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Powell Industries Inc. Reports Operating Results (10-Q)

May 07, 2009 | About:

Powell Industries Inc. (POWL) filed Quarterly Report for the period ended 2009-03-31.

Powell Industries Inc. sells designs develops manufactures packages and services systems and equipment for the distribution control and management of electrical energy and other dynamic processes. The principal products are switchgear and related equipment bus duct and process control systems. These products and systems are utilized primarily byrefineries petrochemical plants utilities paper mills offshore platforms commuter railways vehicular transportation and numerous other industrial commercial and governmental facilities. Powell Industries Inc. has a market cap of $414.6 million; its shares were traded at around $36.27 with a P/E ratio of 13.9 and P/S ratio of 0.6.

Highlight of Business Operations:

Consolidated revenues increased $3.8 million to $164.1 million in the second quarter of fiscal 2009 compared to $160.3 million in the second quarter of fiscal 2008. For the second quarter of fiscal 2009, domestic revenues increased by 12.0% to $128.1 million compared to the second quarter of 2008. Total international revenues decreased to $36.0 million in the second quarter of 2009 compared to $45.9 million in the second quarter of 2008 as a result of the completion of a large international project at the end of fiscal 2008. International revenues are primarily related to energy related investments, principally oil and gas projects. Gross profit for the second quarter of fiscal 2009, as compared to the second quarter of fiscal 2008, increased by approximately $3.1 million to $33.8 million as a result of improved pricing and contract execution. Gross profit as a percentage of revenues increased to 20.6% in the second quarter of fiscal 2009, compared to 19.1% in the second quarter of fiscal 2008. This increase in gross profit as a percentage of revenues resulted from an increased production volume and improved pricing, as well as the favorable impact from the successful completion of certain jobs with margins that exceeded expectations.

Our Electrical Power Products business segment recorded revenues of $158.3 million in the second quarter of fiscal 2009, compared to $154.1 million for the second quarter of fiscal 2008. In the second quarter of 2009, revenues from public and private utilities were approximately $29.8 million, compared to $52.4 million in the second quarter of fiscal 2008. Revenues from industrial and commercial customers totaled $107.7 million in the second quarter of 2009, an increase of $6.8 million compared to the second quarter of fiscal 2008. Municipal and transit projects generated revenues of $20.8 million in the second quarter of fiscal 2009 compared to $0.8 million in the second quarter of fiscal 2008.

For the six months ended March 31, 2009, our Electrical Power Products segment recorded revenues of $322.2 million, compared to $295.2 million for the six months ended March 31, 2008. In the first six months of fiscal 2009, revenues from public and private utilities were approximately $68.3 million, compared to $96.1 million in the first six months of fiscal 2008. Revenues from commercial and industrial customers totaled $221.8 million in the first six months of fiscal 2009, an increase of $34.6 million compared to the first six months of fiscal 2008. Municipal and transit projects generated revenues of $32.1 million in the first six months of fiscal 2009, compared to $11.9 million in the first six months of fiscal 2008.

In the second quarter of fiscal 2009, we generated net income of $8.9 million, or $0.77 per diluted share, compared to $6.0 million, or $0.53 per diluted share, in the second quarter of fiscal 2008. For the six months ended March 31, 2009, we recorded net income of $16.7 million, or $1.45 per diluted share, compared to $9.6 million, or $0.84 per diluted share, for the six months ended March 31, 2008. We generated higher revenues and improved gross profits for the Company as a whole, while leveraging our existing infrastructure to support our increased production volume.

At March 31, 2009, we had cash and cash equivalents of $60.1 million, compared to $10.1 million at September 30, 2008. We have a $71.0 million revolving credit facility in the U.S. and an additional £4.0 million (approximately $5.7 million) revolving credit facility in the United Kingdom, both of which expire in December 2012. As of March 31, 2009, there was approximately $2.1 million borrowed under these lines of credit. Total long-term debt and capital lease obligations, including current maturities, totaled $14.6 million at March 31, 2009, compared to $41.8 million at September 30, 2008. Letters of credit outstanding were $15.9 million at

In December 2008, the Company further amended its Amended Credit Agreement to provide additional working capital support for the Company for 180 days, expiring June 1, 2009. The availability under the US Revolver was increased by $25 million, to $83.5 million, through February 28, 2009. On March 1, 2009, this additional capacity was reduced by $12.5. On June 1, 2009, the amount available under the US Revolver will be reduced to its previous limit of $58.5 million. This amendment also increased the applicable interest rate by 25 to 50 basis points. The amendment also raised the baseline amount for the minimum tangible net worth covenant to $172.5 million from $120 million. Additionally, this amendment extended the expiration of the Amended Credit Agreement by one year, to December 31, 2012.

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