Results

Powell Industries Inc.

12/05/2017 | Press release | Archived content

Press Release (powell industries announces fiscal 2017 fourth quarter results)

Powell Industries Announces Fiscal 2017 Fourth Quarter Results

Dec 05, 2017

HOUSTON, Dec. 5, 2017 /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 2017 fourth quarter and year ended September 30, 2017.

Revenues for the fourth quarter of fiscal 2017 were $95.0 million compared to revenues of $129.8 million for the fourth quarter of fiscal 2016. The Company reported a net loss for the fourth quarter of $5.1 million, or $0.45 per diluted share, compared to net income of $5.5 million, or $0.48 per diluted share, for the fourth quarter of fiscal 2016. Excluding special items, net loss for the fourth quarter of fiscal 2017 was $4.8 million, or $0.42 per diluted share. A reconciliation of this non-GAAP financial measure to net income (loss) is included in the financial tables below.

Brett A. Cope, Powell's President and Chief Executive Officer, stated, "Powell's fourth quarter results reflect a mix of both operational accomplishments and performance challenges. On a positive note, after Hurricane Harvey, we were able to strategically utilize our resources across the US and Canada to help several key customers that had experienced devastation from the storm quickly return to productive operation. However, we also faced challenges during the fourth quarter as a result of Harvey-related issues. While our Houston facilities sustained only minor damage, a number of our employees and their families were more severely impacted and required the support of the company to ensure their safe, but gradual return.

"We have seen order growth as customer momentum appears to be slowly building to fund higher quality jobs ranging up to $3 million in size, primarily for brownfield upgrade projects that have been postponed over the past two years. This has allowed us to become more selective on opportunities during the bidding process and will improve the quality of our backlog over time."

New orders placed during the fourth quarter of fiscal 2017 totaled $112 million compared to $91 million in the third quarter of fiscal 2017 and compared to $111 million in the fourth quarter of fiscal 2016. The Company's backlog as of September 30, 2017 was $250 million compared to $233 million as of June 30, 2017 and compared to $291 million at the end of last year's fourth quarter.

FISCAL 2017 RESULTS

Revenues for fiscal 2017 were $395.9 million compared to revenues of $565.2 million for fiscal 2016. Net loss for fiscal 2017 was $9.5 million, or $0.83 per diluted share, compared to net income of $15.5 million, or $1.36 per diluted share, in fiscal 2016. Excluding special items, net loss for fiscal 2017 was $8.6 million, or $0.75 per diluted share. A reconciliation of this non-GAAP financial measure to net income (loss) is included in the financial tables below.

OUTLOOK

Commenting on the company's outlook, Don R. Madison, Powell's Executive Vice President and Chief Financial and Administrative Officer said, "As we enter our fiscal 2018, we are beginning to see moderate signs of improvement when compared to six months ago in terms of pricing pressure, project quality and order volume for both greenfield and brownfield upgrade opportunities. While it is unclear whether these positive trends are sustainable, if current customer activity continues to gradually increase throughout fiscal 2018, we expect to end the fiscal year with a stronger backlog, which should position Powell for an improved fiscal 2019.

"Due in part to the need to continue managing production gaps in many of our factories and the quality of our current backlog, we expect to report a net loss for fiscal 2018," Madison concluded.

CONFERENCE CALL

Powell Industries has scheduled a conference call for Wednesday, December 6, 2017 at 11:00 a.m. Eastern time. To participate in the conference call, dial 412-902-0030 at least 10 minutes before the call begins and ask for the Powell Industries conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until December 13, 2017. To access the replay, dial 201-612-7415 using a passcode of 13673445#.

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 fifteen 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, 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.

This press release contains references to certain non-GAAP financial measures discussed above. Please see the financial table below for more details on these non-GAAP financial measures, including a reconciliation of these non-GAAP financial measures to net income and the reasons management believes these measures are useful to investors.

Contacts:

Don R. Madison, CFO


Powell Industries, Inc.


713-947-4422

POWELL INDUSTRIES, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS



Three months ended

September 30,


Year ended

September 30,


2017


2016


2017


2016

(In thousands, except per share data)









(Unaudited)









Revenues

$

94,963



$

129,793



$

395,911



$

565,243


Cost of goods sold

84,069



104,117



345,142



459,038


Gross profit

10,894



25,676



50,769



106,205










Selling, general and administrative expenses

15,071



17,138



61,524



74,924


Research and development expenses

2,088



1,278



6,906



6,731


Amortization of intangible assets

92



89



355



352


Restructuring and separation expenses

482



738



1,322



8,441


Operating income (loss)

(6,839)



6,433



(19,338)



15,757










Other income

(508)



(508)



(2,029)



(2,029)


Interest expense

46



37



168



149


Interest income

(271)



(43)



(558)



(156)


Income (loss) before income taxes

(6,106)



6,947



(16,919)



17,793










Income tax provision (benefit)

(964)



1,439



(7,433)



2,283










Net income (loss)

$

(5,142)



$

5,508



$

(9,486)



$

15,510










Earnings (loss) per share:








Basic

$

(0.45)



$

0.48



$

(0.83)



$

1.36


Diluted

$

(0.45)



$

0.48



$

(0.83)



$

1.36










Weighted average shares:








Basic

11,468



11,413



11,453



11,400


Diluted

11,468



11,463



11,453



11,431


















SELECTED FINANCIAL DATA:
















Depreciation and Amortization

$

3,274



$

3,267



$

12,755



$

13,331


Capital Expenditures

$

1,116



$

1,044



$

3,636



$

3,044


Dividends Paid

$

2,970



$

2,963



$

11,875



$

11,845


POWELL INDUSTRIES, INC. & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



September 30, 2017


September 30, 2016

(In thousands)

(Unaudited)





Assets:








Cash and cash equivalents and short-term investments

$

95,188



$

97,720






Restricted cash

15,104



-






Other current assets

139,779



206,420






Property, plant and equipment (net)

139,420



144,977






Restricted cash (non-current)

9,747



-






Long-term assets

15,748



13,399






Total assets

$

414,986



$

462,516










Liabilities & equity:








Current liabilities

$

85,579



$

118,248






Long-term debt, net of current maturities

1,600



2,000






Deferred and other long-term liabilities

6,511



6,951






Stockholders' equity

321,296



335,317






Total liabilities and stockholders' equity

$

414,986



$

462,516










SELECTED FINANCIAL DATA:








Working capital

$

164,492



$

185,892






POWELL INDUSTRIES, INC. & SUBSIDIARIES

NON-GAAP NET INCOME (LOSS) RECONCILIATION



Three months ended

September 30,


Year ended

September 30,

(In thousands)

2017


2016


2017


2016


(Unaudited)

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss):
















GAAP Net income (loss)

$

(5,142)



$

5,508



$

(9,486)



$

15,510


Non-GAAP items:








Restructuring and separation costs

482



738



1,322



8,441


Income tax effect of non-GAAP items

(169)



(95)



(463)



(2,519)










Non-GAAP Net income (loss)

$

(4,829)



$

6,151



$

(8,627)



$

21,432










Diluted shares outstanding

11,468



11,463



11,453



11,431










Diluted Earnings (Loss) Per Share:
















GAAP earnings (loss) per share

$

(0.45)



$

0.48



$

(0.83)



$

1.36


Non-GAAP earnings (loss) per share

$

(0.42)



$

0.54



$

(0.75)



$

1.87










For all periods presented, the Company defines non-GAAP net income (loss) as net income (loss) from operations which excludes restructuring and separation costs. The income tax effect is based on the applicable statutory rate. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. However, the Company believes by excluding these items, these non-GAAP financial measures are helpful in comparing the historical results to current results because this non-GAAP information provides consistent measures of the underlying results of our ongoing operations. The Company also believes the disclosure of non-GAAP net income (loss) will help investors meaningfully evaluate and compare its cash flow generating capacity from quarter to quarter and year to year.

The non-GAAP items, and the basis for excluding them from GAAP financial measures, are outlined below:

  • Restructuring and separation costs- For the year ended September 30, 2017 we incurred $1.3 million in restructuring costs as we continued to reduce our overall cost structure to better align our costs with future production requirements. For the year ended September 30, 2016, we recorded $8.4 million in restructuring and separation costs due to the restructuring of our senior management team and the alignment of our salaried and hourly workforce with future production requirements.

Due to the nature of these items, the Company does not believe that these items reflect its ongoing operations.

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SOURCE Powell Industries, Inc.

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