Orion Energy Systems, Inc. (OESX) Bundle
Understanding Orion Energy Systems, Inc. (OESX) Revenue Streams
Understanding Orion Energy Systems, Inc. Revenue Streams
Orion Energy Systems, Inc. operates through three primary segments: Lighting, Maintenance, and Electric Vehicle Charging. Below is a detailed breakdown of revenue sources and performance metrics for the fiscal year 2024.
Breakdown of Primary Revenue Sources
| Segment | Revenue (2024) | Revenue (2023) | Percentage Change |
|---|---|---|---|
| Lighting Segment | $23,591,000 | $26,194,000 | (9.9%) |
| Maintenance Segment | $7,120,000 | $7,388,000 | (3.6%) |
| Electric Vehicle Charging Segment | $8,556,000 | $4,617,000 | 85.4% |
| Total Revenue | $39,267,000 | $38,199,000 | 2.8% |
Year-over-Year Revenue Growth Rate
The overall revenue growth rate for the fiscal year 2024 compared to fiscal year 2023 was 2.8%, driven primarily by the substantial increase in the Electric Vehicle Charging segment, which grew by 85.4%. In contrast, the Lighting and Maintenance segments experienced declines of 9.9% and 3.6%, respectively.
Contribution of Different Business Segments to Overall Revenue
In fiscal year 2024, the contribution of each segment to total revenue was as follows:
- Lighting Segment: 60.1%
- Maintenance Segment: 18.1%
- Electric Vehicle Charging Segment: 21.8%
Analysis of Significant Changes in Revenue Streams
The revenue dynamics indicate a strategic shift towards Electric Vehicle Charging solutions, which reflects a growing market demand. This segment's revenue increase is significant, contrasting with declines in traditional Lighting and Maintenance services, suggesting a potential pivot in company focus.
In the first six months of fiscal 2025, product revenue decreased by 14.1%, or $4.1 million, compared to the first six months of fiscal 2024. Meanwhile, service revenue saw an increase of 58.1%, or $5.2 million, over the same period.
The following table summarizes the revenue performance across segments:
| Segment | Revenue (First Half FY 2025) | Revenue (First Half FY 2024) | Percentage Change |
|---|---|---|---|
| Lighting Segment | $12,128,000 | $15,569,000 | (22.5%) |
| Maintenance Segment | $3,797,000 | $3,633,000 | 4.5% |
| Electric Vehicle Charging Segment | $4,725,000 | $3,379,000 | 39.9% |
| Total Revenue | $19,122,000 | $20,567,000 | (7.0%) |
The analysis illustrates the company's evolving revenue landscape, highlighting the importance of adapting to market trends and consumer demands, particularly in the electric vehicle sector.
A Deep Dive into Orion Energy Systems, Inc. (OESX) Profitability
A Deep Dive into Orion Energy Systems, Inc. Profitability
Gross Profit Margin: For the six months ended September 30, 2024, the gross profit was $8,771 thousand, compared to $7,740 thousand for the same period in 2023, reflecting a 13.3% increase. The gross margin improved from 20.3% in 2023 to 22.3% in 2024.
Operating Profit Margin: The loss from operations for the six months ended September 30, 2024, was $(6,704) thousand, a decrease from $(10,565) thousand in 2023, resulting in an operating margin of (17.1)% compared to (27.7)% in the previous year.
Net Profit Margin: The net loss for the six months ended September 30, 2024, was $(7,383) thousand, which is an improvement from $(11,025) thousand in 2023. The net profit margin was (18.7)% in 2024 compared to (28.9)% in 2023.
Trends in Profitability Over Time
The following table illustrates the trends in profitability metrics over the past two years:
| Metric | 2024 (6 Months) | 2023 (6 Months) | % Change |
|---|---|---|---|
| Gross Profit | $8,771 | $7,740 | 13.3% |
| Operating Loss | $(6,704) | $(10,565) | 36.5% |
| Net Loss | $(7,383) | $(11,025) | 33.0% |
Comparison of Profitability Ratios with Industry Averages
As of 2024, the company's gross margin of 22.3% is above the industry average of 20%. The operating margin of (17.1)% is below the industry average of (10)%, indicating higher operational challenges. The net profit margin of (18.7)% also falls short compared to the industry average of (5)%.
Analysis of Operational Efficiency
Cost management has shown improvement with general and administrative expenses decreasing by 15.6% in the first half of 2025 compared to the first half of 2024, amounting to $9,098 thousand from $10,779 thousand. Sales and marketing expenses also decreased by 12.5% from $6,608 thousand to $5,785 thousand.
The following table summarizes operational efficiency metrics:
| Expense Type | 2024 (6 Months) | 2023 (6 Months) | % Change |
|---|---|---|---|
| General & Administrative | $9,098 | $10,779 | (15.6)% |
| Sales & Marketing | $5,785 | $6,608 | (12.5)% |
| Research & Development | $592 | $862 | (31.3)% |
Debt vs. Equity: How Orion Energy Systems, Inc. (OESX) Finances Its Growth
Debt vs. Equity: How Orion Energy Systems, Inc. Finances Its Growth
Long-term Debt: As of September 30, 2024, the company's long-term debt totaled $12.525 million, which includes a revolving credit facility of $9.0 million and a term loan of $3.525 million. The previous balance as of March 31, 2024, was $10.003 million.
Short-term Debt: The current maturities of long-term debt stand at $352,000 as of September 30, 2024.
Debt-to-Equity Ratio: The company's debt-to-equity ratio as of September 30, 2024, is calculated as follows:
| Debt | Equity |
|---|---|
| $12.525 million | $15.803 million |
| Debt-to-Equity Ratio: 0.79 | |
This ratio is lower than the industry average, which typically hovers around 1.0, indicating a more conservative approach to leveraging.
Recent Debt Issuances: The company executed a $3.525 million mortgage loan facility as part of an amendment to its existing credit agreement on April 22, 2024.
Credit Ratings: As of the latest update, the company's credit ratings indicate compliance with all debt covenants.
Balancing Debt and Equity Financing: The company has been actively managing its capital structure, utilizing both debt and equity funding. As of September 30, 2024, total shareholders' equity was $15.803 million, reflecting a decrease from $22.542 million as of March 31, 2024.
The company also engages in stock-based compensation and has made recent stock issuances under an employee stock purchase plan, which further influences its equity levels.
Recent Financial Performance: The company reported a net loss of $7.383 million for the six months ending September 30, 2024. This loss has implications for both equity and debt management as the company seeks to stabilize its financial performance.
Summary of Debt and Equity Structure:
| Metric | Value |
|---|---|
| Long-term Debt | $12.525 million |
| Short-term Debt | $352,000 |
| Total Equity | $15.803 million |
| Debt-to-Equity Ratio | 0.79 |
| Net Loss (6 months) | $7.383 million |
Assessing Orion Energy Systems, Inc. (OESX) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio for Orion Energy Systems, Inc. as of September 30, 2024, is calculated as follows:
Current Ratio: 1.49 (Total Current Assets: $39.969 million / Total Current Liabilities: $26.868 million)
The quick ratio, which excludes inventories from current assets, is:
Quick Ratio: 0.91 (Current Assets excluding Inventories: $24.943 million / Current Liabilities: $26.868 million)
Analysis of Working Capital Trends
As of September 30, 2024, the net working capital is:
Net Working Capital: $13.101 million (Current Assets: $39.969 million - Current Liabilities: $26.868 million)
Comparatively, the net working capital as of March 31, 2024, was:
Net Working Capital (March 31, 2024): $16.749 million (Current Assets: $44.822 million - Current Liabilities: $28.053 million)
Cash Flow Statements Overview
The cash flow overview for the six months ended September 30, 2024, is as follows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | ($2,464) | ($11,315) |
| Investing Activities | $155 | ($647) |
| Financing Activities | $2,523 | ($5) |
| Net Increase (Decrease) in Cash | $214 | ($11,967) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has cash and cash equivalents totaling:
Cash and Cash Equivalents: $5.369 million
This reflects an increase from:
Cash and Cash Equivalents (March 31, 2024): $5.155 million
Despite recent operating losses, the company has managed to secure financing, evidenced by:
Term Loan Proceeds: $3.525 million during the six months ended September 30, 2024.
The company has a revolving credit facility with:
Available Credit: $16.7 million as of September 30, 2024, with $9 million drawn against it.
Is Orion Energy Systems, Inc. (OESX) Overvalued or Undervalued?
Valuation Analysis
In assessing whether the company is overvalued or undervalued, we will analyze various valuation ratios, stock price trends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is N/A due to a net loss reported in the latest earnings. For the previous fiscal year, the diluted net loss per share was $0.34.
Price-to-Book (P/B) Ratio
The latest book value per share is $0.48 as of September 30, 2024. The stock price as of the same date was $1.09, resulting in a P/B ratio of 2.27.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of the latest reporting period, EBITDA is calculated from operating income, which was ($6.7 million). The enterprise value, calculated from market capitalization and total debt, stands at approximately $42.8 million. Therefore, the EV/EBITDA ratio is N/A due to negative EBITDA.
Stock Price Trends
Over the past 12 months, the stock price has fluctuated as follows:
| Date | Stock Price ($) |
|---|---|
| September 30, 2023 | 1.02 |
| March 31, 2024 | 1.20 |
| June 30, 2024 | 1.15 |
| September 30, 2024 | 1.09 |
Dividend Yield and Payout Ratios
Currently, there is no dividend yield as the company has not declared any dividends in the last fiscal year. The payout ratio remains 0%.
Analyst Consensus on Stock Valuation
As per the latest analyst ratings:
- Buy: 2
- Hold: 3
- Sell: 1
The consensus indicates a mixed outlook, with a slight bias towards holding the stock based on current financial performance and market conditions.
Summary of Key Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 2.27 |
| EV/EBITDA Ratio | N/A |
| Stock Price (Sept 30, 2024) | $1.09 |
| Dividend Yield | 0% |
| Analyst Consensus | Mixed (2 Buy, 3 Hold, 1 Sell) |
Key Risks Facing Orion Energy Systems, Inc. (OESX)
Key Risks Facing Orion Energy Systems, Inc.
Orion Energy Systems, Inc. faces several internal and external risks that could significantly impact its financial health. These risks encompass industry competition, regulatory changes, and market conditions.
Industry Competition
The company operates in a highly competitive market with numerous players vying for market share. In the second quarter of fiscal 2025, product revenue decreased by 20.7%, or $3.2 million, compared to the second quarter of fiscal 2024. This decline was attributed to increased competition within the lighting segment, which saw revenues drop by 20.1%, or $2.7 million.
Regulatory Changes
Changes in regulatory frameworks, particularly those related to energy efficiency and environmental standards, pose risks to operations. Compliance with new regulations may require additional investments, potentially straining financial resources. The company has ongoing obligations to adhere to various environmental regulations, which could lead to increased operational costs.
Market Conditions
Fluctuations in market demand can adversely impact revenue. The total revenue for the first six months of fiscal 2025 increased marginally to $39.3 million from $38.2 million in the prior year; however, this growth was primarily driven by the Electric Vehicle (EV) segment, which saw an 85.3% increase in revenue. Conversely, the lighting and maintenance segments experienced declines, indicating vulnerability to changing market conditions.
Operational Risks
Operational inefficiencies can also impact profitability. For the first six months of fiscal 2025, general and administrative expenses decreased by 15.6%, reflecting some operational improvements, yet the overall loss from operations was $6.7 million, indicating that operational risks remain a concern.
Financial Risks
Financial risks include high levels of indebtedness and interest rate fluctuations. As of September 30, 2024, the company had a borrowing base supporting approximately $16.7 million of availability under its revolving credit facility, with $9.0 million drawn. Interest expenses rose by 48.1%, primarily due to higher borrowing costs.
Strategic Risks
Strategic risks arise from the potential failure to successfully integrate acquisitions or execute growth strategies. The company has recorded an accrued expense of $2.3 million related to earn-out payments from the acquisition of Voltrek, contingent on future performance. Failure to meet these performance targets could lead to additional financial strain.
Mitigation Strategies
The company has implemented various strategies to mitigate these risks, including cost reduction measures. General and administrative expenses decreased by 9.4% in the second quarter of fiscal 2025 compared to the same period in fiscal 2024. Additionally, a focus on expanding the EV segment, which has shown robust growth, may help offset declines in other areas.
| Risk Factor | Current Impact | Mitigation Strategy |
|---|---|---|
| Industry Competition | Product revenue decreased by 20.7% | Cost reduction and efficiency improvements |
| Regulatory Changes | Increased compliance costs | Investment in compliance programs |
| Market Conditions | Revenue fluctuations across segments | Focus on growth in the EV segment |
| Operational Risks | Loss from operations of $6.7 million | Operational efficiency initiatives |
| Financial Risks | Interest expenses increased by 48.1% | Debt management strategies |
| Strategic Risks | Accrued expenses of $2.3 million for earn-outs | Monitoring acquisition performance closely |
Future Growth Prospects for Orion Energy Systems, Inc. (OESX)
Growth Opportunities
Future growth prospects for Orion Energy Systems, Inc. are driven by several key factors that are poised to enhance its market position and financial performance.
Key Growth Drivers
- Product Innovations: The company has expanded its product portfolio, particularly in the Electric Vehicle (EV) segment, where revenues increased by 85.3% to $8.6 million in the first six months of fiscal 2025 compared to the same period in fiscal 2024.
- Market Expansions: Orion is actively pursuing new markets, particularly in the EV charging infrastructure, which is expected to see substantial growth as electric vehicles become more prevalent.
- Acquisitions: The acquisition of Voltrek, an electric vehicle charging station solutions provider, has added significant capabilities and market presence.
Future Revenue Growth Projections
Revenue for the first six months of fiscal 2025 was reported at $39.3 million, a slight increase from $38.2 million in the previous year. The company aims to focus on enhancing its service revenue, which increased by 58.1% to $14.1 million during the same period.
Earnings Estimates
The earnings estimates suggest a continued focus on improving margins, with gross margins increasing from 20.3% in the first six months of fiscal 2024 to 22.3% in fiscal 2025. This improvement is attributed to better operational efficiency and a favorable revenue mix.
Strategic Initiatives and Partnerships
In October 2024, the company executed an amendment to its Credit Agreement, extending the maturity date of its revolving credit facility to June 30, 2027, providing greater financial flexibility. Partnerships with key industry players in the EV sector are also expected to drive growth.
Competitive Advantages
- Established Market Presence: Orion has a strong foothold in the commercial lighting and energy management systems market, which provides a stable revenue base.
- Innovative Technology: Continuous investment in research and development has led to innovative products that cater to emerging energy needs, particularly in EV charging.
- Cost Management: The company has successfully reduced general and administrative expenses by 15.6% in the first six months of fiscal 2025.
Financial Overview
| Metric | FY 2024 (6 months) | FY 2025 (6 months) | Percentage Change |
|---|---|---|---|
| Total Revenue | $38.2 million | $39.3 million | 2.9% |
| Product Revenue | $25.1 million | $12.4 million | -50.5% |
| Service Revenue | $8.9 million | $14.1 million | 58.1% |
| Gross Margin | 20.3% | 22.3% | 2.0% |
As of September 30, 2024, Orion's total assets were valued at $56.3 million, down from $63.2 million as of March 31, 2024. This reflects the company's strategic focus on optimizing its asset base while pursuing growth opportunities in the EV segment.
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Resources:
- Orion Energy Systems, Inc. (OESX) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Orion Energy Systems, Inc. (OESX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Orion Energy Systems, Inc. (OESX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.