-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JQ1DMK14DI/EqERpDqC2bbsaXyI09LrdC+3eX5B3lIm27dCwceaW6PMxoYpCWE1B qwD2f8LSEJLCIgC4nIZvHQ== 0000890566-95-000128.txt : 19950615 0000890566-95-000128.hdr.sgml : 19950615 ACCESSION NUMBER: 0000890566-95-000128 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950131 FILED AS OF DATE: 19950316 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: POWELL INDUSTRIES INC CENTRAL INDEX KEY: 0000080420 STANDARD INDUSTRIAL CLASSIFICATION: SWITCHGEAR & SWITCHBOARD APPARATUS [3613] IRS NUMBER: 880106100 STATE OF INCORPORATION: NV FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06050 FILM NUMBER: 95521321 BUSINESS ADDRESS: STREET 1: 8550 MOSLEY DR STREET 2: POST OFFICE BOX 12818 CITY: HOUSTON STATE: TX ZIP: 77075 BUSINESS PHONE: 7139446900 MAIL ADDRESS: STREET 2: 8550 MOSLEY DRIVE P O BOX 12818 CITY: HOUSTON STATE: TX ZIP: 77075 FORMER COMPANY: FORMER CONFORMED NAME: PROCESS SYSTEMS INC DATE OF NAME CHANGE: 19780926 10-Q 1 QUARTERLY REPORT FOR THE PERIOD ENDED 01/31/1995 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q (Mark one) [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended January 31, 1995 or [ ] 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 0-6050 POWELL INDUSTRIES, INC. (Exact name of registrant as specified in its charter) NEVADA 88-0106100 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8550 MOSLEY DRIVE, HOUSTON, TEXAS 77075-1180 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (713) 944-6900 Indicate by "X" 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 /X/ No / / Common Stock, par value $.01 per share; 10,517,704 shares outstanding on January 31, 1995. POWELL INDUSTRIES, INC. PART I - Financial Information Item 1. Financial Statements ........................... 3 - 7 Item 2. Management's Discussion and Analysis of Financial Condition and Quarterly Results of Operations ....................... 8 - 9 PART II - Other Information and Signatures ...................... 10 - 12 2 Powell Industries, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Share Data) January 31, October 31, Assets 1995 1994 --------- --------- Current Assets: (unaudited) Cash and cash equivalents .................... $ 2,732 $ 7,598 Accounts receivable, less allowance for doubtful accounts of $1,071 and $1,061, respectively ............................... 36,709 33,976 Costs and estimated earnings in excess of billings ................................ 8,973 7,338 Inventories .................................. 17,478 14,899 Deferred income taxes ........................ 2,019 2,134 Prepaid expenses and other current assets .... 1,845 1,327 --------- --------- Total Current Assets ....................... 69,756 67,272 Property, plant and equipment, net ............. 15,585 15,659 Deferred income taxes, noncurrent .............. 1,524 1,390 Other assets ................................... 6,290 6,423 --------- --------- Total Assets ............................... $ 93,155 $ 90,744 ========= ========= Liabilities and Stockholders' Equity Current Liabilities: Accounts and income taxes payable ............ $ 10,513 $ 9,217 Accrued salaries, bonuses and commissions .... 3,344 4,612 Accrued product warranty ..................... 3,524 3,679 Other accrued expenses ....................... 3,968 5,372 Billings in excess of costs and estimated earnings ................................... 5,312 2,350 Notes payable and current maturities of long-term debt ............................. 2,813 2,813 --------- --------- Total Current Liabilities .................. 29,474 28,043 Long-term debt ................................. 6,563 6,563 Deferred compensation expense .................. 1,951 1,887 Postretirement benefits liability .............. 2,571 2,595 Stockholders' Equity: Preferred stock, 5,000,000 shares authorized; none issued Common stock, par value $.01 a share; 15,000,000 shares authorized; 10,517,704 and 10,492,704 shares issued and outstanding ................................ 105 105 Additional paid-in capital ................... 4,906 4,906 Retained earnings ............................ 51,290 50,485 Deferred compensation-ESOP ................... (3,705) (3,840) --------- --------- Total Stockholders' Equity ................. 52,596 51,656 --------- --------- Total Liabilities and Stockholders' Equity . $ 93,155 $ 90,744 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. 3 Powell Industries, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) (In Thousands, Except Per Share Data) Three Months Ended January 31, -------------------------- 1995 1994 ---------- ---------- Revenues ....................................... $36,589 $34,342 Cost of goods sold ............................. 28,998 26,993 ---------- ---------- Gross profit ................................... 7,591 7,349 Selling, general and administrative expenses ... 6,337 6,269 ---------- ---------- Earnings from operations ....................... 1,254 1,080 Interest, net .................................. 122 203 ---------- ---------- Net earnings before income taxes ............... 1,132 877 Income tax provision ........................... 329 249 ---------- ---------- Net earnings ................................... $803 $628 ========== ========== ---------- ---------- Net earnings per common share .................. $0.08 $0.06 ========== ========== Weighted average number of common shares outstanding ........................... 10,517,704 10,492,704 ========== ========== The accompanying notes are an integral part of these consolidated financial statements. 4 Powell Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) (In Thousands) Three Months Ended January 31, ---------------------- 1995 1994 ------- -------- Operating Activities: Net earnings .................................... $ 803 $ 628 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization ................. 851 821 Deferred income taxes ......................... (19) (732) Postretirement benefit liability .............. (24) 412 Changes in operating assets and liabilities: Accounts receivable ......................... (2,733) (1,907) Costs and estimated earnings in excess of billings ................................... (1,635) 2,751 Inventories ................................. (2,579) (2,343) Prepaid expenses and other current assets ... (518) (659) Other assets ................................ (12) 137 Accounts and income taxes payable ........... 1,296 (1,845) Accrued liabilities ......................... (2,626) (521) Billings in excess of costs and estimated earnings ................................... 2,962 (512) ------- -------- Net cash used in operating activities ............. (4,234) (3,770) ------- -------- Investing Activities: Purchases of property, plant, and equipment ..... (632) (546) Acquisition of Transdyn Controls, Inc. .......... -- (1,539) ------- -------- Net cash used in investing activities ............. (632) (2,085) ------- -------- Net decrease in cash and cash equivalents ......... (4,866) (5,855) Cash and cash equivalents at beginning of period .. 7,598 13,118 ------- -------- Cash and cash equivalents at end of period ........ $ 2,732 $ 7,263 ======= ======== The accompanying notes are an integral part of these consolidated financial statements. 5 Part I Item 1 POWELL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of management, reflect all adjustments which are of a normal recurring nature necessary for a fair presentation of financial position, results of operations, and statements of cash flows. Certain reclassifications of prior year amounts were made to conform to the classifications used in fiscal 1995. B. INVENTORY January 31, October 31, 1995 1994 (unaudited) ------- ------- The components of inventory are summarized below (in thousands): Raw materials and subassemblies .............. $10,719 $ 9,392 Work-in-process .............................. 6,759 5,507 ------- ------- Total inventories ............................ $17,478 $14,899 ======= ======= C. PROPERTY, PLANT AND EQUIPMENT January 31, October 31, 1995 1994 (unaudited) ------- ------- Property, plant and equipment is summarized below (in thousands): Land ............................................. $ 2,514 $ 2,514 Buildings and improvements ....................... 14,329 14,282 Machinery and equipment .......................... 22,159 21,863 Furniture & fixtures ............................. 3,053 3,076 Construction in process .......................... 482 247 ------- ------- 42,537 41,982 Less-accumulated depreciation .................... 26,952 26,323 ------- ------- Total property, plant and equipment, net ......... $15,585 $15,659 ======= ======= 6 D. OTHER FINANCIAL INFORMATION Quarter Ended January 31, -------------------- 1995 1994 ---- ---- Supplemental disclosure of cash flow information (in thousands): Cash paid during the quarter for: Interest .................................... $488 $640 ==== ==== Income taxes ................................ $275 $ 0 ==== ==== E. PRODUCTION CONTRACTS For contracts in which the percentage-of-completion method is used, costs and estimated earnings in excess of billings are shown as a current asset and billings in excess of costs and estimated earnings are shown as a current liability. January 31, October 31, 1995 1994 (unaudited) ----------- ---------- The components of these contracts are as follows (in thousands): Costs and estimated earnings ................. $ 23,185 $ 33,258 Progress billings ............................ (14,212) (25,920) -------- -------- Total costs and estimated earnings in excess of billings .......................... $ 8,973 $ 7,338 ======== ======== Progress billings ............................ $ 28,812 $ 12,556 Costs and estimated earnings ................. (23,500) (10,206) -------- -------- Total billings in excess of costs and estimated earnings .......................... $ 5,312 $ 2,350 ======== ======== 7 Part I Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND QUARTERLY RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES During 1990, the Company concluded a private placement of $15,000,000 in term notes, of which $9,376,000 was outstanding as of January 31, 1995. These notes are unsecured with a fixed interest rate of 10.4 percent. The notes mature through June 1997, with the next payment of $2,813,000 due in June 1995. The Company also has a revolving line of credit, with a major domestic bank, of $10,000,000, which was amended in April 1994, to extend the maturity date to November 1, 1995. As of January 31, 1995 and October 31, 1994, none of this line was outstanding. The Company's ability to satisfy its cash requirements is evaluated by analyzing key measures of liquidity applicable to the Company. The following table is a summary of the measures which are significant to management: January 31, October 31, January 31, 1995 1994 1994 ----------- ----------- ----------- Working Capital......... $40,282,000 $39,229,000 $40,432,000 Current Ratio........... 2.37 to 1 2.40 to 1 2.64 to 1 Debt to Capitalization.. .15 to 1 .15 to 1 .21 to 1 The consolidated statements of cash flows show that approximately $4,866,000 of cash was used during the quarter ended January 31, 1995. The increases in accounts receivables and inventories were due to the increased volume of business and were the major uses of cash along with the reduction of accrued liabilities for incentive compensation, legal and insurance. Billings in excess of costs and estimated earnings increased and had a positive effect on the Company's cash flow during the quarter. The increase in this account reflects the increase in the amount of progress billings in advance of costs incurred during the period. The use of cash for capital expenditures during the quarter was $632,000 which, was mainly invested in machinery and equipment. The Company's fiscal 1995 asset management program will continue to focus on the collection of receivables and reduction in inventories. The Company plans to satisfy its fiscal 1995 capital requirements and operating needs primarily with funds available in cash and cash equivalents of $2,732,000, funds generated from operating activities and funds available under its existing revolving credit line. 8 RESULTS OF OPERATIONS The following table sets forth, as a percentage of revenues, certain items from the Consolidated Statements of Operations. Quarters Ended January 31 1995 1994 - ----------------------------------------------------------------------------- Revenues ............................................. 100.0% 100.0% Gross Profit ......................................... 20.7 21.4 Selling, general and administration expenses ......... 17.3 18.3 Interest, net ........................................ .3 .6 Net earnings before income tax ....................... 3.1 2.6 Income tax provision ................................. .9 .8 Net earnings ......................................... 2.2 1.8 REVENUES for the quarter ended January 31, 1995 were up seven percent to $36,589,000 from $34,342,000 in the first quarter of last year. This increase in volume was due to higher electrical distribution equipment product line revenues which were partially offset by lower revenues from process control product lines. GROSS PROFIT, as a percentage of revenues, was 20.7 percent and 21.4 percent for the quarters ended January 31, 1995 and 1994. The lower percent in 1995 was due to change in product mix shipped during 1995. SELLING, GENERAL AND ADMINISTRATION EXPENSE as a percentage of revenues was 17.3% and 18.3% for the quarters ended January 31, 1995 and 1994. The change in percent shows the effect of higher revenue volume without corresponding increases in expense. INTEREST, NET is lower in 1995 than in 1994 due to the reduction in outstanding debt. INCOME TAX PROVISION The effective tax rate was 29.0% and 28.4% for the quarters ended January 31, 1995 and 1994. The lower than statutory rates are due to foreign sales corporation credits. NET EARNINGS were $803,000 or $.08 per share for the first three months of fiscal 1995, an increase of 28 percent from $628,000 or $.06 per share for the same period last year. This increase was due to the higher volume and lower interest expense. The interest expense improvement was due to lower debt. The order backlog at January 31, 1995 was $102,200,000 compared to $113,200,000 at October 31, 1994. The decrease was primarily the result of a cancellation of a large order for a gas turbine package. 9 Part II OTHER INFORMATION ITEM 1. Legal Proceedings As previously reported in the Company's Form 10-K filed for the fiscal year ended October 31, 1994, on January 4, 1995 a Stay of proceedings in the lawsuit filed by National Westminster Bank Plc ("Natwest") against the Company, Empire Energy Management Systems, Inc., and others, was granted until 30 days after delivery to the court of a copy of the decision of the Armed Services Board of Contract Appeals on Empire Energy's motion for summary judgment in its proceeding against the Air Force for breach of contract and wrongful termination, but not longer than June 13, 1995. This lawsuit was filed in federal district court, Southern District of New York, was served on the Company on August 5, 1993, alleges that the Company defaulted on a Construction Guaranty provided to NatWest in 1992 in connection with a project at MacDill Air Force Base, and seeks damages in excess of $20 million. The Company has denied the substantive allegations of the lawsuit and has filed counterclaims for damages against NatWest alleging bad faith and failure to preserve and protect its collateral, and seeking a declaratory judgment that the Company is not in default of the Construction Guaranty. ITEM 2. Changes in Securities None ITEM 3. Defaults Upon Senior Securities Not applicable ITEM 4. Submission of Matters to a Vote of Security Holders None ITEM 5. Other Information None ITEM 6. Exhibits and Reports on Form 8-K Exhibit 27.0 Financial Data Schedule 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. POWELL INDUSTRIES, INC. Registrant MARCH 15, 1995 THOMAS W. POWELL Date Thomas W. Powell President and Chief Executive Officer (Principal Executive Officer) MARCH 15, 1995 J.F. AHART Date J.F. Ahart Vice President, Secretary-Treasurer Chief Financial Officer (Principal Financial and Accounting Officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 The Schedule contains summary financial information extracted from the Company's unaudited pro forma condensed consolidated financial statements for the quarter ended January 31, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS OCT-31-1994 JAN-31-1995 2,732 0 37,780 1,071 17,478 69,756 42,537 26,952 93,155 29,474 0 105 0 0 52,491 93,155 36,589 36,589 28,998 28,998 6,337 0 122 1,132 329 0 0 0 0 803 0.08 0
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