MANITOWOC, Wis., (GLOBE NEWSWIRE) — Please note that the link for the Live Call Registration has been corrected from the release published today, August 8th, by Orion Energy Systems, Inc. (NASDAQ: OESX) The corrected release follows:
Orion Energy Systems, Inc. (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 2024 first quarter (Q1’24) ended June 30, 2023. Orion will hold an investor call today at 10:00 a.m. ET – details below.
| Q1 Financial Summary | Prior Three Quarters | |||||||||
| $ in millions except per share figures |
Q1’24 | Q1’23 | Change | Q4’23 | Q3’23 | Q2’23 | ||||
| Revenue | $17.6 | $17.9 | ($0.3) | $21.6 | $20.3 | $17.6 | ||||
| Gross Profit | $3.2 | $3.6 | ($0.4) | $4.7 | $4.8 | $4.4 | ||||
| Gross Profit % | 18.0% | 19.8% | (180bps) | 21.9% | 23.6% | 25.3% | ||||
| Net Loss (1) | ($6.6) | ($2.8) | ($3.8) | ($5.1) | ($24.1) | ($2.3) | ||||
| Net Loss per share (1) | ($0.21) | ($0.09) | ($0.12) | ($0.16) | ($0.75) | ($0.08) | ||||
| Adjusted EBITDA (2) | ($4.4) | ($2.9) | ($1.5) | ($1.6) | ($1.6) | ($1.5) | ||||
| Cash & Equivalents | $8.2 | $9.4 | ($1.2) | $16.0 | $8.1 | $12.5 | ||||
| (1) Net Loss and EPS reflect $17.8M non-cash tax charge to record a valuation allowance against Deferred Tax Assets in Q3’23 and a $1.5M, $2.5M, and $1.1M accrual for the earnout associated with the Voltrek acquisition in Q3’23, Q4’23, and Q1’24, respectively. (2) See Adjusted EBITDA reconciliation below. |
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Financial Highlights
- Lighting revenues were $12.6M in Q1’24, compared to $13.9M in Q1’23, reflecting variability in timing of larger projects. Several larger projects for national customers are now ramping in Q2’24. Decreases in LED Lighting and maintenance services were offset by revenue from the Voltrek EV charging acquisition completed in Q3’23.
- LED projects that have begun or are ramping in Q2 include a retrofit project in Germany for the Department of Defense; an outdoor lighting project for Orion’s largest customer; and an LED lighting project in the warehouse/logistics sector, among others.
- Maintenance services revenues were $3.8M in Q1’24 versus $4.1M in Q1’23. Management is focused on offsetting inflation pressures through pricing actions and increasing the percent of self-perform work to improve margin performance.
- EV charging solutions revenue was $1.2 in Q1’24 versus no revenue in the prior year quarter. During the quarter, the business focused on integration and personnel recruiting processes designed to position the business for accelerating growth on a national basis. A significant pipeline of EV opportunities has been built and strong acceleration is expected in Q2.
- Orion’s Q1’24 net loss was ($6.6M), or ($0.21) per share, compared to ($2.8M) or ($0.09) per share in Q1’23.
- Orion closed Q1’24 with $16.8M of financial liquidity, comprised of $8.2M of cash and cash equivalents and $8.6M net availability on its credit facility.
CEO Commentary
Orion CEO Mike Jenkins commented, “We remain confident in our fiscal 2024 outlook for revenue growth of 30% or more. Given our modest size and the variability in timing of larger projects, we do expect continued fluctuation of our revenues on a quarter to quarter basis. However, we have taken steps to diversify our revenue sources in three complementary areas. We believe this positions us to build upon our strong base of long-term customer relationships, enhancing the value we are able to provide to them and to our shareholders.
“We are pleased with our ability to enhance the operating infrastructure for our EV charging solutions business which positions us well to grow this business as we move forward. While Q1’24 revenues declined on a sequential basis, Voltrek’s pipeline of project opportunities has grown substantially over the past few months, supporting our expectation for significant growth in FY 2024. Our maintenance services business also declined slightly in the period as we worked to address pricing issues and complete our national service footprint.
“We entered Q2’23 with the launch of installation activity for our $9.6M turnkey LED lighting retrofit contract for the DoD in Europe, and we expect this project to be largely complete by the end of our fiscal year. We have several other larger retrofit projects anticipated for this year, and we expect continued growth within our distribution business via Energy Service Companies (ESCOs) and electrical contractors, particularly due to the recent launch of our new TritonPro and expanded exterior product lines of LED fixtures. The Triton line combines high-quality components and proprietary Orion design at a price point that is more appealing in these channels. Our new expanded outdoor product line also better positions Orion with a broader product offering.
“Last week, we announced the finalization of a 3-year preventative lighting maintenance contract with an existing retail customer providing maintenance services to approximately 2,000 locations nationwide. Orion initiated this work in February 2023 and reached full scale in July. The overall contract was executed in early Q2 with Orion being selected due to our national footprint and our proven ability to organize, manage and execute across all 50 states.
“Orion is committed to providing the highest quality products and services to support our customers in achieving their business and environmental goals. We differentiate our offerings with smart design, high quality components and our unique turnkey project capabilities that range from initial site designs and custom products through to installation, system commissioning and long-term maintenance services.
“What makes us unique is our ability to deliver highly customized, high-quality solutions at hundreds or even thousands of national locations, all with one point of contact and accountability. We believe this high value offering of complementary solutions and technical expertise will become even more attractive to customers facing the growing complexity of LED lighting, IoT solutions, EV charging and other electrical needs and the ongoing maintenance they require.”
Business Outlook
- Orion continues to expect FY 2024 revenue growth of 30% or more to approximately $100M, generally building as the year progresses with Q2’24 and the second half of the year, being stronger than Q1’24 and the first half of the year.
Financial Results
Orion’s Q1’24 revenue was $17.6M vs. $17.9M in fiscal Q1’23, primarily reflecting the variability in timing of certain LED lighting projects. Several larger projects have commenced in early Q2, including a Department of Defense project in Europe and an outdoor lighting project for Orion’s largest customer.
Gross profit was $3.2M, as compared to $3.6M in Q1’23, and gross profit percentage was 18.0% versus 19.8% in the prior-year period. The gross profit percentage on products increased to 26.4% from 23.0% in Q1’23, primarily due to product sales mix and improved absorption of fixed costs, while services margin declined to -11.2% from 10.3% in the prior-year period. The negative services margin was principally the result of legacy maintenance services contracts from the Stay-Lite Lighting acquisition. Certain of Stay-Lite’s contracts are multi-year contracts and have pricing that is insufficient to absorb cost increases that have occurred in the past year. Orion is in the process of implementing price increases that reflect the current environment for new and existing contracts as they renew.
Total operating expenses increased to $9.6M in Q1’24 from $7.2M in Q1’23, mainly due to increased G&A expenses of $2.0M, principally reflecting the addition of Voltrek operations since Q3’22, including costs of $1.1M for the earnout accrual. Operating costs were level compared to Q4’23, which was the first full quarter of consolidating Voltrek operations.
Orion’s Q1’24 net loss was ($6.6M), or ($0.21) per share, including a $1.1M accrual for the earnout associated with the Voltrek acquisition versus a net loss of ($2.8M), or ($0.09) per share in Q1’23.
Balance Sheet and Cash Flow
Orion ended Q1’24 with $20.6M of working capital, including $8.2M of cash and cash equivalents, $14.6M of accounts receivables, and $17.7M of inventory. Orion’s quarter-end liquidity was $16.8M, including cash and $8.6M of availability on its credit facility. The company had $10.0M of borrowings outstanding on its credit facility at quarter end.
Orion used cash of $7.3M in operating activities in Q1’24 due to the operating results during the quarter and amounts paid during the quarter for a significant project that was completed in Q4’23. Orion believes it is in a good position to fund its operations and growth objectives across its business segments through FY 2024.
| Webcast/Call Detail | |
| Date / Time: | Wednesday, August 9th at 10:00 a.m. ET |
| Live Call Registration: | https://register.vevent.com/register/BI18c3046d398145808d736f4680aaa403 |
| Live call participants must pre-register using the URL above to receive the dial-in information. Simply re-register if you lose the dial-in or PIN. | |
| Webcast / Replay: | https://edge.media-server.com/mmc/p/65gxakct |
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.