Orion Energy Systems, Inc.

Good morning, everyone, and welcome to Orion Energy Systems Fiscal 2025 First Quarter Conference Call. At this time, all participants are in a listen-only mode. I will now turn the call over to Bill Jones, Investor Relations, to begin.

Thank you, Alex, and good morning to everyone, and thank you for joining this call. Mike Jenkins, Orion CEO, and Per Brodine, Orion CFO, We'll review the company's Q1 results, its financial position, and its fiscal 2025 outlook in the prepared remarks, and then we will open the call to investor questions. Today's conference call is being recorded, and a replay will be posted in the investor section of Orion's corporate website, orionlighting.com. As a reminder, remarks and answers to questions to follow include statements which are forward-looking for the private Securities Litigation Reform Act of 1995. Forward-looking statements generally include such words as anticipate, believe, expect, project or similar words. Also, any statements describing future targets and goals, company plans or its outlook are also forward-looking. Such forward-looking statements are subject to various risks that could cause actual results to differ materially from current expectations. Risks include, among other factors, matters that Orion has described in its press release issued this morning, as well as in its filings with the SEC. Except as described therein, Orion disclaims any obligation to update or revise forward-looking statements made as of today's date. Reconciliations of certain non-GAAP financial metrics to their closest GAAP measures are also provided in today's press release. Now, I'll turn the call over to Orion CEO, Mr. Mike Jenkins.

Thanks, Bill. Good morning, and thank you all for joining our call today. It's been two months since our year-end call, and the first quarter was in line with expectations. So I'll keep my comments relatively brief and leave more time for questions. Orion's revenue momentum continued with 13% growth in the first quarter, driven principally by strength in our EV charging system installation business. We expect positive momentum to continue across the company in fiscal 25, as reflected in our full-year outlook targeting 10% to 15% revenue growth. The bright spot in Q1 was obviously in our EV charging segment. Recall that fiscal 24 was the first year of Voltrek operations within Orion. Having built out teams' resources, capabilities, and geographic reach last year, Our EV installation platform is well positioned to meet the needs of large customers across the country. We saw the benefits of our EV charging investments in Q1 as revenue grew over 200% to $3.8 million. Our EV charging Q1 performance was positively impacted by the activation of construction contracts to install Level 2 and Level 3 charging stations, for Eversource Energy's EV Make Ready program. We secured over $11 million of contracts for Eversource customers through this program. The projects are slated for completion this fiscal year, contributing to our fiscal 25 growth outlook. In addition, Voltrek has developed a solid pipeline of larger opportunities that now totals over $45 million. Of course, we've got to convert those opportunities into deals but we are very encouraged by our business development momentum. Voltrek has deep expertise and a track record of successful EV charging installations over more than a decade. This experience puts us in a very strong position to compete for large national and regional EV infrastructure projects. There is also significant federal funding being made available to drive the needed infrastructure catch-up to properly support the growing base of electrical vehicles. In LED lighting solutions, we achieved modest growth in Q1-25 and continue to expect LED lighting segment growth in fiscal 25, supported by major account projects as well as demand from ESCO and distribution partners. Q1 included revenue from our Department of Defense LED retrofit project in Europe, which we completed in the quarter. Orion was brought into this project by a global super ESCO that often utilizes Orion as their lighting partner. Our team did an excellent job on this large and complex project, showcasing our superior project execution capabilities with the added hurdle of working overseas. We are hopeful that our performance could lead to other large projects with this partner in the near future. For the balance of 2025, we expect growth in LED lighting to be driven by a rebound in activity from longstanding automotive customers after limited project activity in fiscal 24. We also anticipate strong opportunities in the public sector, growth in logistics and warehousing, and the initiation of projects in the technology, retail, and government sectors that have been in the planning stages for over a year. We also anticipate ongoing LED lighting projects from our largest customer in addition to their utilization of our maintenance services. We are also working to drive continued growth in lighting product sales within our ESCO and electrical contractor distribution channels. These channels have responded well to our expanded line of Triton Pro high bay and Harris exterior fixtures that were specifically developed to meet their needs for high-quality, energy-efficient LED fixtures that are value-priced. We continue to see solid growth in quoting and actual sales of these product lines. We also expect LED lighting demand to benefit from state regulations banning the sale of fluorescent fixtures and their replacement tubes. Seven states, including California, have approved such regulations. which begin to go into effect in calendar 2025, with other states expected to follow suit. As the deadlines draw closer, we are starting to see customers increasing their attention in this area and begin to develop plans for compliance. We have also been successful in using the regulatory timeline to initiate new customer dialogues and expect to see projects related to these bans begin in the second half of our fiscal 25 and accelerate into fiscal 26 and beyond. Turning to our maintenance services segment, as anticipated, maintenance services revenue declined 11% in Q125 to $3.3 million. The top-line performance reflects the impact of three legacy Staylight customers that chose not to renew long-term contracts following our price increases. The price adjustments were required to return the segment to appropriate levels of profitability following a variety of inflationary factors that have impacted the business over the past two years. Importantly, our objective of returning this business to a suitable gross profit is proving successful. Our quarter 125 gross profit percentage increased to a positive 3.8% from a negative 1.4% in the year prior and we anticipate further strengthening as we progress through 2025. Given our outlook and Q125 performance, we have reiterated our fiscal 25 revenue growth target of 10 to 15% or total revenue of between 100 and 104 million. This outlook is based on anticipated robust growth in EV charging station revenue as well as expected revenue growth in LED lighting solutions. We anticipate large national LED lighting projects for customers across a wide range of sectors, including automotive, retail, technology, logistics and distribution, banking, and the public sector. We also anticipate growth in our ESCO and agent channels, driven by an expanded focus on new high-quality, energy-efficient, value-priced LED products. We continue to expect fiscal 25 revenue to be significantly weighted to the second half of the year, as it was in fiscal 24, and subject to the timing of larger projects. We also expect to finish fiscal 25 with positive adjusted EBITDA. Let me now pass the call to our CFO, Per Brodine, to provide more details on our financial performance for Q1.