powl-20230331

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, 2023


☐			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 1, 2023, there were 11,860,683 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			20
Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
Item 4. Controls and Procedures			25

Part II — Other Information			26
Item 1. Legal Proceedings			26
Item 1A. Risk Factors			26
Item 6. Exhibits			27
Signatures			28

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, 2023		September 30, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	152,039	$	101,954
Short-term investments	11,085		14,554

Accounts receivable, less allowance for credit losses of $431 and $344	170,178		106,111
Contract assets	63,560		88,351
Inventories	58,690		50,415
Income taxes receivable	119		105
Prepaid expenses	2,710		4,679
Other current assets	4,819		3,814
Total Current Assets	463,200		369,983
Property, plant and equipment, net	97,910		98,628
Operating lease assets, net	1,665		2,179

Goodwill and intangible assets, net	1,003		1,003
Deferred income taxes	10,944		9,161
Other assets	12,374		12,426
Total Assets	$	587,096	$	493,380
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:

Accounts payable	$	51,209	$	63,423
Contract liabilities	178,217		79,857
Accrued compensation and benefits	17,789		24,785
Accrued product warranty	2,711		2,345
Current operating lease liabilities	989		1,777
Income taxes payable	2,584		1,720
Other current liabilities	16,192		12,466
Total Current Liabilities	269,691		186,373

Deferred compensation	9,114		7,749
Long-term operating lease liabilities	731		545
Other long-term liabilities	1,765		1,507
Total Liabilities	281,301		196,174
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; 12,666,701 and 12,588,011 shares issued, respectively	126		126
Additional paid-in capital	69,955		67,439
Retained earnings	286,777		283,638
Treasury stock, 806,018 shares at cost	(24,999)		(24,999)
Accumulated other comprehensive loss	(26,064)		(28,998)
Total Stockholders' Equity	305,795		297,206
Total Liabilities and Stockholders' Equity	$	587,096	$	493,380

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,
	2023		2022		2023		2022
Revenues	$	171,444	$	127,854	$	298,302	$	234,423
Cost of goods sold	138,007		108,771		245,401		201,904
Gross profit	33,437		19,083		52,901		32,519

Selling, general and administrative expenses	21,820		17,067		38,693		32,969
Research and development expenses	1,543		1,713		3,044		3,537



Operating income (loss)	10,074		303		11,164		(3,987)

Other income	—		(279)		—		(279)

Interest income, net	(899)		(13)		(1,423)		(16)
Income (loss) before income taxes	10,973		595		12,587		(3,692)
Income tax provision	2,500		1,812		2,951		371
Net income (loss)	$	8,473	$	(1,217)	$	9,636	$	(4,063)

Earnings (loss) per share:
Basic	$	0.71	$	(0.10)	$	0.81	$	(0.34)
Diluted	$	0.70	$	(0.10)	$	0.80	$	(0.34)

Weighted average shares:
Basic	11,878		11,801		11,869		11,783
Diluted	12,149		11,801		12,109		11,783
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,
	2023		2022		2023		2022
Net income (loss)	$	8,473	$	(1,217)	$	9,636	$	(4,063)
Foreign currency translation adjustments	427		902		2,605		956
Gain on cash flow commodity hedge	111		—		329		—
Comprehensive income (loss)	$	9,011	$	(315)	$	12,570	$	(3,107)

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, 2022	12,588	$	126	$	67,439	$	283,638	(806)	$	(24,999)	$	(28,998)	$	297,206
Net income	—	—		—		1,162		—	—		—		1,162
Foreign currency translation adjustments	—	—		—		—		—	—		2,178		2,178
Stock-based compensation	53	—		1,307		—		—	—		—		1,307
Shares withheld in lieu of employee tax withholding	—	—		(423)		—		—	—		—		(423)
Dividends	—	—		131		(3,307)		—	—		—		(3,176)
Gain on cash flow commodity hedge	—	—		—		—		—	—		218		218
Balance, December 31, 2022	12,641	$	126	$	68,454	$	281,493	(806)	$	(24,999)	$	(26,602)	$	298,472
Net income	—	—		—		8,473		—	—		—		8,473
Foreign currency translation adjustments	—	—		—		—		—	—		427		427
Stock-based compensation	26	—		1,650		—		—	—		—		1,650
Shares withheld in lieu of employee tax withholding	—	—		(159)		—		—	—		—		(159)

Dividends	—	—		10		(3,189)		—	—		—		(3,179)
Gain on cash flow commodity hedge	—	—		—		—		—	—		111		111
Balance, March 31, 2023	12,667	$	126	$	69,955	$	286,777	(806)	$	(24,999)	$	(26,064)	$	305,795


											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

SEC Form 10-Q filed by Powell Industries Inc.