-----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, ECWLzkr34+KixyyRyLN4SjRIRzrvMIFRdgjCPrFmvz/gTSeDmVGQ0ICBgtWlOv4t mSM/U9796JNd6vidUEx5Sg== 0000950129-96-000360.txt : 19960315 0000950129-96-000360.hdr.sgml : 19960315 ACCESSION NUMBER: 0000950129-96-000360 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960314 SROS: NONE 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: 96534585 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. DATED 01/31/96 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, 1996 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; 10,542,704 shares outstanding on January 31, 1996. 2 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
3 Powell Industries, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Share Data)
January 31, October 31, 1996 1995 Assets (unaudited) ----------- ----------- Current Assets: Cash and cash equivalents............................................................... $1,131 $3,035 Accounts receivable, less allowance for doubtful accounts of $729 and $724, respectively........................................................ 42,754 32,181 Costs and estimated earnings in excess of billings...................................... 13,038 14,725 Inventories............................................................................. 19,084 20,114 Deferred income taxes................................................................... 968 1,039 Income taxes receivable................................................................. 0 718 Prepaid expenses and other current assets............................................... 1,373 1,889 ----------- ----------- Total Current Assets.................................................................. 78,348 73,701 Property, plant and equipment, net........................................................ 16,087 16,271 Deferred income taxes..................................................................... 1,337 1,286 Other assets.............................................................................. 5,560 5,624 ----------- ----------- Total Assets.......................................................................... $101,332 $96,882 =========== =========== Liabilities and Stockholders' Equity Current Liabilities: Accounts and income taxes payable....................................................... $13,518 $10,843 Accrued salaries, bonuses and commissions............................................... 4,257 5,387 Accrued product warranty................................................................ 3,155 3,015 Other accrued expenses.................................................................. 2,792 3,706 Billings in excess of costs and estimated earnings ..................................... 7,416 5,563 Current maturities of long-term debt.................................................... 2,813 2,813 ----------- ----------- Total Current Liabilities............................................................. 33,951 31,327 Long-term debt............................................................................ 3,750 3,750 Deferred compensation expense............................................................. 2,175 2,006 Postretirement benefits liability......................................................... 2,075 2,142 Stockholders' Equity: Preferred stock, par value $.01; 5,000,000 shares authorized; none issued Common stock, par value $.01 a share; 15,000,000 shares authorized; 10,542,704 shares issued and outstanding ........................................................ 105 105 Additional paid-in capital.............................................................. 5,062 5,062 Retained earnings....................................................................... 57,867 56,183 Deferred compensation-ESOP.............................................................. (3,653) (3,693) ----------- ----------- Total Stockholders' Equity............................................................ 59,381 57,657 ----------- ----------- Total Liabilities and Stockholders' Equity............................................ $101,332 $96,882 =========== ===========
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, --------------------------------- 1996 1995 ----------- ----------- Revenues.................................................................................. $49,568 $36,589 Cost of goods sold........................................................................ 39,254 28,998 ----------- ----------- Gross profit.............................................................................. 10,314 7,591 Selling, general and administrative expenses.............................................. 7,655 6,337 ----------- ----------- Earnings from operations.................................................................. 2,659 1,254 Interest, net............................................................................. 43 122 ----------- ----------- Net earnings before income taxes.......................................................... 2,616 1,132 Income tax provision...................................................................... 932 329 ----------- ----------- Net earnings ............................................................................. $1,684 $803 =========== =========== Net earnings per common and common equivalent share....................................... $0.16 $0.08 ----------- ----------- Weighted average number of shares outstanding............................................. 10,695,776 10,517,704 =========== ===========
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, ------------------------------ 1996 1995 ----------- ----------- Operating Activities: Net earnings............................................................................ $1,684 $803 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization......................................................... 967 851 Postretirement benefit liability...................................................... (67) (24) Changes in operating assets and liabilities: Accounts receivable................................................................. (10,573) (2,733) Costs and estimated earnings in excess of billings.................................. 1,687 (1,635) Inventories......................................................................... 1,030 (2,579) Prepaid expenses and other current assets........................................... 516 (518) Other assets........................................................................ (45) (31) Accounts and income taxes payable or receivable..................................... 3,393 1,296 Accrued liabilities................................................................. (1,904) (2,626) Billings in excess of costs and estimated earnings.................................. 1,853 2,962 Other long-term liabilities......................................................... 208 --- ----------- ----------- Net cash used in operating activities..................................................... (1,251) (4,234) ----------- ----------- Investing Activities: Purchases of property, plant, and equipment............................................. (653) (632) ----------- ----------- Net cash used in investing activities..................................................... (653) (632) ----------- ----------- Net decrease in cash and cash equivalents................................................. (1,904) (4,866) Cash and cash equivalents at beginning of period.......................................... 3,035 7,598 ----------- ----------- Cash and cash equivalents at end of period................................................ $1,131 $2,732 =========== ===========
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 statements of cash flows. B. INVENTORY
January 31, October 31, 1996 1995 (unaudited) -------------- ----------- The components of inventory are summarized below (in thousands): Raw materials and subassemblies........................................................... $13,328 $12,469 Work-in-process........................................................................... 5,756 7,645 -------------- ----------- Total inventories......................................................................... $19,084 $20,114 ============= ===========
C. PROPERTY, PLANT AND EQUIPMENT January 31, October 31, 1996 1995 (unaudited) -------------- ----------- Property, plant and equipment is summarized below (in thousands): Land...................................................................................... $2,514 $2,514 Buildings and improvements................................................................ 14,865 14,777 Machinery and equipment................................................................... 24,222 23,889 Furniture & fixtures...................................................................... 3,981 3,910 Construction in process................................................................... 518 417 -------------- ----------- 46,100 45,507 Less-accumulated depreciation............................................................. 30,013 29,236 -------------- ----------- Total property, plant and equipment, net.................................................. $16,087 $16,271 ============== ===========
7 Part I Item 1 D. OTHER FINANCIAL INFORMATION
Quarter Ended January 31, (unaudited) ---------------------------- 1996 1995 ----------- ----------- Supplemental disclosure of cash flow information (in thousands): Cash paid during the quarter for: Interest............................................................................. $367 $488 =========== =========== Income taxes......................................................................... --- $275 =========== ===========
E. PRODUCTION CONTRACTS Contracts for 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.
January 31, October 31, 1996 1995 (unaudited) -------------- --------------- The components of these contracts are as follows (in thousands): Costs and estimated earnings......................................................... $41,685 $50,282 Progress billings.................................................................... (28,647) (35,557) ---------- ---------- Total costs and estimated earnings in excess of billings............................. $13,038 $14,725 ========== ========== Progress billings.................................................................... $53,234 $29,682 Costs and estimated earnings......................................................... (45,818) (24,119) ---------- ---------- Total billings in excess of costs and estimated earnings............................. $7,416 $5,563 ========== ==========
8 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 $6,563,000 was outstanding as of January 31, 1996. 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 1996. 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, 1996, 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, 1996 1995 1995 Working Capital $44,397,000 $42,374,000 $40,282,000 Current Ratio 2.31 to 1 2.35 to 1 2.37 to 1 Debt to Capitalization .10 to 1 .10 to 1 .15 to 1 Management believes that the Company continues to maintain a strong liquidity position. The increase in working capital at January 31, 1996, as compared to October 31, 1995 is due mainly to increased accounts receivable that were partially offset by increases in billings in excess of costs and estimated earnings and accounts payable. The primary reason for these changes was the increased business level. The consolidated statements of cash flows show that approximately $1,900,000 of cash was used during the three months ended January 31, 1996. The increase in accounts receivables requiring the use of cash was due to the increased volume of business with extended progress and prebilling terms. The other major use of cash was the reduction of accrued liabilities. Costs and estimated earnings and inventories decreased and accounts payable increased, having a positive effect on the Company's cash flow during the quarter. The use of cash for capital expenditures during the three months of 1996 was $653,000 which was primarily invested in machinery and equipment. The Company's fiscal 1996 asset management program will continue to focus on the collection of receivables and reduction in inventories. The Company plans to satisfy its fiscal 1996 capital requirements and operating needs primarily with funds available in cash and cash equivalents of $1,131,000, funds generated from operating activities and funds available under its existing revolving credit line. 9 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 1996 1995 - ------------------------------------------------------------------------- Revenues 100.0% 100.0% Gross Profit 20.8 20.7 Selling, general and administration expenses 15.4 17.3 Interest, net .1 .3 Net earnings before income tax 5.3 3.1 Income tax provision 1.9 .9 Net earnings 3.4 2.2
Revenues for the quarter ended January 31, 1996 were up 35 percent to $49,568,000 from $36,589,000 in the first quarter of last year. This increase in volume was due primarily to higher electrical distribution equipment product line revenues. However, all products had increases in the record first quarter results. Gross profit, as a percentage of revenues, was 20.8 percent and 20.7 percent for the quarters ended January 31, 1996 and 1995. Selling, general and administration expense as a percentage of revenues was 15.4% and 17.3% for the quarters ended January 31, 1996 and 1995. The decrease reflects the effect of higher revenue volume without corresponding increases in expense. Interest, net is lower in 1996 than in 1995 due to the reduction in outstanding debt. Income tax provision The effective tax rates were 35.6% and 29.1% for the quarters ended January 31, 1996 and 1995 respectively. The lower than statutory rate is due to larger foreign sales corporation credits in 1995 which are not projected for 1996. Net earnings were $1,684,000 or $.16 per share for the first quarter of fiscal 1996, an increase of 109% from $803,000 or $.08 per share for the same period last year. This increase was mainly due to the higher revenue volume for the 1996 quarter. The order backlog at January 31, 1996 was $125,329,000 compared to $112,569,000 at October 31, 1995. The increase is the result of record bookings in electrical distribution and control equipment. The total bookings of $62,328,000 during the quarter was the largest total for a quarter in the Company's history. 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 13, 1996 /s/ THOMAS W. POWELL - -------------- ---------------------------------------------- Date Thomas W. Powell President and Chief Executive Officer (Principal Executive Officer) March 13, 1996 /s/ J.F. AHART - -------------- ---------------------------------------------- Date J.F. Ahart Vice President, Secretary-Treasurer Chief Financial Officer (Principal Financial and Accounting Officer) 12 EXHIBIT INDEX 27 -- Financial Data Schedule 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, 1996 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS OCT-31-1995 JAN-31-1996 1,131 0 43,483 729 19,084 78,348 43,586 30,013 101,332 33,951 0 105 0 0 57,867 101,332 49,568 49,568 39,254 39,254 7,655 0 43 2,616 932 0 0 0 0 1,684 0.16 0
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