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Ormat Technologies Reports Second Quarter 2024 Financial Results

HIGHLIGHTS

RENO, Nev., Aug. 06, 2024 (GLOBE NEWSWIRE) — Ormat Technologies, Inc. (NYSE: ORA), a leading renewable energy company, today announced financial results for the second quarter ended June 30, 2024.

KEY FINANCIAL RESULTS

  Q2 2024 Q2 2023 Change (%) H1 2024 H1 2023 Change (%)
GAAP Measures            
Revenues ($ millions)            
Electricity 166.2 155.3 7.0% 357.5 325.6 9.8%
Product 37.8 33.5 13.1% 62.7 43.5 44.0%
Energy Storage 8.9 6.0 48.1% 17.0 10.9 55.9%
Total Revenues 213.0 194.8 9.3% 437.1 380.0 15.0%
             
Gross margin (%)            
Electricity 33.5% 29.6%   36.4% 37.3%  
Product 13.7% 10.4%   14.1% 9.6%  
Energy Storage 5.7% 1.9%   6.6% (0.5)%  
Gross margin (%) 28.8% 25.4%   32.1% 33.0%  
             
Operating income ($ millions) 35.1 24.2 45.0% 87.7 77.4 13.3%
Net income attributable to the Company’s stockholders 22.2 24.2 (8.1)% 60.8 53.2 14.3%
Diluted EPS ($) 0.37 0.40 (7.5)% 1.00 0.90 11.1%
             
Non-GAAP Measures1            
Adjusted Net income attributable to the Company’s stockholders 24.3 24.2 0.3% 63.9 53.2 20.0%
Adjusted Diluted EPS ($) 0.40 0.40 0.0% 1.05 0.90 16.7%
Adjusted EBITDA1 ($ millions) 126.1 100.9 25.0% 267.3 224.4 19.1%

____________________________________
Reconciliation is set forth below in this release.

“Our strong second quarter results demonstrate Ormat’s track record of translating revenue growth into stronger results across our three-operating segments. This was evidenced by the 9.3% increase in total revenues and a 45% and 25.0% increase in operating income and adjusted EBITDA1, respectively, led by strategic expansion to our capacity generating portfolio and improved operating performance,” said Doron Blachar, Chief Executive Officer of Ormat Technologies. “Notably, we are also continuing to make great progress in transitioning our Energy Storage business toward becoming a higher-growth segment with improved margins. These efforts are highlighted by the segment experiencing a 48.1% increase in revenue primarily as a result of the additional 83MW we added in the last 12 months, including the COD at East Flemington this quarter, the signing of our long-term tolling agreement at our Pomona 2 storage facility, and improved merchant prices.”

“Our Electricity segment continued to capture consistent growth during the quarter, which was largely driven by the addition of the Enel assets that we acquired at the beginning of the year, the continued improved generation performance at our Puna facility, and the contributions from a full quarter of performance at Heber following the recent upgrade.”

Blachar continued, “We are encouraged by the increased demand for renewable energy and zero emissions power generation solutions, and we remain confident with our long-term plans to increase our combined geothermal, energy storage and solar generating portfolio to approximately 2.1 to 2.3 GW by the end of 2026. We believe that we are well-positioned to capitalize on favorable industry tailwinds and support our customers’ needs with our diversified portfolio of geothermal, solar, and energy storage solutions.”

FINANCIAL AND RECENT BUSINESS HIGHLIGHTS

IN ADDITION, IN THE SECOND QUARTER, THE COMPANY:

2024 GUIDANCE

The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three and six months ended June 30, 2024, and 2023. 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 the 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 August 06, 2024, 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 September 03, 2024, to stockholders of record as of the close of business on August 20, 2024. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in the next quarter.

CONFERENCE CALL DETAILS

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Wednesday, August 7, 2024, at 9:00 a.m. ET.

Participants within the United States and Canada, please dial 1-888-770-2286, approximately 15 minutes prior to the scheduled start of the call. If you are calling outside of the United States and Canada, please dial +1-646-960-0440. Access code for the call is 9122486. Please request the “Ormat Technologies, Inc. call” when prompted by the conference call operator. The conference call will also be accompanied by a webcast live on the Investor Relations section of the Company’s website.

A replay will be available one hour after the end of the conference call. To access the replay within the United States and Canada, please dial 1-800-770-2030. From outside of the United States and Canada, please dial +1-647-362-9199. Please use the replay access code 9122486. The webcast will also be archived on the Investor Relations section of the Company’s website.

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 1,420MW with a 1,230MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 190MW 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. 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”, “contemplate” or “targets” 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 23, 2024, and in Ormat’s subsequent quarterly reports on Form 10-Q 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 Six-Month periods Ended June 30, 2024, and 2023

  Three Months Ended June 30, Six Months Ended June 30,
  2024 2023 2024 2023
  (Dollars in thousands, except per share data)
Revenues:        
Electricity 166,226   155,324   357,479   325,634  
Product 37,829   33,458   62,661   43,500  
Energy storage 8,908   6,014   16,989   10,894  
Total revenues 212,963   194,796   437,129   380,028  
Cost of revenues:        
Electricity 110,515   109,424   227,245   204,182  
Product 32,662   29,985   53,816   39,336  
Energy storage 8,400   5,897   15,872   10,951  
Total cost of revenues 151,577   145,306   296,933   254,469  
Gross profit 61,386   49,490   140,196   125,559  
Operating expenses:        
Research and development expenses 1,730   2,083   3,294   3,371  
Selling and marketing expenses 4,167   5,369   9,293   9,317  
General and administrative expenses 18,026   17,814   37,563   35,481  
Write-off of long-lived assets 957     957    
Write-off of unsuccessful exploration activities 1,379     1,379    
Operating income 35,127   24,224   87,710   77,390  
Other income (expense):        
Interest income 2,604   4,942   4,443   6,793  
Interest expense, net (33,716 ) (24,393 ) (64,684 ) (48,024 )
Derivatives and foreign currency transaction gains (losses) (332 ) (1,272 ) (1,914 ) (3,209 )
Income attributable to sale of tax benefits 15,798   14,979   33,274   27,545  
Other non-operating income (expense), net 74   79   100   139  
Income from operations before income tax and equity in earnings (losses) of investees 19,555   18,559   58,929   60,634  
Income tax (provision) benefit 3,178   3,956   3,325   (4,929 )
Equity in earnings (losses) of investees, net 1,232   1,996   2,061   2,267  
Net income 23,965   24,511   64,315   57,972  
Net income attributable to noncontrolling interest (1,722 ) (320 ) (3,485 ) (4,752 )
Net income attributable to the Company’s stockholders 22,243   24,191   60,830   53,220  
Earnings per share attributable to the Company’s stockholders:        
Basic: 0.37   0.40   1.01   0.91  
Diluted: 0.37   0.40   1.00   0.90  
Weighted average number of shares used in computation of earnings per share attributable to the Company’s stockholders:        
Basic 60,451   60,245   60,419   58,494  
Diluted 60,755   60,634   60,655   58,901  


ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Condensed Consolidated Balance Sheet
For the Periods Ended June 30, 2024 and December 31, 2023

  June 30, 2024   December 31, 2023
ASSETS
Current assets:      
Cash and cash equivalents 66,262     195,808  
Marketable securities at fair value      
Restricted cash and cash equivalents 97,480     91,962  
Receivables:      
Trade 147,328     208,704  
Other 44,568     44,530  
Inventories 44,647     45,037  
Costs and estimated earnings in excess of billings on uncompleted contracts 29,719     18,367  
Prepaid expenses and other 86,991     41,595  
Total current assets 516,995     646,003  
Investment in unconsolidated companies 129,664     125,439  
Deposits and other 48,737     44,631  
Deferred income taxes 186,194     152,570  
Property, plant and equipment, net 3,328,676     2,998,949  
Construction-in-process 799,868     814,967  
Operating leases right of use 26,192     24,057  
Finance leases right of use 2,887     3,510  
Intangible assets, net 316,515     307,609  
Goodwill 151,074     90,544  
Total assets 5,506,802     5,208,279  
       
LIABILITIES AND EQUITY
Current liabilities:      
Accounts payable and accrued expenses 183,386     214,518  
Short term revolving credit lines with banks (full recourse)     20,000  
Commercial paper 99,974     99,971  
Billings in excess of costs and estimated earnings on uncompleted contracts 16,277     18,669  
Current portion of long-term debt:      
Limited and non-recourse (primarily related to VIEs): 67,921     57,207  
Full recourse 154,246     116,864  
Financing Liability 3,620     5,141  
Operating lease liabilities 4,041     3,329  
Finance lease liabilities 1,267     1,313  
Total current liabilities 530,732     537,012  
Long-term debt, net of current portion:      
Limited and non-recourse: 540,995     447,389  
Full recourse: 839,253     698,187  
Convertible senior notes 424,268     423,104  
Financing liability 219,682     220,619  
Operating lease liabilities 20,480     19,790  
Finance lease liabilities 1,684     2,238  
Liability associated with sale of tax benefits 167,188     184,612  
Deferred income taxes 78,850     66,748  
Liability for unrecognized tax benefits 7,520     8,673  
Liabilities for severance pay 10,009     11,844  
Asset retirement obligation 125,035     114,370  
Other long-term liabilities 33,858     22,107  
Total liabilities 2,999,554     2,756,693  
       
Commitments and contingencies      
Redeemable noncontrolling interest 9,985     10,599  
       
Equity:      
The Company’s stockholders’ equity:      
Common stock 61     60  
Additional paid-in capital 1,624,763     1,614,769  
Treasury stock, at cost (17,964 )   (17,964 )
Retained earnings 766,137     719,894  
Accumulated other comprehensive income (loss) (1,754 )   (1,332 )
Total stockholders’ equity attributable to Company’s stockholders 2,371,243     2,315,427  
Noncontrolling interest 126,020     125,560  
Total equity 2,497,263     2,440,987  
Total liabilities, redeemable noncontrolling interest and equity 5,506,802     5,208,279  


ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Reconciliation of EBITDA and Adjusted EBITDA
For the Three- and Six-Month Periods Ended June 30, 2024, and 2023

We calculate EBITDA as net income before interest, taxes, depreciation, amortization and accretion. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives not designated as hedging instruments; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) cost related to a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items. We adjust for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. We believe that presentation of these measures will enhance an investor’s ability to evaluate our financial and operating performance. 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-six-month periods ended June 30, 2024, and 2023:

  Three Months Ended June 30,       Six Months ended June 30,    
  2024   2023       2024   2023    
  (Dollars in thousands)       (Dollars in thousands)    
Net income 23,965   24,511   (22.3)%   64,315   57,972   10.9%
Adjusted for:                      
Interest expense, net (including amortization of deferred financing costs) 31,112   19,451       60,241   41,231    
Income tax provision (benefit) (3,178)   (3,956)       (3,325)   4,929    
Adjustment to investment in an unconsolidated companies: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla and Ijen 3,418   4,050       6,770   7,032    
Depreciation and amortization 62,683   52,939       124,359   105,335    
EBITDA 118,000   96,995   21.7%   252,360   216,499   16.6%
Mark-to-market gains or losses from accounting for derivative 466   (402)       1,279   591    
Stock-based compensation 5,077   4,311       9,845   7,301    
Allowance for bad debt 221         221      
Write-off of long-lived assets 957         957      
Merger and acquisition transaction costs         1,299      
Write-off of unsuccessful exploration activities 1,379         1,379      
Adjusted EBITDA 126,100   100,904   25%   267,341   224,392   19.1%


ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Reconciliation of Adjusted Net Income attributable to the Company’s stockholders and Adjusted EPS
For the Three and Six-month Periods Ended June 30, 2024, and 2023

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 table reconciles Net income attributable to the Company’s stockholders and Adjusted EPS for the three and six-month periods ended June 30, 2024 and 2023.

  Three Months Ended June 30,   Six Months Ended June 30,
  2024   2023   2024   2023
(in millions, except for EPS)              
GAAP Net income attributable to the Company’s stockholders 22.2   24.2   60.8   53.2
Write-off of long-lived assets 0.8     0.8  
Write-off of unsuccessful exploration activities 1.1     1.1  
M&A costs     1.0  
Allowance for bad debt 0.2     0.2  
Adjusted Net income attributable to the Company’s stockholders $24.3   $24.2   $63.9   $53.2
GAAP diluted EPS 0.37   0.40   1.00   0.90
Write-off of long-lived assets 0.01     0.01  
Write-off of unsuccessful exploration activities 0.02     0.02  
M&A costs     0.02  
Allowance for bad debt 0.00     0.00  
Diluted Adjusted EPS $0.40   $0.40   $1.05   $0.90
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:
Joseph Caminiti or Josh Carroll
Alpha IR Group
312-445-2870
ORA@alpha-ir.com


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