powl-20210331

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, 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 May 3, 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			7
Notes to Condensed Consolidated Financial Statements			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			27

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, 2021		September 30, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	134,093	$	160,216
Short-term investments	19,852		18,705

Accounts receivable, less allowance for credit losses of $382 and $510	72,070		69,957
Contract assets	42,728		50,995
Inventories	30,031		28,968
Income taxes receivable	147		467
Prepaid expenses	2,061		4,402
Other current assets	1,806		1,948
Total Current Assets	302,788		335,658
Property, plant and equipment, net	113,653		114,372
Operating lease assets, net	4,390		5,217

Goodwill and intangible assets, net	1,072		1,161
Deferred income taxes	4,666		3,644
Other assets	14,179		12,226
Total Assets	$	440,748	$	472,278
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	400	$	400
Accounts payable	39,598		35,029
Contract liabilities	54,098		79,445
Accrued compensation and benefits	13,356		21,739
Accrued product warranty	2,467		2,771
Current operating lease liabilities	1,948		2,352
Income taxes payable	310		1,861
Other current liabilities	8,778		9,350
Total Current Liabilities	120,955		152,947
Long-term debt, net of current maturities	—		400
Deferred compensation	8,413		6,710
Long-term operating lease liabilities	2,897		3,434
Other long-term liabilities	2,151		2,161
Total Liabilities	134,416		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	63,112		61,998
Retained earnings	287,364		294,016
Treasury stock, 806,018 shares at cost	(24,999)		(24,999)
Accumulated other comprehensive loss	(19,270)		(24,513)
Total Stockholders' Equity	306,332		306,626
Total Liabilities and Stockholders' Equity	$	440,748	$	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 March 31,				Six months ended March 31,
	2021		2020		2021		2020
Revenues	$	118,716	$	151,570	$	225,291	$	285,720
Cost of goods sold	101,563		121,885		189,867		234,209
Gross profit	17,153		29,685		35,424		51,511

Selling, general and administrative expenses	16,675		18,573		33,549		35,861
Research and development expenses	1,601		1,783		3,274		3,258
Amortization of intangible assets	44		44		88		88


Operating income (loss)	(1,167)		9,285		(1,487)		12,304


Interest expense	51		60		101		127
Interest income	(47)		(330)		(158)		(711)
Income (loss) before income taxes	(1,171)		9,555		(1,430)		12,888
Income tax provision (benefit)	(946)		2,134		(841)		2,692
Net income (loss)	$	(225)	$	7,421	$	(589)	$	10,196

Earnings (loss) per share:
Basic	$	(0.02)	$	0.64	$	(0.05)	$	0.88
Diluted	$	(0.02)	$	0.64	$	(0.05)	$	0.87

Weighted average shares:
Basic	11,707		11,621		11,690		11,617
Diluted	11,707		11,681		11,690		11,673
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 (Unaudited)

(In thousands)


	Three months ended March 31,				Six months ended March 31,
	2021		2020		2021		2020
Net income (loss)	$	(225)	$	7,421	$	(589)	$	10,196
Foreign currency translation adjustments	894		(6,916)		5,243		(4,529)
Comprehensive income	$	669	$	505	$	4,654	$	5,667

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


											Accumulated
				Additional							Other
	Common Stock			Paid-in		Retained		Treasury Stock			Comprehensive
	Shares	Amount		Capital		Earnings		Shares	Amount		Income/(Loss)		Totals
Balance, September 30, 2019	12,373	$	124	$	59,153	$	289,422	(806)	$	(24,999)	$	(24,547)	$	299,153
Net income	—	—		—		2,775		—	—		—		2,775
Foreign currency translation adjustments	—	—		—		—		—	—		2,387		2,387
Stock-based compensation	30	—		982		—		—	—		—		982
Shares withheld in lieu of employee tax withholding	—	—		(611)		—		—	—		—		(611)
Dividends paid	—	—		—		(3,013)		—	—		—		(3,013)
Balance, December 31, 2019	12,403	$	124	$	59,524	$	289,184	(806)	$	(24,999)	$	(22,160)	$	301,673
Net income	—	—		—		7,421		—	—		—		7,421
Foreign currency translation adjustments	—	—		—		—		—	—		(6,916)		(6,916)
Stock-based compensation	17	—		968		—		—	—		—		968


Dividends paid	—	—		—		(3,015)		—	—		—		(3,015)
Balance, March 31, 2020	12,420	$	124	$	60,492	$	293,590	(806)	$	(24,999)	$	(29,076)	$	300,131

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,
	2021		2020
Operating Activities:
Net income (loss)	$	(589)

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