Orion Energy Systems, Inc. OESX announced preliminary results for the third quarter of fiscal 2024 that reflected strong demand from larger clients in the LED lighting business. Although the EV charging business witnessed growth in building its project pipeline, its quarter-to-quarter results were affected by the timing of larger projects.

Despite customer-related delays in its European LED lighting project during the quarter, the company anticipates completing most of the work in the fourth quarter. The company also lowered its revenue expectation for the full year.

The company's shares have plunged 39.6% in the past six months against the Zacks Building Products-Lightning industry's growth of 31.6%.

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Fiscal Q3 Preliminary Results

The company reported preliminary third-quarter revenues in the range of $25.8-$26.2 million, up approximately 28% year over year (considering the mid-point) from $20.3 million a year ago. The Zacks Consensus Estimate for the metric was $26.2 million.

Revenue in the LED Lighting segment increased 31% year-over-year and 36.8% sequentially to approximately $18.6 million. The upside was backed by anticipated growth in contract activity for larger customers, which is expected to continue for the balance of fiscal 2024 and into fiscal 2025. Larger projects encompass about $6.5 million in remaining revenue, including a European retrofit project for the U.S. Department of Defense, an ongoing external lighting project for Orion’s largest customer and an ongoing national LED lighting project for a global warehouse/logistics customer.

EV charging solutions revenue of $2.8 million remained in line with the year-ago reported figure but declined 17.6% sequentially. The Voltrek business has significantly expanded and strengthened its team and geographic reach, experiencing steady growth in its project pipeline and new project quoting activity.

Revenue in the Maintenance services segment increased 39.4% year-over-year and 27.8% sequentially to approximately $4.6 million, driven by a 3-year agreement for preventative lighting maintenance services for a customer's 2,000 retail locations nationwide. Orion remains focused on the profitability of remaining legacy contracts. Maintenance services are projected to decrease slightly through fiscal 2024, reflecting the impact of new pricing on certain legacy customer renewal discussions.

Financials

At the end of the fiscal third quarter, the company’s liquidity was $17.5 million, including $5 million of cash and cash equivalents and $12.5 million in availability under its credit facility. This reflects an improvement from $12.9 million of liquidity, including $4 million of cash and cash equivalents and $8.9 million of net availability on its credit facility reported in a year-ago period.