Orion Reports FY 2023 Revenue of $77M

MANITOWOC, Wis., (GLOBE NEWSWIRE) — (NASDAQ: OESX) (Orion Lighting), a provider of energy-efficient LED lighting, maintenance services and electric vehicle (EV) charging station solutions, today reported results for its fiscal 2023 fourth quarter (Q4’23) and full year (FY 2023) ended March 31, 2023. Orion will hold an investor call today at 10:00 a.m. ET – details below.

Q4 Financial Summary 
$ in millions except 
per share figures 
Q4’23  Q4’22  Change  FY 2022  Change 
Revenue   $21.6  $22.1  ($0.5)  $124.4  ($47.0) 
Gross profit   $4.7  $5.3  ($0.6)  $33.9  ($16.4) 
Gross profit %  21.9%  23.8%  (190 bps)  27.3%  (470 bps) 
Net (loss) (1)(2)  ($5.1)  ($1.2)  ($3.9)  $6.1  ($40.3) 
Net (loss) per share 
($0.16)  ($0.04)  ($0.12)  $0.19  ($1.27) 
Adjusted EBITDA (3)  ($1.6)  ($0.4)  ($1.2)  $9.7  ($17.3) 
Cash & cash 
$16.0  $14.5  $1.5  $14.5  $1.5 
(1) Q4’23 Net Loss and net loss per share reflect a $2.5M Voltrek earnout accrual.
(2) FY 2023 Net Loss and net loss per share reflect a $17.8M non-cash charge to record a valuation allowance against Deferred Tax Assets and a $4.0M Voltrek earnout accrual.
(3) See Adjusted EBITDA reconciliation below. 

Financial Highlights 

  • As expected, FY 2023 revenue of $77.4M declined from $124.4M in FY 2022, due primarily to lower revenue from the company’s largest customer and a global online retailer, as well as from delays in the start of certain large LED retrofit projects, some of which commenced in Q4’23 and Q1’24. 
  • Orion grew FY 2023 revenue outside of its largest customer and a global online retailer by approximately 11% versus FY 2022. This performance reflected progress in diversifying Orion’s customer base and revenues across its LED Lighting, electrical maintenance, and EV charging solutions businesses. 
  • Maintenance services revenue rose 152% to $14.6M in FY 2023 versus $5.8M in FY 2022. 
  • EV charging solutions contributed initial revenue of $6.3M in Orion’s FY 2023 second half, reflecting the Voltrek acquisition in the first week of Q3’23. 
  • Orion’s FY 2023 net loss of ($34.3M), or ($1.08) per share, included a $17.8M non-cash tax charge to record a valuation allowance against Deferred Tax Assets and a $4.0M accrual for the earnout associated with the Voltrek acquisition. 
  • Orion closed FY 2023 with $23.2M of financial liquidity, comprised of $16.0M of cash and cash equivalents and $7.2M available on its credit facility. 

CEO Commentary
Orion CEO Mike Jenkins commented, “Orion finished FY 2023 with our strongest quarter of the year and as our FY 2024 outlook suggests, we believe our business is poised for solid growth in the coming quarters.

“We believe Orion is now well positioned with a more diversified base of solutions and customers. Demand is being driven by the substantial cost savings and environmental benefits we deliver, as well as our deep expertise and proven ability to deliver complex turnkey product and service solutions to enterprises with hundreds or even thousands of locations. 

“Our customers are increasingly challenged by the growing complexity of integrating LED lighting, controls and Internet of Things solutions, pressing new demands for EV charging infrastructure, and the technical expertise required to integrate and maintain these electrical systems. 

“Building off our core expertise in lighting and controls, over the last two years Orion has diversified its business to include electrical maintenance solutions – both preventative and reactive – and also expanded into the rapidly growing market for commercial EV charging solutions. We are working to build out the national capabilities of these new businesses, both of which we expect to play an important role in our growth in FY 2024 and years to come. 

“Orion’s maintenance services are an ideal complement to our LED lighting and EV charging businesses that should provide a growing base of annual recurring service revenue, as we build out our customer and service network. Demand for EV charging solutions is growing rapidly as enterprises of all types work to assess their current and future needs. Our Voltrek acquisition is off to a very strong start as the business delivered revenue of $6.3M in the second half of FY 2023, easily outpacing our goal of $3-$5M. We anticipate very substantial growth at Voltrek over the next several years and are working to leverage Orion’s national service and project management capabilities and reach in order to provide turnkey EV charging solutions across the country. We are already in dialogue with a growing base of large national accounts and expect to see the initial benefit of our investments in the second half of FY 2024. 

“In summary, Orion’s mission is to help our customers achieve their energy efficiency and environmental goals. We approach this mission with a customer for life commitment, rooted in the highest levels of product and service quality available in the markets we serve. Our now diverse business portfolio of LED lighting, lighting and electrical maintenance, and EV charging solutions positions us as a trusted solution provider to our customers.” 

Business Outlook 

  • Orion continues to expect FY 2024 revenue growth of 30% or more to approximately $100M, with a greater proportion of revenue expected in the second half. 
  • Orion’s FY 2024 revenue guidance is based on approximately $34M in aggregate revenue expected from maintenance services and EV charging solutions and the balance from LED lighting products and solutions, including national account projects, ESCO partners and distribution channel sales. 

Financial Results
Orion’s Q4’23 revenue was $21.6M compared to $22.1M in Q4’22 and $20.3M in Q3’23, in line with expected year-end project activity. FY 2023 revenue decreased to $77.4M versus $124.4M in FY 2022, due primarily to the expected year-over-year decrease in activity with Orion’s largest customer and a global online retailer, as well as delays in the activation of certain large LED lighting projects. Excluding Orion’s largest customer and a global online retailer, Orion was able to grow FY 2023 revenues from new and existing customers by $6.5M or 11% over FY 2022.

Gross profit was $4.7M in Q4’23, compared to $5.3M in Q4’22, and gross profit percentage was 21.9% in Q4’23 vs. 23.8% in Q4’22, principally due to changes in the product and services mix. FY 2023 Gross profit was $17.5M compared to $33.9M in FY 2022, primarily due to lower revenue and the impact of certain fixed costs on the gross profit percentage. 

Total operating expenses increased to $9.6M in Q4’23 vs. $6.6M in Q4’22, primarily due to acquisition-related costs of $2.5M for earnout accrual and increased G&A expenses of $0.9M, reflecting the addition of Voltrek operations since Q3’22. Operating expenses were $33.5M in FY 2023, as compared to $25.5M in FY 2022, reflecting Voltrek acquisition costs of $4.8M, as well as higher G&A expenses (of $3.8M) related to Voltrek and Stay-Lite Lighting, which was acquired in Q4’22. 

Orion reported a Q4’23 net loss of ($5.1M), or ($0.16) per share versus a Q4’22 net loss of ($1.2M), or ($0.04) per share, primarily reflecting higher operating expenses as discussed above. Orion reported a FY 2023 net loss of ($34.2M), or ($1.08) per share, versus FY 2022 net income of $6.1M, or $0.19 per share, reflecting a $17.8M non-cash valuation allowance charge against Deferred Tax Assets, as well as lower revenue and higher operating costs in FY 2023. 

Balance Sheet and Cash Flow
Orion ended FY 2023 with $25.9M of working capital, including $16.0M of cash and cash equivalents and $18.2M of inventory. Orion’s year-end liquidity was $23.2M, including cash and $7.2M of availability on its credit facility. Orion had $10M of borrowings outstanding on its credit facility at year-end FY 2023. 

Orion used cash of $2.3M in operating activities in FY 2023 with positive cash provided from operating activities in Q4’23, due to the timing of certain projects and strong cash receipts near fiscal year end. Orion plans to reduce LED lighting inventory by approximately [$5M] in the first half of FY 2024, reflecting a return to more normal supply chain conditions. Orion believes it is in good position to fund its operations and growth objectives across its business segments through FY 2024. 

Webcast/Call Detail
Date / Time:     Tuesday, June 6th at 10:00 a.m. ET 
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Webcast / Replay:     https://edge.media-server.com/mmc/p/zt4f6z4k 

About Orion Energy Systems
Orion provides energy efficiency and clean tech solutions, including LED lighting and controls, maintenance services and electrical vehicle (EV) charging solutions. Orion specializes in turnkey design-through-installation solutions for large national customers, with a commitment to helping customers achieve their business and environmental goals with healthy, safe and sustainable solutions that reduce their carbon footprint and enhance business performance.

Orion is committed to operating responsibly throughout all areas of our organization. Learn more about our ESG priorities, goals and progress here or visit our website at www.orionlighting.com

Non-GAAP Measures
In addition to the GAAP results included in this presentation, Orion has also included the non-GAAP measures, EBITDA (earnings before interest, taxes, depreciation and amortization), and Adjusted EBITDA (EBITDA adjusted for stock-based compensation, payroll tax credit, and acquisition expenses). The Company has provided these non-GAAP measures to help investors better understand its core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to its competitors. Among other things, management uses these non-GAAP measures to evaluate performance of the business and believes these measurements enable it to make better period-to-period evaluations of the financial performance of core business operations. The non-GAAP measurements are intended only as a supplement to the comparable GAAP measurements and Orion compensates for the limitations inherent in the use of non-GAAP measurements by using GAAP measures in conjunction with the non-GAAP measurements. As a result, investors should consider these non-GAAP measurements in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with generally accepted accounting principles.

Consistent with Regulation G under the U.S. federal securities laws, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measures, and this reconciliation is located under the heading “Unaudited EBITDA Reconciliation” following the Unaudited Condensed Consolidated Statements of Cash Flows included in this press release. 

Learn more here.