LED Lighting, Maintenance and EV Charging Solutions Provider Orion Reports FY 2023 Revenue of $77.4M and Reiterates FY 2024 30% Revenue Growth Outlook
MANITOWOC, Wis., June 06, 2023 (GLOBE NEWSWIRE) -- (NASDAQ: OESX) (Orion Lighting), a provider of energy-efficient LED lighting, maintenance services and electric vehicle (EV) charging station solutions, today reported results for its fiscal 2023 fourth quarter (Q4’23) and full year (FY 2023) ended March 31, 2023. Orion will hold an investor call today at 10:00 a.m. ET – details below.
| Q4 Financial Summary | FY 2023 Financial Summary | |||||||||||
| $ in millions except per share figures | Q4’23 | Q4’22 | Change | FY 2023 | FY 2022 | Change | ||||||
| Revenue | $21.6 | ( | $77.4 | ( | ||||||||
| Gross profit | $4.7 | ( | $17.5 | ( | ||||||||
| Gross profit % | 21.9% | (190 bps) | 22.6% | (470 bps) | ||||||||
| Net (loss) (1)(2) | ($5.1) | ( | ( | ($34.3) | ( | |||||||
| Net (loss) per share (1)(2) | ($0.16) | ( | ( | ($1.08) | ( | |||||||
| Adjusted EBITDA (3) | ($1.6) | ( | ( | ($7.6) | ( | |||||||
| Cash & cash equivalents | $16.0 | $16.0 | ||||||||||
| (1) Q4’23 Net Loss and net loss per share reflect a (2) FY 2023 Net Loss and net loss per share reflect a (3) See Adjusted EBITDA reconciliation below. | ||||||||||||
Financial Highlights
- As expected, FY 2023 revenue of
$77.4M declined from$124.4M in FY 2022, due primarily to lower revenue from the company’s largest customer and a global online retailer, as well as from delays in the start of certain large LED retrofit projects, some of which commenced in Q4’23 and Q1’24. - Orion grew FY 2023 revenue outside of its largest customer and a global online retailer by approximately
11% versus FY 2022. This performance reflected progress in diversifying Orion’s customer base and revenues across its LED Lighting, electrical maintenance, and EV charging solutions businesses. - Maintenance services revenue rose
152% to$14.6M in FY 2023 versus$5.8M in FY 2022. - EV charging solutions contributed initial revenue of
$6.3M in Orion’s FY 2023 second half, reflecting the Voltrek acquisition in the first week of Q3’23. - Orion’s FY 2023 net loss of (
$34.3M ), or ($1.08) per share, included a$17.8M non-cash tax charge to record a valuation allowance against Deferred Tax Assets and a$4.0M accrual for the earnout associated with the Voltrek acquisition. - Orion closed FY 2023 with
$23.2M of financial liquidity, comprised of$16.0M of cash and cash equivalents and$7.2M available on its credit facility.
CEO Commentary
Orion CEO Mike Jenkins commented, “Orion finished FY 2023 with our strongest quarter of the year and as our FY 2024 outlook suggests, we believe our business is poised for solid growth in the coming quarters.
“We believe Orion is now well positioned with a more diversified base of solutions and customers. Demand is being driven by the substantial cost savings and environmental benefits we deliver, as well as our deep expertise and proven ability to deliver complex turnkey product and service solutions to enterprises with hundreds or even thousands of locations.
“Our customers are increasingly challenged by the growing complexity of integrating LED lighting, controls and Internet of Things solutions, pressing new demands for EV charging infrastructure, and the technical expertise required to integrate and maintain these electrical systems.
“Building off our core expertise in lighting and controls, over the last two years Orion has diversified its business to include electrical maintenance solutions – both preventative and reactive – and also expanded into the rapidly growing market for commercial EV charging solutions. We are working to build out the national capabilities of these new businesses, both of which we expect to play an important role in our growth in FY 2024 and years to come.
“Orion’s maintenance services are an ideal complement to our LED lighting and EV charging businesses that should provide a growing base of annual recurring service revenue, as we build out our customer and service network. Demand for EV charging solutions is growing rapidly as enterprises of all types work to assess their current and future needs. Our Voltrek acquisition is off to a very strong start as the business delivered revenue of
“In summary, Orion’s mission is to help our customers achieve their energy efficiency and environmental goals. We approach this mission with a customer for life commitment, rooted in the highest levels of product and service quality available in the markets we serve. Our now diverse business portfolio of LED lighting, lighting and electrical maintenance, and EV charging solutions positions us as a trusted solution provider to our customers.”
Business Outlook
- Orion continues to expect FY 2024 revenue growth of
30% or more to approximately$100M , with a greater proportion of revenue expected in the second half. - Orion’s FY 2024 revenue guidance is based on approximately
$34M in aggregate revenue expected from maintenance services and EV charging solutions and the balance from LED lighting products and solutions, including national account projects, ESCO partners and distribution channel sales.
Financial Results
Orion’s Q4’23 revenue was
Gross profit was
Total operating expenses increased to
Orion reported a Q4’23 net loss of (
Balance Sheet and Cash Flow
Orion ended FY 2023 with
Orion used cash of
| Webcast/Call Detail | ||
| Date / Time: | Tuesday, June 6th at 10:00 a.m. ET | |
| Live Call Registration: | https://register.vevent.com/register/BIf70dbe2ab051455c9b10d19c39218029 Live call participants must pre-register using the URL above to receive the dial-in information. Simply re-register if you lose the dial-in or PIN. | |
| Webcast / Replay: | https://edge.media-server.com/mmc/p/zt4f6z4k | |
About Orion Energy Systems
Orion provides energy efficiency and clean tech solutions, including LED lighting and controls, maintenance services and electrical vehicle (EV) charging solutions. Orion specializes in turnkey design-through-installation solutions for large national customers, with a commitment to helping customers achieve their business and environmental goals with healthy, safe and sustainable solutions that reduce their carbon footprint and enhance business performance.
Orion is committed to operating responsibly throughout all areas of our organization. Learn more about our ESG priorities, goals and progress here or visit our website at www.orionlighting.com.
Non-GAAP Measures
In addition to the GAAP results included in this presentation, Orion has also included the non-GAAP measures, EBITDA (earnings before interest, taxes, depreciation and amortization), and Adjusted EBITDA (EBITDA adjusted for stock-based compensation, payroll tax credit, and acquisition expenses). The Company has provided these non-GAAP measures to help investors better understand its core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to its competitors. Among other things, management uses these non-GAAP measures to evaluate performance of the business and believes these measurements enable it to make better period-to-period evaluations of the financial performance of core business operations. The non-GAAP measurements are intended only as a supplement to the comparable GAAP measurements and Orion compensates for the limitations inherent in the use of non-GAAP measurements by using GAAP measures in conjunction with the non-GAAP measurements. As a result, investors should consider these non-GAAP measurements in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with generally accepted accounting principles.
Consistent with Regulation G under the U.S. federal securities laws, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measures, and this reconciliation is located under the heading “Unaudited EBITDA Reconciliation” following the Unaudited Condensed Consolidated Statements of Cash Flows included in this press release.
Safe Harbor Statement
Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or words of similar import. Similarly, statements that describe our future outlook, plans, expectations, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause results to differ materially from those expected, including, but not limited to, the following: (i) our ability to realize the anticipated benefits of the Voltrek acquisition; (ii) we may encounter substantial difficulties, costs and delays involved in integrating our operations with Voltrek’s business; (iii) disruption of management’s attention from ongoing business operations due to the Voltrek acquisition; (iv) our ability to manage general economic, business and geopolitical conditions, including the impacts of natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as the COVID-19 pandemic; (v) the deterioration of market conditions, including our dependence on customers' capital budgets for sales of products and services, and adverse impacts on costs and the demand for our products as a result of factors such as the COVID-19 pandemic and the implementation of tariffs; (vi) our ability to adapt and respond to supply chain challenges, especially related to shipping and logistics issues, component availability, rising input costs, and a tight labor market; (vii) our ability to recruit, hire and retain talented individuals in all disciplines of our company; (viii) our ability to successfully launch, manage and maintain our refocused business strategy to successfully bring to market new and innovative product and service offerings; (ix) potential asset impairment charges and/or increases on our deferred tax asset reserve; (x) our dependence on a limited number of key customers, and the potential consequences of the loss of one or more key customers or suppliers, including key contacts at such customers; (xi) our ability to identify and successfully complete transactions with suitable acquisition candidates in the future as part of our growth strategy; (xii) the availability of additional debt financing and/or equity capital to pursue our evolving strategy and sustain our growth initiatives; (xiii) our risk of potential loss related to single or focused exposure within the current customer base and product offerings; (xiv) our ability to achieve and sustain profitability and positive cash flows; (xv) our ability to differentiate our products in a highly competitive and converging market, expand our customer base and gain market share; (xvi) our ability to manage and mitigate downward pressure on the average selling prices of our products as a result of competitive pressures in the LED market; (xvii) our ability to manage our inventory and avoid inventory obsolescence in a rapidly evolving LED market; (xviii) our increasing reliance on third parties for the manufacture and development of products, product components, as well as the provision of certain services; (xix) our increasing emphasis on selling more of our products through third party distributors and sales agents, including our ability to attract and retain effective third party distributors and sales agents to execute our sales model; (xx) our ability to develop and participate in new product and technology offerings or applications in a cost effective and timely manner; (xxi) our ability to maintain safe and secure information technology systems; (xxii) our failure to comply with the covenants in our credit agreement; (xxiii) our ability to balance customer demand and production capacity; (xxiv) our ability to maintain an effective system of internal control over financial reporting; (xxv) price fluctuations (including as a result of tariffs), shortages or interruptions of component supplies and raw materials used to manufacture our products; (xxvi) our ability to defend our patent portfolio and license technology from third parties; (xxvii) a reduction in the price of electricity; (xxviii) the reduction or elimination of investments in, or incentives to adopt, LED lighting or the elimination of, or changes in, policies, incentives or rebates in certain states or countries that encourage the use of LEDs over some traditional lighting technologies; (xxix) the cost to comply with, and the effects of, any current and future industry and government regulations, laws and policies; (xxx) potential warranty claims in excess of our reserve estimates; and (xxxi) the other risks described in our filings with the Securities and Exchange Commission. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov or at http://investor.oriones.com in the Investor Relations section of our Website.
Twitter: @OrionLighting and @OrionLightingIR
StockTwits: @Orion_LED_IR
| Investor Relations Contacts | |
| Per Brodin, CFO | William Jones; David Collins |
| Orion Energy Systems, Inc. | Catalyst IR |
| pbrodin@oesx.com | (212) 924-9800 or OESX@catalyst-ir.com |
| ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 15,992 | $ | 14,466 | ||||
| Accounts receivable, net | 13,728 | 11,899 | ||||||
| Revenue earned but not billed | 1,320 | 2,421 | ||||||
| Inventories, net | 18,205 | 19,832 | ||||||
| Prepaid expenses and other current assets | 1,116 | 2,631 | ||||||
| Total current assets | 50,361 | 51,249 | ||||||
| Property and equipment, net | 10,470 | 11,466 | ||||||
| Goodwill | 1,484 | 350 | ||||||
| Other intangible assets, net | 6,004 | 2,404 | ||||||
| Deferred tax assets | — | 17,805 | ||||||
| Other long-term assets | 3,260 | 3,543 | ||||||
| Total assets | $ | 71,579 | $ | 86,817 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Accounts payable | $ | 13,405 | $ | 9,855 | ||||
| Accrued expenses and other | 10,552 | 8,427 | ||||||
| Deferred revenue, current | 480 | 76 | ||||||
| Current maturities of long-term debt | 17 | 16 | ||||||
| Total current liabilities | 24,454 | 18,374 | ||||||
| Revolving credit facility | 10,000 | — | ||||||
| Long-term debt, less current maturities | 3 | 19 | ||||||
| Deferred revenue, long-term | 489 | 564 | ||||||
| Other long-term liabilities | 3,384 | 2,760 | ||||||
| Total liabilities | 38,330 | 21,717 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, no par value: Shares authorized: 200,000,000 at March 31, 2023 and 2022; shares issued: 41,767,092 and 40,570,909 at March 31, 2023 and 2022; shares outstanding: 32,295,408 and 31,097,872 at March 31, 2023 and 2022 | — | — | ||||||
| Additional paid-in capital | 160,907 | 158,419 | ||||||
| Treasury stock: 9,471,684 and 9,473,037 common shares at March 31, 2023 and 2022 | (36,237 | ) | (36,239 | ) | ||||
| Retained deficit | (91,421 | ) | (57,080 | ) | ||||
| Total shareholders’ equity | 33,249 | 65,100 | ||||||
| Total liabilities and shareholders’ equity | $ | 71,579 | $ | 86,817 | ||||
| ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) | ||||||||||||||||
| Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Product revenue | $ | 15,495 | $ | 13,629 | $ | 57,210 | $ | 91,889 | ||||||||
| Service revenue | 6,134 | 8,429 | 20,173 | 32,494 | ||||||||||||
| Total revenue | 21,629 | 22,058 | 77,383 | 124,383 | ||||||||||||
| Cost of product revenue | 11,827 | 10,525 | 42,979 | 65,249 | ||||||||||||
| Cost of service revenue | 5,061 | 6,280 | 16,893 | 25,222 | ||||||||||||
| Total cost of revenue | 16,888 | 16,805 | 59,872 | 90,471 | ||||||||||||
| Gross profit | 4,741 | 5,253 | 17,511 | 33,912 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 3,804 | 2,943 | 15,487 | 11,680 | ||||||||||||
| Acquisition related costs | 2,425 | 334 | 4,765 | 512 | ||||||||||||
| Sales and marketing | 2,871 | 2,834 | 11,392 | 11,628 | ||||||||||||
| Research and development | 478 | 532 | 1,852 | 1,701 | ||||||||||||
| Total operating expenses | 9,578 | 6,643 | 33,496 | 25,521 | ||||||||||||
| (Loss) income from operations | (4,837 | ) | (1,390 | ) | (15,985 | ) | 8,391 | |||||||||
| Other income (expense): | ||||||||||||||||
| Other income | — | — | — | 1 | ||||||||||||
| Interest expense | (242 | ) | (21 | ) | (339 | ) | (80 | ) | ||||||||
| Amortization of debt issue costs | (26 | ) | (16 | ) | (73 | ) | (62 | ) | ||||||||
| Interest income | 34 | — | 34 | — | ||||||||||||
| Total other expense | (234 | ) | (37 | ) | (378 | ) | (141 | ) | ||||||||
| (Loss) income before income tax | (5,071 | ) | (1,427 | ) | (16,363 | ) | 8,250 | |||||||||
| Income tax expense (benefit) | 45 | (247 | ) | 17,978 | 2,159 | |||||||||||
| Net (loss) income | $ | (5,116 | ) | $ | (1,180 | ) | $ | (34,341 | ) | $ | 6,091 | |||||
| Basic net (loss) income per share attributable to common shareholders | $ | (0.16 | ) | $ | (0.04 | ) | $ | (1.08 | ) | $ | 0.20 | |||||
| Weighted-average common shares outstanding | 32,293,937 | 31,084,710 | 31,703,712 | 31,018,356 | ||||||||||||
| Diluted net (loss) income per share | $ | (0.16 | ) | $ | (0.04 | ) | $ | (1.08 | ) | $ | 0.19 | |||||
| Weighted-average common shares and share equivalents outstanding | 32,293,937 | 31,234,925 | 31,703,712 | 31,294,573 | ||||||||||||
| ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | ||||||||
| Fiscal Year Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating activities | ||||||||
| Net (loss) income | $ | (34,341 | ) | $ | 6,091 | |||
| Adjustments to reconcile net income to net cash (used in) | ||||||||
| operating activities: | ||||||||
| Depreciation | 1,369 | 1,327 | ||||||
| Amortization of intangible assets | 653 | 227 | ||||||
| Stock-based compensation | 1,612 | 813 | ||||||
| Amortization of debt issue costs | 73 | 62 | ||||||
| Deferred income tax benefit | 17,805 | 1,980 | ||||||
| Loss (gain) on sale of property and equipment | 27 | (77 | ) | |||||
| Provision for inventory reserves | 628 | 623 | ||||||
| Provision for bad debts | 65 | 10 | ||||||
| Other | 96 | 26 | ||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||
| Accounts receivable | (586 | ) | 4,407 | |||||
| Revenue earned but not billed | 1,426 | 851 | ||||||
| Inventories | 1,879 | (420 | ) | |||||
| Prepaid expenses and other assets | 2,017 | (888 | ) | |||||
| Accounts payable | 2,372 | (8,125 | ) | |||||
| Accrued expenses and other liabilities | 2,285 | (6,933 | ) | |||||
| Deferred revenue, current and long-term | 329 | (87 | ) | |||||
| Net cash (used in) operating activities | (2,291 | ) | (113 | ) | ||||
| Investing activities | ||||||||
| Cash to fund acquisitions, net of cash received | (5,600 | ) | (4,012 | ) | ||||
| Cash paid for investment | — | (500 | ) | |||||
| Purchase of property and equipment | (586 | ) | (518 | ) | ||||
| Additions to patents and licenses | (9 | ) | (10 | ) | ||||
| Proceeds from sales of property, plant and equipment | — | 122 | ||||||
| Net cash used in investing activities | (6,195 | ) | (4,918 | ) | ||||
| Financing activities | ||||||||
| Payment of long-term debt | (15 | ) | (14 | ) | ||||
| Proceeds from revolving credit facility | 10,000 | — | ||||||
| Payment of revolving credit facility | — | — | ||||||
| Payments to settle employee tax withholdings on stock-based compensation | (2 | ) | (5 | ) | ||||
| Debt issue costs | (29 | ) | (4 | ) | ||||
| Net proceeds from employee equity exercises | 58 | 127 | ||||||
| Net cash provided by (used in) financing activities | 10,012 | 104 | ||||||
| Net increase (decrease) in cash and cash equivalents | 1,526 | (4,927 | ) | |||||
| ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED EBITDA RECONCILIATION (in thousands) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| March 31, 2023 | Dec. 31, 2022 | March 31, 2022 | March 31, 2023 | March 31, 2022 | ||||||||||||||||
| Net (loss) income | $ | (5,116 | ) | $ | (24,059 | ) | $ | (1,180 | ) | $ | (34,341 | ) | $ | 6,091 | ||||||
| Interest | 208 | 64 | 21 | 305 | 80 | |||||||||||||||
| Taxes | 45 | 19,391 | (247 | ) | 17,978 | 2,159 | ||||||||||||||
| Depreciation | 395 | 311 | 391 | 1,369 | 1,327 | |||||||||||||||
| Amortization of intangible assets | 280 | 269 | 69 | 653 | 227 | |||||||||||||||
| Amortization of debt issue costs | 26 | 16 | 16 | 73 | 62 | |||||||||||||||
| EBITDA | $ | (4,162 | ) | $ | (4,008 | ) | $ | (930 | ) | $ | (13,963 | ) | $ | 9,946 | ||||||
| Stock-based compensation | 177 | 448 | 222 | 1,612 | 813 | |||||||||||||||
| Payroll tax credit | — | — | — | — | (1,587 | ) | ||||||||||||||
| Acquisition related expenses | 2,425 | 1,993 | 334 | 4,765 | 512 | |||||||||||||||
| Adjusted EBITDA | $ | (1,560 | ) | $ | (1,567 | ) | $ | (374 | ) | $ | (7,586 | ) | $ | 9,684 | ||||||
