Orion Energy Systems, Inc. Announces Fiscal 2010 Second Quarter Results

October 27, 2009 at 4:30 PM EDT

MANITOWOC, Wis., Oct 27, 2009 (GlobeNewswire via COMTEX News Network) -- Orion Energy Systems, Inc. (Nasdaq:OESX), a power technology enterprise that designs, manufactures and deploys energy management solutions for the commercial and industrial sectors, today announced financial results for its fiscal 2010 second quarter ended September 30, 2009.

Since December 2001, the Company's integrated systems have benefited its customers and the environment by reducing:



 * customer energy demand by 477,133 kilowatts, or 9.2 billion
   kilowatt hours;
 * customer energy costs by more than $711 million; and
 * indirect carbon dioxide emissions of more than 6 million tons.

"We are pleased with the progress achieved in the fiscal second quarter of 2010 as we exceeded our quarterly revenue guidance with revenue of $14.6 million and exceeded our quarterly earnings per share guidance with a loss of $0.06 per share, as well as generated positive operating cash flow. The value proposition of our integrated systems, strong customer relationships and industry expertise continue to resonate with commercial and industrial businesses despite the ongoing macro-economic uncertainty," commented Neal Verfuerth, CEO of Orion Energy Systems. "Further, our innovative technologies and expertise has positioned Orion as a leader in the energy management space, which should allow us to deliver sustained long-term growth. While we realize that the current environment remains challenging, our healthy balance sheet, strong liquidity position and focus on maximizing the deployment of capital will position Orion well to benefit as market conditions improve."

Key Business Highlights



 * Total bookings for the quarter were $20.3 million, including
   $2.4 million of Orion Virtual Power Plant(TM) ("OVPP") supply
   agreements. Orion defines bookings as customer purchase orders
   received during the quarter, including both purchase orders
   payable in cash and for OVPP supply deliveries over the life of
   the OVPP contracts.

 * Increased facilities retrofitted with the Compact Modular(TM)
   HIF technology to 5,082, representing 807 million square feet as
   of the end of the second quarter of fiscal 2010.

 * Total deployments of the InteLite(R) wireless controls increased
   to 119 customer locations, 11,716 transceivers and 192 control
   panels, representing 5.3 million square feet as of the end of
   the second quarter of fiscal 2010.

 * Nearly doubled the number of installed Apollo(R) solar light
   pipes to 3,591 total installed units, representing 1.6 million
   square feet as of the end of the second quarter of fiscal 2010.

Fiscal 2010 Third Quarter Outlook

Third quarter fiscal 2010 revenues are anticipated to be between $16.5 million and $18.0 million. Earnings per share for the third quarter of fiscal 2010 are estimated to be between a loss of $(0.03) and earnings of $0.01 per diluted share.

Conference Call

Orion will host a conference call on Tuesday, October 27, 2009 at 5:30 p.m. Eastern (4:30 p.m. Central/2:30 p.m. Pacific) to discuss details regarding its second quarter fiscal 2010 performance. Domestic callers may access the earnings conference call by dialing 888-576-4398 (International callers, dial 719-325-2103). 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 webcast.

About Orion Energy Systems

Orion Energy Systems, Inc. (Nasdaq:OESX) is a leading power technology enterprise that designs, manufactures and deploys 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.globenewswire.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) further deterioration of market condition, including customer capital expenditure budgets; (ii) Orion's ability to compete in a highly competitive market and its ability to respond successfully to market competition; (iii) increasing duration of customer sales cycles; (iv) the market acceptance of Orion's products and services, including the Orion Virtual Power Plant; (v) price fluctuations, shortages or interruptions of component supplies and raw materials used to manufacture Orion's products; (vi) loss of one or more key customers or suppliers, including key contacts at such customers; (vii) a reduction in the price of electricity; (viii) the cost to comply with, and the effects of, any current and future government regulations, laws and policies; (ix) increased competition from government subsidies and utility incentive programs; (x) dependence on customers' capital budgets for sales of products and services; (xi) Orion's development of, and participation in, new product and technology offerings or applications; (xii) legal proceedings, including the securities litigation pending against Orion; and (xiii) 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 and Six Months ended September 30, 2008 and 2009
                           (unaudited)

                          Three months ended       Six months ended
                             September 30,           September 30,
                        ----------------------  ----------------------
                           2008        2009        2008        2009
                        ----------  ----------  ----------  ----------
 Revenue                $   18,760  $   14,619  $   34,866  $   27,247
 Cost of revenue            12,425       9,854      23,334      18,981
                        ----------  ----------  ----------  ----------
   Gross profit              6,335       4,765      11,532       8,266
 Operating expenses:
 General and
  administrative             2,893       3,143       5,508       6,306
 Sales and marketing         2,771       2,961       5,423       6,113
 Research and
  development                  373         492         791         911
                        ----------  ----------  ----------  ----------
   Total operating
    expenses                 6,037       6,596      11,772      13,330
                        ----------  ----------  ----------  ----------
  Income (loss) from
   operations                  298      (1,831)       (190)     (5,064)
 Other income (expense):
 Interest expense              (41)        (74)       (108)       (130)
 Dividend and interest
  income                       550          76       1,167         198
                        ----------  ----------  ----------  ----------
   Total other income
    (expense)                  509           2       1,059          68
                        ----------  ----------  ----------  ----------
  Income (loss) before
   income tax                  807      (1,829)        869      (4,996)
 Income tax expense
  (benefit)                    354        (430)        382        (824)
                        ----------  ----------  ----------  ----------
   Net income (loss)    $      453  $   (1,399) $      487  $   (4,172)
                        ==========  ==========  ==========  ==========
 Basic net income per
  share attributable to
  common shareholders   $     0.02  $    (0.06) $     0.02  $    (0.19)
 Weighted-average common
  shares outstanding    26,959,790  21,707,477  26,998,857  21,648,246
 Diluted net income per
  share attributable to
  common shareholders   $     0.02  $    (0.06) $     0.02  $    (0.19)
 Weighted-average common
  shares and share
  equivalents
  outstanding           29,018,991  21,707,477  29,613,684  21,648,246

 Supplemental
  information:
  FAS 123R compensation
   expense
   Cost of revenue      $       65  $       53  $      130  $      112
   General and
    administrative             171         145         425         267
   Sales and marketing         145         136         271         265
   Research and
    development                  7           9          20          19
                        ----------  ----------  ----------  ----------
    Total               $      388  $      343  $      846  $      663
                        ==========  ==========  ==========  ==========


                     Condensed Consolidated Balance
                     Sheets As of March 31, 2009 and
                     September 30, 2009 (unaudited)

                                                 March 31,   Sept. 30,
                                                   2009        2009
                                                ----------  ----------
 Cash and cash equivalents                      $   36,163  $   33,413
 Short term investments                              6,490       1,000
 Accounts Receivable                                11,572      12,742
 Inventories                                        20,232      19,672
 Current assets                                     78,374      69,112
 Property and equipment, net                        22,999      25,739
 Total assets                                      103,722      98,307
 Accounts Payable                                    7,817       5,479
 Current liabilities                                10,947       9,057
 Long term debt                                      3,647       3,337
 Total shareholders' equity                         88,695      85,406


          Condensed Consolidated Statements of Cash Flows
        For the Six Months ended September 30, 2008 and 2009
                           (unaudited)

                                                   Six months ended
                                                    September 30,
                                                ----------------------
                                                   2008       2009
                                                ----------  ----------
 Cash used in operating activities              $     (371) $   (4,149)
 Cash provided by (used in) investing activities   (24,855)      1,715
 Cash used in financing activities                  (6,679)       (316)
                                                ----------  ----------
 Net (decrease) in cash and cash equivalents    $  (31,905) $   (2,750)
                                                ==========  ==========

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SOURCE: Orion Energy Systems, Inc.

CONTACT: Orion Energy Systems
Linda Diedrich
(920) 482-1988
Scott Jensen, Chief Financial Officer
(920) 892-5454

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