Ormat (ORA) 8-K Ormat Technologies Reports 2017 Second Quarter Earnings

Exhibit 99.1

PRESS RELEASE
Ormat Technologies Contact:	Investor Relations Agency Contact:
Smadar Lavi	Rob Fink/Brett Maas
Investor Relations	Hayden - IR
775-356-9029 (ext. 65726)	646-415-8972/646-536-7331
slavi@ormat.com	rob@haydenir.com / brett@haydenir.com

Ormat Technologies Reports 2017 Second Quarter Earnings

Total Revenues increased 12% and Net income attributable to the company's shareholders increased 44%

Company Reiterates Full-Year Guidance

RENO, Nev. August 3, 2017 - Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the second quarter ended June 30, 2017.

Financial Summary:

($ millions, except per share amounts)	2Q 2017			2Q 2016			Change
Revenues
Electricity	$	111.8		$	104.0			7.5	%
Product	$	67.6		$	55.9			21.0	%
Total Revenues	$	179.4		$	159.9			12.2	%
Gross profit	$	70.5		$	65.8			7.1	%
Gross margin (%)		39.3	%		41.2	%		(4.6%	)
Operating income	$	53.2		$	51.9			2.4	%
Net income attributable to the Company’s shareholders	$	35.0		$	24.3			43.9	%
Diluted EPS	$	0.69		$	0.49			40.8	%
Adjusted Net income attributable to the Company’s stockholders (’1)	$	29.5			24.3			21.3	%
Adjusted Diluted EPS(1)	$	0.58		$	0.49			18.4	%
Adjusted EBITDA	$	88.1		$	81.2			8.5	%

Second Quarter 2017 Highlights and Recent Developments:

● Total revenues of $179.4 million, up 12.2% compared to the second quarter of 2016:

o Electricity segment revenues of $111.8 million, up 7.5% compared to the second quarter of 2016, mainly due to higher performance of our Puna plant as well as the consolidation of our Bouillante power plant in Guadeloupe;

o Product segment revenues of $67.6 million, up 21.0% compared to the second quarter of 2016;

● Electricity generation increased 2.4%, compared to the second quarter of 2017, from 1.30 million MWh to 1.33 million MWh;

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^[1] Adjusted Net income attributable to the Company’s stockholders and diluted EPS excludes $5.5 million and $0.11 per diluted share, respectively, of one-time benefit related to tax restructuring as will be fully described in our quarterly report on Form 10Q that will be filled with the SEC on August 4, 2017.

● Gross margin was 39.3% of total revenues compared to 41.2% in the second quarter of 2016, due to lower margins in the product segment; Electricity segment margin increased to 41.5% from 40.2%;

● Operating income increased 2.4% to $53.2 million compared to $51.9 million in the second quarter of 2016;

● Net income attributable to the company's shareholders of $35.0 million, or $0.69 per diluted share, compared to $24.3 million, or $0.49 per diluted share, in the second quarter of 2016;

● Adjusted net income attributable to the company's shareholders of $29.5 million, or $0.58 per diluted share, compared to $24.3 million, or $0.49 per diluted share, in the second quarter of 2016;

● Adjusted EBITDA of $88.1 million, up 8.5% compared to $81.2 million in the second quarter of 2016;

● Declared a quarterly dividend of $0.08 per share for the second quarter of 2017;

● Product segment backlog remains strong at $192.0 million²; added approximately $50.0 million of new orders;

● Executed a new portfolio power purchase agreement (portfolio PPA) with Southern California Public Power Authority (SCPPA), under which SCPPA will purchase 150MW of power generated by a portfolio of Ormat’s new and existing geothermal power plants beginning in the fourth quarter of 2017 at a fixed price of $75.50 per MWh; and

● ORIX acquired 22% ownership stake in Ormat and the previously reported Commercial Cooperation Agreement entered into by Ormat and ORIX is now effective.

“Continued growth in our electricity segment and a strong quarter for our products segment enabled us to deliver 12.2% top-line growth in the second quarter,” commented Isaac Angel, Chief Executive Officer. “Our focus on streamlining our entire value chain over the past three years enabled us to increase electricity segment gross margin to 41.5% and to grow our Adjusted EBITDA by 8.5%, demonstrating the strength of our business.”

“During the second quarter we signed the new portfolio PPA with SCPPA. This portfolio PPA will enable both the development of multiple new projects as well as the sustainable operation of several of our existing geothermal power plants. With the SCPPA portfolio PPA in place, Ormat is well positioned for consistent growth in the US. Another recent noteworthy development is that with the closing of ORIX’s acquisition of an approximately 22% ownership stake in Ormat, the Commercial Cooperation Agreement that Ormat and ORIX executed in connection with that acquisition became effective last week, and we expect that it will expand our business opportunities in Asia and other key geographies and may also improve our access to capital,” added Mr. Angel.

Guidance

Mr. Angel added, “We reiterate our guidance and expect full-year 2017 total revenues between $680.0 million and $700.0 million with electricity segment revenues between $460.0 million and $470.0 million and product segment revenues between $220.0 million and $230.0 million. We expect 2017 Adjusted EBITDA between $340 million and $350 million for the full year. We expect annual Adjusted EBITDA attributable to non-controlling interest to be approximately $23.0 million.”

Second Quarter 2017 Financial Results

For the three months ended June 30, 2017, total revenues were $179.4 million, up from $159.9 million for the three months ended June 30, 2016, an increase of 12.2%. Electricity segment revenues increased 7.5% to $111.8 million in the three months ended June 30, 2017, up from $104.0 million for the three months ended June 30, 2016. Product segment revenues increased 21.0% to $67.6 million for the three months ended June 30, 2017, up from $55.9 million in the three months ended June 30, 2016.

__________________________________

²Backlog as of August 3, 2017 includes revenues for the period betweenJuly 1, 2017 and August 3, 2017.

General and administrative expenses for the three months ended June 30, 2017 were $12.2 million, or 6.8% of total revenues, compared to $8.8 million, or 5.5% of total revenues, for the three months ended June 30, 2016. The increase was mainly due to a $2.1 million non-cash charge for stock-based compensation expense associated with the acceleration of the vesting period of the stock options of the CEO and the CFO as part of ORIX’s acquisition of 22% of ownership stake in Ormat; and $0.9 million of costs associated with the ORIX transaction and Ormat’s M&A activities.

The company reported net income attributable to the company’s shareholders of $35.0 million, or $0.69 per diluted share, compared to net income attributable to the company’s shareholders of $24.3 million, or $0.49 per diluted share, for the same period last year. Adjusted net income attributable to the company’s shareholders was $29.5 million, or $0.58 per diluted share, which excludes $5.5 million and $0.11 per diluted share, respectively, of one-time benefit related to tax restructuring.

Adjusted EBITDA for the three months ended June 30, 2017 was $88.1 million, compared to $81.2 million for the three months ended June 30, 2016, an increase of 8.5%. The reconciliation of GAAP net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flow information is set forth below in this release.

Dividend

On August 3, 2017, ORMAT’s Board of Directors approved a quarterly dividend of $0.08 per share pursuant to the company’s dividend policy. The dividend will be paid on August 29, 2017 to shareholders of record as of the close of business on August 15, 2017.

Conference Call Details

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release at 10 a.m. ET on Thursday, August 3, 2017. 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 Events & Presentations in the Investor Relations section of Ormat’s website.

An archive of the webcast will be available approximately 30 minutes after the conclusion of the live call.

Please ask to be joined into the Ormat Technologies, Inc. call.

Participant telephone numbers
Participant dial in (toll free):	1-877-511-6790
Participant international dial in:	1-412-902-4141
Canada Toll Free	1-855-669-9657
Conference replay
US Toll Free:	1-877-344-7529
International Toll:	1-412-317-0088
Replay Access Code:	10110511

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 the objective of becoming a leading global provider of renewable energy. 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. With 73 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 530 employees in the United States and 720 overseas. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 2,200 MW of gross capacity. Ormat’s current 727 MW generating portfolio is spread globally in the U.S., Guatemala, Guadeloupe, Indonesia and Kenya.

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 1, 2017.

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.

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Ormat Technologies, Inc. and Subsidiaries

Ormat Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three and Six-Month Periods Ended June 30, 2017 and 2016

(Unaudited)

	Three Months Ended June 30						Six Months Ended June 30
	2017			2016			2017			2016
	(In thousands, except per share data)						(In thousands, except per share data)
Revenues:
Electricity	$	111,777		$	104,001		$	227,553		$	211,869
Product		67,587			55,860			141,709			99,586
Total revenues		179,364			159,861			369,262			311,455
Cost of revenues:
Electricity		65,439			62,243			131,475			125,929
Product		43,432			31,822			92,884			55,857
Total cost of revenues		108,871			94,065			224,359			181,786
Gross profit		70,493			65,796			144,903			129,669
Operating expenses:
Research and development expenses		1,050			595			1,652			944
Selling and marketing expenses		4,090			3,668			8,453			7,343
General and administrative expenses		12,201			8,783			22,150			17,532
Write-off of unsuccessful exploration activities		—			863			—			1,420
Operating income		53,152			51,887			112,648			102,430
Other income (expense):
Interest income		362			245			606			565
Interest expense, net		(14,540	)		(18,401	)		(29,463	)		(34,424	)
Derivatives and foreign currency transaction gains (losses)		1,703			(4,332	)		3,041			(2,370	)
Income attributable to sale of tax benefits		4,356			4,519			10,513			8,917
Other non-operating expense, net		6			49			(86	)		240
Income before income taxes and equity in losses of investees		45,039			33,967			97,259			75,358
Income tax provision (benefit)		(6,369	)		(7,890	)		(17,255	)		(17,399	)
Equity in losses of investees, net		(428	)		(1,144	)		(2,027	)		(2,081	)
Net income		38,242			24,933			77,977			55,878
Net income attributable to noncontrolling interest		(3,206	)		(584	)		(7,629	)		(2,258	)
Net income attributable to the Company's stockholders	$	35,036		$	24,349		$	70,348		$	53,620
Earnings per share attributable to the Company's stockholders - Basic and diluted:
Basic:
Net Income	$	0.70		$	0.49		$	1.41		$	1.09
Diluted:
Net Income	$	0.69		$	0.49		$	1.39		$	1.07
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:
Basic		49,771			49,456			49,726			49,314
Diluted		50,624			50,137			50,559			49,977

Ormat Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of June 30, 2017 and December 31, 2016

(Unaudited)

	June 30,			December 31,
	2017			2016
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	118,390		$	230,214
Restricted cash, cash equivalents and marketable securities		49,510			34,262
Receivables:
Trade		79,587			80,807
Other		20,128			17,482
Inventories		18,569			12,000
Costs and estimated earnings in excess of billings on uncompleted contracts		59,901			52,198
Prepaid expenses and other		41,151			45,867
Total current assets		387,236			472,830
Investment in an unconsolidated company		13,957			—
Deposits and other		18,125			18,553
Deferred charges		43,598			43,773
Property, plant and equipment, net		1,526,485			1,556,378
Construction-in-process		408,939			306,709
Deferred financing and lease costs, net		5,186			3,923
Intangible assets, net		86,986			52,753
Goodwill		20,121			6,650
Total assets	$	2,510,633		$	2,461,569
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	101,827		$	91,650
Short-term revolving credit lines with banks (full recourse)		30,000			—
Billings in excess of costs and estimated earnings on uncompleted contracts		17,574			31,630
Current portion of long-term debt:
Limited and non-recourse:
Senior secured notes		32,608			32,234
Other loans		21,495			21,495
Full recourse		10,673			12,242
Total current liabilities		214,177			189,251
Long-term debt, net of current portion:
Limited and non-recourse:
Senior secured notes		334,365			350,388
Other loans		252,085			261,845
Full recourse:
Senior unsecured bonds		203,678			203,577
Other loans		52,742			57,063
Accumulated losses of unconsolidated company in excess of investment		—			11,081
Liability associated with sale of tax benefits		48,810			54,662
Deferred lease income		53,036			54,561
Deferred income taxes		44,113			35,382
Liability for unrecognized tax benefits		6,015			5,738
Liabilities for severance pay		21,025			18,600
Asset retirement obligation		24,267			23,348
Other long-term liabilities		22,823			21,294
Total liabilities		1,277,136			1,286,790
Redeemable non-controlling interest		5,898			4,772
Equity:
The Company's stockholders' equity:
Common stock		50			50
Additional paid-in capital		875,591			869,463
Retained earnings (accumulated deficit)		274,566			216,644
Accumulated other comprehensive income (loss)		(6,933	)		(7,732	)
		1,143,274			1,078,425
Noncontrolling interest		84,325			91,582
Total equity		1,227,599			1,170,007
Total liabilities and equity	$	2,510,633		$	2,461,569

Ormat Technologies, Inc. and Subsidiaries

Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information

For the Three and Six-Month Periods Ended June 30, 2017 and 2016

(Unaudited)

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 cost, (vi) stock-based compensation, (vii) gain from extinguishment of liability, and (viii) gain on sale of subsidiary and property, plant and equipment. EBITDA and Adjusted EBITDA are not a measurement 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 tables reconcile net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA for the three-month and six months periods ended June 30, 2017 and 2016.

	Three Months Ended June 30						Six Months Ended June 30
	2017			2016			2017			2016
	(in thousands)						(in thousands)
Net cash provided by operating activities	$	42,695		$	92,529		$	114,158		$	119,573
Adjusted for:
Interest expense, net (excluding amortization of deferred financing costs)		13,266			17,165			26,671			31,292
Interest income		(362	)		(245	)		(606	)		(565	)
Income tax provision		6,369			7,890			17,255			17,399
Adjustments to reconcile net income or loss to net cash provided by operating activities (excluding depreciation and amortization)		22,570			(42,519	)		17,901			(12,437	)
EBITDA	$	84,538		$	74,820		$	175,379		$	155,262
Mark-to-market gains or losses from accounting for derivatives		(940	)		4,240			(2,463	)		2,494
Stock-based compensation		3,630			817			5,343			1,659
Merger and acquisition transaction cost		900			500			1,700			647
Write-off of unsuccessful exploration activities		—			863			—			1,420
Adjusted EBITDA	$	88,128		$	81,240		$	179,959		$	161,482
Net cash used in investing activities	$	(65,367	)	$	(10,669	)	$	(194,105	)	$	(55,289	)
Net cash provided by (used in) financing activities	$	(33,076	)	$	(37,802	)	$	(31,877	)	$	(57,647	)

	Three Months Ended June 30					Six Months Ended June 30
	2017			2016		2017			2016
	(in thousands)					(in thousands)
Net income	$	38,242		$	24,933	$	77,977		$	55,878
Adjusted for:
Interest expense, net (including amortization of deferred financing costs)		14,178			18,156		28,857			33,859
Income tax provision		6,369			7,890		17,255			17,399
Depreciation and amortization		25,749			23,841		51,290			48,126
EBITDA	$	84,538		$	74,820	$	175,379		$	155,262
Mark-to-market gains or losses from accounting for derivatives		(940	)		4,240		(2,463	)		2,494
Stock-based compensation		3,630			817		5,343			1,659
Merger and acquisition transaction cost		900			500		1,700			647
Write-off of unsuccessful exploration activities		—			863		—			1,420
Adjusted EBITDA	$	88,128		$	81,240	$	179,959		$	161,482