Orion(OESX) - 2025 Q3 - Quarterly Report

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]