Good day, ladies and gentlemen, and welcome to the Orion Energy’s First Quarter 2013 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would like to now introduce your host for today’s Mr. Scott Jensen. Mr. Jensen you may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today for the Orion Energy Systems first quarter fiscal 2013 conference call. First up, let me apologize. It’s our understanding that our earnings release has not hit the wire yet and we’re working frantically behind the scenes here to make sure that that happens as efficiently as possible. So I apologize. We’ll try to provide a little more clarity on our earnings release for the first quarter. And again, we apologize for the delay in the earnings release being available to you. Once again, my name is Scott Jensen, Chief Financial Officer of Orion Energy. With me on the call today is Neal Verfuerth, 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 posted to our website. This supplemental information document provides additional details and analysis on Orion’s financial performance for the first quarter of fiscal year 2013. I will now read the Safe Harbor statement. Our remarks that follow including answers to your 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. Now I’d like to turn the call over to Neal Verfuerth, Chief Executive Officer of Orion Energy Systems. Neal?

Thanks, Scott. As Scott had alluded to -- first of all, good afternoon everybody, thanks for taking the time to listen on our call today. As Scott had alluded to due to a technical snafu, our release has not hit the wire yet. So I’m just going to read what my statement was, it really sits quite nicely with this call. Given our recent release of the InteLite integrated system, which addresses the market for both LED and fluorescent full-range dimming technologies, the quarter we’re reporting is consistent with our expectations for our year-to-date progress. Our value proposition continues to be validated by customer adoption. Furthermore, the higher average selling price of this product presents numerous growth opportunities well into our future. So with that, I just want to talk a little bit about technology. I’ve been in the business now 30 years and I probably have seen more advances in technology in the last 18 months than and I have the previous 28.5 years. The technology on a general basis in lighting has really been evolutionary at best, since Thomas Edison first invented the first electric light source, incandescent light bulb. In 120 years, there hasn’t been really a whole lot of change again, mostly evolutionary with the incandescent bulb still being a cornerstone of the lighting solution for many commercial buildings and most of the residential customers in America today. Only recently, has the technology really become revolutionary with the introduction of the LED technology. I read recently -- it kind of really thought provoking that, with the LEDs, it’s only the fourth lighting technology in the history of mankind, starting back to fire, so it’s really quite profound. With that, there are challenges and opportunities. Starting with Don’t Be MisLED, which is a campaign that we actually…

Thank you, Neal. Consistent with our prior earnings announcements, we’ve provided a fair amount of content within the supplemental information document, which was posted to our website earlier this afternoon covering our first quarter 2013 performance. Accordingly, I will not be walking you down the P&L on a line-by-line basis, but I will address some of the key areas in the quarter. As a reminder, our first quarter is seasonally our weakest quarter within the given fiscal year. Contracted revenue for the first quarter was $23.9 million, which included $10.1 million for solar EPC contracts. Backlog as of the end of the June quarter was in excess of $50 million at $50.5 million, and we currently expect that $25.4 million of our backlog will be recognized as revenue during the remainder of fiscal 2013. Revenue for the first quarter was $15.3 million, which included $2.7 million from solar projects and $13.6 million from energy management systems sales. Our mix of wholesale business during the quarter excluding the solar revenues was 61.5%. Overall gross margin percentage in the quarter was 28.6%. Gross margin on our lighting business was 27.2% for the quarter, and was reduced due to the lower revenues from this segment and the impact of our fixed costs within our manufacturing facility. We expect that these margins will improve in the future on higher volumes. Our gross margin from solar projects for the first quarter was 34.8%, as we maintained the margin improvements that we’ve recognized on projects during the fiscal 2012 fourth quarter. Looking at our solar project backlog for orders that we expect to be completed during the remainder of fiscal 2013, we expect gross margins on these projects to be in the 28% to 30% range. Our operating expenses in the first quarter increased from our…

[Operator Instructions] Okay and our first question comes from Shawn Severson from JMP Securities.

Neal, I was wondering if you could give a little more color, on the type of push back -- I know we're still looking to the numbers but we know significant revenue short fall and I am just trying to understand the dynamics behind the customer decisions. Are these deferrals or is it harder to get in the door to pitch projects, or are these projects that were kind of in the pipeline that are being pushed up, just trying to understand the scope of it?

I think it’s some of each, but even more importantly, as we make this transition Shawn from the older technology to the new, and much of it starts as a discussion about LED, because everybody talking LED -- even at the consumer level as it relates to our large end users. Now it has -- we have to redo a proposal and get down to regenerating a proposal for the newer technology and to start over. We’re at this inflection point as it relates to our customer messaging. We don't want to have our customers say, "Hey Orion, why didn’t you at least talk about the new technology and you put me into this older fluorescent." So we’re actually going to this clunky transition time. We are saying, "Look, you have these alternatives right now. And we believe this is the best alternative based on what we know today about your facility, how you use your facility et cetera." So we’re revisiting a lot of customers that we’ve got proposals going through the gestation period and retooling them to show them this other alternative so that it doesn’t come back that Orion didn’t do right by them. And I think that along with a lot of customers right now are scrambling to get orders out the door in our core business. These all come into play. We don’t have a situation right now where people are saying "no" or that we’re not going to do this, or just put off in the sometime indefinite future. I think it’s really a matter of a lot of these factors all coming into play and retooling everything we’re doing here to get customers into this new technology. You keep in mind, a lot of these people haven’t changed a lighting system, but maybe once in their career. And now hearing all the buzz about the LED, so they’re saying, okay, so is now LED what we should be doing? Just what is the right solution? So, it’s something that never occurred before in my career that we had this major leap in technology that people had to think about. And that of course is factoring and some people like well okay, now should I be waiting for the next great thing.

In the transition to let’s say in LED proposal versus traditional HID for example, what’s the price difference, I mean are the project coming out of just given higher prices with different returns on them or what’s the color there?

The average selling price is considerably higher. It’s not uncommon to see 4x difference between the LED and the fluorescent. However, we have a lot of utility demand side management programs that are underwriting a lot of these costs, and we’re finding we can get aggressive with the controls and our ability to precisely control that light energy, especially in a warehouse application. It allows us to many times use less wattage and again application specific, and because we can pinpoint that light and many times we‘ve even eliminated a fixture -- 1 of the 10 fixtures or something. But it’s a matter as the business gets more complex, it just requires a different sales process and we have been very, very methodical about our entree into LEDs. We knew when that they came, that is going to put hiccup into what we’re doing today, because again everything I just mentioned. But at some point in time, we have to make the decision to go and we decided to go because of not just the market situation, but also where all of the vendors are lining up now. We’re comfortable with all the players that are in that space, availability of components et cetera. Now it’s the time to make this transition and there is really no easy way to ease into it. There is going to be this launching point and that’s what we’re experiencing right now. And having conversations with customers saying, look I just had a large customer in here who's been a good customer for many years. They’ve got 70 facilities, we’ve got 30 more to go and I'm like, guys you want to us do what technology, we have many choices today. We have everything for you.

Out of your book of proposals that you’re working on, how many do you think you’ve already gone back to and shown them a new look with LED versus fluorescent. So just trying to understand how much of the pipeline has been addressed, talked to and given another proposal?

I don’t have the exact stats on that right now. I would say a small percentage. What’s interesting is despite all the hype in the LED industry -- or the lighting industry about LED and if you were at the light fair, you'd stumble over LED suppliers and et cetera. I’m amazed really how difficult it is to still get any as high as quantity component, because it still in this stage where things are kind of settling out. So just to go and call and get the 2,000 power supplies -- high-wattages is not that easily done. So, we’ve been making the investments. We are actually putting in the service as a clean room here at Orion for assembly with all anti-static controls -- everything you need to do to make sure you’re handing the semiconductors in a proper way, and we’re putting all these pieces together and now we’re just starting to do some what we call a technology demonstration -- showing customers -- whether they’re comparing us to competitors, to early Orion fixture or whatever -- what all the attributes are, so it’s taken time to get all these things up to speed.

Okay. And then just lastly kind of a qualitative question, going back to deferrals, and push outs related to the economic conditions, certainly IFN has come down, and general concerns versus the technology transition, I mean in the kind of 50-50 situation or is it heavily biased towards the technology versus the economy in terms of the delays?

What I can give you the best guess at this point. I would say 50-50, I think people are realizing that the economy has been top-of-mind for so long and of course, that’s something that has to be dealt with, but the reality of it is the order flow -- I’m talking to lot of customers, they can’t keep up with their order volume. And we’re seeing in our ends, you can’t get a lot of components we’ve talked about this on other calls and we’re seeing that across a lot of industries. There the situation is bandwidth and again, that competition for capital. So there’s a lot of different things coming to play and I’d love to tell you that there’s one site that’s not situation, but that’s just not the case.

Our next question comes from Philip Shen with Roth Capital.

This is Matt for Phil. Just a couple of questions for you. So we’ve heard about some of the capital budget constraints with your customers and actually seeing a negative dip in commercial and industrial electricity prices over the past few months. Can you guys talk about where you see some strength in end markets with customers? Which customers are giving you the most traction?

I think probably the distribution centers whether it’s food, service or it could be really anything in distribution, given the fact that they don’t make anything. They rely on continuous cost reduction from operations to help their bottom line. At the end of the day, no matter what your businesses is, there are really 2 things you can focus on, it’s increasing revenue and reducing costs -- at the highest level to improve your businesses’ operating performance. And the distribution guys, they have to make their business, because they don’t make a product to continue to drill down on our operating cost. So we’ve got customers that we’ve taken out 2-year-old Orion product, moved them into another facility and then put in LED’s because we can construct additional savings, operating savings on per-square-foot basis.

Okay great. You guys have also highlighted some of the substantial investments in your call center and build out the sales force, can you give us a sense for -- I know you give us the year-over-year but can you just break out the appointments from June and July, is that’s possible.

Just a second Matt. And is your question year-over-year?

No, just the raw volume is that possible.

Likely I’d venture to say that July, because of vacations, is usually a little lighter. A lot of people, especially in the industrial operations, there is a lot companies that still have a shut-down around on the July 4, so that’s always historically a more challenging time get people on the phone and of course you can't get them to make the commitment to the appointment if you can't get them on the phone. Part of the strategy that didn't come through is really increase the sheer number of proposals in the pipeline and the appointments et ceteras. So that is the ultimate hedge to making sure you going to get more of the back end.

Okay, and then a follow-up on that, so do you guys provide a break out between the appointments made for in-house versus your value added resellers.

We -- I'll give you an approximation. We believe more recently it's about 30% direct and about 70% of our lease to our wholesale channels.

Okay. And then you did -- you guys shared the metrics on closing ratios, and I was just wondering -- are the closing ratios on proposals made or they on appointments, or what’s the percentage on that?

Well, think about this way -- we do a proposal, and we do the technology demonstration -- the average period from the initial visit until we’re seeing it is over 400 days. So you have to fill the pipeline, the deal has to resonate for something 400 days or greater, I think, I’ve been heard a one that was -- I remember talking to this customer literally 5 years ago when we were started to get some traction. Now, they never said no, they didn’t do anything, they’ve been just contemplating -- but after that, then whatever -- 1/3 of that comes out of that is what we’re seeing from a closing ratio, so it’s really gross pipeline, gestation, and then whatever that subset is, about a third of that we get the close. But the thing of it is we don’t get I’ll bet you less than 5%, we get no’s. It's we lose the deal to a -- we certainly lose deals -- but more often or not, with the competition people aren't doing anything, they're just deferring the decision.

I’m showing no further questions. I’d like to now turn the conference back over to Scott Jensen for closing remarks.

Thank you, operator. Thank you everyone for joining us we look forward to joining you again later this year for our fiscal 2013 second quarter earnings call. Good day.

Ladies and gentlemen, this now concludes your conference. You may disconnect.