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

May 05, 2010 | About:
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10qk

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Powell Industries Inc. (POWL) filed Quarterly Report for the period ended 2010-03-31.

Powell Industries Inc. has a market cap of $383.8 million; its shares were traded at around $33.25 with a P/E ratio of 9.7 and P/S ratio of 0.6. Powell Industries Inc. had an annual average earning growth of 8.9% over the past 10 years.POWL is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Consolidated revenues decreased $22.0 million to $142.1 million in the second quarter of fiscal 2010 compared to $164.1 million in the second quarter of fiscal 2009. For the second quarter of fiscal 2010, domestic revenues decreased by 20.2% to $102.2 million compared to the second quarter of 2009 as a result of the decrease in demand for our products and services as discussed above. Total international revenues increased to $39.9 million in the second quarter of 2010 compared to $36.0 million in the second quarter of 2009. The acquisition of Powell Canada contributed approximately $16.5 million of our international revenues during the second quarter of fiscal 2010. Gross profit for the second quarter of fiscal 2010, as compared to the second quarter of fiscal 2009, increased by approximately $2.7 million, to $36.5 million, as a result of favorable margins on project completion due to operational efficiencies and the successful negotiation of change orders for which costs were previously recognized. These two factors also contributed to the increase in gross profit as a percentage of revenues increasing to 25.7% in the second quarter of fiscal 2010, compared to 20.6% in the second quarter of fiscal 2009. We anticipate that gross margin levels will decline going forward given the overall mix of jobs currently in our backlog.

services as discussed above. For the first six months of fiscal 2010, domestic revenues decreased by 20.5% to $208.7 million compared to the first six months of fiscal 2009. Total international revenues decreased to $69.3 million in the first six months of 2010 compared to $72.2 million in the first six months of fiscal 2009. The acquisition of Powell Canada contributed approximately $17.6 million of our international revenues during the first six months of fiscal 2010. Gross profit for the first six months of fiscal 2010, as compared to the first six months of fiscal 2009, increased by approximately $6.0 million, to $74.3 million, as a result of favorable margins on project completion due to operational efficiencies, the successful negotiation of change orders for which costs were previously recognized and cancellation fees for orders that were cancelled from our backlog. These factors also contributed to the increase in gross profit as a percentage of revenues to 26.7% for the first six months of fiscal 2010, compared to 20.4% for the first six months of fiscal 2009.

Our Electrical Power Products business segment recorded revenues of $135.1 million in the second quarter of fiscal 2010, compared to $158.3 million for the second quarter of fiscal 2009. In the second quarter of 2010, revenues from public and private utilities were approximately $47.5 million, compared to $29.8 million in the second quarter of fiscal 2009. Revenues from industrial and commercial customers totaled $78.5 million in the second quarter of 2010, a decrease of $29.2 million compared to the second quarter of fiscal 2009. Municipal and transit projects generated revenues of $9.1 million in the second quarter of fiscal 2010 compared to $20.8 million in the second quarter of fiscal 2009. The acquisition of Powell Canada contributed approximately $16.5 million of our Electrical Power Products business segment revenues during the second quarter of fiscal 2010.

For the six months ended March 31, 2010, our Electrical Power Products segment recorded revenues of $265.6 million, compared to $322.2 million for the six months ended March 31, 2009. In the first six months of fiscal 2009, revenues from public and private utilities were approximately $82.1 million, compared to $68.3 million in the first six months of fiscal 2009. Revenues from commercial and industrial customers totaled $165.0 million in the first six months of fiscal 2010, a decrease of $56.8 million compared to the first six months of fiscal 2009. Municipal and transit projects generated revenues of $18.5 million in the first six months of fiscal 2010, compared to $32.1 million in the first six months of fiscal 2009. The acquisition of Powell Canada contributed approximately $17.6 million of our Electrical Power Products business segment revenues during the first six months of fiscal 2010.

In the second quarter of fiscal 2010, we generated net income of $9.9 million, or $0.85 per diluted share, compared to $8.9 million, or $0.77 per diluted share, in the second quarter of fiscal 2009. For the six months ended March 31, 2010, we recorded net income of $19.5 million, or $1.68 per diluted share, compared to $16.7 million, or $1.45 per diluted share, for the six months ended March 31, 2009. We generated improved gross profits for the Company as a whole as a result of favorable margins on project completion due to operational efficiencies and cancellation fees for orders that were cancelled from our backlog for the first half of fiscal 2010, along with the successful negotiation of change orders in the second quarter of fiscal 2010 for which costs were previously recognized.

under these lines of credit. We also have a $19.6 million revolving credit facility and a $2.5 million term loan in Canada. At March 31, 2010, $12.9 million was outstanding under the Canadian revolving credit facility, subject to certain limitations as defined in the credit agreement, and $2.3 million was outstanding under the Canadian term loan. Total long-term debt and capital lease obligations, including current maturities, totaled $22.4 million at March 31, 2010, compared $9.5 million at September 30, 2009. Letters of credit outstanding were $11.8 million at March 31, 2010, 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 $6.0 million, respectively, at March 31, 2010. Amounts available under the Canadian revolving credit facility were approximately $1.4 million at March 31, 2010. For further information regarding our debt, see Notes G and H of Notes to Condensed Consolidated Financial Statements.

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