Q2 2021 Orion Energy Systems Inc Earnings Call
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He said on the mode, maybe we will conduct lessening I say, especially in the south central to keep that at this time I'd say reminder, today's conference is being recorded I would know like to change once once it was like they used to be also with Sir you may begin.
Thank you and good morning, everyone Alright, no my call truthful will open today's call with second quarter highlights.
Update on the business outlook.
Ryan CFO, Phil will then review some additional financial items after which we will open the call to questions. An archived replay of this call will be available later today.
Festers relation section of O'brien corporate website.
This call is taking place on Thursday November 5th.
20.
We box to follow and answers to questions include statements that the company building.
Forward looking within the meaning of the private Securities Litigation Reform Act.
Stanley impacted by COVID-19 related delays R.
R Q2 revenue rose to 26.3 million versus 10.8 million in Q1 R.
R. Q2, 21 results were below the record revenue a 48.3 million achieved in the year ago period, principally due to COVID-19 related impacts.
The second quarter benefited from the resumption of L. A D lighting retrofit activity with customers, particularly including the work that recommenced in early August on a national turnkey retrofit project for our largest customer.
Importantly are operating discipline, new product introductions and product mix enabled Orion to achieving improved gross profit percentage in the second quarter compared to both the year ago quarter and the first quarter of this year.
In particular.
We benefited from proactive cost management efforts and sourcing as well as in managing manufacturing and assembly costs, including higher absorption of our fixed costs.
Our second quarter results also benefited from lower operating costs compared to the prior year, including some steps taken in March to contain costs in anticipation of the impact of COVID-19 on our near term business prospects.
Collectively these factors enabled Orion to return to profitability in the second quarter, achieving net income of 1.2 million or six cents per share compared to a net loss of 2.2 million or seven per share in the first quarter.
I'm very proud of Orion second quarter performance from both a top line and bottom line perspective, as our team was able to quickly pivoted business back to a growth mode. While also maintaining operating discipline.
Ah Ryan's success in this regard is very apparent when compared to our fiscal 2020 Q for results in which on roughly comparable revenue. We had a net loss of about $500000, which did include about $400000 and one time restructuring costs.
Revenue of at least $117 million.
We also expect to be profitable in both the third and fourth quarters and for the full year of fiscal 2021.
Finally, we continue to expect to achieve financial results in fiscal 2022 that should at least match those delivered in fiscal 2020.
Our improved outlook is based on a number of factors outlined in today's release, which I will summarize.
One we anticipate approximately $41 million of product and service revenue from an existing large national retail customer in the second half of fiscal 2021, and a total of approximately 56 million of revenue from this customer for fiscal 2021.
Two.
Continued and growing project activity from a major global logistics provider that is expected to be a significant source of revenue overtime.
Three turn.
Turnkey led lighting retrofit solutions for a large specialty retailers nationwide chain of stores. The first phase of which is expected to generate at least $8 million of revenue during the third and fourth quarters of fiscal 2021 with the balance of the project expected in fiscal 2022.
Four we ours, we see a growing relationship and greater potential revenue from customer design lighting controls for a global online retailers facilities.
To date in fiscal 2020 in fiscal 2021, this customers generated approximately $6 million product revenue with future projects anticipated to begin in Q4 21 and continue into fiscal 2022.
Five we expect continued strength in business activity across a range of markets, including the manufacturing retail logistics public sector and medical markets as well as across all of our channels as more companies seem engaged in pursuing pursuing cost saving projects with strong ROI and relatively short.
Payback periods.
Six we also anticipate continued demand from long standing public sector customers, including the US military veterans administration in the U.S Postal service.
Seven we expect solid revenue opportunities from several new products designed to deliver superior energy efficiency and quality at very attractive pricing.
Our early strong customer and channel reception for these products supports this view.
And eight we're making good progress in building, our new fourth channel the Orion maintenance services business and expect our efforts to create revenue opportunities soon.
In summary, we are seeing business activity improving faster than we had anticipated on our last quarterly call.
Of course access to customer facilities remains critical to our pace and volume of product and service revenue, we have seen a dramatic rebound in activity, but caution that COVID-19 remains a threat to our performance should an outbreak affect our operations or those of our customers or their facilities.
We continue to believe that a ride remains well positioned for our fiscal 2022 results to return to levels achieved in fiscal 2020.
This view is based on the strength of our product offerings and new products. Our turnkey design build install capabilities are expanding base and offerings of various aiotv monitoring and control solutions as well as revenue opportunities in lighting and electrical service maintenance.
Again I, thank the entire Ryan team for their hard work and dedication this year during a challenging and rapidly changing business environment. After.
After ramping down projects personnel expenses rapidly at the close of fiscal 2020, we are now reversing course and ramping up to meet increasing customer demand for projects and proposals.
Through this period, our primary concern remains the safety and well being of our people our customers and our partners the safety precautions and strict protocols, we have developed and implemented to address COVID-19 risks are proving successful we.
We are currently experiencing no material impacts to our business from co with 19 and are working hard to maintain this result.
With that overview, let me turn the call over to Bill held for additional perspective on our financial results Bill.
Thank you Mike Alliance second quarter revenue was 26.3 million as compared to $48.3 million in Q2, a 20 and $10.8 million in Q1 of 2001.
Year over year variance is mainly due to customers delaying projects in response to co that 19 in the first two quarters of fiscal 2021.
The year ago second quarter. It was propelled by significant lighting retrofit activity for major national account.
After halting work for this customer in March we were able to resume their projects in early August.
Reflecting these factors Q2, 21 product revenue decreased to 20.3 million from 35.6 million in Q2 of 20 and service revenue declined to $6 million from 12.8 million.
Second quarter gross profit percentage improved to 27.6% versus 26.5% in Q2 20 prime.
Primarily due to new product introductions cost mitigation and procurement and plant costs as well as to manufacturing and component efficiencies in the design of the new products.
Our gross profit percentage also improved 320 basis points on a sequential basis from 24.4% achieved in Q1 of 21.
Due to the factors noted above as well as efficiencies achieved on higher revenue.
Operating expenses were reduced by 8.8% to 5.4 million in Q2 of 21 compared to 5.9 million in Q2 of 20.
Due to lower commissions on lower volumes as well as to some cost containment efforts implemented at the outset outset the pandemic.
Reflecting lower revenue and some fixed expenses Ryan report, a Q2 21 net income of $1.9 million or six cents per diluted share versus net income of 6.7 million or 22 cents per diluted share in Q2, a 20.
EBITDA was $2.3 million in Q2 of 21 compared to 7.3 million in Q2 of 20.
Our tax loss carry forwards were approximately 75 million for federal tax purposes, and $62 million for state tax purposes.
That should that should provide a large shield for ryan's income taxes.
In coming periods.
We ended the second quarter in a solid financial position with net working capital of $27.4 million, including 12.1 million in cash and cash equivalents compared to working capital of $19.8 million at September Thirtyth 2019.
Shareholders equity improved to 31.2 million at September Thirtyth 2020 from 28.9 million at September Thirtyth 2019.
At the close of Q2 21 line had 7.9 million drawn on its revolving credit facility versus 3.8 million outstanding in the prior year period.
We believe our cash unexpected.
Unexpected teach future cash generation combined with our borrowing capacity provide a strong financial base for the company to continue its growth trajectory.
Now before I turn the call back to Mike I would like to thank those of you on today's call with whom I've had the pleasure to speak with and to meet with during my tenure and Ryan.
As Mike mentioned earlier I will be retiring from our roles and Ryan after today, making this my last conference call with our investors.
Mike.
Thanks I.
I would also like to thank bill for his many contributions to ride over the last five years Bill has been instrumental in helping to guide or Ryan back to significant growth and profitability.
As mentioned earlier pair Brody will succeed bill as our CFO and as participating on today's call.
Pair bring substantial financial public company, CFO and leadership experience to Orion So welcome to Orion pair.
Thank you Mike.
I just wanted to say what an honor it is to join Orion at this exciting time.
And then I've been very impressed with the quality dedication and camaraderie of the team at all levels.
I, particularly appreciate the orderly transition that bill has enabled and the opportunity to work with him over the past few weeks.
I will conclude by saying that I look forward to working with and contributing to the Orion executive team and to building solid relationships with our investors.
Ryan has developed an exciting and substantial market opportunity and I look forward to updating you about our progress on future calls.
And with that operator, I think we can proceed to the Q and a period.
Thank you, Sir ladies and gentlemen, if you have a question at this time. Please brackets time and then the number one key on your Blackstone telephone. If your question has the M. David are you if they move yourself from the queue basketball.
Our first question comes from the line of Craig Irwin from a rough capital partners. Your line is open you may ask your question.
Hi, good morning, and congratulations on the strong earnings this quarter impressive results.
Thank you Eric.
So.
It looks like gross margins were the biggest variance versus my model.
Guys are clearly getting traction there.
And it's going all the way to the bottom line.
Can you talk maybe a little bit more.
About the material sourcing and some of the other items that you called out in your prepared remarks.
You know when we see these continue to rise with improving utilization over the next few quarters.
How should we think about potential for continued leverage on the gross margin side sure.
Sure.
Great question, Craig Thank you.
Covered somewhat bill may have some things to add maybe a little bit more detail, but we really were.
Pleased with the increase in gross margins this quarter I am not going to say, we were surprised but we were pleased and it's a variety of factors one certainly some additional volume going through our manufacturing facility helps when we are absorbing more of our fixed costs and to answer part of your second question going forward with what we expect for revenue in.
Quarter three in quarter, four with a significant amount of that revenue going through our manufacturing operations. We do see additional leverage opportunities for margin caused by higher volumes. We also as a company have a long history of always looking hard at RF product right and making sure. We're doing whatever we can from a supply chain staff.
Endpoint.
Cost reductions efficiencies in our facilities and we saw some of those improvements during this quarter, which helped the margin.
And we also have introduced some products over the last six months that we think are well designed very efficient and efficient for our customers from an installation standpoint, as well as energy standpoint, and they've got really great margins to them because of the way we've been able to design the products. It really was several factors coming together that helped boost.
Margin.
And I would lastly, I would say, we continue to see a path to getting back to those 30% plus margins that we have experienced in the past and we had higher volume quarters.
Bill anything you'd like to add.
No I think that it really does cover well I think that it's the one thing that that I would add Craig is low.
As we take on a project.
We we have a road map, okay, how we're going to take costs out of time, so we might start out with that.
The margin that we want to work at top right and so we'll we'll have a roadmap whether it's.
All but it's really all the things that Mike mentioned, we just kind of time line to get there and we hit those.
Great. Thank you.
So my next question is about the build up of the 40 million dollar plus that you gave us for the.
The December and March fiscal quarters, It's that's really great visibility I know you guys are going to be excited to have that revenue visibility like that at this point.
Your press release, what just little over two weeks ago about the major home improvement retailers, which is clearly helpful for us to see how this comes together.
Can you maybe.
Discuss discrete items in there.
From a proportionate standpoint, how we build that up to a $41 million number.
And what should we be watching to see if there's potential upside to that number.
Sure.
Well first of all we were pleased to be able to give a little more visibility to the next two quarters as as you probably remember it's a little bit.
Unusual for us to do that this early normally we wouldn't have been kind of doing quarter by quarter. So far this fiscal year, given the situation and frankly, the front I just need to repeat that we see the biggest risk being COVID-19 impacts either internally or with our customers, but the project line activity and the scheduled projects, we have going on right now would you.
The the confidence of hitting the numbers that we've just talked about it and I think also we demonstrated by exceeding our Q2 number that we had said we would be at least $25 million getting over $26 million.
So I think that we've kind of laid out the numbers starting back in June to be more specific about our largest customers that people could track between where we're at today and how many sites that we do have and I think with the press release today you can understand the dollar amount we expect from that project during our second half the remainder the buildup of it.
Craig is a combination of some of things I've mentioned today, we are kicking off a much more significantly the project for the.
The specialty retailer.
Our.
Project, we've announced earlier this year of a VA hospital in Las Vegas is kicking off this quarter, we usually expect automotive business to be strong during Q3, and probably Q4. So it's really a variety of things and then some of the newer relationships kicking in and finally through some of the distribution side of our business and our relationship.
With electrical contractors and Escos, we see that picking up also particularly with some of the new product of introduced so it's kind of across the board.
And just want to restate, what I said today and in the press release, we we really are seeing the strongest.
Business activity that we have seen in a very long time of request for proposals and bidding on projects and kicking things off so it's all been very encouraging. So that's how we why we feel confident about the next two quarters.
Great and then last question if I may reflect before I hop back in the queue can you maybe talk a little bit about your.
Peak level of weekly in installations looking backwards roughly how many facilities what are you doing a week for a quarter.
And then you know there's chatter out there.
Wisconsin that you guys have hired a couple dozen people into the lighting sensors business over the last few months sort.
So it seems like that might add capacity for a bigger piece how should we look at.
Potential weekly installs or potential installation capacity and the and the ability to to execute on on demand surge if that does materialize.
Sure.
Great question, So let me start kind of on the.
Sites standpoint, we've mentioned in the past I'll start again with our our large retail.
Retail customer that we have times have done sites, 20% to 25% to 30 sites per week, and we're able to maintain that type of ramp for an extended period of time.
And so that we are at those kind of peaks at times. This fall and will probably be there at some points now through the completion of that project.
Certainly there are certain times during the holidays that we are asked not to be on site as much given the retail nature of their business Secondly, gotta look a little bit differently at the specialty retailer as we've talked about last quarter. We purposefully provided the information as to the 390 sites in somewhere around $8 million right.
Business, so people could understand the magnitude of each site, it's different than our other very large project, but still very important to us and so far the project is going very well and they are we might even see larger quantities of sites done on a on a on a weekly basis because the the projects will typically only last one or two days to be.
Able to to retrofit.
The footprints of those sites. So you kind of put those together, we could have situations, where we might.
At times began.
We could be in 50 sites a week between just those two large customers, perhaps more along with all of our rest of our business. So our activity both internally from a sourcing manufacturing assembly operation, but as importantly, our we've had you mentioned some numbers we've had to ramp up significantly.
For our field people that oversee.
The installations oversee the other activity is going on in the field. So it's a.
And a lot of fun, it's always great to build things back up and get larger and so thats. The reason for a number of the hires you've had both internally in assembly as well as from an execution standpoint in the field.
Thank you we have another question comes the line of Sam.
Darcy from C. Wainwright. Your line is open you may ask your question.
Thanks, Thanks, guys for taking my questions and then.
Thanks for your service than you would have been missed.
Thank you from there.
Thanks, Samir I appreciate.
Yes, good morning, Samir thanks for joining us.
Good morning.
Hi, My first question is sort of a follow up on the goodwill that long in terms of resource allocation because you have visibility.
One of these large accounts.
Should we expect working capital.
And operating expenses.
Improvements over the next few quarters.
Ordering about what you already have.
Well.
Let me answer it this way so if I if I got that so.
As you can see last quarter, we ramped up working capital.
To get to that 26 million basically its receivables and inventory things that are going to turn pretty quick and then turn into cash fairly quick. So I think we're at pretty good levels right now that receivables will grow with the forecast we put out there for revenue.
As far as operating expense.
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I would say take a look at last year. When we can't we ran those kind of levels I think that should be a good proxy for about where we'll be.
Okay.
Well that even for the question was that you have implemented.
In light of gold with a certain cost reductions, which maybe be possible to make permanent and that and.
And so we were expecting to see some improvement on the cost.
Well from some yeah okay.
Go ahead, Mike sorry, Yeah, I think you know.
We.
We've said it a few times now that we took the actions we felt that were necessary at the end of March because at that time, everyone thinks back at that point no one knew how longer deep the situation would be caused by COVID-19, and we were have been Ics unexpectedly or unexpectedly please with the more rapid turnaround in our business prospects, which I think somewhat.
Ties into the the great verticals that we are in and our customers doing very very well.
Don't think Samir one should look at saying that those cost reductions any significant portion is going to be permanent.
Because as we ramp back up volume a lot of US Act is the activity based and so we've had to.
Understandably ramp that up our people to cover that.
That so could there be some because whenever you kind of.
Have to cut back you might add a little more slowly coming back up you maybe see some benefit from that over time.
But I don't think that one should look at those as being significant permanent reductions in costs.
Understood.
And then just one more.
We talked about the leading wealth revenues.
For the next two quarters Keith.
By my calculation it seems that building a little bit logistic company.
Rich you are getting revenue on a project by project basis, there's not.
Much.
We didnt make today.
It's around 4 million PUCO 5 million per quarter.
Is that does and then the build up of that 40 $41 million.
Okay.
Well the the.
You know.
He said earlier, we were pleased to be able to provide a little bit more visibility for everybody on the next two quarters given what we have in the pipeline what we expect to have happened I.
I think on the the new relationship with the.
Very sizable global logistics company is one that is still developing and as we've mentioned a couple of times, it's going to be different than our very.
Very large customer the retail industry and our.
Our specialty retailer, where its a set project number of locations new kind of spill that allowed for people. This is going to be project by project and we are seeing it ramp up its been successful so far and we still think it's going to have a substantial impact on revenues going forward and it's harder to for us to predict so when we lay out.
Our expectation of.
At least 40 million next two quarters, we take that into account when we're trying to look at it. So I think it's one that is going to be a little bit more on hindsight frankly of saying how much we generate from that relationship for what I can tell people is that it is going well so far in the facilities, we've been given the opportunity to work and we still see a lot of potential there.
Thank you Sir we do have another question from the line of Eric Stine from Craig Hallum. Your line is open.
Yes.
Yeah. Good morning, it's Aaron Spychalla on for Eric Thanks for taking the questions.
Good morning, Aaron Good morning.
Good morning, and congrats on the quarter and Bill Congrats on the retirement as well.
First question for me can you just kind of talk a little bit more about the funnel on the national account side the.
The size of that how it's been trending.
The impact of the recent sales hires there and then.
Just how you feel are you getting a better look at that a lot of the opportunities that are in the market and then maybe anything on just where youre at from a penetration standpoint, you know kind of more broadly as you look at a lot of these accounts.
Sure.
We feel very good about our position right now of.
Being asked and invited to the table for larger national account opportunities, but I think it's we think it's a combination of the fact that we have worked with large national accounts for 20 years. So there's been a lot of them out there in the past, but the more recently the significant success. We've had the last few years.
Some larger accounts also provide some great.
A demonstration of our capabilities out there.
Number two as we did a little over a year ago. We added some very experienced sales executive talent to our organization and that takes some time to pay off as they re engage with some of their prior relationships and contacts and get through budget cycles, where companies are at.
I would probably say that some of that was somewhat slowed down by covert back obviously, starting in may when things kind of got changed a bit from a sales cycle standpoint, but we are seeing contribution from the additional people that we brought on board from a sales standpoint and continue to see extremely good production.
And then success with our sales executives, who have been with us for a long time, so it's a great mixture.
So what we do feel that the activity were seeing in the project size. We are seeing is growing and the magnitude of them. So we're feeling much better about the fact that we're getting invited to the table more frequently.
From a penetration standpoint. This market is so big we really I said, a number of times I really don't talk about market share either internally or externally. The market is so big we just have to perform extremely well take care of our customers extremely well and there is plenty of business out there for us to grow substantially in the future and we.
We continue to believe that there is substantial amount both retrofit activity that still needs to take place across North America migrating to Ltd, and the new construction market, where we are playing a bigger and bigger role also looks very favorable for us and we just add there that because we have chosen some verticals.
Like logistics cold storage distribution centers.
Big box retail Fortunately those verticals are doing very very well so a combination of our expertise in those areas and the fact that they are busy and therefore, they're spending money on expansions, it's very helpful to us.
All right. Thanks for the color and then.
You know you talked about the strength.
You are seeing.
RFP activities and things like that you might also mention kind of ROI payback period.
Can you just provide a little bit more color on and again I know it varies by project or if I, just kind of where those are from from a high level and how they've kind of trended over the last few years as we've seen cost come down yes.
Yes, so generally when a company migrates from Florescent technology to led technology. There they are going to see about a 50% energy reduction just apples to apples.
When you then combine that with country.
Control technology, which is often being employed for demand capabilities or occupancy so that the lights go off and no. One is there et cetera that 50% can go up even more significantly so I would say broadly on projects that we are working on we see paybacks in the one to four year period.
I've mentioned previously on our very large customer our retail big box retailer that the paybacks there have been underneath two years in most situations and so they are very very fast and so thats why we believe as companies have capital available and with the movement towards additional green and.
Sure Yes.
Ill.
Carbon footprint reductions that are projects tend to be towards the top of the list of being funded because of the quick payback as well as meeting other objectives of a company from energy reduction et cetera, So still.
Still very strong and as you can imagine if somebody is not already a fluorescent technology, if theyre, they're at pre for us and technologies the numbers almost double again and become very very enticing. We also see that theres plenty of capital out there for companies that want to finance these activities and so we really don't see capital as being that.
Straining, it's more when the companies have the the.
The project when they are ready to move on the projects. The capital is there or can be found and the paybacks are very strong.
Sure. Okay. Thanks for that and then last question for me.
You talked a little bit about the product.
Initiatives and kind of the launch of those just any any update on the UBI product and the other products around kind of coated and viruses and things like that.
Sure.
I'll just start on the JV side front, we are making progress some of the UBI front.
And the primary product that we are working on which we talked about the last couple of quarters is that you'll be that is being.
Being installed.
Along with an air movement product that will be part of a suspended ceiling or a trough or type project.
So in your commercial office environment Hospital environment School environment that that can both move air in a room, but also that airs being treated with you the as its going through so we are working on that we are getting close testing is continuing we are working on this with one of our partners that we've worked with from a manufacturing standpoint, and we expect.
I'll be working with them, having this product in the market, we expect during our fourth quarter of fiscal 21. So.
So we think thats going be very interesting.
And we are working on other aspects of UBI lighting that could come into play we continue to have the technology in the Violet light area, which we've had for years, which is a technology in the four or five spectrum of of UV light and that allows you to attack bacteria through us.
Usage. So we've seen increased activity in that area for that product and so we're still encouraged there and the other things. We mentioned previously about moving towards additional high margin niche products. We continue to investigate some things in horticultural side in other areas. So in particularly we see some of you view coming out probably first quarter I'm, sorry fourth quarter of fiscal 2000.
One along with some other products.
Thank you. Thanks again, everyone. If you would like to ask question. Please press Star and then the number one key on your thoughts stone telephone we do have another question from the line of Mark listen Baby from B. Riley Securities. Your line is open you may ask your question.
Thank you good morning for thank you for taking the question and congrats bill on the upcoming retirement.
Thanks, you guys just talk and you guys have talked about work for this national and global Logistics company coming on a project by project basis.
I'm wondering what type of lead times do you have you had do you expect to have for the upcoming work maybe if you could talk about their facilities are the uniform in terms of kind of sizing job specifications.
And how would you say they compare in terms of the size relative to facilities at your largest national customer right now.
Sure. Thanks.
If it's there.
Their facilities they have a very large number of facilities across North America and the size range is quite significant they might have been a broadly see might range from 50000 square feet up 2 million square feet, plus so they could be very quite different.
And therefore, the lead time as you asked about can also vary some of the projects might move very quickly if they're smaller and the tenant or there is a turnover of a tenant and they want to upgrade to ltd. It could be a project that comes together and it might be implement.
We implemented in.
Four or five weeks could go very quickly and generally a much larger facility. It takes a little more planning a little more.
Activity that goes into being ready to move forward on that project, which could take a longer period of time, but.
Perhaps a couple of months so.
What we kind of keep so so we see it as being a lot of opportunity because there are so many facilities if they have and many many that still have to be converted over to led technology.
As I've said, a few times look it's a little challenging and try to provide visibility to people is that.
We expect them to work with these projects and it's kind of we're kind of at the pace of when they want to do them. So we.
We still think it's going to grow significantly over the next couple of years and will last for a longer period of time, given all the conversions they need to do.
Understood Lastly, I will just say compared to compare to your earlier comment so.
I think we've talked through the last our large retail box customer footprints are call. It around 125000 square feet. So.
Many of these are going to be probably larger than that from a project size standpoint themselves.
That's great to hear thanks for that.
As you are having a kind of new and renewed discussions with your customers and the resurgence of coal it kind of potentially coming back how are you and your customers potentially going to handle things differently than earlier in the year.
Sure. Some of these types of protocols were doing enough maybe.
Both internally in our assembly operations as well as from a customer standpoint.
Fortunately, we were very early to move towards faced coverings in our facilities, which we think has had a very positive impact for us we see.
Certainly have done all of the other types of things that one should be doing we are.
Our very cognizant and educate and coach.
Coach our people on the symptoms of having people stay home if they are exhibiting different symptoms for anyone entering our facilities, we have temperature checks and again checking symptoms within our assembly operations, we have spread.
Spread things out to provide the ability for physical distancing put up physical barriers, where we can doing everything we can to try to minimize the risk and reduce the risk.
For our members likewise externally when working with customers. We first have to follow whatever protocols. They have but certainly if our companys protocols are more stringent we follow them. So again faced coverings avoiding close contact.
Having physical distancing as much as possible being aware of symptoms.
Fortunately for us as we ramp back up heavily starting in August it's gone relatively smoothly like many companies were dealing with one off situations frequently and working with our members to.
Be careful for everybody.
But we've had no significant work stoppages in the field, so far and.
And that's why we've said a couple of times today, we caution everybody that that is something we are watching because it could cause us to slow down if there is an activity externally. Another good thing for US is as it was asked by question earlier today, we might be 40, 50 60 sites per week. So it spreads out our risk somewhat in that many many.
Sites, which continue to move forward. So we're continuing to increase our protocols and our compliance with those we think has had a positive.
Result for us so far.
Got it and one final one for me George.
And your discussions when you are looking to win new business can you talk about the the.
The fact that your products are manufactured in the U.S. and how is that potentially impacting customer decisions. If at all thank you.
Sure I am certain situations, it's absolutely a very positive situation one there might be requirements for things to be by America Act compliant and so certainly that has to happen by manufacturing number two we think there continues to be a growing sentiment of many companies in the us that if they can buy.
Hi.
American made product they would like to do that.
The third one is our risk from a supply chain standpoint is somewhat modified.
And mitigated by having our manufacturing facilities here in the U.S., so not having additional transportation concerns and timeline concerns.
With the product.
Also I would say that part of our.
Our commitment to our customers and part of why we are successful as we usually can deliver product very quickly often faster than most of our competitors. So generally on standard type product, we can deliver it to the customer in 10 to 15 business days, which is typically much faster than many of our competitors.
And then the.
Secondly, I think just having.
The ability to control the supply chain, a little bit has been helpful to us so from.
From a customer standpoint, we see it as a positive there are situations where customers are more interested in making sure that they have other attributes for product that we might find better from having it.
Sourced type product and we will do that where it makes sense for the customer and for our company.
But overall, we still think having the us based manufacturing operation helps us and secondly to your question is.
The second key component for us as always has been our capabilities to revive project related services to handle installation to handle control features to provide a front and back end solution for customers.
We continue to see as our largest.
Differentiation to our competitors and why we continue to win and hold on the businesses, having that broader ability to provide services to customers.
Thank you Sir that concludes the kinase Im sorry, I will now turn the call.
Tim Tim Mike our CFO for closing remarks.
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Great. Thank you Andy.
Again, I want to thank the Orion team for their hard work and operational excellence that has allowed us to bounce back from the COVID-19 delays and put us in a great position for a return to higher revenue and profitability going forward Orion has regained its momentum.
During the period of social distancing, we have participated in several virtual conferences. The most recent of which is recorded and available on our website. Our next event as Craig Hallum Alpha Select conference on Tuesday November 17.
Please join us at events or contact our IR team with any questions or to schedule a call with management. The contact information is included on today's press release. So thanks again for joining today and we really appreciate your time to listen for the call.
And I look forward to updating everybody on our fiscal 2021 Q3 call stay safe and have a good day. Thank you.
Ladies and gentlemen, this conference call is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
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