LED Sales Amount to 60% Revenue for Orion Energy Systems Last Quarter

Orion Energy Systems, a leading designer and manufacturer of high-performance, energy-efficient lighting platforms, today announced financial results for its fiscal 2016 first quarter ended June 30, 2015, highlighted by strong LED sales and solid gross margin expansion.

“Robust LED sales, driven by increasing demand for our products, which, coupled with our continued improvements in manufacturing cost efficiency, drove significant gross margin improvement. This quarter’s performance clearly validates our multi-year efforts to re-position the business for the secular shift to LED lighting that is taking place”

Operating and Financial Highlights

  • Total revenue for the fiscal 2016 first quarter was US $16.6 million, an increase of 24.6% compared to $13.3 million in the prior-year period. Lighting revenue for the fiscal 2016 first quarter increased 35% compared to the prior-year period.
  • LED lighting product sales were $9.6 million in the fiscal 2016 first quarter, an increase of 269% compared to $2.6 million in the prior-year period, reflecting 60.9% of total lighting product revenue, which compared to 21.4% in the fiscal 2015 first quarter.
  • The fiscal 2016 first quarter gross margin was 22.7% compared to 19.6% in the prior-year period.
  • As of June 30, 2015, Orion had a lighting backlog of $5.2 million in LED and high-intensity fluorescent (HIF) lighting orders, compared to a lighting backlog of $7.0 million as of June 30, 2014.

“Robust LED sales, driven by increasing demand for our products, which, coupled with our continued improvements in manufacturing cost efficiency, drove significant gross margin improvement. This quarter’s performance clearly validates our multi-year efforts to re-position the business for the secular shift to LED lighting that is taking place,” said John Scribante, Chief Executive Officer. “As we move forward, we are committed to executing on our three initiatives for 2016 including growing LED revenues, driving innovation and improving gross and operating margins. We believe we have never been better-positioned to capitalize on the massive market opportunity standing before us in LED retrofit solutions, which should deliver meaningful value to our shareholders.”

Financial Review

Fiscal 2016 First Quarter

Revenue: Total revenue was $16.6 million for the fiscal 2016 first quarter, an increase of 24.6% compared to $13.3 million in the prior-year period. Total lighting sales for the fiscal 2016 first quarter were $16.5 million, a 35.2% increase compared to $12.2 million in the prior-year period. The increase was driven by stronger reseller sales during the quarter on increased demand for Orion’s new LED product offerings.

LED Lighting Revenue: Product revenue from Orion’s LED products was $9.6 million during the fiscal 2016 first quarter, an increase of 269% compared to $2.6 million in the prior-year period. LED sales during the period were 57.6% of total revenue and 60.8% total lighting product revenue, marking a new record for LED sales as a percentage of total revenue.

Gross Margin: Total gross margin improved to 22.7% during the fiscal 2016 first quarter, compared to 19.6% for the prior-year period. The improvement was largely due to the increase in revenue volume, reductions in component costs and a mix benefit on increased revenue from LED high bay products.

Net Income / Loss: The Company reported a net loss for the fiscal 2016 first quarter of $3.7 million, or $0.13 per share, compared to net loss of $4.4 million, or $0.20 per share, in the prior-year period.

Balance Sheet Review

Cash and Investments: Orion had $17.9 million in cash and cash equivalents as of June 30, 2015, compared to $16.8 million at June 30, 2014. The Company had $3.2 million in borrowings outstanding on its line of credit.

Working Capital: The Company’s working capital as of June 30, 2015 was $35.3 million, consisting of $54.2 million in current assets and $18.9 million in current liabilities, compared to $29.7 million, consisting of $44.2 million in current assets and $14.5 million in current liabilities, at June 30, 2014.

Net Cash from Operations: The Company reported a $2.1 million use of cash from operations during the fiscal 2016 first quarter, compared to a $1.3 million use of cash from operations during the prior-year period. The increase was attributed to a build-up of inventory related to the increase in revenue and expectations for the calendar back half and an increase in DSO related to prolonged collections of government projects and utility incentives, offset somewhat by a decrease in accounts payable as a result of inventory purchases and favorable vendor terms.

Total Debt: Orion’s total debt decreased $0.2 million to $5.6 million at June 30, 2015, compared to $5.8 million at June 30, 2014. It increased $0.5 million sequentially.

Management Outlook for Fiscal Year 2016

“We are encouraged by our first quarter results and feel confident that we will reach positive EBITDA for the full fiscal year, driven by a significant year-over-year increase in revenue, significant year-over-year margin expansion, positive cash flow from operations, and positive GAAP EPS in the second half of the fiscal year,” Scribante said. 

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