Q4 2025 Orion Energy Systems Inc Earnings Call
Operator: Good morning, everyone, and welcome to Orion Energy Systems fiscal 2025 fourth quarter conference call. At this time, all participants are in a listen only mode.
Good morning, everyone and welcome to Orion Energy systems fiscal 2025 first quarter conference call. At this time, all participants are in a listen only mode.
Bill Jones: Now I'll turn to Bill Jones, Investor Relations, to begin. Thank you and good morning to all. Today, Sally Washlow, Orion's CEO, and Per Brodin, CFO, will review the company's fiscal 2025 results and outlook, and following their prepared remarks, we'll open the call to investor questions. Today's conference is being recorded. A replay will be posted in the investor section of the company's website, orionlighting.com.
Bill Johnson: Now I'll turn to Bill Johnson Investor Relations to begin.
Thank you and good morning to all.
Bill Johnson: Today, So we watch, though Ryan CEO impair Brody CFO will review the company's fiscal 2025 results and outlook and following their prepared remarks, we'll open the call to investor questions.
Bill Johnson: Today's conference is being recorded a replay will be posted in the investors section of the company's website.
Bill Johnson: Ryan lighting dotcom.
Bill Jones: As a reminder, please. As a reminder, prepared remarks and answers to questions include statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally include words such as anticipate, believe, expect, project, or similar words. Also, any statements describing future objectives or goals, company plans, and outlook are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to differ materially from current expectations. Risks include, among other matters, those that Orion has described in its press release issued this morning and in its SEC filing. Except as described therein, Orion disclaims any obligation to update, revise forward-looking statements which are made as of today.
Speaker Change: As a reminder, please.
Speaker Change: As a reminder, prepared remarks and answers to your questions include statements that are forward looking under the private Securities Litigation Reform Act of 1995.
Speaker Change: Forward looking statements generally include words.
Such as anticipated.
Speaker Change: We expect project or similar words.
Also any statements describing future objectives or goals copy plans and outlook.
Speaker Change: Are also forward looking piece.
These forward looking statements are subject to various risks.
Speaker Change: It could cause actual results to differ materially from current expectations.
Risks include among other matters those that Orion has described in its press release issued this morning, and an SEC filings.
As described there in Orion disclaims any obligation to update revise forward looking statements, which are made as of today.
Sally Washlow: Reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press Now I will turn the conference over to Orion's CEO, Sally Washlow, to begin. Good morning, and thank you for your interest in Orion. As you may know, I took on the CEO position in mid-April, following nearly three years of service on Orion's board of directors. I've had the chance to speak with some of our investors since becoming CEO, but for most of you this is the first time and I look forward to getting to know you. It's an honor and exciting opportunity to lead Orion's impressive team.
Reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press release.
Speaker Change: Now I will turn the conference over to Orion CEO, Sally watch law to begin.
Speaker Change: Good morning, and thanks, Good morning, and thank you for your interest and around <unk>.
Speaker Change: As you May know I took on the CEO position in mid April following nearly three years of service on Orion's Board of directors.
Speaker Change: I had the chance to speak with some of our investors.
Speaker Change: It's becoming CEO, but for most of you. This is the first time and I look forward to getting to know yet.
Speaker Change: It's an honor and exciting opportunity to lead arranged impressive team.
Sally Washlow: Over the past few years, Orion has made great strides in diversifying and enhancing a portfolio of complementary industry-leading products and services to better meet our customers' needs. We have also made significant progress reducing our cost structure and enhancing gross profit margins. And we have been very productive in developing new revenue opportunities. I feel we are moving in the right direction.
Speaker Change: Over the past few years Orion has made great strides in diversifying and enhancing a portfolio of complementary industry, leading products and services to better meet our customers' needs. We have also made significant progress reducing our cost structure.
Speaker Change: And then enhancing gross profit margins and we have been very productive and developing new revenue opportunities I feel we are moving in the right direction. However, it's clear that we need to do a better job, both developing and executing on our pipeline of product and service opportunities.
Sally Washlow: However, it's clear that we need to do a better job both developing and executing on our pipeline of product and service opportunities with greater urgency. And that is my principal goal. While our lighting segment revenue remained challenged in FY25, we achieved 37% growth in revenue at our Voltrek electric vehicle charging station solutions business. We also accomplished a substantial turnaround in the profitability of our electrical maintenance business. Based on the strength of that business, capabilities, and performance, maintenance returned to sequential growth in FY25 through the expansion of existing customer engagement. Looking into FY26 and beyond, I am pleased to report that we have expanded our pipeline for LED lighting projects with a number of project wins that underscore our unique value proposition and enhance future revenue visibility.
Speaker Change: With greater urgency and that is my principal goal.
Speaker Change: Okay.
Speaker Change: While our lighting segment revenue remained challenged in FY 'twenty five we achieved 37% growth in revenue at our Wolf Trax electric vehicle charging station solutions business.
Speaker Change: We also accomplished a substantial turnaround and the profitability of our electrical maintenance business.
Speaker Change: Based on the strength of that business capabilities and performance.
Speaker Change: <unk> returned to sequential growth in FY 'twenty five through the expansion of existing customer engagements.
Speaker Change: Looking into FY 'twenty, six and beyond I am pleased to report that we have set have expanded our pipeline for led lighting projects with a number of project wins that underscore our unique value proposition and enhance future revenue visibility.
Sally Washlow: In our Q3 reporting, we highlighted new customer relationships and contracts that provide between $100 million and $200 million in total revenue potential over the next five years, and last month, we announced additional project wins that build on that potential. On the cost side, we have made meaningful reductions in the cost of our LED lighting fixtures through product re-engineering, plant efficiency efforts, and diversified sourcing, which are benefiting our LED lighting margins without impacting our ability to deliver the highest levels of design, quality, and energy efficiency in our product. We also reduced our operating overheads by more than $4 million in FY25, $2 million of which will be reflected as we progress through FY26, and we intend to implement a further $1.5 million in annual overhead reductions during FY26.
Speaker Change: And our Q3 reporting we highlighted new customer relationships and contracts that provide between 100 and 200 million in total revenue per ton potential over the next five years and last month, we announced additional project wins that build on that potential.
Speaker Change: On the cost side, we have made meaningful reductions in the cost of our led lighting fixtures through product reengineering plant efficiency efforts and diversified sourcing which are benefiting our led lighting margins without impacting our ability to deliver.
Speaker Change: The highest levels of design quality and energy efficiency and our products.
Speaker Change: We also reduced our operating overhead by more than 4 million in FY 'twenty, five 2 million of which will be reflected as we progress through FY 'twenty six and we intend to implement a further $1 5 million in annual overhead reductions during FY.
Speaker Change: 26.
Sally Washlow: Despite lower revenue, our operating discipline allowed Orion to achieve positive adjusted EBITDA in both Q3 and Q4 and positive operating cash flow for full fiscal 2025 year. My role is to build on this progress by bringing enhanced leadership, focus, and urgency to our team and its efforts to achieve our growth and profitability goals. I strongly believe the Orion team possesses the skills, has industry-leading products, technical expertise, resources, customer relationships, and service commitment to do just that.
Speaker Change: Despite lower revenue our operating discipline allowed Orion to achieve positive adjusted EBITDA in both Q3, and Q4 and positive operating cash flow for full fiscal 2025 year.
Speaker Change: My role is to build on this progress by bringing enhanced leadership focus and urgency to our team and its efforts to achieve our growth and profitability goals.
Speaker Change: We believe the Orion team possesses the scale has industry, leading products technical expertise resources customer relationships and service commitment to do just that.
Sally Washlow: To better capitalize on the strengths of our three lines of business and the substantial base of customer relationships Orion has built over the past 20 years, we have reorganized our company into two commercial business units effective with the April 1st start of our fiscal 2026 year. The two units are solutions, which includes products and services that we develop, manage and deliver to specific end customers and partners, which is focused on product sales via distribution agents, electrical contractors and energy service companies or ESCO channels. To provide a bit more insight, our Solutions Business Unit is focused on developing and executing across our full range of LED lighting, EV charging, and maintenance service solutions.
Speaker Change: To better capitalize on the strengths of our three lines of business and the substantial base of customer relationships Orion has built over the past 20 years.
Speaker Change: We have reorganized our company into two commercial business units effective with the April 1st start of our fiscal 2026 year.
Speaker Change: The two units are solutions, which includes products and services that we develop manage and deliver too specific and customers and partners, which is focused on product sales via distribution agents electrical contractors and energy service companies or.
Speaker Change: ESCO channels.
Speaker Change: To provide a bit more insight our solutions business unit is focused on developing and executing across our full range of led lighting EV charging and maintenance service solutions solutions taps, our full array of capabilities to deliver the greatest potential.
Sally Washlow: Solutions TAPs are full array of capabilities to deliver the greatest potential value to our customers and typically involve large projects in terms of revenue. The Solutions Business Unit also provides the potential to cross-sell and build new projects and reoccurring revenue opportunities with our long-term customers. Our partners business unit is focused on the sale of LED lighting and EV charging products through distribution channels such as ESCO's electrical product distributors and lighting contractors. To strengthen our position in the partners channel, Orion has developed new product lines such as Triton Pro, which balance performance, energy efficiency, and design at competitive price points.
Speaker Change: <unk> to our customers and typically involves large projects in terms of revenue.
Speaker Change: The solutions business unit also provides the potential to cross sell and build new project and reoccurring revenue opportunities with our long term customers.
Speaker Change: Our partners business unit is focused on the sale of led lighting and EV charging products through distribution channels, such as <unk> electrical distributors.
Speaker Change: Distributors and lighting contractors.
Speaker Change: To strengthen our position in the partners channel.
Speaker Change: <unk> has developed new product lines, such as Triton pro which balanced performance energy efficiency and design at competitive price points. These new products have been well received and we're building on their success with additional products designed based on partner feedback to resonate with.
Sally Washlow: These new products have been well-received and we're building on their success with additional products designed based on partner feedback to resonate with our customers. We are also making focused investments to drive growth in the Partners Business Unit, including the addition of an industry veteran who will focus solely on this channel and our partners. Overall, our business reorganization is intended to deliver a more cohesive combination of capabilities across LED lighting, EV charging, and electrical maintenance to optimize our success.
Speaker Change: With our customers.
Speaker Change: We are also making focused investments to drive growth in the partners business unit, including the addition of an industry veteran who will focus solely on this channel and our partners.
Speaker Change: Okay.
Speaker Change: Overall, our business reorganization is intended to deliver a more cohesive combination of capabilities across led lighting, EV charging and electrical maintenance to optimize our success.
Sally Washlow: Though we have made some progress in developing business synergies over the past several months, it has become clear that we need to better leverage our engineering, design, and national project management capabilities within the combined solutions business unit. There is work to be done to further integrate the solutions segment, including implementing systems and training to support our team members to represent and execute on our full array of offerings.
Speaker Change: So we have made some progress and developing business synergies over the past several months. It has become clear that we need to better leverage our engineering design and National project management capabilities within the combined solutions business unit. There is work to be done to further integrate the.
Speaker Change: <unk> segment, including implementing systems and training to support our team members to represent and execute on our full array of offerings.
Sally Washlow: Structure aside, the imperative for the team is to stay in close contact with our customers and prospects and to main focus and urgency to progress opportunities to the finish line or reassess and redeploy resources on more promising projects to fully maximize our business performance.
Speaker Change: Structure aside the imperative for the team is to stay close and close contact with our customers and prospects and to main focus and urgency to progress opportunities to the finish line or reassess and redeploy resources on more promising projects to fully maximize our busy.
Sally Washlow: In summary, Orion is clearly differentiated by the unique platform of high-quality, industry-leading products and innovative services we have been providing over more than two decades. These strengths, combined with our large base of long-term customers, our progress on costs, margins, and growing our project pipeline, position Orion to deliver improving financial performance in FY26 and longer term. I'm firmly committed and incentivized to make this happen for all of our stakeholders.
Speaker Change: <unk> performance in.
Speaker Change: In summary, Orion is clearly differentiated by the unique platform of high quality industry, leading products and innovative services, we have been providing.
Speaker Change: Over more than two decades. These strengths combined with our large base of long term customers our progress on cost margins and growing our project pipeline position Orion to deliver improving financial performance in FY 'twenty, six and longer term I am firmly committed.
Speaker Change: And incentivized to make this happen for all of our stakeholders.
Per Brodin: With that overview, I will turn the call over to our CFO, Per Brodin, to review our financial performance and fiscal 2026 outlook. Thank you, Sally. In Q4-25, we reported revenue of $20.9 million, up sequentially from $19.6 million in Q3-25, but below the $26.4 million achieved in Q4-24. In addition, Orion has made excellent progress building its project backlog. On an annual basis, Fiscal 25 revenues were $79.7 million versus $90.6 million in Fiscal 24 reflecting the following segment trends. Our EV charging business delivered a strong performance both in Q4-25 and for the full year in 2025, with revenues up 18% and 37%, respectively, as Voltrek expanded its geographic reach and executed on its order backlog.
Speaker Change: With that overview I will turn the call over to our CFO <unk> to review, our financial performance and fiscal 2026 outlook.
Speaker Change: Thank you Sally.
Speaker Change: In Q4, 'twenty five we reported revenue of $20 9 million up sequentially from $19 6 million in Q3 25.
Speaker Change: But below the $26 4 million achieved in Q4 2004.
Speaker Change: In addition, right.
Speaker Change: Ian has made excellent progress building its project backlog.
Speaker Change: On an annual basis fiscal 'twenty five revenues were $79 7 million versus $90 6 million in fiscal 'twenty four reflecting the following segment trends.
Speaker Change: Our EV charging business delivered a strong performance both in Q4 dollars 25 and for the full year in 2025 with revenues up 18% and 37% respectively. As both trek expanded its geographic reach and executed on its order backlog.
Per Brodin: EV charging also achieved an improved gross margin of 28.3% in FY25 versus 27.2% in FY24, mainly due to an improvement in revenue mix as well as greater fixed cost absorption on higher revenue. In LED lighting, Q4-24 and Fiscal 24 revenues trailed the prior year periods by 33% and 22%, respectively, due to reduced major project activity, as well as reduced product demand in our energy service company and electrical distribution channels. Lighting achieved a gross margin of 26.6% in fiscal 25 versus 27.3% in fiscal 24, offsetting much of the impact of lower revenues with targeted price increases, cost reductions, and sourcing initiatives.
Speaker Change: EV charging also achieved an improved gross margin of 28, 3% in FY 'twenty five.
Speaker Change: 27, 2% in FY 'twenty, four mainly due to an improvement in revenue mix as well as greater fixed cost absorption on higher revenue.
Speaker Change: And led lighting Q4 dollars 24 in fiscal 'twenty four revenues trailed the prior year periods by 33% and 22% respectively due to reduced major project activity.
Speaker Change: As well as reduced product demand and our energy service company and electrical distribution channels.
Speaker Change: Lightning achieved a gross margin of 26, 6% in fiscal 'twenty five.
Speaker Change: 27, 3% in fiscal 'twenty, four offsetting much of the impact of lower revenues with targeted price increases cost reductions and sourcing initiatives.
Per Brodin: We expect margins to improve on modestly higher LED revenues in Fiscal 26 as Ryan executes on its substantial backlog. as anticipated. Our electrical maintenance services segment revenue decreased year-over-year to $4.1 million in Q4-25 versus $5.2 million a year ago. However, the business achieved a substantial turnaround in gross margin following our strategic repricing actions to improve profitability and our exit from several large but unprofitable contracts. Fiscal 25 maintenance revenue was $15.2 million versus $17.1 million in Fiscal 24 as new opportunities within existing customers provided sequential revenue improvements in each of the last three quarters of Fiscal 25, offsetting more than half of the revenue loss due to the ending of legacy contracts.
Speaker Change: We expect margins to improve modestly higher <unk> revenues in fiscal 'twenty six.
Ryan: Ryan executes on its substantial backlog.
Speaker Change: As anticipated.
Speaker Change: Our electrical maintenance services segment revenue decreased year over year to $4 1 million in Q4, 25 versus $5 2 million a year ago. However.
Speaker Change: However, the business achieved a substantial turnaround in gross margin following our strategic repricing actions to improve profitability.
Speaker Change: Our exit from several large but unprofitable contracts.
Speaker Change: Fiscal 'twenty five maintenance revenue was $15 2 million versus $17 1 million in fiscal 'twenty four as new opportunities within existing customers provided sequential revenue improvements in each of the last three quarters of fiscal 'twenty five.
Speaker Change: Offsetting more than half of the revenue loss due to the ending of legacy contracts.
Per Brodin: maintenance services gross profit margin rebounded to 18.2% in fiscal 25 from 4.4% in fiscal 24 and we expect continued improvements in both revenue and profitability in fiscal 26. Overall, our blended gross profit margin increased 170 basis points to 27.5% in Q4-25 versus 25.8% in Fiscal 24. The increase was due to profitability improvements in maintenance and a higher margin revenue mix in EV charging, as well as lower overhead costs. As Sally mentioned, we've reduced manufacturing costs on our base lighting products through reengineering and efficiency efforts in the plant. We expect our overall gross margin to remain strong in fiscal 26, though it will vary to some extent on a quarterly basis due to product mix and volume.
Speaker Change: Maintenance services gross profit margin rebounded to 18, 2% in fiscal 'twenty five from four 4% in fiscal 'twenty four and we expect continued improvements in both revenue and profitability in fiscal 2006.
Speaker Change: Overall, our blended gross profit margin increased 107, 170 basis points to 27, 5% in Q4 25 versus 25, 8% in fiscal 'twenty four.
Speaker Change: The increase was due to profitability improvement and maintenance and higher margin revenue mix in EV charging as well as lower overhead costs.
Speaker Change: As Sally mentioned, we've reduced manufacturing cost on our base lighting products through reengineering and efficiency efforts in the plant we.
Speaker Change: We expect our overall gross margin to remain strong in fiscal 'twenty six.
Speaker Change: It will vary to some extent on a quarterly basis due to product mix and volume.
Per Brodin: Moving down the income statement, our total operating expenses were $8.4 million in Q4'25 versus $5 million in Q4'24, primarily due to a $3.5 million year-over-year difference in the quarter for a Gold Trek earn-out expense, which was 0.5 million. Q4'25 compared to a $3 million net credit adjustment in Q4'24, reflecting the reversal of prior earn out expense accruals. As we mentioned, Orion reduced its annual operating overhead run rate by more than $4 million during fiscal 25. However, roughly of this improvement will be reflected as we progress through Fiscal 26. Progress was offset by a $1.6 million year-over-year increase in Voltrec earn-out expense reflected in Fiscal 25 operating expenses, which improved to $30.8 million versus $31.7 million in Fiscal 24.
Speaker Change: Okay.
Speaker Change: Moving down the income statement, our total operating expenses were $8 4 million in Q4 'twenty five.
Speaker Change: <unk> 5 million in Q4, 24, primarily due to a $3 $5 million year over year difference in the quarter for bold trek earn out expense, which was <unk>.
Speaker Change: $5 million.
Speaker Change: Q4, 25% compared to a $3 million net credit adjustment in Q4, 24, reflecting the reversal of prior earn out expense accruals.
Speaker Change: As we mentioned.
Speaker Change: Orion reduced its annual operating overhead run rate by more than $4 million during fiscal 'twenty five.
Speaker Change: However, roughly of this improvement will be reflected as we progress through fiscal 2006.
Speaker Change: This progress was offset by a $1 $6 million year over year increase in both trek earn out expense reflected in fiscal 'twenty, five operating expenses, which improved to 38 million versus 31 7 million in fiscal 'twenty four.
Per Brodin: Orion's gross margin improvement was not sufficient to offset lower revenue and the $3.5 million year-over-year variance in earn-out expense. resulting in a Q4'25 net loss of $2.9 million or $0.09 per share compared to net income of $1.6 million or $0.05 per share in Q4'24. Likewise, our fiscal 25 net loss increased slightly to $11.8 million or $0.36 per share compared to a net loss of $11.7 million or $0.36 per share in fiscal 24. Cash generated from operations improved to a positive $600,000 in Fiscal 25 from negative $10.1 million in Fiscal 24 primarily due to inventory and other working capital management.
Speaker Change: Yeah.
Speaker Change: <unk> gross margin improvement was not sufficient to offset lower revenue and a $3 5 million year over year variance and earn out expense, resulting.
Speaker Change: Resulting in a Q4 25 net loss of $2 9 million or <unk> <unk> per share compared to net income of $1 6 million or <unk> <unk> per share in Q4 24.
Speaker Change: Likewise, our fiscal 25 net loss increased slightly.
Speaker Change: $11 8 million or <unk> 36 per share compared to a net loss of 11 7 million or <unk> 36.
Speaker Change: Per share in fiscal 2004.
Speaker Change: Okay.
Speaker Change: Cash generated from operations improved to a positive 600000 in fiscal 'twenty five from negative $10 1 million in fiscal 'twenty four.
Speaker Change: Merrily due to inventory and other working capital management.
Per Brodin: We were also able to reduce revolver borrowings to $7 million at the close of Fiscal 25 from $10 million a year ago. Net working capital was $8.7 million at year-end, compared to $10.5 million last quarter and $16.8 million last year. Lower year-end current assets reflects our active working capital management, which includes a roughly $6 million year-over-year decrease in inventory investment. Year-end financial liquidity totaled $13 million, and as we disclosed today, in order to pay Orion's Voltrek burnout obligations, we've structured and executed a binding term sheet designed to resolve the obligation while mitigating the near-term liquidity impact.
Speaker Change: We were also able to reduce revolver borrowings to $7 million at the close of fiscal 'twenty five from $10 million a year ago.
Speaker Change: Networking capital was $8 7 million at year end compared to $10 5 million last quarter and $16 8 million last year.
Speaker Change: Load lower year end current assets reflects our active working capital management, which includes a roughly $6 million year over year decrease in inventory investments.
Speaker Change: Okay.
Speaker Change: Yearend financial liquidity totaled $13 million as we disclose and as we disclosed today in <unk>.
Speaker Change: Order to pay Orion bold trek earn out obligations, we've structured and executed a binding term sheet designed to resolve the obligation while mitigating the near term liquidity impact.
Per Brodin: Under the term sheet, Orion intends to use 1 million, issue 1 million of common stock in July, make an $875,000 cash payment on August 1st, and repay the remaining balance with a two-year 7% subordinated note, which matures in July 2027. Based on our financial position, improved cost structure, margin profile, and this revised earn-out structure, we believe Orion has sufficient capital to satisfy all of its obligations and to support its business and growth goals through fiscal 2026.
Speaker Change: Under the term sheet Orion intends to use 1 million issue 1 million of common stock in July.
Speaker Change: $875000 cash payment on August one.
Speaker Change: And repay the remaining balance with a two year, 7% subordinated note, which matures in July 2027.
Speaker Change: Okay.
Speaker Change: Based on our financial position improved cost structure margin profile in this revised earn out structure. We believe Orion has sufficient capital to satisfy all of its obligations and to support its business and growth goals through fiscal 2026.
Per Brodin: Now turning to our We've initiated a fiscal 26 revenue outlook expectation of 5% to approximately $84 million, which will be reported based on our new solutions and partners business unit structure. For context, to our prior reporting segments. Our revenue outlook anticipates modest growth in LED lighting and electrical maintenance revenue. Additionally, despite the substantial long-term potential we see for EV charging station infrastructure, Our fiscal 26 outlook currently anticipates flat to slightly lower EV charging revenues due to current uncertainty around the near-term scope, pace, and funding for EV charging projects. Though we still have a few days left in our fiscal 26 first quarter, we currently expect total revenues in the vicinity of that achieved in Q1 2025, although it is likely to be slightly less.
Speaker Change: Now turning to our outlook we have.
Speaker Change: <unk> initiated a fiscal 'twenty six revenue outlook expectation of 5% to approximately $84 million, which will be reported based on our new solutions and partners business unit structure.
Speaker Change: For context to our prior reporting segments.
Speaker Change: Our revenue outlook anticipates modest growth in OLED lighting, and electrical maintenance revenues. Additionally.
Speaker Change: Additionally, despite the substantial long term potential we see for EV charging station infrastructure, our fiscal 'twenty six outlook currently anticipates flat to slightly lower EV charging revenues due to current uncertainty around the near term scope pace and funding for EV charging.
Speaker Change: Projects.
Speaker Change: So we still have a few days left in our fiscal 'twenty six first quarter. We currently expect total revenues in the vicinity of that achieved in Q1 25, although it is likely to be slightly less.
Per Brodin: Based on expected operating costs and gross margin improvements, we believe our Revenue Growth Outlook positions Orion to approach or achieve positive adjusted EBITDA for the full fiscal year. In developing our outlook, we try to incorporate current economic and business factors and their potential impacts on the timing and magnitude of existing and anticipated projects, including those outlined in today's press release. Of course, we plan to revisit our outlook commentary and refine it as required as we progress through fiscal 2026.
Speaker Change: Yes.
Speaker Change: Based on expected operating cost and gross margin improvements, we believe our revenue growth outlook positions Orion to approach or achieve positive adjusted EBITDA for the full fiscal year.
Speaker Change: In developing our outlook, we've tried to incorporate current economic and business factors and their potential impact on the timing and magnitude of the existing and anticipated projects.
Speaker Change: Including those outlined in today's press release.
Speaker Change: Of course, we plan to revisit our outlook commentary and refine it as required as we progress through fiscal 2026.
Operator: And with that, I'll ask the operator to open the call to the Q&A session. Thank you. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. We ask that you please limit yourself to two questions before returning to the queue. One moment for our first question.
Speaker Change: And with that I'll ask the operator to open the call to the Q&A session.
Speaker Change: Thank you to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: Ask that you please limit yourself to two questions before returning to the Q1 moment for our first question.
Eric Stine: Our first question is going to come from the line of Eric Stine with Craig Callum Capital Group. Your line is open. Please go ahead. Hi, Sally. Hi, Per. Hello.
Speaker Change: Our first question is going to come from the line of Eric Stine with Craig Hallum Capital Group. Your line is open. Please go ahead.
Speaker Change: Hi family fare.
Speaker Change: Hello.
Sally Washlow: Good morning, so maybe I'll just start with the order trends. You call those out that you have seen a rebound or a strengthening in in Q4 and that that's continued into Q1. Curious, I mean, has that been pretty constant throughout the quarter? I know you're almost done with the quarter. Is this something you expect to see in Q2 and going forward? And maybe what do you attribute that to if there's something specific? Is it, you know, just more comfort at the federal level that, you know, budgets are not going to be cut or, you know, buildings closed and all of the noise that was coming out a couple months ago?
Speaker Change: Good morning, So maybe I'll just start with the order trends you called those out that you have seen a rebound or a strengthening in in Q4 and that that's continued into Q1.
Speaker Change: Curious I mean has that been pretty constant throughout the quarter.
Speaker Change: I know you're almost done with the quarter or is this something you expect to.
Speaker Change: C.
Speaker Change: In Q2, and going forward and maybe what do you attribute that to if theres something specific is it.
Speaker Change: More comfort at the federal level that budgets are not going to be cut or.
Speaker Change: Buildings closed and all of the noise that was coming out of a couple of months ago.
Sally Washlow: I can start with that. So nice to connect today. We saw the beginning of the year got off to a really good start with orders and in April was probably our strongest and then May and June continued to progress. So we expect that to be to continue. Fortunately, you know, the noise has less noise has helped and we continue to execute upon the projects that we have in the backlog and continue to build that backlog as well. I think maybe for a little more color, some of that, you know, is the actualization of orders related to some of the projects that we've talked about in the past that, you know, may have not yet manifested themselves in order.
Speaker Change: I can start with that so nice to connect today, we saw.
Speaker Change: At the beginning of the year got off to a really good start with orders and in April was probably our strongest and then may and June continued to progress.
Speaker Change: So we expect that to continue.
Speaker Change: Fortunately.
Speaker Change: The noise has less noise has helped.
Speaker Change: And we continue to execute upon in the projects that we have in the backlog and continue to build that backlog as well.
Speaker Change: And I think maybe for a little more color.
Speaker Change: Some of that.
Speaker Change: Actualization of orders related to some of the projects that we've talked about in the past that may have not yet manifested themselves in orders. So those are starting to come through and reflect themselves in the pipeline themselves.
Eric Stine: So those are starting to come through and reflect themselves in the pipeline themselves. Got it. Okay, that is helpful.
Speaker Change: Got it Okay that is helpful and I guess for my second one maybe.
Sally Washlow: And I guess for my second one, maybe on EV charging can certainly appreciate you know the uncertainty that you are calling out and and also the long term but just you know what are the assumptions that go into you thinking that that business in fiscal 26 flat that down. I mean, are you Are you factoring in any improvement in the macro? Just any thoughts around that would be helpful. We're taking a conservative approach with that segment for this upcoming fiscal year, but we have a strong pipeline of projects, and we continue to look at the overall environment through EV sales and the need for the infrastructure to continue to be built.
Speaker Change: And just on EV charging can certainly appreciate the uncertainty that you're calling out and also the long term.
Speaker Change: But just what are the assumptions that go into your thinking that that business in fiscal 2000 Six's is flat to down I mean are you.
Speaker Change: Are you factoring in any improvement in the macro.
Speaker Change: Just any thoughts around that would be helpful.
Speaker Change: We're taking a conservative approach with that segment for this upcoming fiscal year, but we have a strong pipeline of projects.
Speaker Change: And we continue to look at the overall environment through.
Speaker Change: <unk>.
Speaker Change: Sales and the need for the infrastructure to continue to be built.
Sally Washlow: So we're leveraging the work that we've done in the areas that we have, along with the fleets that we work with, and their continued progress of building electrified fleets, and then us being the provider of choice to help them with the infrastructure to support those fleets. in the past. You know, a pretty big pipeline there. I mean, is it fair that part of the The pipeline is still there, that hasn't changed, but the closing of that pipeline Yeah, it is. We have a good pipeline. I think some of the noise at the federal level has hurt, but we continue to progress on several projects, and we'll continue to stay focused and quite frankly, capture market share where we can on those projects.
Speaker Change: So.
Speaker Change: We're leveraging the work that we've done in.
Speaker Change: In the areas that we have along with the fleets that we work with and their continued progress of building.
Speaker Change: Electrified fleet, and then us being the provider of choice to help them with the infrastructure to support those fleets.
Speaker Change: Got it and you've talked about in the past.
Speaker Change:
Speaker Change: A pretty big pipeline there I mean is it fair that part of this is Jeff.
Speaker Change: The pipeline is still there that hasnt changed but the closing of that pipeline is a main factor.
Speaker Change: Yeah. It is we have a good pipeline.
Speaker Change: I think some of the noise at the federal level has has hurt but we continue to progress on several projects and will continue to stay focused in and quite frankly capture market share where we can on those projects.
Eric Stine: Okay, thanks.
Speaker Change: Okay. Thanks.
Operator: Thank you and one moment as we move on to our next question.
Speaker Change: Okay.
Speaker Change: Thank you and one moment as we move on to our next question.
Sameer Joshi: Our next question is going to come from the line of Sameer Joshi with HC Wainwright. Your line is open. Please go ahead.
Speaker Change: Our next question is going to come from the line of Sameer Joshi with H C. Wainwright. Your line is open. Please go ahead.
Sameer Joshi: Good morning, Sally. Thanks. Just following up on the previous Eric's question on EV visibility, your fiscal 4Q revenue was Thank you. EV industry in general, it seems that On the ground, the sales have not been impacted. So, are you just being overcautious in the outlook? I think, Sameer, the way we're thinking about it is we do have a strong pipeline, as Sally mentioned in her comments. I think we have said previously that You know, to date, we have not been as subject to direct federal funding issues and on the EV side. So we don't see that necessarily as such a large impact on our EV business.
Sameer Joshi: Good morning.
Speaker Change: Sure.
Speaker Change: Thanks for taking my questions.
Speaker Change: Just following up on the previous.
Speaker Change: On EV visibility.
Speaker Change: Yes.
Speaker Change: Your Q revenue fiscal Q3 revenue was actually sequentially.
Speaker Change: The highest of the year.
Speaker Change: Of the four quarters.
Speaker Change: And it seems that a little bit at the mines.
Speaker Change: At the federal level in <unk>.
Speaker Change: And the law against that.
Speaker Change: EV industry in general it seems that.
Speaker Change: The on the ground the seals.
Speaker Change: <unk> been impacted so much.
Speaker Change: So are you just being cautious in the outlook for <unk>.
Speaker Change: Yes.
Speaker Change: I think Sameer the way, we're thinking about it is.
Speaker Change: We do have.
Speaker Change: <unk> pipeline as Sallie mentioned in her comments.
Speaker Change: I think we have said previously that.
Speaker Change: To date, we have not been as subject to direct federal funding issues on the EV side. So we don't see that necessarily as such a large impact.
Per Brodin: However, there is, you know, Maybe some. additional impact down the road, depending on how it affects the overall environment in EV.
Speaker Change: Our EV business.
Speaker Change: There is.
Speaker Change: Maybe some.
Speaker Change: Additional impact down the road, depending on how it affects the overall environment in EV. We did have one significant project that was impacted.
Per Brodin: We did have one significant project that was impacted by some of the federal actions, and that one project was canceled mid-project. But we feel that through the funding that's available through both utilities and states that we'll have, you know, enough. to achieve our, what we think is conservative objective, but there certainly remains uncertainty in that sector, just depending, I'd say, on timing of when the infrastructure improvements will be made.
Speaker Change: By some of the.
Speaker Change: Federal actions and that one project was canceled mid project.
Speaker Change: But we feel it through the funding that's available through both utilities and states that we'll have enough to achieve or what we think is conservative.
Speaker Change: Objective, but there certainly is remains uncertainty in that sector, just depending I would say.
Speaker Change: I mean, when the infrastructure improvements will be made.
Speaker Change: Okay.
Sameer Joshi: Thanks for that. Just a couple quick ones. Earned out for 2026, you mentioned $1 million and then $875,000. Is there anything else to be expected to be paid during the year based on performance or?
Speaker Change: Understood Thanks for that color.
Speaker Change: Just a couple quick ones.
Speaker Change: For 2026.
Speaker Change: And $1 million and 875000.
Speaker Change: Is there.
Speaker Change: Okay.
Speaker Change: We expect it to be paid during the year based on performance.
Speaker Change: Is it.
Per Brodin: The end of fiscal 2025 was the end of the earn-out opportunity related to that purchase. So the obligation that we have remaining, you know, will only be, I'll say, subject to the payment in stock in July, the $875,000 mentioned, and then the remaining balance, which is subject to agreement on the final amount as we move forward. But there will be no more earn-out opportunity, per se. And that remaining balance is subject to this coordinated note that we mentioned in the prepared remarks. will be decided later.
Speaker Change: The end of fiscal 2025 was the end of the earn out.
Speaker Change: Iron out opportunity related to that purchase so the obligation that we have.
Speaker Change: Have remaining.
Speaker Change: We will only be let's say subject to the payment in stock.
Speaker Change: July the 875000 mentioned and then the remaining balance which is subject to agreement on the final amount as we move forward, but there will be no more earn out opportunity per se.
Speaker Change: Understood Thanks for that color.
Speaker Change: And that remains a balance subject to the subordinated note that we mentioned in the prepared remarks, the one that is decided.
Speaker Change: Later, Okay got it.
Sameer Joshi: And then, in terms of cadence of revenues throughout the quarter, you mentioned first quarter is likely to be flattered. The rest of the quarter should we expect year-over-year increase in that 5%-ish range or do you see any other... Right now, we see the quarters playing out relatively consistently. Obviously, they'll need to be above the amount that I alluded to that we expect to achieve in Q1, but not significantly. We're not expecting this year to be as... back-end loaded, as we've seen in the last couple of years. So overall, expect it to be a little more even.
Speaker Change: And then in terms of cadence of revenues towards the quarter.
Speaker Change: You mentioned first quarter is likely to be flat or down.
Speaker Change: The rest of the quarters should we expect year over year increase in that 5% ish.
Speaker Change: Range or do you see any other.
Speaker Change: Reliability from where you sit right now.
Speaker Change: Okay right now.
Speaker Change: We see the quarter playing out relatively consistently obviously they'll need to be above the amount that I alluded to that we expect to achieve in Q1, but not significantly.
Speaker Change: We're not expecting this year to be back.
Speaker Change: And loaded as we've seen in the last couple of years. So overall, we expect it to be a little more.
Per Brodin: But obviously, the subsequent quarters to Q1 will be higher in order to achieve our outlook.
Speaker Change: But obviously the subsequent quarters to Q1 will be higher in order to achieve our outlook.
Per Brodin: And then last one on gross margins. We see the outlook, but in terms of the business units, partners, and solutions, should we expect different levels of gross margins there? And also, maybe I can squeeze in, will you be also providing EV and LED gross margins separately in this, going forward? I'll address the last question first. I'll say we have to yet refine what our external reporting will be. In general, we'll report, expect to report on the partners and solutions basis, certainly expect to provide color on a revenue basis for some of the other things that we've done historically.
Speaker Change: Understood and then last one on gross margins.
Speaker Change: You see the outlook, but in terms of the.
Speaker Change: The business unit's.
Speaker Change: Partners and solutions.
Speaker Change: Should we expect.
Speaker Change: Different levels of.
Speaker Change: Gross margin there and also.
Speaker Change: Maybe I can squeeze in.
Speaker Change: Will you be also providing EV and <unk> gross margins separately.
Speaker Change: Going forward.
Speaker Change: I'll address the last question first I'll say, we have to refine refine what our external reporting will be in general will report.
Speaker Change: Back to report on the partners and solutions basis, certainly expect to provide color on a revenue basis for some of the other things.
Speaker Change: Things that we've done historically.
Per Brodin: and then we'll have to determine what we... How granular we get from a gross margin standpoint, going back to the beginning of your question, you know, we expect those margins to be relatively consistent. I think overall, as we said, We expect to be at a level higher than what we achieved this quarter. based on the savings and other product initiatives that we've initiated.
Speaker Change: Then we will have to determine what we.
Speaker Change: How granular we get from a gross margin standpoint going back to the beginning of your question.
Speaker Change: We expect those margins to be relatively consistent I think overall as we said.
Speaker Change: We expect to be.
Speaker Change: At a level higher than what we achieved this quarter.
Speaker Change: Based on the.
Speaker Change: Savings and other product initiatives that we've initiated.
Sameer Joshi: Thanks a lot. Thank you.
Speaker Change: Understood got it thanks, a lot for taking my questions.
Operator: One moment for our next question.
Samir: Thanks Samir.
Speaker Change: Thank you one moment for our next question.
Gaoshi Shree: Our next question is going to come from the line of Gaoshi Shree with Singular Research. Your line is open. Please go ahead. Good morning, guys. Can you hear me? Yes. So I'm just following up on that, Dave's modern questions. Just given that the easy. segment. forecasted to be flat. the margin improvement is coming from sourcing improvements and some temporary pricing actions. How can you maintain that non- Improvement. Is that through mainly through servicing improvements or is that some of the pricing? I'd say a lot of the improvement we expect to come through. the lighting and the services side.
Speaker Change: Our next question is going to come from the line of Kashi, Sri <unk> with singular research. Your line is open. Please go ahead.
Kashi Sri: Good morning, guys can you hear me.
Speaker Change: Yes, yes.
Speaker Change: Okay. So just following up on that gross margin questions.
Speaker Change: Just given that the EV.
Speaker Change: Segment is forecasted to be flat.
Speaker Change: In the Q the margin improvement is coming from sourcing improvements and some temporary pricing actions.
Speaker Change: How.
Speaker Change: Sure.
Speaker Change: Hi.
Speaker Change: How can you maintain that margin improvement is that partly is that through mainly through some of the improvements or is that some of it is that some of the pricing actions also be istent.
Speaker Change: Let's say a lot of the improvement we expect to come through.
Speaker Change: The lighting and the services side.
Per Brodin: and we expect to maintain. Yeah, reasonable. We expect EV margins to remain reasonably consistent. So some of that, you know, it's just pricing of projects and supply chain. initiatives.
Speaker Change: And we.
Speaker Change: We expect to maintain.
Speaker Change: Reasonable.
Speaker Change: We expect EBIT margins to remain reasonably consistent.
Speaker Change: So some of that is pricing of projects and supply chain.
Speaker Change: Initiatives.
Speaker Change: Okay.
Gaoshi Shree: Okay.
Per Brodin: And on the, um, on the, the earn out side. the thought process behind. settling at stock prices, at these depressed prices. and is there any kind of provision for. preventing further shareholder The thought process was to reach an agreement that was satisfactory to both sides of this agreement and to, as we mentioned, mitigate some of the liquidity impact in the near term. So that was the agreement we reached in terms of a combination of shares, cash, and subordinated notes. Got you.
Speaker Change: Okay and on the.
Speaker Change: On the debt.
Speaker Change: Side, what is the thought process behind.
Speaker Change: Settling at stock price here at these depressed prices.
Speaker Change: And is there any kind of provision for.
Speaker Change: Preventing further shareholder dilution.
Speaker Change: The thought process was to reach the agreement that was satisfactory to both sides of this agreement.
Speaker Change: And two as you mentioned mitigate some of the liquidity.
Speaker Change: Impact in the near term so that was the agreement we reached in terms of the combination of shares cash and subordinated note.
Speaker Change: Got you and just my last question.
Gaoshi Shree: And just my last question, in terms of the management. holding back performing bonus. Would you specify if the NASDAQ complies? are expertly included in that. I'm sorry, we didn't hear that entire question. Could you repeat? So, as far as Sports Director, that's Sally, the competition bonus is kind of tied to the performance milestone. It's the NASDAQ compliance also. Dezellem were included in that conversation. It's I mean it's tied to the NASDAQ compliance and per se the the shares will be appropriately allocated whatever we might have to do in terms of keeping that compliant. if that answers your question.
Speaker Change: In terms of.
Speaker Change: Right.
Speaker Change: With the management.
Speaker Change: Holding back performance.
Speaker Change: Bonuses could you specify the NASDAQ compliance is also explicitly included in that.
Speaker Change: Compensation package.
Speaker Change: I'm sorry.
Speaker Change: Didn't hear that entire question could you repeat that.
Speaker Change: So.
Speaker Change: Despite deposits directed at Sally.
Speaker Change: Bonus is tied to the performance milestone.
Speaker Change: The NASDAQ compliance also kind of explicitly included in that compensation.
Speaker Change: It's I mean, that's tied to the NASDAQ compliance per se.
Speaker Change: The shares will be appropriately allocated whatever we might have to do.
Speaker Change: In terms of keeping that compliance.
Speaker Change: If that answers your question.
Per Brodin: Thank you.
Gaoshi Shree: I'm gonna jump back on the queue. Thank you.
Speaker Change: Thank you.
Speaker Change: Ill jump back into queue. Thank you guys.
Operator: And as a reminder, if you would like to ask a question at this time, please press star 11 on your telephone. One moment for our next question.
Speaker Change: Thank you and as a reminder, if you would like to ask a question at this time. Please press star one on your telephone one moment for our next question.
Bill Dezellem: Our next question's gonna come from the line of Bill Dezellem with Titan Capital Management. Your line is open. Please go ahead. Thank you. I'd actually like to pick up on a couple of the questions that have already been asked. First of all, the federal government rule changes. Would you please walk us through the ones that actually impact you all? There's just been so much noise that I've lost track of. What is a... What is a headwind? What is a tailwind? What is simply noise?
Speaker Change: Our next question is going to come from the line of Bill Dijon with Titan Capital Management. Your line is open. Please go ahead.
Speaker Change: Thank you I actually would like to pick up on a couple of the questions that have already.
Speaker Change: Ben.
Speaker Change: When asked.
Speaker Change: First of all the federal government rule changes would you. Please walk us through the ones that actually impact you. All there's there's just been so much noise that I've lost track of.
Speaker Change: What is a.
Speaker Change: The headwind what is a tailwind what is simply noise.
Sally Washlow: Would you walk us through that, please? Are you referring to specifically the EV segment? I'm actually referring to both, because I think there's been a lot of discussion. I'll start with the EV side, and Pera can certainly add to this, when, as Pera said, we were minimally impacted by one direct government project that we had on EV, and it was canceled. We fully recovered much of our costs within that as well, based upon the contract. I guess the other side of this, good news, bad news, we were not, we didn't have a big pipeline of business tied directly to NEVI, so we were never really getting the tailwinds of all of that, so it hasn't, that, the funding, the NEVI funding, and the lack thereof, has not directly impacted our EV pipeline, per se.
Speaker Change: Would you walk us through that please.
Speaker Change: Are you referring to specifically the <unk> segment.
Speaker Change: I am actually referring to both.
Speaker Change: There's been a lot of discussion.
Speaker Change: And the government in general so yeah.
Speaker Change: Asking for a little help here.
Speaker Change: Sure. Yes, there is there has been no shortage.
Speaker Change: So I'll start with the EV side and in Tara can certainly add to this win.
Speaker Change: As per said, we were minimally impacted by one direct government projects that we had.
Speaker Change: On an EV and <unk>.
Speaker Change: It was cancelled we fully recovered much of our cost within that as well based upon the contract.
Speaker Change: I guess the other side of this good news bad news.
Speaker Change: We were not we didn't have a big pipeline of business tied directly to <unk>. So we were never really getting the tailwind of all of that so it hasn't that the funding the navy funding and the lack thereof has not directly impacted our EV.
Speaker Change: The pipeline.
Per Brodin: On the lighting side of the business. We have several projects in our pipeline that remain to be strong, they're getting executed within various sectors of the federal government, and if anything, they're growing, and maybe it's because they're in areas that the current administration is focused on as well. Per, not sure if you want to add more there. Yeah, no, I think Just touching on both of those points, then on the NEVI side, I think, as we had discussed in previous calls, we never really got a lot of tailwind from that effort. And that is one of the items that we believe has been scuttled as part of the new administration.
Speaker Change: Per se.
Speaker Change: On the lighting side of the business.
Speaker Change: We have several projects in our pipeline that.
Speaker Change: We remain to be strong theyre getting executed within various sectors of the federal government and.
Speaker Change: If anything they are growing and maybe it's because they're in areas that the current invest.
Speaker Change: The current administration is focused on as well.
Speaker Change: Not sure if you want to add more there yes.
Speaker Change: Yes, I think.
Speaker Change: Just touching on both of those points and then every side I think as we have discussed in previous calls we never really got a lot of tailwind from that effort and that is one of the items that we believe has been scuttled as part of the new administration. So.
Per Brodin: So while we thought that may ultimately provide some tailwind in the EV sector for us, it hadn't yet. And now we obviously don't expect it to. The one specific project that was canceled, just for clarity, that project was in process. So we achieved some benefit from that, but then it was since canceled by the government, and we don't expect that to move forward at any other time. And that, again, was an EV project. And then with respect to the other projects we have with the federal government, we have significant revenues expected in fiscal 26, and those are underway.
Speaker Change: While we thought that may ultimately provide some tailwind in the EV sector for us.
Speaker Change: Hadn't yet now we obviously don't expect it to.
Speaker Change: One specific product project that was canceled just for clarity.
Speaker Change: That project was in process so.
Speaker Change: Cheap some benefit from that but then it was since.
Speaker Change: Canceled by the government and we don't expect that to move forward at any other time.
Speaker Change: And that again was an EV project and then with respect to the other.
Speaker Change: Projects, we have with the federal government.
Speaker Change: Yes.
Speaker Change: Significant revenues expected in fiscal 'twenty, six and those are underway youll see.
Sally Washlow: You will see in. Q1, some significant benefit from those projects, and we expect that to continue throughout the rest of 26. And then I guess one follow-on, just to clarify, a lot of the, say, impetus that helps drive our business is driven by, when it is driven by funding, it's driven by funding from utilities and state monies, so that that is not nearly as subject to federal. funding as it is the savings trying to be achieved by electric utilities as well as the state's efforts to improve their infrastructure.
Speaker Change: Q1.
Speaker Change: Some significant benefit from those projects and we expect that to continue throughout the rest of 2006, and then I guess one follow on just to clarify a lot of the let's say.
Speaker Change: Impetus that helps drive our business is driven by.
Speaker Change: When it is driven by funding is driven by funding from utilities and state monies.
Speaker Change: That is not nearly as subject to federal.
Speaker Change: <unk> as it is.
Speaker Change: Savings trying to be achieved by electric utilities as well as the state's efforts too.
Speaker Change: Improve their infrastructure.
Bill Dezellem: Great, thank you.
Speaker Change: Great. Thank you and then.
Sally Washlow: And then, relative to the new structure... that you have talked about. Is that now possible because the Voltrek earn-out is complete, or is that pure coincidence, the timing of the... It's I mean, it's certainly possible because the earn out is complete, but there's there's a lot of Things that we can do within the two businesses and combining solutions allows us to further leverage our national footprint and capabilities to to expand you know a lot of the project that work that we do in other geographic areas. So the timing's right for it and and we're moving forward with that initiative.
Speaker Change: Relative to the the new structure.
Speaker Change: That that you have talked about.
Speaker Change: Partners versus versus solutions.
Speaker Change: Is that now possible because the volt track earn out is complete or is that pure coincidence.
Speaker Change: The timing of those two.
Speaker Change: And I mean, that's certainly possible because the earn out is complete but there is there is a lot of them.
Speaker Change: Things that we can do within the two businesses.
Speaker Change: And combining solutions allows us to further leverage our national footprint and capabilities.
Speaker Change: Two to expand.
Speaker Change: A lot of the projects that work that we do.
Speaker Change: In other geographic areas. So the timing is right for it.
Speaker Change: And and we're moving forward with that initiative.
Sally Washlow: So you. You wouldn't, uh, you would or would not say that it's, uh... that it could not have happened prior to the earn-out being complete, and therefore now it's possible. I think it could have happened. It didn't happen, but we are moving forward with it. Okay, that's helpful.
Speaker Change: Sure.
Speaker Change: You wouldn't you would or would not say that it's.
Speaker Change: They could not have happened prior to the earn out being.
Speaker Change: Complete and therefore now its possible.
Speaker Change: I think it could have happened it didnt happen, but we are moving forward with that.
Sally Watchlaw: Okay. That's helpful. Thanks Sally.
Bill Dezellem: Thanks, Sally.
Sally Washlow: And then, relative to the industry veteran that you've hired for the channel sales, would you expound upon that Sure. He is a returning Orion team member and is excited about the future potential that we have. And we were able to get him to rejoin the company and lead a channel that, quite frankly, we have struggled with over the past couple of years. So we were excited to have him back and he's a very productive leader and driver within that channel.
Speaker Change: And then.
Speaker Change: Relative to the.
Speaker Change: Industry veteran that you've hired for the channel.
Speaker Change: Sales would you expound upon that please.
Speaker Change: Sure he is returning.
Speaker Change: Oh, Ryan team member.
Speaker Change: And is excited about the future potential that we have.
Speaker Change: And we were able to get him.
Speaker Change: <unk> rejoined the company and lead a channel that quite frankly, we have struggled with over the past couple of years or so.
Speaker Change: We were excited.
Speaker Change: I did to have them back.
Speaker Change: And these.
Speaker Change: These are very productive.
Speaker Change: Leader and driver within that channel.
Bill Dezellem: Alright, with that additional color, I have to ask, what prompted him to leave and where did he go? He went to a competitor and maybe wasn't happy with some of the direction, but he's looking forward to the future here and knows that we have a great team, which we do, and we have great products, and he's happy to represent them again and help us rebuild that channel.
Speaker Change: Alright with that additional color I have to ask what prompted them to leave and we're going to go.
Speaker Change: He went to a competitor.
Speaker Change: And.
Speaker Change: Yes, maybe wasn't happy with some of the direction.
Speaker Change: But he is he is looking forward to the future here and knows that we have a great team, which we do.
Speaker Change: And we have great products in these he's happy to represent them again and help us rebuild that channel.
Sally Washlow: Great, thank you. And then, relative to the commentary about your wins in fiscal Q4 and those... here in the first quarter. Would you talk in more detail about those than you have at this point? I mean, some of them we did announce, but in terms of, you know, some of the wins, I think that the great news that Orion brings is our flexible supply chain, how we're able to, you know, work with with customers and meet their needs. So we've had, you know, we just touched upon government agencies that are specifically looking to us for our BAA products.
Speaker Change: Great. Thank you and then.
Speaker Change: Relative to the.
Speaker Change: The commentary about your wins.
Speaker Change: In fiscal Q4, and those continuing here in the first quarter would you talk in more detail about those and then you have up to this point.
Speaker Change: I mean, some of them we did announce.
Speaker Change: And in terms of some of the wins I think the great news that Orion brings is.
Speaker Change: Our flexible supply chain, how we're able to work with with customers and meet their needs.
Speaker Change: So we've had we just touched upon government agencies that are specifically.
Speaker Change: Looking to us for RBA products.
Sally Washlow: So that has been some wins and those projects continue. We've recently won a national bank with nice revenue potential through an ESCO partner. So we continue to, you know, build our product pipeline and, you know, there's more to come in that realm as well.
Speaker Change: So that has been some wins and those projects continue.
Speaker Change: We have recently won.
Speaker Change: Our National Bank.
Speaker Change: With with nice revenue potential through an ESCO partner.
Speaker Change: So we continue to build.
Speaker Change: Build our product pipeline and.
Speaker Change: There is more to come in that realm as well.
Bill Dezellem: Thank you. And then relative to the tariffs and the shifting global cost structure as a result, have you seen any clear direct impact yet from from your domestic, the benefits of your domestic manufacturing, or is it still too early, because it's really unknown what the tariffs are going to be country by country. Yeah, Bill, I think it's safe to say it's, you know, there's more unknown than known at this point, something we monitor on an ongoing basis. We believe, based on what we know today, we'll be able to manage through this. Our intent is to manage through it on, I'll just call it a neutral basis.
Speaker Change: Thank you and then relative to the tariffs and this is just the shifting global cost structure. As a result have you seen any any clear direct impact yet from.
Speaker Change:
Speaker Change: From your domestic the benefits of your domestic manufacturing or is it still too early because it's really unknown what the.
Speaker Change: Tariffs are going to be country by country.
Bill Johnson: Yes, Bill I think it's safe to say it's.
Speaker Change: Theres more unknown than known at this point.
Speaker Change: Something we monitor.
Speaker Change: Ongoing basis.
Speaker Change: We believe based on what we know today, we will be able to manage through this.
Speaker Change: Our intent is to manage through it.
Speaker Change: Call it a neutral basis.
Per Brodin: But there's more to come based on, you know. The news that comes every day, but as of yet, no significant impact.
Speaker Change: But there's more to come based on.
Speaker Change: The news that comes every day so.
Speaker Change: But as of yet no significant impact.
Bill Dezellem: Understood, and then lastly, given that we are only just a few days away from the end of this quarter, any additional insight that you can share beyond what you already have on this call with an earlier question would be appreciated. No, I think that's, you know, about as much color as we care to. Bring about the quarter, certainly incremental to what we typically do, but we felt that based on where we are relative to the quarter ending next week that we'd provide that color. and we look forward to reporting it out. beginning of August.
Speaker Change: Understood and then lastly, given that we are only just a few days away from the end of this quarter.
Speaker Change: Any additional insight that you can share beyond what you already have on this.
Speaker Change: This call with an earlier question would be appreciated.
Speaker Change: No I think thats about as much.
Speaker Change: Colors with carrier.
Speaker Change: Bringing about the quarter certainly incremental to what we typically do but we felt that based on where we are relative to the quarter ending next week that would provide that color.
Speaker Change: And we look forward to reporting it out.
Speaker Change: At the beginning of August.
Bill Dezellem: Great.
Operator: Thank you both for taking all the questions. Thanks, Bill.
Speaker Change: Great. Thank you both for taking all the questions.
Speaker Change: Thanks Bill.
Steve Redd: Thank you and one moment for our next question. Our next question comes from the line of Steve Redd with Blackwall. Your line is open, please go ahead.
Speaker Change: Thank you and one moment for our next question.
Speaker Change: Our next question comes from the line of Steve Brad with Black Walter Your line is open. Please go ahead.
Sally Washlow: Sally, you're, I mean, at this point, not new, but still fairly new to the job. What are the frustrations you're seeing with the corporate structure? There have to be. And then what will you do or what is your path to expedite the remedy? So you're right, I am fairly new and we've been working hard this quarter, you know, on that structure. I think that the The synergies and the cross-selling that we can do within our solutions business, I think there's a lot more that we can capitalize on there, just in terms of how we scale the business and how those teams can work together.
Speaker Change: Kelly.
Speaker Change: I mean at this point not new but it's still fairly new to the job.
Speaker Change: What are the frustration as youre seeing with the corporate structure there has to be in.
Speaker Change: And then what will you do or what is your path to expedite the remedying of it.
Speaker Change: So.
Speaker Change: Youre right I am fairly new and we've been working hard this quarter.
Speaker Change: On that structure.
Speaker Change: I think that the.
Speaker Change: <unk>.
Speaker Change: The synergies and the cross selling that we can do within our solutions business. I think there is a lot more that we can capitalize on there.
Speaker Change: Just just in terms of.
Speaker Change: How we scale the business.
Speaker Change: And and how those teams can work together, so I think that that's great potential for the future.
Sally Washlow: So I think that's great potential for the future within solutions is our maintenance business, our EV business, as well as a lot of the project work that we do. And I think that there's a lot to be had within that group. So maybe we've been a little too siloed in that, and we're certainly breaking that down. There's a lot of maintenance work to be done across the US, not only in lighting, but in EV. And we have a footprint that can help manage that. And then on the partner side, some of it is some channel rebuilding.
Speaker Change: Within solutions.
Speaker Change: Is our maintenance business, our EV business.
Speaker Change: As well as a lot of the project work that we do.
Speaker Change: And I think that there is a lot to be had within that group.
Speaker Change: So maybe maybe we've been a little too siloed and that and we're certainly breaking that down.
Speaker Change: There is a lot.
Speaker Change: Of maintenance work to be done across the U S not only in lighting, but in EV and <unk>.
Speaker Change: We have a footprint that can can help manage that.
Speaker Change: Then.
Speaker Change: On the partner side.
Speaker Change: Some of it is some channel rebuilding and as we spoke to earlier, bringing back an industry veteran to lead that.
Sally Washlow: And as we spoke to earlier, bringing back an industry veteran to lead that will help us lean into that channel as well, and also bring new products to that channel that are required to sell and compete in that channel. So we're going to move quicker and with greater urgency. Sally, it sounds to me like you've got large opportunities in your cost structure. I mean, do I agree? Do you want to, you know, specifically personnel? Do you see that as well? I mean, that's that seems to me where I know, of course, that always drops quickest to the bottom line.
Speaker Change: Help us lean into that channel as well and and also bring new products to that channel that are required to sell and compete in that channel. So.
Speaker Change: We're going to move quicker.
Speaker Change: And with greater urgency.
Speaker Change: So it sounds to me like you've got large opportunities in your cost structure.
Speaker Change: No.
Speaker Change: I mean do I agree.
Speaker Change: Sure.
Speaker Change: Specifically personnel.
Speaker Change: You see that as well I mean that seems to me. We're in of course, it always drops quickest to the bottomline.
Sally Washlow: But is am I reading that correctly? You know, we're always looking into that to maximize the team's capability, but, you know, I want to stabilize the team and get us on a path to growth as well, and have some team members learn from each other in terms of their specific lines of business, and how do we capitalize on how we execute some of these projects in the market as well within a greater national footprint.
Speaker Change: But am I reading that correctly.
Speaker Change: Where.
Speaker Change: We're always looking into that to maximize.
Speaker Change: The team's capability, but.
Speaker Change: I want to stabilize the team and get us on a path to growth as well and have some team members learn from each other in terms of their specific lines of business and how do we capitalize on how we execute some of these projects and the market is well within our greater.
Speaker Change: Our national footprint.
Sally Washlow: All right, thanks. Thank you.
Speaker Change: Okay alright. Thanks.
Speaker Change: Thank you.
Sally Washlow: This concludes the question and answer session, and I'll turn the call back to Sally Washlow for conclusive remarks. I want to thank everyone for taking the time to join us today. We look forward to updating investors on our first quarter call in early August. And in the meantime, we hope to meet with you in person or virtually at upcoming conferences, which we will announce as confirmed. We are currently planning to participate in a few investment conferences beginning in late August and September, which we will announce via press release once confirmed. You may also reach out to our investor relations team with any questions.
Speaker Change: This concludes our question and answer session and I will turn the call back to Sally Washington for concluding remarks.
Sally Washington: I want to thank everyone for taking the time to join US today, we look forward to updating investors on our first quarter call in early August and then in the meantime, we hope to meet with you in person or virtually at upcoming conferences, which will we will announce as confirmed we are current.
Speaker Change: Planning to participate in a few investment conferences beginning in late August and September, which we will announce via press release once confirmed.
Speaker Change: May also reach out to our Investor relations team with any questions. Their contact information is at the bottom of our press release. Thanks again for your time today and your interest in Orion.
Sally Washlow: Their contact information is at the bottom of our press release. Thanks again for your time today and your interest in Orion.
Operator: Operator, I'll turn it back to you. Thank you.
Speaker Change: Operator.
Speaker Change: I will turn it back to you.
Operator: That concludes today's conference call. You may now disconnect. Everyone have a great day. Thank you for your attention one last time.
Speaker Change: Thank you that concludes today's conference call. You may now disconnect everyone have a great day.
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