Orion Energy Systems, Inc.

Good morning, everyone, and welcome to Orion Energy Systems' fiscal 2027 second quarter conference call. At this time, all participants are in a listen-only mode. In this call, Sally Washlow, Orion's CEO, and Per Brodin, its CFO, will review the company's second quarter results, as well as its fiscal 2027 outlook. Then we will open the call to investors' questions. To ask a question during the session, you will need to press star 11 on your telephone. will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Today's call is being recorded. A replay will be posted in the investor section of the company's website, orionlighting.com. I will now turn the call over to Per Brodin, Orion CFO.

Thank you, Corey. First, as a reminder, Prepared remarks and answers to questions on this call 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 forward-looking 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. In addition, Reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press release. And now I will turn the call over to Orion's CEO, Sally Washlow.

Thank you, Per. Good morning, everyone, and thank you for being with us today. In the second quarter of fiscal 2027, we delivered growth of 9% year over year. all of Orion's business segments, LED lighting, EV charging, and maintenance recorded expected levels of financial performance in the second quarter and continue on a trajectory to meet our full fiscal year guidance. As a reminder, those expectations which we recently increased are to achieve positive adjusted EBITDA on revenue of between 100 and 102 million, an increase from prior guidance of 95 to 97 million in FY27. As we head into the second half of the fiscal year, FY27 shapes up as a continuation of the successful turnaround we began in FY20 26, which came in at $86 million in revenue and $2 million in positive adjusted EBITDA. FY26 represented a return to growth for this company in both revenue and profitability. Orion's unrivaled supply chain and project management capabilities are attributes that I cannot emphasize enough. our resilient supply chain provides a competitive advantage that is consistently cited by Orion's customers. Many of our customers come back to Orion asking to expand the work we are doing with them, whether it is expanding the scope of work at a single facility or adding increased opportunities at additional locations. These projects run the gamut, ranging from lighting only to EV infrastructure projects to electrical contracting. Our existing expectations for this fiscal year reflect our confidence in the continuing growth trajectory for the company, along with recent industry research that informs us that we are about to begin a new industrial LED lighting replacement cycle. The October cover story of a respected industry publication, Lighting Management and Maintenance, reports that 10% to 20% of America's LED installed base may already be due for replacement. For commercial, industrial, and outdoor applications, the segment that Orion serves, that replacement cycle may be 20% to 30%. Orion's recent announcements serve as early indicators of this replacement cycle. As for FY27 specifically, the quarter included a number of milestones. Q2 marked an additional multi-million deployment of our data center lighting solution for one of the world's largest hyperscalers. This followed June's announcement of our first multimillion-dollar deployment for this globally renowned hyperscaler. We believe we are still in the early innings of deploying our cost-saving and energy-efficient solution with this hyperscaler, and there is still growth in this segment, evidenced by our discussions of finalizing additional scope to our already announced wins. Our customizable lighting solution, manufactured right here in Wisconsin, is capable of delivering higher energy efficiency, resiliency, and decarbonization in LED lighting. Another announcement, our latest $10 to $15 million engagement with a major nationwide retailer. Our long-time customer made a follow-on commitment to us in the second quarter for a new LED lighting project estimated to represent $10 to $15 million. We believe we will achieve the higher range of this commitment, and we will keep you apprised as we execute this project in Q3 and Q4. This latest scope of work involves retrofitting interior LED lighting and IoT system installations at locations we had not previously retrofitted. This is the most recent in a multi-year sequence of engagements for us with this well-known brand. Furthermore, we believe this will expand to additional stores, which could equal or be more than our previously announced Project. We've seen adoption of the full spectrum of Orion's products and services typified by our recent announcement of a global automotive leader that is deploying both our LED lighting solutions and our EV charging infrastructure. We will continue to focus on scaling EV charging across a broader customer base and geographic footprint. More than ever, industrial America requires full footprint LED lighting, EV charging, and electrical infrastructure. It needs it at scale and at the maximum of efficiency and cost effectiveness. We believe strongly that we will continue to be a provider of choice for AI and IoT-driven electrification to Fortune 100 corporations and other global leaders. With that, let me turn it over to Orion CFO Per Brodin to review our financial performance and outlook.