OESX - Earnings call transcript Q4 2022 | Orion Energy Systems, Inc.

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Operator

Good day, ladies and gentlemen and welcome to the Orion Energy Systems Fiscal 2022 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

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

Bill Jones

will good open Altschaefl, the today's business Mike performance and operations. Board company’s CEO Chair and Jenkins COO, Orion's will call outlook. review morning. you, business Orion's Mike and XXXX then Thank to review

call June Remarks will Orion's expect, statements the statements of forward-looking Orion's to Act XXXX. words. then be or call additional within to that X, financial Reform questions. to available follow taking These believe, call Investor will meaning An of archived questions, that be is after generally Finally, and we CFO include items This include open the the in will Relations believes Litigation XXXX. answers Tuesday, Private words Securities Per the section website. review such company of Brodin, the today the anticipate, your and place forward-looking replay as of

release these SEC. corresponding GAAP made forward-looking measures are filings, the described well financial in to the goals statements that this that release to as date. press Additional actual expected. morning objectives, has describe this forward-looking. non-GAAP and materially different matters at include metrics of www.orionlighting.com. company or plans, These Except risks with its Reconciliations in described the various company obligation also issued as today's statements, disclaims and to than any risks filings forward-looking statements among as future could is to in subject be others the are are Such in the update which of results available today's that certain press cause are provided

the call turn to over I Mike? Mike Now, Altschaefl. will

Mike Altschaefl

We in quarter results few announced fiscal joining morning performed our Good challenges, Bill. fourth year reported in was fiscal revenue acquisition well flow Despite cash a XXXX. results and million. was driven base to last a particularly Orion A ESCO you by electrical and growing profitability That over to 'XX projects and EBITDA for by and of year by we our ago grow last of in fiscal year X.X% we successful strong. economic financial adjusted March a and of call. customer able cash of and last today channels, actual position ended of in and versus the and our ‘XX nearly ‘XX Lighting. our our year. growth a Stay-Lite and business liquidity weeks to our $XXX.X by was existing remains largest mix business contractor partner for variety standpoint, Orion expected margin terms our outside Thanks, progress today’s new XX% and XX, external and distribution fiscal customer from compared gross thank

business our Our to amidst outlook by commentary challenges then well, economic will Jenkins, and challenging of efforts issues. to and to other other business are on and our base progressing a are comment COO, in Mike to and having some it posted even over supply focus to our customers to turn which sources diversify Mike? global revenue customer operations return environment resources, responding now additional provide some I'll and our matters. I on chain our

Mike Jenkins

Mike. Thanks

and by our we reactivating verticals. base particularly ‘XX, expanded national specialty adding the in account or fiscal customers, During technology major retail

our from accounts can service. to a focus best capabilities with the industry and growing highlight design target our products, leading have quality Our our to we install benefit design, and capabilities, We to which reference of turnkey base highest who levels performance. deliver energy deliver we go-to-market customers innovative to high manufacturing, ability of of work the validate unique and efficiency, strategy build unique domestic is all Orion’s customer benefit engineering, custom of

fiscal in Service us going few particularly Company traction and $XX.X for a we channel, our as end ‘XX and quality we opportunity XX% measured million. growth provide ESCO can customers well products. to sourcing efficiency fixtures We through a to We ESCO forward, in fraction by their and by as Energy our strengths dependable our offers this performance turnaround position the a as lower proposition in just savings appreciated usage, overseas. believe significant about ESCO that value generally revenue channel encouraged Also the put Orion’s grew lead the a because Orion of typically to produce are where upgrades strong through a quality partners ESCO or to partner partners the Because deliver continue reductions efficiency deliver deliver U.S. components lumens performance, a focused ESCO energy energy on delivery cost industry and delivering to fixtures customers. business customers. efficiency in manufacturer, energy to from to their highest customers. ROI weeks, per manufacturing limited we their which excellent reliability. to is they maintenance, compensation Orion tied energy has improvements competitors and products win of methods, watt, in is utilizes design, our to are our as

As LED fixtures in success several to example, East ESCO we had for supply large an districts. good this supporting Coast year school

program this funding working additional create to facilities. in upgrade that are We build other to regions may and educational upon success believe opportunities federal

from fiscal million, focuses the to which to on continues and up for market channel, with distributor $XX.X important also prior. electrical achieved revenue channel This in path growth line ‘XX us. of year be broad contractor distributors an $XX.X Our

channel, LED have build, designed this lighting and tends agricultural to specifically developed We smaller projects. new for supply products which

impact smart our growth channel the relationships enabled very by our Orion issues, supply minimal successful future mitigating business challenges periods. and customer created operations. build continue Despite this to measures within meet electrical quite chain with have been related and to and pandemic team We on impact. many has of in any our requirements ‘XX base contribute in fiscal the bets and us to contractor own Proactive inventory expect

our two and Mike. project solutions less I position. maintenance it pass weeks strong or times short in and product complete this combined turnkey meet manufactured service in to delivering a puts back still to are now over ability We with will us lead

Mike Altschaefl

provide new Maintenance Orion. to provider accounts with turn including service channels Midwest market that while a a points made I'll and our growing customer area opportunities. expertise compliment Lighting team allows provides greenfield focused the LED in our our over their to more specialty exciting value service strides the our base as potential, heavily one customer. purchased and national cycle, Orion for two national product revenue. excellence two solution ongoing lighting national with of business open growth contact ideal provide geographic reach opportunities which additional is maintenance Similarly, an we proposition LED retail to sectors. that of our us recurring Mike. Stay-Lite of systems with sales, in and Orion's Services. retail services strength this a and maintenance electrical long-term the in lighting maintenance national extend it To particularly for entire to demonstrate services the significant regular Mid-Atlantic existing strong services out now provide has and particular sales January past building should customer retail systems regions, the Lighting, lighting new to electrical Thanks an national on solutions our and building years major customer Stay-Lite customers formulating to our We us reach, our should service and life offerings. turnkey maintenance largest are our Maintenance introduce expand address industry, launching of business retail services lighting services after

many to with as also to them customers services our our We and services good electrical electrical our steady we see distribution and business. a that and of this we and a to our $XX deliver gross over service for Growth between continued long-term. opportunities trends the the expansion with with us positive great relationships project give $X.X contractor ‘XX of in of able dynamics LED partner in maintenance business. at lighting in revenue can fiscal a with that expect from million up number business our execute capabilities in there maintenance ESCO of growing business line are on profit in some growth contractors and and meaningful turnkey existing growth Orion track building regions optimism generate base ’XX in maintenance or are country. solutions in compliments fiscal for balances recurring certain least should percentage of This provide installation million revenue, lighting roughly growth partners is Overall, and

create decision visibility near-term economic timing. supply customer projects making and in chain challenges and current continue challenges However, their to other regarding

second projects. delays near-term continued certain ‘XX customer results challenges impacted half fiscal to larger on create Some visibility and our

make timing, performance guidance time. revenue we have it our ’XX, specific a though provide uncertainties path exceeding to ‘XX ahead, around or at to principally project Looking matching in fiscal difficult this revenue realistic fiscal

customer completion largest We decline expect the retrofit our million the in turnkey of lighting and of to the control footprint. $XX U.S. LED to fiscal of the revenue bulk store approximately ‘XX, from following

regarding potential revenue customer this decline. are our offset We to the outside of strong growth for optimistic in business this

a to performance in to envisioned initiatives. and business via a factors plan growth of and We influence or ‘XX ‘XX to revenue other revenue fiscal and long-term Board path in annual matching business grow goal years. customer. five organic revenue Our approximately partnerships expected our with strategic Management achievement external outside growth committed plus combination a Orion's growth XX% of the growth through double-digit We key exceeding to press Orion's fiscal reviewed this organic organic million release. the to today's result would of $XXX of approximately remained largest over acquisitions,

the and product team's delivering our turnkey on service and solutions goal service capabilities, is and with confidence partners, growing growth the a service our return unique rooted compelling portfolio, our strength in to investment environmental in planet. benefits customers expanding of base our to and Our commitment of customers achieving our Orion's quality distribution highest and

partnerships to in growth through acquisition. confident transactions such Stay-Lite our also are as We recent strategic our or accelerate ability our

of and advanced performance created fixture. including Laboratory. Our right less for the is strength sponsored with in Category, connected sustainable Energy luminaire a wanted growing Department ongoing that a competition of also NREL The were luminaire was and to a Orion in and shareholder and have recognition. on existing analysis of pipeline WiFi the highly Manufacturer one Orion I Wisconsin highlight LED minutes. for few National than was of winners finalist U.S. controls, recognized believe a networked trough the execute two our This efficient we opportunities. industry the Pacific retrofit technology of financial of four a We fluorescent Concept recent retrofit in We Awards. the value. L-Prize by challenge can Northwest LED the of Orion's in to financial American-Made research manner to opportunities accretive have potential Year

businesses service quality and high are our earlier light for We such ISON four in be is to company very products PureMotion in the high leading our ISON Awards. providers, quality UV-C publication SpacesXLearning New education, year, state. institutions, XXXX proud SpacesXLearning others PureMotion a in and interested creating facilities. won And of this Product educational each

spaces, line shared in I Our for environments, offices, energy annually. have the one medical providing lighting ESG about airborne concepts. our This finally, want viruses, sanitizes we initial our Core collective PureMotion Bay with resource history efficiency spaces. ESG Star Lighting, such ESG an professionals. eliminates Category team. Harris values sustainability light response by mentality, American air committed Lumen for rooted Ultrahigh number one be that and a other we was Orion interest sum fundamental was the in in stakeholders be LED as to minute. of ESG including employees to team reduced thinking growing public in With Bay Line talk reporting, will And drive workplace schools, improved product enhanced High online as Orion's report, nothing but our two ranked number meaning our industry been Inside year, to delivering energy in the a long High updated for in made COVID-XX and and which fixture safety our is include conception, a ISON ranked facilities, will

for the ongoing and with efficiency, needs in technology partner customers technology perpetual life as relationships environmental benefits our we And philosophy also value. customer embrace core a innovation, we embrace also changing meet to finally, impact. which and and a We of and customers see new view and a lower as safety, our enhanced

evolve manner. and some we meeting the spend key relationships I your improved these committed needs to time our carbon performance, and encourage are of feedbacks deliver friendly hope to energy We with savings, stakeholder productive welcome to operating we continue reduction. in a and evolving that sustainability footprint sustainability, may report you

Now to the Per financial like Per? I'd highlights turn additional call to Brodin, discuss and to over insights.

Per Brodin

quickly can then Q&A. I'll highlights some Mike. we review the open and for you, call Thank

revenue million fiscal our mentioned, which $X.X strong from X.X% As Fourth fiscal following ‘XX growth ‘XX from million increase of revenue $XXX.X $X.X million, services. by our Orion driven grew the outside pandemic. ESCO in and including customer a activity, Mike account channel, in COVID-XX by onset maintenance to enabled million travel relationship, national quarter million largest by decreased the QX of project restrictions XX, $XX.X had to benefited $XX.X and which work easing the increased

million year Our Fourth to was forwards revenue. lower gross or $X.X percentage tax included profit ‘XX quarter in declined income a deferred fiscal year net XXXX XX.X% Orion's XX.X% Gross XXXX versus increased well was the cost benefit. fiscal included pricing to also supply net million improved also although fiscal revenue, were pay $XX reported $X.X and pandemic. valuation $XX.X Fiscal million $X.X net operating QX from XX.X% noncash income generated product share federal operating share tax which $X.X $XX.X million March, than compares prior QX from QX QX associated million which ‘XX, in $X.XX against benefited or of adjusted net $X.X in $X.X XXXX in million XX.X% million million tax our on $XX.X the we $X.XX not per diluted million primarily ‘XX XXXX based of from $XX.X year. versus release marketing expenses to benefit of Orion's of for ’XX. cash million tax tax $XX.X ‘XX, ‘XX, XXXX. fourth expenses XXXX. million Orion including ‘XX, reflects versus suppressed loss fiscal expect fiscal $X.X the for fiscal $X.X million. to from as million in absorption reductions of the higher do rate including profit fiscal in in allowance fiscal per expenses expense. taxes slightly XX.X% fiscal cost ongoing for the to million $XX.X which carry assets. ’XX, COVID-XX diluted principally effective reduced because grew below million EBITDA of due fixed The and operating of were increases with of profit percentage level as ‘XX Fiscal $XX.X chain Orion QX higher million management. to sales gross as quarter a The recent and to million loss years meaningful several in as in QX, purposes more expense, increase Fiscal in negative XXXX $X.X acquisition on

no March outlook, working economic position. and confident on over in material capital to plan improved compared company's our $XX Looking with in facility with ‘XX $XX.X on we supply remain million at ‘XX, beyond available Supporting uncertainties. potential the strategic credit near-term in XX, outstanding. and despite ended million very million $XX.X debt fiscal fiscal growth chain XXXX, million XXXX. million and including long-term financial to strong Orion customer liquidity, a March remains XX, $XX of $XX.X our cash Net We

Q&A Given our session. we'll call we potential will operator environment And to to positioned prudently the acquisition back financial with well for pursue the opportunistic. in opportunities the accretive that, and are strength, over we other turn remain this

Operator

[Operator Certainly. from question Instructions] first Craig And Eric of comes Hallum. Stine our

open. is line Your

Eric Stine

for everyone. taking Thanks Hi the questions.

Mike Altschaefl

Yes. Good Eric. morning,

Eric Stine

morning. Good

you're contribution just for maybe fiscal So in Depot, do the Home the appreciate with starting ‘XX. detail giving

or we longer additional visibility or know, way sustainable work million and that think should you should forward, run direction a we here, ‘XX rate fiscal kind $XX kind have it's about one of expect of the just term? You a as other what whether into going curious

Mike Altschaefl

now U.S. services in to business more a we Yes, locations the felt little the of substantially other new yet retail give since we locations in continuing the we that store consists mentioned going we've past, visibility the maintenance special wanted projects were which of through retrofit construction which the of forward. of of locations within with

we this expect going customer, line for that of So of $XX be a number base to forward. a and somewhat the we with expect do years to million continue

that So ‘XX concentration XX% fiscal at that $XX Depot XX% revenues we managed we've through Home a and assuming of And which flat is think we revenues the ‘XX, for in reality healthier we was the $XX in feel with we million had million. we'd at be stay concentration, situation. much

plus items level the the revenue mentioned, revenues So of overall we that do be service I to range. yes $XX of around Eric, expect million that combination

Eric Stine

is? got about Okay, but I And you've one, that’s there, think an what second targets inorganic five-year to great. your that think is hopes maybe that. do there? my you And maintenance just think appreciate mean, add area longer just is you sources? as think where obviously high details maintenance on maybe term, of through will services you for part it services, it Is something that I you organic, some that you

Mike Altschaefl

Absolutely.

giving January, with company into this $XX of expecting ‘XX of the in we're million other million and us run couple our a revenue Stay-Lite customers retail $XX rate point fiscal starting acquisition in of around is from roughly revenue So that at going time. a of

think will in we as $XX we've So exceed revenue. million mentioned, we

forward a we revenues Midwest strong total really have Mid-Atlantic but and and of those to of nationwide a proportion to inorganic. is a on the it's we grow. combination basis. ability likely have our How that particularly a So now expect and that to we greater becoming presence, be the We certainly services organic going states, in provide do

also to able that And existing acquisitions. base, of so do different expect this full advantage customer adding point we which We by we through additional to locations expand also. not at it do provide in we rolling that. growth may to our be that have out taken may And to people

So for the future. a sectors we think both great opportunities that we may we the recurring well as some as it's lighting revenues industry and opportunity other in in that for into see get

Eric Stine

Okay, that's you. great. Thank

Mike Altschaefl

Thank you, Eric.

Operator

our And from Riley. next B. of Rygiel comes Alex question

open. Your line is

Alex Rygiel

morning, Thank you. gentlemen. Good

Mike Altschaefl

Good Alex. morning,

Alex Rygiel

of random A couple here. questions

ESCOs fiscal we so of how First, revenue them compressing? business, in about and flattish, talk and about large sort customer of ‘XX you maintenance. the can obviously if a achieve EBITDA a There bit expanding is year-over-year, you or should your guidance directionally shifts margins here from guess towards around various away think I

just sort on could you if go? thoughts So give should where there margins some directionally of us

Mike Altschaefl

may Per a on ask and bit me longer-term. Sure, let have start little I just

So facility, company as half grow a not adjust we've and fiscal first, even as additional the having term we that $X.X to had with obviously viable And get second originally us. anticipated, and it's from hit then somewhat ‘XX, pleased a it up the the for coming EBITDA of as as improvements facility. certainly strong mid-teens with full that high to manufacturing were manufacturing into we of this consistently end through high We've is we get million. EBITDA get an are as flow grows single little past those digits, And, the we that said range. had double levels a at feel in volume be objective revenues we area a very can current additional we've getting and that in to and our longer margin the our of stronger through in we feel that company year digit

up mid-double-digits for to single think reasonable time. a I and lower double-digits digits over moving high us is think I midterm more So expectation the short-term,

Alex Rygiel

Thank then projects of you chance you. could XXXX? fiscal were in quantify delayed the any And value that

Mike Altschaefl

time through back into those couple as that significant was future and attempted fiscal and we projects last information feel releases I comments calls and had. we've we we'd a revenue to the being and walked to that give first of all, entered guidance level we do some in projects had to that, had was on And as of the couple what why, back existing of January XXXX, high based combination particularly some to some did it we our of given of provide Well, base, now, delayed. expectations that of we some press at we've goes customer times to will sales

that it's from being just revenue to us or year to expected lot we've through think internally that has chain and pushed ago business that fair today say Things of that from not due the amount continued originally the I lost back is have our of do of to going through fourth So be pushed and XXXX. of a back projects either a what significant a customers. feel been back. quarter supply delayed, aspects we fiscal to the We shortfall year

probably put a terms of due pushed with expected their of said, of business sometimes and had has in access. $XX and to a that of was COVID that chain So mix challenges of and we decisions, $XX customer of somewhere that box been, you some between situations that kind would million all and own supply largely around in somewhat million situations back

Alex Rygiel

or all if baseline that? that here there of kind back, in And in revenue? assumption million, were to million $XX portion to that of baseline is how million much And revenues none of million of a be flattish that $XX to it upside to your commentary could in is Is XXXX? of of your $XX of that come therefore, of assumption $XX flattish

Mike Altschaefl

of business in XXXX, being XXXX what in we that we that is hope say flat in Alex, are talking we most would when to part visibility today we we see expected that may I say occur of that it XXXX.

if of XXXX, and that expected year be new customers it doing this happen So I acquisitions. going during would other it may upside we had suddenly what -- are we a always make and not into our that looking fiscal potential that be some all of always than, certainly I we're will projects fiscal There's for and would think potential. big say not upside happens, would more

XXXX I would be if there optimistic significantly to would assume simply certainly I that suddenly it be not So correct higher. some could be think but upside, all happens of feel that

Alex Rygiel

helpful. Thank very you much. Very

Mike Altschaefl

Alex. Thank you,

Operator

Wainwright. of comes question next our from H.C. Amit Dayal And

open. is line Your

Amit Dayal

Thank everyone. morning, Good you.

Mike Altschaefl

Good morning, Amit.

Amit Dayal

Mike. Hi Yes.

some of projects respect know guiding maybe year-over-year, or environment you're canceled? flattish being of result I we any what's today. the of to Just, of for sort but to sort Mike, mean, targets the macro saw these risk announcement improvements with I

Some about Have sort that how helpful? fall customer any cetera? continuing any out, et seen base, your happen you. of we color already fall be -- projects of part you these these or as side to on should Thank pushed in would are customers of companies of think any that get

Mike Altschaefl

Absolutely.

I that today the necessary some right starts felt terms prepared of some there of say we think on that what's the globally reason it to we things in with in that are our it level, probably remarks now just are at macro watching going uncertainties. is,

situations looking we slows for when cost have seen or reduction. other where provides energy customers companies economy migrating And do would so, on to down yet, possible greater are things XX% that what decide the slow LED to savings the they're change to economy we it's think planning hand, of might and in significantly, do. usually if the down, terms lighting a that And

So times move capital those at projects can forward.

cons some changes be pros of economic impacts our in on in So terms could there business. economy and the or changes

of caution I would even in But of prevailed I we of there But I economy months area. that the they to when or say, but safety the COVID of have on and the savings modestly concern fortunately energy ago customer people. have they back think might be continue again, in ago that and and been overall and to do three gotten seen lighting the put uncertainties we some have chain things, side of the improvement say side decisions. would and projects probably great supply stop would our certainly six their hit logistics I better first and just for right were some environment past at the because now certain would sometimes months had some have projects what and companies itself the LED to than better, in things

customers by those So first the on we continued we're the their our challenges supply going fast that do to move And say some seeing want now. quarter, and watching are projects might caution right saying I'd they how are where into be. chain things of

Amit Dayal

that. Thank appreciate I you.

was I guys one percentage how for terms ESCO much XXXX in Just one, of fiscal guess, you last of in revenues?

Per Brodin

I sorry. hear that didn't question. I'm full

Mike Altschaefl

Amit part you could out over, us the Yes, start please? cut first on

Amit Dayal

just channel. wondering much, Yes, ESCO XXXX? in was the revenues ESCO I was how percentage what of

Per Brodin

For year, the full XX%. it was

Amit Dayal

Okay.

you. That's all Okay. I have. Thank

Per Brodin

year-over-year, was sorry. XX%. It, I'm sorry. I'm yes, flat it

Amit Dayal

XX% growth.

Operator

Partners. next Campbell comes Alliance Global question from of Our Jeffrey

Your line open. is

Jeffrey Campbell

morning thanks and this color for the Good point. at all

Mike Altschaefl

morning. good Yes,

Jeffrey Campbell

ask wanted create relationships services, installations, installations on installations businesses work? obviously can the can own you others? over leading the service perform to work wondering lead work really to I if well is regarding maintenance services your is, your I'm or What exclusively time on from to as that as installations

Mike Altschaefl

be Yes, We question. to great absolutely believe that case. the

the And we to business on services maintenance are is back connection a we acquired January, where currently our being that whose in able in provide no services the of facilities. Often miscellaneous to possible services Stay-Lite, manufacturer do to us lighting turnkey product. doing -- the services. significant solution services there electrical for well that the different So think in between on based our maintenance maintenance in as as variety your happens product provides secondly, customers, from to is both who that ability direction quite other the LED of fixtures is project And us existing the point, then on cross-sell the we side. is the

base. we limited our So by install own not are

Jeffrey Campbell

performance. you. Thank about on just further understand you color channel. ESCOs important see importance, wondered want strategically approaching how the ESCOs some could their others, I more about do go you to you that on I ESCOs I provide Okay, as emphasis wondered great. I mean, are work approach, just relationships little a there, with? if bit you And the ESCO than you the how just do

Mike Altschaefl

Sure.

projects on history we when customers, We energy first years ago, that, have to their really business five past in for that and selling started two we've manage number working with about And a back of ESCOs XX service of energy long been companies talked in a these ESCOs going years the we've ago. adding shifts strategically the years. in from the we focus ESCO heavily few made results and of on the our focusing little we back starting are see and lost focus some market. heavier ESCOs been good to and And kind we've a sales, we very them on last going distribution, having really a strategic

see not to in because cases think have we can sometimes And buy can't from in inventory the the we product provide believe got do ESCOs distribution competitors many the directly good channels. there our a of that services we've want and the lot today them. which our do, we're of of manufacturer, to they us. with may typically market we we So addition, for buy to position a in like U.S. and potential because need we manufacturing, able some components based of

see we a number ESCOs past. touched not that in and future bright really So believe actually there of a them the we've us we are, with for

have And marketing so sales activities on active the heavily some we channel. focused and very ESCO

Jeffrey Campbell

you're really growth And you if since, year-over-year. effort of up concerted that been of a more minutes some an in Do for making ago you having that flat else? that do have area that or few sort of that were you've just XXXX, this might from eye and keeping on the more out that away think maybe see the that respective and forces sales projects you I those been now could the pushing that pushed same just other business gotten it's anything there said attribute a sales ESCO discussed follow you're you to

Per Brodin

Per. it's Jeff,

misquoted penetration I on the Let me that. that, correct

about markets the penetration XX% For actually XXXX year. current, prior at U.S. and XX% the fiscal for was

that. sorry So, for

Jeffrey Campbell

that’s good growth. so Oh

Per Brodin

penetration… significant That's dollars growth, both and

Jeffrey Campbell

scratch last can you Then my question. Great.

Per Brodin

apologize mixed And Yes. for to that one a I I'll more if got add it, because we bit could maybe I little up. actually earlier,

we out the business of segments called this markets. our we the K, when in K later U.S. our break it's week, as issue one our do So ESCO

for we on so And basis, grew ESCO XXXX. XX% XXXX, a over the I'm business year-over-year actually by fiscal sorry, in

and So I growth making saw in in but we good future. clear XXXX, ESCO apologize the in for see growth not earlier, that we extremely as potential it market the

a thanks So lot Jeffrey. questions, your

Jeffrey Campbell

clarity. for thanks Well, great. Oh, the

Per Brodin

Thanks.

Operator

next [Operator from Bill of Tieton Instructions] come Our Capital. question Dezellem will

line's Your open.

Bill Dezellem

you. Thank

supply chain. start with me Let

sense a months in that of that bit You supply has ago, the is the in impact had a was either them and from or you future your specifically but do on what yours China impact mentioned competitors chain than have lockdowns it likely three could months? better little

Mike Altschaefl

we the often on a position as or in less, through we product earlier of sales few I over be, about tell timely weeks in opportunities somewhat that mentioned on to Asia fact particularly we the to to My a fact the feel the a we've retrofit. our and last chain Bill. when because the two that whether and specific better call, deliver we have has certainly channel construction continuing where our component that high situation But do need situations we complete amount don't we're good our is think basis that competitors competitor substantially in our view we supply deliver shape, have import that knowledge that would level, anecdotally we're can believe been less months be a site fixtures of the we product either to competitors been from and China new given or not able comments it's

So come substitutions that both certain and we of the up alternatives with fared as and fairly have think finding Asia, well. in our finished hard that from working some suppliers took components goods we efforts, that as inventory, we building and early well really

most from think a position in our chain we standpoint. we so supply a are And larger better than of competitors

Bill Dezellem

Right.

have question the there? that, is advantage that you of widen do the was, so way, I your sense essence that it think And months, asked coming suppose, I in that may what’s should

Mike Altschaefl

point tell extent this this of in better hasn't point at seen time the we've gotten of some lockdowns it hard not they takes it's yet the kind time it I'm at significantly time. think in full both and situations because I to -- sure it.

would on versus school's a have few out little say one, still to supply advantages over think competitors. months we there next standpoint from could So to our be a I that chain bit the but some us still

Bill Dezellem

to with then catch if to thank up costs that Great, at have result And about pricing you. as question with all, my has need do second a does inflation? How of pricing. much, your come

Mike Altschaefl

gross from we has marketplace, to team it's a making sure in the the margin. that We our remain protecting do a gross is go year-over-year when through your the on period, balance to we've heavily philosophy able taken you management a grew our focus our and a we reflection inflationary fact margin. basis you that to margins protect And as between on competitive have moves need been feel gross an price And that that right always increases we and been wanting that that.

that over were feel to line And we the the competitors doing did We that of were were we that we suppliers that we have very had could we inflationary what our with below pressures hard obtain or our last felt some we we those, of as doing. worked watched saw competitors with we our and what price we also seeing. months the in information three increases we either and -- some XX manage general of

feel protected Bill. far now right and our period competitive is this have margin so managed through a it with in our we've gross of So we that inflation remain and certainly feel position

Bill Dezellem

time. thank Great, for the you

Mike Altschaefl

thanks bill. Yes,

Operator

last our And Investment. question Equities [indiscernible] will from come

line open. Your is

Unidentified Analyst

Thank my everyone. question. morning, for taking Good you

Mike Altschaefl

Sure.

Unidentified Analyst

we've what I'm -- revenue obviously I looking resolved components to the especially it's what growth shortfall and break the to be how and customer et I'm or delays of the expect those in over what chain and several looks fourth and you been but a are the you quarter-to-quarter, and obviously at supply investor quarters. new last the of delays, quarters? know declining, quarter the about over next several down the cetera, lull been the trend doing relative for quarter fourth components talked do Can the you've from revenue

Mike Altschaefl

Sure.

I Appreciate your being you I for question, shareholder. think thank Tony. a one,

as as not of we half and expectations that February detail we we some the was the attempted XXXX discussed much think today as fiscal what second up call to things our somewhat that happen. to back to in that caused were. in I of February our original that And in certainly could describe

global planning construction had their their more were steel doing on in facilities their where projects, we for had QX as fulfillment it supply supply government the new with they pause construction go new chain therefore where fixtures we and were And business such other some expected chain so, business calendar Federal situations were their their was quickly. We to due their of slowdown somewhat. and Government centers. take expected for materials, of XXXX, needed customers back impacts retailer, that to some but of QX online I'll the those a and We quarter a had pull had combination the to continuing issues -- a of -- call issues that fulfillment first had to in centers, and they where

So than had those is handful the been was we quarter. continued fourth you And as of Those things somewhat the had for which back January that quarter delays softer and the in the fourth said, February part what we through delayed. saw most expected timeframe. why,

been Again, on I past. of that the although, most projects terms think today, we somewhat feel onto turning feel we planning been have has of in that fully sluggish business that lost, say very continued back the be the will has that companies first quarter they I in not to optimistic.

revenue the a in be It's about but are base we think reasons canceled. our that from we're that about we things just when likely backend so And good expectations, somewhat loaded projects the at have place. been and customer we And slowdown our the this point, seeing it's and not mentioned. feel that of we again, for to lot have, a XXXX, fiscal

can as get at probably this I it's So specific time, as Tony.

Unidentified Analyst

second have -- revenues the do you feel competitive how maintained Have you as lowered? consider And would position helpful. bit very a or dropped? raised market is, your it, my share your you've or you, you've that question is That's your

Mike Altschaefl

and mentioned couple question. the that did we first retail through fourth of for you one is our we to And where in fiscal XXXX impact locations. situation the quarter earlier coming, thing, tie the the U.S. it of those known little is, a a get one There rollout was have I'll to a, largest a get also Well, you things back of was there your had bit I and of customers. locations end largely of finally most that get should

fall the in that quarter. was and that happened part that So off of fourth

today competitors next from things -- the XX% where Energy more and growing Department have the going been than about about really past going is have than to implemented a take them optimistic I away somewhere market forward, and a just we the more is that in one market through just to think I commercial business the I talked from and five be a because We around fact it's get competitive when stand talk share. that massive industry. still I've think industrial feel lighting U.S. standpoint, about the And in we be the years. that lot share think we to think very and of Studies our and over better our massively never

industry product, better think than is important. and service to business I execution size market our better through not and It's size competitors. our So at this better taking that me the we of win share the just

Unidentified Analyst

thank the and Understood, best very luck. much you of

Mike Altschaefl

you Thank much, Tony. very

Operator

turn remarks. to That the now session. back I the would Mike Q&A like concludes closing call for over Altschaefl to

Mike Altschaefl

participated joined LD see Today, the the for is again a Conference section the in any We in for our Hybrid want IR were thanks in-person your at our Micro. are to presentation, conferences Investors, California, to which And Latonia. interest you, many Orion. past Conference LD of contact who we Micro us who everyone please on and over Thank today participating and virtual year, recorded are of website. several may in available which

questions if included welcome release, IR really to and we press have with in would a if today's So any you interest. is contact contact like you our your schedule management, Their team. or call please information

quarter. you Thanks to we to the look a today’s thanks Have for great day. after us So lot. again forward next a joining talking and on call

Operator

concluded. conference Today’s now Thank you. call is

may disconnect. You now

Orion Energy Systems (OESX) 7 Jun 222022 Q4 Earnings call transcript