Orion Energy Systems, Inc. Announces Fiscal 2013 Third Quarter Results
Reports Increased Quarterly Revenue and Earnings
Orion Energy Systems, Inc. (NYSE MKT: OESX), a leading power technology
enterprise, announced today its financial results for its fiscal 2013
third quarter and fiscal year-to-date period ended December 31, 2012.
“With revenues increasing year-over-year and sequentially, coupled with
earnings returning to positive territory, our fiscal third quarter
results reflect our renewed commitment to driving sustainable,
profitable growth. While there is more work to be done, we have made
great strides over the last several months aligning our priorities to
deliver improved financial performance, and ultimately shareholder
value,” commented John Scribante, Chief Executive Officer of Orion
Energy Systems. “Looking ahead, driving profitable top-line growth
through a culture of innovation, while maintaining financial discipline
and improving operational efficiency remain my top priority.”
Third Quarter of Fiscal 2013
For the third quarter of fiscal 2013, the Company reported revenues of
$29.1 million, a 6% increase compared to $27.4 million for the third
quarter of fiscal 2012.
For the third quarter of fiscal 2013, the Company reported net income of
$0.7 million, or $0.03 per share. For the third quarter of fiscal 2012,
the Company’s net income was $0.1 million, or $0.00 per share.
Total order backlog as of December 31, 2012 was $38.3 million. The
Company currently expects approximately $10.2 million of its existing
backlog to be recognized as revenue during the remainder of fiscal 2013.
First Nine Months of Fiscal 2013
For the first nine months of fiscal 2013, the Company reported revenues
of $63.8 million, a 19% decrease compared to $79.1 million for the first
nine months of fiscal 2012.
For the first nine months of fiscal 2013, the Company reported a net
loss of $10.9 million, or $(0.51) per share. For the first nine months
of fiscal 2012, the Company’s net income was $0.6 million, or $0.03 per
share. During the first nine months of fiscal 2013, the Company incurred
non-recurring charges in the amount of $6.2 million, including a
non-cash valuation reserve charge related to its deferred tax assets of
$4.1 million, or approximately $(0.19) per share, and reorganization
expenses of $2.1 million, or approximately $(0.10) per share.
Cash, Debt and Liquidity Position
Orion had $13.1 million in cash and cash equivalents and $1.0 million in
short-term investments as of December 31, 2012, compared to $23.0
million and $1.0 million, respectively, at March 31, 2012. The reduction
in cash during the first nine months was primarily due to $6.0 million
used to repurchase common shares, $1.8 million for capital expenditures
and $2.2 million for the repayment of debt.
Total short and long-term debt was $7.5 million as of December 31, 2012,
compared to $9.5 million as of March 31, 2012. There were no borrowings
outstanding under the Company’s revolving credit facility as of December
31, 2012, which has availability of $13.3 million.
The Company repurchased 2.9 million shares of its common stock at an
average price per share of approximately $2.22 during the fiscal 2013
first nine months. As previously disclosed, the Company halted its share
repurchase program mid-October 2012 in order to conserve cash while it
stabilizes its profit performance.
Supplemental Information
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 and nine months ended December
31, 2012. The purpose of the supplemental information is to provide
further discussion and analysis of the Company’s financial results for
the third quarter and year-to-date ended December 31, 2012. The
supplemental information can be found in the Investor Relations section
of Orion’s Web site at http://investor.oriones.com/events.cfm.
Conference Call
Orion will host a conference call on Tuesday, February 5, 2013 at 5:00
p.m. Eastern (4:00 p.m. Central/2:00 p.m. Pacific) to discuss details
regarding its fiscal 2013 third quarter performance. Domestic callers
may access the earnings conference call by dialing 877-754-5294
(international callers, dial 678-894-3013). Investors and other
interested parties may also go to the Investor Relations section of
Orion’s Web site 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.
About Orion Energy Systems
Orion Energy Systems, Inc. (NYSE MKT: OESX) is a leading power
technology enterprise that designs, manufactures and deploys energy
management systems – consisting primarily of high-performance, energy
efficient lighting platforms, intelligent wireless control systems and
direct renewable solar technology for commercial and industrial
customers – without compromising their quantity or quality of light.
Since December 2001, Orion’s technology has benefitted its customers and
the environment by reducing its customer’s:
-
Energy demand by 781,069 kilowatts, or 24.8 billion kilowatt-hours;
-
Energy costs by $1.9 billion; and
-
Indirect carbon dioxide emission by 16.2 million tons.
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 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) deterioration of market conditions, including
customer capital expenditure budgets; (ii) our ability to compete and
execute our growth strategy in a highly competitive market and our
ability to respond successfully to market competition; (iii) increasing
duration of customer sales cycles; (iv) the market acceptance of our
products and services, (v) our ability to recruit and hire sales talent
to increase our in-market direct sales; (vi) our development of, and
participation in, new product and technology offerings or applications,
including customer acceptance of our new LED product line (vii) the
substantial cost of our various legal proceedings and our ongoing SEC
inquiry; (viii) price fluctuations, shortages or interruptions of
component supplies and raw materials used to manufacture our products;
(ix) loss of one or more key employees, customers or suppliers,
including key contacts at such customers; (x) our ability to effectively
manage our product inventory to provide our products to customers on a
timely basis; (xi) our ability to effectively manage the credit risk
associated with our debt funded OTA contracts; (xii) a reduction in the
price of electricity; (xiii) the cost to comply with, and the effects
of, any current and future government regulations, laws and policies;
(xiv) increased competition from government subsidies and utility
incentive programs; (xv) dependence on customers’ capital budgets for
sales of products and services; (xvi); the availability of additional
debt financing and/or equity capital; and (xvii) 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 the Company
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.oesx.com
in the Investor Relations section of the Company’s Web site.
|
ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
Product revenue
|
|
$
|
24,274
|
|
|
$
|
22,660
|
|
|
$
|
71,746
|
|
|
$
|
53,171
|
|
Service revenue
|
|
|
3,132
|
|
|
|
6,427
|
|
|
|
7,356
|
|
|
|
10,634
|
|
Total revenue
|
|
|
27,406
|
|
|
|
29,087
|
|
|
|
79,102
|
|
|
|
63,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue
|
|
|
17,445
|
|
|
|
15,708
|
|
|
|
50,484
|
|
|
|
37,172
|
|
Cost of service revenue
|
|
|
2,447
|
|
|
|
4,798
|
|
|
|
5,716
|
|
|
|
7,874
|
|
Total cost of revenue
|
|
|
19,892
|
|
|
|
20,506
|
|
|
|
56,200
|
|
|
|
45,046
|
|
Gross profit
|
|
|
7,514
|
|
|
|
8,581
|
|
|
|
22,902
|
|
|
|
18,759
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
2,841
|
|
|
|
2,848
|
|
|
|
8,641
|
|
|
|
10,788
|
|
Sales and marketing
|
|
|
4,053
|
|
|
|
4,730
|
|
|
|
11,557
|
|
|
|
13,243
|
|
Research and development
|
|
|
556
|
|
|
|
427
|
|
|
|
1,771
|
|
|
|
1,834
|
|
Total operating expenses
|
|
|
7,450
|
|
|
|
8,005
|
|
|
|
21,969
|
|
|
|
25,865
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
64
|
|
|
|
576
|
|
|
|
933
|
|
|
|
(7,106
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(160
|
)
|
|
|
(138
|
)
|
|
|
(397
|
)
|
|
|
(441
|
)
|
Dividend and interest income
|
|
|
226
|
|
|
|
213
|
|
|
|
594
|
|
|
|
656
|
|
Total other income
|
|
|
66
|
|
|
|
75
|
|
|
|
197
|
|
|
|
215
|
|
Income (loss) before income tax
|
|
|
130
|
|
|
|
651
|
|
|
|
1,130
|
|
|
|
(6,891
|
)
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
56
|
|
|
|
-
|
|
|
|
490
|
|
|
|
4,057
|
|
Net income (loss)
|
|
$
|
74
|
|
|
$
|
651
|
|
|
$
|
640
|
|
|
$
|
(10,948
|
)
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share
|
|
$
|
0.00
|
|
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
$
|
(0.51
|
)
|
Weighted-average common shares outstanding
|
|
|
22,996,050
|
|
|
|
20,191,547
|
|
|
|
22,969,169
|
|
|
|
21,271,465
|
|
Diluted net income (loss) per share
|
|
$
|
0.00
|
|
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
$
|
(0.51
|
)
|
Weighted-average common shares outstanding
|
|
|
23,254,830
|
|
|
|
20,245,194
|
|
|
|
23,388,651
|
|
|
|
21,271,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following amounts of stock-based compensation were recorded
(in thousands):
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
|
|
|
|
|
|
|
|
Cost of product revenue
|
|
$
|
37
|
|
$
|
21
|
|
$
|
114
|
|
$
|
78
|
General and administrative
|
|
|
144
|
|
|
43
|
|
|
440
|
|
|
462
|
Sales and marketing
|
|
|
119
|
|
|
78
|
|
|
391
|
|
|
357
|
Research and development
|
|
|
9
|
|
|
3
|
|
|
21
|
|
|
18
|
Total
|
|
$
|
309
|
|
$
|
145
|
|
$
|
966
|
|
$
|
915
|
|
ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2012
|
|
2012
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
23,011
|
|
|
$
|
13,074
|
|
Short-term investments
|
|
|
1,016
|
|
|
|
1,020
|
|
Accounts receivable, net
|
|
|
19,167
|
|
|
|
20,233
|
|
Inventories, net
|
|
|
18,132
|
|
|
|
17,766
|
|
Deferred contract costs
|
|
|
2,193
|
|
|
|
1,727
|
|
Deferred tax assets
|
|
|
1,549
|
|
|
|
-
|
|
Prepaid expenses and other current assets
|
|
|
2,174
|
|
|
|
3,363
|
|
|
Total current assets
|
|
|
67,242
|
|
|
|
57,183
|
|
Property and equipment, net
|
|
|
30,225
|
|
|
|
28,747
|
|
Long-term inventory
|
|
|
12,328
|
|
|
|
11,871
|
|
Patents and licenses, net
|
|
|
1,689
|
|
|
|
1,686
|
|
Deferred tax assets
|
|
|
2,609
|
|
|
|
213
|
|
Long-term accounts receivable
|
|
|
7,555
|
|
|
|
6,107
|
|
Other long-term assets
|
|
|
4,002
|
|
|
|
3,562
|
|
|
Total assets
|
|
$
|
125,650
|
|
|
$
|
109,369
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
14,300
|
|
|
$
|
13,359
|
|
Accrued expenses
|
|
|
3,018
|
|
|
|
6,760
|
|
Deferred revenue
|
|
|
2,614
|
|
|
|
1,462
|
|
Current maturities of long-term debt
|
|
|
2,791
|
|
|
|
2,737
|
|
|
Total current liabilities
|
|
|
22,723
|
|
|
|
24,318
|
|
Long-term debt, less current maturities
|
|
|
6,704
|
|
|
|
4,720
|
|
Deferred revenue
|
|
|
3,048
|
|
|
|
3,070
|
|
Other long-term liabilities
|
|
|
406
|
|
|
|
401
|
|
|
Total liabilities
|
|
|
32,881
|
|
|
|
32,509
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
126,753
|
|
|
|
127,778
|
|
Treasury stock
|
|
|
(32,470
|
)
|
|
|
(38,381
|
)
|
Shareholder notes receivable
|
|
|
(221
|
)
|
|
|
(296
|
)
|
Retained deficit
|
|
|
(1,293
|
)
|
|
|
(12,241
|
)
|
|
Total shareholders’ equity
|
|
|
92,769
|
|
|
|
76,860
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
125,650
|
|
|
$
|
109,369
|
|
|
ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended December 31,
|
|
|
|
|
|
2011
|
|
2012
|
Operating activities
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
640
|
|
$
|
(10,948)
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating
|
|
|
|
|
|
|
|
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
3,029
|
|
|
3,414
|
|
Stock-based compensation expense
|
|
|
966
|
|
|
914
|
|
Deferred income tax (benefit) expense
|
|
|
(312)
|
|
|
3,945
|
|
(Gain) loss on sale of property and equipment
|
|
|
(15)
|
|
|
38
|
|
Provision for bad debts
|
|
|
409
|
|
|
712
|
|
Other
|
|
|
61
|
|
|
44
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, current and long-term
|
|
|
1,238
|
|
|
(330)
|
|
Inventories, current and long-term
|
|
|
(3,596)
|
|
|
823
|
|
Deferred contract costs
|
|
|
6,903
|
|
|
466
|
|
Prepaid expenses and other assets
|
|
|
(1,089)
|
|
|
(805)
|
|
Accounts payable
|
|
|
3,005
|
|
|
(941)
|
|
Accrued expenses
|
|
|
1,328
|
|
|
3,737
|
|
Deferred revenue
|
|
|
(6,081)
|
|
|
(1,130)
|
|
Net cash provided by (used in) operating activities
|
|
|
6,486
|
|
|
(61)
|
Investing activities
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(3,398)
|
|
|
(1,848)
|
|
Purchase of property and equipment held under operating leases
|
|
|
(3)
|
|
|
-
|
|
Purchase of short-term investments
|
|
|
(4)
|
|
|
(4)
|
|
Additions to patents and licenses
|
|
|
(184)
|
|
|
(97)
|
|
Proceeds from asset sales
|
|
|
5
|
|
|
30
|
|
Net cash used in investing activities
|
|
|
(3,584)
|
|
|
(1,919)
|
Financing activities
|
|
|
|
|
|
|
|
Payment of long-term debt
|
|
|
(1,260)
|
|
|
(2,194)
|
|
Proceeds from debt
|
|
|
4,583
|
|
|
156
|
|
Proceeds from repayment of shareholder notes
|
|
|
47
|
|
|
7
|
|
Repurchase of common stock into treasury
|
|
|
(279)
|
|
|
(6,007)
|
|
Excess tax benefits from stock-based compensation
|
|
|
682
|
|
|
21
|
|
Deferred financing costs
|
|
|
(124)
|
|
|
-
|
|
Proceeds from issuance of common stock
|
|
|
122
|
|
|
60
|
|
Net cash provided by (used in) financing activities
|
|
|
3,771
|
|
|
(7,957)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
6,673
|
|
|
(9,937)
|
Cash and cash equivalents at beginning of period
|
|
|
11,560
|
|
|
23,011
|
Cash and cash equivalents at end of period
|
|
$
|
18,233
|
|
$
|
13,074
|
|
|
|
|
|
|
|