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 2023 fourth quarter and full year ended September 30, 2023.
All comparisons are to the comparable period in the prior fiscal
year, unless otherwise noted.
Fourth Quarter Key
Highlights:
- Revenues totaled $209 million, an
increase of 28%;
- Gross profit was $52 million, or
24.9% of revenue, an improvement of 430 basis points;
- Net Income was $26 million, or
$2.17 per diluted share, and included:
- Unusual items resulting in a
benefit of $0.22 per diluted share;
- Net new orders totaled $171
million;
- As of September 30, 2023, backlog
was $1.3 billion, an increase of 118%;
- Cash and short-term investments as
of September 30, 2023, totaled $279 million.
Full Year Key Highlights:
- Revenues totaled $699 million, an
increase of 31%;
- Gross profit was $148 million, or
21.1% of revenue, an improvement of 510 basis points;
- Net Income was $54.5 million, or
$4.50 per diluted share and included:
- Unusual items throughout Fiscal
2023 with a combined benefit of $0.38 per diluted share;
- Net new orders totaled $1.4
billion, approximately double the prior year.
Brett A. Cope, Powell’s Chairman and Chief
Executive Officer, stated, “The Powell team delivered another
outstanding quarter to close out a record year for the Company. Our
revenue grew 28% in the quarter, driven by strength across our core
industrial end markets as well as continued growth within our
Utility and Commercial and Other Industrial market sectors. We
recorded $171 million of net new orders in the quarter, reflecting
our expectation that new order activity will remain healthy, but
return to a more normalized trend compared to previous quarters.
Overall, Powell was awarded $1.4 billion of new orders in Fiscal
2023, which was almost double the prior year total, and marked the
highest in the Company’s history. I’m incredibly proud of the
entire Powell team’s performance to put together one of the best
years in the Company’s history.”
Fourth Quarter 2023
Results Revenues totaled $208.6 million
compared to $192.4 million in the third quarter of Fiscal 2023 and
$162.7 million in the fourth quarter of the prior year. These
increases reflect our strong growth within the Oil and Gas market
sector, mainly driven by higher LNG revenue.
Gross profit totaled $52.0 million, or 24.9% of
revenue, compared to $42.7 million, or 22.2% of revenue, in the
third quarter of Fiscal 2023, and $33.4 million, or 20.6% of
revenue, in the fourth quarter of the prior year.
Net new orders totaled $171 million compared to
$505 million in the third quarter of Fiscal 2023 and $259 million
in the fourth quarter of the prior year. The declines are
predominantly a function of challenging comparable periods and new
order activity returning to a more normalized cadence.
Backlog totaled $1.3 billion as of September 30,
2023, which was consistent with our backlog as of June 30, 2023,
and improved from the $592 million of backlog as of September 30,
2022.
Net income was $26.4 million, or $2.17 per
diluted share, compared to $18.5 million, or $1.52 per diluted
share, in the third quarter of Fiscal 2023 and $8.7 million, or
$0.73 per diluted share, in the fourth quarter of the prior
year.
Full Year 2023 ResultsRevenues
totaled $699.3 million, an increase of 31% compared to $532.6
million in Fiscal 2022, driven by strong growth in the Company’s
Oil & Gas, Petrochemical, Utility, and Commercial & Other
Industrial markets, partially offset by lower revenue in the
Traction market.
Gross profit was $147.6 million, or 21.1% of
revenue, compared to $85.0 million, or 16.0% of revenue, in Fiscal
2022.
New orders placed totaled $1.4 billion, roughly
double the $718 million of new orders placed in Fiscal 2022. The
increase was mainly due to strength in the Company’s core Oil, Gas
and Petrochemical markets, continued growth in the Commercial and
Other Industrial markets, as well as sustained market activity in
the Utility market sector.
Net income was $54.5 million, or $4.50 per
diluted share, compared to $13.7 million, or $1.15 per diluted
share, in Fiscal 2022.
In Fiscal 2023, our fourth quarter and full year
results both include unusual items, which include gains from order
cancellations and a $1.9 million non-cash tax benefit resulting
from the release of the valuation allowance associated with our
U.K. operations. The combined impact was $0.22 per diluted
share and $0.38 per diluted share, respectively, for the fourth
quarter and the full year of Fiscal 2023.
During Fiscal 2022, the Company recognized three
unusual events that, when combined, contributed $0.80 per diluted
share.
Cope added, “We are entering Fiscal 2024 with
$1.3 billion of backlog comprised predominantly of projects that
are of a nature, scope and duration that are core to what Powell
does best. We continue to see healthy levels of project activity
across our end markets, and believe the fundamentals supporting our
core industrial markets remain favorable and robust. We continue to
take steps to optimize our operational efficiencies while
proactively addressing staffing levels, all of which have had a
significant positive impact on our profitability. We are confident
that our execution and strategic initiatives coupled with favorable
industry dynamics will support another successful year for
Powell.”
OUTLOOK
Commenting on the Company's outlook, Michael
Metcalf, Powell’s Chief Financial Officer said, “Looking forward,
we anticipate continued strength commercially across our core end
markets throughout Fiscal 2024. We are also encouraged by our
profitability improvements resulting from strengthening operating
leverage, as well as the commercial levers that have been
implemented in an effort to grow and protect our margin profile.
Our focus remains on executing our growing backlog as we navigate
through Fiscal 2024. As we assess the quality and mix of our
backlog, along with the staying power of these commercial
improvements that we’ve implemented, we expect our Fiscal 2024
margins to be similar to what we experienced throughout Fiscal
2023, which includes the normal seasonality impact that we
regularly encounter in our fiscal first quarter. Considering these
variables, in addition to the strong commercial outlook across most
of our end markets, as well as our liquidity position and the
strength of our balance sheet, we are confident that Fiscal 2024
will be another strong year for Powell.”
CONFERENCE CALL Powell
Industries has scheduled a conference call for Wednesday, December
6, 2023, 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, 2023 and
may be accessed by calling 1-877-344-7529 (domestic) or
1-412-317-0088 (international) and using passcode 4055736#.
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. &
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
Three Months EndedSeptember
30, |
|
|
Year EndedSeptember 30, |
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
208,641 |
|
|
$ |
162,676 |
|
|
|
$ |
699,308 |
|
|
$ |
532,582 |
|
Cost of goods sold |
156,659 |
|
|
129,236 |
|
|
|
551,755 |
|
|
447,564 |
|
Gross profit |
51,982 |
|
|
33,440 |
|
|
|
147,553 |
|
|
85,018 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
20,429 |
|
|
21,458 |
|
|
|
78,813 |
|
|
70,831 |
|
Research and development
expenses |
1,749 |
|
|
1,620 |
|
|
|
6,220 |
|
|
6,963 |
|
Operating income |
29,804 |
|
|
10,362 |
|
|
|
62,520 |
|
|
7,224 |
|
|
|
|
|
|
|
|
|
|
Other income |
- |
|
|
- |
|
|
|
- |
|
|
(2,285 |
) |
Interest income, net |
(2,915 |
) |
|
(255 |
) |
|
|
(6,430 |
) |
|
(334 |
) |
Income before income
taxes |
32,719 |
|
|
10,617 |
|
|
|
68,950 |
|
|
9,843 |
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit) |
6,283 |
|
|
1,878 |
|
|
|
14,425 |
|
|
(3,894 |
) |
|
|
|
|
|
|
|
|
|
Net income |
$ |
26,436 |
|
|
$ |
8,739 |
|
|
|
$ |
54,525 |
|
|
$ |
13,737 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
2.22 |
|
|
$ |
0.74 |
|
|
|
$ |
4.59 |
|
|
$ |
1.16 |
|
Diluted |
$ |
2.17 |
|
|
$ |
0.73 |
|
|
|
$ |
4.50 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
Basic |
11,890 |
|
|
11,811 |
|
|
|
11,879 |
|
|
11,797 |
|
Diluted |
12,158 |
|
|
11,969 |
|
|
|
12,120 |
|
|
11,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
$ |
2,106 |
|
|
$ |
2,152 |
|
|
|
$ |
8,606 |
|
|
$ |
9,358 |
|
Capital Expenditures |
$ |
3,813 |
|
|
$ |
686 |
|
|
|
$ |
7,819 |
|
|
$ |
2,451 |
|
Dividends Paid |
$ |
3,115 |
|
|
$ |
3,063 |
|
|
|
$ |
12,407 |
|
|
$ |
12,233 |
|
POWELL INDUSTRIES, INC. &
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
September 30, 2023 |
|
September 30, 2022 |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
Cash, cash equivalents and short-term investments |
$ |
279,009 |
|
|
$ |
116,508 |
|
|
|
|
|
Other current assets |
342,976 |
|
|
253,475 |
|
|
|
|
|
Property, plant and equipment, net |
97,625 |
|
|
98,628 |
|
|
|
|
|
Long-term assets |
32,632 |
|
|
24,769 |
|
|
|
|
|
Total assets |
$ |
752,242 |
|
|
$ |
493,380 |
|
|
|
|
|
|
|
|
|
Liabilities and equity: |
|
|
|
|
|
|
|
Current liabilities |
$ |
395,686 |
|
|
$ |
186,373 |
|
|
|
|
|
Deferred and other long-term liabilities |
11,530 |
|
|
9,801 |
|
|
|
|
|
Stockholders’ equity |
345,026 |
|
|
297,206 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
752,242 |
|
|
$ |
493,380 |
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
|
|
|
|
|
|
|
Working capital |
$ |
226,299 |
|
|
$ |
183,610 |
|
|
|
|
|
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 |
Powell Industries (NASDAQ:POWL)
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Powell Industries (NASDAQ:POWL)
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