Orion Energy Systems Announces Fiscal 2015 First Quarter Results
Company to Hold Conference Call with Accompanying Slide Presentation
Operating and Financial Highlights
Total revenue for the fiscal 2015 first quarter was
$13.3 million, compared to $20.9 millionin the prior-year period.
LED lighting sales increased 127.7% year-over-year to
$2.6 millionin the fiscal 2015 first quarter, accounting for 20.9% of lighting product revenues, an increase from $1.1 million, or 7.6% of lighting product revenues, in the prior-year period.
June 30, 2014, the Company had a current backlog of purchase orders amounting to $7.4 million, with $7.0 millionin LED and HIF lighting orders, the largest lighting backlog total since September 2011.
In addition to the hundreds of existing reseller customers, the
Company grew its network of key regional resellers to 53 at
June 30, 2014from 30 at March 31, 2014. Orion believes that expansion in this metric will serve as a leading indicator of future sales as there is a certain ramp-up time from signing to when resellers begin to produce a consistent order flow.
June 30, 2014, the Company's working capital was $29.7 millioncompared to $33.1 millionat March 31, 2014.
Fiscal 2015 First Quarter
Total revenue was
$13.3 millionfor the fiscal 2015 first quarter, compared to $20.9 millionin the prior-year period. The decrease in revenue was a result of delayed customer purchase decisions in the early months of the fiscal 2015 first quarter, coupled with cyclical budget allocation of prospective customers. Also, Orion has seen a decrease of $3.9 millionin revenues year-over-year attributed directly to their exit of the solar energy business line. Revenue from the non-core solar business is expected to be approximately $1.5 millionduring fiscal 2015 and will not continue into future years.
Product revenue from Orion's LED products increased to
$2.55 million, or 20.9% of total lighting product revenues, during fiscal 2015 first quarter, compared to $1.1 million, or 7.6% of total lighting product revenues, in the prior-year period.
- Total lighting revenues that were generated through resellers during the fiscal 2015 first quarter was 71.2%, compared to 62% in prior-year period.
- Total gross margin was 19.6% for the fiscal 2015 first quarter, compared to 27.4% for the prior-year period, largely as a result of the decline in lighting product revenue and the related impact of fixed expenses within its manufacturing facility. As the Company begins to realize economies-of-scale among its lighting product categories, it expects to achieve gross margins of approximately 30%.
The Company reported a net loss for the fiscal 2015 first quarter of
$4.4 million, or $0.20per diluted share, compared to a net loss of $0.8 million, or $0.04per diluted share, in the prior-year period.
Balance Sheet Review
Orion had approximately
$16.3 millionin cash and cash equivalents and $0.5 millionin short-term investments as of June 30, 2014, compared to $17.6 millionand $0.5 million, respectively, at March 31, 2014.
The Company's working capital as of
June 30, 2014, was $29.7 million, consisting of $44.2 millionin current assets and $14.5 millionin current liabilities, compared to $33.1 million, consisting of $50.3 millionin current assets and $17.2 millionin current liabilities, at March 31, 2014.
The Company reported a
$1.3 milliondecrease of net cash from operations during first quarter of 2015, compared to a $2.0 millionincrease of net cash from operations in the prior-year period.
Total debt was
$5.8 millionat June 30, 2014, compared with $6.6 millionat March 31, 2014.
The Company continues to expect total revenues for fiscal 2015 to
$80.0 millionto $105.0 million, which is based largely on projected sales acceleration of its LED product line.
- Orion has budgeted a ramp-up in sales over the subsequent quarters of fiscal 2015 from LED products. The Company expects that the timeline of increased sales will largely match with the historical capital allocation budgets of its clients in the second half of calendar 2015, as well as reflect the growing adoption rate from target customers in the office, retail, and industrial sectors.
- The Company continues to evaluate potential acquisition possibilities that could expand its supply chain capabilities, product line, and be complementary to its existing operations.
- The Company-wide re-branding initiative will continue, positioning Orion as a premier LED lighting solutions company.
In conjunction with this press release, Orion has posted supplemental
information on its website which further discusses the financial
performance of the Company for the three months ended
Orion will discuss these results in a conference call today,
|The dial-in numbers are:|
|Domestic callers:||(877) 754-5294|
|International callers:||(678) 894-3013|
The Company will be utilizing an accompanying slideshow presentation in conjunction with this call, which will be available on the Investor Relations section of Orion's website at www.oesx.com.
To listen to the live webcast, go to the Investor Relations section of Orion Energy Systems' website at http://investor.oriones.com/events.cfm for a live webcast link. To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast.
An audio replay of the earnings conference call will be available shortly after the call and will remain available through August 11, 2014. The replay can be accessed by dialing (855) 859-2056. The replay pass code for callers is 74639105.
Orion is leading the transformation of commercial and industrial buildings with state-of-the-art energy efficient lighting systems. Orion manufactures and markets a cutting edge portfolio of products encompassing LED Solid-State Lighting, high intensity fluorescent, and smart controls. Orion's 70+ patents held or pending provide unparalleled optical and thermal performance, which drive financial, environmental, and work-space benefits for a wide variety of retrofit markets.
Safe Harbor Statement
Certain matters discussed in this press release, including under our
"Outlook for Fiscal 2015" section, 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 the Company's
financial guidance or 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) our development of, and participation in, new product
and technology offerings or applications, including customer acceptance
of our LED product lines; (ii) the rate of customer adoption of LED
lighting products and the increasing duration of customer sales cycles
as customers defer purchasing decisions to evaluate LED product costs
and performance; (iii) deterioration of market conditions, including
delays to customer capital expenditure budgets; (iv) our ability to
compete and execute our growth and profitability strategy in a highly
competitive market and our ability to respond successfully to market
competition; (v) any material changes to our inventory obsolescence
reserves; (vi) our ability to recruit and hire sales talent to increase
our in-market sales; (vii) the substantial cost of our various legal
proceedings; (viii) our decreasing emphasis on obtaining new solar
photovoltaic construction projects, (ix) price fluctuations, shortages
or interruptions of component supplies and raw materials used to
manufacture our products; (x) loss of one or more key customers or
suppliers, including key contacts at such customers; (xi) our ability to
effectively manage our product inventory to provide our products to
customers on a timely basis; (xii) our ability to effectively manage the
credit risk associated with our debt funded OTA contracts; (xiii) a
reduction in the price of electricity; (xiv) the cost to comply with,
and the effects of, any current and future government regulations, laws
and policies; (xv) increased competition from government subsidies and
utility incentive programs; (xvi) dependence on customers' capital
budgets for sales of products and services; (xvii) the availability of
additional debt financing and/or equity capital; (xviii) potential
warranty claims; (xix) potential acquisitions; and (xx) our expectations
for the fiscal year ending
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three Months Ended
|Cost of product revenue||12,884||9,855|
|Cost of service revenue||2,245||846|
|Total cost of revenue||15,129||10,701|
|General and administrative||2,759||3,648|
|Acquisition and integration related expenses||—||22|
|Sales and marketing||3,303||2,878|
|Research and development||490||416|
|Total operating expenses||6,552||6,964|
|Loss from operations||(829||)||(4,352||)|
|Other income (expense):|
|Dividend and interest income||174||94|
|Total other income||61||4|
|Loss before income tax||(768||)||(4,348||)|
|Income tax (benefit) expense||13||11|
|Basic net loss per share||$||(0.04||)||$||(0.20||)|
|Weighted-average common shares outstanding||
|Diluted net loss per share||$||(0.04||)||$||(0.20||)|
|Weighted-average common shares outstanding||
The following amounts of stock-based compensation were recorded (in thousands):
Three Months Ended
|Cost of product revenue||$||20||$||12|
|General and administrative||221||345|
|Sales and marketing||126||65|
|Research and development||3||5|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||17,568||$||16,336|
|Accounts receivable, net||15,098||13,651|
|Deferred contract costs||742||130|
|Prepaid expenses and other current assets||4,673||2,786|
|Total current assets||50,341||44,232|
|Property and equipment, net||23,135||22,667|
|Other intangible assets, net||7,551||7,264|
|Long-term accounts receivable||1,966||1,539|
|Other long-term assets||931||959|
|Liabilities and Shareholders' Equity|
|Deferred revenue, current||614||376|
|Current maturities of long-term debt||3,450||3,187|
|Total current liabilities||17,191||14,517|
|Long-term debt, less current maturities||3,151||2,595|
|Deferred revenue, long-term||1,316||1,295|
|Other long-term liabilities||270||272|
|Additional paid-in capital||130,766||131,433|
|Shareholder notes receivable||(50||)||(40||)|
|Total shareholders' equity||77,012||73,331|
|Total liabilities and shareholders' equity||$||98,940||$||92,010|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
|Adjustments to reconcile net loss to net cash provided by (used in) operating|
|Stock-based compensation expense||370||427|
|Loss (gain) on sale of property and equipment||21||(5||)|
|Provision for inventory reserves||594||20|
|Provision for bad debts||80||44|
|Changes in operating assets and liabilities:|
|Accounts receivable, current and long-term||(4,387||)||1,830|
|Inventories, current and long-term||864||612|
|Deferred contract costs||(893||)||612|
|Prepaid expenses and other assets||439||829|
|Net cash provided by (used in) operating activities||2,022||(1,283||)|
|Purchase of property and equipment||(130||)||(304||)|
|Purchase of short-term investments||(1||)||(1||)|
|Additions to patents and licenses||(19||)||(48||)|
|Proceeds from sales of property, plant and equipment||30||1,001|
|Net cash (used in) provided by investing activities||(120||)||648|
|Payment of long-term debt||(850||)||(819||)|
|Proceeds from repayment of shareholder notes||1||10|
|Proceeds from issuance of common stock||35||212|
|Net cash used in financing activities||(814||)||(597||)|
|Net increase (decrease) in cash and cash equivalents||1,088||(1,232||)|
|Cash and cash equivalents at beginning of period||14,376||17,568|
|Cash and cash equivalents at end of period||$||15,464||$||16,336|
Investor Relations Contacts:
Chief Financial Officer
Senior Vice President
News Provided by Acquire Media