Orion Energy Systems, Inc. (OESX)
F3Q09 Earnings Call
February 3, 2009 5:30 pm ET
Erik Birkerts – Chief Operating Officer
Neal Verfuerth – President and CEO
Scott Jensen – CFO and Treasurer
Eric Prouty – Canaccord Adams
Eric Stine – Northland Securities
Jeff Osborne – Thomas Weisel Partners
Glenn Wortman – Sidoti & Company
Tom Spiro – Spiro Capital Management
Previous Statements by OESX
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Thank you for joining us for Orion Energy Systems’ Fiscal 2009 Third Quarter Conference Call. With me on the call today are Neal Verfuerth, President and CEO, and Scott Jensen, CFO.
Before we begin, I will read the Safe Harbor Statement. Our remarks that follow, including answers to your questions, include statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified as such because the context of such statements will include words such as “believe,” “anticipate,” “expect,” or words of similar import. Similarly, statements that describe future plans, objectives, or goals are also forward-looking statements.
These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters that we have described in our press release issued this afternoon and furnished to the Securities and Exchange Commission on Form 8-K and Form 10-K filed with the SEC on June 27, 2008, and other filings we have made with the SEC. Except as described in these filings, we disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all.
Now, I'd like to turn the call over to Neal.
I'd also like to welcome everyone to our Orion Energy Systems Fiscal 2009 Third Quarter Conference Call. After I make a few opening comments, I’ll ask Erik to provide some highlights from the quarter as well as describe progress within our business. Scott will then provide financial detail in the third quarter, and I will conclude with comments on Orion’s strategic direction and long-term vision.
We’re pleased with the results our business delivered in the third quarter despite navigating through the worst global recession seen in decades. These results demonstrate the strong fundamentals of our business, the value of our technology that we deliver to our customers, and most importantly the hard work and commitment of our people. Additionally our results during the quarter nearly reached the record levels we achieved in last year’s third quarter, a time when the economy was healthier and business confidence was high.
For the third quarter of fiscal 2009, we reported revenues of $22.4 million, net income of $1.2 million, and earnings per share of $0.04. During the third quarter we installed our high-performance energy-efficient lighting known as Phase 1 in over 344 facilities, an increase of over 300 facilities that we completed in the second quarter. Our installed base of our customer facilities in total now numbers 4387 facilities and represents over 725 million square feet of space retrofitted. Our projects have a positive impact on grid capacity and since late 2001, we’ve delivered permanent base load reduction of over 422 megawatts of base load. Furthermore, we’ve made significant progress in delivering new and innovative solutions to our customers with strong shipments and installations of our products, which include in addition to our Phase 1 offering a specialty freezer fixture and we continue to gain traction on our phase 2 and phase 3 deployment of the Apollo Solar Light Pipe and Wireless InteLite control systems.
Despite the economic headwinds, we continue to win new customers and roll out our solutions across our existing customer base. Even in the tough times, the economic savings and improved working conditions delivered by our technology are major contributors to our customers’ cost cutting and lean initiatives. However, this overall uncertainty in the market continues to present challenges to Orion’s sales engine. We now have to invest more time into developing new deals and reselling existing deal due to plant closures and key contacts and decision makers losing their jobs.
We are also investing time thawing Orion proposal from frozen CapEx budgets. We continue to be encouraged that our strong value proposition is shining through, but at this point, we are still maintaining a conservative outlook for the remainder of fiscal ’09. With that being said, we are reaffirming our guidance in the range of 0 to 9% with an earnings per share of $0.06 to $0.11.
We’re committed to ensuring that the company remains profitable without compromising our long-term enterprise value. We will continue to invest in our business with long-term view that will allow us to capture the sizeable opportunities that lie before us. I want to emphasize our financial strength and flexibility which will allow us to continue to be aggressive in the market.
We’re profitable and cash flow positive on an operating basis. We have $49 in cash and short-term investments and nominal debt on our balance sheet as of December 31. We maintain a bank revolving line of credit with approximately $20 million in availability. We are confident that we have the resources necessary to execute on our strategy. We also have about $7.5 million remaining on our $30 million share repurchase authorization from the board, and we have the ability to continue repurchasing shares in the market as opportunities present themselves.