January 18, 2022

Orion Moves Sales Forecast from $150M to $130M

Company cites “slower than expected customer activity.” Stock price drops 21%

Orion Energy Systems announced Tuesday that it anticipates 2022 fiscal year revenues of approximately $130M – a significant adjustment to its prior expectation of at least $150M. The company’s fiscal year closes on March 31, 2022. The company explains that the pullback is due to customer delays on several larger LED lighting and controls projects, primarily caused by the response of customers to supply chain disruptions and COVID-19 related impacts to their businesses.

Still, Orion’s updated FY 2022 revenue outlook represents growth of approximately 11% over FY 2021 revenue of $116.8M.

Mike Altschaefl, Orion’s CEO and Board Chair, detailed many account-specific project delays that are impacting 2022 revenue:

A major automotive customer has postponed approximately $7M in expected FY 2022 project activity, principally due to the impact of component shortages in their operations.

A major online retailer has temporarily halted new facility construction projects due to shortages and delays in obtaining key construction materials and equipment, impacting roughly $5M in expected FY 2022 project activity

The delay of a government-related turnkey LED retrofit project of approximately $7M.

Slower than expected activity with two large national logistics customers caused by “multiple factors.”

Importantly, Altschaefl stated that Orion has not lost any of these customers or projects and ongoing customer dialogues suggest that the bulk of these projects will likely proceed as these customers overcome supply-chain and COVID-19 related challenges.

Home Depot(?) business:
Altschaefl added that “business with our largest customer, a major national retailer, remains strong.” He expects that $60 million of the forecasted $130 million of 2022 revenues to come from the major customer. In a past earnings call, an analyst from Roth Capital Partners cited Home Depot as the major national retailer in a question posed to Altschaefl.

Orion will provide more perspective on its fiscal 2022 third quarter and 2022 outlook with the release of its quarterly financial results currently planned for February 9th.

Orion Energy Systems, Inc. (NASDAQ: OESX) stock price opened Tuesday at $4.20 per share. In after-hours trading on Tuesday, Orion is currently trading at $3.35 – a decline of approximately 21%.