Orion(OESX) - 2025 Q2 - Quarterly Report

Revenue Performance - Total revenue for the three months ended September 30, 2024, was $19.361 million, a decrease of 6.0% compared to$ 20.586 million for the same period in 2023[80]. - Product revenue decreased by 20.7% to $12.367 million, while service revenue increased by 39.9% to$ 6.994 million, indicating a shift in revenue composition[80]. - The lighting segment revenue decreased by 20.1% to $10.840 million, primarily due to timing variability in larger projects and the completion of a Department of Defense project[83]. - The maintenance segment revenue increased by 4.5% to$ 3.796 million, driven by increased work orders from a major customer[84]. - The electric vehicle (EV) segment revenue increased by 39.8% to $4.725 million, attributed to higher revenue volume from municipalities[85]. - Product revenue decreased by 14.1%, or$ 4.1 million, to $25.1 million for the first six months of fiscal 2025 compared to the same period in fiscal 2024[87]. - Service revenue increased by 58.1%, or$ 5.2 million, to $14.1 million for the first six months of fiscal 2025 compared to the same period in fiscal 2024[87]. - Total revenue increased by 2.8% to$ 39.3 million for the first six months of fiscal 2025 compared to $38.2 million in the same period of fiscal 2024[87]. - The Electric Vehicle Charging Division revenue increased by 85.3%, or$ 3.9 million, to $8.6 million for the first six months of fiscal 2025 compared to the same period in fiscal 2024[92]. Profitability and Expenses - Gross profit for the three months ended September 30, 2024, was$ 4.472 million, a slight decrease of 2.1% from $4.569 million in the prior year[80]. - Gross profit increased by 13.3% to$ 8.8 million, with gross margin improving from 20.3% to 22.3%[87]. - General and administrative expenses decreased by 9.4% to $4.568 million, primarily due to a reduction in earn-out expenses related to Voltrek[81]. - General and administrative expenses decreased by 15.6%, or$ 1.7 million, to $9.1 million for the first six months of fiscal 2025 compared to the same period in fiscal 2024[88]. - Research and development expenses decreased by 14.1% to$ 0.328 million, reflecting cost management efforts[81]. - Research and development expenses decreased by 31.3%, or $0.3 million, to$ 0.6 million for the first six months of fiscal 2025 compared to the same period in fiscal 2024[89]. Net Loss and Operating Performance - The company reported a net loss of $3.625 million for the three months ended September 30, 2024, an improvement of 17.4% compared to a net loss of$ 4.388 million in the same period last year[80]. - The operating loss in the lighting segment improved by 34.7% to $1.281 million, reflecting a higher percentage of product revenue with better gross margins[83]. Cash Flow and Working Capital - Cash used in operating activities was$ 2.5 million for the first six months of fiscal 2025, a significant improvement from $11.3 million in the same period of fiscal 2024[94]. - The company had approximately$ 5.4 million in cash and cash equivalents as of September 30, 2024, an increase from $5.2 million at March 31, 2024[93]. - The company’s net working capital decreased to$ 13.1 million as of September 30, 2024, from $16.7 million as of March 31, 2024[97]. Backlog and Market Conditions - Backlog as of September 30, 2024, totaled$ 11.1 million, down from $22.0 million as of March 31, 2024, indicating a decrease of 49.5%[103]. - The company expects its backlog to be recognized as revenue within one year, excluding contracted maintenance services[103]. - The company’s exposure to market risk has not materially changed since March 31, 2024[108]. Financing and Credit Arrangements - The company executed Amendment No. 2 to the credit agreement, adding a$ 3.525 million mortgage loan facility secured by its office headquarters property[101]. - The maturity date of the Credit Facility was extended from December 29, 2025, to June 30, 2027[101]. - Quarterly installments of $88,125 are due starting October 1, 2024, as part of the new mortgage loan facility[101]. - There were no off-balance sheet arrangements reported by the company[104]. - The company has not made any material changes to its critical accounting policies since the last reporting period[105].