Orion Energy Systems, Inc. Announces Fiscal 2009 Third Quarter Results
PLYMOUTH, Wis., Feb 3, 2009 (GlobeNewswire via COMTEX News Network) -- Orion Energy Systems, Inc. (Nasdaq:OESX), a leading provider of energy management systems to the commercial and industrial sectors, today announced financial results for its fiscal 2009 third quarter ended December 31, 2008.
"We reported solid results for the third quarter of fiscal 2009 despite an increasingly difficult operating environment. During the quarter, we continued to see meaningful customer wins by both Orion's direct sales team and Orion's partner network, the successful completion of various scheduled projects for national account customers, and profitability improvements through reductions in discretionary corporate spending and other efficiencies," commented Neal Verfuerth, CEO of Orion Energy Systems. "While we are realistic with regard to the challenges we may face in the coming year, we remain confident in our business model as it delivered profits, positive cash flows and near record revenues for the quarter. Revenues in this difficult quarter were just shy of Orion's historic high water mark seen last year during healthier economic times."
Mr. Verfuerth concluded, "As of December 31, we had $49 million in cash and short-term investments and nominal debt on our balance sheet. Orion's financial strength and flexibility, combined with our people and products, will allow us to aggressively provide impactful and economically sound solutions to the energy and sustainability challenges facing both corporate customers and the electrical grid."
Fiscal 2009 Third Quarter Results
Revenue. Total revenue for the quarter was $22.4 million compared to $23.3 million for the fiscal 2008 third quarter, representing a decrease of 4%. Third quarter revenues reflected a sequential improvement of 19%, or $3.6 million, over the second quarter of fiscal 2009.
Gross Profit. Gross profit for the quarter was $7.4 million compared to $8.3 million for the fiscal 2008 third quarter, representing a decrease of 11%. Third quarter gross profit reflected a sequential improvement of 17.5% over the $6.3 million of gross profit reported for the second quarter of fiscal 2009.
Operating Expenses. Total operating expenses for the quarter were $5.5 million (24.6% of total revenue) compared to $6.0 million (25.8% of total revenue) for the fiscal 2008 third quarter, representing a decrease of 8%. Third quarter operating expenses also reflected improvement compared to the $6.0 million of operating expenses (32% of total revenue) reported in the second quarter of fiscal 2009.
Income from Operations. Income from operations for the fiscal 2009 third quarter was $1.9 million (8.5% of total revenue) compared to operating income of $2.3 million (9.9% of total revenue) for the fiscal 2008 third quarter, representing a decrease of 17%. However, third quarter operating income reflected improvement compared to the $298 thousand operating income (2% of total revenue) reported in the second quarter of fiscal 2009.
Net Income. Net income for the quarter was $1.2 million compared to $1.2 million for the fiscal 2008 third quarter. Earnings per diluted share were $0.04 for the quarter compared to $0.05 for the fiscal 2008 third quarter. Net income results for the quarter reflected sequential improvement compared to the $453 thousand of net income reported in the second quarter of fiscal 2009.
Results for the Nine Months Ended December 31, 2008
Revenue. Total revenue for the nine months ended December 31, 2008, was $57.2 million compared to $58.4 million for the same prior year period, representing a decrease of 2%.
Gross Profit. Gross profit for the six months ended December 31, 2008, was $19.0 million compared to $20.2 million for the same prior year period, representing a decrease of 6%.
Operating Expenses. Total operating expenses for the six months ended December 31, 2008, were $17.2 million compared to $14.4 million for the same prior year period, an increase of 19%.
Income from Operations. Income from operations for the nine months ended December 31, 2008, was $1.7 million compared to operating income of $5.8 million for the same prior year period, representing a decrease of 71%.
Net Income. Net income for the nine months ended December 31, 2008, was $1.6 million compared to $3.0 million for the same prior year period, representing a decrease of 46%. Earnings per diluted share were $0.06 for the nine months ended December 31, 2008, compared to $0.14 for the same prior year period.
Business Highlights
* Deployed energy management systems in 344 facilities in the third
quarter of fiscal 2009, representing over 55 million square feet
retrofitted, and bringing Orion's installed base to 4,387
facilities.(1) This compares favorably to the 301 facilities and 49
million square feet retrofitted in the second quarter of fiscal
2009.
* Since December 2001, the company has benefited its customers and
the environment as follows:
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Cumulative From
December 1, 2001
Through
December 31, 2008
---------------------------------------------------------------------
High intensity fluorescent (HIF) systems sold 1,419,428
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Total units sold (including HIF) 1,825,091
---------------------------------------------------------------------
Customer kilowatt demand reduction 423,000
---------------------------------------------------------------------
Customer kilowatt hours saved 6,683,363,511
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Customer electricity costs saved $514,618,900
---------------------------------------------------------------------
Indirect carbon dioxide emission reductions from
customers' energy savings (tons) 4,389,332(2)
---------------------------------------------------------------------
Square footage retrofitted 725,678,664
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* Secured ten new Orion Virtual Power Plant(tm) negawatt supply
agreements during the third quarter, representing gross income
streams of $780 thousand. Orion had 27.5 million kWh of negawatts
under 12 supply agreements as of December 31, 2008.
* Witnessed continued performance by Orion's VAR partner network.
Sales to VAR partners for the nine months ended December 31, 2008,
exceeded prior year sales for the same period by 47%.
* Added 51 new contractor partners during the third quarter, bringing
the total network of contractor partners who have conducted
business on a recurring basis with Orion to over 370 as of December
31, 2008. Sales to contractor partners for the nine months ended
December 31, 2008, exceeded prior year sales for the same period by
75%.
* Awarded the prestigious Platts Global Energy Award for Sustainable
Technology Innovation of the Year, recognizing Orion's integrated
energy management system as "the single most innovative technology
advance in the area of green technology."
* Granted approval by the New Jersey Board of Public Utilities to
deploy, in partnership with Public Service Electric & Gas Company
(PSE&G) and General Electric, Orion's integrated lighting system as
a capacity solution in the port region of New Jersey. Under the
program, PSE&G will provide financial incentive to reduce the
simple pay-back period for Orion's integrated system, which
includes wireless InteLite(tm) controls and Apollo Solar Light
Pipes(tm), to two years.
* Received Sysco Corporation's prestigious Facilities Supplier of the
Year award. This is the second straight year Orion has received
this recognition, testament to the high value Orion's solutions
provide to its customers.
* Repurchased over 3.8 million shares of outstanding common stock
during the third quarter as part of the $30 million share
repurchase program originally approved by Orion's Board of
Directors on July 17, 2008 and supplemented with additional
repurchase authorization on December 15, 2008. Orion has
repurchased a total of 5.3 million shares at an average price of
$4.27 as of December 31, 2008.
(1) Orion's total installed base of 4,387 reflects a downward
adjustment of 7 due to removal of duplicate records from
historical data.
(2) Emissions rate reflects recent revision of EGRID database
(EGRID2007 Version 1.0 - October 2008); without revision
emissions would have totaled 4,554,716 tons
Recent Developments
* Orion announced on January 7, 2009, that its Board of Directors adopted a shareholder rights agreement, with the issuance of rights under the agreement taking place on February 15, 2009 to shareholders of record as of the close of business on February 1, 2009.
Full-Year Fiscal 2009 Outlook
Orion is re-affirming its annual revenue guidance range of 0% to 9% year-over-year revenue growth. Total revenue for fiscal 2009 is forecasted to be between $81 million and $88 million, with the expectation that fiscal 2009 total revenue will likely be close to the bottom end of this estimated range. Orion is also re-affirming its annual earnings guidance with earnings per share for fiscal 2009 estimated to be between $0.06 and $0.11 per diluted share.
Conference Call
Orion will host a conference call on Tuesday, February 3, at 5:30 p.m. Eastern (4:30 p.m. Central/2:30 p.m. Pacific) to discuss details regarding its second quarter performance. Domestic callers may access the earnings conference call by dialing 877-741-4251 (International callers, dial 719-325-4754). 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. (Nasdaq:OESX) 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.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 conditions; (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; (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 subsidiaries and utility incentive programs; (x) dependence on customers' capital budgets for sales of products and services; (xi) Orion's ability to effectively manage its anticipated growth; and (xii) 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 Nine Months ended December 31, 2007 and 2008
(unaudited)
Three months ended Nine months ended
December 31, December 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
Revenue $ 23,311 $ 22,375 $ 58,437 $ 57,241
Cost of revenue 15,057 14,955 38,258 38,289
---------- ---------- ---------- ----------
Gross profit 8,254 7,420 20,179 18,952
Operating expenses:
General and
administrative 3,288 2,438 6,766 7,946
Sales and marketing 2,260 2,741 6,309 8,164
Research and
development 454 347 1,334 1,138
---------- ---------- ---------- ----------
Total operating
expenses 6,002 5,526 14,409 17,248
---------- ---------- ---------- ----------
Income from operations 2,252 1,894 5,770 1,704
Other income (expense):
Interest expense (648) (33) (1,272) (141)
Dividend and
interest income 286 325 480 1,492
---------- ---------- ---------- ----------
Total other income
(expense) (362) 292 (792) 1,351
---------- ---------- ---------- ----------
Income before
income tax 1,890 2,186 4,978 3,055
Income tax expense 737 1,032 2,023 1,414
---------- ---------- ---------- ----------
Net income 1,153 1,154 2,955 1,641
Accretion of redeemable
preferred stock and
preferred stock
dividends (75) -- (225) --
Participation rights of
preferred stock in
undistributed earnings (264) -- (775) --
---------- ---------- ---------- ----------
Net income
attributable to
common shareholders $ 814 $ 1,154 $ 1,955 $ 1,641
========== ========== ========== ==========
Basic net income per
share attributable to
common shareholders $ 0.06 $ 0.05 $ 0.17 $ 0.06
Weighted-average common
shares outstanding 13,889,162 25,203,827 11,774,702 26,398,338
Diluted net income per
share attributable to
common shareholders $ 0.05 $ 0.04 $ 0.14 $ 0.06
Weighted-average common
shares and share
equivalents
outstanding 22,858,230 26,414,750 20,752,432 28,710,765
Supplemental
information:
FAS 123R compensation
expense
Cost of revenue $ 24 $ 68 $ 68 $ 198
General and
administrative 185 121 565 546
Sales and marketing 157 157 267 428
Research and
development 13 12 29 32
---------- ---------- ---------- ----------
Total $ 379 $ 358 $ 929 $ 1,204
========== ========== ========== ==========
Condensed Consolidated Balance Sheets
As of March 31, 2008 and December 31, 2008 (unaudited)
March 31, December 31,
2008 2008
---------- ----------
Cash and cash equivalents $ 78,312 $ 24,175
Short term investments 2,404 24,692
Accounts Receivable 17,666 19,144
Inventories 16,789 18,592
Current assets 116,896 89,617
Property and equipment, net 11,539 20,949
Total assets 130,702 113,288
Accounts Payable 7,521 8,963
Current liabilities 12,606 12,445
Long term debt 4,473 3,813
Total shareholders' equity 113,190 96,601
Condensed Consolidated Statements of Cash Flows
For the Nine Months ended December 31, 2007 and 2008
(unaudited)
Nine months ended
December 31,
----------------------
2007 2008
---------- ----------
Cash used in operating activities $ (2,115) $ (468)
Cash used in investing activities (1,821) (33,491)
Cash provided by (used in) financing activities 86,946 (20,178)
---------- ----------
Net increase (decrease) in cash
and cash equivalents $ 83,010 $ (54,137)
========== ==========
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SOURCE: Orion Energy Systems, Inc.
Orion Energy Systems
Erik G. Birkerts, Chief Operating Officer
(920) 482-1924
FD Ashton Partners
Victoria Paris
(312) 553-6715
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