-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HiczXa08ApxaCNx/LI3wKuy/sPwjlIeTz9roX6MTWsJU1iSyg5exvgz8ZxEMTMcv W1WyrAY7UkeQgok+8tJgHg== 0000950129-97-000985.txt : 19970312 0000950129-97-000985.hdr.sgml : 19970312 ACCESSION NUMBER: 0000950129-97-000985 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970311 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: 97554528 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 POWELL INDUSTRIES, INC. - 01/31/97 1 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, 1997 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; 10,613,683 shares outstanding on March 5, 1997. 2 Powell Industries, Inc. and Subsidiaries 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 3 Powell Industries, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Share Data)
January 31, 1997 October 31, Assets (unaudited) 1996 ----------- ----------- Current Assets: Cash and cash equivalents ............................................... $ 10,098 $ 8,935 Accounts receivable, less allowance for doubtful accounts of $707 and $777, respectively ........................................ 32,239 37,013 Costs and estimated earnings in excess of billings ...................... 16,877 13,934 Inventories ............................................................. 11,181 14,114 Deferred income taxes ................................................... 2,181 2,572 Income taxes receivable ................................................. -- 876 Prepaid expenses and other current assets ............................... 2,343 1,700 -------- -------- Total Current Assets .................................................. 74,919 79,144 Property, plant and equipment, net ........................................ 17,464 14,602 Deferred income taxes ..................................................... 1,267 1,164 Other assets .............................................................. 4,595 4,613 -------- -------- Total Assets .......................................................... $ 98,245 $ 99,523 ======== ======== Liabilities and Stockholders' Equity Current Liabilities: Accounts and income taxes payable ....................................... $ 8,401 $ 8,543 Accrued salaries, bonuses and commissions ............................... 4,845 5,687 Accrued product warranty ................................................ 1,681 1,614 Accrued legal expenses .................................................. 3,719 3,903 Other accrued expenses .................................................. 2,375 3,717 Billings in excess of costs and estimated earnings ...................... 4,991 5,425 Current maturities of debt .............................................. 3,750 3,750 -------- -------- Total Current Liabilities ............................................. 29,762 32,639 Deferred compensation expense ............................................. 1,354 2,157 Postretirement benefits liability ......................................... 1,458 1,502 Commitments and contingencies Stockholders' Equity: Preferred stock, par value $.01; 5,000,000 shares authorized; none issued Common stock, par value $.01; 15,000,000 shares authorized, 10,609,504 and 10,604,644 shares issued and outstanding ................ 106 106 Additional paid-in capital .............................................. 5,603 5,601 Retained earnings ....................................................... 63,312 60,943 Deferred compensation-ESOP .............................................. (3,350) (3,425) -------- -------- Total Stockholders' Equity ............................................ 65,671 63,225 -------- -------- Total Liabilities and Stockholders' Equity ............................ $ 98,245 $ 99,523 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 4 Powell Industries, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) (In Thousands, Except Per Share Data)
Three Months Ended January 31, -------------------------------- 1997 1996 ------------ ------------ Revenues ................................................................. $ 43,128 $ 39,861 Cost of goods sold ....................................................... 32,840 31,001 ------------ ------------ Gross profit ............................................................. 10,288 8,860 Selling, general and administrative expenses ............................. 6,888 5,924 ------------ ------------ Earnings from continuing operations before interest and income taxes ..... 3,400 2,936 Interest expense (income), net ........................................... (138) 43 ------------ ------------ Earnings from continuing operations before income taxes .................. 3,538 2,893 Income tax provision ..................................................... 1,169 1,031 ------------ ------------ Earnings from continuing operations ...................................... 2,369 1,862 Loss from discontinued operations, net of income tax ..................... -- (178) ------------ ------------ Net earnings ............................................................. $ 2,369 $ 1,684 ============ ============ Net earnings (loss) per common and common equivalent share: Continuing operations .................................................. $ 0.22 $ 0.18 Discontinued operations ................................................ -- (0.02) ------------ ------------ Net earnings per common and common equivalent share ...................... $ 0.22 $ 0.16 ============ ============ Weighted average number of common and common equivalent shares outstanding 10,771,622 10,695,776 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 5 Powell Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) (In Thousands)
Three Months Ended January 31, ------------------------------ 1997 1996 -------- -------- Operating Activities: Net earnings .......................................................... $ 2,369 $ 1,684 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization ....................................... 830 798 Deferred income taxes (benefit) ..................................... 288 (681) Postretirement benefits liability ................................... (44) 118 Changes in operating assets and liabilities: Accounts receivable ............................................... 4,774 (8,204) Costs and estimated earnings in excess of billings ................ (2,943) 876 Inventories ....................................................... 2,933 373 Prepaid expenses and other current assets ......................... (643) 680 Other assets ...................................................... (99) (36) Accounts payable and income taxes payable or receivable ........... 734 1,757 Accrued liabilities ............................................... (2,301) (2,105) Billings in excess of costs and estimated earnings ................ (434) 1,423 Deferred compensation expense ..................................... (728) 209 Changes in net assets of discontinued activities .................. -- 2,119 -------- -------- Net cash provided by (used in) operating activities ..................... 4,736 (989) -------- -------- Investing Activities: Purchases of property, plant and equipment ............................ (3,575) (676) -------- -------- Net cash used in investing activities ................................... (3,575) (676) -------- -------- Financing activities: Exercise of stock options ............................................. 2 -- -------- -------- Net cash provided by financing activities ............................... 2 -- -------- -------- Net increase (decrease) in cash and cash equivalents .................... 1,163 (1,665) Cash and cash equivalents at beginning of period ........................ 8,935 2,796 -------- -------- Cash and cash equivalents at end of period .............................. $ 10,098 $ 1,131 Supplemental disclosure of cash flow information (in thousands): Cash paid during the quarter for: Interest ........................................................... $ 195 $ 367 ======== ======== Income taxes ....................................................... -- -- ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 6 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 cash flows. B. INVENTORY
January 31, 1997 October 31, (unaudited) 1996 ------------ ----------- The components of inventory are summarized below (in thousands): Raw materials and subassemblies ................................ $ 7,764 $ 8,118 Work-in-process ................................................ 3,417 5,996 ------- ------- Total inventories .............................................. $11,181 $14,114 ======= =======
C. PROPERTY, PLANT AND EQUIPMENT
January 31, 1997 October 31, (unaudited) 1996 ------------ ----------- Property, plant and equipment is summarized below (in thousands): Land ............................................................ $ 2,362 $ 2,362 Buildings and improvements ...................................... 13,361 13,255 Machinery and equipment ......................................... 21,336 21,157 Furniture & fixtures ............................................ 3,010 2,923 Construction in process ......................................... 5,267 1,869 ------- ------- 45,336 41,566 Less-accumulated depreciation ................................... 27,872 26,964 ------- ------- Total property, plant and equipment, net ........................ $17,464 $14,602 ======= =======
7 Part I Item 1 D. PRODUCTION CONTRACTS For contracts in which the percentage-of-completion accounting 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.
1997 October 31, (unaudited) 1996 ------------ ----------- The components of these contracts are as follows (in thousands): Costs and estimated earnings ................................... $ 53,436 $ 45,559 Progress billings .............................................. (36,559) (31,625) -------- -------- Total costs and estimated earnings in excess of billings ....... $ 16,877 $ 13,934 ======== ======== Progress billings .............................................. $ 44,941 $ 50,667 Costs and estimated earnings ................................... (39,950) (45,242) -------- -------- Total billings in excess of costs and estimated earnings ....... $ 4,991 $ 5,425 ======== ========
8 Part I Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND QUARTERLY RESULTS OF OPERATIONS 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 1997 1996 - --------------------------------------------------------------- Revenues .......................... 100.0% 100.0% Gross Profit ...................... 23.9 22.2 Selling, general and administrative expenses ........................ 16.0 14.9 Earnings from continuing operations before income taxes ............. 8.2 7.3 Income tax provision .............. 2.7 2.6 Losses from discontinued operations --- (.5) Net earnings ...................... 5.5 4.2
Revenues for the quarter ended January 31, 1997 were up 8.2 percent to $43,128,000 from $39,861,000 in the first quarter of last year. This increase in volume was due primarily to higher electrical distribution equipment revenues. Export sales were $17,312,000 or 40.1 percent of sales, an increase of 4.3 percent from $16,600,000 in the first quarter of 1996. Gross profit, as a percentage of revenues, was 23.9 percent and 22.2 percent for the quarters ended January 31, 1997 and 1996, respectively. This increase is due to improved prices and higher volumes in the electrical distribution operations partially offset by higher overhead expenses. Selling, general and administrative expenses as a percentage of revenues were 16.0 percent and 14.9 percent for the quarters ended January 31, 1997 and 1996, respectively. The increase is primarily due to higher sales commissions and selling expenses. Income tax provision effective tax rates were 33.0 percent and 35.6 percent for the quarters ended January 31, 1997 and 1996, respectively. The lower than statutory rate is due to foreign sales corporation credits. Earnings from continuing operations increased to $2,369,000 or $.22 per share for the first quarter of fiscal 1997, an increase of 27.2 percent from $1,862,000 or $.18 per share for the same period last year. The increase is primarily due to the factors discussed above. Net earnings were $2,369,000 or $.22 per share for the first quarter of fiscal 1997, an increase of 40.7 percent from $1,684,000 or $.16 per share for the same period last year. Backlog The order backlog at January 31, 1997 was $119,978,000 compared to $106,457,000 at October 31, 1996. The increase is the result of record bookings in electrical distribution and control equipment. The total bookings of $56,649,000 during the quarter was the largest total for a quarter in the Company's history. 9 LIQUIDITY AND CAPITAL RESOURCES During 1990, the Company concluded a private placement of $15,000,000 in term notes, of which $3,750,000 was outstanding as of January 31, 1997. These notes are unsecured with a fixed interest rate of 10.4 percent. The notes mature with the final payment of $3,750,000 due in June 1997. In October 1995, the Company entered into a $15,000,000 revolving line of credit agreement with a major domestic bank. As of January 31, 1997, the Company did not have borrowings outstanding under this line. 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, 1997 1996 1996 Working Capital $45,157,000 $46,505,000 $36,643,000 Current Ratio 2.5 to 1 2.4 to 1 2.4 to 1 Debt to Capitalization .1 to 1 .1 to 1 .1 to 1
Management believes that the Company continues to maintain a strong liquidity position. The decrease in working capital at January 31, 1997, as compared to October 31, 1996 is due mainly to a decrease in accounts receivable partially offset by decreases in accrued liabilities. Cash and cash equivalents increased approximately $1,163,000 during the three months ended January 31, 1997. The decrease in accounts receivable provided cash due to collection on extended progress and prebilling term receivables. The primary use of cash was for capital expenditures related to the plant expansion at three operating facilities. The Company's fiscal 1997 asset management program will continue to focus on the collection of receivables and reduction in inventories. The Company plans to satisfy its fiscal 1997 capital requirements and operating needs primarily with funds available in cash and cash equivalents of $10,098,000, funds generated from operating activities and funds available under its existing revolving line of credit. The previous discussion should be read in conjunction with the consolidated financial statements. Any forward looking statements in the preceding paragraphs of this Form 10Q 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 uncertainty in that actual results may differ materially from those projected in the forward looking statements. These risks and uncertainties include, without limitation, difficulties which could arise in obtaining materials or components in sufficient quantities as needed for the Company's manufacturing and assembly operations, unforeseen political or economic problems in countries to which the Company exports its products in relation to the Company's principal competitors, any significant decrease in the Company's backlog of orders, any material employee relation problems, or any material litigation or claims made against the Company, as well as general market conditions, competition and pricing. 10 Part II OTHER INFORMATION ITEM 1. Legal Proceedings No material developments in litigation previously reported. 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 a. Exhibits 27.0 Financial Data Schedule b. Reports on Form 8K None 11 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 10, 1997 - -------------- ------------------------------------ Date Thomas W. Powell President and Chief Executive Officer (Principal Executive Officer) March 10, 1997 - -------------- ------------------------------------ Date J.F. Ahart Vice President, Secretary-Treasurer Chief Financial Officer (Principal Financial and Accounting Officer) 12 EXHIBIT INDEX
Exhibit No. Description - ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JANUARY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JAN-01-1997 JAN-01-1997 10,098 0 32,946 707 11,181 74,919 45,336 27,872 98,245 29,762 0 0 0 106 65,564 98,245 43,128 43,128 32,840 32,840 6,888 0 138 3,538 1,169 0 0 0 0 2,369 0.22 0
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