IPO FILING: Orion Energy Systems, Energy Efficient Lighting Backed By GE (GE, OESX)

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A lighting-efficiency company named Orion Energy Systems, Inc. has filed to come public via an IPO.  For filing purposes, it has a proposed $100 million stock offering and will trade under the ticker "OESX" on NASDAQ.  Orion lists Thomas Weisel Partners, Canaccord Adams, and Pacific Growth Equities as the underwriters.

Orion’s designs and manufactures energy management systems consisting primarily of high-performance, energy efficient lighting systems, controls and related services. It delivers energy savings and efficiency gains to commercial and industrial customers with the aim of the same quantity or quality of light. The core of its energy management system is its high intensity fluorescent, or HIF, lighting system with a goal to cut electricity costs by approximately 50% while increasing quantity of light by approximately 50%.  Orion said in the filing that it has sold and installed high-performance HIF lighting systems in over 1,800 facilities across North America, including at 73 Fortune 500 companies like General Electric, Kraft Foods, Newell Rubbermaid, OfficeMax, SYSCO, and Toyota Motor Corp.  So by description this isn’t a clean energy or alternative energy company, but it is more green or less brown so to speak.

Its annual revenue has increased nearly four-fold from $12.4 million in fiscal 2004 to $48.2 million in fiscal 2007; and in the last three months ended June 30, 2007, it recognized revenue of $16.7 million, compared to $9.7 million for the three months ended June 30, 2006. It also estimates that cumulative electricity cost savings for its customers of approximately $224 million and has reduced base and peak load electricity demand by approximately 243 megawatts, or MW, through June 30, 2007. It goes further to estimate that the reduced electricity consumption has reduced associated indirect carbon dioxide emissions by approximately 2.8 million tons over the same period.

If the company can capture more and more business from all the entities that have mandated energy savings in the coming years, it sounds like it is in the right spot.  It was a bit surprising to see GE (NYSE:GE) listed as a site customer, until seeing that GE’s GE Energy Financial Services, Inc. (GEEFS) indirect affiliate, GE Capital Equity Investments, Inc. owns 9.2% of the company.  According to the DOE, lighting accounts for 22% of electric power consumption in the United States, with commercial and industrial lighting accounting for 65% of that base amount. 

Jon C. Ogg
August 20, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.