Good day, ladies and gentlemen, and welcome to Orion Energy’s Second Quarter Fiscal 2014 Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions following at that time. (Operator Instructions). As a reminder this conference is being recorded. Now I’ll turn the conference over to your host Chief Financial Officer, Scott Jensen. Please begin.

Thank you and welcome to Orion Energy's fiscal second quarter conference call. With me today is John Scribante, our Chief Executive Officer. As a reminder, the earnings press release issued today once again includes a section that briefly discusses the supplemental information document that was posted to the company’s website. This supplemental information document provides additional details and analyses on Orion’s financial performance for the fiscal second quarter ended September 30, 2013. I will now read the Safe Harbor statement. Remarks that follow, including answers to questions, include statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified as such because the context of such statements will include words, such as believe, anticipate, expect or words of similar import. Similarly, statements that describe future plans, objectives, or goals are also forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include among others, matters that we have described in our press release issued this afternoon and in our filings with the Securities and Exchange Commission. Except as described in these filings, we disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all. I’d now like to turn the call over to John Scribante, Chief Executive Officer of Orion Energy Systems. Please go ahead, John.

Thanks for that, Scott. Good afternoon everybody and thank you for joining us on this call today. Last quarter we began for the first time in many years providing financial guidance for our investors and today I’m very pleased to say that Orion’s results came within the range for earnings expectations and above those expectations for revenue. Our revenue rose 42% year-over-year to $27.5 million, which was also up 32% sequentially versus the first quarter of fiscal ’14. At the same time, we posted earnings excluding some one-time tax benefits and special charges of $0.03 per share and generated $7.6 million in cash from operations as we continued to focus on our inventory management, our cash collection, and improved asset utilization. The company remains dedicated to increasing shareholder value by driving both topline growth and earnings expansion as well as increased and sustainable return on invested capital. Our revenue growth this quarter reflected substantial progress with Orion’s large solar project at the Brick Township landfill in New Jersey as renewable energy sales rose to $9.1 million, compared to $2.8 million a year ago. Our energy efficiency or core lighting business grew to $18.4 million from $16.7 million last year, reflecting the contributions from Harris for the quarter as Scott will review in a moment. While we’re clearly pleased with the company’s overall growth year over year, the core lighting part of our business declined on an organic basis, primarily due to order timing and the fact that we were working on some rather large national contracts with Coca-Cola and others at this time last year. We discussed the lumpiness of our orders in the past and we do not anticipate this current softness as being any sort of a trend. In fact, we recently won some very attractive business as…

Thank you, John and good day everyone. After the market close today, we reported results for the second quarter of fiscal 2014. Consistent with prior earnings announcements, we’ve provided additional content within the supplemental information document which was posted to our website earlier this afternoon covering our fiscal second quarter and year-to-date performance. Accordingly, I will not walk down the P&L on a line-by-line basis, but I do want to address some of the key areas. We continued to make significant progress in our performance as reflected in our results for the fiscal 2014 second quarter. As John mentioned, we delivered revenue growth, profits and strong cash flow from operations. Revenue of $27.5 million exceeded our prior year second quarter by 42% and included $9.1 million or approximately 33% of total revenue for solar projects within our engineered systems segment. Revenue from our recently acquired Harris business contributed $4.2 million during the second quarter. As John mentioned, our core lighting channel revenues were down year over year, attributable to several sizeable national account projects that were not anniversaried. As we discussed last quarter, our gross margins continued to be negatively impacted by the higher mix of solar revenue at lower than average company margins. We continue to mark progress through the construction of the $20 million solar landfill project which we expect to be substantially complete by our fiscal 2014 fourth quarter. Our solar project gross margins were 21.2% this past quarter and we expect our solar margins to be in the low 20% for the remainder of fiscal 2014. Our lighting efficiency gross margins for the quarter were 32.1%, an improvement over the prior year’s comparable margin of30.4%. Even more encouraging was the fact that manufactured gross margins that are managed to work operations were 33.1% for the quarter…

Thanks Scott. Before opening the call for questions, just let me just say that we’re very pleased with the rapid pace of transformation Orion has gone through these past few quarters. Not only are we now profitable, a growing technology leader in the energy space, but we have purchased and nearly completed the integration of the company that will help propel us forward into the LED markets across many new channels. Our cash flow is strong and the demand for our installations is clearly growing as evidenced by some of the large multinational contracts that we’ve recently won. As noted this quarter, we continued to see some lumpiness in orders which will need to be overcome through more focused topline expansion and sound execution of our operating strategy. We’re dedicated to improving manufacturing efficiencies as rapidly as possible and increase the capacity utilization at our operations. This will in turn increase margins. As well the shift over time to a greater proportion of our revenue coming from the lighting industry versus the solar market, which is typified by long lead times and less attractive margins. While we’ll continue to service this area, we believe that the sound strategy for us really lies in leveraging our sales and engineering talent to expand our presence in lighting, particularly in the LED arena. We believe that Orion is on the right path to more predictable earnings, improved margins and sustained growth. Our customer focus is second to none and we’ll continue to invest in new technologies, product line expansion and business development to propel this company forward and meet the increasing demand which we see in the years to come. We believe the company is very well positioned in the markets that we serve and we’re pursuing the channels customers and economies of scale that will deliver real shareholder value in the future. With that operator, we will now open it up for questions. Thank you.

(Operator Instructions). Our first question is from Steve Shaw from Sidoti & Company. Your line is open. Steve Shaw – Sidoti & Company: Was all the solar growth related to the large project and was there anything else in there?

Predominantly the majority of it was the large projects, Steve. We’ve got a few other projects in process right now that are predominantly service driven smaller projects where we’re providing engineering design, construction management activities. But the landfill project was the predominant amount of that $9.1 million Steve Shaw – Sidoti & Company: And then apologies if you guys talked about this. I may have missed this. The cost initiatives that you guys have instituted as of late, is there a dollar number that you guys could put up for the quarter that you saved?

Yeah. I talked a little bit about that net operating expense change which was $800,000. The cost containment initiatives are a little larger than that because we have been increasing our sales force. So the sales force adds have net backed down, but within the operating expenses year-over-year it’s about $800,000. That’s consistent with the approximate net $3 million that we had talked about on an annualized basis in the past for our cost containment and cost reduction initiatives. Steve Shaw – Sidoti & Company: How many sales have you had this quarter?

Sales before that? That – what do we have, three, four?

One per quarter and then with the Harris acquisition four on top of that. So seven in the quarter.

One for mark plus four, seven in the quarter.

Next question is from Carter Driscoll of Ascendiant Capital. Your line is open.

I was hoping you could talk about the way you view your solar initiatives. Obviously you want to focus on your core lighting operations, but it sounds as though not only is this going to be a business potentially under … with the worst margins split in your core business, the one which you offer some assurances that you have goo expertise that might not be core to your business. Wondering about what’s the potential for winding down either investment on that side what happens in terms of resources committed to that business now? Just bring out if you were to hypothetically decide to exit that business, what it would entail.

Great question, Carter. The business was formed really by accumulating a series of existing people in our business that had a lot of experience in just general construction, general installation and as we ramped up solar, we utilized many of the people that have been with our company for eight or 10 years. Scaling it back is really a matter of redeploying those resources essentially the same business. It’s construction. It’s working with the utilities, working with incentives, the engineering. All that is very relevant on the lighting side, on the retrofit side of our business. So we’ve already been scaling that back and deploying and sharing those resources with other parts of our business. The market – the distributed generation solar market is not a favorable market for us as it once was. A lot of that market demand shifted into residential and utility and with the incentives dropping as they have in say the northeast where we did spend a lot of our time, it has truly put pressure on our margins and we decided that we will be very selective in those opportunities. And as our core customers, our national account customers have opportunities and it’s good business for us we will pursue that. But it is a nice business to have where we can really allocate resources back and forth from the lighting construction to the solar construction.

We have very little capital assets tied to that business. So if we do decide to continue to redeploy where the opportunities present themselves, we don’t have any charges that we would take to exit the business.

That was going to be my next question. Thank you for that additional color. Could you talk maybe about, one of the underlying opportunities from buying Harris was the government segment. Can you talk about -- potentially the shutdown could have verberations beyond the limited timeframe that did exist and potentially we have a very divided government and you could have another shutdown in the first quarter of next year. And how that’s playing out in terms of the renaissance potentially in that segment to engage.

It clearly locked us out during the first couple of weeks there. We’ve really had a difficult time getting back in, getting back on those bases. So it will have an impact, although we did take that into consideration when we provided our earnings guidance for the quarter. So we expect to get back in there. You’re right though. It’s a risk being in that segment.

(Operator Instructions). Next question is from George Gasper, a Private Investor. Your line is open.

Actually I’m impressed with your operations through the quarter and the outlook. I’d like to talk a little bit about that outlook. What I’m impressed about and if you could highlight this, your backlog is down and probably because of your solar pasture. Your sales estimate is pretty impressive relative even to the last quarter. There’s got to be a shift in mix obviously, but I would consider this to be a very positive outlook considering the decline in backlog. Where do you see this all coming from in the quarter?

Very good questions, George and you’re right. Our decline in backlog is predominantly driven by the solar side of our business. So as we’ve been working through that large contract that’s’ been the reason for the decrease. We’re encouraged so on the lighting side obviously the Harris acquisition is accretive year-over-year from that perspective. We’re encouraged by what we’re seeing right now. John talked about that national account contract that we’ve signed. We’re very encouraged by early indication on several fronts with the LDR product. We’re looking at very strong incentive markets right now within states. There’s dollars that are being allocated so we’re encouraged by that. Then just general macro – the purchasing manager’s index has been up. That’s generally been an indicator for us of spending dollars. That’s what we’re seeing as we head into the back half.

And then a question on the transfer of the manufacturing equipment out of Harris. I know when walking the floor at your annual meeting time, the network. You obviously have a room to put this equipment in, but what do you see -- can you focus in on what your capacity revenue wise may be and network once you’ve concluded this transition relative to where you are now?

That’s a great question. So we’ve always looked at the equipment and the infrastructure to be able to support on an annual basis approximately $250 million of manufactured revenue. We’ve operated at less than 20% of that capacity. So the ability to be able to bring some of Harris’s equipment in and through all the initiatives that I mentioned during the call, our lean initiatives, to be able to do so without adding any headcount. So we’re looking at really maintaining the existing headcount in Manitowoc to the best of our ability, but being able to bring in their lighting revenues and really drive additional gross margin and leveraging the capacity that we have available to us.

And then if I could ask just one additional or just a comment. There is the latest Kiplinger Letter just out this week is highlighting very bullish comments on the LED business and talking specifically about the outfitting of big warehouses to save upwards of $100,000 a year, indicating 75% energy savings despite the higher LED cost. This is pretty positive commentary. Do you have any thoughts to highlight what they’re saying in here?

Yeah, absolutely. That’s the big idea here. That’s the business that’s really going to be the most meaningful for Orion going forward. We have a major, major shift in the marketplace that is making LED a much more viable alternative than even the linear fluorescent in a lot of markets. So we’re up with our linear fluorescent and at the same time building out LED. We are seeing that shift as you had indicated to occur not only in the warehousing space, but now in the office space, retail space. You really you’re seeing it in gas station canopies. You’re seeing it in streetlights. The city of New York just announced every streetlight in New York or every – yes, streetlight in New York City, not the traffic lights, but the overhead lights are moving to LED. The market opportunity just retrofit alone is $5, $6, $7 billion just in the U.S market. So that’s the big idea. That’s the strategy. That’s where we’re pursuing it. But we’re doing it not as a single play LED basis. We’re doing it to continue running our linear fluorescent which in a lot of markets hasn’t reached that tipping point. So it is a transformation and it’s going to occur over the next several years. We’re gearing up and preparing for that and certainly we have the capacity in our plant at least for the next several years.

There are no further questions at this time. I’d like to turn the call over to Mr. Scribante for any closing remarks.

Great. Thank you. It’s been a pleasure to be here and I appreciate you taking the time. We look forward to another great quarter and we’ll see you again shortly. So thank you again and appreciate your questions.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.