Ormat Technologies, Inc. Reports Third Quarter 2009 Results

November 4, 2009

Q3 Revenue increased 20% to $119.8 million

RENO, Nev., Nov. 4 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the third quarter of 2009.

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

Third Quarter Results

For the three-month period ended September 30, 2009, total revenues were $119.8 million, an increase of 20.2% from $99.7 million in the third quarter of 2008, consisting of a 65.5% increase in Product Segment revenues and flat Electricity Segment revenues.

For the quarter, the Company reported net income of $23.4 million, or $0.52 per share of common stock (basic and diluted), compared to $15.8 million, or $0.35 per share of common stock (basic and diluted), for the same period a year ago, which represents an increase of 48.1%. The increase in net income is primarily attributable to our Product Segment.

Commenting on the quarter's results, Dita Bronicki, Chief Executive Officer of Ormat, stated: "As in previous quarters of this year, we continued to benefit from the significant increase in revenue from our Product Segment resulting from the record backlog that we had at the beginning of 2009. We expect revenue from this segment to return to previous levels in 2010 with a corresponding reduction in margins.

Generation in our Electricity Segment continued to grow. Year-over-year our total U.S. and international generation for the quarter was up 19% to about 799,000 MWh. We continued to add land to our exploration portfolio and secured new lease agreements covering approximately 2,300 acres in California and Nevada."

Electricity revenues for the third quarter of 2009 were $68.7 million, consistent with the third quarter of 2008. Revenues in our electricity segment this quarter were impacted by a decline in the average revenue rate from $103 to $86 per MWh due to the effect of lower oil prices on the Puna power plant's energy rates.

Revenues from the Product Segment for the three-month period ended September 30, 2009 were $51.1 million, compared to $30.9 million in the same quarter in 2008, an increase of 65.5%. The increase in product sales was primarily attributable to EPC contracts for the construction of three large binary geothermal projects in Nevada, New Zealand and Costa Rica.

Adjusted EBITDA in the third quarter of 2009 increased 30.8% to $50.3 million compared to $38.5 million in the same quarter last year. Adjusted EBITDA includes consolidated EBITDA and the Company's share in the interest, taxes, depreciation and amortization related to the Company's unconsolidated 50% interest in the Mammoth complex in California. As further described in "Reconciliation of EBITDA and Adjusted EBITDA and Additional Cash Flows Information" below, we changed the method for calculating EBITDA and adjusted EBITDA beginning in the third quarter of 2009.

Cash and cash equivalents as of September 30, 2009 decreased to $20.3 million from $34.4 million as of December 31, 2008. In addition, as of November 4, 2009, we have available unused bank lines of credit and other borrowing capacity aggregating $412.5 million of which $218.7 million is unused.

On November 4, 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 December 1, 2009 to shareholders of record as of the close of business on November 18, 2009.

Commenting on the outlook for 2009, Ms. Bronicki said, "With regard to our Electricity Segment, following our third quarter earnings results, we are narrowing the range as we currently expect electricity segment revenues for 2009 to be between $254 and $258 million. We also expect an additional $9 million of revenue from our share of electricity revenue generated by a subsidiary, which is accounted for under the equity method. Given our Product Segment results for the third quarter, we are increasing our guidance and expect revenues in this segment to be approximately $150 million."

Ms. Bronicki concluded, "It has been a productive quarter and year thus far for Ormat. We have weathered the economic uncertainty with sound results and substantial liquidity, and we are encouraged by our position over the long term. Our priority going forward remains on investing for the long-term, moving forward with our exploration activities and continuing to add the land and funding necessary to continue to our growth."

Nine-Month Results

For the nine-month period ended September 30, 2009, total revenues increased 28.3% to $320.0 million, compared to $249.3 million for the nine months ended September 30, 2008. Net income for the period was $53.9 million, or $1.19 per share of common stock (basic and diluted), compared to $37.9 million, or $0.87 per share of common stock (basic and diluted) for the same period last year, which represents an increase of 42.3% in net income.

Revenues attributable to our Electricity Segment for the nine months ended September 30, 2009 were $191.9 million, consistent with the same period last year. Product Segment revenues for the nine months ended September 30, 2009 were $128.0 million, an increase of 116.3%, compared to $59.2 million for the nine months ended September 30, 2008.

Adjusted EBITDA for the nine month period ended September 30, 2008 increased 25.2% to $127.5 million compared to $101.8 million in same period last year. Adjusted EBITDA includes consolidated EBITDA and the Company's share in the interest, taxes, depreciation and amortization related to the Company's unconsolidated 50% interest in the Mammoth complex in California. As further described in "Reconciliation of EBITDA and Adjusted EBITDA and Additional Cash Flows Information" below, we changed the method for calculating EBITDA and adjusted EBITDA beginning in the third quarter of 2009.

Conference Call Details

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release at 9:00 a.m. U.S. E.S.T. on Thursday, November 5, 2009. The call will be available as a live, listen-only webcast at 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 Noon EST on November 5, 2009 through 11:59 p.m. EST, November 112 2008. Please call: (800) 642-1687 (U.S. and Canada) or (706) 645-9291 (International) and enter the code 37808458.

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 III; 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.

    For Immediate Release
    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
    dbronicki@ormat.com            tfromer@kcsa.com / mcsaby@kcsa.com

    Ormat Technologies, Inc. and Subsidiaries
    Condensed Consolidated Statements of Operations
    For the Three and Nine-Month Periods Ended
    September 30, 2009 and 2008
     (Unaudited)

                               Three Months Ended    Nine Months Ended
                                  September 30,         September 30,
                               -------------------   ------------------
                                  2009   2008 (1)       2009   2008 (1)
                                  ----  ----------      ----  ----------
                                  (in thousands,        (in thousands,
                                  except per share     except per share
                                     amounts)              amounts)

     Revenues:
       Electricity             $68,715     $68,837  $191,915    $190,130
       Product                  51,113      30,889   128,037      59,204
                                ------      ------   -------      ------

           Total revenues      119,828      99,726   319,952     249,334
                               -------      ------   -------     -------

     Cost of revenues:
       Electricity              44,394      44,742   133,236     124,924
       Product                  35,780      23,730    87,265      47,484
                                ------      ------    ------      ------

           Total cost of
            revenues            80,174      68,472   220,501     172,408
                                ------      ------   -------     -------

           Gross margin         39,654      31,254    99,451      76,926

     Operating expenses:
       Research and
        development expenses     3,863       1,894     7,151       3,375
       Selling and marketing
        expenses                 3,393       2,647    10,909       8,186
       General and
        administrative
        expenses                 6,437       7,587    19,554      19,539
                                 -----       -----    ------      ------

           Operating income     25,961      19,126    61,837      45,826

     Other income (expense):
       Interest income             157         637       585       2,735
       Interest expense, net    (4,358)     (3,017)  (12,063)    (12,654)
       Foreign currency
        translation and
        transaction gains
        (losses)                 1,320      (1,028)    1,329      (2,570)
       Income attributable to
        sale of equity
        interests                3,869       4,995    12,403      13,159
       Other non-operating
        income (expense), net      246      (2,066)      646      (2,045)
                                   ---      ------       ---      ------

           Income before
            income taxes and
            equity in income
            of investees        27,195      18,647    64,737      44,451

     Income tax provision       (4,340)     (3,187)  (12,307)     (7,871)
     Equity in income of
      investees, net               591         372     1,496       1,319
                                   ---         ---     -----       -----
           Net income           23,446      15,832    53,926      37,899
     Net loss attributable to
      noncontrolling interest       80          79       236         237
                                    --          --       ---         ---

           Net income
            attributable to the
            Company's
            stockholders       $23,526     $15,911   $54,162     $38,136
                               =======     =======   =======     =======

       Earnings per share
        attributable to the
        Company's stockholders-
        basic and diluted        $0.52       $0.35     $1.19       $0.87
                                 =====       =====     =====       =====

       Weighted average
        number of shares used
        in computation of
        earnings per share
        attributable to the
        Company's stockholders:
         Basic                  45,413      45,337    45,379      43,782
                                ======      ======    ======      ======
         Diluted                45,564      45,483    45,477      43,921
                                ======      ======    ======      ======

    (1)  Amounts have been reclassified to reflect the implementation of
         the new accounting guidance for noncontrolling interests in
          consolidated financial statements.



    Ormat Technologies, Inc. and Subsidiaries
    Condensed Consolidated Balance Sheets
    As of September 30, 2009 and December 31, 2008
    (Unaudited)

                                                 September 30, December 31,
                                                    2009          2008 (1)
                                                    ----        ----------

                                                      (in thousands)
    Assets
    Current assets:
      Cash and cash equivalents                    $20,343        $34,393
      Restricted cash, cash equivalents and
       marketable securities                        60,846         24,439
      Receivables:
        Trade                                       55,332         49,839
        Related entities                               478            338
        Other                                       19,981         15,654
      Due to Parent                                  1,059          1,085
      Inventories                                   14,193         13,724
      Costs and estimated earnings in excess
       of billings on uncompleted contracts         23,955          6,982
      Deferred income taxes                          2,864          3,003
      Prepaid expenses and other                    10,286         16,222
                                                    ------         ------
           Total current assets                    209,337        165,679
    Long-term marketable securities                  2,057          1,994
    Restricted cash, cash equivalents
     and marketable securities                       2,981          2,951
     Unconsolidated
      investments                                   34,219         30,559
    Deposits and other                              18,738         16,876
    Deferred income taxes                           14,006         13,965
    Property, plant and equipment, net             971,316        958,186
    Construction-in-process                        514,205        386,501
    Deferred financing and lease costs, net         22,116         19,240
    Intangible assets                               42,507         44,853
                                                    ------         ------
           Total assets                         $1,831,482     $1,640,804
                                                ==========     ==========
    Liabilities and Equity
    Current liabilities:
      Accounts payable and accrued expenses        $77,423       $103,336
      Billings in excess of costs and estimated
       earnings on uncompleted contracts             5,494         15,670
      Current portion of long-term debt:
        Limited and non-recourse                    20,024          6,676
        Full recourse                                2,824              -
        Senior secured notes (non-recourse)         19,943         20,085
      Due to Parent, including current portion
       of notes payable to Parent                    9,834         16,616
                                                     -----         ------

           Total current liabilities               135,542        162,383
    Long-term debt, net of current portion:
      Limited and non-recourse                     136,031          7,814
      Full recourse                                 37,176              -
      Revolving credit lines with banks
       (full recourse)                             112,000        100,000
      Senior secured notes (non-recourse)          244,588        252,060
    Notes payable to Parent                              -          9,600
    Liability associated with sale of equity
     interests                                     106,641        113,327
    Deferred lease income                           73,254         74,427
    Deferred income taxes                           44,524         33,231
    Liability for unrecognized tax benefits          4,079          3,425
    Liabilities for severance pay                   18,461         17,640
    Asset retirement obligation                     14,226         13,438
                                                    ------         ------
           Total liabilities                       926,522        787,345
                                                   -------        -------

    Equity:
      The Company's stockholders' equity:
        Common stock                                    46             45
        Additional paid-in capital                 706,616        701,273
        Retained earnings                          191,210        144,465
        Accumulated other comprehensive income         293            645
                                                       ---            ---
                                                   898,165        846,428
      Noncontrolling interest                        6,795          7,031
                                                     -----          -----
           Total  equity                           904,960        853,459
                                                   -------        -------
           Total liabilities and  equity        $1,831,482     $1,640,804
                                                ==========     ==========

    (1)  Amounts have been reclassified to reflect the implementation of
         the new accounting guidance for noncontrolling interests in
         consolidated financial statements.

Ormat Technologies, Inc. and Subsidiaries

Reconciliation of EBITDA and Adjusted EBITDA and Additional Cash Flows Information

(Unaudited)

We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate adjusted EBITDA to include 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 or liquidity 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 cash provided by operating activities to EBITDA and adjusted EBITDA, for the three and nine-month periods ended September 30, 2009 and 2008:

                                 Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                   ----------------       ---------------
                                   2009        2008       2009       2008
                                   ----        ----       ----       ----
                                    (in thousands)         (in thousands)

    Net cash provided by
     operating activities        $22,364    $40,273    $77,696    $89,897
    Adjusted for:
      Interest expense, net
       (excluding amortization
       of deferred financing
       costs)                      4,074      2,712     10,201     11,741
      Interest income               (157)      (637)      (585)    (2,735)
      Income tax provision         4,340      3,187     12,307      7,871
      Adjustments to reconcile
       net income to net cash
       provided by operating
       activities (excluding
       depreciation and
       amortization)              18,683     (7,963)    25,024     (7,680)
                                  ------     ------     ------     ------

    EBITDA                        49,304     37,572    124,643     99,094
    Interest, taxes,
     depreciation and
     amortization attributable
     to the Company's equity
     in Mammoth-Pacific L.P.       1,020        899      2,843      2,736
                                   -----        ---      -----      -----

    Adjusted EBITDA              $50,324    $38,471   $127,486   $101,830
                                 =======    =======   ========   ========


    Net cash used in
     investing activities       $(90,479) $(136,325) $(248,881) $(303,702)
                                ========  =========  =========  =========

    Net cash provided by
     (used in) financing
     activities                  $42,400    $(3,572)  $156,919   $204,721
                                 =======    =======   ========   ========

We previously calculated EBITDA to exclude equity income of investees and other non-operating expense (income) and adjusted EBITDA to exclude other non-operating expense (income). The change in the way we now calculate EBITDA and adjusted EBITDA results in higher EBITDA and adjusted EBITDA for each of the periods shown above than we would have reported using our prior method for calculating EBITDA and adjusted EBITDA. The following table shows, for each period reported above, the differences in our reported EBITDA and adjusted EBITDA resulting from the change in our method for computing these amounts.

                                 Three Months Ended    Nine Months Ended
                                    September 30,        September 30,
                                  ----------------      ----------------
                                  2009        2008      2009        2008
                                  ----        ----      ----        ----
                                   (in thousands)       (in thousands)

    EBITDA, as previously
     calculated                  $43,278    $35,299   $108,769    $89,231
    Adjusted for inclusion:
      Equity in income of
       investees                     591        372      1,496      1,319
      Other non-operating
       income                      5,435      1,901     14,378      8,544
                                   -----      -----     ------      -----

    EBITDA, as currently
     calculated                  $49,304    $37,572   $124,643    $99,094
                                 =======    =======   ========    =======


    Adjusted EBITDA, as
     previously calculated       $44,889    $36,570   $113,108    $93,286
    Adjusted for inclusion:
      Other non-operating
       income                      5,435      1,901     14,378      8,544
                                   -----      -----     ------      -----

    Adjusted EBITDA, as
     currently calculated        $50,324    $38,471   $127,486   $101,830
                                 =======    =======   ========   ========

This comparative non-GAAP information is provided to assist investors in evaluating the impact of the change in the way we calculate these amounts in performing their financial analysis of our operations for the periods presented. This information should not be considered in isolation or as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP or other non-GAAP financial measures.

In addition, we now reconcile EBITDA and adjusted EBITDA to our net cash provided by operating activities for each of the periods shown, rather than net income amounts we have used for reconciliation in prior periods. Accordingly, the information in the tables above is not directly comparable to similar reconciliation information we have reported for prior periods not reflected in the tables above.

SOURCE Ormat Technologies, Inc.