EX-99.1 2 ex991-q320earningsrelease.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
powelllogoa13.jpgPRESS RELEASE

FOR IMMEDIATE RELEASE

Contacts:    Michael W. Metcalf, CFO
Powell Industries, Inc.
713-947-4422

Ken Dennard / Natalie Hairston
Dennard Lascar Investor Relations
POWL@dennardlascar.com
713-529-6600


POWELL INDUSTRIES ANNOUNCES
FISCAL 2020 THIRD QUARTER RESULTS

HOUSTON — AUGUST 4, 2020 — Powell Industries, Inc. (NASDAQ: POWL), a leading supplier of custom engineered solutions for the management, control and distribution of electrical energy, today announced results for the fiscal 2020 third quarter ended June 30, 2020.
Revenues for the third quarter of fiscal 2020 were $118.1 million compared to revenues of $151.6 million for the second quarter of fiscal 2020 and revenues of $135.6 million for the third quarter of fiscal 2019. Net income for the third quarter of fiscal 2020 was $3.5 million, or $0.30 per diluted share, compared to net income of $7.4 million, or $0.64 per diluted share, for the second quarter of fiscal 2020 and net income of $5.1 million, or $0.44 per diluted share for the third quarter of fiscal 2019. During the fiscal third quarter, net income was reduced by $1.2 million, or $0.12 per share due to restructuring costs and was offset by $1.7 million, or a $0.14 per share gain resulting from tax benefits recognized. New orders placed during the third quarter of fiscal 2020 totaled $81 million compared to $145 million in the third quarter of fiscal 2019 and $301 million in the second quarter of fiscal 2020 which included the largest order in Company history. The Company’s backl

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og as of June 30, 2020 was $532 million, a decrease of 6% sequentially from $566 million at March 31, 2020 and compared to $407 million as of June 30, 2019.
Brett A. Cope, Powell’s Chairman and Chief Executive Officer, stated, “As we continue to navigate through the global market uncertainty and challenges associated with the COVID-19 pandemic, our number one priority remains the safety of our employees, customers and suppliers. I am very proud of all of our employees globally for their continued efforts embracing safe work practices across all of our facilities.”
Mr. Cope continued, “Our third quarter results reflected another quarter of solid operating performance resulting in strong margins and cash flow despite the lower sequential and year-over-year revenues. Third quarter gross profit as a percentage of revenue was 18.1%, up 60 basis points from 17.5% in the same period of last year as a result of strong project execution and cost management. Additionally, our focus on both operating costs and working capital throughout fiscal 2020 has enabled the business to further enhance our liquidity position, generating $46 million of operating cash flow during the fiscal third quarter.”
“We have entered an unprecedented cycle across our industrial end markets, with increased uncertainty across the geographies where we operate and compete. Considering this and in an effort to align operating costs with the current market activity, during the quarter we took the difficult, but necessary decision to reduce our workforce in order to align operating costs with the current market activity.”
Mr. Cope concluded by stating, “Looking forward, our backlog is solid at $532 million, up $125 million from the prior year and our balance sheet is very strong, particularly our current liquidity position coupled with minimal leverage. We remain focused on the success of our customers, by continuing to deliver high performance electrical distribution products, solutions and service support.”


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OUTLOOK
Commenting on the company's outlook, Michael Metcalf, Powell’s Chief Financial Officer said, “We continue to show solid operational momentum through the fiscal third quarter of 2020, with both orders and earnings per share at their highest levels through the first nine months of the year dating back to fiscal 2015. As we close out fiscal 2020, we anticipate a more challenging commercial environment with respect to our broader industrial end markets. However, given our robust backlog position, as well as our year-to-date earnings and operational cash flow, we are confident that fiscal 2020 will be a strong year financially for the company.”

CONFERENCE CALL
Powell Industries has scheduled a conference call for Wednesday, August 5, 2020 at 11:00 a.m. Eastern time. To participate in the conference call, dial 412-902-0030 at least 10 minutes before the call begins and ask for the Powell Industries conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until August 12, 2020. To access the replay, dial 201-612-7415 using a passcode of 13706826#.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting powellind.com. To listen to the live call on the web, please visit the website at least 15 minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 90 days at powellind.com.
Powell Industries, Inc., headquartered in Houston, designs, manufactures and services custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy.  Powell markets include large industrial customers such as utilities, oil and gas producers, refineries, petrochemical plants, pulp and paper producers, mining operations and commuter railways.   For more information, please visit powellind.com.


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Any forward-looking statements in the preceding paragraphs of this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties in that actual results may differ materially from those projected in the forward-looking statements. In the course of operations, we are subject to certain risk factors, competition and competitive pressures, sensitivity to general economic and industrial conditions, international political and economic risks, availability and price of raw materials and execution of business strategy. For further information, please refer to the Company's filings with the Securities and Exchange Commission, copies of which are available from the Company without charge.

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POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
2020
 
2019
 
2020
 
2019
(In thousands, except per share data)
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
Revenues
$
118,062

 
$
135,588

 
$
403,781

 
$
368,676

Cost of goods sold
96,718

 
111,873

 
330,926

 
310,255

Gross profit
21,344

 
23,715

 
72,855

 
58,421

 
 
 
 
 
 
 
 
Selling, general and administrative expenses
15,511

 
17,117

 
51,372

 
50,240

Research and development expenses
1,605

 
1,631

 
4,863

 
4,988

Amortization of intangible assets
44

 
44

 
132

 
132

Insurance proceeds
—

 
(950
)
 
—

 
(950
)
Restructuring and other, net
1,400

 
233

 
1,400

 
233

Operating income
2,784

 
5,640

 
15,088

 
3,778

 
 
 
 
 
 
 
 
Interest expense
52

 
59

 
179

 
170

Interest income
(190
)
 
(305
)
 
(901
)
 
(707
)
Income before income taxes
2,922

 
5,886

 
15,810

 
4,315

 
 
 
 
 
 
 
 
Income tax provision (benefit)
(559
)
 
797

 
2,133

 
963

 
 
 
 
 
 
 
 
Net income
$
3,481

 
$
5,089

 
$
13,677

 
$
3,352

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.30

 
$
0.44

 
$
1.18

 
$
0.29

Diluted
$
0.30

 
$
0.44

 
$
1.17

 
$
0.29

 
 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
Basic
11,631

 
11,579

 
11,622

 
11,567

Diluted
11,698

 
11,603

 
11,686

 
11,589

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED FINANCIAL DATA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
$
2,637

 
$
2,948

 
$
7,878

 
$
9,408

Capital Expenditures
$
809

 
$
1,269

 
$
4,311

 
$
3,241

Dividends Paid
$
3,019

 
$
3,003

 
$
9,047

 
$
8,991



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POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 
 
 
 
 
June 30, 2020
 
September 30, 2019
(In thousands)
(Unaudited)
 
 
 
 
Assets:
 
 
 
 
 
 
 
   Cash, cash equivalents and short-term investments
$
163,356

 
$
124,681

 
 
 
 
   Other current assets
186,795

 
203,887

 
 
 
 
   Property, plant and equipment, net
114,826

 
120,812

 
 
 
 
   Long-term assets
22,221

 
18,031

 
 
 
 
      Total assets
$
487,198

 
$
467,411

 
 
 
 
 
 
 
 
Liabilities and equity:
 
 
 
 
 
 
 
   Current liabilities
$
170,499

 
$
157,896

 
 
 
 
   Long-term debt, net of current maturities
400

 
800

 
 
 
 
   Deferred and other long-term liabilities
12,728

 
9,562

 
 
 
 
   Stockholders’ equity
303,571

 
299,153

 
 
 
 
      Total liabilities and stockholders’ equity
$
487,198

 
$
467,411

 
 
 
 
 
 
 
 
SELECTED FINANCIAL DATA:
 
 
 
 
 
 
 
   Working capital
$
179,652

 
$
170,672

 
 
 
 




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