powl-20220331

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 March 31, 2022


☐			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 May 2, 2022, there were 11,780,643 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 (Unaudited)			3
Condensed Consolidated Statements of Operations (Unaudited)			4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)			5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)			6
Condensed Consolidated Statements of Cash Flows (Unaudited)			7
Notes to Condensed Consolidated Financial Statements (Unaudited)			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			26

Part II — Other Information			28
Item 1. Legal Proceedings			28
Item 1A. Risk Factors			28
Item 6. Exhibits			29
Signatures			30

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)


	March 31, 2022		September 30, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	86,431	$	114,314
Short-term investments	27,143		19,667

Accounts receivable, less allowance for credit losses of $703 and $333	90,741		78,304
Contract assets	58,553		54,199
Inventories	43,685		29,835
Income taxes receivable	154		161
Prepaid expenses	2,413		4,382
Other current assets	2,559		1,599
Total Current Assets	311,679		302,461
Property, plant and equipment, net	105,968		109,457
Operating lease assets, net	3,205		3,453

Goodwill and intangible assets, net	1,003		1,003
Deferred income taxes	4,690		4,639
Other assets	13,160		15,179
Total Assets	$	439,705	$	436,192
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	—	$	400
Accounts payable	48,697		45,247
Contract liabilities	56,706		42,433
Accrued compensation and benefits	12,608		20,395
Accrued product warranty	2,347		2,531
Current operating lease liabilities	1,629		1,415
Income taxes payable	1,102		1,076
Other current liabilities	9,794		7,659
Total Current Liabilities	132,883		121,156

Deferred compensation	9,085		8,613
Long-term operating lease liabilities	1,836		2,413
Other long-term liabilities	3,031		2,787
Total Liabilities	146,835		134,969
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; 12,586,661 and 12,497,691 shares issued, respectively	126		125
Additional paid-in capital	65,075		63,948
Retained earnings	272,068		282,505
Treasury stock, 806,018 shares at cost	(24,999)		(24,999)
Accumulated other comprehensive loss	(19,400)		(20,356)
Total Stockholders' Equity	292,870		301,223
Total Liabilities and Stockholders' Equity	$	439,705	$	436,192

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 March 31,				Six months ended March 31,
	2022		2021		2022		2021
Revenues	$	127,854	$	118,716	$	234,423	$	225,291
Cost of goods sold	108,771		101,563		201,904		189,867
Gross profit	19,083		17,153		32,519		35,424

Selling, general and administrative expenses	17,067		16,675		32,969		33,549
Research and development expenses	1,713		1,601		3,537		3,274
Amortization of intangible assets	—		44		—		88


Operating income (loss)	303		(1,167)		(3,987)		(1,487)

Other income	(279)		—		(279)		—

Interest expense (income)	(13)		4		(16)		(57)
Income (loss) before income taxes	595		(1,171)		(3,692)		(1,430)
Income tax provision (benefit)	1,812		(946)		371		(841)
Net loss	$	(1,217)	$	(225)	$	(4,063)	$	(589)

Loss per share:
Basic	$	(0.10)	$	(0.02)	$	(0.34)	$	(0.05)
Diluted	$	(0.10)	$	(0.02)	$	(0.34)	$	(0.05)

Weighted average shares:
Basic	11,801		11,707		11,783		11,690
Diluted	11,801		11,707		11,783		11,690
Dividends per share	$	0.26	$	0.26	$	0.52	$	0.52

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 March 31,				Six months ended March 31,
	2022		2021		2022		2021
Net loss	$	(1,217)	$	(225)	$	(4,063)	$	(589)
Foreign currency translation adjustments	902		894		956		5,243
Comprehensive income (loss)	$	(315)	$	669	$	(3,107)	$	4,654

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, 2021	12,498	$	125	$	63,948	$	282,505	(806)	$	(24,999)	$	(20,356)	$	301,223
Net loss	—	—		—		(2,846)		—	—		—		(2,846)
Foreign currency translation adjustments	—	—		—		—		—	—		54		54
Stock-based compensation	72	1		1,007		—		—	—		—		1,008
Shares withheld in lieu of employee tax withholding	—	—		(660)		—		—	—		—		(660)
Dividends	—	—		69		(3,269)		—	—		—		(3,200)
Balance, December 31, 2021	12,570	$	126	$	64,364	$	276,390	(806)	$	(24,999)	$	(20,302)	$	295,579
Net loss	—	—		—		(1,217)		—	—		—		(1,217)
Foreign currency translation adjustments	—	—		—		—		—	—		902		902
Stock-based compensation	17	—		711		—		—	—		—		711


Dividends	—	—		—		(3,105)		—	—		—		(3,105)
Balance, March 31, 2022	12,587	$	126	$	65,075	$	272,068	(806)	$	(24,999)	$	(19,400)	$	292,870


											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	—	—		—		(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	—	—		—		(3,035)		—	—		—		(3,035)
Balance, March 31, 2021	12,498	$	125	$	63,112	$	287,364	(806)	$	(24,999)	$	(19,270)	$	306,332

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

POWELL INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Six months ended March 31,
	2022	2021
Operating Activities:		<

SEC Form 10-Q filed by Powell Industries Inc.