Core Viewpoint - Orion Energy Systems, Inc. is showcasing its high-quality, USA-manufactured LED lighting products at LightFair 2025, emphasizing its commitment to quality and innovation amidst industry challenges [1][3]. Company Overview - Orion specializes in energy-efficient solutions, including LED lighting, EV charging stations, and electrical maintenance services, focusing on helping customers achieve business and environmental goals [5]. - The company offers turnkey design-through-installation solutions for large national customers and works with ESCO and distribution partners [5]. Product Highlights - Orion's LED lighting fixtures are noted for their high quality and performance, contrasting with competitors who are increasing prices and lead times [2]. - The company emphasizes its flexible supply chain, which allows it to meet market demands effectively [2]. Industry Context - Orion's products are not affected by current tariff-related volatility, positioning the company favorably in the market [3]. - The company is committed to manufacturing in Wisconsin, reinforcing its dedication to local production and quality [3]. Investor Engagement - An informal investor gathering will be held on May 6 at LightFair, providing an opportunity for investors to meet the CEO and learn more about the company [4].

Core Viewpoint - Orion Energy Systems, Inc. has appointed Sally A. Washlow as the new CEO, replacing Michael H. Jenkins, to enhance focus on revenue growth and profitability [1][3]. Leadership Changes - Sally A. Washlow, previously a board member, has been appointed as CEO, bringing over 25 years of experience in business growth and operational excellence [1][3][5]. - Scott Green has been promoted to Chief Operating Officer, responsible for sales and project management functions, with nearly 30 years of experience in the lighting industry [2][4]. Financial Outlook - Orion expects its revenue for the fiscal year ending March 31, 2025, to be near the midpoint of its guidance range of $77 million to $83 million [2]. Strategic Focus - The Board believes new leadership is essential for executing revenue growth and cost containment initiatives, aiming to return the company to consistent profitability [3]. - Ms. Washlow expressed confidence in Orion's future, highlighting strong positions in LED lighting, EV charging stations, and electrical maintenance businesses [4]. Company Background - Orion Energy Systems specializes in energy-efficient solutions, including LED lighting and EV charging stations, and aims to help customers achieve business and environmental goals [7].

Core Points - Orion Energy Systems, Inc. has appointed Sally A. Washlow as the new CEO, replacing Michael H. Jenkins, to enhance focus on revenue growth and profitability [1][3] - Scott Green has been promoted to Chief Operating Officer, responsible for sales and project management functions [2][4] - The company expects revenue to be near the midpoint of its $77 million to $83 million outlook for the fiscal year ending March 31, 2025 [2] Leadership Changes - Sally A. Washlow brings over 25 years of experience in driving business growth and operational excellence, having previously served as President and CEO of Cobra Electronics [3][5] - Scott Green has nearly 30 years of experience in the lighting industry and joined Orion in 2013 [4] Company Outlook - Washlow believes Orion has a strong foundation in LED lighting, EV charging stations, and electrical maintenance, aiming to enhance profitability and generate positive cash flow [4] - The company specializes in energy-efficient solutions, including LED lighting and EV charging, targeting large national customers [7]

Core Insights - Orion Energy Systems, Inc. has initiated an on-site LED lighting installation project for a federal government agency, with current purchase orders amounting to approximately $3 million and potential for project expansion [1][2][3] Group 1: Project Details - The project involves a turnkey solution for a facility in the Southeastern United States, including the installation of Buy American Act-compliant LED lighting retrofit systems and significant upgrades to the facility's electrical infrastructure [2] - The project is expected to enhance the facility's energy efficiency and support modernization initiatives [2] Group 2: Company Background and Relationships - Orion has a long-standing relationship of over 20 years with the federal entity, focusing on improving energy efficiency in government facilities [3] - The company has previously completed a $9.6 million LED lighting retrofit project for the Department of Defense in Europe, showcasing its experience in the government sector [3][4] Group 3: Company Offerings - Orion specializes in energy efficiency and clean tech solutions, including LED lighting, controls, maintenance services, and electric vehicle charging solutions [4] - The company is committed to providing turnkey design-through-installation solutions for large national customers, aiming to help them achieve business and environmental goals [4]

Financial Data and Key Metrics Changes - Orion's Q3 '25 revenue was $19.6 million, down from $26 million in Q3 '24 and $19.4 million in the previous quarter, impacted by project timing and reduced activity in the lighting distribution channel [33] - The blended gross margin improved by 490 basis points to 29.4% from 24.5% in Q3 '24, marking the second highest quarterly rate in 7 years [10][35] - Operating expenses decreased by 16.9% to $7 million in Q3 '25 from $8.4 million in Q3 '24, primarily due to lower fixed costs [40] - Net operating loss improved to $1.5 million or $0.05 per share from $2.3 million or $0.07 per share in Q3 '24 [41] - Cash generated from operations was $3.8 million in Q3 '25, with a cash balance increasing to $7.5 million from $5.2 million at the prior year-end [42] Business Line Data and Key Metrics Changes - The Lighting business saw gross profit margins of 30.1% in Q3 '25, up from 27.4% in Q3 '24, despite lower revenues [36] - The Maintenance business gross margin rebounded over 2,000 basis points to 26.4% in Q3 '25, up from 6.2% in Q3 '24 [22] - Revenue from the EV Charging segment was $2.4 million in Q3 '25, down from $2.8 million in Q3 '24, but year-to-date revenue is up 48% [34] Market Data and Key Metrics Changes - The lighting industry is facing headwinds due to higher interest rates and a slowdown in new commercial construction projects [12] - There are now 14 states adopting bans on fluorescent lighting fixtures, which is expected to drive demand for LED retrofits [14] Company Strategy and Development Direction - The company is reorganizing its operations into two commercial business units: Solutions and Partners, to better serve customer needs and enhance revenue opportunities [24][25] - Orion has landed 7 new LED lighting contracts with revenue potential of $100 million to $200 million over the next 5 years, indicating a focus on growth in LED lighting and EV charging [7][29] - The company aims to achieve double-digit revenue growth and positive adjusted EBITDA in fiscal 2026, with a more specific revenue outlook to be provided in June [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the disappointing revenue performance but expressed confidence in the company's positioning for improved performance in fiscal '26 [6] - The company is focused on resetting costs and breakeven points to ensure profitability despite potential project delays [56] - Management remains optimistic about growth prospects in the EV Charging business, despite uncertainties regarding federal funding [17][19] Other Important Information - Management and the Board agreed to forgo 10% of their salaries and retainers until business performance improves [107][110] - The company is in the initial 180-day period to regain compliance with NASDAQ listing requirements, with a potential extension if necessary [113][114] Q&A Session Summary Question: Clarification on the $100 million to $200 million pipeline - Management confirmed that the $100 million to $200 million represents closed-won business, with expectations to actualize revenue in that range over the next 5 years [49] Question: Inventory composition and potential write-offs - Management stated that inventory has been substantially reduced and is productive, with no significant write-offs expected from restructuring [61] Question: Targeting new customer wins in Maintenance - Management indicated that new customer wins have been primarily internally generated, with a bolstered sales team aiding in this effort [64] Question: Assumptions driving the $100 million to $200 million revenue potential - Management explained that the range reflects project timing and rollout assumptions, with many opportunities on the lighting side [70] Question: Impact of project delays - Management noted that delays are typically influenced by customer readiness and macroeconomic factors rather than pricing [74] Question: Update on federal government projects - Management reported no direct impacts from federal funding on current projects, with ongoing opportunities in government lighting projects [81][83]

Revenue Performance - Total revenue for the three months ended December 31, 2024, decreased by 24.6% to $19.584 million compared to $25.971 million in the same period of 2023[102] - Product revenue decreased by 15.9%, or $2.7 million, while service revenue decreased by 41.1%, or $3.7 million, due to lower volume across all segments[102] - Lighting segment revenue decreased by 28.7%, or $5.3 million, primarily due to the conclusion of a significant project for the U.S. Department of Defense[106] - Maintenance segment revenue decreased by 14.8%, or $0.7 million, due to reduced work orders from a major customer, but operating income increased by 129.2%[107] - Electric Vehicle (EV) segment revenue decreased by 13.2%, or $0.4 million, attributed to lower revenue volume from municipalities[109] - Product revenue decreased by 14.7%, or $6.8 million, to $39.4 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[110] - Service revenue increased by 8.4%, or $1.5 million, to $19.4 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[110] - Total revenue decreased by 8.3%, or $5.3 million, to $58.9 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[110] - The lighting division revenue decreased by 17.7%, or $7.9 million, to $36.8 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[116] Expense Management - General and administrative expenses decreased by 21.4%, or $1.1 million, primarily due to reduced acquisition earn-out expenses and restructuring[103] - Research and development expenses decreased by 17.8%, or $0.1 million, reflecting cost management efforts[104] - General and administrative expenses decreased by 17.3%, or $2.7 million, to $13.0 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[111] - Sales and marketing expenses decreased by 11.6%, or $1.1 million, to $8.6 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[113] - Research and development expenses decreased by 30.6%, or $0.4 million, to $0.8 million for the first nine months of fiscal 2025 compared to the same period in fiscal 2024[114] Cash Flow and Financial Position - Cash provided by operating activities was $1.3 million for the first nine months of fiscal 2025, compared to cash used of $10.3 million in the same period of fiscal 2024[123] - The company had approximately $7.5 million in cash and cash equivalents as of December 31, 2024, an increase from $5.2 million at March 31, 2024[120] Backlog and Future Revenue - As of March 31, 2024, the backlog totaled $22.0 million, expected to be recognized as revenue within one year[136] - The backlog decreased to $14.4 million as of December 31, 2024[136] Debt and Credit Facilities - Amendment No. 2 added a $3.525 million mortgage loan facility secured by the office headquarters property in Manitowoc, Wisconsin[134] - Quarterly installments of $88,125 are due starting October 1, 2024, as part of the credit agreement[134] - Amendment No. 3 extended the maturity date of the Credit Facility from December 29, 2025, to June 30, 2027[135] Accounting and Market Risk - There are no off-balance sheet arrangements reported[137] - No material changes in accounting policies were noted for the quarter ended December 31, 2024[138] - The company’s exposure to market risk has not materially changed since March 31, 2024[141] Segment Operations - The company operates in three segments: Lighting, Maintenance, and Electric Vehicle Charging, with each segment's performance regularly reviewed by the chief operating decision maker[100] - Gross margin increased from 24.5% in Q3 fiscal 2024 to 29.4% in Q3 fiscal 2025, primarily due to improved margins in the lighting and maintenance segments[102]

Financial Performance - Orion Energy Systems reported a quarterly loss of $0.05 per share, better than the Zacks Consensus Estimate of a loss of $0.06, and an improvement from a loss of $0.07 per share a year ago, representing an earnings surprise of 16.67% [1] - The company posted revenues of $19.58 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 28.66%, compared to year-ago revenues of $25.97 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Stock Performance - Orion Energy Systems shares have increased approximately 3.7% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is -$0.02 on revenues of $32.56 million, and -$0.30 on revenues of $99.28 million for the current fiscal year [7] - The outlook for the industry, specifically the Building Products - Lighting sector, is currently in the top 35% of Zacks industries, suggesting a favorable environment for stock performance [8]

Core Viewpoint - Orion Energy Systems, Inc. reported a decline in revenue for Q3'25, with total revenue of $19.6 million, down 25% from $26.0 million in Q3'24, and updated its FY 2025 revenue outlook to a range of $77 million to $83 million due to project delays and market softness [1][5][11]. Financial Performance - Q3'25 LED lighting revenue was $13.2 million, a decrease of 29% from $18.5 million in Q3'24 [1][15]. - EV charging revenue for Q3'25 was $2.4 million, down 13% from $2.8 million in Q3'24, but year-to-date revenue increased by 48% to approximately $11.0 million compared to $7.4 million in YTD'24 [1][20]. - Maintenance revenue in Q3'25 was $3.9 million, down 15% from $4.6 million in Q3'24, but improved sequentially from $3.8 million in Q2'25 [1][20]. - Gross profit for Q3'25 was $5.8 million, with a gross margin of 29.4%, up from 24.5% in Q3'24, reflecting improved profitability in maintenance and LED lighting [1][15][17]. Cost Management and Operational Efficiency - The company has reduced its annual revenue breakeven point by 25% to a range of $78 million to $85 million, down from approximately $105 million to $115 million over the past two years [5][6]. - Orion achieved a positive adjusted EBITDA in Q3'25 and improved its cash position to $7.5 million, up from $5.4 million in Q2'25 [6][21]. - Operating expenses decreased by $1.4 million to $7.0 million in Q3'25, attributed to reductions in fixed costs and compensation-related expenses [16]. Business Development and Future Outlook - The company added seven new customers/projects with an estimated revenue potential of $100 million to $200 million over the next five years [4][5]. - Orion expects to complete $14 million to $24 million in FY2026 from these new business opportunities, enhancing visibility for future growth [5][14]. - The company plans to reorganize its business into two Commercial Business Units (CBUs) to better align sales, marketing, and product development activities [9][10]. Revenue Outlook - Orion's FY'25 revenue outlook has been adjusted to $77 million to $83 million, with Q4'25 revenue expected to be between $19 million and $25 million [11][12]. - Recent contracts expected to contribute to future revenue include a $13 million LED lighting project for a major U.S. university and a $5 million to $10 million contract with a nationwide Energy Service Company [12][13].

Core Viewpoint - Orion Energy Systems, Inc. reported a decline in revenue for Q3'25 and updated its FY'25 revenue outlook to a range of $77 million to $83 million, reflecting project delays and market softness, but highlighted improvements in cost structure and gross margins [1][9][13]. Financial Performance - Q3'25 total revenue was $19.6 million, down 29% from $26.0 million in Q3'24, with LED lighting revenue at $13.2 million, EV charging revenue at $2.4 million, and maintenance revenue at $3.9 million [2][17]. - Gross profit for Q3'25 was $5.8 million, with a gross margin of 29.4%, an increase of 490 basis points from 24.5% in Q3'24 [2][17]. - Net loss for Q3'25 improved to $(1.5) million, or $(0.05) per share, compared to a net loss of $(2.3) million, or $(0.07) per share in Q3'24 [2][19]. Business Developments - The company added seven new customers/projects with an estimated revenue potential of $100 million to $200 million over the next five years, enhancing its project pipeline [5][6]. - Orion plans to reorganize its business into two Commercial Business Units (CBUs) to better align sales, marketing, and product development activities [11][12]. - The company expects to achieve double-digit revenue growth and positive Adjusted EBITDA performance in FY'26, supported by a strong project backlog and new maintenance service opportunities [16]. Cost Management - Orion has reduced its annual revenue breakeven point by 25% to a range of $78 million to $85 million, down from approximately $105 million to $115 million over the past two years [6][8]. - Operating expenses decreased by $1.4 million to $7.0 million in Q3'25, driven by fixed cost reductions and a decrease in Voltrek earnout expense accruals [18][19]. - The company achieved positive cash flow from operating activities of $3.8 million in Q3'25, with cash and liquidity position improving to $7.5 million [22][24]. Market Outlook - Orion's FY'25 revenue outlook reflects the impact of project timing changes, with expected Q4'25 revenue between $19 million and $25 million [13]. - The company anticipates a strong year-end close for its Voltrek EV charging segment, benefiting from delayed projects related to Eversource Energy's 'EV Make Ready' program [10][13]. - Recent contracts expected to contribute to future revenue include a multi-year LED lighting retrofit contract worth $12 million to $18 million and a contract extension valued at $23 million to $30 million [14][20].

Revenue Performance - Q3'25 revenue was $19.6M, a decrease of 29% from $26.0M in Q3'24, with year-to-date revenue at $58.9M compared to $64.2M in YTD'24[4]. - Orion has reduced its FY'25 revenue outlook to $77M - $83M, reflecting project delays and reduced activity in the distribution channel[12][7]. - The company expects Q4'25 revenue to be between $19M - $25M, which would be in line with or better than the first three quarters of FY'25[12]. - EV charging solutions revenue grew 48% year-to-date to approximately $11.0M compared to $7.4M in YTD'24[8][16]. - Maintenance services revenue was $3.9M in Q3'25, down from $4.6M in Q3'24, but improved sequentially from $3.8M in Q2'25[17]. Profitability and Loss - Net loss for Q3'25 was $1.5M, or $(0.05) per share, an improvement from a net loss of $2.3M, or $(0.07) per share in Q3'24[20]. - Net loss for the three months ended December 31, 2024, was $1.508M, an improvement from a net loss of $2.256M in Q3 2023[32]. - Net loss for the nine months ended December 31, 2024, was $8,890 thousand, an improvement from a loss of $13,281 thousand in the same period of 2023, representing a 33.3% reduction in losses[35]. Cash Flow and Liquidity - Adjusted EBITDA for Q3'25 was slightly positive, with cash position increasing to $7.5M from $5.4M in Q2'25[6][21]. - Orion's financial liquidity improved to $15.6M at December 31, 2024, compared to $13.1M at September 30, 2024, and $15.3M at March 31, 2024[23]. - Net cash provided by operating activities for the nine months ended December 31, 2024, was $1,298 thousand, compared to a cash outflow of $10,267 thousand in the prior year, indicating a significant turnaround[35]. - Cash and cash equivalents at the end of the period increased to $7,497 thousand from $4,967 thousand, reflecting a net increase of $2,342 thousand[35]. Operational Changes - Orion plans to reorganize its business into two Commercial Business Units to enhance focus and efficiency, with full implementation expected by April 1, 2025[10][11]. - Orion added seven new customers/projects with an estimated revenue potential of $100M to $200M over the next five years[5][10]. Balance Sheet and Assets - Total assets decreased to $52.713M at December 31, 2024, from $63.169M at March 31, 2024[34]. - Total liabilities decreased to $38.238M at December 31, 2024, from $40.627M at March 31, 2024[34]. - Orion's total shareholders' equity decreased to $14.475M at December 31, 2024, from $22.542M at March 31, 2024[34]. Credit and Financing - Orion extended its bank credit facility with Bank of America by 18 months to June 30, 2027, indicating confidence in its liquidity position[23]. - Proceeds from long-term debt amounted to $3,525 thousand, while payments of revolving credit facility were $2,500 thousand, indicating active financing management[35]. Inventory and Receivables - Accounts receivable increased by $1,723 thousand during the nine months ended December 31, 2024, compared to a decrease of $2,156 thousand in the same period of 2023[35]. - Inventories increased by $4,462 thousand for the nine months ended December 31, 2024, contrasting with a decrease of $2,963 thousand in the prior year[35]. Employee Compensation and Credit Quality - Stock-based compensation for the nine months ended December 31, 2024, was $822 thousand, up from $681 thousand in the same period of 2023, reflecting increased employee incentives[35]. - The company reported a provision for credit losses of $65 thousand for the nine months ended December 31, 2024, down from $170 thousand in the previous year, indicating improved credit quality[35].