Orion Energy 'on track' to achieve Q3 revenue of at least $40M, consensus $35.8M

Given improved visibility on the timing of major customer projects, Orion believes it is on track to achieve both Q3'21 and Q4'21 revenue of at least $40M in each quarter and FY 2021 annual revenue of at least $117M. Orion expects to be profitable in its Q3 and Q4 periods and for the full fiscal year. This updated outlook, supported by the following factors, reflects the Company's current business outlook and assumes no material negative COVID-19 impacts. In October Orion secured new contract extensions from an existing large national retail customer, representing approximately $41M of expected product and service revenue for the second half of FY 2021. This retailer also named Orion as the lighting and controls partner for new construction projects. In Q2, Orion completed several initial facilities for a new national customer, a major global logistics company, and several more projects are in process. This customer is expected to be a significant source of revenue as we move forward. Orion expects to work with the customer on a project-by-project basis, versus larger-scale multi-site commitments, which limits visibility on the timing of future revenue contributions. Also in Q2, Orion added a new large specialty retail customer and is providing turnkey LED lighting retrofit solutions for its nationwide chain of stores. The initial phase of the project is expected to generate product and service revenue of at least $8M during the third and fourth quarters of FY 2021. Orion expects to retrofit the customer's remaining stores in late FY 2021 and FY 2022. Collaborating with a long-standing electrical contractor partner, Orion is providing custom-designed luminaires and lighting controls in new facilities for a global online retailer. To date in FY 2020 and FY 2021 this customer has generated approximately $6M in product revenue. Orion sees a growing relationship with a greater potential revenue impact from future phases of the customer's new facilities, beginning in late FY 2021 into FY 2022. Orion is experiencing a stronger than expected rebound in activity across a range of markets, including the public sector, medical, logistics and retail, as well as in its Energy Service Company, electrical contractor and distribution channels, as more and more businesses are able to proceed with retrofit and new construction projects. Management teams seem more engaged in pursuing cost saving projects with strong ROI and relatively short payback periods, many of which were placed on hold due to COVID-19. Orion also anticipates continued demand from long-standing public sector customers, including the U.S. Military, the Veterans Administration and the U.S. Postal Service. Orion has recently launched several new products that were designed to deliver superior quality and energy efficiency at very attractive pricing. These new products are being well received by customers and look to offer solid revenue opportunities going forward. Based on a growing base of customer engagements and project opportunities, Orion believes it is well positioned and expects to achieve financial results in FY 2022 that should at least match those delivered in FY 2020. In FY 2020, Orion achieved record revenue of $151M and net income of $12.5M, or $0.40 per diluted share. Orion cautions investors that this outlook involves uncertainty related to the COVID-19 pandemic and related business and other economic impacts.