Ormat Technologies Reports Q1 Results

Ormat Technologies, Inc. announced financial results for the first quarter of 2008. Total revenues for the first quarter were $69.4 million, versus $61.7 million for the first quarter of 2007, an increase of 12.4%, consisting of an increase of 36.3% in revenues from the Company's Electricity Segment, offset in part by a reduction in revenues from the Products Segment.

The Company reported net income of $10.1 million, or $0.24 per share of common stock (basic and diluted), as compared to a net loss of $5.8 million, or $0.15 per share of common stock (basic and diluted), for the first quarter of 2007. The increase in net income is due primarily to an increase in generating capacity and energy generation, as well as an increase in energy rates in the United States, which offset a decline in the Products Segment. In addition, the Company reduced cost of revenues by 16.0% on a year over year basis.

Commenting on the quarter's results, Dita Bronicki, Chief Executive Officer of Ormat, stated: "The first quarter performance was in line with our expectations for 2008 and highlighted our improved operating performance, increase in our overall generating capacity and improvement in power prices in certain projects.

"Since the beginning of the first quarter, we declared commercial operation for the Galena 3 and Heber South projects and continued to make progress on our exploration work to secure geothermal resources for 2010 and beyond. Also during the quarter, we strengthened our products backlog signing three EPC agreements for a total amount of over $100 million, consisting of one geothermal and two recovered energy generation power plants, out of which approximately $50 million are still subject to a Notice to Proceed. We expect to add an additional 174 MW by the end of 2009 from projects that are currently under construction, including Olkaria and Brawley," Ms. Bronicki continued.

Electricity revenues for the quarter ended March 31, 2008 were $59.5 million, an increase of 36.3% from $43.7 million in the first quarter of 2007, and an increase of 7.2% from $55.5 million in the fourth quarter of 2007. This increase is primarily attributable to the increase in energy generation in the United States to 572,488 MWh for the three month period, from 437,126 MWh in the comparable period last year. Such increased generation resulted from additional power plants placed in service, enhanced performance of our existing power plants, as well as revenue from the Amatitlan project in Guatemala which came online in March of 2007. Also adding to the revenue increase was an increase in the energy rates in the Puna project (due to higher oil prices) and in our Standard Offer #4 power purchase agreements with Southern California Edison.

Products Segment revenues for the quarter were $9.9 million, compared to $18.1 million in the first quarter of 2007, a decrease of 45.4%. The gross margin of the Products Segment was increased from 12% to 18%. The decrease in product revenue is principally attributable to last year's lower products backlog, and the timing of revenue recognition in accordance with the percentage of completion method for each of our geothermal and recovered energy generation products. Our manufacturing and construction activities were not reduced, as we increased the amount of our manufacturing and construction activities for our own projects.

Adjusted EBITDA for the first quarter of 2008 was $27.5 million, as compared to $13.4 million in the same quarter last year, an increase of 105.9%. Adjusted EBITDA includes operating income and depreciation and amortization totaling $1.5 million and $4.1 million for the quarters ended March 31, 2008 and 2007, respectively, related to the Company's unconsolidated investment interest of 50% in the Mammoth Project in California and in the first quarter of 2007, 80% in the Leyte Project in the Philippines. The reconciliation of GAAP net income or loss to Adjusted EBITDA is set forth below in this release.

Cash, cash equivalents and marketable securities as of March 31, 2008 decreased to $30.7 million from $60.7 million as of December 31, 2007. In addition, in April 2008 we received $64 million from the second closing of a tax monetization transaction and have bank lines of credits aggregating $160 million as of today.

On May 6, 2008, Ormat's Board of Directors approved the payment of a quarterly cash dividend of $0.05 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 May 27, 2008 to shareholders of record as of the close of business on May 20, 2008. The Company expects to pay a dividend of $0.05 per share in the next two quarters as well.

Commenting on the outlook for 2008, Ms. Bronicki said, "Following our first quarter earnings results, we maintain our guidance for 2008 and expect our 2008 Electricity Segment revenues to be approximately $245 million. We also expect an additional approximately $9 million of revenues from our share of electricity revenues generated by Mammoth that is accounted for under the equity method. With regard to our Products Segment, we maintain our guidance for 2008 revenues and expect them to be between $70 million and $80 million."

Ms. Bronicki concluded, "We are excited with the progress we have made this quarter, especially in recovered energy generation, which has experienced increasing interest as the need for energy efficiency begins to play a greater role in combating global warming."

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.D.T. on Wednesday, May 7, 2008. 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. To listen to a replay, please call (800) 642-1687 in the United States and Canada and (706) 645-9291 for international callers and utilize code 44334775.

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 more than 75 patents. Ormat currently operates the following geothermal and recovered energy-based

power plants: in the United States -- Brady, Heber, Mammoth, Ormesa, Puna, Steamboat and OREG 1; in Guatemala -- Zunil and Amatitlan; in Kenya -- Olkaria; and in Nicaragua -- Momotombo.

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 5, 2008.

     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-months periods Ended March 31, 2008 and 2007
    (Unaudited)

                                             Three Months Ended March 31,
                                              2008                2007
                                      (in thousands, except per share amounts)

    Revenues:
      Electricity                           $59,519             $43,658
      Products                                9,868              18,089
          Total revenues                     69,387              61,747

    Cost of revenues:
      Electricity                            38,676              39,722
      Products                                8,050              15,924
          Total cost of revenues             46,726              55,646

          Gross margin                       22,661               6,101

    Operating expenses:
      Research and development expenses         696                 704
      Selling and marketing expenses          3,519               1,986
      General and administrative expenses     6,027               5,747
          Operating income (loss)            12,419              (2,336)

    Other income (expense):
      Interest income                         1,046               1,415
      Interest expense                       (3,603)             (7,782)
      Foreign currency translation and
       transaction gains (losses)              (183)               (716)
      Impairment of auction rate securities    (328)                 --
      Other non-operating income                 40                 352
          Income (loss) before income taxes,
           minority interest, and equity in
           income of investees                9,391              (9,067)

    Income tax benefit (provision)           (2,071)              1,995
    Minority interest                         2,205                  --
    Equity in income of investees               539               1,231
          Net income (loss)                 $10,064             $(5,841)

      Earnings (loss) per share -
       basic and diluted                      $0.24              $(0.15)

      Weighted average number of
       shares used in computation of
       earnings (loss) per share:
        Basic                                42,163              38,109
        Diluted                              42,271              38,109



Net income for the quarters ended March 31, 2008 and 2007 includes stock-based compensation expense of $1.1 million, or $0.03 per share (basic and diluted) and $0.6 million, or $0.01 per share (basic and diluted), respectively.


    Ormat Technologies, Inc. and Subsidiaries
    Condensed Consolidated Balance Sheets
    As of March 31, 2008 and December 31, 2007
    (Unaudited)

                                                  March 31,       December 31,
                                                    2008             2007
                                                       (in thousands)
    Assets
    Current assets:
      Cash and cash equivalents                    $30,722          $47,227
      Marketable securities                              -           13,489
      Restricted cash, cash equivalents and
       marketable securities                        33,096           29,236
      Receivables:
        Trade                                       48,824           46,519
        Related entities                               602              385
        Other                                       10,026            9,008
      Due to Parent                                  1,739              253
      Inventories, net                              13,184           10,312
      Costs and estimated earnings in excess of
       billings on uncompleted contracts             2,252            3,608
      Deferred income taxes                          1,747            1,732
      Prepaid expenses and other                     5,737            7,059
          Total current assets                     147,929          168,828

    Long-term marketable securities                  3,234            2,762
    Restricted cash, cash equivalents and
     marketable securities                           4,411            5,605
    Unconsolidated investments                      31,398           30,560
    Deposits and other                              16,355           15,294
    Deferred income taxes                           11,978           12,427
    Property, plant and equipment, net             789,248          743,386
    Construction-in-process                        272,904          234,014
    Deferred financing and lease costs, net         13,620           14,044
    Intangible assets, net                          47,209           47,989
          Total assets                          $1,338,286       $1,274,909

    Liabilities and Stockholders' Equity
    Current liabilities:
      Accounts payable and accrued expenses        $97,399          $75,836
      Billings in excess of costs and estimated
       earnings on uncompleted contracts            12,755            4,818
      Current portion of long-term debt:
        Limited and non-recourse                     7,083            7,667
        Full recourse                                1,000            1,000
        Senior secured notes (non-recourse)         25,475           25,475
      Due to Parent, including current portion of
       notes payable to Parent                      31,975           31,695
          Total current liabilities                175,687          146,491

    Long-term debt, net of current portion:
      Limited and non-recourse                      12,858           14,490
      Senior secured notes (non-recourse)          273,840          273,840
    Notes payable to Parent, net of current
     portion                                        19,200           26,200
    Deferred lease income                           75,527           76,198
    Deferred income taxes                           21,329           20,680
    Liability for unrecognized tax benefits          5,578            5,330
    Liabilities for severance pay                   17,758           15,201
    Asset retirement obligation                     13,266           13,014
          Total liabilities                        615,043          591,444

    Minority interest                               63,177           65,382

    Stockholders' equity:
      Common stock                                      42               41
      Additional paid-in capital                   547,482          513,109
      Retained earnings                            111,503          103,545
      Accumulated other comprehensive income         1,039            1,388

         Total stockholders' equity                660,066          618,083

         Total liabilities and stockholders'
          equity                                $1,338,286       $1,274,909



    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, minority interest 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 and Leyte Projects. 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-month periods ended March 31, 2008 and 2007:


                                                  Three Months Ended March 31,
                                                      2008           2007
                                                        (in thousands)
    Net income (loss)
    Adjusted for:                                   $10,064        $(5,841)
      Equity in income of investees                    (539)        (1,231)
      Minority interest                              (2,205)             -
      Interest expense, net (including
       amortization of deferred financing costs)      2,885          6,367
      Other non-operating income                        143            364
      Income tax provision (benefit)                  2,071         (1,995)
      Depreciation and amortization                  13,631         11,560

    EBITDA                                           26,050          9,224

    Equity in income of Mammoth-Pacific
     L.P. and Ormat Leyte                               539          1,231
    Depreciation, amortization, interest and taxes
     attributable to the Company's equity in
     Mammoth-Pacific L.P. and Ormat Leyte               919          2,904

                                                      1,458          4,135
    Adjusted EBITDA                                 $27,508        $13,359


Source: Ormat Technologies, Inc.
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