Ormat Technologies Inc. ( ORA) Q3 2010 Earnings Call November 3, 2010 09:00 am ET Executives Marybeth Csaby - KCSA Strategic Communications Dita Bronicki - CEO Joseph Tenne - CFO Yoram Bronicki - President & COO Analysts Ben Kallo - Robert W. Baird Gregg Orrill - Barclays Capital Elaine Kwei - Jefferies Michael Lapides - Goldman Sachs Lasan Johong - RBC Capital Markets Steve Milunovich - Band of America Merrill Lynch Brain Shore - Avondale Partners, LLC Presentation Operator
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, please see Risk Factors as described in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on March 8, 2010. In addition, during this call statements that may be made include financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission such as adjusted EBITDA. This measure may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.Management of Ormat Technologies believes that adjusted EBITDA may provide meaningful supplemental information regarding liquidity measurements that both management and investors benefit from and accesing Ormat technologies liquidity and we are planning and forecasting future period. This non-GAAP financial measure may also facilitate management's internal comparison to the company's historical liquidity. Before I open the call over to management, I would like to remind everyone that a slide presentation accompanies this call and can be access on company’s website at www.ormat.com under the web cast and presentation link as found in the Investor Relations tab. With that said, I would like to turn the call over to Dita. Dita the call is yours. Dita Bronicki Thank you, Marybeth and good morning everyone and Thank you for joining us. The highlight of the quarter is the electricity segment. Revenue were up 23%, production is up 20% and more importantly (inaudible) in public which move to start of constructions and there will be ITC cash grant is substantial. We are planning to placing service approximately 120 MW by the end of 2013 in the United States. We will elaborate on these another developments during the call. I return the call over to Joseph for review of the quarter financial. I'll then update the (inaudible) of operation and following my remarks we will open the call to questions. Joseph, the floor is yours.
Joseph TenneThank you, Dita and good morning everybody. We have included seven financial highlights from our company statements of operations and balance sheets in our earnings release and in the accompanying slides. Please note, that some of the comparative figures have been revised to get effect to get effect to a rite of cost associated with project which we determined in the third quarter of 2009 would not support commercial operations. I would like now to review the main issues which effected of our financial results this quarter starting with slide 4. This quarter that electricity segment have revenues of $83.4 million, $15.5 million increase from the first quarter of 2009. The 22.7% increase in the results is a result of additional generation and capacity with Puna, North Brawley and the Mammoth complex being the major contributors. The increase in electricity segment revenues is also positively reflected by an increasing average revenue rate of our (inaudible) portfolio from $87 per megawatt hour in the third quarter of 2009 to $89 per megawatt hours in the third quarter of 2010. In the product segment on the next slide this quarter revenues were $18.1 compared to $51.1 in the same quarter last year. We expect revenues and corresponding margins to get down from last years high and expect this which continues throughout the year due to a decline in product for the backlog from last years record levels. For the third quarter of 2010, total revenues were $101.5 million compared to $119 million in the third quarter of 2009 as shown in slide six. Depreciation in the quarter amounted to $23.4 million. Moving to slide seven, the companies total gross margin was 24.8% compared to 32.9% in the same period last year. Gross margin for this electricity segment was 26.2% compared to 35.1% in the same quarter last year. Read the rest of this transcript for free on seekingalpha.com