Orion Energy Systems, Inc.

Good day and thank you for standing by. Welcome to the Orion Energy Systems Fiscal 2026 First Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bill Jones, Investor Relations. Please go ahead.

Good morning. Thank you all for joining us today. Sally Washlow, Orion's CEO, and Per Brodin, its CFO, will review the company's first quarter results and its Fiscal 2026 Outlook, and then we will open the call to investor questions. Today's conference is being recorded. A replay will be posted in the Investor section of the company's website, orionlighting.com. As a reminder, prepared remarks and answers to questions include statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally include words such as anticipate, believe, expect, project, or similar words. Also, any statements describing future objectives or goals, company plans, and outlook are also forward-looking. These statements are subject to various risks that could cause actual results to differ materially from current expectations. Risks include, among other matters, those that Orion has described in its press release, issued this morning, and in its SEC filings. Except as described therein, Orion disclaims any obligation to update or revise forward-looking statements made as of today. Reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press release. Now, I will turn the call over to Orion CEO, Sally Washlow.

Good morning, and thank you for taking the time to join today's call. When I became CEO in April, I was confident that we could promptly establish a trajectory of -over-year growth in revenue, profitability, and shareholder value. Today, less than halfway through my first full quarter as CEO, I can say that I'm not just confident of it, I'm certain of it. Here are the three reasons why I am certain of it. Orion Energy Systems is recognized widely for unsurpassed quality in LED lighting and electrical infrastructure for industrial and commercial facilities. Unsurpassed quality. The proof of this is that some of the biggest names in the automotive industry rely on Orion, and effectively only on Orion, to light up its most critical facilities in North America. Orion Voltrec is recognized particularly throughout the Northeastern United States for unsurpassed quality in EV charging and electrical infrastructure. Unsurpassed quality. This too is evidenced by yesterday's announcement about our most recent deployment in the Boston Public Schools. Orion is also recognized widely as an ongoing partner of unsurpassed quality in our maintenance services. Unsurpassed quality, our maintenance services have been integral to our long-standing and new customer relationships. Recent headlines notwithstanding, all three markets for these business lines have tailwinds nationally and regionally. Orion has a timely opportunity to convert its quality leadership into market leadership in all three of them. We further believe that this translates into a parallel growth opportunity for reoccurring revenue and margin expansion. With a sharpened focus on growth, profitability, and market penetration in each of these areas, we believe we can achieve that market leadership in this fiscal year. I'll have more to say about this with increasing frequency and with increasing granularity throughout this fiscal year. But for now, I believe strongly that we are on track to achieve three milestones for FY 2026. By the end of the third quarter, a positive resolution that enables publicly traded Orion to maximize this opportunity for growth in shareholder value. By the end of the third quarter, the enactment of a growth, profitability, and cost containment initiative that enables Orion to become a recognized long-term market leader in its core businesses. And by the end of the fourth quarter, 84 million in revenue at a positive adjusted EBITDA for the full fiscal year. Walking in the door in April, I was fully cognizant that for my fellow shareholders, the Orion saga has been a long journey. Today, I say only that we see no better growth opportunity in the sector than Orion and that we are now embarking on a mission that is fully capable of fulfilling it beginning in this fiscal year, and I am certain of that too. Now, drilling down on Q1, overall, the work we have been doing to enhance margin and reduce costs enabled us to deliver meaningful progress on the bottom line in Q126 and puts us in a solid position for the full year. Our gross profit percentage rose to over 30% for the first time in about six years, and we achieved our third consecutive quarter of positive adjusted EBITDA. These improvements were achieved as the EV segment faced a tough year over year comparison. The decrease in EV revenue was largely offset by a solid rebound in maintenance revenue and slightly higher LED lighting revenue. While visibility in the EV segment remains challenged, we did have the public school bus charging station project start near the end of June. Our gross profit percentage increase resulted from meaningful reductions in the cost of our LED lighting fixtures through re-engineering, plant efficiency efforts, and enhanced sourcing, as well as from both margin and volume increases in our maintenance service business. We were able to reduce total operating expenses by .6% to 6.9 million in Q126, from 7.7 million in Q125 through personnel and other cost control efforts, and we expect to benefit from other cost initiatives as we progress through the year. Turning to revenue, we have made great progress in building our pipeline of contracted LED lighting projects some of which are highlighted in today's release, and we continue to make progress building our footprint within existing maintenance service customers. We are also taking steps to improve sales performance in our lighting distribution business, which serves a different base of customers. We have had initial success in this channel with the new line of value-based LED lighting fixtures, including Triton Pro, which we designed and engineered in response to feedback from channel partners and end customers. Triton Pro balances high quality design, components, and energy efficiency at competitive price points that are resonating with customers. Now, with a compelling product line and an investment in personnel to expand our market penetration in this channel, we expect our lighting distribution business to return to a path of growth. Another exciting potential avenue for growth for Orion is in electrical infrastructure, which falls in the sweet spot of our many decades of collective experience from large LED lighting projects, high voltage EV charging station infrastructure, and a wide range of electrical maintenance services. Each of our segments is involved in electrical infrastructure, and we have built a nationwide network of certified electricians with deep expertise and major project experience that is ideally suited to meet this need. Increasingly, our customers have been coming to us to bid on electrical infrastructure projects that may or may not involve other areas of specialty. Electrical infrastructure work is both an ideal compliment to our existing business, as well as a great opportunity to add further value to our customer relationships. Companies across the US are making significant investments in electrical infrastructure for large scale data centers, alternative energy generation, retail and office complexes, electrified vehicle fleet charging, and other applications. Rapid growth in both the scope and complexity of electrical systems and the range of businesses that rely on them is starting to challenge the available pool of experienced personnel. Based on customer discussions over the past few months, we believe Orion is in a strong and unique position to serve this nationwide opportunity. We are still in the early stages of creating a roadmap to evaluate this market opportunity. We have invested some time and resources to compete for such projects, and we recently secured an electrical infrastructure project from an existing customer and have submitted initial bids on a few other projects. I don't have much more to say at this time on this matter, but did want to share with investors that we are exploring opportunities and will provide updates as warranted. Now, I'd like to follow up on the reorganization plan we discussed on our last conference call. The decision had been made prior to me becoming CEO, but after further review, both internally and externally, we have decided to retain our existing operational and reporting structure rather than reorganize into two business units. We came to realize that we could achieve the same synergies under the current structure while keeping our team and resources focused on customer priorities and business development dialogues at the core of our growth goals. We are realigning some roles and are working to better integrate our EV solutions across our national footprint to create both sales and operational efficiency benefits that were objectives of the prior plan. The most important thing is for our teams to stay in close contact with our customers and prospects and to drive increased collaboration across our segments and we feel we can best achieve those goals under our current structure. I believe Orion has built a strong and unique platform of high quality and industry leading solutions to meet our customers' goals and needs. We have made significant reduction in overhead, meaningful progress enhancing margin, and have built a diversified pipeline of revenue to support our growth. In the first quarter, we made progress in our goal to return Orion to profitability, trimming our Q1 net loss to 1.2 million from 3.6 million in Q125 and 6.6 million in Q124. As stated earlier, we believe we are on track to achieve the revenue growth and adjusted EBITDA goals of our FY26 outlook. I am both excited and confident in Orion's potential to deliver both growth and improving bottom line performance in FY26 and moving forward. With that, let me turn it over to Orion CFO, Per Brodeen to review our financial performance and outlook.