Good day, ladies and gentlemen, and welcome to Orion Energy’s Second Quarter Fiscal 2015 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) And as a reminder, this conference is being recorded. I would like to introduce your host for today’s conference, Mr. Adam Prior of The Equity Group. Sir, you may begin.

Thank you. The company issued the announcement of Orion’s fiscal 2015 second quarter and first half results this afternoon. The company has made available supplemental information document and accompanying slide presentation on its website at www.oesx.com in the Investor Relations section. 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 of the context of such statements will include words, such as believe, anticipate, expects 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. With us from Orion is John Scribante, Orion’s Chief Executive Officer; and Scott Jensen, Chief Financial Officer. With that, I’ll turn the call over to John. Please go ahead, John.

Thank you, and good afternoon, everybody. Let me first start by saying that we had a strong order bookings quarter and we are well positioned to achieve our year-end revenue in line with our guidance. While our bookings are strong and now ahead of the first half of our prior year’s booking space, much of the revenue will land in our third quarter due to our customers construction schedules. So we are confident that we will achieve our plan for this year. During the last quarter, we increased our reseller network to cover more territory than ever, reaching over 70 ESCO resellers, and given only a few months left in the year for capital budgets, order velocity is increasing. While some are still debating their technology choices, the LED debate is mostly resolved, and component costs are beginning to level off. All of this lends itself to a brighter future for Orion. Next, let me provide an explanation of the long-term inventory impairment charge that we reported during the quarter and also provide some clarity around our gross margins and the initiatives underway to improve our LED product margins. For the quarter, we reported a non-cash impairment charge of $12.1 million, related to our long-term inventory, capitalized development costs and patent investment into our wireless controls product offering. This inventory was purchased over seven years ago, and was initially developed for use with high bay florescent fixtures. While we had some success during our fiscal ‘14 year in increasing our control sales, unit volumes declined significantly during the quarter, coupled with continuing acceleration of LED market adoption, the improved performance of LED lighting products and greater energy savings resulting from these retrofits, we believe that this leaves complex industrial controls as a difficult incremental sale. We will continue to support…

Thank you, John. I’ll briefly discuss financials, but I encourage everyone to review our supplemental package and press release. Orion’s total revenue was $13.4 million for the fiscal 2015 second quarter, compared to $27.5 million in the prior year period. The predominant reason for lower revenues was the result of the expected decline in our non-core solar business of $8.9 million. As noted in the past, we are no longer focused on the solar business, and we expect to generate approximately $1.5 million of solar revenue in fiscal 2015. The remainder of the decline was due to construction-related delays in the lighting business that John alluded to earlier. However, we have been encouraged by a growing backlog and a growing pipeline of new product orders. As of September 30, the company had the largest lighting backlog in the company’s history, with $11.8 million in LED and HIF lighting orders. Product revenue from Orion’s LED products increased to $5.2 million or 39.2% of total lighting product revenues during the fiscal 2015 second quarter, compared to $1 million or 5.4% of total lighting product revenues in the prior year period. Due to recent product releases and reseller interest, we believe LED product sales will continue to grow and reach between 50% to 70% of our total product revenues during the second half of our fiscal year 2015. Company narrowed its expectations of total revenues for fiscal 2015 to range between $80 million and $88 million, adjusted from an initial range of $80 million to $105 million. At the beginning of the year, we’ve provided a wide range, and now have greater visibility as our sales ramp and thus are tightening the range, and we are confident that our current backlog, reseller growth and sales pipeline supports our current guidance. As John noted…

Thank you. Let me conclude by reviewing the strategies we are executing in order to take full advantage of this market potential. First, our products. Orion has and will continue to set the standards for the leading products in the market. In the past it was fluorescent, now it is LED. We offer and develop top of the line products in terms of efficiency, performance, modularity and fixture life, and we’ll continue to do so. We know that the bar is constantly raised by competitors, and the best way to compete is to raise the bar ourselves. Our new ISON LED exterior Area Light is a perfect example. The design and modularity of this product is ground breaking to the market, and at the same time, it delivers the lowest total cost of ownership. In having both of our competitively priced, Apollo product line as well as our ISON class high-performance products, it provides a solution for both ends of the market. Next, we will further expand our reseller network until we have captured all of the opportunity while still providing our resellers with ample room to grow. During the first half of this fiscal year, we added 40 new resellers to our network, and they are building a pipeline of sales opportunities. We understand these companies. We understand how they operate, how they sell, how they install, and most importantly, how they need to be treated. Our commitment to deliver the best customer experience in the industry is paramount, and that is why we offer products with the fastest install times, the fastest shipping in the industry. That is why we package our products in easy to handle and on-the-job site packaging. We offer design, engineering and customer support that best suits these companies and helps them to become…

(Operator Instructions) Our first question comes from the line of Steve Dyer of Craig-Hallum. Your line is open. Steve Dyer – Craig-Hallum Capital: Hi.

Hello Steve.

Hi Steve. Steve Dyer – Craig-Hallum Capital: As you look at revenue, kind of the cadence of the last two quarters of the fiscal year, obviously it sounds like Q3 will be larger than Q4. Do you think Q3 – would you expect that’s going to be up year-over-year, I know you had some solar last year as well, but just trying to kind of think about modeling the last two quarters appropriately?

Yes, we do expect our lighting revenue now to increase on the lighting side year-over-year, and you’ll start to see Q3 in the solar revenue is going to taper off and start to decline as well in the prior year. Steve Dyer – Craig-Hallum Capital: Okay. And as I look at your gross margin guidance for the year, it implies even kind of in the back half of the year here, low 20s. Why wouldn’t that be a little bit higher than that, if you’re kind of picking up a lot of the overhead absorption and so forth? Is it component costs still or why wouldn’t that be a bit better, particularly in Q3?

It is component costs, Steve, as we work through some of the inventory that we already have. It is specific to a product line on the LED side. We also are evaluating the new products that were just launched in early October. We know that those have higher-than-normal company margins. And so we’re evaluating the order flow and trying to be conservative around that, in terms of contribution from new products. Steve Dyer – Craig-Hallum Capital: And then the 30% next fiscal year. What is that based on? Is that based on assuming nicely higher revenue from lighting or lower component costs, or both?

It’s both. It’s a function of increasing revenue as our pipeline grows, as we add resellers, as our new products gain traction in the marketplace. And then it’s focused on cost-containment initiatives efficiencies, as we have really converted the plant over from a fluorescent production facility to an LED production facility, and we get better and we get longer runs around product orders, and just leveraging that price power too on the LED component side. Steve Dyer – Craig-Hallum Capital: Okay. As you take a step back, it seems certainly that the industry is very much in its infancy at least at this point, and a lot of the retrofit guys have the luxury of kind of waiting and seeing. When do you sort of think this – when do you think it kind of hits its inflection point? Obviously big penetration is expected by 2020, but is ‘16 the real breakout year, or how do you think about that?

Steve, I would agree with that. And I think it’s even sooner than that. We’re seeing tides turn right now in our booking space, the order flow. Unfortunately some of the revenue gets shelved into backlog from last quarter just due to construction schedules. Those revenues could have showed up, if it wasn’t for just some issues at the job site with getting access in being available. So that gives us a lot of confidence. Our forecasts for the quarters are very strong. We see orders that were people were sitting on their hands and making evaluations now start to release those orders. So we feel very confident about the back half of our year and going into next year. As I had indicated, our month of September, we had 50% of our revenues were LED. That was well ahead of our expectation. You may recall I’ve said in the past that I talk by the end of our fiscal year we’d be at 50%. And as a result, it really outpaced our supply chain. And while we were working towards certain component availability at the cost that we needed, it just – the orders we had onslaught of orders in one product line, it really put the squeeze on us. And that will fix itself. That’s a very correctable issue that, as a matter of fact, we’re ahead of right now, and as I alluded to, you’ll start to see that margin improvement on that product line occur. And to Scott’s point, we have launched a new product set which we expect to really return margins to where they belong in this company. So the inflection point, I wish I could predict everything, but my sense is that it is upon us, and we’ll be ready for it here in the next several months, in the next couple of months. Steve Dyer – Craig-Hallum Capital: Okay. And then last question for me and I’ll hop back in the queue. Operating expenses jumped a bit in the quarter. Is this a run rate, or was there anything sort of one-time in nature that would suggest those will fall back?

Yes, so we had fair number of costs relates to the product launches, research development, certification, testing costs. We’ve had the re-branding initiative as well, and we’re continuing to expand the reseller and territory manager base within U.S. markets. Steve Dyer – Craig-Hallum Capital: So it sounds like some of those will come out but…

Some of those will not recur, right. Steve Dyer – Craig-Hallum Capital: Okay. Thank you.

Thank you.

Thank you. Our next question comes from the line of George Gaspar, Private Investor. Sir, your line is open. George Gaspar [ph] – Private Investor: Yes, good afternoon.

Hi George. George Gaspar [ph] – Private Investor: Good afternoon everyone. Could you relate on this impairment charge that you took? How usable is that inventory at this point going forward, and is it a total write-off, or is that still usable, that can be utilized in say the next six months to a year?

Yes, so we’ve impaired a significant portion of that inventory, and really took it down to a marketable value. The challenge that we’ve had George is with LED component costs coming down with the efficiencies improving, the energy savings is so significant that the incremental investment for a customer based around our cost structure of the development of those controls, we couldn’t sell them. So it’s a viable technology in the marketplace. It’s unique to the industrial space right now, and that’s been a lagging market when you think about LED adoption. We’ve seen faster adoption in the commercial office and retail space. And so we can take it to market, but it was inappropriately valued and it needed to be adjusted. George Gaspar [ph] – Private Investor: Okay, good. And is there – can you relate what you still have as far as inventory, and that particular line that has [indiscernible].

Sure. Yes, we kept of the original $12.1 million impairment we left $0.5 million of value. We believe that we can move through that in the next 12 months. George Gaspar [ph] – Private Investor: I see.

With it appropriately priced. George Gaspar [ph] – Private Investor: Okay, all right. And then a question on the new exterior product line applications. Can you highlight the most promising near-term, where the reaction is coming on the positive side for you looking out, what those specific applications are?

Sure. So we launched two product lines. We launched what I’ll call a moderately priced or a broad-based priced product, meaning that, it could be priced to be very, very competitive. And it’s really designed for the industrial park, the water treatment plants, the industrial facilities were the elegance of the fixture is not necessary and it’s more about performance and price. So that, as I alluded to in my comments, the Apollo line is designed for that buyer who is looking for the low-end cost to get a project done with still the warrantees and performance that Orion has stood for in the past. The ISON product, which is utilizing proprietary optics and our thermal management, as well as that modular – if you saw our slide deck that we posted today, and also the products that we launched on our web, the modular capability of that, this is really designed for your auto dealership, the customer parking lot and the business park, all the area parking. And that’s a product line that we intend to further expand into more applications as well, more outside area of parking applications, but that’s a very high efficient products. It is a little more priced – little more premium on the price, but for the total cost of ownership buyer who is looking for the best value and having the greatest performance over time is going to live with this product. This is one that we offer extended warrantees up to 10 years on, and it’s because of our confidence in the thermal technologies. So that’s an exciting product for us. It was a whole [Technical Difficulty] because not having that product line. And so we expect that to be an incremental contributor to our businesses going forward. George Gaspar [ph] – Private Investor: Okay, all right. And then a question on the revenue forecast that you have now, the $80 million to $88 million. If I just take the $80 million range number and subtract out the revenue stream from the first half, this suggests that effectively second half revenue would be in the $53 million-plus range or basically 100% increase over the first half?

Correct. George Gaspar [ph] – Private Investor: And that’s basically the way you’re looking at it then?

Well, historically if you looked at the trends, the seasonal trends in our business, that line is up pretty close to what we’ve done over the last several years. In addition, you got to factor in that $12 million backlog that we have contributing to the quarters going forward. We’re still very confident of being able to achieve that target range that we gave. George Gaspar [ph] – Private Investor: Okay. And then one question here on stock-based compensation. There is a slight increase in the six months versus the previous share, 785,000 versus 676,000. Where is that increase compensation on stock base going within this organization?

George, is the question trend, or the question the increase year-over-year? George Gaspar [ph] – Private Investor: I am looking at the year-over-year increase.

Yes, okay. So the increase is really driven around as we look at long-term incentive and properly valuing those awards at the date they are granted. We’ve had a significant increase in the stock price year-over-year. And so that gets valued at current market. So any award that was granted earlier this year is going to carry a higher stock compensation expense versus the prior year. George Gaspar [ph] – Private Investor: I see, okay. All right, thank you.

Thank you, George.

Thank you. Our next question comes from the line of Craig Irwin of ROTH Capital Partners. Sir your line is open. Craig Irwin – ROTH Capital Partners: Good evening, and thank you for taking my questions. So John, when I look at the success in LED lighting market, the fact that you’ve been able to double revenues sequentially increase it five-folds year-over-year, obviously there is no issue with stickiness on the customer side there. You look at the conventional lighting guys, many of them report challenges pushing this business at anything closer to the growth rates you’ve been achieving. Can you maybe talk about whether or not this is a product that’s driving this more than anything, or do you see this is a channel [ph], the way that you approach the channel differently than these competitors? And as another question there, if there is an opportunity to add additional products in there, or if potential acquisition might benefit in this really high rate of growth?

Sure. If I don’t answer your question, keep poking at me, because there is a lot going into this. I think historically we’ve been such a sales-driven company, and a company that when we see this opportunity while it’s still a transition, and there is no doubt, we had a rough quarter in just getting through the quarter, getting through all the changes having an onslaught of LED orders with a product that is just a showstopper in the marketplace, the LDR. All of these things – they’re great problems to have, but they do create some backend waves in the organization when you’re moving a lot of product to a manufacturing facility was tooled out for fluorescent and now your rapidly changing them. So we have a lot of struggle going through, but the ability to bring new product to market and to drop that product into a sales channel that is expanding, is growing. And our strategy is very, very different than many of our competitors. It’s a strategy that does not rely on traditional methods of go-to-market, it’s a strategy that is very forward and aggressive and disruptive. And we believe it’s the right strategy. And having a product development focus today. We spent the last year and a half really turning the organization around, and now we’re a very sales-driven, very product-driven, people-driven company, that it just – it became very natural for us, and it really took us back into the days where we had our rapid growth in the HIF business, where we approached the channel very differently than all of the traditional lighting companies, and we took a product to market that was very unique. And all of the same tendencies and same strategies work very, very well for us in LED. Our…

Well, yes, I’ll give Neal credit for that. The legacy of this business going direct, it was very disruptive. And it clearly gave us the scar tissue and gave us the ability and the seasonality of our sales people to go after an LED market, which is very, very disruptive. And what I mean by that is you have entrants into the marketplace today that can’t get access to the existing channels because they are new players. They struggle with that. Our market strategy is straight and true and the good news is there is a lot of people in this company that truly know how to go after that business in the same fashion, which is well established in our business, to go win that business. So we continue to support that. We’re not entirely opposed to these other things, but we’re not reliant on them. So you may see some of our product moving through those channels but they become more opportunistic or driven specifically by a customer need. Craig Irwin – ROTH Capital Partners: Great. And then last question, if I may. So I don’t subscribe to this service, but I know there is a company based in Princeton that offers a very thorough analysis of all the budgets for lighting subsidies across the North American market. And I understand they were reporting that a high percentage of those subsidy programs were depleted starting this fall, something north of 50% were starting to see limited funds or no funds available. Does that impact your quarter in anyway? Is this something that you monitor closely, and is this something that contributes to the bit of the hockey stick that we’re seeing in your revenue forecasts this year?

I’m pretty – well, couple of comments. One is, that isn’t anything new. Year-over-year they are always running out of money and they are always reloading and it’s very – some more established incentive programs they’ve got it budgeted and figured out and some of the newer markets that have newer incentives, they’ll burn through them and they don’t manage them to the extent that they can stand with the demand. So they will come and go throughout. And one of the advantages of our reseller network is where one incentive drops off, another one pops up somewhere else. So it’s really easy to remobilize and redeploy sales into other markets. In terms of, did it impact our business? I’m not aware of any material impact that a lack of an incentive played in our quarter. Craig Irwin – ROTH Capital Partners: Great. Thanks again for taking my questions.

Thanks Craig.

You bet. Thanks for your questions.

Thank you. We have a follow-up question from the line of George Gaspar [ph], Private Investor. Sir, your line is open. George Gaspar [ph] – Private Investor: Yes, thanks you. I’d like to ask you for some additional on the mix of your competitors moving from the fluorescent – the efficiency of florescent area. How did that competition look? And as you transitionalize now over into this LED area, what changes are you experiencing in terms of the competitive atmosphere and the number of companies that are in the various fields? And then also, could you highlight on this exterior lighting fixture, if that’s – is the resellers are key on that side of the market as opposed to let’s say those straight LED side of the market you’ve been on?

I think what the competitors are doing in the marketplace right now is, to some degree to the prior question, there is a lot of people out there struggling. And so you’re navigating around people that are moving product on price basis. You take the strength that Orion has traditionally brought and continues to bring, even currently and will always bring, and that is a value proposition, a story to be told. So while market price will always have a drag on the market, highly trained sales people and highly trained resellers and people with relationships and the abilities to serve their customers have the opportunity to win a majority share of that business. So there is always going to be a price drag, but we believe that by providing both ends of the market with the solution, those that are looking for a total cost of ownership solution, we will always outpace the competitors. And those that are competing on cost, we have some products that can do that as well. So really depends on what you value as a customer. In terms of our resellers, the mix. We are experiencing some of our more – I guess our longer term resellers making the transition from an industrial sale to a commercial sale. There are some struggles there. And if you’re not used to calling on the property management and the asset managers of a real-estate trust or a privatively owned real-estate company, it’s different than calling on facility managers of the industrial park. So it’s just training and education and we continue to have our regular training sessions and outreach. And the more territory managers that we put out in the field to work with our resale customer, that is showing progress. So again we believe that in-market sales strategy to support our resellers is the right strategy. George Gaspar [ph] – Private Investor: Okay. And just one follow-on John on this. This reseller market with the significant number of additions of resellers that you added here, that you’ve described in your release. Then basically these resellers are concentrating on the LED side of the market?

I would say as a general statement, yes. There is – I think almost all of our resellers quite frankly are focusing on the LED business and will pick-up the florescent if it’s the right move, but if you’re not representing LED as your primary solution in today’s market, certainly giving customers options and doing the right financial evaluation to serve their particular objectives is certainly important, but that’s the game today. That I think in large regard has been resolved, LED is the future and we’ll continue to support that. George Gaspar [ph] – Private Investor: Okay. Thank you, and good luck going forward here in the next couple of quarters. If you meet your targets, it will be an impressive turnaround to say the least.

I appreciate your confidence, George.

Thank you, George.

Thank you. At this time, I’m showing no further questions. I would like to turn the call back over to John Scribante for closing remarks.

All right. Well, thank you. It’s been, as I had indicated, it was a tough quarter to get through, but the good news is we’re through it and we’ve got great opportunity ahead of us. Next couple of quarters are going to be very, very busy for us. We appreciate your support and we look forward to talking to you soon. Thank you and have a great day.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may all disconnect. Everyone have a great day.