Orion Energy Systems, Inc. (OESX)
Q4 2013 Earnings Call
May 22, 2013, 05:00 pm ET
Scott Jensen - CFO
John Scribante - CEO
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I’ll now turn the conference over to, Scott Jensen, Chief Financial Officer. Please begin.
Thank you, operator. Good afternoon, everyone, and thank you for joining us today for the Orion Energy Systems’ fourth quarter and fiscal 2013 year-end conference call. Once again, my name is Scott Jensen, Chief Financial Officer. With me on the call today is John Scribante, Chief Executive Officer.
As a reminder, the earnings press release issued today once again includes a section that briefly discusses the supplemental information document that was posted to the company’s website. This supplemental information document provides additional details and analysis on Orion’s financial performance for the fourth quarter and fiscal year ended March 31, 2013. Additionally, several slides that highlight key metrics from the company’s financial and operational performance for the same time period have also been posted to the company’s website.
I will now 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 in our filings with the Securities and Exchange Commission. 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.
And now, I would like to turn the call over to John Scribante, Chief Executive Officer of Orion Energy Systems.
Good afternoon everybody. Thank you for joining our call. Today, I'll begin with a brief overview of our results for the quarter. Then I'll discuss our pending transaction with Harris Manufacturing. Third, I'll give you an update on the progress we made against our strategic initiatives. And finally I'll detail some of our more longer term priorities.
By all accounts, we ended our fiscal 2013 in a much stronger position than when we began. Our improving financial results in the second half of our fiscal year that is consistent year-over-year revenue growth, substantial earnings improvement and a strengthening balance sheet. These all are direct results of the execution of our short-term plan to realign and expand our sales force, increase our fiscal discipline and streamline our operations.
Turning to our results, the fourth quarter was a great quarter for Orion by delivering very solid performance. Specifically, revenue increased 4% over 2012 to $22.3 million and our core lighting product revenues increased 10%, marking it the first time in six quarters that we grew our revenues in this segment and our GAAP earnings per share were $0.03 versus a loss of $0.01 last year. And most significantly, our fourth quarter performance marks the second consecutive quarter of improving both revenues and profitability.
So continuing with our financial position, we finished the fourth quarter with approximately $14.4 million in cash and generated $2.3 million in free cash flow. With cash, equity and total assets relatively unchanged, we reduced our debt 11% compared to the prior quarter. Continued execution of our purchasing strategies and financial discipline led to across the board reductions in all significant inventory product categories, and inventory level decreased 10% from our third quarter and 12% from our prior year-end. Overall, these improving results were driven by our diligence and commitment to implementing our short-term plan of improving operational efficiencies.
And today, we are very excited to announce the signing of a definitive agreement to acquire Harris Manufacturing and the related entities; a manufacturer and marketer of energy efficient lighting products. Fundamentally, this company is very similar to Orion in many regards. With over 40 years experience with energy efficient lighting systems, the company offers a comprehensive product line of LED and fluorescent fixtures, day-lighting products, and fixture retrofit solutions.
On a higher level the Harris acquisition holds true to our strategy we have discussed in recent calls as it will further expand our sales force, broaden the markets that we serve, as well as provide immediate and accretive growth in earnings.
Let me share with you the specific rationale behind this deal and why it makes sense for Orion. First of all, Harris provides innovative LED products and this acquisition helps us stay ahead of the competition by bringing these new products to the market. An example of this is the very unique and patent pending LDR, which is a LED fixture retrofit for general office applications that does not require the removal of the old fixture. This is a significant savings in labor and customer disruption. This product alone provides a sizable new market opportunity, it complements our recently announced LED Downlight and will allow our sales team to reach deeper into its diverse customer base.