SOURCE: Ram Power, Corp.

Ram Power, Corp.

November 13, 2013 20:03 ET

Ram Power Announces 2013 Third Quarter Results

RENO, NV--(Marketwired - Nov 13, 2013) - Ram Power, Corp. (TSX: RPG)

  • CONTINUED STRONG REVENUE AND EBITDA GROWTH
  • SUCCESSFUL REMEDIATION PROGRAM
  • UPDATE TO EARNINGS CALL DATE

Ram Power, Corp. (TSX: RPG) ("Ram Power" or the "Company"), a renewable energy company focused on the development, production and sale of electricity from geothermal energy, is pleased to announce its operating results for the third quarter ended September 30, 2013. This earnings release should be read in conjunction with Ram Power's financial statements, and management's discussion and analysis ("MD&A"), which are available on the Company's website at www.ram-power.com and have been posted on SEDAR at www.sedar.com.

QUARTER HIGHLIGHTS

The achievement of commercial operation of the Phase II expansion at San Jacinto in December 2012 continued to generate strong year-over-year revenue growth for the Company of $11.2 million for the three months ended September 30, 2013, compared to $6.9 million for the same period in 2012, a 62% increase. EBITDA, as defined below, increased 214% to $6.9 million for the three months ended September 30, 2013 compared to $2.2 million for the three months ended September 30, 2012.

Significant accomplishments and key highlights during the quarter and to date include:

  • The Company generated approximately 103,840 MWh (net) for the quarter ended September 2013 which is a 34% increase over the comparable quarter for 2012. Year to date through September 2013, the Company generated 332,837 MWh (net) and billed $36 million which is a 49% increase in net generation and a 79% increase in revenue over 2012. Revenue increased at a higher rate than generation as a result of the tariff increase effective October 2012.

  • Remediation of Well SJ 6-1: The Company successfully replaced 367 meters of damaged liner and perforated a 60 meter section of liner which had demonstrated increased temperature and permeability. SJ 6-1 steamflow is currently estimated at 9.8 tonnes / hour or 1.3 MW (gross) and the well was connected to the plant on September 26, 2013.

  • Remediation of Well SJ 6-2: The Company successfully perforated 60 meters of blank liner to recover production at an upper major zone that may have been affected by prior mineral deposition to preserve the long-term physical condition and production of the well. After a brief recovery period, well SJ 6-2 was placed back in service and steam-flow is currently estimated at 58 tonnes / hour per hour or 8 MW (net).

  • Remediation of Well SJ 9-3: The Company successfully drilled a fork leg to a total depth of 1,900 meters during which the drilling operation experienced a total loss of circulation at 1,200 meters and 70 to 80% circulation losses for the remainder of the drilling which is a strong indication of high permeability. The well is scheduled to be placed back in service in late November; results to date are encouraging and further details will be disclosed as available.

  • Remediation of Well SJ 12-3: The Company has begun the remediation efforts on well SJ 12-3, and expects the efforts to conclude in early December, and following a recovery period, expects SJ 12-3 back in service in mid-December; results to date are encouraging and further details will be disclosed as available.

  • Overhead cost savings of $1.1 million and $1.7 million were realized for the three and nine months ended September 30, 2013, respectively, as a result of the 2013 corporate restructuring.

Antony Mitchell, Executive Chairman for Ram Power, stated, "Notwithstanding the interruptions in production that occurred due to the remediation program, San Jacinto continues to generate strong revenue and EBITDA for the quarter. We look forward to the successful completion of the remediation program in December, and the continued review and reductions of all general and administrative costs across the Company."

FINANCIAL OVERVIEW

The financial results of Ram Power for the three and nine months ended September 30, 2013 are summarized below:

                         
                         
    Three months ended     Nine months ended  
(all figures in U.S dollars)   September 30, 2013     September 30, 2012     September 30, 2013     September 30, 2012  
Total revenue   $ 11,241,582     $ 6,923,134     $ 36,341,952     $ 20,289,964  
Other direct costs     (1,814,764 )     (1,157,363 )     (4,517,831 )     (3,238,738 )
Depreciation and amortization of plant assets     (6,119,558 )     (3,140,639 )     (18,379,078 )     (9,379,961 )
General and administrative expenses     (2,043,338 )     (3,125,601 )     (7,647,583 )     (8,463,674 )
Other operating costs     (428,305 )     (423,395 )     (390,972 )     (878,021 )
Operating income (loss)     835,617       (923,864 )     5,406,488       (1,670,430 )
Recovery (loss) on impairment     315,000       -       (18,348,852 )     -  
(Loss) gain on warrant liability valuation     (2,592,864 )     1,192,169       422,258       4,986,795  
Loss on prepayment option valuation     (3,026,544 )     -       (4,583,518 )     -  
Other loss     (1,303,648 )     (114,409 )     (498,345 )     (104,851 )
Total loss and comprehensive loss     (11,874,879 )     (3,174,256 )     (39,681,126 )     (5,668,840 )
Total loss and comprehensive loss per share   $ (0.04 )   $ (0.01 )   $ (0.13 )   $ (0.02 )
                                 
    As at September 30, 2013       As at December 31, 2012                  
Total assets   $ 460,429,459     $ 506,823,848                  
Long-term debt     245,461,440       210,591,894                  
Total liabilities     284,833,032       294,542,373                  
Cash     24,866,726       51,330,351                  
Working capital     11,401,247       (11,325,167 )                
                                 
                                 

For the fiscal quarter ended September 30, 2013, the Company reported revenue of $11.2 million compared to revenue of $6.9 million for the same period in 2012. The 62% increase in revenue resulted primarily from commencement of San Jacinto Phase II operations in December 2012. EBITDA, as defined below, increased $4.7 million to $6.9 million for the quarter ended September 30, 2013 compared to $2.2 million for the quarter ended September 30, 2012, which was primarily the result of $4.3 million increase in revenue from San Jacinto operations.

For the nine months ended September 30, 2013, the Company reported revenue of $36.3 million compared to revenue of $20.3 million for the same period in 2012. The 79% increase in revenue resulted primarily from commencement of San Jacinto Phase II operations in December 2012. EBITDA, as defined below, increased $16.1 million to $23.8 million for the nine months ended September 30, 2013 compared to $7.7 million for the nine months ended September 30, 2012, which was primarily the result of $16 million increase in revenue from San Jacinto operations.

For the fiscal quarter ended September 30, 2013, the Company reported a total loss and comprehensive loss of $11.9 million, or $(0.04) per share, compared to a total loss and comprehensive loss of $3.2 million, or $(0.01) per share, for the same period in 2012. Total loss and comprehensive loss for the quarter included non-cash depreciation and amortization expense of $6.1 million, mark-to-market valuation losses of $5.6 million and unrealized foreign exchange losses of $1.2 million. The valuation and foreign exchange losses are the result of volatility in certain market factors used in the valuation and are not a reflection of Company performance.

For the nine months ended September 30, 2013, the Company reported a total loss and comprehensive loss of $39.7 million, or $(0.13) per share, compared to a total loss and comprehensive loss of $5.7 million, or $(0.02) per share, for the same period in 2012. Total loss and comprehensive loss for the nine months ended September 30, 2013 was the result of non-cash depreciation and amortization expense of $18.4 million, a one-time loss on impairment of the Geysers and other North America projects of $18.3 million, mark-to-market valuation losses of $4.2 million, and nonrecurring corporate restructuring costs of $1.3 million.

For the nine months ended September 30, 2013, the Company had net operating cash inflows of $6.4 million, net investing cash outflows of $16.9 million and net financing cash outflows of $16 million, which combined for a net decrease in cash of $26.5 million. The Company expended $19.3 million for additions to property, plant and equipment and geothermal properties, including $10.6 million for Phase II expansion of the San Jacinto project and $8.3 million for the costs related San Jacinto drilling and remediation activities. At September 30, 2013, the Company had cash of $24.9 million, of which $24.4 million was held for current use in the San Jacinto project.

FORWARD LOOKING GUIDANCE

In concert with our press release dated October 2, 2013, the overall remediation drilling program has a targeted increase in steam availability of approximately 9 to 14 MW, or 70-110 tonnes / hour of additional net capacity bringing total generation to approximately 59 to 63 MW (net). At that level, utilizing current power purchase agreement, the San Jacinto project's annualized net revenue will be approximately $56-61 million and EBITDA of $45-50 million respectively.

EARNINGS CALL DATE CHANGE

Due to the active drilling program, and scheduling conflicts therein with key participants, the Company will postpone the earnings call to discuss the quarter ending September 30, 2013 financial and operating results to Wednesday, November 20, 2013 at 10:00 am EST (7:00 am PST). To listen to the call, please dial 1-866-696-5910 by entering the participant pass code 9816348, or on the web at http://bell.media-server.com/m/p/nijasozc.

About Ram Power, Corp.

Ram Power is a renewable energy company engaged in the business of operating and developing geothermal properties and has interests in geothermal projects in Nicaragua and the United States.

USE OF NON-GAAP MEASURES

Certain non-GAAP measures referenced in this news release have no standardized meaning under International Financial Reporting Standards ("IFRS") and, therefore, are unlikely to be comparable to similar measures presented by other issuers. Where we reference non-GAAP measures, we provide definitions. For example, EBITDA is commonly defined as earnings before interest, taxes, depreciation and amortization. EBITDA is most directly comparable to the GAAP measure operating income or loss, except depreciation and amortization expenses of plant assets are excluded in the calculation of EBITDA. Accordingly, where EBITDA measures are disclosed by the Company, they equal operating income or loss plus depreciation and amortization of plant assets. Although a non-GAAP measure, management believes users of the Company's financial information find EBITDA useful in assessing the Company's financial performance. In the Company's earnings releases, consolidated financial statements and MD&As, unless otherwise noted, all financial data is prepared in accordance with IFRS.

Cautionary Statements

This news release contains certain "forward-looking information" which may include, but is not limited to, statements with respect to future events or future performance, management's expectations regarding the Company's growth, results of operations, estimated future revenue, requirements for additional capital, revenue and production costs, future demand for and prices of electricity, business prospects and opportunities. In addition, statements relating to estimates of recoverable geothermal energy "reserves" or "resources" or energy generation are forward-looking information, as they involve implied assessment, based on certain estimates and assumptions, that the geothermal resources and reserves described can be profitably produced in the future. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "predicts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. A number of known and unknown risks, uncertainties and other factors may cause the actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current geothermal energy production, development and/or exploration activities and the accuracy of probability simulations prepared to predict prospective geothermal resources; changes in project parameters as plans continue to be refined; possible variations of production rates; failure of plant, equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the geothermal industry; political instability or insurrection or war; labor force availability and turnover; delays in obtaining governmental approvals or in the completion of development or construction activities, or in the commencement of operations; as well as those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form. These factors should be considered carefully and readers of this news release should not place undue reliance on forward-looking information.

Although the forward-looking information contained in this news release is based upon what management believes to be reasonable assumptions, there can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The information in this news release, including such forward-looking information, is made as of the date of this news release and, other than as required by applicable securities laws, Ram Power assumes no obligation to update or revise such information to reflect new events or circumstances.

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