Powell Industries Announces Fiscal 2024 Second Quarter Results
April 30, 2024 at 04:30 pm EDT
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HOUSTON, April 30, 2024 (GLOBE NEWSWIRE) -- Powell Industries, Inc. (NASDAQ: POWL), a leading supplier of custom-engineered solutions for the management, control and distribution of electrical energy, today announced results for the Fiscal 2024 second quarter ended March 31, 2024. All comparisons are to the second quarter of Fiscal 2023, unless otherwise noted.
Second Quarter Key Highlights:
Revenues totaled $255 million, an increase of 49%;
Gross profit of $63 million, or 24.6% of revenue, a 510 basis point improvement;
Net income of $33 million, or $2.75 per diluted share;
New orders(1) totaled $235 million;
Backlog(2) as of March 31, 2024, remained at $1.3 billion;
Cash and short-term investments as of March 31, 2024, totaled $365 million.
Brett A. Cope, Powell’s Chairman and Chief Executive Officer, stated, “Powell delivered solid second quarter results supported by continued growth within our Industrial end markets as well as strong performances from both our Electric Utility and Commercial and Other Industrial markets. Revenue in the quarter was 49% higher than the second quarter of Fiscal 2023, while excellent project execution and volume leverage drove a 510 basis point improvement in gross margin to 24.6%. New orders of $235 million in the quarter were higher by 19% sequentially and were well-balanced across the markets we serve, keeping our backlog essentially unchanged at $1.3 billion. Overall, we are encouraged by both our financial performance in the first half of the year as well as the activity levels within each of the markets we serve.”
Second Quarter 2024 Results Revenues totaled $255.1 million compared to $171.4 million in the second quarter of Fiscal 2023, and $194.0 million in the first fiscal quarter. The increase compared to second quarter of Fiscal 2023 was primarily driven by strong growth across the Oil and Gas and Petrochemical sectors, which grew 66% and 93%, respectively. Revenue from the Commercial and Other Industrial sector increased 57%, and revenue from the Electric Utility sector grew 11%.
Gross profit increased 88% to $62.7 million, or 24.6% of revenue, compared to $33.4 million, or 19.5% of revenue, in the second quarter of Fiscal 2023 and compares to $48.2 million, or 24.8% of revenue, in the first fiscal quarter.
New orders totaled $235 million compared to $508 million in the second quarter of Fiscal 2023 and $198 million in the first fiscal quarter. The year-over-year decline was the result of two large, domestic projects in the LNG and Petrochemical markets awarded in the second quarter of Fiscal 2023.
Backlog totaled $1.3 billion as of March 31, 2024, which was essentially flat sequentially compared to backlog as of December 31, 2023, and increased 25% compared to backlog of $1.0 billion as of March 31, 2023.
Net income was $33.5 million, or $2.75 per diluted share, compared to $8.5 million, or $0.70 per diluted share, in the second quarter of Fiscal 2023 and $24.1 million, or $1.98 per diluted share, in the first fiscal quarter.
Cope added, “Project activity across the markets we serve remains active. We anticipate that projects within the LNG market will continue to progress, however, based upon the recent pause on LNG export permitting by the Department of Energy, the timing of these future projects may be impacted. We are experiencing continued growth of our Commercial and Other Industrial sector, as well as the Electric Utility sector, while also seeing strong activity related to energy transition projects. We remain encouraged by the growth dynamics across the markets in which we compete and are well positioned to support these newer applications with Powell’s products and expertise.”
OUTLOOK
Commenting on the Company's outlook, Michael Metcalf, Powell’s Chief Financial Officer, said, “We continue to expect another strong year of financial performance in Fiscal 2024 as our core Industrial end markets, as well as our Electric Utility and Commercial and Other Industrial markets, are exhibiting favorable dynamics and activity levels to support our growth. The quality and duration of our backlog, in conjunction with the level of commercial activity, also support our expectation that this strong financial performance can be sustained throughout Fiscal 2024 and into Fiscal 2025. Our capacity initiatives focused on servicing current and future backlog remain on track and are progressing as planned, with our Gulf Coast fabrication yard expansion now fully utilized and helping to support the execution of our $1.3 billion backlog. We expect to complete the current capacity expansion initiative at our products factory in Houston by mid-Fiscal 2025, which will help to enable our initiatives to facilitate future growth.”
CONFERENCE CALL Powell Industries has scheduled a conference call for Wednesday, May 1, 2024 at 11:00 a.m. Eastern time. To participate in the conference call, dial 1-833-953-2431 (domestic) or 1-412-317-5760 (international) at least 10 minutes before the call begins and ask for the Powell Industries conference call. A telephonic replay of the conference call will be available through May 8, 2024 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using passcode 4054049#.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting powellind.com. To listen to the live call on the web, please visit the website at least 15 minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 90 days at powellind.com.
About Powell Industries Powell Industries, Inc., headquartered in Houston, designs, manufactures and services custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy. Powell markets include large industrial customers such as utilities, data centers, oil and gas producers, refineries, liquefied natural gas facilities, petrochemical plants, pulp and paper producers, mining operations and commuter railways. For more information, please visit powellind.com.
Any forward-looking statements in the preceding paragraphs of this release 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 uncertainties in that actual results may differ materially from those projected in the forward-looking statements. In the course of operations, we are subject to certain risk factors, competition and competitive pressures, sensitivity to general economic and industrial conditions, international political and economic risks, availability and price of raw materials and execution of business strategy. For further information, please refer to the Company's filings with the Securities and Exchange Commission, copies of which are available from the Company without charge.
POWELL INDUSTRIES, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
Six Months Ended March 31,
2024
2023
2024
2023
(In thousands, except per share data)
(Unaudited)
Revenues
$
255,108
$
171,444
$
449,125
$
298,302
Cost of goods sold
192,388
138,007
338,211
245,401
Gross profit
62,720
33,437
110,914
52,901
Selling, general and administrative expenses
20,947
21,820
41,294
38,693
Research and development expenses
2,284
1,543
4,251
3,044
Operating income
39,489
10,074
65,369
11,164
Interest income, net
(4,428
)
(899
)
(8,426
)
(1,423
)
Income before income taxes
43,917
10,973
73,795
12,587
Income tax provision
10,429
2,500
16,222
2,951
Net income
$
33,488
$
8,473
$
57,573
$
9,636
Earnings per share:
Basic
$
2.79
$
0.71
$
4.81
$
0.81
Diluted
$
2.75
$
0.70
$
4.73
$
0.80
Weighted average shares:
Basic
11,992
11,878
11,966
11,869
Diluted
12,191
12,149
12,167
12,109
SELECTED FINANCIAL DATA:
Depreciation
$
1,724
$
2,176
$
3,365
$
4,312
Capital Expenditures
$
903
$
630
$
2,138
$
3,356
Dividends Paid
$
3,175
$
3,106
$
6,299
$
6,180
POWELL INDUSTRIES, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2024
September 30, 2023
(In thousands)
(Unaudited)
Assets:
Cash, cash equivalents and short-term investments
$
365,339
$
279,009
Other current assets
351,306
342,976
Property, plant and equipment, net
96,655
97,625
Long-term assets
36,318
32,632
Total assets
$
849,618
$
752,242
Liabilities and equity:
Current liabilities
$
441,826
$
395,686
Deferred and other long-term liabilities
14,007
11,530
Stockholders’ equity
393,785
345,026
Total liabilities and stockholders’ equity
$
849,618
$
752,242
SELECTED FINANCIAL DATA:
Working capital
$
274,819
$
226,299
(1)
New orders (bookings) represent the estimated value of contracts added to existing backlog (unsatisfied performance obligations).
(2)
The amounts recorded in backlog may not be a reliable indicator of our future operating results and may not be indicative of continuing revenue performance over future fiscal quarters or years primarily due to unexpected contract adjustments, cancellations or scope reductions.
Powell Industries, Inc. develops, designs, manufactures and services custom-engineered equipment and systems. The Company distributes, controls and monitors the flow of electrical energy and provides protection to motors, transformers and other electrically powered equipment. Its principal products include integrated power control room substations (PCRs), custom-engineered modules, electrical houses (E-Houses), traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers, switches and bus duct systems. Its products are designed for application voltages ranging from approximately 480 volts to 38,000 volts and are used in oil and gas refining, onshore and offshore oil and gas production, petrochemical, liquefied natural gas (LNG) terminals, pipeline, terminal, mining and metals, light rail traction power, electric utility, pulp and paper and other industrial markets.
POWELL INDUSTRIES, INC. 
