Ormat Technologies, Inc. Reports Second Quarter 2009 Results / Q2 net income increased 32.3% to $16.0 million; Q2 revenues increased 24.9% to $100.2 million;

RENO, Nev., Aug. 5 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. today announced record financial results for the second quarter of 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040422/LATH066LOGO) Second Quarter Results

Total revenues for the second quarter were $100.2 million, compared to $80.2 million for the second quarter of 2008, an increase of 24.9%, which consisted of a 115.1% increase in revenues from the Product Segment, and a decline of 2.0% in revenue in the Electricity Segment.

For the quarter, the Company reported net income of $16.0 million, or $0.35 per share (basic and diluted), compared to net income of $12.1 million, or $0.28 per share (basic and diluted), for the second quarter of 2008. The increase in net income is primarily attributable to our Product Segment and some foreign currency translation gains.

Commenting on the quarter's results, Dita Bronicki, Chief Executive Officer of Ormat, stated: "We are pleased with the growth of our business and the record revenues of $100.2 million in this quarter. Total generation for the quarter was strong, up 14% from the 2008 quarter. We produced 811,000 megawatt hours and 1,701,000 megawatt hours for the quarter and first six months, respectively, up from 712,000 megawatt hours and 1,444,000 megawatt hours, respectively, last year. Notwithstanding the strong growth in generation, total revenues in the Electricity Segment declined slightly due to the expected reduction in Puna revenues resulting from lower oil prices and the ongoing construction at Puna. Our Product Segment delivered another solid quarter which more than offset the reduction in the Electricity Segment."

"During the quarter, we continued to make selective investments in land acquisition, which is fundamental to building a sustainable growth company with profitable results. Our strategy is to continue to invest in high potential land. Our growth initiatives continue moving forward, with new exploration occurring at several sites within the United States." Ms. Bronicki continued.

Electricity revenues for the three-month period ended June 30, 2009 were $60.6 million compared to $61.8 million in the year ago period, a decrease of 2.0%. The decrease in electricity revenues is primarily attributable to lower energy rates at Puna, due to lower oil prices and to the expiration of the "adder", an additional energy rate paid to us under the Heber 2 power purchase agreement.

Revenues from the Product Segment totaled $39.7 million for the quarter, compared to $18.4 million in 2008.

Adjusted EBITDA for the second quarter of 2009 was $32.3 million, compared to $29.2 million in the same quarter last year. Adjusted EBITDA includes operating income and depreciation and amortization totaling $1.2 million and $1.3 million for the quarters ended June 30, 2009 and 2008, respectively, related to the Company's unconsolidated investment interest of 50% in the Mammoth Project in California. The reconciliation of GAAP net income to Adjusted EBITDA is set forth below in this release. Cash and cash equivalents as of June 30, 2009 increased to $46.0 million from $34.4 million as of December 31, 2008.

On August 5, 2009, Ormat's Board of Directors approved the payment of a quarterly cash dividend of $0.06 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 August 27, 2009 to shareholders of record as of the close of business on August 18, 2009. The Company expects to pay a dividend of $0.06 per share in the next quarter as well.

Commenting on the outlook for 2009, Ms. Bronicki said, "Following our second quarter earnings results, we are increasing our guidance for 2009. We expect our total revenues to increase to between $382 million and $400 million. With the delay in the commercial operation of North Brawley, we expect our 2009 Electricity Segment revenues to be between $252 million and $260 million. We also expect additional revenues of approximately $9 million from our share of electricity revenues generated by Mammoth that is accounted for under the equity method. With regard to our Product Segment, we are increasing our guidance for 2009 revenues and expect them to now be between $130 million and $140 million."

Ms. Bronicki concluded, "This has been another good quarter for Ormat. During the quarter and subsequently, we were able to raise additional project financing and corporate loans of over $80 million to fund our growth. In addition, the recently announced regulations for the ITC cash grant and the expected regulations for the U.S. Department of Energy loan guaranty reflect a further increase in governmental support for the renewable energy industry, and Ormat is well positioned to take advantage of it."

Six-Month Results

For the six-month period ended June 30, 2009, total revenues were $200.1 million, an increase of 33.8% from $149.6 million in the same period last year. Net income for the period was $30.5 million, an increase of 38.1% from $22.1 million in the same period last year. Earnings per share (diluted) for the first half of 2009 was $0.67, compared to $0.52 in the first half of 2008.

Electricity Segment revenues for the six-month period ended June 30, 2009 were $123.2 million, compared to $121.3 million in the same period a year ago. Product Segment revenues for the first half of 2009 were $76.9 million, compared to $28.3 million in the same period in 2008.

Adjusted EBITDA for the six-month period was $68.2 million, compared to $56.7 million in the same period a year ago. Adjusted EBITDA includes consolidated EBITDA and the Company's share in the operating income and depreciation and amortization totaling $2.7 million and $2.8 million for the six months ended June 30, 2009 and 2008, respectively, related to the Company's unconsolidated investment interest of 50% in the Mammoth project in California. The reconciliation of GAAP net income to Adjusted EBITDA is set forth below in this release.

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. EDT on Thursday, August 6, 2009. The call will be available as a live, listen-only webcast at http://www.ormat.com/. During the webcast, management will refer to slides that will be posted on the web site. The slides and accompanying webcast can be accessed through the Event Calendar in the Investor Relations section of Ormat's website.

A 30-day archive of the webcast will be available approximately 2 hours after the conclusion of the live call. A replay will be available from 10:00 a.m. EDT on August 6, 2009 through 11:59 p.m. EDT, August 13, 2009. Please call: [phone] (U.S. and Canada) or [phone] (International) and enter the code 20233844.

About Ormat Technologies

Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. The Company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat products and systems are covered by 75 U.S. patents. Ormat has built over approximately 1,200 MW of plants half for its own account and half as supplies to utilities and developers. Ormat current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States - Brady, Heber, Mammoth, Ormesa, Puna, Steamboat, OREG 1, OREG 2 and Peetz; in Guatemala - Zunil and Amatitlan; in Kenya - Olkaria; in Nicaragua - Momotombo and in New Zealand - GDL.

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 Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2009.

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 Contact: Investor Relations Contact Dita Bronicki Todd Fromer / Marybeth Csaby CEO KCSA Strategic Communications 775-356-9029 212-896-1215 / 212-896-1236 [e-mail] [e-mail] / [e-mail] Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Statements of Operations For the Three and Six-Month Periods Ended June 30, 2009 and 2008 (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------- ----------------- 2009 2008 (1) 2009 2008 (1) ---- ---------- ---- ---------- (in thousands, (in thousands, except per share except per share amounts) amounts) Revenues: Electricity $60,562 $61,774 $123,200 $121,293 Product 39,673 18,447 76,924 28,315 ------ ------ ------ ------ Total revenues 100,235 80,221 200,124 149,608 ------- ------ ------- ------- Cost of revenues: Electricity 44,958 41,506 88,842 80,182 Product 27,242 15,704 51,485 23,754 ------ ------ ------ ------ Total cost of revenues 72,200 57,210 140,327 103,936 ------ ------ ------- ------- Gross margin 28,035 23,011 59,797 45,672 Operating expenses: Research and development expenses 2,487 785 3,288 1,481 Selling and marketing expenses 3,215 2,020 7,516 5,539 General and administrative expenses 5,582 5,925 13,117 11,952 ----- ----- ------ ------ Operating income 16,751 14,281 35,876 26,700 Other income (expense): Interest income 276 1,052 428 2,098 Interest expense, net (4,415) (4,851) (7,705) (9,637) Foreign currency translation and transaction gains (losses) 2,569 (1,359) 9 (1,542) Income attributable to sale of equity interests 4,366 4,848 8,534 8,164 Other non-operating income, net 550 309 400 21 --- --- --- -- Income before income taxes and equity in income of investees 20,097 14,280 37,542 25,804 Income tax provision (4,478) (2,613) (7,967) (4,684) Equity in income of investees, net 355 408 905 947 --- --- --- --- Net income 15,974 12,075 30,480 22,067 Net loss attributable to noncontrolling interest 77 86 156 158 -- -- --- --- Net income attributable to the Company's stockholders $16,051 $12,161 $30,636 $22,225 ======= ======= ======= ======= Earnings per share attributable to the Company's stockholders: Basic $0.35 $0.28 $0.68 $0.52 ===== ===== ===== ===== Diluted $0.35 $0.28 $0.67 $0.52 ===== ===== ===== ===== Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: Basic 45,369 43,828 45,361 42,995 ====== ====== ====== ====== Diluted 45,451 43,978 45,425 43,127 ====== ====== ====== ====== (1) Amounts have been reclassified to reflect the implementation of SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51. Ormat Technologies, Inc. and Subsidiaries Condensed Consolidated Balance Sheets As of June 30, 2009 and December 31, 2008 (Unaudited) June 30, December 31, 2009 2008 (1) ---- ---------- (in thousands) Assets Current assets: Cash and cash equivalents $46,028 $34,393 Restricted cash, cash equivalents and marketable securities 35,255 24,439 Receivables: Trade 53,323 49,839 Related entities 477 338 Other 16,758 15,654 Due to Parent 1,951 1,085 Inventories, net 14,609 13,724 Costs and estimated earnings in excess of billings on uncompleted contracts 14,622 6,982 Deferred income taxes 3,746 3,003 Prepaid expenses and other 8,451 16,222 ----- ------ Total current assets 195,220 165,679 Long-term marketable securities 2,053 1,994 Restricted cash, cash equivalents and marketable securities 2,983 2,951 Unconsolidated investments 33,425 30,559 Deposits and other 17,209 16,876 Deferred income taxes 14,157 13,965 Property, plant and equipment, net 972,433 958,186 Construction-in-process 469,069 386,501 Deferred financing and lease costs, net 22,911 19,240 Intangible assets, net 43,297 44,853 ------ ------ Total assets $1,772,757 $1,640,804 ========== ========== Liabilities and Equity Current liabilities: Accounts payable and accrued expenses $79,367 $103,336 Billings in excess of costs and estimated earnings on uncompleted contracts 14,584 15,670 Current portion of long-term debt: Limited and non-recourse 18,290 6,676 Senior secured notes (non-recourse) 19,896 20,085 Due to Parent, including current portion of notes payable to Parent 9,650 16,616 ----- ------ Total current liabilities 141,787 162,383 Long-term debt, net of current portion: Limited and non-recourse 124,912 7,814 Revolving credit lines with banks (full recourse) 120,000 100,000 Senior secured notes (non-recourse) 244,588 252,060 Notes payable to Parent, net of current portion - 9,600 Liability associated with sale of equity interests 108,616 113,327 Deferred lease income 73,809 74,427 Deferred income taxes 41,431 33,231 Liability for unrecognized tax benefits 4,077 3,425 Liabilities for severance pay 17,454 17,640 Asset retirement obligation 13,958 13,438 ------ ------ Total liabilities 890,632 787,345 ------- ------- Equity: The Company's stockholders' equity: Common stock 46 45 Additional paid-in capital 704,854 701,273 Retained earnings 170,409 144,465 Accumulated other comprehensive income (loss) (59) 645 --- --- 875,250 846,428 Noncontrolling interest 6,875 7,031 ----- ----- Total equity 882,125 853,459 ------- ------- Total liabilities and equity $1,772,757 $1,640,804 ========== ========== (1) Amounts have been reclassified to reflect the implementation of SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51. Ormat Technologies, Inc. and Subsidiaries Reconciliation of adjusted EBITDA (Unaudited)

We calculate EBITDA as net income before interest, taxes, depreciation and amortization, equity income of investees and other non-operating expense (income). We calculate adjusted EBITDA to include operating income, depreciation and amortization, interest and taxes attributable to our equity investments in the Mammoth complex. EBITDA and adjusted EBITDA are not measurements of financial performance under accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America. EBITDA and adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of a Company's ability to service and/or incur debt. 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, 2009 and 2008:

Three Months Six Months Ended June Ended June 30, 30, ------------- ------------ 2009 2008 2009 2008 ---- ---- ---- ---- (in thousands) (in thousands) Net income $15,974 $12,075 $30,480 $22,067 Adjusted for: Equity in income of investees (355) (408) (905) (947) Interest expense, net (including amortization of deferred financing costs) 4,139 3,799 7,277 7,539 Other non-operating income (7,485) (3,798) (8,943) (6,643) Income tax provision 4,478 2,613 7,967 4,684 Depreciation and amortization 14,382 13,601 29,615 27,232 ------ ------ ------ ------ EBITDA 31,133 27,882 65,491 53,932 Equity in income of Mammoth-Pacific L.P. 355 408 905 947 Depreciation, amortization, interest and taxes attributable to the Company's equity in Mammoth-Pacific L.P. 834 918 1,823 1,837 --- --- ----- ----- Adjusted EBITDA $32,322 $29,208 $68,219 $56,716 ======= ======= ======= =======

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Ormat Technologies, Inc.

CONTACT: Dita Bronicki, CEO of Ormat Technologies, Inc.,
[phone], [e-mail]; or Investor Relations, Todd Fromer,
[phone], [e-mail], or Marybeth Csaby, [phone],
[e-mail], both of KCSA Strategic Communications, for Ormat
Technologies, Inc.

Web Site: http://www.ormat.com/