UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒

~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the Quarterly Period Ended June 30, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐

~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

Commission file number 001-33887

Orion Energy Systems, Inc.

(Exact name of Registrant as specified in its charter)

Wisconsin

39-1847269

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification number)


2210 Woodland Drive, Manitowoc, Wisconsin		54220
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: ~~(920)~~ (920) 892-9340

Securities registered pursuant to Section 12(b) of the act:

Title of Each Class

Trading Symbol (s)

Name of Each Exchange on Which Registered

Common stock, no par value

OESX

The Nasdaq Stock Market LLC

(NASDAQ Capital Market)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an "emerging growth company". See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒☐

Non-accelerated filer	☐☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were ~~31,250,071~~32,502,558 shares of the Registrant’s common stock outstanding on ~~July 29, 2022.~~August 4, 2023.

ORION ENERGY SYSTEMS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, ~~2022~~2023

TABLE OF CONTENTS


		Page(s)
PART I FINANCIAL INFORMATION		3
ITEM 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, ~~2022~~2023 and March 31, ~~2022~~2023	3
	Condensed Consolidated Statements of Operations for the Three Months Ended June 30, ~~2022~~2023 and June 30, ~~2021~~2022	4
	Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended June 30, ~~2022~~2023 and June 30, ~~2021~~2022	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, ~~2022~~2023 and June 30, ~~2021~~2022	6
	Notes to the Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	27
ITEM 4.	Controls and Procedures	27
PART II OTHER INFORMATION		28
ITEM 1.	Legal Proceedings	28
ITEM 1A.	Risk Factors	28
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
ITEM 5.	Other Information	28
ITEM 6.	Exhibits	29
SIGNATURE		30

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~ITEM 1.~~

~~FINANCIAL STATEMENTS~~

ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	June 30, 2022			March 31, 2022			June 30, 2023			March 31, 2023
Assets
Cash and cash equivalents	$	9,424		$	14,466		$	8,249		$	15,992
Accounts receivable, net		11,735			11,899			14,613			13,728
Revenue earned but not billed		1,894			2,421			1,231			1,320
Inventories, net		18,753			19,832			17,689			18,205
Prepaid expenses and other current assets		2,624			2,631			1,172			1,116
Total current assets		44,430			51,249			42,954			50,361
Property and equipment, net		11,061			11,466			10,534			10,470
Goodwill		622			350			1,484			1,484
Other intangible assets, net		2,330			2,404			5,738			6,004
Deferred tax assets		18,783			17,805
Other long-term assets		3,375			3,543			3,436			3,260
Total assets	$	80,601		$	86,817		$	64,146		$	71,579
Liabilities and Shareholders’ Equity
Accounts payable	$	7,411		$	9,855		$	11,524		$	13,405
Accrued expenses and other		7,362			8,427			10,045			10,552
Deferred revenue, current		127			76			732			480
Current maturities of long-term debt		16			16			16			17
Total current liabilities		14,916			18,374			22,317			24,454
Revolving credit facility		—			—			10,000			10,000
Long-term debt, less current maturities		15			19			—			3
Deferred revenue, long-term		545			564			470			489
Other long-term liabilities		2,553			2,760			4,558			3,384
Total liabilities		18,029			21,717			37,345			38,330
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.01 par value: Shares authorized: 30,000,000 at June 30, 2022 and March 31, 2022; 0 shares issued and outstanding at June 30, 2022 and March 31, 2022		0			0
Common stock, no par value: Shares authorized: 200,000,000 at June 30, 2022 and March 31, 2022; shares issued: 40,723,299 at June 30, 2022 and 40,570,909 at March 31, 2022; shares outstanding: 31,250,071 at June 30, 2022 and 31,097,872 at March 31, 2022		0			0
Preferred stock, $0.01 par value: Shares authorized: 30,000,000 at June 30, 2023 and March 31, 2023; no shares issued and outstanding at June 30, 2023 and March 31, 2023								—			—
Common stock, no par value: Shares authorized: 200,000,000 at June 30, 2023 and March 31, 2023; shares issued: 41,973,543 at June 30, 2023 and 41,767,092 at March 31, 2023; shares outstanding: 32,502,558 at June 30, 2023 and 32,295,408 at March 31, 2023								—			—
Additional paid-in capital		158,727			158,419			161,095			160,907
Treasury stock, common shares: 9,476,228 at June 30, 2022 and 9,473,037 at March 31, 2022		(36,240	)		(36,239	)
Treasury stock, common shares: 9,470,985 at June 30, 2023 and 9,471,684 at March 31, 2023								(36,236	)		(36,237	)
Retained deficit		(59,915	)		(57,080	)		(98,058	)		(91,421	)
Total shareholders’ equity		62,572			65,100			26,801			33,249
Total liabilities and shareholders’ equity	$	80,601		$	86,817		$	64,146		$	71,579

The accompanying notes are an integral part of these Condensed Consolidated Statements.

ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)


	Three Months Ended June 30,						Three Months Ended June 30,
	2022			2021			2023			2022
Product revenue	$	13,483		$	28,246		$	13,671		$	13,483
Service revenue		4,423			6,855			3,942			4,423
Total revenue		17,906			35,101			17,613			17,906
Cost of product revenue		10,385			19,433			10,059			10,385
Cost of service revenue		3,967			5,438			4,383			3,967
Total cost of revenue		14,352			24,871			14,442			14,352
Gross profit		3,554			10,230			3,171			3,554
Operating expenses:
General and administrative		3,754			3,111			5,739			3,754
Acquisition costs		14			—
Acquisition related costs								53			14
Sales and marketing		2,889			3,245			3,296			2,889
Research and development		514			456			480			514
Total operating expenses		7,171			6,812			9,568			7,171
(Loss) income from operations		(3,617	)		3,418
Loss from operations								(6,397	)		(3,617	)
Other income (expense):
Other (expense) income		(1	)		1
Other income								—			(1	)
Interest expense		(17	)		(19	)		(176	)		(17	)
Amortization of debt issue costs		(15	)		(16	)		(24	)		(15	)
Interest income								2			—
Total other expense		(33	)		(34	)		(198	)		(33	)
(Loss) income before income tax		(3,650	)		3,384
Income tax (benefit) expense		(815	)		874
Net (loss) income	$	(2,835	)	$	2,510
Basic net (loss) income per share attributable to common shareholders	$	(0.09	)	$	0.08
Loss before income tax								(6,595	)		(3,650	)
Income tax expense								42			(815	)
Net loss							$	(6,637	)	$	(2,835	)
Basic net loss per share attributable to common shareholders							$	(0.21	)	$	(0.09	)
Weighted-average common shares outstanding		31,138,398			30,860,178			32,345,823			31,138,398
Diluted net (loss) income per share	$	(0.09	)	$	0.08
Diluted net loss per share							$	(0.21	)	$	(0.09	)
Weighted-average common shares and share equivalents outstanding		31,138,398			31,289,924			32,345,823			31,138,398

The accompanying notes are an integral part of these Condensed Consolidated Statements.

ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except share amounts)

Shareholders’ Equity

Common Stock

Shares

Additional
Paid-in
Capital

Treasury
Stock

Retained
Deficit

Total
Shareholders’
Equity

Balance, March 31, 2022

31,097,872

$
158,419

$
(36,239
)

$
(57,080
)

$
65,100

Exercise of stock options for cash

26,646

54

—

—

54

Shares issued under Employee Stock Purchase
Plan

443

—

1

—

1

Stock-based compensation

125,744

254

—

—

254

Employee tax withholdings on stock-based
compensation

(634
)

—

(2
)

—

(2
)
Net loss

—

—

—

(2,835
)

(2,835
)
Balance, June 30, 2022

31,250,071

$
158,727

$
(36,240
)

$
(59,915
)

$
62,572


	Shareholders’ Equity
	Common Stock
	Shares		Additional Paid-in Capital		Treasury Stock			Retained Deficit			Total Shareholders’ Equity
Balance, March 31, 2023		32,295,408	$	160,907	$	(36,237	)	$	(91,421	)	$	33,249
Shares issued under Employee Stock Purchase Plan		699		—		1			—			1
Stock-based compensation		206,451		188		—			—			188
Net loss		—		—		—			(6,637	)		(6,637	)
Balance, June 30, 2023		32,502,558	$	161,095	$	(36,236	)	$	(98,058	)	$	26,801

	Shareholders’ Equity
	Common Stock														Shareholders’ Equity
	Shares			Additional Paid-in Capital		Treasury Stock			Retained Deficit			Total Shareholders’ Equity			Common Stock
Balance, March 31, 2021		30,805,300		$	157,485	$	(36,240	)	$	(63,171	)	$	58,074
															Shares			Additional Paid-in Capital		Treasury Stock			Retained Deficit			Total Shareholders’ Equity
Balance, March 31, 2022																31,097,872		$	158,419	$	(36,239	)	$	(57,080	)	$	65,100
Exercise of stock options for cash		24,045			101		—			—			101			26,646			54		—			—			54
Shares issued under Employee Stock Purchase Plan		496			—		3			—			3			443			—		1			—			1
Stock-based compensation		171,470			160		—			—			160			125,744			254		—			—			254
Employee tax withholdings on stock-based compensation		(610	)		—		(4	)		—			(4	)		(634	)		—		(2	)		—			(2	)
Net income		—			—		—			2,510			2,510
Balance, June 30, 2021		31,000,701		$	157,746	$	(36,241	)	$	(60,661	)	$	60,844
Net loss																—			—		—			(2,835	)		(2,835	)
Balance, June 30, 2022																31,250,071		$	158,727	$	(36,240	)	$	(59,915	)	$	62,572

The accompanying notes are an integral part of these Condensed Consolidated Statements.

ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Three Months Ended June 30,						Three Months Ended June 30,
	2022			2021			2023			2022
Operating activities
Net (loss) income	$	(2,835	)	$	2,510
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Net loss							$	(6,637	)	$	(2,835	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		354			309			346			354
Amortization of intangible assets		52			67			266			52
Stock-based compensation		254			160			188			254
Amortization of debt issue costs		15			16			24			15
Deferred income tax		(978	)		872			—			(978	)
Gain on sale of property and equipment		(1	)		—
Loss (gain) on sale of property and equipment								28			(1	)
Provision for inventory reserves		100			134			161			100
Provision for credit losses								190			—
Other		(9	)		—			1			(9	)
Changes in operating assets and liabilities:
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		109			(5,934	)		(1,075	)		109
Revenue earned but not billed		527			1,886			89			527
Inventories		979			(1,232	)		355			979
Prepaid expenses and other assets		160			251			(257	)		160
Accounts payable		(2,491	)		1,447			(1,906	)		(2,491	)
Accrued expenses and other		(1,273	)		(3,550	)		666			(1,273	)
Deferred revenue, current and long-term		32			98			234			32
Net cash used in operating activities		(5,005	)		(2,966	)		(7,327	)		(5,005	)
Investing activities
Cash to fund acquisition		55			—
Cash paid for investment		—			(500	)
Cash to fund acquisition, net of cash received								—			55
Purchases of property and equipment		(139	)		(152	)		(508	)		(139	)
Additions to patents and licenses		(1	)		(4	)		—			(1	)
Proceeds from sale of property, plant and equipment								95			—
Net cash used in investing activities		(85	)		(656	)		(413	)		(85	)
Financing activities
Payment of long-term debt		(4	)		(4	)		(4	)		(4	)
Proceeds from revolving credit facility		—			—			—			—
Payments of revolving credit facility		—			—			—			—
Payments to settle employee tax withholdings on stock-based compensation		(2	)		(4	)		—			(2	)
Deferred financing costs		—			(4	)
Net proceeds from employee equity exercises		54			104
Net cash provided by financing activities		48			92
Proceeds from employee equity exercises								1			54
Net cash (used in) provided by financing activities								(3	)		48
Net decrease in cash and cash equivalents		(5,042	)		(3,530	)		(7,743	)		(5,042	)
Cash and cash equivalents at beginning of period		14,466			19,393			15,992			14,466
Cash and cash equivalents at end of period	$	9,424		$	15,863		$	8,249		$	9,424
Supplemental disclosure of non-cash investing and financing activities:
Operating lease assets obtained in exchange for new operating lease liabilities							$	363		$	—

The accompanying notes are an integral part of these Condensed Consolidated Statements.

ORION ENERGY SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED NOTES TO THE CONDENSED ~~CONSOLIDATED~~CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF BUSINESS

Orion includes Orion Energy Systems, Inc., a Wisconsin corporation, and all consolidated subsidiaries. Orion ~~is a developer, manufacturer and provider of energy-efficient LED~~provides light emitting diode lighting ~~controls and~~systems, wireless Internet of Things ~~(“IoT”) systems, including~~enabled control solutions, project engineering, energy project management design, maintenance services and turnkey ~~project implementation, program management and system maintenance~~electric vehicle charging station installation services to commercial and industrial businesses, and federal and local governments, predominantly in North America.

Orion’s corporate offices and leased primary manufacturing operations are located in Manitowoc, Wisconsin. Orion also leases office space in Jacksonville, Florida, Lawrence, Massachusetts and Pewaukee, Wisconsin.

NOTE 2 ~~— IMPACT OF COVID-19~~

The COVID-19 pandemic has disrupted business, trade, commerce, financial and credit markets, in the U.S. and globally. Orion’s business was adversely impacted by measures taken by customers, suppliers, government entities and others to control the spread of the virus beginning in March 2020, the last few weeks of Orion’s 2020 fiscal year, and continuing most significantly into the second quarter of fiscal 2021. During the third quarter of fiscal 2021, Orion experienced a rebound in business as project installations resumed for its largest customer. However, potential future risks remain due to the COVID-19 pandemic. It is not possible to predict the overall impact, including the economic and regulatory impact, the COVID-19 pandemic will have on Orion’s business, liquidity, capital resources or financial results. If the COVID-19 pandemic becomes more pronounced in Orion’s markets or experiences a resurgence in markets recovering from the spread of COVID-19, Orion’s results of operation would likely be materially adversely affected.

~~NOTE 3~~ — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Orion and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Orion have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement have been included. Interim results are not necessarily indicative of results that may be expected for the fiscal year ending March 31, ~~2023~~2024 or other interim periods.

The Condensed Consolidated Balance Sheet as of March 31, ~~2022~~2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete financial statements.

The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in Orion’s Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022~~2023 filed with the SEC on June ~~10, 2022.~~12, 2023.

Allowance for Credit Losses

Orion performs ongoing evaluations of its customers and continuously monitors collections and payments. Orion estimates an allowance for credit losses based upon the historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. We also consider customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during that reporting period. Areas that require the use of significant management estimates include revenue recognition, inventory obsolescence, allowance for ~~doubtful accounts,~~credit losses, accruals for warranty and loss contingencies, earn-out, income taxes, impairment analyses, and certain equity transactions. Accordingly, actual results could differ from those estimates.

Concentration of Credit Risk and Other Risks and Uncertainties

Orion's cash is primarily deposited with 1one financial institution. At times, deposits in this institution exceeds the amount of insurance provided on such deposits. Orion has not experienced any losses in such accounts and believes that it is not exposed to any significant financial institution viability risk on these balances.

Orion purchases components necessary for its lighting products, including lamps and LED components, from multiple suppliers. For the three months ended June 30, 2023 and June 30, 2022, 0no suppliers accounted for more than ~~10.0%~~10.0% of total cost of revenue.

For the three months ended June 30, ~~2021, 1 supplier~~2023, two customers accounted for ~~12.8%~~20.6% and 11.0% of total ~~cost of revenue.~~

revenue, respectively. For the three months ended June 30, 2022, 1one customer accounted for ~~13.8%~~13.8% of total revenue. ~~For the three months ended June 30, 2021, 2 customers accounted for 50.9 % and 14.2% of total revenue, respectively.~~

As of June 30, ~~2022, 1~~2023, one customer accounted for ~~10.8%~~11.1% of accounts receivable. As of March 31, ~~2022, 2~~2023, one customers accounted for ~~11.8% and 10.4%~~10.8% of accounts ~~receivable, respectively.~~receivable.

Recent Accounting Pronouncements

~~Issued: Not Yet Adopted~~

Recently Adopted Standards

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses. Since the issuance of ASU 2016-13, the FASB released several amendments to improve and clarify the implementation guidance. The provisions of ASU 2016-13 and the related amendments are effective for Orion for fiscal years (and interim reporting periods within those years) beginning after December 15, 2022. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Orion ~~is currently evaluating the impact~~adopted ASU 2016-13 effective April 1, 2023. The effect of adoption ~~of this standard on its consolidated statements of operations, cash flows and the related footnote disclosures.~~was immaterial.

NOTE 43 — REVENUE

Orion generates revenue primarily by selling manufactured or sourced commercial lighting fixtures and components, sourced electric vehicle chargers and related products, installing these ~~fixtures~~products in customer’s facilities, and providing maintenance services including repairs and replacements for the lighting and related electrical components. Orion recognizes revenue in accordance with the guidance in “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) when control of the goods or services being provided (which we refer to as a performance obligation) is transferred to a customer at an amount that reflects the consideration Orion expects to receive in exchange for those goods or services.

During the ~~fourth~~third quarter of fiscal ~~2022,~~2023, Orion acquired ~~Stay-Lite Lighting,~~Voltrek LLC ("Voltrek"), which ~~provides lighting~~sells and ~~electrical services.~~installs sourced electric vehicle charging stations and related software subscriptions and renewals. The results of ~~Stay-Lite Lighting~~Voltrek are included in the Orion ~~Services Group~~Electric Vehicle Charging segment ("EV") and ~~accelerate~~compliment Orion’s existing turnkey installation model.

The sale of charging stations and related software subscriptions and renewals is presented in Product revenue. Orion is the ~~growth~~principal in the sales of ~~Orion’s maintenance~~charging stations as it has control of the physical products prior to transfer to the customer. Accordingly, revenue is recognized on a gross basis. For certain sales, primarily software subscriptions and renewals, Orion is the sales agent providing access to the content and recognize commission revenue net of amounts due to third parties who fulfill the performance obligation. For these sales, control passes at the point in time upon providing access of the content to the customer.

The sale of installation and services ~~customer offering. The disaggregated revenue table provides total revenue~~related to the EV charging business is presented in Service revenue. Revenue from the ~~maintenance services offering.~~EV segment that includes both the sale of product and service is allocated between the product and service performance obligations based on relative standalone selling prices, and is recorded in Product revenue and Service revenue, respectively, in the Condensed Consolidated Statement of Operations.

Revenue from the maintenance offering that includes both the sale of Orion manufactured or sourced product and service is allocated between the product and service performance obligations based on relative standalone selling prices, and is recorded in Product revenue and Service revenue, respectively, in the Condensed Consolidated Statement of Operations.

The following tables provide detail of Orion’s total revenue for the three months ended June 30, ~~2022~~2023 and June 30, ~~2021~~2022 (dollars in thousands):


	Three Months Ended June 30, 2022						Three Months Ended June 30, 2023
	Product		Services		Total		Product		Services		Total
Revenue from contracts with customers:
Lighting product and installation	$	12,404	$	1,358	$	13,762	$	11,785	$	831	$	12,616
Maintenance services		989		3,065		4,054		899		2,855		3,754
Solar energy related revenues		0		0		0
Electric vehicle charging								982		256		1,238
Total revenues from contracts with customers		13,393		4,423		17,816		13,666		3,942		17,608
Revenue accounted for under other guidance		90		0		90		5		—		5
Total revenue	$	13,483	$	4,423	$	17,906	$	13,671	$	3,942	$	17,613

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2022
	Product		Services		Total		Product		Services		Total
Revenue from contracts with customers:
Lighting product and installation	$	27,359	$	6,661	$	34,020	$	12,404	$	1,358	$	13,762
Maintenance services		98		194		292		989		3,065		4,054
Solar energy related revenues		16		0		16		—		—		0
Total revenues from contracts with customers		27,473		6,855		34,328		13,393		4,423		17,816
Revenue accounted for under other guidance		773		0		773		90		—		90
Total revenue	$	28,246	$	6,855	$	35,101	$	13,483	$	4,423	$	17,906

From time to time, Orion sells the receivables from one customer to a financing institution. The was no such activity during the three months ended June 30, 2023 or 2022. The total amount received from the sales of these receivables during the three months ended June 30, 2021 was $2.4 million. Orion’s losses on these sales were $2 thousand, for the three months ended June 30, 2021 and are included in Interest expense in the Condensed Consolidated Statement of Operations.

The following chart shows the balance of Orion’s receivables arising from contracts with customers, contract assets and contract liabilities as of June 30, ~~2022~~2023 and March 31, ~~2022~~2023 (dollars in thousands):


	June 30, 2022			March 31, 2022		June 30, 2023		March 31, 2023
Accounts receivable, net	$	11,735		$	11,899	$	14,613	$	13,728
Contract assets	$	1,704		$	1,966	$	1,231	$	1,320
Contract liabilities	$	(52	)	$	—	$	657	$	480

There were 0no significant changes in the contract assets outside of standard reclassifications to accounts receivable, net upon billing. ~~There were 0 significant changes to~~Deferred revenue, current as of June 30, 2023 and March 31, 2023, includes $0.7 million and $0.5 million, respectively, of contract ~~liabilities.~~liabilities which represent consideration received from a new customer contract on which installation has not yet begun and Orion has not fulfilled the promises included.

NOTE 54 — ACCOUNTS RECEIVABLE, NET

As of June 30, ~~2022,~~2023 and March 31, ~~2022,~~2023, Orion's accounts receivable and allowance for ~~doubtful accounts~~credit losses balances were as follows (dollars in thousands):


	June 30, 2023			March 31, 2023
Accounts receivable, gross	$	14,885		$	13,814
Allowance for credit losses		(272	)		(86	)
Accounts receivable, net	$	14,613		$	13,728

June 30,
2022

March 31,
2022

Accounts receivable, gross

$
11,753

$
11,907

Allowance for doubtful accounts

(18
)

(8
)
Accounts receivable, net

$
11,735

$
11,899

Changes in Orion’s allowance for credit losses were as follows (dollars in thousands):


	For the Three Months Ended June 30,
	2023			2022
Beginning of period	$	(86	)	$	(8	)
Credit loss expense		(190	)		(10	)
Write-off		4			—
End of period	$	(272	)	$	(18	)

NOTE 65 — INVENTORIES, NET

As of June 30, ~~2022,~~2023 and March 31, ~~2022,~~2023, Orion's inventory balances were as follows (dollars in thousands):


	Cost		Excess and Obsolescence Reserve			Net
As of June 30, 2023
Raw materials and components	$	8,050	$	(1,171	)	$	6,879
Work in process		631		(173	)		458
Finished goods		10,938		(586	)		10,352
Total	$	19,619	$	(1,930	)	$	17,689

As of March 31, 2023
Raw materials and components	$	9,988	$	(1,094	)	$	8,894
Work in process		693		(135	)		558
Finished goods		9,313		(560	)		8,753
Total	$	19,994	$	(1,789	)	$	18,205

Cost

Excess and
Obsolescence
Reserve

Net

As of June 30, 2022

Raw materials and components

$
10,462

$
(799
)

$
9,663

Work in process

1,356

(178
)

1,178

Finished goods

8,506

(594
)

7,912

Total

$
20,324

$
(1,571
)

$
18,753

As of March 31, 2022

Raw materials and components

$
10,781

$
(1,140
)

$
9,641

Work in process

1,529

(267
)

1,262

Finished goods

9,593

(664
)

8,929

Total

$
21,903

$
(2,071
)

$
19,832

NOTE 76 — PREPAID EXPENSES AND OTHER CURRENT ASSETS

~~As of June 30, 2022, and March 31, 2022, prepaid~~Prepaid expenses and other current assets ~~include the following (dollars in thousands):~~consist primarily of prepaid insurance premiums, debt issue costs, prepaid subscription fees and sales tax receivable.

June 30,
2022

March 31,
2022

Payroll tax credit

$
1,587

$
1,587

Other prepaid expenses

1,037

1,044

Total

$
2,624

$
2,631

NOTE 87 — PROPERTY AND EQUIPMENT, NET

As of June 30, ~~2022,~~2023 and March 31, ~~2022,~~2023, property and equipment, net, included the following (dollars in thousands):


	June 30, 2023			March 31, 2023
Land and land improvements	$	433		$	433
Buildings and building improvements		9,491			9,491
Furniture, fixtures and office equipment		7,783			7,782
Leasehold improvements		540			540
Equipment leased to customers		4,997			4,997
Plant equipment		11,195			11,234
Vehicles		948			720
Construction in Progress		121			37
Gross property and equipment		35,508			35,234
Less: accumulated depreciation		(24,974	)		(24,764	)
Total property and equipment, net	$	10,534		$	10,470

June 30,
2022

March 31,
2022

Land and land improvements

$
433

$
433

Buildings and building improvements

9,491

9,491

Furniture, fixtures and office equipment

7,690

7,650

Leasehold improvements

490

490

Equipment leased to customers

4,997

4,997

Plant equipment

11,135

11,130

Vehicles

568

796

Construction in Progress

134

3

Gross property and equipment

34,938

34,990

Less: accumulated depreciation

(23,877
)

(23,524
)
Total property and equipment, net

$
11,061

$
11,466

NOTE 98 — LEASES

From time to time, Orion leases assets from third parties. Orion also leases certain assets to third parties.

Orion accounts for leases in accordance with ASC 842. Under ASC 842, both finance and operating lease ROU assets and lease liabilities for leases with initial terms in excess of 12 months are recognized at the commencement date based on the present value of lease payments over the lease term. Orion recognizes lease expense for leases with an initial term of 12 months or less, referred to as short term leases, on a straight-line basis over the lease term.

A summary of Orion’s assets leased from third parties follows (dollars in thousands):


	Balance sheet classification	June 30, 2023		March 31, 2023
Assets
Operating lease assets	Other long-term assets	$	2,349	$	2,174
Liabilities
Current liabilities
Operating lease liabilities	Accrued expenses and other	$	923	$	823
Non-current liabilities
Operating lease liabilities	Other long-term liabilities		1,870		1,826
Total lease liabilities		$	2,793	$	2,649

Balance sheet classification

June 30, 2022

March 31, 2022

Assets

Operating lease assets

Other long-term assets

$
2,283

$
2,440

Liabilities

Current liabilities

Operating lease liabilities

Accrued expenses and other

$
784

$
768

Non-current liabilities

Operating lease liabilities

Other long-term liabilities

2,068

2,271

Total lease liabilities

$
2,852

$
3,039

Orion had operating lease costs of ~~$0.3~~$0.4 million for the three months ended June 30, ~~2022.~~2023. Orion had operating lease costs of ~~$0.2~~$0.3 million for the three months ended June 30, ~~2021.~~2022.

The estimated maturity of lease liabilities for each of the next five years is shown below (dollars in thousands):


Maturity of Lease Liabilities	Operating Leases			Operating Leases
Fiscal 2023	$	857
Fiscal 2024		838
Fiscal 2024 (period remaining)				$	785
Fiscal 2025		828			1,083
Fiscal 2026		722			984
Fiscal 2027		71			177
Fiscal 2028					—
Thereafter					—
Total lease payments	$	3,316		$	3,029
Less: Interest		(464	)		(236	)
Present value of lease liabilities	$	2,852		$	2,793

Assets Orion Leases to Other Parties

One of Orion’s frequent customers purchases products and installation services under agreements that provide for monthly payments, at a fixed monthly amount, of the contract price, plus interest, typically over a five-year period. While Orion retains ownership of the light fixtures during the financing period, the transaction terms and the underlying economics associated with used lighting fixtures results in Orion essentially ceding ownership of the lighting fixtures to the customer after completion of the agreement. The portions of the transaction associated with the sale of the light fixtures is accounted for as a sales-type lease under ASC 842. The total transaction price in these contracts is allocated between the lease and non-lease components in the same manner as the total transaction price of other turnkey projects containing lighting fixtures and installation services.

Revenues, and production and acquisition costs, associated with sales-type leases are included in Product revenue and Costs of product revenues in the Condensed Consolidated Statement of Operations.

~~The following chart shows the amount of~~ There was no revenue and cost of sales arising from sales-type leases during the three months ended June 30, ~~2022~~2023 and June 30, ~~2021 (dollars in thousands):~~2022.

Three Months Ended June 30,

2022

2021

Product revenue

$
—

$
552

Cost of product revenue

$
—

$
480

NOTE 109 — GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Orion has ~~$0.6~~$0.9 million of goodwill related to its purchase of Voltrek in the third quarter of fiscal 2023, which has an indefinite life, and is assigned to the EV Charging operating segment.

Orion has $0.6 million of goodwill related to its purchase of Stay-Light Lighting during fiscal year 2022, which has an indefinite ~~life. The goodwill~~life, and is assigned to the Orion Services Group reporting unit. Goodwill increased by $0.2 million to $0.6 million as compared to March 31, 2022. This increase is due to updates to purchase accounting within the measurement period. Maintenance operating segment.

See Note 1918 – Acquisition for further discussion of the ~~Stay-Lite Lighting~~Voltrek acquisition.

As of June 30, ~~2022,~~2023 and March 31, ~~2022,~~2023, the components of, and changes in, the carrying amount of other intangible assets, net, were as follows (dollars in thousands):


	June 30, 2022							March 31, 2022							June 30, 2023									March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net		Weighted Average Useful Life		Gross Carrying Amount		Accumulated Amortization			Net
Amortized Intangible Assets
Patents	$	2,620	$	(1,927	)	$	693	$	2,652	$	(1,932	)	$	720	$	2,521	$	(1,956	)	$	565		8.5	$	2,521	$	(1,930	)	$	591
Licenses		58		(58	)		0		58		(58	)		0		58		(58	)		—		—		58		(58	)		—
Trade name and trademarks		164		(16	)		148		118		(6	)		112		464		(94	)		370		4.0		464		(73	)		391
Customer relationships		4,109		(3,632	)		477		4,178		(3,618	)		560		5,509		(4,041	)		1,468		6.3		5,509		(3,914	)		1,595
Vendor relationships																2,600		(275	)		2,325		3.4		2,600		(183	)		2,417
Developed technology		900		(900	)		0		900		(900	)		0		900		(900	)		—		—		900		(900	)		—
Total Amortized Intangible Assets	$	7,851	$	(6,533	)	$	1,318	$	7,906	$	(6,514	)	$	1,392	$	12,052	$	(7,324	)	$	4,728		5.5	$	12,052	$	(7,058	)	$	4,994


Indefinite-lived Intangible Assets
Trade name and trademarks	$	1,012	$	—		$	1,012	$	1,012	$	—		$	1,012	$	1,010	$	—		$	1,010			$	1,010	$	—		$	1,010
Total Amortized Intangible Assets	$	1,012	$	—		$	1,012	$	1,012	$	—		$	1,012
Total Non-Amortized Intangible Assets															$	1,010	$	—		$	1,010			$	1,010	$	—		$	1,010

Amortization expense on intangible assets was ~~$0.1~~$0.3 million for the three months ended June 30, ~~2022.~~2023, respectively.

Amortization expense on intangible assets was ~~$0.1~~$0.1 million for the three months ended June 30, ~~2021.~~

~~As of June 30,~~ 2022, ~~the weighted average remaining useful life of intangible assets was 8.5 years.~~respectively.

The estimated amortization expense for the remainder of fiscal ~~2022,~~2024, the next five fiscal years and beyond is shown below (dollars in thousands):


Fiscal 2024 (period remaining)	$	820
Fiscal 2025		1,086
Fiscal 2026		848
Fiscal 2027		589
Fiscal 2028		518
Fiscal 2029		471
Thereafter		396
Total	$	4,728

Fiscal 2023 (period remaining)

$
155

Fiscal 2024

203

Fiscal 2025

193

Fiscal 2026

184

Fiscal 2027

163

Fiscal 2028

118

Thereafter

302

Total

$
1,318

NOTE 1110 — ACCRUED EXPENSES AND OTHER

As of June 30, ~~2022,~~2023 and March 31, ~~2022,~~2023, accrued expenses and other included the following (dollars in thousands):

	June 30, 2022		March 31, 2022
					June 30, 2023		March 31, 2023
Accrued acquisition earn-out					$	3,000	$	3,000
Other accruals	$	2,266	$	2,221		2,162		2,598
Compensation and benefits		1,598		1,668		1,818		1,412
Credits due to customers						1,122		1,310
Accrued project costs		1,307		2,215		971		1,218
Credits due to customers		884		1,209
Warranty		684		728		502		497
Sales returns reserve						69		71
Sales tax						325		274
Legal and professional fees		264		106		76		172
Sales tax		222		157
Sales returns reserve		137		123
Total	$	7,362	$	8,427	$	10,045	$	10,552

Orion generally offers a limited warranty of one to ten years on its lighting products, including the pass through of standard warranties offered by major original equipment component manufacturers. The manufacturers’ warranties cover lamps, power supplies, LED modules, chips and drivers, control devices, and other fixture related items, which are significant components in Orion's lighting products.

Changes in Orion’s warranty accrual (both current and long-term) were as follows (dollars in thousands):


	For the Three Months Ended June 30,
	2023			2022
Beginning of period	$	646		$	860
Accruals		64			167
Warranty claims (net of vendor reimbursements)		(56	)		(216	)
End of period	$	654		$	811

For the Three Months Ended
June 30,

2022

2021

Beginning of period

$
860

$
1,009

Accruals

167

117

Warranty claims (net of vendor reimbursements)

(216
)

(88
)
End of period

$
811

$
1,038

NOTE 1211 — NET ~~(LOSS) INCOME~~LOSS PER COMMON SHARE

Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period and does not consider common stock equivalents.

Diluted net income per common share reflects the dilution that would occur if stock options were exercised and restricted shares vested. In the computation of diluted net income per common share, Orion uses the treasury stock method for outstanding options and restricted shares. For the three months ended June 30, 2023 and 2022, Orion was in a net loss position; therefore, the Basic and Diluted weighted-average shares outstanding are equal because any increase to the basic shares would be anti-dilutive. Net (loss) income per common share is calculated based upon the following shares:


	For the Three Months Ended June 30,
	2023			2022
Numerator:
Net loss (in thousands)	$	(6,637	)	$	(2,835	)
Denominator:
Weighted-average common shares outstanding		32,345,823			31,138,398
Weighted-average common shares and common share equivalents outstanding		32,345,823			31,138,398
Net loss per common share:
Basic	$	(0.21	)	$	(0.09	)
Diluted	$	(0.21	)	$	(0.09	)

For the Three Months Ended
June 30,

2022

2021

Numerator:

Net (loss) income (in thousands)

$
(2,835
)

$
2,510

Denominator:

Weighted-average common shares outstanding

31,138,398

30,860,178

Weighted-average common shares and common share
equivalents outstanding

31,138,398

31,289,924

Net (loss) income per common share:

Basic

$
(0.09
)

$
0.08

Diluted

$
(0.09
)

$
0.08

The following table indicates the number of potentially dilutive securities excluded from the calculation of Diluted net income per common share because their inclusion would have been anti-dilutive. The number of shares is as of the end of each period:


	For the Three Months Ended June 30,
	2023		2022
Common stock options		—		115,782
Restricted shares		582,506		1,081,452
Total		582,506		1,197,234

For the Three Months Ended
June 30,

2022

2021

Common stock options

—

—

Restricted shares

—

26,205

Total

—

26,205

NOTE 1312 — LONG-TERM DEBT

Long-term debt consisted of the following (dollars in thousands):


	June 30, 2022			March 31, 2022			June 30, 2023			March 31, 2023
Revolving credit facility	$	—		$	—		$	10,000		$	10,000
Equipment debt obligations		31			35			16			20
Total long-term debt		31			35			10,016			10,020
Less current maturities		(16	)		(16	)		(16	)		(17	)
Long-term debt, less current maturities	$	15		$	19		$	10,000		$	10,003

Revolving Credit Agreement

On December 29, 2020, Orion entered into a new ~~$25~~$25 million Loan and Security Agreement with Bank of America, N.A., as lender (the “Credit Agreement”). The Credit Agreement replaced Orion’s prior ~~$20.15~~$20.15 million secured revolving credit and security agreement (the “Prior Credit Agreement”).

The replacement of the Prior Credit Agreement with the Credit Agreement provides Orion with increased financing capacity and liquidity to fund its operations and implement its strategic plans.

The Credit Agreement provides for a five-year ~~$25.0~~ $25.0 million revolving credit facility (the “Credit Facility”) that matures on December 29, ~~2025.~~2025. Borrowings under the Credit Facility are subject to a borrowing base requirement based on eligible receivables, inventory and cash. As of June 30, ~~2022,~~2023, the borrowing base ~~supports $15.8 million availability~~ of the Credit ~~Facility. As~~Facility supports $18.6 million of ~~June 30,~~availability, with $8.6 million of remaining availability net of $10.0 million borrowed.

Effective November 4, 2022, ~~0 amounts were borrowed~~Orion, with Bank of America, N.A. as lender, executed Amendment No. 1 to its Credit Agreement. The primary purpose of the amendment was to include the assets of the acquired subsidiaries, Stay-Lite Lighting, Inc. ("Stay-Lite Lighting") and Voltrek, as secured collateral under the Credit ~~Facility.~~Agreement. Accordingly, eligible assets of Stay-Lite and Voltrek will be included in the borrowing base calculation for the purpose of establishing the monthly borrowing availability under the Credit Agreement. The amendment also clarified that the earn-out liabilities associated with the Stay-Lite and Voltrek transactions are permitted under the Credit Agreement and that the expenses recognized in connection with those earn-outs should be added back in the computation of EBITDA, as defined, under the Credit Agreement.

As of June 30, ~~2022,~~2023, Orion was in compliance with all debt covenants.

Equipment Debt Obligations

In February 2019, Orion entered into additional debt agreements with a financing company in the principal amount of ~~$44~~$44 thousand and ~~$30~~$30 thousand to fund the purchase of certain equipment. The debts are secured by the related equipment. The debts bear interest at a rate of ~~6.43%~~6.43% and ~~8.77%~~8.77% per annum, respectively, and both debts mature in January ~~2024.~~2024.

NOTE 1413 — INCOME TAXES

Orion’s income tax provision was determined by applying an estimated annual effective tax rate, based upon the facts and circumstances known, to book income (loss) before income tax, adjusting for discrete items. Orion’s actual effective tax rate is adjusted each interim period, as appropriate, for changes in facts and circumstances. For the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, Orion recorded income tax ~~(benefit)/~~expense (benefit) of ~~$(0.8) million~~$42 thousand and ~~$0.9~~$(0.8) million, respectively, using this methodology.

As of June 30, ~~2022~~2023 and March 31, ~~2022,~~2023, Orion ~~has~~had a ~~recorded~~full valuation allowance ~~of $1.2 million~~ against its net deferred tax asset balance. Orion considers future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event that Orion determines that the deferred tax assets are able to be realized, an adjustment to the deferred tax asset would increase income in the period such determination is made.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. Orion considers future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event that Orion determines that the more or less of its deferred tax assets are able to be realized, an adjustment to the valuation allowance would be reflected in the company’s provision for income taxes.

Uncertain Tax Positions

As of June 30, ~~2022,~~2023, Orion’s balance of gross unrecognized tax benefits was approximately ~~$0.2~~$0.2 million, all of which would reduce Orion’s effective tax rate if recognized.

Orion has classified the amounts recorded for uncertain tax benefits in the balance sheet as Other long-term liabilities to the extent that payment is not anticipated within one year. Orion recognizes penalties and interest related to uncertain tax liabilities in income tax (benefit) expense. Penalties and interest are included in the unrecognized tax benefits.

NOTE 1514 — COMMITMENTS AND CONTINGENCIES

Litigation

Orion is subject to various claims and legal proceedings arising in the ordinary course of business. Orion does not believe the final resolution of any of such claims or legal proceedings will have a material adverse effect on Orion’s future results of operations or financial condition.

State Tax Assessment

During fiscal year 2018, Orion was notified of a pending sales and use tax audit by the Wisconsin Department of Revenue for the period covering April 1, 2013 through March 31, 2017. This sales and use tax audit was settled during the quarter ended June 30, 2022 with no tax adjustment.

NOTE 1615 — SHAREHOLDERS’ EQUITY

~~Shareholder Rights Plan~~

On January 3, 2019, Orion entered into Amendment No. 1 to the Rights Agreement, which amended the Rights Agreement dated as of January 7, 2009 and extended its terms by three years to January 7, 2022. In December 2021, Orion’s

~~Board of Directors announced that it had decided to allow the Rights Agreement to terminate and expire by its terms on January 7, 2022.~~

Employee Stock Purchase Plan

In August 2010, Orion’s Board of Directors approved a non-compensatory employee stock purchase plan, or “ESPP”. In the three months ended June 30, ~~2022,~~2023, Orion issued ~~443~~700 shares under the ESPP plan at a closing market price of ~~$2.01.~~$1.63. In the three months ended June 30, 2022, Orion issued 443 shares under the ESPP plan at a closing market price of $2.01.

Sale of shares

In March ~~2020,~~2023, Orion filed a universal shelf registration statement with the Securities and Exchange Commission. Under the shelf registration statement, Orion currently has the flexibility to publicly offer and sell from time to time up to ~~$100~~$100 million

of debt and/or equity securities. The filing of the shelf registration statement may help facilitate Orion’s ability to raise public equity or debt capital to expand existing businesses, fund potential acquisitions, invest in other growth opportunities, repay existing debt, or for other general corporate purposes.

In March 2021, Orion entered into an At Market Issuance Sales Agreement to undertake an “at the market” (ATM) public equity capital raising program pursuant to which Orion may offer and sell shares of common stock from time to time, having an aggregate offering price of up to ~~$50~~$50 million. ~~NaN~~No share sales ~~were~~have been effected pursuant to the ATM program through June 30, ~~2022.~~2023.

NOTE 1716 — STOCK OPTIONS AND RESTRICTED SHARES

At Orion’s 2019 annual meeting of shareholders held on August 7, 2019, Orion’s shareholders approved the Orion Energy Systems, Inc. 2016 Omnibus Incentive Plan, as amended and restated (the “Amended 2016 Plan”). The Amended 2016 Plan increased the number of shares of Orion’s common stock available for issuance under the Amended 2016 Plan from 1,750,000 shares to 3,500,000 shares (an increase of 1,750,000 shares); added a minimum vesting period for all awards granted under the Amended 2016 Plan (with limited exceptions); and added a specific prohibition on the payment of dividends and dividend equivalents on unvested awards.

The Amended 2016 Plan authorizes grants of equity-based and incentive cash awards to eligible participants designated by the Plan's administrator. Awards under the Amended 2016 Plan may consist of stock options, stock appreciation rights, performance shares, performance units, common stock, restricted stock, restricted stock units, incentive awards or dividend equivalent units.

Prior to the 2016 Omnibus Incentive Plan, Orion maintained its 2004 Stock and Incentive Awards Plan, as amended, which authorized the grant of cash and equity awards to employees (the “2004 Plan”). No new awards are being granted under the 2004 Plan; however, all awards granted under the 2004 Plan that are outstanding will continue to be governed by the 2004 Plan. Forfeited awards originally issued under the 2004 Plan are canceled and are not available for subsequent issuance under the 2004 Plan or under the Amended 2016 Plan. The Amended 2016 Plan and the 2004 Plan also permit accelerated vesting in the event of certain changes of control of Orion as well as under other special circumstances.

Certain non-employee directors have from time to time elected to receive stock awards in lieu of cash compensation pursuant to elections made under Orion’s non-employee director compensation program.

The following amounts of stock-based compensation were recorded (dollars in thousands):


	For the Three Months Ended June 30,
	2023		2022
Cost of product revenue	$	1	$	1
General and administrative		182		250
Sales and marketing		4		2
Research and development		1		1
Total	$	188	$	254

For the Three Months Ended
June 30,

2022

2021

Cost of product revenue

$
1

$
1

General and administrative

250

155

Sales and marketing

2

3

Research and development

1

1

Total

$
254

$
160

During the ~~first~~ three months ~~of fiscal 2022,~~ended June 30, 2023, Orion had the following activity related to its stock-based ~~compensation:~~compensation. Restricted shares includes both performance-vesting restricted stock and time vesting-restricted stock.

	Restricted Shares			Stock Options
Awards outstanding at March 31, 2022		450,458			142,428
							Restricted Shares			Stock Options
Awards outstanding at March 31, 2023								743,454			73,136
Awards granted		756,738			0			50,753			—
Awards vested or exercised		(125,744	)		(26,646	)		(206,451	)		—
Awards forfeited		—			—			(5,250	)		(73,136	)
Awards outstanding at June 30, 2022		1,081,452			115,782
Awards outstanding at June 30, 2023								582,506			—
Per share weighted average price on grant date	$	2.18			0		$	1.66			—

As of June 30, ~~2022,~~2023, the amount of deferred stock-based compensation expense to be recognized, over a remaining period of ~~3.0~~2.0 years, was approximately ~~$2.1~~$1.1 million.

NOTE 1817 — SEGMENTS

Reportable segments are components of an entity that have separate financial data that the entity's chief operating decision maker ("CODM") regularly reviews when allocating resources and assessing performance. Orion's CODM is the chief executive officer. Previously, Orion ~~has the following business~~had four reportable segments: Orion Services Group Division ("OSG"), Orion Distribution Services Division ("ODS"), ~~and~~ Orion U.S. Markets Division ~~("USM"~~(“USM”) and Orion Electric Vehicle Charging Division (“EV Division”). ~~The accounting policies are~~Effective during the ~~same~~first quarter of fiscal 2024, Orion began to evaluate and report the business using three segments: Orion Lighting Division, Orion Maintenance Division and Orion Electric Vehicle Charging Division (“EV Division”). Orion configured its fiscal 2024 plan in order to compare actual performance to plan performance for ~~each business~~these segments. Due to the change in composition of reportable segments in the first quarter of fiscal 2024, the corresponding segment ~~as they are~~information for fiscal year 2023 has been restated for presentation on a ~~consolidated~~comparable basis.

~~Orion Services Group Division~~Lighting Segment

The ~~OSG segment~~Lighting Segment develops and sells lighting products and provides construction ~~engineering along with installation~~ and ~~maintenance~~engineering services for Orion's commercial lighting and energy management systems. ~~OSG~~The Lighting Segment provides engineering, design, lighting products and in many cases turnkey solutions for large national accounts, governments, municipalities, schools and other ~~customers.~~

~~Orion Distribution Services Division~~

~~The ODS segment~~customers mostly through direct sales and also sells lighting products ~~through~~though manufacturer representative agencies and ~~a network of North American broadline electrical distributors and contractors.~~

~~Orion U.S. Markets Division~~

~~The USM segment sells commercial lighting systems and energy management systems~~ to ~~contractors and~~the wholesale contractor markets through energy service companies ~~("ESCOs").~~and contractors.

Maintenance Segment

The Maintenance Segment provides retailers, distributors and other businesses with maintenance, repair and replacement services for the lighting and related electrical components deployed in their facilities.

Electric Vehicle Charging Segment

The Electric Vehicle Charging Segment offers leading electric vehicle charging expertise, sells and installs sourced electric vehicle charging stations with related software subscriptions and renewals and provides EV turnkey installation solutions with ongoing support to all commercial verticals.

Corporate and Other

Corporate and Other is comprised of operating expenses not ~~directly~~ allocated to Orion’s segments and adjustments to reconcile to consolidated results (dollars in thousands).


	Revenues				Operating Loss						Total Assets
	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2023		2022		2023			2022			June 30, 2023		March 31, 2023
Segments:
Lighting Segment	$	12,621	$	13,852	$	(766	)	$	(1,004	)	$	28,025	$	25,009
Maintenance Segment		3,754		4,054		(1,840	)		(290	)		8,250		10,372
Electric Vehicle Charging Segment		1,238		—		(1,934	)		—			9,945		11,501
Corporate and Other		—		—		(1,857	)		(2,323	)		17,926		24,697
	$	17,613	$	17,906	$	(6,397	)	$	(3,617	)	$	64,146	$	71,579

Revenues

Operating Income (Loss)

For the Three Months Ended
June 30,

For the Three Months Ended
June 30,

2022

2021

2022

2021

Segments:

Orion Services Group

$
9,035

$
21,988

$
(2,229
)

$
1,864

Orion Distribution Services

4,826

9,286

(51
)

2,122

Orion U.S. Markets

4,045

3,827

186

651

Corporate and Other

—

—

(1,523
)

(1,219
)

$
17,906

$
35,101

$
(3,617
)

$
3,418

NOTE 1918 — ACQUISITION

Acquisition of Voltrek

Effective on ~~January 1,~~October 5, 2022, Orion acquired all the membership interests of Voltrek, an electric vehicle charging station solutions provider for a purchase price of $5.0 million in cash and $1.0 million of shares of common stock of Orion, subject to normal and customary closing adjustments of $0.9 million (the “Voltrek Acquisition”). In addition, depending upon the relative EBITDA growth of Voltrek’s business in fiscal 2023, 2024 and 2025, Orion could pay up to an additional $3.0 million, $3.5 million and $7.15 million, respectively, in earn-out payments. These compensatory payments do not fall within the scope of ASC 805, Business Combinations, and will be expensed over the course of the ~~issued~~earn-out periods to the extent they are earned. As of June 30, 2023, Orion recorded $3.0 million to accrued expenses for the fiscal 2023 earn-out opportunity and ~~outstanding capital stock of Stay-Lite Lighting, Inc. (“Stay-Lite Lighting”), a nationwide lighting~~an additional $2.1 million to other long-term liabilities for the cumulative potential earn-out opportunity which would be paid in fiscal 2026. The Voltrek Acquisition was funded with cash and ~~electrical maintenance service provider, for $4.3 million (the “Stay-Lite Acquisition”). Stay-Lite Lighting will operate~~Orion shares. Voltrek operates as ~~Stay-Lite Lighting,~~Voltrek, an Orion Energy Systems business. The ~~acquisition accelerates the growth of Orion's~~Voltrek Acquisition leverages Orion’s project management and maintenance ~~services offerings through its Orion Services Group, which provides lighting and electrical services to customers.~~expertise into a rapidly growing sector.

Orion has accounted for ~~this transaction~~the Voltrek Acquisition as a business combination. Orion has ~~preliminarily~~ allocated the purchase price of approximately ~~$4.3~~$6.9 million ~~which includes an estimate of the earn-out liability of $0.2 million and $0.1 million for the working capital adjustment received in the first quarter fiscal 2023,~~ to the assets acquired and liabilities assumed at estimated fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill. ~~Orion could pay up to $0.7 million in earnout related~~The purchase price and closing adjustments were paid in cash and 620,067 shares of common stock with a total fair market value of $1.0 million, which is ~~based on performance during the current and following calendar years. Orion is~~recorded in the ~~process of finalizing third party valuations of property and equipment and intangible assets and related tax impacts.~~

~~The preliminary allocation of the purchase consideration to the~~opening balance sheet at fair value of $0.8 million, the ~~assets acquired and liabilities assumed as of January 1, 2022,~~discount on which is ~~as follows (dollars in thousands):~~due to lock-up requirements on the shares.

The following table summarizes the purchase price allocation for Voltrek:


(in thousands)				Opening Balance Sheet
Cash	$	95		$	416
Accounts receivable		2,690			1,363
Revenue earned but not billed		342			325
Inventory		504			880
Prepaid expenses and other current assets		41			39
Property and equipment		725			4
Goodwill		622			920
Other intangible assets		673			4,300
Other long-term assets		537			223
Accounts payable		(965	)		(1,133	)
Accrued expenses and other		(550	)		(286	)
Other long-term liabilities		(411	)		(180	)
Net purchase consideration		4,303		$	6,871

Goodwill recorded from the ~~acquisition of Stay-Lite Lighting~~Voltrek Acquisition is attributable to the ~~expected synergies from~~skillset of the ~~business combination.~~acquired workforce. The goodwill resulting from the ~~acquisition~~Voltrek Acquisition is expected to be deductible for tax purposes. The intangible assets include amounts recognized for the fair value of the trade name, vendor relationship and customer ~~relationships.~~ relationships.

The tradename intangible asset was valued using a relief from royalty method. The significant assumptions used include the estimated revenue and royalty rate, among other factors.
The vendor relationship intangible asset was valued using the income approach – excess earnings method. The significant assumptions include estimated revenue, cost of goods sold, and probability of renewal, among other factors.

The customer relationship intangible asset was valued using the income approach – with-and-without method. The significant assumptions include estimated cash flows (including appropriate revenue, cost of revenue and operating expenses attributable to the asset, retention rate, among other factors), and discount rate, reflecting the risks inherent in the future cash flow stream, among other factors.

The categorization of the framework used to measure fair value of the intangible assets ~~was determined based upon~~is considered to be within the ~~income (discounted cash flow) approach.~~Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used.

The following table presents the details of the intangible assets acquired at the date of ~~acquisition~~Voltrek Acquisition (dollars in thousands):


	Estimated Fair Value		Estimated Useful Life (Years)		Estimated Fair Value		Estimated Useful Life (Years)
Tradename	$	164		5	$	300		5
Vendor relationship						2,600		7
Customer relationships		509		8		1,400		3

Transaction costs related to the acquisition totaled $0.5 million in fiscal 2022 and $14 thousand in the first quarter fiscal 2023 and are recorded in acquisition costs in the consolidated statements of operations.

~~Stay-Lite Lighting’s~~Voltrek's post-acquisition results of operations since ~~January 1,~~October 5, 2022 are included in ~~the~~ Orion’s Condensed Consolidated Statements of Operations. The operating results of ~~Stay-Lite Lighting~~Voltrek are included in the EV segment. See note 17 – Segments, for results.

Transaction costs related to the Voltrek Acquisition are recorded in acquisition costs in the Condensed Consolidated Statements of Operations. Transaction costs totaled $0.1 million in the three months ended June 30, 2023 and $14 thousand in the three months ended June 30, 2022, respectively.

If Voltrek was acquired on April 1, 2022, the pro forma Orion ~~Services Group segment.~~revenue for the three months ended June 30, 2022 would have been $19.1 million and proforma net loss would have been $(3.2) million.

~~NOTE 20 — SUBSEQUENT EVENTS~~

~~Subsequent events are events or transactions~~The pro forma information was determined based on the historical results of Orion and unaudited financial results from Voltrek. These proforma results reflect additional depreciation and amortization that ~~occur after~~would have been charged assuming the ~~balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed~~fair value adjustments to property, plant, and equipment and intangible asset occurred at the ~~date~~beginning of the ~~balance sheet, including~~period, along with consequential tax effects. The unaudited pro forma results have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the ~~estimates inherent~~business combinations been completed at the beginning of the period or the results that may occur in the ~~process~~future. Furthermore, the unaudited pro forma financial information does not reflect the impact of ~~preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at~~any synergies resulting from the ~~date of the balance sheet but arose after that date.~~ acquisitions.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ITEM 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited Condensed Consolidated Financial Statements and related notes included in this Form 10-Q, as well as our audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021.~~2023.

Cautionary Note Regarding Forward-Looking Statements

Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “believe”, “anticipate”, “should”, “intend”, “plan”, “will”, “expects”, “estimates”, “projects”, “positioned”, “strategy”, “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements are subject to several risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements. There may be events in the future that we are not able to predict accurately or over which we have no control. Potential risks and uncertainties include, but are not limited to, those discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022.~~2023. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.

Overview

We provide state-of-the-art light emitting diode (“LED”) lighting systems, wireless Internet of Things (“IoT”) enabled control solutions, ~~project engineering, energy project management design~~commercial and industrial electric vehicle (“EV”) charging infrastructure solutions and maintenance services. We help our customers achieve their sustainability, energy savings and carbon footprint reduction goals through innovative technology and exceptional service. We ~~research, design, develop, manufacture, market,~~ sell ~~install,~~our products and ~~implement energy management systems consisting primarily of high-performance, energy-efficient~~services into many vertical markets within the broader commercial and industrial ~~interior and exterior LED lighting systems and related services. Our products are targeted for applications in three primary~~ market ~~segments:~~segment. Primary verticals include: big box retail, manufacturing, warehousing/logistics, commercial office, federal and ~~retail, area lighting,~~municipal government, healthcare and ~~industrial applications, although we do sell and install products into other markets.~~schools. Our services consist of turnkey installation and system maintenance. Virtually all of our sales occur within North America.

Our lighting products consist primarily of LED lighting fixtures, many of which include IoT enabled control systems. Our principal lighting customers include large national account end-users, federal and state government facilities, large regional account end-users, electrical distributors, electrical contractors and energy service companies ~~("ESCOs"~~(“ESCOs”). Currently, most of our lighting products are manufactured at our leased production facility located in Manitowoc, Wisconsin, although as the LED and related IoT market continues to evolve, we are increasingly sourcing products and components from third parties in order to provide versatility in our product development.

We differentiate ourselves from our competitors through offering comprehensive project management services to national account customers to retrofit their multiple locations. Our comprehensive services include initial site surveys and audits, utility incentive and government subsidy management, engineering design, and project management from delivery through to installation and controls integration. In addition, we began to offer lighting and electrical maintenance services in fiscal 2021 which enables us to support a lifetime business relationship with our ~~customer.~~customer (which we call “Customers for Life”). We completed the ~~acquisition of~~ Stay-Lite Lighting acquisition on January 1, 2022, which ~~is intended~~has allowed us to further expand our maintenance services capabilities. We completed the acquisition of Voltrek on October 5, 2022, which has allowed us to further expand our turnkey services capabilities as well as capitalize on the rapidly growing market for EV charging solutions.

We believe the market for LED lighting products and related controls continues to grow. Due to their size and flexibility in application, we also believe that LED lighting systems can address opportunities for retrofit applications that cannot be satisfied

by other lighting technologies. Our LED lighting technologies have ~~become~~been the primary component of our revenue as we continue to strive to be a leader in the LED market.

In fiscal 2022, we continued to successfully capitalize on our capability of being a full service, turn-key provider of LED lighting and controls systems with design, build, installation and project management services, as we continued a very large project for a major national account. As a result of this success, we have ~~begun to evolve~~evolved our business strategy to focus on further expanding the nature and scope of our products and services offered to our customers. This further expansion of our products and services includes pursuing projects to develop recurring revenue streams, including providing lighting and electrical maintenance services and utilizing control sensor technology to collect data and assisting customers in the digitization of this data, along with other potential services. We also ~~plan to pursue~~are pursuing the expansion of our IoT, “smart-building” and “connected ceiling” and other related technology, software and controls products and services that we offer to our customers. We currently plan on investing significant time, resources and capital into expanding our offerings in these areas with no expectation that they will result in us realizing material revenue in the near term and without any assurance they will succeed or be profitable. In fact, it is likely that these efforts will reduce our profitability, at least in the near term as we invest resources and incur expenses to develop these offerings. While we currently intend to primarily pursue these expansion strategies organically, we also ~~are actively exploring~~may explore potential additional business acquisitions, like our acquisition of Stay-Lite Lighting and Voltrek, which ~~would~~have more quickly ~~add~~added these types of expanded and different capabilities to our product and services offerings. ~~It is possible that one or more of such potential acquisitions, if successfully completed, could significantly change, and potentially transform, the nature and extent of our business.~~

We generally do not have long-term contracts with our customers for product or turnkey services that provide us with recurring annual revenue. However, ~~some of~~ our maintenance services contracts usually consist of multi-year arrangements. We typically generate substantially all of our revenue from sales of lighting and control systems and related services to governmental, commercial and industrial customers on a project-by-project basis. We also perform work under master services or product purchasing agreements with major customers with sales completed on a purchase order basis. In addition, in order to provide quality and timely service under our multi-location master retrofit agreements we are required to make substantial working capital expenditures and advance inventory purchases that we may not be able to recoup if the agreements or a substantial volume of purchase orders under the agreements are delayed or terminated. The loss of, or substantial reduction in sales to, any of our significant customers, or our current single largest customer, or the termination or delay of a significant volume of purchase orders by one or more key customers, could have a material adverse effect on our results of operations in any given future period.

We typically sell our lighting systems in replacement of our customers’ existing fixtures. We call this replacement process a "retrofit". We frequently engage our customer’s existing electrical contractor to provide installation and project management services. We also sell our lighting systems on a wholesale basis, principally to electrical distributors and ESCOs to sell to their own customer bases.

The gross margins of our products can vary significantly depending upon the types of products we sell, with margins typically ranging from 10% to 50%. As a result, a change in the total mix of our sales among higher or lower margin products can cause our profitability to fluctuate from period to period.

Our fiscal year ends on March 31. Our current fiscal year ends on March 31, ~~2023~~2024 and is referred to as “fiscal ~~2023”~~2024”. We refer to our just completed fiscal year, which ended on March 31, ~~2022,~~2023, as "fiscal ~~2022"~~2023", and our prior fiscal year which ended on March 31, ~~2021~~2022 as "fiscal ~~2021"~~2022". Our fiscal first quarter of each fiscal year ends on June 30, our fiscal second quarter ends on September 30, our fiscal third quarter ends on December 31 and our fiscal fourth quarter ends on March 31.

~~Impact of COVID-19~~

~~The COVID-19 pandemic has disrupted business, trade, commerce, financial~~ and ~~credit markets, in~~Orion Electric Vehicle Charging Division (“EV Division”). Effective during the U.S. and globally. Our business was adversely impacted by measures taken by customers, suppliers, government entities and others to control the spread of the virus beginning in March 2020, the last few weeks of our 2020 fiscal year, and continuing most

~~significantly into the second~~first quarter of fiscal ~~2021. During~~2024, we began to evaluate and report the ~~third quarter of fiscal 2021, we experienced a rebound in~~ business ~~as project installations resumed for our largest customer. However, potential future risks remain due to the COVID-19 pandemic. It is not possible to predict the overall impact, including the economic~~using three segments: Orion Lighting Division, Orion Maintenance Division and regulatory impact, the COVID-19 pandemic will have on put business, liquidity, capital resources or financial results. If the COVID-19 pandemic becomes more pronounced in our markets or experiences a resurgence in markets recovering from the spread of COVID-19, our results of operation would likely be materially adversely affected.Orion Electric Vehicle Charging Division (“EV Division”).

Acquisition

Acquisition of ~~Stay-Lite Lighting~~Voltrek

Effective on ~~January 1,~~October 5, 2022, we acquired all of the ~~issued and~~ outstanding ~~capital stock~~membership interests of ~~Stay-Lite Lighting,~~Voltrek LLC, a ~~nationwide lighting and electrical maintenance service provider, for a cash~~leading electric vehicle charging company that provides turnkey installation solutions with ongoing support to all commercial verticals. The initial purchase price consisted of ~~$4.0 million. In addition, depending upon the~~$5.0 million cash and $1.0 million of stock. We also paid an additional $3.0 million based on Voltrek's performance ~~during the current~~in fiscal 2023 and ~~following calendar years, Orion~~ could pay up to an additional ~~$0.7~~$3.5 million and $7.15 million in ~~earn out related purchase price.~~compensatory consideration if Voltrek exceeds certain earnings targets in fiscal 2024 and 2025, respectively. The acquisition was funded from existing cash ~~resources. Stay-Lite Lighting will operate~~and credit resources and has been operating as ~~Stay-Lite, an~~Voltrek, a division of Orion Energy ~~Systems business. The acquisition accelerates the growth of our maintenance services offerings through our Orion Services Group, which provides lighting and electrical services to customers.~~Systems.

~~Recent Developments~~

During the fourth quarter of fiscal 2022, we substantially completed a significant project rollout for our large national retail customer. During the first quarter of fiscal 2021, we continued to support this customer, but at lower revenue levels than the comparative prior year quarter.

Results of Operations - Three Months Ended June 30, ~~2022~~2023 versus Three Months Ended June 30, ~~2021~~2022

The following table sets forth the line items of our Condensed Consolidated Statements of Operations and as a relative percentage of our total revenue for each applicable period, together with the relative percentage change in such line item between applicable comparable periods (dollars in thousands, except percentages):


	Three Months Ended June 30,															Three Months Ended June 30,
	2022			2021						2022			2021			2023			2022						2023			2022
	Amount			Amount			% Change			% of Revenue			% of Revenue			Amount			Amount			% Change			% of Revenue			% of Revenue
Product revenue	$	13,483		$	28,246			(52.3	)%		75.3	%		80.5	%	$	13,671		$	13,483			1.4	%		77.6	%		75.3	%
Service revenue		4,423			6,855			(35.5	)%		24.7	%		19.5	%		3,942			4,423			(10.9	)%		22.4	%		24.7	%
Total revenue		17,906			35,101			(49.0	)%		100.0	%		100.0	%		17,613			17,906			(1.6	)%		100.0	%		100.0	%
Cost of product revenue		10,385			19,433			(46.6	)%		58.0	%		55.4	%		10,059			10,385			(3.1	)%		57.1	%		58.0	%
Cost of service revenue		3,967			5,438			(27.1	)%		22.2	%		15.5	%		4,383			3,967			10.5	%		24.9	%		22.2	%
Total cost of revenue		14,352			24,871			(42.3	)%		80.2	%		70.9	%		14,442			14,352			0.6	%		82.0	%		80.2	%
Gross profit		3,554			10,230			(65.3	)%		19.8	%		29.1	%		3,171			3,554			(10.8	)%		18.0	%		19.8	%
General and administrative expenses		3,754			3,111			20.7	%		21.0	%		8.9	%		5,739			3,754			52.9	%		32.6	%		21.0	%
Acquisition costs		14			—		NM				0.1	%		—
Acquisition related costs																	53			14			278.6	%		0.3	%		0.1	%
Sales and marketing expenses		2,889			3,245			(11.0	)%		16.1	%		9.2	%		3,296			2,889			14.1	%		18.7	%		16.1	%
Research and development expenses		514			456			12.7	%		2.9	%		1.3	%		480			514			(6.6	)%		2.7	%		2.9	%
(Loss) income from operations		(3,617	)		3,418			(205.8	)%		(20.2	)%		9.7	%
Loss from operations																	(6,397	)		(3,617	)		76.9	%		(36.3	)%		(20.2	)%
Other income		(1	)		1		NM				(0.0	)%		0.0	%		—			(1	)		(100.0	)%		—			(0.0	)%
Interest expense		(17	)		(19	)		(10.5	)%		(0.1	)%		(0.1	)%		(176	)		(17	)		935.3	%		(1.0	)%		(0.1	)%
Amortization of debt issue costs		(15	)		(16	)		(6.3	)%		(0.1	)%		(0.0	)%		(24	)		(15	)		60.0	%		(0.1	)%		(0.1	)%
(Loss) income before income tax		(3,650	)		3,384		NM				(20.4	)%		9.6	%
Income tax (benefit) expense		(815	)		874		NM				(4.6	)%		2.5	%
Net (loss) income	$	(2,835	)	$	2,510		NM				(15.8	)%		7.2	%
Interest income																	2			—		NM				0.0	%		0.0	%
Loss before income tax																	(6,595	)		(3,650	)		80.7	%		(37.4	)%		(20.4	)%
Income tax expense (benefit)																	42			(815	)	NM				0.2	%		(4.6	)%
Net loss																$	(6,637	)	$	(2,835	)		134.1	%		(37.7	)%		(15.8	)%

*NM - Not Meaningful

Revenue, Cost of Revenue and Gross Margin. Product revenue ~~decreased 52.3%~~increased 1.4%, or ~~$14.8~~$0.2 million, for the first quarter of fiscal ~~2023~~2024 versus the first quarter of fiscal ~~2022.~~2023. Service revenue decreased ~~35.5%~~10.9%, or ~~$2.4~~$0.5 million, for the first quarter of fiscal ~~2023~~2024 versus the first quarter of fiscal ~~2022.~~2023. The resulting decrease in ~~product and service~~total revenue was due to ~~significantly lower project revenues from our largest customer and other customer delays on several~~variability in the timing of larger ~~LED~~ lighting ~~and controls~~ projects ~~primarily caused~~offset by the ~~response~~addition of customers to supply chain disruptions and COVID-19 related impacts to our businesses. This includes installations from our existing large national retail customer, which represented 13.8% of total revenueEV revenue. The decrease in the first quarter ~~of fiscal 2023. This decrease in~~ revenue iswas partially offset by revenues due to the acquisition ~~of Stay-Lite Lighting.~~Voltrek. Cost of product revenue decreased by ~~46.6%~~3.1%, or ~~$9.0~~$0.3 million, in the first quarter of fiscal ~~2023~~2024 versus the comparable period in fiscal ~~2022.~~2023. Cost of service revenue ~~decreased~~increased by ~~27.1%~~10.5%, or ~~$1.5~~$0.4 million, in the first quarter of fiscal ~~2023~~2024 versus the comparable period in fiscal ~~2022. The decrease in product and service costs was primarily due to the decrease in revenue.~~2023. Gross margin decreased from ~~29.1%~~19.8% of revenue in the first quarter of fiscal ~~2022~~2023 to ~~19.8%~~18.0% in the first quarter of fiscal ~~2023,~~2024, due primarily to reduced sales decreasing the absorption of fixed costs.

Operating Expenses

General and Administrative. General and administrative expenses increased ~~20.7%~~52.9%, or ~~$0.6~~$2.0 million, in the first quarter of fiscal ~~2023~~2024 compared to the first quarter of fiscal ~~2022.~~2023. This comparative increase was primarily due to the acquisition of ~~Stay-Lite Lighting.~~Voltrek and a $1.1 million accrual of the expected Voltrek earn-out payment.

Acquisition Related Costs. Acquisition related costs were relatively flat, in the first quarter of fiscal 2024 compared to the first quarter of fiscal 2023.

Sales and Marketing. Sales and marketing expenses ~~decreased 11.0%~~increased 14.1%, or $0.4 million, in the first quarter of fiscal ~~2023~~2024 compared to the first quarter of fiscal ~~2022.~~2023. This comparative ~~decrease~~increase was primarily due to ~~a reduction in commission expense on lower sales, partially offset by increased employment costs.~~the acquisition of Voltrek.

Research and Development. Research and development expenses ~~increased 12.7%, or $0.1 million,~~were relatively flat, in the first quarter of fiscal ~~2023~~2024 compared to the first quarter of fiscal ~~2022, as a result of increased testing.~~2023.

~~Interest Expense.~~ ~~Interest expense in the first quarter of fiscal 2023 decreased 10.5%, or $2 thousand, from the first quarter of fiscal 2022. The decrease in interest expense was due to fewer sales of receivables.~~Lighting Division

~~Orion Services Group Division~~

Our ~~OSG segment~~lighting division develops and sells lighting products and provides construction ~~engineering along with installation~~ and ~~maintenance~~engineering services for our commercial lighting and energy management systems. ~~OSG~~Our lighting division provides engineering, design, lighting products and in many cases turnkey solutions for large national accounts, governments, municipalities, schools and other ~~customers.~~customers mostly through direct sales and also sells lighting products though manufacturer representative agencies and to the wholesale contractor markets through ESCOs and contractors.

The following table summarizes our ~~OSG segment~~lighting division operating results (dollars in thousands):


	Three Months Ended June 30,									Three Months Ended June 30,
	2022			2021			% Change			2023			2022			% Change
Revenues	$	9,035		$	21,988			(58.9	)%	$	12,621		$	13,852			(8.9	)%
Operating income	$	(2,229	)	$	1,864			(219.6	)%
Operating loss										$	(766	)	$	(1,004	)		23.7	%
Operating margin		(24.7	)%		8.5	%					(6.1	)%		(7.2	)%

~~OSG segment~~Lighting division revenue in the first quarter of fiscal ~~2023~~2024 decreased by ~~58.9%~~8.9%, or $13.0 million. The decrease in revenue was due to a significant reduction of project volume from our largest customer and other customer delays on several larger LED lighting and controls projects, primarily caused by the response of customers to supply chain disruptions and COVID-19 related impacts to our businesses. This revenue decrease is partially offset by the added revenue from Stay-Lite Lighting. This decrease led to a corresponding operating loss in this segment, as a result of revenue decreasing absorption of fixed costs.

~~Orion Distribution Services Division~~

~~Our ODS segment focuses on selling lighting products through manufacturer representative agencies and a network of North American broadline and electrical distributors and contractors.~~

~~The following table summarizes our ODS segment operating results (dollars in thousands):~~

Three Months Ended June 30,

2022

2021

%
Change

Revenues

$
4,826

$
9,286

(48.0
)%
Operating income

$
(51
)

$
2,122

(102.4
)%
Operating margin

(1.1
)%

22.9
%

~~ODS segment revenue in the first quarter of fiscal 2023 decreased by 48.0%, or $4.5~~$1.2 million compared to the first quarter of fiscal ~~2022~~2023. The decrease in lighting division revenue was due to variability in the timing of larger lighting projects. The decrease in corresponding operating loss in this segment is a result of improved gross margin.

Maintenance Division

Our maintenance division provides retailers, distributors and other businesses with maintenance, repair and replacement services for the lighting and related electrical components deployed in their facilities.

The following table summarizes our maintenance division operating results (dollars in thousands):


	Three Months Ended June 30,
	2023			2022			% Change
Revenues	$	3,754		$	4,054			(7.4	)%
Operating loss	$	(1,840	)	$	(290	)		(534.5	)%
Operating margin		(49.0	)%		(7.2	)%

Maintenance division revenue in the first quarter of fiscal 2024 decreased by 7.4%, or $0.3 million, compared to the first quarter of fiscal 2023, primarily due to a decrease in sales to one ~~customer. The decrease in sales resulted in a corresponding operating~~customer. Operating loss in this segment ~~based on operating leverage.~~increased as a result of a decrease in gross margins driven by higher subcontractor costs.

~~Orion U.S. Markets~~23

Electric Vehicle Charging Division

Our ~~USM segment sells~~EV division offers leading electric vehicle charging expertise and provides EV turnkey installation solutions with ongoing support to all commercial ~~lighting systems and energy management systems to the wholesale contractor markets. USM customers include ESCOs and contractors.~~verticals.

The following table summarizes our ~~USM~~EV segment ~~operating~~operations results (dollars in thousands):


	Three Months Ended June 30,
	2023			2022			% Change
Revenues	$	1,238		$	—		NM
Operating loss	$	(1,934	)	$	—		NM
Operating margin		(156.2	)%		—	%

* NM - Not Meaningful

Three Months Ended June 30,

2022

2021

%
Change

Revenues

$
4,045

$
3,827

5.7
%
Operating income

$
186

$
651

(71.4
)%
Operating margin

4.6
%

17.0
%

~~USM~~EV segment revenue generated by Voltrek in the first quarter of fiscal ~~2023 increased by 5.7%, or $0.2 million, compared to the first quarter of fiscal 2022, primarily due to a more diversified customer base.~~2024 was $1.2 million. Operating ~~income~~loss in this segment ~~decreased as~~was primarily a result of ~~increased allocation~~$1.1 million of earn-out expense included in general and administrative costs.

Liquidity and Capital Resources

Overview

We believe our existing cash and operating cash flow provide us with the financial flexibility needed to meet our capital requirements, including to fund targeted our budgeted capital expenditures ~~acquisitions~~ and working capital needs for at least one year from the date of this report, as well as our longer-term capital requirements for periods beyond at least one year from the date of this report.

We had approximately ~~$9.4~~$8.2 million in cash and cash equivalents as of June 30, ~~2022,~~2023, compared to ~~$14.5~~$16.0 million at March 31, ~~2022.~~2023. Our cash position decreased as a result of an operating loss and an overall use of working capital during the first quarter of fiscal ~~2023.~~2024.

Our future liquidity needs and forecasted cash flows are dependent upon many factors, including our relative revenue, gross margins, cash management practices, cost containment, working capital management and capital expenditures. While we believe that we will likely have adequate available cash and equivalents and credit availability under our Credit Agreement to satisfy our currently anticipated working capital and liquidity requirements ~~during~~for at least the next 12 months based on our current cash flow forecast, ~~there can be no assurance to that effect. If~~if we experience significant liquidity constraints, we may be required to issue equity or debt securities, reduce our sales efforts, implement additional cost savings initiatives or undertake other efforts to conserve our cash.

Cash Flows

The following table summarizes our cash flows for the three months ended June 30, ~~2022~~2023 and ~~2021~~2022 (in thousands):


	Three Months Ended June 30,						Three Months Ended June 30,
	2022			2021			2023			2022
Operating activities	$	(5,005	)	$	(2,966	)	$	(7,327	)	$	(5,005	)
Investing activities		(85	)		(656	)		(413	)		(85	)
Financing activities		48			92			(3	)		48
Decrease in cash and cash equivalents	$	(5,042	)	$	(3,530	)	$	(7,743	)	$	(5,042	)

Cash Flows Related to Operating Activities. Cash used in operating activities primarily consists of net loss adjusted for certain non-cash items, including depreciation, amortization of intangible assets, stock-based compensation, amortization of debt issue costs, provisions for reserves, and the effect of changes in working capital and other activities.

Cash used in operating activities for the first ~~three months~~quarter of fiscal 2024 was $7.3 million and consisted of our net loss of $6.6 million adjusted for non-cash expense items and net cash used in changes in operating assets of $0.8 million, the largest of which was a $1.9 million decrease in accounts payable.

Cash used in operating activities for the first quarter of fiscal 2023 was $5.0 million and consisted of our net loss of $2.8 million adjusted for non-cash expense items and net cash used in changes in working capital of $2.0 million, the largest of which was a $2.5 million decrease in accounts payable.

Cash used in operating activities for the first three months of fiscal 2022 was $3.0 million and consisted of our net income adjusted for non-cash expense items of $1.6 million and net cash used in changes in operating assets and liabilities of $7.0 million. Cash used by operating assets and liabilities consisted primarily of an increase in accounts receivable of $5.9 million due to higher sales and the timing of collections, and a decrease in accrued expenses and other of $3.6 million due to timing of invoices received. Cash provided by changes in operating assets and liabilities consisted primarily of a decrease of $1.9 million in revenue earned but not billed and an increase in accounts payable of $1.4 million due to the timing of payments.

Cash Flows Related to Investing Activities. Cash used in investing activities of $0.4 million in the first quarter of fiscal 2024 consisted primarily of purchases of property and equipment.

Cash used in investing activities of $0.1 million in the first ~~three months~~quarter of fiscal ~~2022~~2023 consisted primarily of purchases of property and equipment.

Cash used in investing activities of $0.7 million in the first three months of fiscal 2022 consisted primarily of cash paid for a non-controlling equity stake in ndustrial of $0.5 million and purchases of property and equipment.

Cash Flows Related to Financing Activities. Cash used by financing activities of $3 thousand in the first quarter of fiscal 2024 consisted primarily of payment of long-term debt.

Cash provided by financing activities of $48 thousand in the first ~~three months~~quarter of fiscal 2023 consisted primarily of proceeds from employee equity exercises.

~~Cash provided by financing activities of $0.1 million in the first three months of fiscal 2022 consisted primarily of proceeds from employee equity exercises.~~

Working Capital

Our net working capital as of June 30, ~~2022~~2023 was ~~$29.5~~$20.6 million, consisting of ~~$44.4~~$43.0 million in current assets and ~~$14.9~~$22.3 million in current liabilities. Our net working capital as of March 31, ~~2022~~2023 was ~~$32.9~~$25.9 million, consisting of ~~$51.2~~$50.4 million in current assets and ~~$18.4~~$24.5 million in current liabilities. ~~The decrease in our working capital from the fiscal 2022 year-end was primarily due to an overall reduction in project volume performed for our largest customer.~~

We generally attempt to maintain at least a three-month supply of on-hand inventory of purchased components and raw materials to meet anticipated demand, as well as to reduce our risk of unexpected raw material or component shortages or supply interruptions. Because of recent supply chain challenges, we have been making additional incremental inventory purchases. Our accounts receivables, inventory and payables may increase to the extent our revenue and order levels increase.

Indebtedness

~~Indebtedness~~

Revolving Credit Agreement

On December 29, 2020, we entered into a new $25 million Loan and Security Agreement (the “Credit Agreement”) with Bank of America, N.A., as lender (the “Lender”). The Credit Agreement replaced our prior $20.15 million secured revolving credit and security agreement (the “Prior Credit Agreement”).

The replacement of the Prior Credit Agreement with the Credit Agreement provides us with increased financing capacity and liquidity to fund our operations and implement our strategic plans.

The Credit Agreement provides for a five-year $25.0 million revolving credit facility (the “Credit Facility”) that matures on December 29, 2025. Borrowings under the Credit Facility are subject to a borrowing base requirement based on eligible receivables, inventory and cash. As of June 30, ~~2022,~~2023, the borrowing base ~~supports $15.8 million availability~~ of the Credit ~~Facility. As~~Facility supports $18.6 million of ~~June 30, 2022, no amounts were borrowed under the Credit Facility.~~availability, with $8.6 million of remaining availability net of $10.0 million borrowed.

The Credit Agreement is secured by a first lien security interest in substantially all of our assets.

~~Backlog~~Effective November 4, 2022, we, along with the Lender, executed Amendment No. 1 to the Credit Agreement. The primary purpose of the amendment was to include the assets of our acquired subsidiaries, Stay-Lite Lighting and Voltrek as secured collateral under the Credit Agreement. Accordingly, eligible assets of Stay-Lite and Voltrek are now included in our borrowing base calculation for the purpose of establishing our monthly borrowing availability under the Credit Agreement. The amendment also clarified that the earn-out liabilities associated with the Stay-Lite and Voltrek transactions are permitted under the Credit Agreement and that the expenses recognized in connection with those earn-outs should be added back in the computation of EBITDA, as defined, under the Credit Agreement.

Backlog

Backlog represents the amount of revenue that we expect to realize in the future as a result of firm, committed purchase orders. Backlog totaled ~~$8.3~~$19.0 million and ~~$10.1~~$17.2 million as of June 30, ~~2022~~2023 and March 31, ~~2022,~~2023, respectively. We generally expect our backlog to be recognized as revenue within one ~~year, although the COVID-19 pandemic may extend this time period.~~year. Backlog does not include any amounts for contracted maintenance services.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Inflation

We have experienced increases in various input costs including labor, components and transportation in the past year. In response, we have implemented multiple price increases, and we have substantially mitigated the inflationary pressures, such that our results from operations have not been materially affected to date by inflation. We are monitoring input costs and cannot currently predict the future impact toon our operations by ~~inflation.~~increasing or ongoing inflationary pressures.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make certain estimates and judgments that affect our reported assets, liabilities, revenue and expenses, and our related disclosure of contingent assets and liabilities. We re-evaluate our estimates on an ongoing basis, including those related to revenue recognition, inventory valuation, ~~collectability of receivables,~~ stock-based compensation ~~warranty reserves~~ and income taxes. The estimates of forecasted cash flows are used in the assessment for impairment of long-lived assets and the realizability of deferred tax assets. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. A summary of our critical accounting policies is set forth in the “Critical Accounting Policies and Estimates” section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended March 31, ~~2022.~~2023. For the ~~three months~~quarter ended June 30, ~~2022,~~2023, there were no material changes in our accounting policies.

Recent Accounting Pronouncements

For a complete discussion of recent accounting pronouncements, refer to Note 3 in the Condensed Consolidated Financial Statements included elsewhere in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~ITEM 3.~~

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

Our exposure to market risk was discussed in the “Quantitative and Qualitative Disclosures About Market Risk” section contained in our Annual Report on Form 10-K for the year ended March 31, ~~2022.~~2023. There have been no material changes to such exposures since March 31, ~~2022.~~2023.

ITEM 4. CONTROLS AND PROCEDURES

~~ITEM 4.~~

~~CONTROLS AND PROCEDURES~~

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, ~~2022,~~2023, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on this evaluation, such officers have concluded that our disclosure controls and procedures were effective as of June 30, ~~2022.~~2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) for the quarter ended June 30, ~~2022,~~2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~ITEM 1.~~

~~LEGAL PROCEEDINGS~~

We are subject to various claims and legal proceedings arising in the ordinary course of business. As of the date of this report, we do not believe that the final resolution of any of such claims or legal proceedings will have a material adverse effect on our future results of operations.

See Note 15 – Commitments and Contingencies, to the Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

~~ITEM 1A.~~

~~RISK FACTORS~~

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I - Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022,~~2023, which we filed with the SEC on June ~~10, 2022~~12, 2023 and in Part 1 - Item 2 under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~None~~

ITEM 5. OTHER INFORMATION

~~OTHER INFORMATION~~

~~None~~

None

ITEM 6. EXHIBITS

(a)

Exhibits

~~ITEM 6.~~

~~EXHIBITS~~

~~(a)~~

~~Exhibits~~

~~10.1~~	Voluntary Retirement and Consulting Agreement, dated as of August 2, 2022 and effective as of November 10, 2022, between Orion Energy Systems, Inc. and Michael W. Altschaefl, is hereby incorporated by reference.

~~10.2~~	~~Amended Executive Employment and Severance Agreement, effective as of November 10, 2022, by and between Orion Energy Systems, Inc. and Michael H. Jenkins, is hereby incorporated by reference.~~ 31.1

~~10.3~~	~~Consulting Agreement, dated as of August 2, 2022 and effective as of August 4, 2022, between Orion Energy Systems, Inc. and Alan Howe, is hereby incorporated by reference.~~

~~31.1~~	Certification of Chief Executive Officer of Orion Energy Systems, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.+

31.2	Certification of Chief Financial Officer of Orion Energy Systems, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.+

32.1	Certification of Chief Executive Officer of Orion Energy Systems, Inc. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+

32.2	Certification of Chief Financial Officer of Orion Energy Systems, Inc. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+

101.INS	Inline XBRL Instance Document+

101.SCH	Inline XBRL Taxonomy extension schema document+

101.CAL	Inline XBRL Taxonomy extension calculation linkbase document+

101.DEF	Inline XBRL Taxonomy extension definition linkbase document+

101.LAB	Inline XBRL Taxonomy extension label linkbase document+

101.PRE	Inline XBRL Taxonomy extension presentation linkbase document+

104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2022,~~2023, has been formatted in Inline XBRL.

+ Filed herewith

SIGNATURE

~~Filed herewith~~

*	~~Management contract or compensatory plan or arrangement~~

~~SIGNATURE~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on August ~~5, 2022.~~9, 2023.


ORION ENERGY SYSTEMS, INC.

By		/s/ J. Per Brodin
		J. Per Brodin
		Chief Financial Officer
		(Principal Financial Officer and Authorized Signatory)

	Cost		Excess and Obsolescence Reserve			Net
As of June 30, 2022
Raw materials and components	$	10,462	$	(799	)	$	9,663
Work in process		1,356		(178	)		1,178
Finished goods		8,506		(594	)		7,912
Total	$	20,324	$	(1,571	)	$	18,753

As of March 31, 2022
Raw materials and components	$	10,781	$	(1,140	)	$	9,641
Work in process		1,529		(267	)		1,262
Finished goods		9,593		(664	)		8,929
Total	$	21,903	$	(2,071	)	$	19,832

	June 30, 2022		March 31, 2022
Payroll tax credit	$	1,587	$	1,587
Other prepaid expenses		1,037		1,044
Total	$	2,624	$	2,631

Fiscal 2023 (period remaining)	$	155
Fiscal 2024		203
Fiscal 2025		193
Fiscal 2026		184
Fiscal 2027		163
Fiscal 2028		118
Thereafter		302
Total	$	1,318

	Revenues				Operating Income (Loss)
	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2022		2021		2022			2021
Segments:
Orion Services Group	$	9,035	$	21,988	$	(2,229	)	$	1,864
Orion Distribution Services		4,826		9,286		(51	)		2,122
Orion U.S. Markets		4,045		3,827		186			651
Corporate and Other		—		—		(1,523	)		(1,219	)
	$	17,906	$	35,101	$	(3,617	)	$	3,418