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RENO, NV--(Marketwired - May 15, 2014) - 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 quarter ended March 31, 2014. 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.
HIGHLIGHTS
San Jacinto-Tizate Project
- The San Jacinto-Tizate Power Plant generated 94,959 (net) MWh resulting in revenue of $10.7 million for the quarter ended March 31, 2014 (a decrease of 10% over 2013) and EBITDA (as defined below) of $7.5 million in first quarter 2014 compared to revenue of $11.9 million and EBITDA of $7.9 million in first quarter 2013;
- The Company commenced the 30-day stabilization period of the resource field for the San Jacinto project on April 18, 2014. Following the conclusion of the 30-day stabilization period expected on May 18th, the Company will conduct a 7-day performance test to determine the net operating output of the Project which is expected to conclude on May 25th.
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 $6.4 million in cash. The Company's subsidiaries acquired by U.S. Geothermal Inc. as part of the acquisition were Western Geopower, Inc., Skyline Geothermal Holdings, Inc., and Etoile Holdings, Inc., which in turn includes all membership interests in Mayacamas Energy LLC and Skyline Geothermal LLC.
- As previously disclosed, Ram Power formed a Mergers and Acquisitions Committee to explore and evaluate a broad range of strategic alternatives for the Company to enhance shareholder value. Dundee Securities Ltd. has been appointed as financial advisor on the strategic alternatives review process, and is continuing to examine a range of strategic alternatives which may include the acquisition or disposition of assets, joint ventures, the sale of the Company, alternative operating models including maximizing operational efficiencies, or continuing with the current business plan, among other potential alternatives.
FINANCIAL OVERVIEW
The financial results of Ram Power for the quarters ended March 31, 2014 and 2013 are summarized below:
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Three months ended |
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| (all figures in U.S dollars) |
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March 31, 2014 |
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March 31, 2013 |
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| Total revenue |
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$ |
10,723,304 |
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$ |
11,898,730 |
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| Other direct costs |
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(1,488,290 |
) |
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(1,247,556 |
) |
| Depreciation and amortization of plant assets |
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(6,413,306 |
) |
|
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(6,133,362 |
) |
| General and administrative expenses |
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(1,559,480 |
) |
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(2,876,823 |
) |
| Other operating income (costs) |
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(183,096 |
) |
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83,158 |
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| Operating income |
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1,079,132 |
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|
|
1,724,147 |
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| Loss on impairment |
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2,713,257 |
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- |
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| Gain on warrant liability valuation |
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(749,029 |
) |
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(1,303,893 |
) | | Gain on prepayment option valuation |
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(1,159,000 |
) |
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- |
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| Other gains (losses) |
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5,292,333 |
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|
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1,858,336 |
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| Current and deferred tax expense |
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(1,886,667 |
) |
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- |
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| Total loss and comprehensive loss |
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(1,310,472 |
) |
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(7,928,341 |
) |
| Total loss and comprehensive loss per share |
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$ |
(0.00 |
) |
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$ |
(0.03 |
) |
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As at March 31,
2014 |
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As at December 31,
2013 |
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| Total assets |
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$ |
453,707,332 |
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$ |
457,959,404 |
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| Long-term debt |
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44,696,618 |
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239,841,360 |
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| Total liabilities |
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292,575,477 |
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295,537,930 |
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| Cash |
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17,700,245 |
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22,549,994 |
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| Working capital* |
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4,489,797 |
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6,329,850 |
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| *As at March 31, 2014, the Company was not in compliance with the financial ratio requirements of the Phase I and Phase II credit agreements allowing the Phase I and Phase II lenders to accelerate the loans at their discretion. As a result, all amounts outstanding under these agreements are classified as short-term liabilities. This classification created a working capital deficit of $184.9 million. The Company anticipates obtaining a waiver from the lenders, which would bring the Company into compliance and eliminate the risk of acceleration of the loans. With the waiver, working capital would be $4.5 million. |
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For the quarter ended March 31, 2014, the Company reported revenue of $10.7 million and a total loss and comprehensive loss of $1.3 million, or less than $(0.01) per share, compared to revenue of $11.9 million and a total loss and comprehensive loss of $7.9 million, or $(0.03) per share, for first quarter 2013. The 10% decrease in revenue resulted from wells offline for the drilling remediation program in 2014. Total loss and comprehensive loss for the quarter ended March 31, 2014 was the result of non-cash depreciation and amortization expense of $6.4 million and deferred tax expense of $1.9 million, offset by a one-time recovery of impairment of the Geysers project of $2.7 million and other gains of $3.3 million.
EBITDA of $7.5 million for the quarter ended March 31, 2014 compared to $7.9 million for the same period in 2013. The $0.4 decrease in EBITDA principally resulted from a decrease in revenue of $1.2 million and increases in direct costs of $0.5 million, offset by cost savings in general and administrative expenses of $1.3 million.
For the quarter ended March 31, 2014, the Company had net operating cash inflows of $3.4 million, net investing cash outflows of $3.2 million and net financing cash outflows of $5.3 million, which combined for a net decrease in cash of $4.8 million. The Company expended $3.2 million for additions to geothermal properties, principally related to San Jacinto drilling costs. At March 31, 2014, the Company had cash of $17.7 million, of which $16.2 million was held for current use in the San Jacinto project.
"I would like to thank our shareholders for their support during the testing phase at San Jacinto and the strategic process," said Antony Mitchell, Executive Chairman of Ram Power. "We continue to look for additional avenues for maximizing steam flow from San Jacinto and are encouraged with the feedback we have received during the strategic process."
Ram Power will hold its earnings call to discuss the quarter ending March 31, 2014 financial and operating results on Wednesday, May 28, 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 4634739, or on the web at http://bell.media-server.com/m/p/eug9mrvr.
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.
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