POWELL INDUSTRIES ANNOUNCES FISCAL 2022 FOURTH QUARTER AND FULL YEAR RESULTS

Rhea-AI Summary

Powell Industries, Inc. (NASDAQ: POWL) reported a strong fiscal 2022 performance, with fourth-quarter revenues of $163 million, up 26% year-over-year. Net income reached $9 million ($0.73 per diluted share), benefiting from a cost recovery. For the full year, revenues totaled $533 million, a 13% increase, with net income at $14 million ($1.15 per diluted share). New orders surged 78% to $719 million, and backlog hit a record $592 million, reflecting strong market activity, particularly in Oil, Gas & Petrochemical sectors. The company anticipates continued growth in fiscal 2023.

Positive

• Fourth-quarter revenues increased by 26% to $163 million.
• Full-year revenues totaled $533 million, a 13% increase.
• Net income for the fourth quarter was $9 million, or $0.73 per diluted share.
• New orders for the fourth quarter totaled $259 million, an increase of $138 million.
• Record backlog reached $592 million, a 43% increase year-over-year.
• The company expects improved earnings in fiscal 2023, excluding non-recurring items.

Negative

• Fourth-quarter net income decreased from $9.1 million in the prior quarter to $9 million.
• Net income for fiscal 2022 was lower than projected growth levels.

HOUSTON, Dec. 5, 2022 /PRNewswire/ -- 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 2022 fourth quarter and full year ended September 30, 2022. All comparisons are to the comparable period in the prior fiscal year, unless otherwise noted.

Fiscal Fourth Quarter Key Highlights:

• Revenues totaled $163 million, an increase of 26%;
• Net Income was $9 million, or $0.73 per diluted share, and included:
• $2 million related to a prior year cost recovery on a municipal project, generating $0.17 per diluted share;
• New orders totaled $259 million, an increase of $138 million;
• As of September 30, 2022, backlog was a record $592 million, an increase of 43%;
• Cash and short-term investments as of September 30, 2022, totaled $117 million.

Full Year Key Highlights:

• Revenues totaled $533 million, an increase of 13%;
• Net Income was $14 million, or $1.15 per diluted share;
• During Fiscal 2022, the Company had three non-recurring events, that when combined, contributed $0.80 per diluted share;
• New orders totaled $719 million, an increase of 78%.

Brett A. Cope, Powell's Chairman and Chief Executive Officer, stated, "We finished our fiscal year with solid fourth quarter revenue growth of 26% compared to the prior year and $259 million of new orders – the highest total since the second quarter of fiscal 2020. Activity in our core Oil, Gas & Petrochemical markets continues to improve from the pandemic lows, as we booked a large industrial order to support the production of Liquefied Natural Gas.  The volume of small to mid-sized project activity continued through the fiscal year end period, spanning across all of our core end markets, resulting in a record $592 million of ending backlog for the business. Strong project execution, higher volume with a favorable mix of services related projects, as well as the recovery of a prior year change order related to a municipal project, all contributed to a gross profit margin of 20.6% in the quarter.  This strong performance is in large part a direct result of our focused and deliberate efforts around our strategic initiatives to diversify our business, strengthen our services offerings, emphasize technology and ensure that Powell is positioned for future success."

Revenues for the fourth quarter totaled $162.7 million compared to $135.5 million in the third quarter and compared to $129.5 million in the fourth quarter of the prior year. Revenues for the full year totaled $532.6 million, an increase of 13% compared to $470.6 million in fiscal 2021.

New orders placed in the fourth quarter totaled $259 million compared to $202 million in the third quarter and compared to $121 million of new orders in the fourth quarter of the prior fiscal year. New orders placed during the full fiscal year totaled $719 million, an increase of 78% compared to $404 million in fiscal year 2021.

Backlog totaled a record $592 million as of September 30, 2022, which represents sequential growth of 18% compared to $503 million as of June 30, 2022, and compares to $415 million as of September 30, 2021.

Net income in the fiscal fourth quarter was $8.7 million dollars, or $0.73 per diluted share, compared to $9.1 million, or $0.76 per diluted share, in the fiscal third quarter, and compares to $3.3 million, or $0.28 per diluted share, in the fourth quarter of the prior fiscal year. During the fourth fiscal quarter, the Company recognized a non-recurring, after tax gain of $2.0 million, or $0.17 per diluted share resulting from the favorable cost recovery attributable to a prior year municipal project.

Net income in the full year was $13.7 million dollars, or $1.15 per diluted share, compared to net income of $0.6 million, or $0.05 per diluted share, in full year fiscal 2021.  During fiscal 2022, the Company recognized three non-recurring events. During the third fiscal quarter, the business recognized a $1.6 million after tax gain through the divestiture of a non-core, industrial valve repair and servicing division within the Powell Canada entity. Secondly, due to the sustained, positive earnings generated out of Powell Canada, the valuation allowance that was previously established against the entity's deferred tax assets was reversed generating a $5.9 million after tax gain. These two events, combined with the aforementioned cost recovery related to the municipal project in the fourth fiscal quarter, contributed $0.80 per diluted share in fiscal 2022.

Cope added, "We are entering fiscal 2023 with a very solid foundation to build upon over the coming quarters. Our record backlog of $592 million provides us with solid volume across all of our operating divisions as we focus on strong project execution and factory efficiencies. Commercially, we remain encouraged by the activity across our Industrial end markets, as well as our continued growth in the Utility and Commercial and Light Industrial end markets. I am optimistic about fiscal 2023 and am incredibly proud of our team's performance during this most recent quarter as well as the resiliency they've demonstrated over the past two years."

OUTLOOK

Commenting on the Company's outlook, Michael Metcalf, Powell's Chief Financial Officer said, "As we close out fiscal 2022 and look forward to fiscal 2023, we are very encouraged by the commercial activity that we're experiencing across our core end markets.  Considering this, and in addition to our current order book at $592 million, we anticipate revenue growth in most of our key market sectors versus the prior year. Additionally, as a result of the pricing and cost actions that were implemented throughout this past fiscal year, we expect continued improvement in project quality resulting in increased profitability in fiscal 2023. Based upon these dynamics, and accounting for the typical seasonality that we experience during the first fiscal quarter, we anticipate earnings in fiscal 2023 to significantly improve versus fiscal 2022, excluding the non-recurring items."

CONFERENCE CALL 

Powell Industries has scheduled a conference call for Tuesday, December 6, 2022, 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 December 13, 2022 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using passcode 2932915#. 

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.

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, 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 STATEMENT OF OPERATIONS
	Three Months Ended September 30,								Year Ended September 30,
	2022				2021				2022				2021
(In thousands, except per share data)
	(Unaudited)
Revenues	$	162,676			$	129,455			$	532,582			$	470,559
Cost of goods sold	129,236				106,983				447,564				395,496
Gross profit	33,440				22,472				85,018				75,063
Selling, general and administrative expenses	21,458				16,958				70,831				67,217
Research and development expenses	1,620				1,624				6,963				6,670
Amortization of intangible assets	-				25				-				157
Operating income	10,362				3,865				7,224				1,019
Other income	-				-				(2,285)				-
Interest (income) expense	(255)				5				(334)				(73)
Income before income taxes	10,617				3,860				9,843				1,092
Income tax provision (benefit)	1,878				599				(3,894)				461
Net income	$	8,739			$	3,261			$	13,737			$	631
Earnings per share:
Basic	$	0.74			$	0.28			$	1.16			$	0.05
Diluted	$	0.73			$	0.28			$	1.15			$	0.05
Weighted average shares:
Basic	11,811				11,720				11,797				11,705
Diluted	11,969				11,818				11,943				11,789
SELECTED FINANCIAL DATA:
Depreciation and Amortization	$	2,152			$	2,436			$	9,358			$	10,335 2,931
Capital Expenditures	$	686			$	451			$	2,451			$
Dividends Paid	$	3,063			$	3,040			$	12,233			$	12,142

 

POWELL INDUSTRIES, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2022				September 30, 2021
(In thousands)
Assets:
Cash, cash equivalents and short-term investments	$	116,508			$	133,981
Other current assets	253,475				168,480
Property, plant and equipment, net	98,628				109,457
Long-term assets	24,769				24,274
Total assets	$	493,380			$	436,192
Liabilities and equity:
Current liabilities	$	186,373			$	121,156
Deferred and other long-term liabilities	9,801				13,813
Stockholders' equity	297,206				301,223
Total liabilities and stockholders' equity	$	493,380			$	436,192
SELECTED FINANCIAL DATA:
Working capital	$	183,610			$	181,305

 

Contacts:	Michael W. Metcalf, CFO
	Powell Industries, Inc.
	713-947-4422
	Robert Winters or Ryan Coleman
	Alpha IR Group
	POWL@alpha-ir.com
	312-445-2870

 

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SOURCE Powell Industries

FAQ

What were Powell Industries' revenues for the fourth quarter of fiscal 2022?

Powell Industries reported fourth-quarter revenues of $163 million, a 26% increase year-over-year.

What is Powell Industries' net income for the full year of fiscal 2022?

The company reported a net income of $14 million, or $1.15 per diluted share, for the full fiscal year 2022.

What was the record backlog reported by Powell Industries as of September 30, 2022?

Powell Industries reported a record backlog of $592 million as of September 30, 2022, which is a 43% increase compared to the previous year.

How did new orders perform in the fourth quarter of fiscal 2022 for Powell Industries?

New orders in the fourth quarter totaled $259 million, marking an increase of 78% from the previous fiscal year.

What is Powell Industries' outlook for fiscal 2023?

The company anticipates revenue growth in most key market sectors and expects earnings in fiscal 2023 to significantly improve compared to fiscal 2022, excluding non-recurring items.