Q3 2025 Orion Energy Systems Inc Earnings Call
Good morning, everyone, and welcome to Orion Energy Systems Fiscal 2025.
Speaker Change: Third quarter conference call. At this time, all participants are in a listen-only mode. I will now turn the call over to Bill Jones, Investor Relations, to begin.
Mike Jenkins: Thank you, Olivia. And good morning to everyone joining this call today. Mike Jenkins, Orion CEO and Per Brodin, CFO.
Mike Jenkins: We'll review the company's Q3 2025 results and outlook, and following their prepared remarks, we'll open the call to investor questions.
Thank you.
Mike Jenkins: Today's conference is being recorded. A replay will be posted on Orion's corporate website, orionlighting.com, in the Investors section.
Mike Jenkins: As a reminder, prepared remarks and answers to questions that follow will include statements that are forward-looking under the Private Securities Litigation Reform Act of 1995.
Mike Jenkins: Forward-looking statements generally include words such as anticipate, believe, expect, project, or similar words. Also, any statements describing future goals or objectives, company plans, or outlook are also forward-looking.
Mike Jenkins: Such forward-looking statements are subject to various risks that could cause actual results to differ materially from current expectations.
Mike Jenkins: Risks include, among other matters, those that Orion has described in its press release issued this morning and in its filings with the Securities and Exchange Commission.
Mike Jenkins: Except as described therein, Orion disclaims any obligation to update or revise forward-looking statements, which are made as of today.
Speaker Change: Reconciliations of certain non-GAAP financial metrics to the nearest GAAP measures are also provided in today's press release. And with that, I will now turn the call over to Orion CEO, Mr. Mike Jenkins.
Thanks, Bill, and thank you all for joining us today.
Speaker Change: As highlighted in today's press release, we have had significant developments and progress in Q3, yet our revenue performance was disappointing.
Speaker Change: I believe the actions we have taken over the past year have put Orion in a stronger position for substantially improved performance in Fiscal 26 on both top and bottom lines.
Speaker Change: I will let Per walk you through our Q3 results, and I will focus my remarks on actions we have taken to position Orion for meaningful revenue growth, as well as substantial bottom line improvements as we move forward.
Speaker Change: On the revenue side, over the past few months, we have landed seven new LED lighting contracts and opportunities with revenue potential of $100 to $200 million over the next five years.
Speaker Change: This new business is the result of changes we have been making in our sales, marketing, product, and services offerings to better meet customer needs.
Speaker Change: Building on this success, we are reorganizing our operations to further enhance and focus our go-to-market approaches, which has been resonating with long-term and new customers.
Speaker Change: We have also continued to work on business process improvements that lower our overall fixed operating costs to reduce our revenue break-even level and increase the contribution from incremental revenue.
Speaker Change: This is work that we needed to do as it is important in helping us to manage through inevitable variability in the timing of large orders.
Speaker Change: We have also made substantial progress over the past 18 months in improving product and service margins.
Speaker Change: In our lighting business, cost engineering, enhancing our plant layout, and supply chain strategies have allowed us to redesign products and processes so that we are able to deliver the same high performance but at lower cost of goods.
Speaker Change: As a result, we have been able to remove total cost from our manufacturing site.
Speaker Change: This engineering and product know-how has also helped us produce Triton Pro, which is a line of products designed to provide more price-sensitive customers with a competitive product line with strong performance.
Speaker Change: Triton Pro margins are accretive to our overall lighting margin, considering they do not require a lot of fixed cost, as they are produced through a network of contract manufacturers to Orion's specifications.
Speaker Change: As we have discussed at length, margins in our maintenance business have made a substantial rebound due to strategic pricing and restructuring decisions made last year.
Speaker Change: Orion's total quarter 325 blended gross margin percentage improved 490 basis points to 29.4 percent. This is the second highest quarterly rate in seven years as a result of all of our work in the above areas.
Speaker Change: Considering the increase in gross margin, as well as reductions to fixed costs,
Speaker Change: We have reduced Orion's annual break-even point by at least 20% between 78 and 85 million dollars depending on our revenue mix from approximately a hundred and five to a hundred and fifteen million dollars over the past two years
Speaker Change: Progress on our revenue break-even was reflected in slightly positive quarter three adjusted EBITDA.
Speaker Change: Stepping back to look at larger industry trends, the lighting industry as a whole has faced headwinds due to higher interest rates, a slowdown in new commercial construction projects, and uncertainty around the economy.
Speaker Change: Despite this backdrop, as I mentioned, Orion has landed a strong base of new projects that we outlined in today's press release.
Speaker Change: Looking forward, the substantial return on investment, typically 1-4 years moving from fluorescent to LED, and better light quality that are provided by our LED lighting solutions should continue to make LED retrofit projects compelling capital investments.
Speaker Change: Adding urgency for LED retrofits is the rollout of mandates that prohibit the sale of fluorescent lighting fixtures and the replacement tubes due to the safety and environmental issues they pose.
Speaker Change: A particular concern is the danger of mercury utilized in fluorescent tubes and the safety challenges of handling and disposing them.
Speaker Change: In addition, there are substantial energy efficiency, maintenance, and illumination benefits from converting to LED lighting.
There are now 14 states.
Speaker Change: which have either or are in the process of adopting these fluorescent bands. It is important to note that these mandates are fully state-driven and are not tied to federal regulations nor funding. Please go to our website at orionlighting.com for more information regarding these bands.
Speaker Change: Turning to our Voltrek EV charging solutions business, we expect a strong close to fiscal 25 from projects, including some under Eversource Energy's EV Make Ready program that were previously expected in quarter 325.
Speaker Change: Revenue from the EV charging segment is up 48% year-to-date and Voltrek, a pioneer in EV charging solutions, is well positioned to continue its growth trajectory in fiscal 26.
Speaker Change: Of course, the prospect of federal funding for EV charging is now unclear, as the new administration is sought to halt disbursements under the $5 billion Electric Vehicle Infrastructure Act, or NEVI, program.
Speaker Change: It is too early to tell, ultimately, where the NEVI funding program is going.
Speaker Change: Importantly, Orion has very little exposure to NEBI funded projects in our fiscal 26 outlook.
Speaker Change: Though the elimination or reduction of funding, tax credits, and rebates could impact the plans of some customers.
Speaker Change: Despite this near-term uncertainty, we remain bullish about our growth prospects in our EV charging business, as evidenced by the value of our pipeline growing sequentially in the quarter.
Speaker Change: Orion Voltrek is a strong player in the EV charging solution space with a broad portfolio of successful projects across the country.
Speaker Change: As a result, we believe we are uniquely positioned to address the EV charging station needs of larger corporate and public sector organizations with large footprints.
Speaker Change: Even today, there is a very pressing need to build out additional infrastructure to properly support the current installed base of EVs. And that need grows each day as new vehicle shipments continue to expand the installed base of commercial and consumer electric vehicles.
Speaker Change: Even with reduced federal support, we believe the market opportunity is sufficiently large to continue Voltrex growth in fiscal 26 and longer term.
Speaker Change: Whether EVs eventually comprise 25% or 50% or more of all domestic vehicles, the infrastructure to properly support those vehicles will still need to be substantially expanded.
Speaker Change: Turning to our electrical maintenance business, we believe it provides a very solid long-term platform on which to build a growing base of recurring revenue with excellent cross fertilization potential with LED lighting.
Speaker Change: We also believe this business will benefit from the increasing complexity, interactivity, and importance of electrical systems, monitoring, and controls.
Speaker Change: Following our restructuring of this business, we are now in a position to begin adding new customers and we have closed one significant account which will begin in Q4 and is expected to grow to two to five million dollars per annum.
Speaker Change: As we often mentioned, our year-to-date maintenance revenue has been impacted by pricing increases that resulted in the intentional loss of a few large, unprofitable customers.
Speaker Change: Importantly, these actions have allowed us to solidify our business and bring our gross margin percentage back into the range that is positively contributing to our company.
Speaker Change: The gross margin in maintenance rebounded over 2,000 basis points to 26.4% in Q3'25 up from 6.2% in Q3'24.
Speaker Change: In addition, we have begun to win new business from existing and new customers that provides a solid base to grow upon.
Speaker Change: With that as a backdrop, I'd like to discuss the reorganization of our business that we disclosed in today's release. The purpose of this reorganization is to focus our team and resources to better serve our customers and enhance our revenue and profit opportunities, while also working to streamline our operating overhead.
Speaker Change: We anticipate $1.5 million of further annual cost reductions through targeted staffing elimination.
Speaker Change: Also, senior management and the board have agreed to forego 10% of their salaries and retainers to the balance of fiscal 25 and until business performance improves.
Speaker Change: We are reorganizing our three business segments into two commercial business units, or CBUs, that target very different end customer needs.
The first unit, Solutions,
Speaker Change: is focused on developing and executing our LED lighting, EV charging, and maintenance services business for large and complex corporate, government, and super ESCOs where we provide turnkey solutions, as well as to other private sector accounts.
Speaker Change: The solution CBU focuses on combining leading products and technology with services to create a strong value proposition.
Speaker Change: Services provided included include activities like site audits, custom product and systems engineering, installation, commissioning, system maintenance, and overall project management.
The second unit, Partners,
Speaker Change: We'll focus on accelerating LED lighting and EV charging product sales by catering to the unique needs and dynamics of Orion's distribution partners, including energy service companies or ESCOs and our distributors and agents.
Speaker Change: These channels require portfolio products to meet their needs for levels of efficiencies and price points.
Speaker Change: To better serve this market, Orion has developed new product lines, such as Triton Pro, that balance smart design, performance, and energy efficiency with more competitive price points.
Speaker Change: These new products have been well-received, and our partners have built a significant mutual pipeline of new projects using TritonPro.
Speaker Change: Our focus through the new structure is to get even closer with our customers through dedicated teams to discover our customers' unmet and future needs.
Speaker Change: We will be able to take this insight into our product and services development process to provide greater value and the ability to capture more new business.
Speaker Change: Orion has already commenced these realignments and expects the new structure to be fully implemented and effective as financial reporting segments as of April 1st, 2025.
Speaker Change: Orion has built a strong platform of very competitive product and service solutions that help our customers meet their energy savings, workplace safety, and sustainability goals.
Speaker Change: In addition, we deliver the highest levels of lighting and electrical project expertise with elite customer service and delivery.
Speaker Change: We now have an expanding project pipeline of opportunities across our business, which give us strong confidence for the coming quarters.
Speaker Change: Reflecting the impact of the change in timing of new business projects, we have reduced our fiscal 25 revenue outlook to a range of 77 to 83 million dollars. This outlook implies Q4 25 revenue of 19 to 25 million, which would be approximately in line or better than any of our first three quarters of this year.
Speaker Change: This outlook is based on the current business climate, initial revenue expected from large national LED projects, as well as significant sequential rebound in Orion's Voltrek EV charging solutions business.
Speaker Change: Due to stronger-than-anticipated new maintenance service opportunities, we now expect Fiscal 25 maintenance services revenue to decrease by approximately $2-3 million in Fiscal 25 versus our initial expectation of a $4-5 million decline.
Speaker Change: Looking ahead and considering a growing base of customers and large projects expected to engage over the next several quarters, we believe Orion is well positioned to achieve double-digit revenue growth.
Speaker Change: and Positive Adjusted EBITDA in Fiscal 2026. We plan to provide a more specific Fiscal 26 Revenue Outlook when we report Q4 25 results in June.
Now I'll turn it over to Per Brodin.
Thanks, Mike.
Per Brodin: As we reported, our Q3 revenue of $19.6 million was impacted by customer changes in the timing in LED and EV charging project starts, as well as reduced activity in the lighting distribution channel.
Per Brodin: which impacted Orion and the overall industry partly due to slower new construction and economic uncertainties.
Per Brodin: Q3 revenue in 2025 was $19.6 million versus $26 million in Q3'24 and $19.4 million last quarter.
Per Brodin: The year-over-year comparison was impacted by delays, as well as a large Department of Defense project in Europe that had benefited the prior year period.
Per Brodin: As highlighted in today's press release and Mike's remarks, there are several LED lighting projects that we expect to begin in the coming months that will benefit our fiscal Q4 and 2026 results.
or EV charging segment, which is up 48% year-to-date.
Per Brodin: was also impacted by project timing in the quarter with Q3'25 revenues of $2.4 million versus $2.8 million in Q3'24.
Per Brodin: We expect a strong Q4, which will benefit from construction service contracts related to Eversource Energy's EV Make Ready program and a large public school bus EV project for Boston Public Schools.
And maintenance.
Per Brodin: 3.9 million of Q3 revenues were higher than expected driven by new opportunities with existing customers.
Per Brodin: So below Q4-24 revenues due to the intentional roll-off of unprofitable stay-alike legacy contracts.
Per Brodin: Sequentially, gross margin improved more than 600 basis points from Q2.
Per Brodin: A large portion of that was due to profitability improvement in maintenance services, as we've discussed.
Per Brodin: Also, as we demonstrated, margin improvement in lighting where gross profit was 30.1% versus 27.4% in Q3-24, even on lower revenues in the current year period.
that improvement is due to both mix and structure.
Per Brodin: By structure, I mean we've taken steps to lower our manufacturing costs on our base products through re-engineering and efficiency efforts in the plant.
Per Brodin: Mixer refers to revenue that includes more sourced product which carries less fixed cost and more variable cost and is above 30% margin so it's accretive overall.
Per Brodin: This Bend Toward More Source product is a testament to the strength of our Triton Pro line and the strategic decision that we made in 2023 with its launch that expanded our reach and leadership in more value-oriented LED market segments.
Per Brodin: We expect this mixed shift and structural changes to continue to positively impact our lighting margins into the future, which should become even more evident in stronger revenue corridors.
Per Brodin: We've talked a lot about the gross margin improvement in our maintenance business and we said we expected to reach a normalized level in Q3 2025, more in line with the overall business.
Per Brodin: We demonstrated this in Q3 with a 26.4% gross margin, which is more in line with where our overall business has been and within the range that we expect for maintenance going forward.
Per Brodin: Our EV gross margin was 30% in Q3'25, also very strong.
Per Brodin: And of course, our gross margins will continue to vary some depending on projects and revenue level due to fixed costs.
Per Brodin: Reflecting on the turnaround in maintenance and our overall outlook, we expect Orion's blended gross margin to remain strong in Q4-25 and sustained through fiscal 2026.
Per Brodin: Operating expenses decreased 16.9% or $1.4 million to $7 million in Q3'25.
From $8.4 million in Q3 2024
Per Brodin: due mainly to lower fixed costs, including employee and compensation-related reductions, and a $600,000 reduction in Voltrec earn-out expense accrual.
Per Brodin: As mentioned previously, Orion has been working hard on process improvement, which enables us to remove inefficiencies and costs from our business.
The improvement in gross margin combined with lower operating expenses
Per Brodin: led to Orion's Q3'25 net operating loss, improving to $1.5 million or $0.05 per share from $2.3 million or $0.07 per share in Q3'24.
Per Brodin: Cash generated from operations was $3.8 million in Q3'25 due to strong accounts receivable conversion.
Per Brodin: Here to date, we've generated $1.3 million of cash in operating activities and paid down $2.5 million under our revolving credit facility, including $1.5 million paid in Q3-25.
Per Brodin: Our cash balance increased to $7.5 million in Q3 from $5.2 million at prior year end.
Per Brodin: Current assets list current liabilities, or net working capital, was $10.5 million at the close of Q3'25 compared to $13.1 million last quarter and $16.7 million at year-end.
Per Brodin: Lower current assets reflect our significant efforts to drive our inventory levels down.
Per Brodin: Considering our growth expectations and Orion's financial liquidity, we believe we are well positioned to fund our business and growth goals through fiscal 25 and beyond.
And now, Olivia, you may begin the Q&A session.
Speaker Change: Thank you. Ladies and gentlemen, if you wish to ask a question at this time, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1 1 again. Please stand by while we compile the Q&A roster.
Speaker Change: Now first question coming from the line of Eric Steinwood Crick, Harlem Capital Group. Your line is now open.
Hi Mike, hi Per. Good morning. Hey, Per.
Speaker Change: Hey, so maybe, can we just talk about the pipeline first? I just want to make sure I'm clear on this. So you talked about seven new customers and projects, hundred to two hundred million dollars.
are those
Speaker Change: In your pipeline, are you saying that that's what you think that the, you've had a number of...
Speaker Change: announcements both maintenance and project here of the last couple months.
Speaker Change: Are you referring to what you think that those awards can become? I'm just trying to figure out...
Speaker Change: you know, is that business you have in hand? Do you need to still close that? And you also talk about a number of large opportunities approaching final stages of negotiation, so just wondering what's in each bucket.
Yeah, thanks Eric, good question.
Speaker Change: So what we talked about and what we've released is closed one business And so those projections are of the closed one, which means we do believe that we will actualize revenue in that range From 100 to 200 million dollars over the next five years as a result
Speaker Change: Separate from that, as you referenced, there are several other large significant opportunities which are in the final stages of the pipeline and we hope to make further announcements in the near future.
Got it, and so...
Speaker Change: I mean any color and I you know if you can't I get it but any color on you know maybe you're talking about large projects and getting close you know how how much that might increase that 100 to 200 million you know maybe how that spread across
lighting, charging, maintenance, any color would be great.
I would say that the magnitude of those opportunities
is certainly in the eight figures per annum.
Speaker Change: and that's that's about kind of as tight a range as I want to give it at this point being that they're still in the pipeline and not yet closed. These what we are seeing is
Speaker Change: These opportunities between the closed and pipeline are coming from what I would say is a pretty diverse customer base.
Speaker Change: So, when you look through what has already been announced and won, it was in the press release today, you see sectors such as building products, retailers.
Speaker Change: One that is very involved in what we would call the mush market, which is the municipal, university, schools, and hospital space.
Speaker Change: additional expansion with core customers and of course our automotive business rebounding, continuing to rebound as well heading into into fiscal 26. The new the other projects which are in the pipeline also involve some additional sectors as well.
Thank you very much.
Speaker Change: got it okay and then maybe last one for me just you know I know it's it's been an ongoing source of frustration just the the project push outs
Speaker Change: Is there any thought you've given or ways that you think you could better
Speaker Change: maybe anticipate some of these project changes or I mean potentially when you're thinking about annual guidance you know maybe factoring that in better or just
Speaker Change: Some thoughts because I know I mean, this is this has been a pretty frequent Occurrence here over the last you know number of quarters and longer
Speaker Change: Sure. Yeah, for sure it is a source of frustration for management as well when some of these projects, either new business coming in despite our
Thank you for joining us. Thank you.
Speaker Change: You know, constant communication. Those things can slip based on the customer's timeline or, in some cases, projects which have been well-planned are postponed for other reasons.
Speaker Change: Now one of the things certainly that we plan to do for fiscal 26 is to take a and we announced it in this
Speaker Change: today's release as well, is to really reset our costs and our break-even point so that even should we get impacted by any delays in revenue that we can be profitable.
Speaker Change: and that's really our focus. We do believe we can, with all this new business that has already been won and it is in the pipe, that we can continue to, we can grow the top line, double digits, but we're also focusing on being very sharp on costs and establishing a new break-even point so that we're assured that we will be profitable.
Okay, thank you.
Thank you.
Thank you.
Speaker Change: Our next question coming from the line of Amit Dale with HC Wren. Your line is now open.
Speaker Change: Thank you. Good morning everyone. I'm just following up on Eric's question about the 100 to 200 million dollar outlook from the backlog side of things. How much of that is exposure to any government contracts or opportunities?
Speaker Change: Yeah, none of that pipeline is really focused at all on the federal space. As I mentioned earlier, some of it is in the municipal space, but really none of it is tied to federal.
Speaker Change: Understood, thank you. And then, you know, with respect to the inventory, maybe can you share, you know, what the inventory is comprised of right now? And, you know, is there anything within that that may be written off as you go through the reorganization process?
Speaker Change: No, we have been working very hard on our inventory as a company over the last 18 months and have reduced it substantially. I think we've got a very productive inventory at this point in time and we're not expecting any significant write-offs as a result of the restructuring.
Speaker Change: How are you sort of, you know, targeting new, you know, customer wins? Are you using maybe, you know,
Speaker Change: outside help for this or is it just an internal sales force that you know is trying to go and get deals done to build that customer base out?
Speaker Change: We're always looking to use partners and network for opportunities, but the ones that have been announced thus far have been internally generated. Certainly, we've bolstered our sales team with some experienced people from the industry, and those individuals have helped.
Speaker Change: provide some new opportunities to us. We think that we've got the right infrastructure, capabilities, capacity now to leverage for new business. And now that we've solidified the base, we are profitable. I think we're in a good position to start moving forward with new business.
Speaker Change: Understood. That's all I have, guys. I'll take my other questions offline. Thank you.
Thank you.
Thank you.
Moderator: Our next question, coming from the lineup, Kashi Sri with Singular Research, your line is now open.
Kashi Sri: Hey, good morning guys. Thanks for taking my question. Good morning.
On the $100 to $200 million revenue potential, what's the
Kashi Sri: the assumptions that are driving the low end to the high end and how much of that is pricing and how much of that is EV growth.
Kashi Sri: Sure. So in a range like that, you know, we have timing. These projects and these new customers obviously have phases to them. These are quite large.
Kashi Sri: And there's a series of rollout assumptions that go into them. So what we're trying to be is transparent.
Kashi Sri: that there is a range of outcomes in the new business that are, you know, not always within our control. And so we're just trying to do a better job of exposing the range of what we think these could be. We do think that that's a realistic range at this point in time.
Kashi Sri: Regarding EV, a lot of these opportunities are more on the lighting side we have, and I reference this in my
Kashi Sri: comments earlier that we have expanded our pipeline of EV opportunities sequentially quarter over quarter so despite you know the obvious
Kashi Sri: Noise Coming around the federal space right now. We continue to expand our pipeline So we think we've got some nice growth opportunities in that area as well But they're not listed in the hundred to two hundred
Kashi Sri: In terms of the project delays, I know you've mentioned most of that is factor on the macro factors and is that customer readiness and is that funding availability. As you, I mean,
Speaker Change: In order to kickstart these projects, are you guys, as you look forward, is there any discussion around pricing adjustments or enhanced services as you try to motivate the clients to proceed with their projects?
Speaker Change: Yeah, most of our project, I mean, substantially all of our projects have a very good ROI for customers so they are motivated. Typically the factors that create delays are not...
influenced by necessarily our pricing.
Speaker Change: You know, Finance King can influence it, along with the overall macro factors we discussed.
Speaker Change: or just things going on in their own business. And so therefore they shift their capital from one area to another and defer a project for a little bit. So there's a wide variety of those things. We're constantly looking at opportunities, obviously, to
Speaker Change: where opportunities are closed, if there's a delay, to see what the source of that delay is and whether or not it's something we can solve. That includes financing options through third parties that we work with quite regularly.
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Speaker Change: Okay, and can you give us any color on that five million project with the auto automotive OEMs that you guys have mentioned in your press release?
Thank you.
Speaker Change: Yeah, so that's just an indication that we have two primary OEMs that we do a lot of work with. We cycle through there, we do...
Speaker Change: There are new facilities. We cycle through and do retrofits throughout their footprint every probably seven years And we're seeing that cycle improve
Speaker Change: number one in terms of going through all the facilities, and number two I would say, and as referenced before, one of these OEMs is very focused on the fluorescent bands which are coming, and so we're seeing an acceleration of their footprint as a result of the fluorescent bands, any areas that have not yet been touched.
to get those converted to LED.
Speaker Change: color on that front in terms of engagement, in terms of changing policy.
Speaker Change: Yeah, I think we're going to have to wait and see where this all takes out. Clearly, it's rapidly evolving. I can say
as mentioned in my remarks, we're not...
Speaker Change: really don't see any impacts directly from NEVI or federal funding on our projects and none of you know, none of that should impact our fiscal 26 outlook.
We were impacted with one project, and
Speaker Change: That was basically for a government entity that went through and as DOJ kind of went into that entity and restructured things.
Speaker Change: that project was placed on hold and that was a seven-figure project. It was not due to federal funding but it was due to essentially that organization getting reorganized.
Speaker Change: So, that's the only impact that we've seen, which was unfortunate, but we don't see anything moving forward.
Awesome. Thank you so much, Alvin.
Thank you very much.
Speaker Change: Yeah, maybe maybe one other sorry follow-on point to that last point is we do continue to see great opportunities You know that we've worked with the Department of Defense and some other entities in the government
Speaker Change: on the lighting projects, we do see projects moving forward on both of those fronts unaffected.
One question.
Thank you.
Thank you.
Speaker Change: And our next question coming from the line of Bill DeZilla with Teton Capital Management. Your line is now open.
Speaker Change: what that ultimately will accomplish from the customer perspective and what the customer will see that's different.
Good morning, Bill. The new structure...
Essentially what it does is it aligns our sales...
primarily our sales and demand creation teams.
with execution capabilities and creates distinct focus between
Speaker Change: Well, we're calling the solutions or turnkey business and our partner business.
Speaker Change: Traditionally, this organization has been more functionally focused, so you have one sales team, and that sales team has some opportunities which are partner, some opportunities which are turnkey.
What we're trying to do is create...
Speaker Change: Very strong alignment between the front end of our business and the operational and execution side of our business
Speaker Change: So that we really are embedded with our customers, we understand their needs, and where we need to have some divergent strategies when it comes to product lines, pricing, ways we promote things, or other service offerings.
Speaker Change: that we're able to do that because we have very crystal clear vision of what our customer needs are and how to sell and execute against those.
Mike Jenkins: And Mike, how is that different from the way you were either are structured now or before you began implementing those changes?
Mike Jenkins: Sure. So again, this is primarily on the front side of our business and particularly, you know, our sales organization.
Mike Jenkins: has, again, had the ability to focus on a wide variety of opportunities, whether they be ESCOs or distribution or solutions oriented.
What this does is it basically creates clean lines.
for our sales and go-to-market approach.
Mike Jenkins: that everybody is focused on either the partner side of the business or the solution side.
Mike Jenkins: So again, going back to Triton Pro as an example, one of the things that we were hearing loud and clear from our partners
Mike Jenkins: was that the market was shifting, they needed additional competitive offerings, which we responded to. I think we did that quite well. And that's driven some growth and opportunities on that side of the business.
Mike Jenkins: And that's something that if we had just focused on the solution side, we probably would have got there, but it probably would have been later than having that insight coming from the ESCOs and then reacting to it.
Mike Jenkins: So, I think moving forward, this will allow us to be even faster in terms of reacting to market needs and be very tailored in our offering to them.
Speaker Change: And are you finding with your salespeople that some of them are just better suited, whether it's their genetic makeup or their relationships that they have for...
for direct business or through ESCOs.
Speaker Change: Absolutely, great question Bill. Yes, I mean some people are absolutely better based on their experience and how to manage things because it is a difference and how to manage.
Speaker Change: through partners and with partners. And so, yes, the team is, you know, we're aligning our people based on their capabilities, experience and aptitude to one of those two segments moving forward.
Speaker Change: Maybe taking this one step further, it appears that you are winning new business at a faster rate. So congratulations on that success.
Hi.
The question is why? And how repeatable is that?
Speaker Change: tied into that question is, to what degree have you already been at some level, your salespeople been kind of falling into a line of focused on the OEMs or focused on the partners, and as a result,
That's actually what's leading to this success at closing business.
Speaker Change: Yeah, you know, we have added some new salespeople, as I referenced before, some other people from the industry. I think they've brought us some great.
Speaker Change: skills, talents, and accounts that we could go after and win. As often as the case, it's not one single thing that we do. It's a combination or accumulation of actions that we've been taking, both on the marketing side of the business and in the sales side of the business.
Speaker Change: that is allowing us to pick up these new accounts. Certainly moving forward, we see the value of focus and that's really what we wanna do. We believe through that focus in the organization, we'll continue to see this level of momentum and acceleration.
Speaker Change: The incentives that your customers are receiving, are those coming from the federal level, the state level, the utilities themselves, where are the predominant originators of the incentives?
Speaker Change: Great question. It's primarily the utilities, local utilities, which are providing the vast majority of lighting incentives.
Speaker Change: And so all of the things that we're hearing in the news relative to the federal government and cutting back really has no impact. This is all tied to the utilities trying to manage the additional lots that they need to produce as time goes forward.
Speaker Change: Absolutely, yep, well said. Okay, thank you, appreciate the time and congratulations on the margin improvement.
Thanks, Bill.
Thank you.
Speaker Change: Thank you. As a reminder, to ask a question, please press star 11. And our next question, coming from the line of Andrew Shapiro with Lawndale Capital Management. Your line is now open.
Speaker Change: The management and board were taking a 10% salary and retainer cut. Can you clarify, is this a deferral and thus accrual or a complete give up or give back?
Speaker Change: We're foregoing that for the balance of this year and then until business performance improves in general, so we're foregoing it.
Speaker Change: Can you clarify the word forego? Again, is it a give back or is it deferral and accrual, meaning a cash savings only for the time being?
It's a give up.
Speaker Change: will not be accruing for the compensation. Okay, thank you for that and then I appreciate you sharing the pain and can you update us on
Speaker Change: The company's NASDAQ listing status, the timeline and various milestones and where we're at on the clock.
Here, we are in the...
Speaker Change: I'll call it the initial 180-day period in which we're allowed to regain compliance.
period expires in mid
March, I believe it's March 19th.
Speaker Change: If we are not in compliance by the end of that period, we are allowed to apply for an extension for another 180 days. If we're not in compliance by mid-March, I would believe we would.
Speaker Change: apply for that 180-day extension and you know our thought is that with
Speaker Change: execution on our plan that within that, either within this period or the next period, our hope and thought is that we would regain compliance and move on from there.
Thank you.
Speaker Change: and in an application for extension, typically you have to present a roadmap or a plan for what the company would do to regain compliance.
Speaker Change: is the thought as you just described solely based on execution of said plan or there are other options that you are preparing to or would be prepared to put on the table to maintain said listing?
Speaker Change: That's something that is subject to further evaluation as we move toward that timeframe. But if there are other things that we believe we need to do, we would include that in that application.
Speaker Change: Okay and when's the company's annual meeting typically take place and when you'd have to decide whether you're putting forward you know reverse split or some other kind of shareholder vote action?
Speaker Change: I'm not sure I heard that quite right but if the question was when our typical annual meeting timing is that's usually in
early August of each year.
Speaker Change: Okay, so in the next, yeah, so in the next window, if you were to pursue a reverse stock split, which isn't necessarily the optimal way of dealing with the issue, but it is a way of dealing with it, that's, I guess, when you'd have to decide you're going to put a manner up for vote for the shareholders.
Yes, I believe that's true.
Okay, thank you.
Thank you.
Thank you.
Thank you.
This concludes our Q&A session.
Mike Jenkins: I'll now turn the conference back to Mike Jenkins for closing.
remarks.
Mike Jenkins: Thank you all again for joining us today. We look forward to updating investors on our fiscal 2025 fourth quarter call and we hope to see or speak with you at upcoming investor conferences which we will announce separately via press release.
Mike Jenkins: Please contact our investor relations team for any additional questions regarding today's call or to schedule a meeting. Their contact information is in today's press release. Once again, thank you for attending our call.
Mike Jenkins: Thank you. That concludes today's conference call. Thank you all for your participation. You may now disconnect.