June 13, 2023
New Details Emerge from Orion's Annual Report
Previously undisclosed elements of two acquisitions and more Home Depot details now revealed.
Orion Energy Systems last week disclosed its financial results for the fiscal year ending in 2023, ending on March 31. The company experienced a significant decline in sales, as anticipated, primarily due to the gradual reduction of business from a major customer.
The annual report, filed by Orion, was made public yesterday, revealing previously undisclosed information regarding the company's two corporate acquisitions in 2022. Additionally, the report provided further insights into the revenue generated from Orion's largest customer, believed to be The Home Depot.
Home Depot business wanes as expected, but other revenues seem stalled
Orion's revenue from The Home Depot decreased from 49% of total revenues in fiscal 2022 to 16.2% in fiscal 2023. They anticipate similar customer concentration in fiscal 2024. To compensate, Orion aims to diversify its customer base by targeting national accounts, ESCOs, agent-driven distribution channels, lighting maintenance customers, and the EV market.
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Orion's revenue from The Home Depot declined from 49.0% (fiscal 2022) to 16.2% (fiscal 2023).
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This causes the non-Home Depot business to be essentially flat, even with two small, strategic acquisitions lifting the 2023 revenue comparison.
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Orion expects customer concentration to remain at a similar level in fiscal 2024.
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Orion is focusing on diversifying its customer base to reduce dependency on The Home Depot.
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Expansion efforts include targeting national accounts, ESCOs, agent-driven distribution channels, lighting maintenance customers, and the EV market.
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The goal is to replace the reduced revenue from their previous significant customer.
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Orion aims to increase revenue streams by tapping into new markets and customer segments.
New specifics about the Stay-Lite acquisition
In 2022 Orion Energy Systems acquired Stay-Lite Lighting, a nationwide lighting and electrical maintenance service provider. The acquisition bolstered Orion’s turnkey services capabilities.
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Orion Energy Systems acquired Stay-Lite Lighting for $4.0 million.
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Stay-Lite Lighting operates as Stay-Lite, an Orion Energy Systems business.
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The acquisition boosts the growth of Orion's maintenance services offerings.
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Orion Services Group provides lighting and electrical services to customers.
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The acquisition was funded using existing cash resources.
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Stay-Lite Lighting's operations were included in Orion's fiscal 2023 results.
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The acquisition took effect on January 1, 2022.
New details about the Voltrek acquisition
Orion Energy Systems acquired Voltrek LLC, an electric vehicle charging company, on October 5, 2022. The acquisition was funded through cash and credit resources, and Voltrek now operates as a division of Orion Energy Systems.
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Orion Energy Systems acquired Voltrek LLC, a company based in Lawrence, Massachusetts.
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Orion reported Voltrek’s 2021 revenues as $4.8 million mainly from projects in New England.
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The initial purchase price was $5.0 million cash and $1.0 million of stock.
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An additional $3.0 million will be paid based on Voltrek's performance in fiscal 2023.
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Additional compensatory consideration of up to $3.5 million and $7.15 million may be paid if Voltrek exceeds earnings targets in fiscal 2024 and 2025, respectively.
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Voltrek provides turnkey installation solutions with ongoing support for electric vehicle charging in commercial verticals.
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The acquisition was funded from existing cash and credit resources.
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Voltrek now operates as a division of Orion Energy Systems.
