Orion Energy Systems Secures Three-Year Contract with Nationwide Energy Services Company

Rhea-AI Summary

Orion Energy Systems (NASDAQ: OESX) has secured a three-year contract with a nationwide Energy Service Company (ESCO) partner, starting January 2025. The agreement is expected to generate $5-$10 million annually. Orion has been selected as one of three approved suppliers for turnkey lighting projects across the ESCO's customer network.

The comprehensive service package includes site visits, lighting audits, fixture manufacturing, project management, installation, and commissioning of LED lighting and control systems. The contract expansion reflects Orion's proven expertise in delivering high-efficiency products and managing complex turnkey projects.

Positive

• Secured new three-year contract worth $5-$10M annually
• Selected as one of three approved suppliers for ESCO's network
• Contract includes comprehensive service package expanding revenue streams

Negative

• Competition from two other approved suppliers may limit market share

Insights

Financial Analyst

The $5-10M annual contract represents a significant revenue opportunity for Orion Energy Systems, potentially accounting for 10-20% of their annual revenue based on current figures. The three-year commitment provides valuable revenue visibility and stability for this micro-cap company. The selection as one of three approved suppliers for a nationwide ESCO demonstrates competitive positioning in the energy efficiency market. The comprehensive scope including audits, manufacturing and installation services suggests healthy margins. However, execution risks and working capital management will be important given the company's current market cap of $27M. The January 2025 start date allows time for operational preparation but means immediate financial impact will be delayed.

Energy Industry Expert

This contract reflects the growing trend of ESCOs expanding their energy efficiency initiatives through strategic partnerships. The turnkey solution approach, combining LED lighting with control systems, positions Orion well in the evolving energy services market. The deal's structure as a preferred supplier agreement, rather than an exclusive contract, suggests competitive pricing pressure but also scalability potential. The focus on comprehensive services from audit to installation demonstrates the market's shift toward integrated energy solutions. This partnership model could serve as a template for future ESCO relationships, though success will depend on Orion's operational execution and ability to maintain competitive pricing while delivering quality service.

MANITOWOC, Wis., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Orion Energy Systems, Inc. (NASDAQ: OESX) (Orion Lighting), a provider of energy-efficient LED lighting, electric vehicle (EV) charging stations, and maintenance service solutions, announced today its selection for a three-year contract by a longstanding, nationwide Energy Service Company (ESCO) partner. This new contract and expanded relationship will commence in January 2025 and is anticipated to generate $5 - $10 million per year.

Orion has been named one of three approved suppliers for turnkey lighting projects across the ESCO’s extensive customer network. Under the agreement, Orion’s comprehensive services will include site visits, detailed lighting audits, fixture manufacturing, project management, fixture installation, and the installation and commissioning of its industry-leading LED lighting and control systems.

This partnership underscores Orion’s commitment to supporting our customers’ efforts to achieve their energy efficiency and sustainability goals while enhancing lighting environments. This expanded business relationship is a result of Orion’s demonstrated capabilities in high efficiency products and managing complex turnkey audit, engineering and installation projects.

“We are honored to expand our collaboration with this valued ESCO partner,” stated Michael Jenkins, Orion CEO. “This contract is a testament to Orion’s ability to deliver high-quality, energy-efficient lighting and controls solutions that meet the evolving needs of large-scale energy service providers. We are excited to contribute to a more sustainable future through this partnership.”

About Orion Energy Systems
Orion provides energy efficiency and clean tech solutions, including LED lighting and controls, electrical vehicle (EV) charging solutions, and maintenance services. 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 sustainability goals and progress here, or visit our website at www.orionlighting.com.

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 plans, objectives or goals, including business relationships with government customers, 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 risks described in our filings with the Securities and Exchange Commission.

Shareholders, potential investors and other readers are urged to consider risks and uncertainties 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. Except as required by applicable law, we assume no obligation to update any forward-looking statements publicly or to update the reasons why actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

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Marketing Contact
Steve Paulus, Director, Marketing and Communications
Orion Energy Systems, Inc.
spaulus@oesx.com
(920) 239-8007

Investor Relations Contacts

Per Brodin, CFO Orion Energy Systems, Inc. pbrodin@oesx.com

William Jones; David Collins Catalyst IR (212) 924 9800 or oesx@catalyst-ir.com

FAQ

What is the value of Orion Energy Systems' (OESX) new ESCO contract?

The contract is expected to generate between $5-$10 million per year over three years.

When does OESX's new ESCO contract begin?

The contract will commence in January 2025.

What services will OESX provide under the new ESCO contract?

Orion will provide site visits, lighting audits, fixture manufacturing, project management, installation, and commissioning of LED lighting and control systems.

How many suppliers were selected for the ESCO's lighting projects?

Orion Energy Systems was named as one of three approved suppliers for the ESCO's turnkey lighting projects.