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

February 04, 2010 | About:
10qk

10qk

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Powell Industries Inc. (POWL) filed Quarterly Report for the period ended 2009-12-31.

Powell Industries Inc. has a market cap of $351.5 million; its shares were traded at around $30.57 with a P/E ratio of 9.4 and P/S ratio of 0.5. POWL is in the portfolios of Chuck Royce of ROYCE & ASSOCIATES.

Highlight of Business Operations:

Consolidated revenues decreased $34.6 million to $135.9 million in the first quarter of fiscal 2010 compared to $170.5 million in the first quarter of fiscal 2009. This decrease in revenues is a result of reduced backlog discussed above. For the first quarter of fiscal 2010, domestic revenues decreased by 20.7% to $106.4 million compared to the first quarter of 2009. Total international revenues were $29.5 million in the first quarter of 2010 compared to $36.2 million in the first quarter of 2009. Gross profit for the first quarter of fiscal 2010 increased by approximately $3.3 million, to $37.8 million, as a result of favorable margins on project completion due to operational efficiencies, a reduced workforce and cancellation fees for orders that were cancelled from our backlog. As a result, gross profit as a percentage of revenues increased to 27.8% in the first quarter of fiscal 2010, compared to 20.2% in the first quarter of fiscal 2009.

Our Electrical Power Products business segment recorded revenues of $130.5 million in the first quarter of fiscal 2010, compared to $163.9 million for the first quarter of fiscal 2009. This decrease in revenues is a result of reduced volume related to the reduction in orders and backlog discussed above. In the first quarter of fiscal 2010, revenues from public and private utilities were approximately $30.4 million, compared to $38.5 million in the first quarter of fiscal 2009. Revenues from commercial and industrial customers totaled $78.0 million in the first quarter of fiscal 2010, a decrease of $36.1 million compared to the first quarter of fiscal 2009. Municipal and transit projects generated revenues of $22.1 million in the first quarter of fiscal 2010 compared to $11.3 million in the first quarter of fiscal 2009. The decrease in revenues is discussed above.

Consolidated selling, general and administrative expenses increased to 16.7% of revenues in the first quarter of fiscal 2010 compared to 12.7% of revenues in the first quarter of fiscal 2009. Selling, general and administrative expenses were $22.6 million for the first quarter of fiscal 2010 compared to $21.6 million for the first quarter of fiscal 2009. Selling, general and administrative expenses increased primarily due to expenses of approximately $1.6 million incurred for the acquisition of Powell Canada and an increase of approximately $1.0 million in our estimated allowance for bad debts partially offset by reduced commissions expense associated with lower bookings of new orders.

In the first quarter of fiscal 2010, we recorded net income attributable to Powell Industries, Inc. of $9.6 million, or $0.83 per diluted share, compared to $7.9 million, or $0.68 per diluted share, in the first quarter of fiscal 2009 As discussed above, we generated improved gross profit percentages in all of our business segments, as a result of operational efficiencies, a reduced workforce and cancellation fees for orders that were cancelled from our Electrical Power Products business segment backlog.

The order backlog at December 31, 2009, was $341.7 million, compared to $365.8 million at September 30, 2009 and $509.4 million at the end of the first quarter of fiscal 2009. New orders placed during the first quarter of fiscal 2010 totaled $107.7 million compared to $172.2 million in the first quarter of fiscal 2009. Backlog decreased during the second half of fiscal 2009 and into fiscal 2010 as an increasing number of our customers cancelled or delayed the start of new capital projects for various reasons. This decline in orders in the second half of fiscal 2009 and the first quarter of fiscal 2010 will negatively impact our revenues in fiscal 2010.

At December 31, 2009, we had cash and cash equivalents of $83.2 million, compared to $97.4 million at September 30, 2009. We have a $58.5 million revolving credit facility in the U.S. and an additional $6.4 million revolving credit facility in the United Kingdom, both of which expire in December 2012. As of December 31, 2009, there were no amounts borrowed under these lines of credit. We also have a $19.1 million revolving credit facility and a $2.4 million term loan in Canada. At December 31, 2009, $11.6 million was outstanding under the Canadian revolving credit facility, subject to certain limitations as defined in the credit agreement, and $2.4 million was outstanding under the Canadian term loan. Total long-term debt and capital lease obligations, including current maturities, totaled $21.5 million at December 31, 2009, compared to $9.5 million at September 30, 2009. Letters of credit outstanding were $11.8 million at December 31, 2009, compared to $17.6 million at September 30, 2009, which reduce our availability under our credit facilities. Amounts available under the U.S. revolving credit facility and the revolving credit facility in the United Kingdom were approximately $46.7 million and $6.4 million, respectively, at December 31, 2009. Amounts available under the Canadian revolving credit facility were approximately $7.0 million at December 31, 2009. For further information regarding our debt, see Notes G and H of Notes to Condensed Consolidated Financial Statements.

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