Orion Energy System, Inc. Announces Fiscal 2009 First Quarter Results

August 5, 2008 at 12:00 AM EDT

 

PLYMOUTH, Wis., Aug. 5, 2008 (PRIME NEWSWIRE) -- Orion Energy Systems, Inc. (NasdaqGM:OESX - News), a leading provider of energy management systems to the commercial and industrial sectors, today announced financial results for its fiscal 2009 first quarter ended June 30, 2008.

Fiscal 2009 First Quarter Results

Revenue. Total revenue for the quarter was $16.1 million compared to $16.7 million for the fiscal 2008 first quarter, a decrease of 3.6%.

Gross Profit. Gross profit for the quarter was $5.2 million compared to $5.6 million for the fiscal 2008 first quarter, a decrease of 7.7%.

Operating Expenses. Total operating expenses for the quarter was $5.7 million compared to $4.1 million for the fiscal 2008 first quarter, an increase of 39%.

Income from Operations. Operating loss from operations for the fiscal 2009 first quarter was $(0.5) million compared to operating income of $1.5 million for the fiscal 2008 first quarter, a decrease of 133%.

Net Income. Net income for the quarter was $0.03 million, primarily the result of interest income, compared to $0.7 million for the fiscal 2008 first quarter, a decrease of 96%. Earnings per diluted share were $0.00 for the quarter compared to $0.04 for the fiscal 2008 first quarter.

Full-Year Fiscal 2009 Outlook

Orion reaffirms its revised annual revenue guidance range of 25% to 28% year-over-year revenue growth, with total revenue for fiscal 2009 forecasted to be between $101 million and $103 million. Additionally, Orion is issuing earnings per share guidance for fiscal 2009 estimated at $0.16 to $0.19 per diluted share.

"The first quarter highlighted the tension that exists between pursuing near-term growth opportunities and making the necessary investments to prepare for sustainable future growth. Results within the quarter were softer than anticipated due to increased efforts to further develop our sales organization, which resulted in more attention being diverted from closing current opportunities than originally planned. We also witnessed a lengthening of sales cycles across some customer opportunities due to the current economic environment," commented Neal Verfuerth, CEO of Orion Energy Systems. "With that said, we have made improvements in the last several weeks, including a number of key management changes to realign the focus of our senior leadership to regain momentum and capitalize on the significant opportunity that exists for Orion and its shareholders."

Business Highlights


 * Deployed energy management systems in 276 facilities in the
   first quarter of  fiscal 2009, representing over 34 million square
   feet retrofitted, and bringing Orion's installed base to
   3,762 facilities.(1)  New customer additions in the first quarter
   of fiscal 2009 will result in $1.1 million in annual saved energy
   costs and an annual reduction in indirect CO2 emissions from
   energy savings by over 10,000 tons.  Since December 2001, the
   company has benefited its customers and the environment as follows:

 ---------------------------------------------------------------------
                                     Cumulative From December 1, 2001
                                         Through June 30, 2008
 ---------------------------------------------------------------------
 High intensity fluorescent (HIF) systems sold             1,204,000
 ---------------------------------------------------------------------
 Total units sold (including HIF)                          1,554,000
 ---------------------------------------------------------------------
 Customer kilowatt demand reduction                          357,000
 ---------------------------------------------------------------------
 Customer kilowatt hours saved                         5,215,555,000
 ---------------------------------------------------------------------
 Customer electricity costs saved                       $401,598,000
 ---------------------------------------------------------------------
 Indirect carbon dioxide emission reductions
  from Customers' energy savings (tons)                    3,554,000(2)
 ---------------------------------------------------------------------
 Square footage retrofitted                              621,046,000
 ---------------------------------------------------------------------

 * Hired 13 new sales associates and expanded training content, tools,
   and methodologies to allow for more efficient organizational
   growth.  Sales organization numbered 64 employees on June 30, 2008.

 * Added 87 new contractor partners, bringing the total network of
   contractor partners who have conducted business on a recurring
   basis with Orion to over 280.

 * Furthered vertical integration by completing installation of
   cord set manufacturing capability, which is expected to result
   in cost savings, reduced inventory, shorter lead times and
   enhanced customer responsiveness.

 * Received $854,500 in Community Development Zone tax credits as
   part of Wisconsin's "Grow Wisconsin" initiative.

Share Repurchase

On July 17, 2008, Orion's Board of Directors approved a share repurchase program, authorizing the Company to repurchase in the aggregate up to $20 million of its outstanding common stock.

Conference Call

Orion will host a conference call on Tuesday, August 5, at 5:30 p.m. Eastern (4:30 p.m. Central/2:30 p.m. Pacific) to discuss details regarding its first quarter performance. Domestic callers may access the earnings conference call by dialing 877-419-6592 (International callers, dial 719-325-4864). Investors and other interested parties may also go to the Investor Relations section of Orion's website at http://investor.oriones.com/events.cfm for a live webcast of the conference call. To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast.

Orion Energy Systems, Inc. (NasdaqGM:OESX - News) is a leading power technology enterprise that designs, manufactures and implements energy management systems, consisting primarily of high-performance, energy efficient lighting systems and controls and related services, for commercial and industrial customers without compromising their quantity or quality of light.

The Orion Energy Systems, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4540

Safe Harbor Statement

Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors 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 future plans, 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) Orion's ability to compete in a highly competitive market and its ability to respond successfully to market competition; (ii) the market acceptance of Orion's products and services; (iii) price fluctuations, shortages or interruptions of component supplies and raw materials used to manufacture Orion's products; (iv) loss of one or more key customers or suppliers; (v) a reduction in the price of electricity; (vi) the cost to comply with, and the effects of, any current and future government regulations, laws and policies; (vii) increased competition from government subsidiaries and utility incentive programs; (viii) dependence on customers' capital budgets for sales of products and services; (ix) Orion's ability to effectively manage its anticipated growth; and (x) potential warranty claims. 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 Orion undertakes 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://www.oriones.com in the Investor Relations section of our website.


              ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
                 SELECTED FINANCIAL INFORMATION
         (in thousands, except share and per share amounts)
          Condensed Consolidated Statements of Operations
         for the Three Months ended June 30, 2007 and 2008
                           (unaudited)

                                                 Three months ended
                                                      June 30,
                                              ------------------------
                                                 2007          2008
                                              -----------  -----------
 Revenue                                      $    16,721  $    16,106
 Cost of revenue                                   11,118       10,909
                                              -----------  -----------
   Gross profit                                     5,603        5,197
 Operating expenses:
 General and administrative                         1,571        2,615
 Sales and marketing                                2,111        2,652
 Research and development                             437          418
                                              -----------  -----------
   Total operating expenses                         4,119        5,685
                                              -----------  -----------
  Income (loss) from operations                     1,484         (488)
 Other income (expense):
 Interest expense                                    (295)         (67)
 Dividend and interest income                          40          617
                                              -----------  -----------
   Total other income (expense)                      (255)         550
                                              -----------  -----------
  Income before income tax                          1,229           62
 Income tax expense                                   481           28
                                              -----------  -----------
   Net income                                         748           34
 Accretion of redeemable preferred stock
  and preferred stock dividends                       (75)          --
 Participation rights of preferred stock in
  undistributed earnings                             (219)          --
                                              -----------  -----------
   Net income attributable to
    common shareholders                       $       454  $        34
                                              ===========  ===========
 Basic net income per share attributable to
  common shareholders                         $      0.05  $      0.00
 Weighted-average common shares outstanding     9,950,486   27,038,353
 Diluted net income per share attributable to
  common shareholders                         $      0.04  $      0.00
 Weighted-average common shares and
  share equivalents outstanding                18,087,951   30,015,198

 Supplemental information:
  FAS 123R compensation expense
   Cost of revenue                            $        21  $        65
   General and administrative                          65          254
   Sales and marketing                                 53          126
   Research and development                             8           13
                                              -----------  -----------
    Total                                     $       147  $       458
                                              ===========  ===========


                Condensed Consolidated Balance Sheets
           As of March 31, 2008 and June 30, 2008 (unaudited)

                                                March 31,    June 30,
                                                  2008         2008
                                              -----------  -----------
 Cash and cash equivalents                    $    78,312  $    54,215
 Short term investments                             2,404       24,971
 Inventories                                       16,789       19,951
 Current assets                                   116,896      114,413
 Property and equipment, net                       11,539       14,218
 Total assets                                     130,702      131,356
 Current liabilities                               12,606       11,645
 Long term debt                                     4,473        4,263
 Total shareholders' equity                       113,190      115,029



             Condensed Consolidated Statements of Cash Flows
            For the Three Months ended June 30, 2007 and 2008
                               (unaudited)

                                                 Three months ended
                                                      June 30
                                              ------------------------
                                                  2007        2008
                                              -----------  -----------
 Cash provided by operating activities        $     1,822  $       949
 Cash used in investing activities                   (706)     (26,235)
 Cash provided by (used in)
  financing activities                               (705)       1,189
                                              -----------  -----------
 Net increase (decrease) in cash and
  cash equivalents                            $       411  $   (24,097)
                                              ===========  ===========


 (1) Orion's total installed base of 3,762 facilities reflects a
     downward adjustment of 169 facilities due to removal of
     duplicate records from historical data.

 (2) The calculation of indirect carbon dioxide emission
     reductions reflects the most recent Environmental Protection
     Agency eGrid data.  Using the prior eGrid data, cumulative
     indirect carbon emission reductions from customers' energy
     savings from December 1, 2001 through June 30, 2008 would have
     equaled 5,084,957 tons.

 


Contact:
         Orion Energy Systems
         Erik G. Birkerts
         (920) 482-1924
         
         FD Ashton Partners
         Victoria Paris
         (312) 553-6715

Source: Orion Energy Systems, Inc.