Orion Energy Systems (OESX) H.C. Wainwright 26th Annual Global Investment Conference 2024 summary

Business overview and strategy

• Focuses on helping customers achieve sustainability, energy savings, and carbon reduction through retrofit lighting, maintenance, and EV infrastructure services.

• Operates in three main segments: lighting retrofits, lighting/electrical maintenance, and EV charging infrastructure installation.

• Serves commercial and industrial markets, including retail, automotive, logistics, healthcare, agriculture, and public sector.

• Utilizes three go-to-market channels: distributors, ESCOs, and direct turnkey projects for large, multi-site clients.

• Offers four revenue streams: product sales, turnkey services, EV infrastructure, and maintenance contracts.

Market trends and regulatory drivers

• LED technology has advanced to be 30%-40% more efficient than first-generation LEDs, with only 40% market penetration in commercial/industrial sectors.

• Eight states have banned the sale of fluorescent lighting, with bans taking effect from January 2025 onward, driving demand for LED retrofits.

• Federal funding, such as the NEVI Act, is accelerating EV infrastructure buildout, with $5 billion appropriated for high-speed charging.

• Buy American Act (BAA) and Build America, Buy America (BABA) requirements are shaping product lines for federal and state-funded projects.

• ESG and regulatory compliance are increasingly motivating customer investments alongside traditional ROI considerations.

Operations, capabilities, and customer solutions

• Manufactures most interior lighting products in Wisconsin, with product lines tailored for BAA and BABA compliance.

• Provides turnkey project management from facility audit to design, installation, commissioning, and ongoing maintenance.

• Offers advanced lighting controls and IoT-enabled fixtures for data gathering and integration with building management systems.

• Maintenance contracts are typically three years, providing recurring revenue and nationwide service coverage.

• Expanded into EV charging through the acquisition of Voltrek, now nationalizing those capabilities and cross-selling to existing clients.