.4 | ) | % | 114.5 | 160.8 | (28.8 | ) | % | ||||||||||||||||
Net income attributable to the Company’s stockholders | 14.9 | 15.7 | (5.0 | ) | % | 43.2 | 64.8 | (33.3 | ) | % | ||||||||||||||||
Diluted EPS ($) | 0.26 | 0.31 | (16.1 | ) | % | 0.77 | 1.26 | (38.9 | ) | % | ||||||||||||||||
Non-GAAP Measures 1 | ||||||||||||||||||||||||||
Adjusted Net income attributable to the Company’s stockholders | 17.8 | 15.7 | 13.7 | % | 55.7 | 64.8 | (14.0 | )% | ||||||||||||||||||
Adjusted Diluted EPS ($) | 0.32 | 0.31 | 3.6 | % | 0.99 | 1.26 | (21.6 | )% | ||||||||||||||||||
Adjusted EBITDA1 ($ millions) | 101.6 | 107.1 | (5.1 | ) | % | 285.4 | 311.0 | (8.2 | ) | % |
(1) Reconciliation is set forth below in this release
“We again delivered year-over-year growth in the Electricity segment. The recent acquisition of two geothermal power plants in Nevada, the stable operation of the Puna power plant at 26MW and the contribution of business interruption insurance related to the Puna eruption helped us deliver sequential growth despite the operational challenges and unexpected equipment issues we recently experienced in some of our power plants. We made progress in resolving these challenges and expect them to gradually recover by the first half of 2022.” commented Doron Blachar, Chief Executive Officer.
“Our product segment market continued to recover from Covid impacts as we signed in the third quarter two supply contracts in Nicaragua and in Indonesia,” continued Blachar. “As a result, our product segment backlog increased to $67 million, giving us a good start for this segment going into 2022. As we move towards full operation of our portfolio and continued recovery of our product segment, we expect to increase top- and bottom-line growth, boosting overall profitability and supporting the earnings power of the Company.”
“We continue to make progress in our growth plans in both our storage and geothermal portfolios, and we expect to expand the capacity of the two geothermal assets that we recently acquired and continue to accelerate our development in Indonesia where a significant portion of the world’s geothermal potential exists” concluded Blachar. “We are making steps toward achieving our long-term goal of increasing our combined geothermal, energy storage and solar generating portfolio to more than 1.5 GW by 2023, supporting our target of an annual run-rate of more than $500 million in Adjusted EBITDA towards the end of 2022.”
FINANCIAL AND BUSINESS HIGHLIGHTS
In addition, the Company:
2021 GUIDANCE
The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three and nine months ended September 30, 2021. However, the Company is unable to provide a reconciliation for its Adjusted EBITDA guidance range due to the 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 November 3, 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 December 3, 2021, to stockholders of record as of the close of business on November 17, 2021.
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 4, at 10 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): | 1-844-200-6205 | |
Participant international dial-in: | 1-929-526-1599 | |
Participant access code | 248607 | |
Conference replay | ||
US Toll Free: | 1-866 813 9403 | |
International Toll: | +44 204 525 0658 | |
Replay Access Code: | 355169 | |
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 1.1 GW with 1,015 MW of geothermal and Solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and 83 MW energy storage portfolio that 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 February 26, 2021 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 Nine Month Periods Ended September 30, 2021 and 2020
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
(Dollars in thousands, except per share data) | ||||||||
Revenues: | ||||||||
Electricity | 142,651 | 123,660 | 421,503 | 395,201 | ||||
Product | 10,527 | 29,625 | 26,580 | 120,737 | ||||
Energy storage | 5,664 | 5,662 | 24,012 | 10,022 | ||||
Total revenues | 158,842 | 158,947 | 472,095 | 525,960 | ||||
Cost of revenues: | ||||||||
Electricity | 81,549 | 76,670 | 245,136 | 219,988 | ||||
Product | 9,182 | 24,037 | 23,180 | 95,724 | ||||
Energy storage | 4,971 | 4,210 | 15,017 | 9,014 | ||||
Total cost of revenues | 95,702 | 104,917 | 283,333 | 324,726 | ||||
Gross profit | 63,140 | 54,030 | 188,762 | 201,234 | ||||
Operating expenses: | ||||||||
Research and development expenses | 1,175 | 1,490 | 3,179 | 4,281 | ||||
Selling and marketing expenses | 2,671 | 4,076 | 10,935 | 13,724 | ||||
General and administrative expenses | 23,554 | 14,539 | 60,400 | 43,154 | ||||
Business interruption insurance income | (248 | ) | (17,761 | ) | (248 | ) | (20,743 | ) |
Operating income | 35,988 | 51,686 | 114,496 | 160,818 | ||||
Other income (expense): | ||||||||
Interest income | 519 | 626 | 1,590 | 1,469 | ||||
Interest expense, net | (22,230 | ) | (21,756 | ) | (59,872 | ) | (58,814 | ) |
Derivatives and foreign currency transaction gains (losses) | (21 | ) | 1,047 | (16,229 | ) | 2,111 | ||
Income attributable to sale of tax benefits | 7,879 | 7,014 | 21,654 | 16,818 | ||||
Other non-operating income (expense), net | 44 | 961 | (308 | ) | 1,343 | |||
Income from operations before income tax and equity in earnings (losses) of investees | 22,179 | 39,578 | 61,331 | 123,745 | ||||
Income tax provision | (2,048 | ) | (15,361 | ) | (9,323 | ) | (45,275 | ) |
Equity in earnings (losses) of investees, net | 649 | (1,119 | ) | 1,796 | (196 | ) | ||
Net income | 20,780 | 23,098 | 53,804 | 78,274 | ||||
Net income attributable to noncontrolling interest | (5,878 | ) | (7,419 | ) | (10,617 | ) | (13,516 | ) |
Net income attributable to the Company's stockholders | 14,902 | 15,679 | 43,187 | 64,758 | ||||
Earnings per share attributable to the Company's stockholders: | ||||||||
Basic | 0.27 | 0.31 | 0.77 | 1.27 | ||||
Diluted | 0.26 | 0.31 | 0.77 | 1.26 | ||||
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: | ||||||||
Basic | 56,003 | 51,072 | 55,995 | 51,051 | ||||
Diluted | 56,298 | 51,282 | 56,413 | 51,386 |
ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
For the Periods Ended September 30, 2021 and December 31, 2020
September 30, 2021 | December 31, 2020 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | 267,802 | 448,252 | |||||
Marketable securities at fair value | 45,479 | — | |||||
Restricted cash and cash equivalents | 88,498 | 88,526 | |||||
Receivables: | |||||||
Trade | 140,314 | 149,170 | |||||
Other | 27,346 | 17,987 | |||||
Inventories | 27,356 | 35,321 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 9,324 | 24,544 | |||||
Prepaid expenses and other | 29,320 | 15,354 | |||||
Total current assets | 635,439 | 779,154 | |||||
Investment in unconsolidated companies | 109,725 | 98,217 | |||||
Deposits and other | 61,716 | 66,989 | |||||
Deferred income taxes | 149,178 | 119,299 | |||||
Property, plant and equipment, net | 2,298,903 | 2,099,046 | |||||
Construction-in-process | 615,482 | 479,315 | |||||
Operating leases right of use | 19,690 | 16,347 | |||||
Finance leases right of use | 7,002 | 11,633 | |||||
Intangible assets, net | 370,889 | 194,421 | |||||
Goodwill | 91,342 | 24,566 | |||||
Total assets | 4,359,366 | 3,888,987 | |||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | 127,432 | 152,763 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 15,829 | 11,179 | |||||
Current portion of long-term debt: | |||||||
Limited and non-recourse: | |||||||
Senior secured notes | 25,391 | 24,949 | |||||
Other loans | 36,203 | 35,897 | |||||
Full recourse | 312,661 | 17,768 | |||||
Operating lease liabilities | 2,902 | 2,922 | |||||
Finance liabilities | 13,854 | 3,169 | |||||
Total current liabilities | 534,272 | 248,647 | |||||
Long-term debt, net of current portion: | |||||||
Limited and non-recourse: | |||||||
Senior secured notes | 296,382 | 315,195 | |||||
Other loans | 258,916 | 284,928 | |||||
Full recourse: | 742,978 | 777,090 | |||||
Operating lease liabilities | 16,650 | 12,897 | |||||
Finance liabilities | 246,722 | 9,104 | |||||
Liability associated with sale of tax benefits | 97,714 | 111,476 | |||||
Deferred income taxes | 85,922 | 87,972 | |||||
Liability for unrecognized tax benefits | 3,677 | 1,970 | |||||
Liabilities for severance pay | 16,598 | 18,749 | |||||
Asset retirement obligation | 71,628 | 63,457 | |||||
Other long-term liabilities | 6,009 | 6,235 | |||||
Total liabilities | 2,377,468 | 1,937,720 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interest | 9,542 | 9,830 | |||||
Equity: | |||||||
The Company's stockholders' equity: | |||||||
Common stock | 56 | 56 | |||||
Additional paid-in capital | 1,269,568 | 1,262,446 | |||||
Retained earnings | 573,408 | 550,103 | |||||
Accumulated other comprehensive income (loss) | (9,647 | ) | (6,620 | ) | |||
Total stockholders' equity attributable to Company's stockholders | 1,833,385 | 1,805,985 | |||||
Noncontrolling interest | 138,971 | 135,452 | |||||
Total equity | 1,972,356 | 1,941,437 | |||||
Total liabilities, redeemable noncontrolling interest and equity | 4,359,366 | 3,888,987 |
ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA
For the Three and Nine-Month Periods Ended September 30, 2021 and 2020
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 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 nine-month periods ended September 30, 2021 and 2020.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||
Net income | $ | 20,780 | $ | 23,098 | $ | 53,804 | $ | 78,274 | ||||||||||
Adjusted for: | ||||||||||||||||||
Interest expense, net (including amortization of deferred financing costs) | 21,711 | 21,130 | 58,282 | 57,345 | ||||||||||||||
Income tax provision (benefit) | 2,048 | 15,361 | 9,323 | 45,275 | ||||||||||||||
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla | 2,889 | 4,395 | 8,253 | 10,271 | ||||||||||||||
Depreciation and amortization | 47,548 | 39,628 | 130,503 | 111,728 | ||||||||||||||
EBITDA | $ | 94,976 | $ | 103,612 | $ | 260,165 | $ | 302,893 | ||||||||||
Mark-to-market (gains) or losses from accounting for derivative | — | 431 | 1,096 | (1,612 | ) | |||||||||||||
Stock-based compensation | 2,120 | 2,807 | 6,840 | 7,060 | ||||||||||||||
Reversal of a contingent liability | — | — | (418 | ) | — | |||||||||||||
Allowance for bad debts related to February power crisis in Texas | — | — | 2,980 | — | ||||||||||||||
Hedge losses resulting from February power crisis in Texas | — | — | 9,133 | — | ||||||||||||||
Merger and acquisition transaction costs | 4,539 | 211 | 5,497 | 1,369 | ||||||||||||||
Other write-off | — | — | 134 | — | ||||||||||||||
Settlement expenses | — | — | — | 1,277 | ||||||||||||||
Adjusted EBITDA | $ | 101,635 | $ | 107,061 | $ | 285,427 | $ | 310,987 |
ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS
For the Three and Nine-Month Periods Ended September 30, 2021 and 2020
Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS are adjusted for 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 and Nine-month periods ended September 30, 2021 and 2020.
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
(in millions, except for EPS) | |||||||||||
GAAP Net income attributable to the Company's stockholders | $ | 14.9 | $ | 15.7 | $ | 43.2 | $ | 64.8 | |||
One-time net expense related to February power crisis in Texas, net of taxes | — | — | 8.8 | — | |||||||
Acquisition costs related to TG Geothermal Portfolio transaction, net of taxes | $ | 2.9 | — | $ | 3.7 | — | |||||
Adjusted Net income attributable to the Company's stockholders | $ | 17.8 | $ | 15.7 | $ | 55.7 | $ | 64.8 | |||
GAAP diluted EPS | $ | 0.26 | $ | 0.31 | $ | 0.77 | $ | 1.26 | |||
One-time net expense related to February power crisis in Texas, net of taxes | — | — | 0.16 | — | |||||||
Acquisition costs related to TG Geothermal Portfolio transaction, net of taxes | $ | 0.06 | — | $ | 0.07 | — | |||||
Diluted Adjusted EPS | $ | 0.32 | $ | 0.31 | $ | 0.99 | $ | 1.26 |
1 Reconciliation is set forth below in this release
Ormat Technologies Contact: Smadar Lavi VP Corporate Finance and Head of Investor Relations 775-356-9029 (ext. 65726) This email address is being protected from spambots. You need JavaScript enabled to view it. | Investor Relations Agency Contact: Rob Fink FNK IR 646-415-8972 This email address is being protected from spambots. You need JavaScript enabled to view it. |
Last Trade: | US$68.75 |
Daily Change: | 1.23 1.82 |
Daily Volume: | 666,361 |
Market Cap: | US$4.160B |
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