Calpine Reports Record 1996 Third Quarter and Nine Months Results.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Nov. 14, 1996--Calpine Corp. (NYSE NYSE See: New York Stock Exchange :CPN CPN Communist Party of Nepal CPN Commercial Property News CPN Civic Practices Network CPN Calling Party Number CPN Community Psychiatric Nurse (UK) CPN Cisco Powered Network CPN Connaitre et Proteger la Nature ), the San Jose-based power company, today announced record earnings for the quarter ended Sept. 30, 1996. Net income was $10.7 million for the quarter ended Sept. 30, 1996, up 114% compared to net income of $5.0 million for the same period in 1995. Earnings per share rose to $0.76 for the quarter, from $0.45 for the same period in 1995. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, earnings per share was $0.93 for the quarter after a one-time non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $0.11 for a non-recurring expense described below. Revenue increased 68% to $70.9 million for the quarter, compared with $42.2 million for the same period last year. For the nine months ended Sept. 30, 1996, net income increased 187% to $15.2 million, compared with $5.3 million for the first nine months of 1995. Earnings per share was $1.19, compared with $0.48 for the same period in 1995. On a pro forma basis, earnings per share was $0.85 for the first nine months of 1996. Revenue for the nine months ended Sept. 30, 1996 was $152.9 million, up 65% from the $92.5 million reported for the same period in 1995. Total assets at Sept. 30, 1996 were $1.0 billion, compared to $554,531 at Dec. 31, 1995. Record earnings for the third quarter and first nine months of 1996 were primarily attributable to Calpine's successful acquisitions program. Since April 1995, Calpine has added more than 360 mw of gas-fired operating facilities, diversifying its generation mix to approximately 50% gas-fired and 50% geothermal ge·o·ther·mal also ge·o·ther·mic adj. Of or relating to the internal heat of the earth. ge . These new gas-fired facilities include: Greenleaf 1 and 2, two 49.5 mw facilities acquired in April 1995; Watsonville, a 28.5 mw facility structured as a long-term operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. in June 1995; King City, a 120 mw facility structured as a long-term operating lease in May 1996; and Gilroy, a 120 mw facility acquired in August 1996. In the quarter, the company recorded a $943,000 after-tax, non-cash reserve related to the company's electricity trading operations, and a one-time, after-tax non-cash charge of $2.2 million in order to reserve for capitalized costs associated with Calpine's attempted acquisition of O'Brien Environmental Energy Company. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The quarter was highlighted by several major events: -0- -- Initial Public Offering: On Sept. 25, 1996, Calpine successfully completed the initial public offering of 18,045,000 shares of common stock. The company's former shareholder, Electrowatt Ltd., sold 12,567,180 shares of common stock, representing its entire ownership in Calpine. On Oct. 17, 1996, Calpine issued an additional 1,793,400 shares of common stock related to the exercise of the underwriter's over-allotment option. In summary, proceeds of the offering were $317.4 million, with Calpine raising net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $109.8 million. This was the largest initial public offering of common stock in the history of the independent power industry. -- Gilroy Acquisition: In August 1996, Calpine acquired the 120 mw Gilroy gas-fired facility for $125.0 million plus certain contingent consideration estimated to be approximately $24.1 million. Located in Gilroy, Calif., the facility sells electricity under a long-term power sales agreement which expires in 2018 and sells thermal energy thermal energy Internal energy of a system in thermodynamic equilibrium (see thermodynamics) by virtue of its temperature. A hot body has more thermal energy than a similar cold body, but a large tub of cold water may have more thermal energy than a cup of boiling to an adjacent food processing Food processing is the set of methods and techniques used to transform raw ingredients into food for consumption by humans or animals. The food processing industry utilises these processes. plant owned by ConAgra. Gilroy's proximity to Calpine's other Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern gas-fired operations provides operating and fuel management opportunities to reduce cost and optimize plant efficiencies. -- Pasadena Merchant Plant: In September 1996, Calpine entered into a series of definitive agreements for the development of a 240 mw gas-fired merchant facility in Pasadena, Texas. This facility will be the first partial merchant plant in the U.S. to be developed by an independent power company and funded with non-recourse project debt. A merchant plant is a power generation plant built to serve a mix of customers in a market area without being fully committed (Law) committed to prison for trial, in distinction from being detained for examination. See also: Fully to long-term power sales agreements. Permitting for the Pasadena facility is underway and construction is expected to begin in January. In August 1996, Calpine entered into a letter of intent with ING Capital Corporation, which has committed to provide approximately $150.0 million of non-recourse construction financing and $100.0 million of long-term financing Long-term financing Liabilities repayable in more than one year plus equity. . The company anticipates financial closing in December. Commercial operation is scheduled to begin in August 1998. When Pasadena comes on-line, it will be the lowest cost producer selling into the Texas open market. -- International Business Development: At the Cerro Prieto geothermal resource in Baja California Baja California, state, Mexico Baja California (Span.: bä`hä kälēfōr`nyä), state (1990 pop. 1,660,855), 27,628 sq mi (71,576 sq km), NW Mexico, on the Baja California peninsula. Mexicali is the capital. , Mexico, Calpine has invested in a steam field development which supplies steam to geothermal power Geothermal power Thermal or electrical power produced from the thermal energy contained in the Earth (geothermal energy). Use of geothermal energy is based thermodynamically on the temperature difference between a mass of subsurface rock and water and a mass plants owned and operated by Mexico's national utility. In Indonesia, negotiations continue for the development of the first of three 110 mw geothermal power plants to be built at the Ulubelu geothermal resource on the island of Sumatra. -0- The company has scheduled its quarterly conference call for today, Nov. 14, at 2:30 PST PST Paroxysmal supraventricular tachycardia, see there . To access the call, or a post-view recording, please contact Katherine Potter at 800/359-5115. Calpine Corp. is a San Jose-based power company, serving customers in the U.S. and international markets. With interests in more than 1,000 mw of power generation facilities, Calpine produces enough energy to meet the electrical needs of more than one million households. Except for the historical financial information contained herein, the matters discussed in this news release may be considered "forward-looking" statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectation of the company and its management. Prospective investors are cautioned that any such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are not guarantees of future performance and involve a number of risks and uncertainties; actual results could differ materially from those indicated by such forward-looking statements. Among the important factors that could cause results to differ materially from those indicated by such forward-looking statements are: (i) that the information is of a preliminary nature and may be subject to further adjustments, (ii) the possible unavailability of financing, (iii) risks related to the development and operation of geothermal energy geothermal energy: see energy, sources of. geothermal energy Power obtained by using heat from the Earth's interior. Most geothermal resources are in regions of active volcanism. resources, (iv) the impact of avoided cost pricing and energy price fluctuations, (v) the impact of curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. , (vi) risks associated with the power project development and acquisition, (vii) start-up risks, (viii) general operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. , (ix) the dependence on third parties, (x) risks associated with international investments, (xi) risks associated with the power marketing business, (xii) changes in government regulation, (xiii) the effects of seismic disturbances Noun 1. seismic disturbance - an instance of agitation of the earth's crust; "the first shock of the earthquake came shortly after noon while workers were at lunch" shock , (xiv) the dependence on senior management, (xv) volatility in the company's stock price, (xvi) fluctuations in quarterly results and seasonality, and (xvii) other risks identified from time to time in the company's reports and registration statements filed with the Securities and Exchange Commission, including the registration statement on Form S-1 related to the company's recent initial public offering and in the company's quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended Sept. 30, 1996. -0-
Calpine Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
Revenue:
Electricity and steam sales $ 68,281 $ 40,883 $140,311 $89,897
Service contract revenue 172 1,947 5,606 5,076
Income (loss) from
unconsolidated investments in
power projects 1,158 (654) 2,871 (2,445)
Interest income on loans
to power projects 1,286 -- 4,103 --
Total revenue 70,897 42,176 152,891 92,528
Cost of revenue:
Plant operating expenses,
depreciation, operating lease
and production
royalties 34,384 20,682 81,219 48,895
Service contract expenses
and other 1,469 1,593 5,953 3,998
Total cost of revenue 35,853 22,275 87,172 52,893
Gross profit 35,044 19,901 65,719 39,635
Project development expenses 1,044 1,379 2,454 2,687
General and administrative
expenses 4,903 2,076 10,777 5,735
Income from operations 29,097 16,446 52,488 31,213
Other (income) expense:
Interest expense 12,434 8,404 31,099 23,520
Other expense and income, net 1,149 (380) (1,628) (1,235)
Income before provision for
income taxes 15,514 8,422 23,017 8,928
Provision for
income taxes 4,782 3,457 7,862 3,665
Net income $ 10,732 $ 4,965 $ 15,155 $ 5,263
Primary earnings per share
Weighted average shares
outstanding 14,070 10,961 12,695 10,964
Primary earnings per share $ 0.76 $ 0.45 $ 1.19 $ 0.48
Fully diluted earnings per share
Weighted average shares
outstanding 14,303 10,961 12,772 10,964
Fully diluted earnings
per share $ 0.75 $ 0.45 $ 1.19 $ 0.48
Supplementary data:
Depreciation and amortization $ 12,348 $ 9,086 $ 27,699 $18,760
Interest expense per indenture $ 13,852 $ 8,724 $ 33,933 $23,966
EBITDA $ 45,139 $ 26,177 $ 86,441 $51,544
EBITDA to total interest expense 3.26 3.00 2.55 2.15
Pro forma earnings per share $ 0.93 $ 0.75 $ 0.85 $ 0.65
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CONTACT: Calpine Corp., San Jose Katherine Potter, 408/995-5115 |
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