LED Lighting, EV Charging and Electrical Maintenance Provider Orion Announces Preliminary Q3’24 Revenue Growing to $25.8M-$26.2M and Improved Cash Position; Updates FY 2024 Anticipated Revenue Outlook to $90M-$95M
Orion Energy Systems, Inc. (NASDAQ: OESX) announced preliminary revenue results for its fiscal 2024 third quarter, reporting an approximate 28% increase in revenue compared to the same period in the previous year. LED lighting, EV charging, and maintenance services all showed positive growth, with LED lighting revenue experiencing the most significant increase. The company also reported an improvement in financial liquidity, with a net availability of approximately $12.5M on its credit facility.
Positive
Approximate 28% increase in revenue for Q3’24 compared to the same period in the previous year
LED lighting revenue increased to approximately $18.6M in Q3’24 vs. $14.2M in Q3’23 and $13.6M in Q2’24
EV charging solutions revenue was approximately $2.8M in Q3’24, with steady growth in its project pipeline
Maintenance services revenue rose to approximately $4.6M in Q3’24, benefiting from a 3-year agreement to provide preventative lighting maintenance services for a customer’s approximately 2,000 retail locations nationwide
Orion closed Q3’24 with approximately $17.5M of financial liquidity, showing an improvement from the previous quarter
The preliminary financial results for Orion Energy Systems, Inc. indicate a significant increase in revenue for the fiscal 2024 third quarter, with a 28% rise compared to the same period in the previous year. This growth is primarily attributed to the company's LED lighting segment, which saw a substantial increase in revenue. Notably, the company has secured large contracts, including a notable retrofit project for the U.S. Department of Defense and projects for a major global warehouse/logistics customer. These contracts suggest a strong order book and potential for sustained revenue growth in the short to medium term.
However, the EV charging segment did not show growth from the previous year, indicating potential challenges in project timing or market saturation. The steady growth in the maintenance services segment, driven by a long-term service agreement, contributes to a diversified revenue stream, which can be seen as a positive sign for risk mitigation. The improved liquidity position, with an increase from $12.9M to $17.5M, enhances the company's financial flexibility and may positively influence investor sentiment. Nonetheless, the reduction in full-year guidance, from an expected $100M to a range of $90M to $95M, may raise concerns about the company's ability to meet long-term revenue targets and could lead to increased scrutiny from investors.
Orion's performance in the LED lighting sector reflects a broader industry trend of increasing adoption of energy-efficient solutions . The company's ability to secure large-scale projects demonstrates its competitive positioning and the effectiveness of its sales strategy. The maintenance services revenue growth aligns with the industry's shift towards service-based models, which provide recurring revenue and strengthen customer relationships.
However, the flat performance in the EV charging sector requires a closer look at market dynamics. With the expansion of the Voltrek team and geographic reach, Orion is poised to capitalize on the growing EV market, but the lack of quarter-over-quarter growth suggests that the company may need to refine its go-to-market strategy or face stiff competition. The market for EV charging is rapidly evolving and companies must adapt quickly to maintain and grow their market share. Orion's updated revenue outlook and the acknowledgment of project delays may reflect broader market challenges that could affect other players in the industry.
Orion's preliminary results underscore the ongoing demand for energy-efficient lighting solutions , particularly within the context of global energy conservation efforts and the transition to sustainable practices. The company's success in securing contracts with the U.S. Department of Defense and other large customers is indicative of the public and private sectors' commitment to reducing energy consumption. The expansion of Orion's lighting maintenance services also suggests that there is a growing market for comprehensive energy solutions that go beyond product sales to include after-sales support and services.
On the other hand, the stagnation in EV charging revenue may point to challenges in this segment, such as project delays or competitive pressures. Given the increased focus on electric vehicles as a part of the broader shift towards renewable energy, it's crucial for Orion to leverage its expanded team and enhanced geographic reach to capture more market share in this segment. The company's liquidity improvement is a positive indicator of financial health, but the lowered revenue guidance may signal to stakeholders that Orion is encountering obstacles that could affect its future performance in the energy sector.
01/18/2024 - 07:29 AM
MANITOWOC, Wis., Jan. 18, 2024 (GLOBE NEWSWIRE) -- Orion Energy Systems, Inc. (NASDAQ: OESX) (Orion Lighting
Orion’s preliminary results described in the press release are subject to adjustment and finalization based on Orion’s quarterly reporting period closing procedures and the related review procedures conducted by its independent auditors.
Q3 Snapshot Prior Three Quarters $ in millions except Q3’24 Q3'23 Estimated Change Q2’24 Q1’24 Q4’23 LED Lighting Revenue $18.6 $14.2 +$4.4 $13.6 $12.6 $14.5 Maintenance Revenue $4.6 $3.3 +$1.3 $3.6 $3.8 $3.7 EV Charging Revenue $2.8 $2.8 $0.0 $3.4 $1.2 $3.4 Total Revenue $26.0 $20.3 +28% $20.6 $17.6 $21.6
*Based on mid-point of revenue range
Revenue Highlights
Orion reported a preliminary Q3’24 revenue range of $25.8M to $26.2M , an approximate increase of 28% , compared to Q3’23 revenue of $20.3M . Based on the mid-point of the revenue range, preliminary Q3’24 revenues were comprised as follows:
LED Lighting revenue increased to approximately $18.6M in Q3’24 vs. $14.2M in Q3’23 and $13.6M in Q2’24, driven by anticipated growth in contract activity for larger customers that is expected to continue for the balance of FY 2024 and into FY 2025. Larger projects include approximately $6.5M in remaining revenue from a European retrofit project for the U.S. Department of Defense, an ongoing external lighting project for Orion’s largest customer, and an ongoing national LED lighting project for a global warehouse/logistics customer. EV charging solutions revenue was approximately $2.8M in Q3’24 vs. $3.4M in Q2’24 and $2.8M in the year ago quarter. The Voltrek business has substantially expanded and enhanced its team and geographic reach and is seeing steady growth in its project pipeline as well as new project quoting activity. Maintenance services revenue rose to approximately $4.6M in Q3’24 compared to $3.6M in Q2’24 and $3.6M in Q3’23, principally benefitting from a 3-year agreement to provide preventative lighting maintenance services for a customer’s approximately 2,000 retail locations nationwide. Orion continues to focus on the profitability of remaining legacy contracts. Orion closed Q3’24 with approximately $17.5M of financial liquidity, comprised of approximately $5.0M of cash and cash equivalents and approximately $12.5M net availability on its credit facility. This is an improvement from Q2’24, when Orion had approximately $12.9M of liquidity, including $4.0M of cash and cash equivalents and $8.9M of net availability on its credit facility. Orion CEO Mike Jenkins commented, “As anticipated, our LED lighting operations have been ramping to address a growing base of larger client projects and our EV charging business continues to gain traction in building its project pipeline, however its quarter-to-quarter results were impacted by the timing of larger projects. Our Q3’24 results reflected additional customer-related delays on our European LED lighting project, however we expect to complete the vast majority of the work during our fourth quarter. As an outcome of some project delays, we have updated our full year guidance to a range of $90M to $95M – growth of 16-23% , from an earlier expectation of growth to at least $100M .
“Finally, because we are confident about the long-term potential for our business, we are investing time to get out and meet with investors. We hope to speak with you at upcoming events including the Sidoti Microcap Conference LD Micro Invitational th & 9th .”
Business Outlook
Orion now expects FY 2024 revenue growth between 16% and 23% to a range of approximately $90M to $95M . This updated outlook implies Q4’24 revenue in the range of $26M to $31M compared to $21.6M in Q4’23. Growth over the balance of FY 2024 is largely expected from large national account LED lighting projects including the large DoD European retrofit project, an external lighting project for Orion’s largest customer, and projects for a large warehouse/logistics sector customer. Additionally, Orion expects growth in EV charging solutions driven by its current project pipeline. Maintenance services are expected to decrease slightly over the balance of FY 2024, reflecting the impact of new pricing on certain legacy customer renewal discussions. About Orion Energy Systems
Orion is committed to operating responsibly throughout all areas of our organization. Learn more about our Sustainability and Governance priorities, goals and progress here 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 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.
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What is the ticker symbol for Orion Energy Systems, Inc.?
The ticker symbol for Orion Energy Systems, Inc. is OESX.
What were the preliminary revenue results for Orion Energy Systems, Inc. in Q3’24?
Orion Energy Systems, Inc. reported a preliminary revenue range of $25.8M to $26.2M, an approximate increase of 28%, compared to Q3’23 revenue of $20.3M.
How much did LED lighting revenue increase in Q3’24?
LED lighting revenue increased to approximately $18.6M in Q3’24 vs. $14.2M in Q3’23 and $13.6M in Q2’24, driven by anticipated growth in contract activity for larger customers.
What was the EV charging solutions revenue in Q3’24?
EV charging solutions revenue was approximately $2.8M in Q3’24, with steady growth in its project pipeline.
What was the maintenance services revenue in Q3’24?
Maintenance services revenue rose to approximately $4.6M in Q3’24, benefiting from a 3-year agreement to provide preventative lighting maintenance services for a customer’s approximately 2,000 retail locations nationwide.
What was the financial liquidity of Orion Energy Systems, Inc. at the end of Q3’24?
Orion closed Q3’24 with approximately $17.5M of financial liquidity, showing an improvement from the previous quarter.
