Orion Energy : Results of Operations and Financial Condition (Form 8-K)

Results of Operations and Financial Condition

As previously publicly reported, during the fourth quarter of fiscal 2021, Orion Energy Systems, Inc. (the 'Company') reversed $20.9 million of deferred tax valuation allowance based on an updated evaluation on the realizability of those tax assets. Given the Company's reversal of its valuation allowance, the Company announced that it expects to record future tax provisions that approximate statutory rates in effect each subsequent period. The Company also announced that it expected to be able to utilize its net operating loss carryforwards to offset its future cash income tax liabilities for the foreseeable future (to the extent allowable by income tax regulations). Upon the completion of an analysis of its expected pre-tax income during fiscal 2022, the Company currently estimates that it will likely apply an effective tax rate of approximately 26-27% on its pre-tax book income. This estimate is subject to revision based on changes in income tax regulations and expected earnings levels.

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