powl-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-12488

Powell Industries, Inc.

(Exact name of registrant as specified in its charter)


Delaware						88-0106100
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

8550 Mosley Road
Houston
Texas						77075-1180
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code:

(713) 944-6900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

POWL

NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

At August 2, 2021, there were 11,691,673 outstanding shares of the registrant’s common stock, par value $0.01 per share.

POWELL INDUSTRIES, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


			Page
Part I — Financial Information			3
Item 1. Condensed Consolidated Financial Statements			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Statements of Stockholders' Equity			6
Condensed Consolidated Statements of Cash Flows			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			27
Item 4. Controls and Procedures			27

Part II — Other Information			29
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 6. Exhibits			30
Signatures			31

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

POWELL INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share and per share data)


	June 30, 2021		September 30, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	108,675	$	160,216
Short-term investments	20,165		18,705

Accounts receivable, less allowance for credit losses of $545 and $510	72,369		69,957
Contract assets	50,827		50,995
Inventories	28,397		28,968
Income taxes receivable	172		467
Prepaid expenses	3,190		4,402
Other current assets	1,739		1,948
Total Current Assets	285,534		335,658
Property, plant and equipment, net	112,485		114,372
Operating lease assets, net	3,732		5,217

Goodwill and intangible assets, net	1,028		1,161
Deferred income taxes	4,230		3,644
Other assets	14,952		12,226
Total Assets	$	421,961	$	472,278
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	400	$	400
Accounts payable	33,416		35,029
Contract liabilities	43,140		79,445
Accrued compensation and benefits	16,379		21,739
Accrued product warranty	2,432		2,771
Current operating lease liabilities	1,640		2,352
Income taxes payable	54		1,861
Other current liabilities	7,849		9,350
Total Current Liabilities	105,310		152,947
Long-term debt, net of current maturities	—		400
Deferred compensation	8,793		6,710
Long-term operating lease liabilities	2,554		3,434
Other long-term liabilities	2,363		2,161
Total Liabilities	119,020		165,652
Commitments and Contingencies (Note F)
Stockholders' Equity:
Preferred stock, par value $0.01; 5,000,000 shares authorized; none issued	—		—
Common stock, par value $0.01; 30,000,000 shares authorized; 12,497,691 and 12,422,411 shares issued, respectively	125		124
Additional paid-in capital	63,500		61,998
Retained earnings	282,284		294,016
Treasury stock, 806,018 shares at cost	(24,999)		(24,999)
Accumulated other comprehensive loss	(17,969)		(24,513)
Total Stockholders' Equity	302,941		306,626
Total Liabilities and Stockholders' Equity	$	421,961	$	472,278

The accompanying notes are an integral part of these condensed consolidated financial statements.

POWELL INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share data)


	Three months ended June 30,				Nine months ended June 30,
	2021		2020		2021		2020
Revenues	$	115,813	$	118,062	$	341,105	$	403,781
Cost of goods sold	98,646		96,718		288,513		330,926
Gross profit	17,167		21,344		52,592		72,855

Selling, general and administrative expenses	16,710		15,511		50,259		51,372
Research and development expenses	1,772		1,605		5,046		4,863
Amortization of intangible assets	44		44		132		132

Restructuring and other, net	—		1,400		—		1,400
Operating income (loss)	(1,359)		2,784		(2,845)		15,088


Interest expense	51		52		152		179
Interest income	(72)		(190)		(230)		(901)
Income (loss) before income taxes	(1,338)		2,922		(2,767)		15,810
Income tax provision (benefit)	703		(559)		(138)		2,133
Net income (loss)	$	(2,041)	$	3,481	$	(2,629)	$	13,677

Earnings (loss) per share:
Basic	$	(0.17)	$	0.30	$	(0.22)	$	1.18
Diluted	$	(0.17)	$	0.30	$	(0.22)	$	1.17

Weighted average shares:
Basic	11,720		11,631		11,700		11,622
Diluted	11,720		11,698		11,700		11,686
Dividends per share	$	0.26	$	0.26	$	0.78	$	0.78

The accompanying notes are an integral part of these condensed consolidated financial statements.

POWELL INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In thousands)


	Three months ended June 30,				Nine months ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	(2,041)	$	3,481	$	(2,629)	$	13,677
Foreign currency translation adjustments	1,301		2,543		6,544		(1,986)
Comprehensive income (loss)	$	(740)	$	6,024	$	3,915	$	11,691

The accompanying notes are an integral part of these condensed consolidated financial statements.

POWELL INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands)


											Accumulated
				Additional							Other
	Common Stock			Paid-in		Retained		Treasury Stock			Comprehensive
	Shares	Amount		Capital		Earnings		Shares	Amount		Income/(Loss)		Totals
Balance, September 30, 2020	12,422	$	124	$	61,998	$	294,016	(806)	$	(24,999)	$	(24,513)	$	306,626
Net loss	—	—		—		(364)		—	—		—		(364)
Foreign currency translation adjustments	—	—		—		—		—	—		4,349		4,349
Stock-based compensation	59	1		893		—		—	—		—		894
Shares withheld in lieu of employee tax withholding	—	—		(632)		—		—	—		—		(632)
Dividends paid	—	—		—		(3,028)		—	—		—		(3,028)
Balance, December 31, 2020	12,481	$	125	$	62,259	$	290,624	(806)	$	(24,999)	$	(20,164)	$	307,845
Net loss	—	—		—		(225)		—	—		—		(225)
Foreign currency translation adjustments	—	—		—		—		—	—		894		894
Stock-based compensation	17	—		853		—		—	—		—		853


Dividends paid	—	—		—		(3,035)		—	—		—		(3,035)
Balance, March 31, 2021	12,498	$	125	$	63,112	$	287,364	(806)	$	(24,999)	$	(19,270)	$	306,332
Net loss	—	—		—		(2,041)		—	—		—		(2,041)
Foreign currency translation adjustments	—	—		—		—		—	—		1,301		1,301
Stock-based compensation	—	—		388		—		—	—		—		388


Dividends paid	—

SEC Form 10-Q filed by Powell Industries, Inc.