Orion(US:OESX)2023-02-09 21:34Revenue Performance - Total revenue for the three months ended December 31, 2022, was $20.3 million, a decrease of 33.9% compared to $30.7 million in the same period of 2021[127]. - Product revenue decreased by 30.6%, or $6.8 million, to $15.4 million, while service revenue decreased by 42.6%, or $3.6 million, to $4.9 million[127]. - Revenue from the largest customer represented 18.2% of total revenue in Q3 fiscal 2023, down from 48.6% in Q3 fiscal 2022[127]. - OSG segment revenue decreased by 56.9%, or $11.4 million, in Q3 FY2023 compared to Q3 FY2022, attributed to reduced project volume from the largest customer[133]. - ODS segment revenue fell by 24.9%, or $1.2 million, in Q3 FY2023 compared to Q3 FY2022, primarily due to decreased sales to one customer[135]. - USM segment revenue decreased by 10.9%, or $0.6 million, in Q3 FY2023 compared to Q3 FY2022, due to a less diversified customer base[138]. - Total revenue for the first nine months of FY2023 was $55.8 million, a decrease of 45.5% compared to $102.3 million in FY2022[141]. - Product revenue decreased by 46.7%, or $36.5 million, for the first nine months of FY2023 compared to FY2022, driven by lower project revenues from the largest customer[141]. - EV segment revenue generated by Voltrek in Q3 FY2023 was $2.8 million, with an operating loss of $1.5 million primarily due to earnout expenses[139]. - EV segment revenue for the first nine months of fiscal 2023 was $2.8 million, with an operating loss of $1.5 million, resulting in an operating margin of -53.0%[155]. Expenses and Financials - Gross margin decreased from 24.9% in Q3 fiscal 2022 to 23.6% in Q3 fiscal 2023, primarily due to reduced sales affecting fixed cost absorption[127]. - General and administrative expenses increased by 38.7%, or $1.1 million, in Q3 fiscal 2023, attributed to acquisitions and stock-based compensation[128]. - Acquisition expenses increased by $1.8 million in Q3 FY2023 compared to Q3 FY2022, primarily due to a $1.5 million earnout expense related to the acquisition of Voltrek[129]. - Sales and marketing expenses rose by 4.2%, or $0.1 million, in Q3 FY2023 compared to Q3 FY2022, reflecting lower commission expenses offset by costs from acquired businesses[130]. - General and administrative expenses increased by 33.7%, or $2.9 million, in the first nine months of FY2023 compared to FY2022, mainly due to acquisitions and stock-based compensation[142]. - A non-cash tax charge of $17.8 million was recorded due to the likelihood that domestic deferred tax assets will not be realized[146]. - Cash and cash equivalents decreased to approximately $8.1 million as of December 31, 2022, down from $14.5 million at March 31, 2022, due to operating losses and working capital usage[157]. - Cash used in operating activities for the first nine months of fiscal 2023 was $5.2 million, primarily due to a net loss of $29.2 million adjusted for non-cash items[160]. - Cash used in investing activities was $6.1 million in the first nine months of fiscal 2023, primarily for the acquisition of Voltrek and property purchases[162]. - Cash provided by financing activities was $5.0 million in the first nine months of fiscal 2023, mainly from proceeds of the Credit Agreement used to acquire Voltrek[164]. Acquisitions and Investments - The company completed the acquisition of Voltrek for $5.0 million in cash and $1.0 million in stock, with potential earnout payments of up to $13.65 million based on EBITDA growth[123]. - The acquisition of Stay-Lite Lighting was completed for $4.0 million, with potential earnout payments of up to $0.7 million based on performance[124]. - The company plans to invest significantly in expanding IoT and smart-building technologies, although these efforts may reduce profitability in the near term[116]. - The company expects a $50 million decrease in business from its largest customer in the first nine months of fiscal 2023, but overall business has grown by approximately 9%[125]. - Backlog increased to $19.5 million as of December 31, 2022, compared to $10.1 million as of March 31, 2022, indicating future revenue potential[172]. - The Credit Agreement provides a $25 million revolving credit facility, with $16.3 million available as of December 31, 2022, and $5.0 million drawn down[169]. Future Outlook - The new Electric Vehicle (EV) segment is expected to exceed expectations for the second half of fiscal 2023, contributing to revenue growth[125]. - The company has implemented multiple price increases to mitigate inflationary pressures, which have not materially affected operations to date[174]. - The company expects to meet its capital requirements for at least the next 12 months based on current cash flow forecasts[158].