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Orion Energy Systems, Inc. F1Q11 (Qtr End 06/30/10) Earnings Call Transcript

Orion Energy Systems, Inc. F1Q11 (Qtr End 06/30/10) Earnings Call Transcript

Orion Energy Systems, Inc. (OESX)

F1Q11 (Qtr End 06/30/10) Earnings Call

August 05, 2010 5:30 p.m. ET


Victoria Paris - IR

Neal Verfuerth - CEO

Scott Jensen - CFO


Glenn Wortman - Sidoti & Company

Brian Kremer - Roth Capital Partners

Jeff Osborne - Thomas Weisel Partners



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Welcome to Orion Energy Systems First Quarter 2010 Earnings Conference Call. (Operator Instructions). This call is being recorded. If you have any objections, you may disconnect at this time.

I will now turn the call over to Victoria Zebras. Victoria, you may begin.

Victoria Paris

Thank you JJ, and thank you for joining us for Orion Energy Systems fiscal 2010 first quarter conference call. With me today on the call today are Neal Verfuerth, Chairman and CEO and Scott Jensen, CFO. Please note a copy of the presentation used on today's call is available in the investor relations section of Orion's website at

Before we begin, I will read the Safe Harbor statement. Our remarks that follow including answers to your questions include statements that we believe to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally as such because the context of such statements will include words such as believe, anticipate, expect or words of similar import.

Similarly, statements that describe future plans or objectives or goals are also forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. These risks include among others, matters that we have described in our press release issued this afternoon and in our filings with the Securities and Exchange Commission. Except as described in these filings, we disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call if at all.

Now I'd like to turn the call over to Neal.

Neal Verfuerth

Thank you Victoria. Welcome everybody to the Orion Energy Systems' fiscal 2011 first quarter conference call. As you saw on the press release we issued this afternoon, we are pleased to report first quarter contracted revenues or bookings of 18.8 million, up 22% from the 15.4 million in the prior year's period. First quarter contracted revenues or bookings included 14.7 million in cash deals and 4.1 million in finance deals from OTA and PPA technology contracts.

Given that there has been some confusion in the past around the term bookings, I wanted to spend a few minutes redefining the term going forward as contracted revenues. To be clear, these are deals that are under contract. The design and engineering work has been completed. The product has been built and are purchased and are typically producing megawatts and/or kilowatts to our customers and recurring revenue to Orion within 90 to 180 days.

Given the execution of our strategy to increase the adoption of our supply agreements, the OTA and PPA, we truly believe that contracted revenues are a key performance metric that more accurately reflects the traction we continue to make with our customers.

During the quarter we recorded a GAAP loss of $0.05. Scott will go into more detail on that momentarily but again, given the increasing number of deals being completed through our financing solutions we believe that providing a non-GAAP reconciliation for EPS more properly reflects the financial impact of these contracts, particularly as it relates to the cost associated with the customer acquisitions.

Thus in combination with reported of our bookings or contracted revenues going forward, we will also provide you a non-GAAP EPS number which should give you a more meaningful accurate way of evaluating our current and future business performance.

As such during the quarter we reported a non-GAAP loss per share of $0.02. However, on an annual basis, given our solid performance during the quarter as well as the increased activity we are experiencing in various stages of our pipeline, including some sizable deals, we're confident that Orion's technology will continue to excel in the marketplace, outperforming competitors time and time again, in spite of the continued uncertainty in the general macroeconomic environment.

As such we are reaffirming our fiscal 2011 guidance of contracted revenues of a 100 to $110 million, GAAP revenues in the range of 78 to 85 million, GAAP EPS in the range of $0.02 to $0.10 and non-GAAP EPS in the range of $0.25 to $0.33 per share.

Our suite of products deliver permanent distributed load reduction and renewable generation allowing our customers to take themselves off the grid by reducing the waste of the facilities during peak time hours and then supplementing that with renewable generating assets positioning Orion as a leading power technology enterprise.

Our priority going forward is to build up on the success we have seen to-date and expanding our partner channel and giving more feed on the street that are trade and selling and servicing our technology the Orion way.

We continue to believe that this channel will be key to our long-term success as it allows us to scale our business more economically and effectively on an end market basis. Our growing product or operating which has of second quarter now includes and LED lighting platform of demand response solution and a new metering application with our InteLite wireless controls all compliments our existing products.

The integrated lighting solution, external lighting product and affordable Tyack and finally the continued adoption of our innovative finance solution. Before I go into detail around these key growth initiatives let me highlight a few drivers of this quarter's performance. In the first quarter we retrofitted nearly 37 million square feet, 250 facility bringing our total coverage to 923 million square feet across 5870 facilities throughout North America.

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