OESX - Earnings call transcript Q3 2021 | Orion Energy Systems, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Orion Energy Systems Fiscal 2021 Third Quarter conference call. [Operator Instructions].

As a reminder, today's conference is being recorded. I would now like to turn the call over to Bill Jones. Sir, you may begin.

Bill Jones

morning, good and you, everyone. Thank Altschaefl, Orion's third today's with open highlights CEO, and outlook. Mike quarter business an call the will update on after Brodin, additional the Per then to which, items, call CFO, open we Orion's questions. will will financial review be of Investor in of corporate will section later website. today An archived call available replay Orion's this the Relations This taking on February Thursday, place is call XX, XXXX. forward-looking Act Private and to the XXXX. to be that Securities questions company the of Reform statements Remarks within include answers meaning that of follow Litigation the believes These forward-looking words include such as words of believe, or statements generally anticipate, similar expect import. plans, Likewise, statements that or also describe future forward-looking statements. objectives are goals These to subject be to are forward-looking than different that expected. statements could results materially cause actual risks issued and include, with matters Such among this Commission. has Exchange that and other described its the company filings press Securities risks the morning release in its Except filings, as any update forward-looking company obligation to disclaims described these statements. the in that, With over Mike. turn call let me to the

Michael Altschaefl

you everyone, Bill. call. thank Good morning, for Thanks, joining today's and

in to we Fiscal related rebounded As improved million our sharply QX the from million XXXX. to levels in slowdown. in activity stronger customers COVID-XX Revenue $XX.X $XX.X expected, following as QX XXXX of QX Orion's business substantially returned

lighting Our major continued reflected quarter turnkey controls significant our third work retrofit for national LED performance customer. retail and

also The specialty for a retailer of from new benefited third LED quarter national during start the lighting retrofits the period.

did start-up been Our scale, the our are impact which inefficiencies, date, uncommon gross pleased not customer projects margin to very this negatively has results percentage. overall for of with

our we well market very demand lighting our Product the improve Bay the However, our play offerings as development product such as success in competitive we and balance as exterior role project. are next-generation outdoor High solid meet customers, customized core continues needs highly important is that expand work fixtures, will and a design strategy a deliver margin of do working efficiency Star product fixtures lighting energy to exciting Product in performance, seeing our several environments, expect profile. new evolving introduce to the lines to the later solutions of some LED with as month. quality designs Line an this that later. about the also for products over linear higher LED margins to new Orion's at to fixtures, develop which talk to bit of innovation improved enhance as our I work we overall plan while safer we

Services point continue quarter quarter to build third Maintenance the reflected certain costs or new next during Our base offerings lighting single the and SG&A we contracts long-term operational also revenue for contact as of our should fourth this generating business are the with for two natural we we potential and will investment of performance This for our team and extension a create work new some begin of optimistic revenue customers. regarding the as We Orion synergy existing the infrastructure. customers. and service build quarter, of

We compared million ago to and our XXXX to QX million similarly EBITDA QX XXXX. $X.X year as the QX $X.X period XXXX and controls. natural million commission Things that share programs, line, Primarily Our the of growing systems Orion is install $X.X entry and field could turnkey delivered or our Maintenance Service in participation lighting per process, and a lighting, high-quality, Internet $X.XX to need from well and lighting basis. in And exceeded our net nationwide income capabilities and that strong our due electrical customers nationwide installation other on Maintenance that our to in performances. real for was the we developed and a $X.X million extension where XXXX led into controls QX programs. solutions a turnkey of Services we there execute delivered of be improved top in prospects learned

and recent in no our manufacturing experienced have our offices, and stringent business been largely our though to This COVID-XX at to these months. safety protocols facility remain to potential their sites, fortunate members very at developed grateful the guidelines strict for customer threat we important result risk are of we maintained partners our the that COVID-XX high. COVID-XX in protocols, remains and impact adherence have has and We committed remains. COVID-XX team our of business to a significant while disruptions I'm

track a customized are customers As national of turnkey source growing and unique LED one our we account executing have large national lighting efficient, high-quality, large installation Orion's solution the programs value proven indicated, number record recognizing in capabilities with of services.

customer our these next our large prospects Our leveraging capabilities fiscal and to is this sales develop in that is year. very it new progress supports team active for outlook

our to outlook. XXXX Turning Fiscal

We are construction projects. energy-efficient and LED around encouraged new by lighting retrofit customer sentiment

savings, continue safety in more normalized business and to posture We efficiency proposals XX that contemplated their improved next for LED over to projects on focused drive strong a increased are for to lighting XX believe operating customers We demand the see are facilities. moving energy large months. toward ways particularly and

can customer. retrofit operational retail can that the environment in into continuous are which For use example, large increased sensor proposition new savings, experience customer going continued LED support in to of addition expanding other are obtain this network forward. higher and well their at our as value solutions facility to We deliver demand of as opportunities the safety, improvements. or a operational fixture in spread added with located The from and a the for with to the Of we own we level light, to expected customers be provide. data is digitize a ceiling improvements project our energy workplace and and national anticipate analysis technology throughout the easily could company quality lighting for capabilities include importance retail revenue equal the can incorporated to that systems make

our and the channels. this expect and matures, national to through other we as customer roughly to base revenue sales Fiscal our of our XXXX large represent expand We of continue X/X relationship accounts

stores retrofits XXXX. We national retail continue also expect LED customers' Fiscal the lighting to specialty in for a

sector base large the growing from with a with work along two facilities. Though anticipate public the automotive and strength healthcare we warehousing project of cycles logistics national customers, and customers, Additionally, may our sales continued for ability longer healthy, our footprint to confident we with solutions carbon digitize and safe business. larger enable be reduce in sustainable to their their help customers and them achieve savings that our opportunities, feel

to existing are light growing space, solutions also and new the products with air solutions address and technologies. We Fiscal that are These movement well movement safety mold fungus, during the on of join products that technology excited air LED's risks Orion's that the fits incorporate products targeted as and we existing naturally Obviously, announced there's opportunity and and customers. agreement viruses, products, environmental business build with related with significant the manufacturing XXX We will dangers their this This business to environments. an and potential we movement air movement fixtures. These antimicrobial to bacteria, today a expects germs, the and for concerns XXXX. this solutions. the utilize services customer provide air exclusive employers as addition been COVID-XX see by product attention which movement has products desire UVC with UVC to products safer virus. health healthy, launch UVC wavelength QX of and in around demand partner. bacteria sustainable a comfort. licensing find our meet viruses that antimicrobial by provide well and as with into mildew, as family to kill will and Orion a incorporate Orion work proven as Orion's ISON air lighting environmental products branded including combat area our an increasing will new including technologies to week, patented safe on of nanometer in

our drive our and expect products manufacturing recently In to efficiencies, including increase we from that addition announced to will Fiscal X% to to XXXX. of products, sourcing begin efforts as results the introduction enter benefit higher-margin we price a niche and benefit also

increase greater certain industry price result cost of larger we competitive as as Our that believe announced industry some experiencing. increases have our is competitors the a remain increases. very price We can of

somewhat summarize. and $XXX based revenue Fiscal One, and retrofit factors other I release, million believe income half an today's in customer are positioned $XX.X expect or outdoor results of that million achieved the Fiscal match which the should weighted full revenue achieve Fiscal XXXX least delivered of at We Fiscal least We $XX $X.XX a In lighting on XXXX, and for per million with of continue will is in record revenue new we for financial quarter, those the from year we million national construction, existing well locations, retail at in of to to of in expect revenue net XXXX. additional of outlook XXXX, $XXX second of XXXX. share. more to third Fiscal This outlined projects. number large diluted

XXXX of as roughly electrical with Postal and building threat provide significant in In the that in our for target XX% the ongoing contractor potential Fiscal which in with revenue, in or customers, summary, products facilities strengthening movement demand and for specialty Seven, products remains our Energy opportunities X/X of levels expect our LED Customer largest strong lighting several from and XXXX. one in outlook. we demand with solutions. in retrofit expect over turnkey out down our in existing custom that new decision-making, to a antimicrobial safe Service. contributions U.S. customer XX% potential this the pace revenue XXXX. to Fiscal customer sustainable the including lighting We continued XXXX a revenue sector represent major continuation roughly Four, Six, military, hospital national solution VA LED from lighting logistics retailers' expected the work sector early and sources significant with as of and ten, planned remain seeing combined Five, with And, for global business growth Two, Service this are QX a for offer which modest result rapidly potential. critical retrofit and Fiscal on ongoing will two on products, Company, substantial activity remain market's Maintenance to Services, from two and solutions and COVID-XX time. for revenue anticipated stores. UVC a Three, industry warehousing And our online basis, existing the revenue revenue could of Nine, XXXX. expected U.S. synergistic retailers expected automotive family our global public in including result, volume. customers. ESCO in activity the as access for and the we and market. project-by-project business of healthcare Fiscal a warehousing healthy, on along facilities. Eight, progress customers with steady a emerging channels. to new growing planned business demand the from for expect LED logistics as Orion near-term These space, continue the factor and customers air and customers, Fiscal are

So outside put the prudent our impacts to we COVID-XX much to reduce our control, feel in risks place and of protocols have therefore, it safety rigorous we highlight. business; of is to

remains Fiscal We continue XXXX and positioned Orion to beyond. believe for well

the turnkey and of based our strength expanding in potential our install build Control Our on and business. is IoT for new Services capabilities, & offerings, design, product Monitoring growth view Orion various Maintenance our existing Solutions the engagement

of In perspective me for acquisition over potential, also that, Brodin, financial opportunities our we CFO Per additional to let identify base and call Per? potential the organic turn on results. to addition business. to our our strengthen and to growth seeking are Orion's expand review With

Per Brodin

began two increased for in Orion's and QX following QX for activity to $XX.X reflecting well mid-August. $XX.X LED other continued that sequentially XX%; retrofit installation from Mike. major revenue as these grew growth as contribution revenue million revenue increased a third from Fiscal of our revenue and XXXX retail specialty impact reflects healthy XX% quarter in a in you, business from business The million million XXXX projects. customer. and last commenced project a XXXX. work on related quarter account quarter contributions COVID full Thank significant service and included Fiscal $XX.X Fiscal Fiscal that products, Revenue March QX significantly to disruptions the an a from XXXX national service national for retrofit another principally August national the we project early product through

profit because $X.X change by but start-up service in rates, partially product mix QX gross versus XXXX XX.X% necessary and on of in because the million XXXX Maintenance launching margin QX versus higher in costs related XXXX; lower XXXX; start-up offset and in costs customer higher Specialty higher to to Fiscal increased in at Third to as primarily Retail from XXXX revenue XX.X% because related Project. National volumes, and QX $X.X QX, support Fiscal sequentially improvement Fiscal expenses well operating XX.X% business. sales improved to to a Fiscal of principally of as Orion's sales increased mainly declined incremental margin, quarter $X.X million revenues QX inefficiencies percentage Fiscal million Services costs other commissions in

in and Given generated $X.XX or in million is million which or with $X.XX the new XXXX of net as tax million $XX QX assets. income America. December the to of In income flow-through future periods. Those cash allowance recognized $XX.X to share net level year. $XX shield full and state period a with were million loss the a on meaningful NOL small Fiscal valuation for net QX million million cash per carry-forwards of of per of federal facility expanded XXXX. per $XX deferred have recorded Fiscal of cash Orion's income from and on discussed outstanding XXXX past, Orion's credit compared start net liquidity in the share for income revenues, our significant $X.X Orion share no Fiscal position million higher strong taxes generated amounts $X.XX of on will the $X.X or our company and expense income $X.X in availability of Bank with tax continue equivalents approximately at taxes very tax We because we each carry-forwards, full QX

also facility has a very borrowing has that more access current will for able session. with turn will as And tenure. that We and over increased operator a current liquidity and both well fund but base Q&A call to objectives; are to new and were longer an robust pleased commitment, that, the to to the our us capital allow We believe growth operations the as our inorganic. only back not our I we credit organic secure

Operator

[Operator Instructions].

we have First H.C. Wainwright. from question, Joshi Sameer

Sameer Joshi

Congratulations on a strong quarter.

UV that of already And part this that is, will quarter. demand for kind about national this expect? fiscal you customers The product, the the to the product introduce first XXX two sense any orders customers nanometer are fourth have we what you question that have is in you the you product probably to your looking Do or with retailer of question add existing you? of

Michael Altschaefl

for is Sure. to asking. We're excited the very product so trougher itself about be And Sameer, the a for, thanks product. going product

through either grid, air the be in a movement is dropped if addition, through brought XxX fixer, XxX-foot kill that there has as UVC and room. But that a so that as ceiling of think will, So air air treat can the will it's a the product grid product being to will moving it capabilities in or help the throughout chamber, fixture. moderate that air temperature you

well there certainly and the the into industry safe It's in to it. demand healthy So early we we're and very and little good about bit conversations, the for environment very in fits excited this and expect be. say will We a what solutions. product, for the it to had have demand be need

know them but customers a probably more it. to for as to the we're product about take encouraged, we'll and with ready environment. manufacture in customers and we their on we're to yes, we've future, existing And So currently back done our could very in our about is it talk that what that

this as So a possibility. we see

Sameer Joshi

a had XXX already you understand, I as And Okay. nanometer product.

you just did see a that that? demand forward-looking increased it's any for COVID, for During prospect too? Or

Michael Altschaefl

a does, had you XXX, And that does which if contact. it what We nanometer on fungus think addressing about attack really product, have and and mold XXX XXX the is is product bacteria.

So on surfaces. the

is a services showing attack is on to bacteria. light those that it So

situation. increased interest during seen have the COVID-XX We

surface so can And additional that operating opportunity is revenues still while people experienced is up UVC product a XXX, it completely there continuously significant with UVC but might at used space customers contact we combination which not the this product. contained shining that room. this forward continuously can in from bacteria not exposed envision outside within of time, attacking be is that then is we for that have want fixture, outside, an could like because the occupied be product on the it in combined, of going two product which a not where are And a so think matched the fixture. where having We having is

some of see we having the combination So two, some perhaps, possibilities.

Sameer Joshi

Understood.

margin from relatively XX.X% decreased revenues, on moving the Just being your launched. XX% looked around around these to at that quarter-over-quarter, profile then to even the to are and XX%. Maintenance though revenues, could you Services around service I The trying get the margins out And actually from levels. service increased margins, that margins figure services.

does for forward? launching, Services Maintenance that are expenses there that look that for going continue that also could to profile you how profitability higher and operating So are be other

Per Brodin

question. over a think we that for to move that forward. some And as that mentioned to sequential improve prepared about particular decrease change and project. the of if I costs Thanks start-up inefficiencies as Sameer, was you attributable the those margin expect we think with we in during associated remarks quarter, see the

you I that OMS expect historical product could think the range revenues. will that service in for service be our

little plus a So it's or minus bit.

of lower to to on in and your it have expenses, And think built, for not we that with business. will respect question be not significantly kind range, I that then of build, significantly higher. the infrastructure base started

the that -- somewhat will have investment I getting certainly QX there. expenses XXXX -- into continue operating that more expenses to to some think that build And XXXX. include we're we related Fiscal

that building business forward. need good we that infrastructure time attempt have success we move based and we core the for think to would to business that as being launch and business, more a As we on build then potentially

Operator

from Craig-Hallum. question, Next Stine have we Eric

Eric Stine

fiscal, the the change talk quite add got keeping bit year the the impact ten-plus about the these And you your items more will they new was retrofit? this are just a narrow. facilities, next past, fiscal existing fiscal in details year? that, I guess, upcoming is new new you've versus I versus a guess, just I sounds It logistics little impacting customer? magnitude with whether customer? are could quarter when -- So maybe like in an mean, logistics your

Michael Altschaefl

Sure.

excited very our We are of another addition sector to portfolio. customer of about this the

our very is of be has kind we continue think warehousing I logistics it part past. the will substantial -- of in grow, As and a forward it going to mentioned, as we been think could continuing business

doing company. most fortunate project-by-project will basis. their we to likely projects customers back to and projects upgrade going on they work I at a times, mixture, new large it's And opportunity them may, start either interim with basis about we to an the build second retrofit be, would business with of to be a warehousing on So for situations say were a they for turnover announced the have business their talked warehousing also. addition, LED They're them the previously in going logistics But company. logistics is would lighting. as Eric. on And to existing we've be go properties portfolio to through with of as or those and upon facilities, an be

retrofit it's would mixture, think say to heavily weighted towards it's a going probably activity. I So be I but

Eric Stine

on follow-up Got just it. And a then that.

the have others what that's there? to of the very all you is mean, one both there that Or expectation customers, you're currently project does this business are mentioned curious possibly, is You when Fiscal think getting you out logistics type with on that at expect since also include you commentary potentially project that the about for look there? I based the of, or hand? that is component Just largest, see you of in acceleration out what logistics XXXX. or that

Michael Altschaefl

that the been of of It's warehousing space for combination number years. a logistics the fact in a we've

distribution have in always well and in great have and We customers facilities. done worked cold storage,

new line that So some for is well the is a over products suited product not for past launched this area new And we've these, really of us. year. our including the very

segments, business our base could we those So that when -- start larger become area could it's stream our Fiscal am forward. of combined, two of be part one revenue existing largest our our that these saying saying I global we have addition revenue of that with going of are customer significant warehousing to when logistics the think logistics companies we think, all a warehousing XXXX very

Eric Stine

Got it.

you penetration what So to not out you in new adding there, hand. more already have necessarily targets more have it's these

Michael Altschaefl

Yes.

Eric Stine

one last then And me. Okay. for

you've from I at about the impact third COVID, -- Just know least real talked quarter. no in

you potential your see taking Just curious of on supply the you're and there chain supply some chain proactively? or how health steps any issues

Michael Altschaefl

of COVID-XX certain with. work standpoint, West the area have a respect to our having out more been front. And they that are source there gaps have ports certain rather with to Sure. there's there items, high-volume aspects the on up A backup I stays us hard the alternatives out But We now is or volume. challenges move strained good right COVID-XX, that the internationally sure From work and are chain industry of significant find There little do of the particularly China, getting things things Coast. and suppliers. in are more some say today China. make suppliers have both around had specifically ports of are supply multiple domestically have and where come through on in others with product seeing aspects, supply and we that things logistics to will on that routinely to the been activity a we've in challenges getting we chain to certainly shape

will the stress the And are that with down which causing that a then supply bit filter is a respect global now. there linked issue And I probably so fact with to think somewhat. right on those chain more semiconductors, little supply

I we're we -- it very well. managing think So

with logistics couple as and had over in to next significant customer But impact as dealing other standpoint industry a others not our are we well to from industries perhaps ourselves a think challenges of have quarters. base. our be any the We do supply some going chain

Operator

question. Thank

Craig from ROTH Irwin Capital have Next Partners. was question

Craig Irwin

stuff to us for fairly or fiscal ask the right? of scope a points plus to about to It's five, cause that that hand for we last into to How You possibly XXX the going six be guided business wanted range a plus weeks, the very the you you year, that is are, in but can given out quarter. basically of guidance, over next ship what, weeks kind happens you're contraction. can of quarter? significant to, have you that that the three much things might but lower will that in number? XXX number variance weeks two, higher that lot a of there two quite I sequential maybe the we see Mike, around

Michael Altschaefl

fiscal current the be that least And year We the was to very QX million, that and certainly half if as of look and a would at of be the the thought end half the $XXX year of Well, second go of I And bit seeing very the somewhat we unusual we going what with release back year. we, had last actually quite strong at to we $XX would had. thought decided at we're the we revenue similar level. of call, specific we provide that, that go for be. to strong second we're little million the feel and our quarter, think I backlog, still pretty where position, pipeline look in that same that in at quarterly was guidance which at our you back our an to a on saying

fiscal really the our have view changed for whole we year. So not

year in likely what last bit. can we to of a that consistent. be million. full the yes, right And and somewhat few had best excess be the this around for it's said happen of little is so now, think Craig, to things year But think we earlier $XXX us at point, in we the And move things weeks fiscal

Craig Irwin

Understood. Understood. That makes sense.

as XXXX, pretty then well. were something we about doing also look better to maybe clear similar at as So you XXXX,

job You year them. a of expect come actual would They done going for That's from that brought did for customer the build home you've months, logistics a most you, and share even the to kind be completion of their I The your plans logistics of that those anchor say would third a you on, of obviously new customer, clear. is months, center six great with customer. the planned the of those nine lighting. the revenue facilities, ahead

the so the that contribute you turn logistics not So business customer the at mean, in the old. have have? can for these visibility changed you talk I your and you old new about How assumptions logistics all customer, year? of to XXX-plus to? customers potentially there sort chunky get some And was things your to are where you're of other I a different orders. sort few handicapping wondering are you're just how to there pointing that

Michael Altschaefl

Sure.

You got it.

second just So first demonstrates investors And pace. starting understand at likely the important $XX having that have market we year this which it million that a feel XXX, thought to continue that quarters of feel we forward. we the all, going people of to confident very in half was we confident of about couple getting ago, and the back level at think that we're and

thing ours our of too and a it's down XXXX for the sign revenue, Fiscal we one-third much is we large having of We good great, businesses. that this period XXXX And that get of for a customer think between concentration also understand important revenue think but not is of a of still three-year us. good maintain to $XXX many million

expanded that So and is with it's visibility -- helpful, customer. we that also and

we two ongoing, about I new second So of retail see business. retailers, the the retrofit doing question, which it break the talk variety but into as for projects fact healthy of stores, for this the To talk a first buckets. that a part facilities. would them. has about We And would those it's your different being been just that not in that we're project online global we have the

actually visibility the of time part us talked planned and are have they about that is That that which are amount Fiscal the lines. our those are that -- item of we on new I fair business, construction, of give to there So into second things a was XXXX. visibility because

that for the particular revenue gives that of us of so And that piece amount business. of predicting are comfort we

proposal global one which two one projects where The just awarded by retrofit. most now, those, that they facilities talking they and some provide customers; time will as that the logistics with be pick work on basis them recently with back industry them having the and announced two these see us, the the in while third now those move We had we facility for get and facility forward. a element, to we're we them then project Those, on want you and about. are those cases for warehousing significant opportunity, that

the part negative of magnitude, we as but rollout is rollout national quite the significant. be as stores So new a could think, visible the it's construction, not or of

anticipated, are when $XXX those. we place could talked get we been estimates our the first one but the of customer. both about and of developed their that I going talking And partly would we've those more We for what because customer about customers we be slowly access making and of about potential best our with trying in encouraged that excellent. the think still to retrofits think, have COVID think little to with decisions we're has It to is their than opportunity relationship we for a by estimates So think opportunity lastly, say, just while. Craig, -- We put these the that forward. we're very a we million, the facilities to the

Craig Irwin

the from the would a to business right, if in customers the largest very fixtures from won I with. there. the customers, largest lot -- may. won Excellent. some Orion's attractive do out Excellent. assume most some of getting of market, quite of all the of that it's business large of Last lighting I attention buyers question, And customers

box it logistics, the As need the its the in that and wave mean, competitive little maybe look spaces. organic you you a, to to Orion might to you something mix would maybe is we but I that add big material, at that at talk not this for how it need Can SKU's a next retail traction of Is Orion if should customers? maybe moment? necessary be that? happens, SKU diversify warehousing, upside you bit the you about produce gain might that at for make might

Michael Altschaefl

a question, great Craig. It's

first, which that sometimes particularly also product be box Line, products, our historically with we think, ceilings, feel XX, product. environment, talk well we customers in very be linear often It product XX big competitive, I which area price line to using there. ceilings, for stores, have. specialty so great our a in that the product very retailers' product is higher very has logistics is can about we that environment, big been in a our strong XX-foot is High with in traction well and we're We warehousing next-generation of used we are retail part Star expect to and but received, of that this seeing positioned retail Bay the it the

round what for fixture that that products are there area. In we year very And introduced that line light that to round a type product past ceilings, cover introduced also higher call have people certain have customers this a of are addition, the look. style UFO or robust we we've prefer now

lighting to outdoor lighting received. product garages, well additional to be we that in -- or found introduced have And areas. area parking have for for parking We also retail likewise, areas lots lots,

user the farming strong. is going trend a growing standpoint, getting We certainly horticultural the vertical an potential in think And produce area. obvious air future increase of we product combination is both market. UVC that closer we out to think think likely area be to in the the about. the talked investigating want that side that opportunity the are products antimicrobial is There's at we and expansion continue there, other cannabis we look to other from the the movement I and consumer of actively that the the end and the to the

side. expansion been always are with horticultural farm, say, I'll we the dairy into environments. in the farming, some an exploring can We've so product harsher strong, be more in washable And enclosed that

think And so another also. that is that area we

looking products. always we're to So expand

now, We expand question. very eye we SKU extensive the keep very, will to. have Appreciate a we right our but open where to portfolio need

Operator

[Operator Instructions].

Securities. Riley have we B. Next, from Wiesenberger Marc be

Unidentified Analyst

your [ph] business aspirations think actually how should But can the success that And for progress in medium-term new jumping about work about we could construction talk to there? Any for represent? work? is you much in and how I traction ask, Marc. expanding This Amad wanted with the

Michael Altschaefl

joining today. appreciate Thank you you, am us I

continue and LED. still been that of pretty we spaces building given significant be in large percentage also. have performed to -- has our the is to market, been business While retrofit there well historically, the in done to new a that of studies retrofit, opportunity in converted construction our how believe have -- market many need has we But product always

been based year construction into retailer product existing of fixtures strong we've the times we for do Commented of XXXX expect specialty custom do a last role line we some been fixtures new and/or applications. us has to for doing new forward. global play this and year, those and a for think designed our So that work couple a going with online can construction Fiscal

So product used versatile is confident very line new that in and construction. we can feel be our

to going it to to be us And so we need at that which after the different retrofit. get construction, part of continue can channels for that is than market new work somewhat

of an look to that's construction. are at sure part So a sales of new getting we making strategy opportunity

Unidentified Analyst

talk And channel? on potential helpful. then ESCO That's its impact the can you and environment the about liquidity

Michael Altschaefl

customers. it Well, the they're installers And are do they product is buying impacted market installing that because our then At customers. of channel seeing called that, Energy Service that market. HVAC we ESCO's it has are energy have service seeing Those the their customer years. by -- -- sites. solutions usually we're we well. that they the end, is been for ESCO it understand their strengthening many, the their type may And energy are good for one for very other been channel companies of in again, in we feel we And very, channel product and COVID-XX. we some or products, somewhat again, in have many But and a again, Company

And substantial products in very, good From with sorry. there we projects, -- marketplace energy think standpoint, that very, a for I'm and do can support understand very liquidity financing available them the so is product. we well very

the extent larger balance energy believe want their of through to companies savings energy so have where And sheet other we have products have is large there arrangements. leases or available projects, companies ESCO's that ample things off with for to working -- types financing we are projects that

Unidentified Analyst

from hearing commodity increase. We're pricing prices question Can are just you environment? Last some talk me. the starting that to Understood. and about seeing

will on easily quarter? that you be this able your that And and to quickly customers? how on have an margins pass impact gross to So how will much of in

Michael Altschaefl

is through commodities. certainly and certain I respect some There believe, the components inflation, with chain to supply coming

and which from supply and somewhat some the of metal We is the in our shortages, we suppliers increases other growing that in of areas. And in call, some power are subcomponents a seeing are mentioned in reality area global I price purchase. semiconductor as earlier things some there

semiconductors. we purchase we that generally to but using increase to the X% will to a, don't we XXXX. that Fiscal buy would To will of the directly, impact be announced out recently our semiconductors board, that, our base across price and So we react have supplies products, a power customer start on that in roll

coming to levels. the other existing certainly immediate that we get of priced But over turn projects off new have orders. few weeks impact phase And would next going have type ongoing so into prices. have It it's work they been that business in, that at of announced, as kind we next before at a new be higher any business is over doesn't re-proposed or the an continue of those it's in the been effect that will the

as our what that, of my about have we margins believe some lower significant we increase, competitors announced forward. keep to than ranges So prepared believe, the mentioned that us we which, talked going allow been and think larger but increases is in many I we price will remarks, have pretty remain the who will competitive, we that that in price have

Operator

That sir. closing remarks. Mike to now over Altschaefl call the turn I session. Q&A the for you, concludes will Thank

Michael Altschaefl

Thank you, work revenue position forward. a operational delays excellence in to back Orion COVID-XX their to hard return bounce to great allowed going team the and Katrina. that I a us us related profitability the has and thank want for and for higher from put

of period this most we of on in our several and virtual recorded participated conferences, is social have During continued which distancing, recent website. the available

We to are March. in virtual planning conference ROTH in participate a

or IR team our and also contact is a contact with the IR release. any to today's on questions with information can You call schedule included management press

joining you again thank day. forward So our updating a you. investors for on our today. call. QX Have XXXX look Thank good Fiscal We call to all

Operator

this Thank conference for Today's call attending you is now presentation. concluded.

may now great a disconnect your You lines. Have day.

Orion Energy Systems (OESX) 11 Feb 212021 Q3 Earnings call transcript