RENO, NV--(Marketwired - Aug 12, 2014) - Ram Power, Corp. (
HIGHLIGHTS
San Jacinto-Tizate Project
- The San Jacinto-Tizate Power Plant generated 104,356 (net) MWh resulting in revenue of $11.7 million for the quarter ended June 30, 2014 (a decrease of 11% over the same period in 2013) and EBITDA (as defined below) of $8 million in second quarter 2014 compared to revenue of $13.2 million and EBITDA of $9 million in second quarter 2013. Revenue and EBITDA for the six months ended June 30, 2014 were $22.4 and $15.5 million, respectively and $25.1 and $16.8 million, respectively for the same period in 2013. The decline was caused by wells offline for the drilling remediation program during the first part of the year and the turbine overhaul in June;
- In May 2014, the Company completed the 30-day stabilization period and the 7-day performance test of the resource field for the San Jacinto project. In accordance with the amendment to the project's credit facilities, the Company concluded a 30-day stabilization period on May 18th, followed immediately by a 7 day performance test which concluded on May 25th. During the 7-day performance test, the Project produced an average of 57.8 MW (gross) / 52.7 MW (net).
Corporate Update
- In April 2014, the Company successfully completed the previously announced transaction with U.S. Geothermal Inc. for the sale of the Geysers project for a total of $6.4 million in cash. The Company's subsidiaries acquired by U.S. Geothermal Inc. as part of the acquisition were Western Geopower, Inc., Skyline Geothermal Holdings, Inc., and Etoile Holdings, Inc., which in turn includes all membership interests in Mayacamas Energy LLC and Skyline Geothermal LLC.
- As previously disclosed, Ram Power formed a Mergers and Acquisitions Committee to explore and evaluate a broad range of strategic alternatives for the Company to enhance shareholder value. Dundee Securities Ltd. was appointed as financial advisor on the strategic alternatives review process, and is continuing to examine a range of strategic alternatives which may include the acquisition or disposition of assets, joint ventures, the sale of the Company, alternative operating models including maximizing operational efficiencies, or continuing with the current business plan, among other potential alternatives.
FINANCIAL OVERVIEW
The financial results of Ram Power for the three and six months ended June 30, 2014 and 2013 are summarized below:
| Three months ended | Six months ended | |||||||||||||||
| (all figures in U.S dollars) | June 30, 2014 | June 30, 2013 | June 30, 2014 | June 30, 2013 | ||||||||||||
| Total revenue | $ | 11,720,327 | $ | 13,201,640 | $ | 22,443,631 | $ | 25,100,370 | ||||||||
| Other direct costs | (1,723,519 | ) | (1,455,511 | ) | (3,211,809 | ) | (2,703,067 | ) | ||||||||
| Depreciation and amortization of plant assets | (6,515,746 | ) | (6,126,158 | ) | (12,929,052 | ) | (12,259,520 | ) | ||||||||
| General and administrative expenses | (1,872,571 | ) | (2,727,422 | ) | (3,432,051 | ) | (5,604,245 | ) | ||||||||
| Other operating income (costs) | (107,478 | ) | (45,825 | ) | (290,574 | ) | 37,333 | |||||||||
| Operating income | 1,501,013 | 2,846,724 | 2,580,145 | 4,570,871 | ||||||||||||
| Loss on impairment | (97,915 | ) | (18,663,852 | ) | 2,615,342 | (18,663,852 | ) | |||||||||
| Gain on warrant liability valuation | (334,583 | ) | (1,711,229 | ) | 1,083,612 | 3,015,122 | ||||||||||
| Gain on prepayment option valuation | 2,516,000 | 1,556,974 | (1,357,000 | ) | (1,556,974 | ) | ||||||||||
| Other gains (losses) | (6,181,084 | ) | 1,863,263 | (341,975 | ) | 805,303 | ||||||||||
| Current and deferred tax expense | (1,865,110 | ) | (2,056,108 | ) | (3,751,777 | ) | (4,112,216 | ) | ||||||||
| Total loss and comprehensive loss | (11,047,080 | ) | (21,934,014 | ) | (12,357,552 | ) | (31,918,463 | ) | ||||||||
| Total loss and comprehensive loss per share | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.03 | ) | $ | (0.11 | ) | ||||
| As at June 30, 2014 |
As at December 31, 2013 |
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| Total assets | $ | 437,632,141 | $ | 457,959,404 | ||||||||||||
| Long-term debt | 46,406,978 | 239,841,360 | ||||||||||||||
| Total liabilities | 287,431,868 | 295,537,930 | ||||||||||||||
| Cash | 18,802,574 | 22,549,994 | ||||||||||||||
| Working capital | 2,760,677 | 6,329,850 | ||||||||||||||
For the quarter ended June 30, 2014, the Company reported revenue of $11.7 million and a total loss and comprehensive loss of $11 million, or $(0.03) per share, compared to revenue of $13.2 million and a total loss and comprehensive loss of $21.9 million, or $(0.08) per share, for second quarter 2013. The 11% decrease in revenue resulted from wells offline for the drilling remediation program in 2014 and downtime related to a scheduled turbine overhaul in June. Total loss and comprehensive loss for quarter ended June 30, 2014 was the result of non-cash depreciation and amortization expense of $6.5 million, deferred tax expense of $1.9 million and other losses related to the valuation of the company's derivatives of $4 million.
EBITDA of $8 million for the quarter ended June 30, 2014 declined 11% compared to EBITDA of $9 million for the same period in 2013. The decrease principally resulted from a decrease in revenue of $1.5 million and increases in direct costs of $0.7 million, offset by cost savings in general and administrative expenses of $0.9 million.
The Company recognized a net loss of $12.4 million for the six months ended June 30, 2014 compared to a net loss of $31.9 million for the same period in 2013, which resulted in a decreased loss of $19.5 million due to various factors, including $21.3 million decrease related to impairment losses on the Geysers project offset by a $2.7 million increase related to decreased revenue from the San Jacinto project. Revenue for the six months ended June 30, 2014 of $22.4 million was $2.7 million less than revenue for the same period in 2013 of $25.1 million. EBITDA for the first six months of 2014 of $15.5 million also declined by 11% compared to $16.8 million for the same period in 2013. The drilling remediation program and turbine overhaul contributed to the decline.
For the six months ended June 30, 2014, the Company had net operating cash inflows of $4.3 million, net investing cash inflows of $2 million and net financing cash outflows of $10 million, which combined for a net decrease in cash of $3.7 million. The Company expended $5.3 million for additions to geothermal properties, principally related to San Jacinto drilling and turbine overhaul costs. At June 30, 2014, the Company had cash of $18.8 million, of which $14.6 million was held for current use in the San Jacinto project.
The Company reduced corporate financing costs and corporate overhead in 2013 through refinancing the corporate credit facility and restructuring the corporate office. As a result, we expect interest on corporate debt to be approximately $4 million and corporate costs, including North America project costs, to be approximately $4 million this year. The Company expects the corporate cash on hand as of June 30, 2014 of $4.3 million will allow the Company to continue to satisfy its obligations through January 2015, allowing the Company time to complete the strategic process.
"I'd like to thank our shareholders for their continued patience while we continue to work through the strategic process for the Company," stated Antony Mitchell, Executive Chairman of Ram Power. "During the second quarter, we successfully sold the Geysers project which allows for liquidity through the end of year. Additionally, we are working closely with our lender group, interested parties and the Government of Nicaragua to have a transaction which will maximize our shareholder value."
Ram Power will hold its earnings call to discuss the quarter ending June 30, 2014 financial and operating results on Wednesday, August 13, 2014 at 10:00 am EDT (7:00 am PDT). To listen to the call, please dial 1-866-696-5910 by entering the participant pass code 7077888, or on the web at http://bell.media-server.com/m/p/zri7iuds.
About Ram Power, Corp.
Ram Power is a renewable energy company engaged in the business of acquiring, exploring, developing, and operating geothermal properties, and has interests in geothermal projects in the United States, Canada, and Latin America.
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.
Contact Information:
Steven Scott
Director of Investor Relations
Ram Power, Corp.
Phone: 775-398-3711
Email:
www.ram-power.com