Orion(US:OESX)2025-11-05 21:17Revenue Performance - Product revenue increased by 3.6% to $12.813 million, while service revenue rose by 1.6% to $7.106 million for the three months ended September 30, 2025[129]. - Total revenue for the same period reached $19.919 million, reflecting a 2.9% increase compared to $19.361 million in the prior year[129]. - Total revenue for the first six months of FY2026 was $39.494 million, a 0.6% increase from $39.267 million in FY2025, driven by a 4.7% increase in product revenue[138]. - Service revenue decreased by 6.8%, or $1.0 million, to $13.169 million in the first six months of FY2026 compared to FY2025[138]. Profitability and Margins - Gross profit increased by 38.1% to $6.177 million, with gross margin improving from 23.1% to 31.0% due to higher revenue in the EV and maintenance segments[129]. - Gross profit increased by 37.7% to $12.078 million in the first six months of FY2026, with gross margin improving from 22.3% to 30.6%[138]. Expenses - Cost of service revenue decreased by 17.3% to $4.965 million, primarily due to restructuring efforts made in fiscal 2025[129]. - General and administrative expenses decreased by 16.5% to $3.812 million, attributed to the absence of Voltrek earnout expenses and reduced wages[130]. - Sales and marketing expenses fell by 16.6% to $2.376 million, mainly due to decreased wages and benefits from restructuring[131]. - Research and development expenses decreased by 29.6% to $231,000 compared to the previous year[132]. Segment Performance - Lighting segment revenue decreased by 1.6%, or $0.2 million, to $10.664 million in Q2 FY2026 compared to Q2 FY2025, with an operating loss reduced by 33.4% to $853 thousand[134]. - Maintenance segment revenue increased by 18.3%, or $0.7 million, to $4.491 million in Q2 FY2026, with operating income rising by 257.4% to $554 thousand[135]. - EV segment revenue increased by 0.8%, or $39 thousand, to $4.764 million in Q2 FY2026, with operating income improving by 275.3% to $1.059 million[136]. - Maintenance segment revenue for the first six months of FY2026 increased by 19.2%, or $1.4 million, to $8.488 million, with operating income rising to $683 thousand[144]. - EV segment revenue decreased by 12.8%, or $1.1 million, to $7.460 million in the first six months of FY2026, but operating income improved by 188.3% to $737 thousand[147]. Cash Flow and Liquidity - Cash and cash equivalents decreased to approximately $5.2 million as of September 30, 2025, from $6.0 million at March 31, 2025, due to a $1.3 million debt repayment[149]. - Cash provided by operating activities was $1.304 million in the first six months of FY2026, compared to a cash outflow of $2.464 million in the same period of FY2025[151]. - Cash used in financing activities was $1.8 million in the first six months of fiscal 2026, primarily due to payments on the revolving credit facility and long-term debt[154]. - Cash provided by financing activities was $2.5 million in the first six months of fiscal 2025, mainly from a term loan, partially offset by payments on the revolving credit facility and long-term debt[155]. - Net working capital as of September 30, 2025, was $8.1 million, with current assets of $32.0 million and current liabilities of $24.0 million[156]. - The borrowing base under the revolving credit facility supported approximately $14.1 million of availability as of September 30, 2025, with $5.8 million drawn against it[158]. Other Financial Information - The company expects customer concentration to remain around 24.3% for fiscal 2025, with efforts to diversify its customer base ongoing[127]. - The company completed a 1-for-10 reverse stock split on August 22, 2025, to comply with Nasdaq's Minimum Bid Price Rule[120]. - An estimated liability of approximately $1.4 million has been accrued for the remaining earnout amount related to the acquisition of Voltrek[121]. - Backlog totaled $18.2 million as of September 30, 2025, expected to be recognized as revenue within one year[166]. - Monthly principal payments of $25,000 on the Senior Subordinated Note will begin on January 15, 2026, increasing to $50,000 on July 15, 2026[163]. - The final Remaining Earnout Amount could exceed the current accrued liability and materially affect future liquidity[165]. - The credit agreement includes a springing minimum fixed cost coverage ratio of 1.0 to 1.0 when excess availability falls below $4.0 million, which is currently not required[160]. - The company has no off-balance sheet arrangements[167].