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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
Form 10-Q 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-12488 
Powell Industries, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware 88-0106100
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
 
8550 Mosley Road 
Houston
Texas77075-1180
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
(713) 944-6900
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per sharePOWLNASDAQ Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes       No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes      No
At April 29, 2024, there were 11,987,838 outstanding shares of the registrant’s common stock, par value $0.01 per share.
1





POWELL INDUSTRIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 
 Page

2





PART I — FINANCIAL INFORMATION 
Item 1. Financial Statements

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share data)
March 31, 2024September 30, 2023
ASSETS  
Current Assets:  
Cash and cash equivalents$323,256 $245,875 
Short-term investments42,083 33,134 
Accounts receivable, less allowance for credit losses of $331 and $273, respectively
183,980 206,591 
Contract assets75,010 60,621 
Inventories82,075 63,865 
Income taxes receivable95 100 
Prepaid expenses3,362 5,419 
Other current assets6,784 6,380 
Total Current Assets716,645 621,985 
Property, plant and equipment, net96,655 97,625 
Operating lease assets, net1,089 1,436 
Goodwill and intangible assets, net1,503 1,003 
Deferred income taxes17,105 17,064 
Other assets16,621 13,129 
Total Assets$849,618 $752,242 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current Liabilities:  
Accounts payable$79,767 $56,666 
Contract liabilities315,699 279,796 
Accrued compensation and benefits19,624 29,947 
Accrued product warranty4,568 3,305 
Current operating lease liabilities573 773 
Income taxes payable4,954 6,517 
Other current liabilities16,641 18,682 
Total Current Liabilities441,826 395,686 
Deferred compensation11,195 9,145 
Long-term operating lease liabilities516 663 
Other long-term liabilities2,296 1,722 
Total Liabilities455,833 407,216 
Commitments and Contingencies (Note F)
Stockholders' Equity:  
Preferred stock, par value $0.01; 5,000,000 shares authorized; none issued
  
Common stock, par value $0.01; 30,000,000 shares authorized; 12,793,856 and 12,668,001 shares issued, respectively; 11,987,838 and 11,861,983 shares outstanding, respectively
128 127 
Additional paid-in capital68,348 71,526 
Retained earnings376,401 325,281 
Treasury stock, 806,018 shares at cost
(24,999)(24,999)
Accumulated other comprehensive loss(26,093)(26,909)
Total Stockholders' Equity393,785 345,026 
Total Liabilities and Stockholders' Equity$849,618 $752,242 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3





POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
 
 Three months ended March 31,Six months ended March 31,
 2024202320242023
Revenues$255,108 $171,444 $449,125 $298,302 
Cost of goods sold192,388 138,007 338,211 245,401 
Gross profit62,720 33,437 110,914 52,901 
Selling, general and administrative expenses20,947 21,820 41,294 38,693 
Research and development expenses2,284 1,543 4,251 3,044 
Operating income39,489 10,074 65,369 11,164 
Interest income, net(4,428)(899)(8,426)(1,423)
Income before income taxes43,917 10,973 73,795 12,587 
Income tax provision10,429 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:  
Basic11,992 11,878 11,966 11,869 
Diluted12,191 12,149 12,167 12,109 
Dividends per share$0.2650 $0.2625 $0.5275 $0.5225 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4





POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
 
 
 Three months ended March 31,Six months ended March 31,
 2024202320242023
Net income$33,488 $8,473 $57,573 $9,636 
Foreign currency translation adjustments(2,269)427 816 2,605 
Gain on cash flow commodity hedge 111  329 
Comprehensive income$31,219 $9,011 $58,389 $12,570 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5





POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(In thousands)

Accumulated
AdditionalOther
 Common StockPaid-inRetainedTreasury StockComprehensive 
 SharesAmountCapitalEarningsSharesAmountIncome/(Loss)Totals
Balance, September 30, 202312,668 $127 $71,526 $325,281 (806)$(24,999)$(26,909)$345,026 
Net income— — — 24,085 — — — 24,085 
Foreign currency translation adjustments— — — — — — 3,085 3,085 
Stock-based compensation98 — 1,657 — — — — 1,657 
Shares withheld in lieu of employee tax withholding— — (4,752)— — — — (4,752)
Dividends— — 423 (3,204)— — — (2,781)
Balance, December 31, 202312,766 $127 $68,854 $346,162 (806)$(24,999)$(23,824)$366,320 
Net income— — — 33,488 — — — 33,488 
Foreign currency translation adjustments— — — — — — (2,269)(2,269)
Stock-based compensation28 1 1,205 — — — — 1,206 
Shares withheld in lieu of employee tax withholding— — (1,724)— — — — (1,724)
Dividends— — 13 (3,249)— — — (3,236)
Balance, March 31, 202412,794 $128 $68,348 $376,401 (806)$(24,999)$(26,093)$393,785 


Accumulated
AdditionalOther
 Common StockPaid-inRetainedTreasury StockComprehensive 
 SharesAmountCapitalEarningsSharesAmountIncome/(Loss)Totals
Balance, September 30, 202212,588 $126 $67,439 $283,638 (806)$(24,999)$(28,998)$297,206 
Net income— — — 1,162 — — — 1,162 
Foreign currency translation adjustments— — — — — — 2,178 2,178 
Stock-based compensation53 — 1,307 — — — — 1,307 
Shares withheld in lieu of employee tax withholding— — (423)— — — — (423)
Dividends— — 131 (3,307)— — — (3,176)
Gain on cash flow commodity hedge— — — — — — 218 218 
Balance, December 31, 202212,641 $126 $68,454 $281,493 (806)$(24,999)$(26,602)$298,472 
Net income— — — 8,473 — — — 8,473 
Foreign currency translation adjustments— — — — — — 427 427 
Stock-based compensation26 — 1,650 — — — — 1,650 
Shares withheld in lieu of employee tax withholding— — (159)— — — — (159)
Dividends— — 10 (3,189)— — — (3,179)
Gain on cash flow commodity hedge— — — — — — 111 111 
Balance, March 31, 202312,667 $126 $69,955 $286,777 (806)$(24,999)$(26,064)$305,795 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6





POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 Six months ended March 31,
 20242023
Operating Activities:  
Net income$57,573 $9,636 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation3,365 4,312 
Stock-based compensation2,863 2,956 
Unrealized mark-to-market gain on derivative contracts(30) 
Bad debt expense, net100 101 
Deferred income taxes(41)(1,783)
Changes in operating assets and liabilities:  
Accounts receivable, net22,812 (63,300)
Contract assets and liabilities, net21,338 123,082 
Inventories(18,137)(8,060)
Income taxes(1,555)862 
Prepaid expenses and other current assets1,671 1,026 
Accounts payable 22,879 (11,919)
Accrued liabilities(11,453)(3,331)
Other, net(494)1,932 
Net cash provided by operating activities100,891 55,514 
Investing Activities:  
Purchases of short-term investments(12,551)(3,695)
Maturities of short-term investments3,691 7,385 
Purchases of property, plant and equipment(2,138)(3,356)
Purchase of intangible assets(250) 
Proceeds from sale of property, plant and equipment 12 
Net cash provided by (used in) investing activities(11,248)346 
Financing Activities:  
Shares withheld in lieu of employee tax withholding(6,476)(582)
Dividends paid(6,299)(6,180)
Net cash used in financing activities(12,775)(6,762)
Net increase in cash and cash equivalents76,868 49,098 
Effect of exchange rate changes on cash and cash equivalents513 987 
Cash and cash equivalents at beginning of period245,875 101,954 
Cash and cash equivalents at end of period$323,256 $152,039 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7





POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
 
A. Overview and Summary of Significant Accounting Policies
Overview
Powell Industries, Inc. (we, us, our, Powell or the Company) is a Delaware corporation founded by William E. Powell in 1947. Our major subsidiaries, all of which are wholly owned, include Powell Electrical Systems, Inc.; Powell (UK) Limited; Powell Canada Inc.; and Powell Industries International, B.V.
We develop, design, manufacture and service custom-engineered equipment and systems that (1) distribute, control and monitor the flow of electrical energy and (2) provide protection to motors, transformers and other electrically powered equipment. We are headquartered in Houston, Texas, and serve the oil and gas and petrochemical markets, which include onshore and offshore production, liquefied natural gas (LNG) facilities and terminals, pipelines, refineries and petrochemical plants. Additional markets include electric utility, data centers, renewable energy, mining and metals, light rail traction power, pulp and paper, and other municipal, commercial and industrial markets.
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of Powell and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
 
The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP), have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. We believe that these financial statements contain all adjustments necessary so that they are not misleading.
The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Powell and its subsidiaries included in Powell’s Annual Report on Form 10-K for the year ended September 30, 2023, which was filed with the Securities and Exchange Commission (SEC) on December 6, 2023.
References to Fiscal 2024 and Fiscal 2023 used throughout this report shall mean the current fiscal year ending September 30, 2024 and the prior fiscal year ended September 30, 2023, respectively.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying footnotes. The most significant estimates used in our condensed consolidated financial statements affect revenue recognition and estimated cost recognition on our customer contracts, allowance for credit losses, provision for excess and obsolete inventory, warranty accruals and income taxes. The amounts recorded for warranties, legal, income taxes, impairment of long-lived assets (when applicable), liquidated damages and other contingent liabilities require judgments regarding the amount of expenses that will ultimately be incurred. We base our estimates on historical experience, forecasts and various other assumptions, as well as the specific circumstances surrounding these contingent liabilities, in evaluating the amount of liability that should be recorded. Additionally, the basis for recognition of deferred tax assets requires estimates related to future income and other assumptions regarding timing and future profitability because the ultimate realization of net deferred tax assets is dependent on the generation of future taxable income during periods in which temporary differences become deductible. Estimates routinely change as new events occur, additional information becomes available or operating environments change. Actual results may differ from our prior estimates.
8





Accounting Standards Updates and Disclosure Rules Issued but Not Yet Adopted
In November 2023, the Financial Accounting Standard Board (FASB) issued Accounting Standards Update (ASU) 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires that public entities disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) on an annual and interim basis. It also requires that public entities disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures in assessing segment performance and resource allocation. Additionally, it requires that all existing annual disclosures about segment profit or loss and assets must be provided on an interim basis and clarifies that single reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years beginning after December 15, 2024. A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. We are currently evaluating the impacts of the new standard.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures. It requires greater disaggregation of information in the tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, and should be applied on a prospective basis. Retrospective application and early adoption are permitted. We are currently evaluating the impacts of the new standard.

In March 2024, the SEC adopted final rules designed to enhance and standardize disclosures related to the risks and impacts of climate-related matters. The final rules require registrants to disclose certain climate-related information in registration statements and annual reports. Such information relates to climate-related risks and risk management processes for, and governance and oversight activities of such risks. The final rules also include requirements to disclose the financial effects of severe weather events and other natural conditions in the audited financial statements. In addition, larger registrants will be required to disclose information about greenhouse gas emissions, which will be subject to a phased-in assurance requirement. These disclosure requirements will be effective for the Company's fiscal year beginning October 1, 2025. In April 2024, the SEC voluntarily stayed the final rules as a result of pending legal challenges. We are currently evaluating the impacts of the final rules on our consolidated financial statements and related disclosures.


B. Earnings Per Share
We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common share include the weighted average of additional shares associated with the incremental effect of dilutive restricted stock and restricted stock units.
The following table reconciles basic and diluted weighted average shares used in the computation of earnings per share (in thousands, except per share data):
 Three months ended March 31,Six months ended March 31,
 2024202320242023
Numerator:  
Net income$33,488 $8,473 $57,573 $9,636 
Denominator:    
Weighted average basic shares11,992 11,878 11,966 11,869 
Dilutive effect of restricted stock and restricted stock units199 271 201 240 
Weighted average diluted shares12,191 12,149 12,167 12,109 
Earnings per share:    
Basic$2.79 $0.71 $4.81 $0.81 
Diluted$2.75 $0.70 $4.73 $0.80 



9





C. Detail of Selected Balance Sheet Accounts
Inventories
The components of inventories are summarized below (in thousands):
March 31, 2024September 30, 2023
Raw materials, parts and sub-assemblies$87,564 $68,631 
Work-in-progress1,204 1,379 
Provision for excess and obsolete inventories(6,693)(6,145)
Total inventories$82,075 $63,865 

Property, Plant and Equipment
Property, plant and equipment are summarized below (in thousands):
 March 31, 2024September 30, 2023
Land$21,606 $21,526 
Buildings and improvements124,070 121,454 
Machinery and equipment94,683 92,477 
Furniture and fixtures3,803 3,726 
Construction in process1,403 4,129 
$245,565 $243,312 
Less: Accumulated depreciation(148,910)(145,687)
Total property, plant and equipment, net$96,655 $97,625 

There were no assets under finance lease as of March 31, 2024 or September 30, 2023.

Intangible Asset
In December 2023, we acquired intellectual property for a total consideration of $0.5 million, of which $250 thousand was paid in cash at the acquisition date.

Accrued Product Warranty
Activity in our product warranty accrual consisted of the following (in thousands):
 Three months ended March 31,Six months ended March 31,
 2024202320242023
Balance at beginning of period$3,680 $2,380 $3,305 $2,345 
Increase to warranty expense1,867 1,211 2,994 1,690 
Deduction for warranty charges(968)(882)(1,742)(1,335)
Change due to foreign currency translation(11)2 11 11 
Balance at end of period$4,568 $2,711 $4,568 $2,711 
 


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D. Revenue
Revenue Recognition
Our revenues are primarily generated from the manufacturing of custom-engineered products and systems under long-term fixed-price contracts under which we agree to manufacture various products such as 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. These products may be sold separately as an engineered solution but are typically integrated into custom-built enclosures which we also build. These enclosures are referred to as power control room substations (PCRs®), custom-engineered modules or electrical houses (E-Houses). Some contracts may also include the installation and the commissioning of these enclosures.
Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We believe that this method is the most accurate representation of our performance because it directly measures the value of the services transferred to the customer over time as we incur costs on our contracts. Contract costs include all direct materials, labor and indirect costs related to contract performance, which may include indirect labor, supplies, tools, repairs and depreciation costs.
We also have contracts to provide field service inspection, installation, commissioning, modification, and repair services, as well as retrofit and retrofill components for existing systems. If the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our performance completed to date (i.e., a service contract in which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount that we have the right to invoice. Our performance obligations are satisfied as the work progresses. Revenues from our custom-engineered products and value-added services transferred to customers over time accounted for approximately 95% of revenues for the three months ended March 31, 2024, 94% of revenues for the six months ended March 31, 2024, and 93% of revenues for the three and six months ended March 31, 2023.
We also have sales orders for spare parts and replacement circuit breakers for switchgear that are obsolete or that are no longer produced by the original manufacturer. Revenues from these sales orders are recognized at the time we fulfill our performance obligation to the customer, which is typically upon shipment and represented approximately 5% of revenues for the three months ended March 31, 2024, 6% of revenues for the six months ended March 31, 2024, and 7% of revenues for the three and six months ended March 31, 2023.
Additionally, some contracts may contain a cancellation clause that could limit the amount of revenue we are able to recognize over time. In these instances, revenue and costs associated with these contracts are deferred and recognized at a point in time when the performance obligation is fulfilled.
Selling and administrative costs incurred in relation to obtaining a contract are typically expensed as incurred. We periodically utilize a third-party sales agent to obtain a contract and will pay a commission to that agent. We record the full commission liability to the third-party sales agents at the order date, with a corresponding deferred asset. As the project progresses, we record commission expense based on percentage of completion rates that correlate to the project and reduce the deferred asset. Once we have been paid by the customer, we pay the commission and the deferred liability is reduced.
Performance Obligations
A performance obligation is a promise in a contract or with a customer to transfer a distinct good or service. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue as the performance obligations are satisfied. To determine the proper revenue recognition for contracts, we evaluate whether a contract should be accounted for as more than one performance obligation or, less commonly, whether two or more contracts should be combined and accounted for as one performance obligation. This evaluation of performance obligations requires significant judgment. The majority of our contracts have a single performance obligation where multiple engineered products and services are combined into a single custom-engineered solution. Our contracts include a standard one-year assurance warranty. Occasionally, we provide service-type warranties that will extend the warranty period. These extended warranties qualify as a separate performance obligation, and revenue is deferred and recognized over the warranty period. If we determine during the evaluation of the contract that there are multiple performance obligations, we allocate the transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.
Remaining unsatisfied performance obligations, which we refer to as backlog, represent the estimated transaction price for goods and services for which we have a material right, but work has not been performed. As of March 31, 2024, we had backlog of $1.3 billion, of which approximately $733 million is expected to be recognized as revenue within the next twelve
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months. Backlog may not be indicative of future operating results as orders may be cancelled or modified by our customers. Our backlog does not include service and maintenance-type contracts for which we have the right to invoice as services are performed.
Contract Estimates
Actual revenues and project costs may vary from previous estimates due to changes in a variety of factors. The cost estimation process is based upon the professional knowledge and experience of our engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the availability of materials, and the effect of any delays on our project performance. We periodically review our job performance, job conditions, estimated profitability and final contract settlements, including our estimate of total costs and make revisions to costs and income in the period in which the revisions are probable and reasonably estimable. We bear the risk of cost overruns in most of our contracts, which may result in reduced profits. Whenever revisions of estimated contract costs and contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period.
For the six months ended March 31, 2024 and 2023, our operating results were positively impacted by $7.8 million and $7.4 million, respectively, as a result of net changes in contract estimates related to projects in progress at the beginning of the respective period. These changes in estimates resulted primarily from favorable project execution, reduced cost estimates and negotiations of variable consideration, discussed below, as well as revenue recognized from project cancellations and other changes in facts and circumstances during these periods. Gross unfavorable changes in contract estimates were immaterial for both the six months ended March 31, 2024 and 2023.
Variable Consideration
It is common for our long-term contracts to contain variable consideration that can either increase or decrease the transaction price. Due to the nature of our contracts, estimating total cost and revenue can be complex and subject to variability due to change orders, back charges, spare parts, early completion bonuses, customer allowances and liquidated damages. We estimate the amount of variable consideration based on the expected value method, which is the sum of the probability-weighted amounts, or the most likely amount method which uses various factors including experience with similar transactions and assessment of our anticipated performance. Variable consideration is included in the transaction price if legally enforceable and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is resolved.

Contract Modifications
Contracts may be modified for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the enforceable rights and obligations under the contract. Most of our contract modifications are for goods and services that are not distinct from the existing performance obligation. Contract modifications result in a cumulative catch-up adjustment to revenue based on our measure of progress for the performance obligation.
Contract Balances
The timing of revenue recognition, billings and cash collections affects accounts receivable, contract assets and contract liabilities in our Condensed Consolidated Balance Sheets.
Contract assets are recorded when revenues are recognized in excess of amounts billed for fixed-price contracts as determined by the billing milestone schedule. Contract assets are transferred to accounts receivable when billing milestones have been met, or we have an unconditional right to payment.
Contract liabilities typically represent advance payments from contractual billing milestones and billings in excess of revenue recognized. It is unusual to have advanced milestone payments with a term greater than one year, which could represent a financing component on the contract.
Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period and are generally classified as current.
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Contract assets and liabilities as of March 31, 2024 and September 30, 2023 are summarized below (in thousands):
March 31, 2024September 30, 2023
Contract assets$75,010 $60,621 
Contract liabilities(315,699)(279,796)
Net contract liability$(240,689)$(219,175)
Our net contract billing position remained a net liability at both March 31, 2024 and September 30, 2023, primarily due to favorable contract billing milestones. We typically allocate a significant percentage of the progress billing to the early stages of the contract. These favorable billing milestones are driving the increase in the net contract liability at March 31, 2024. To determine the amount of revenue recognized during the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. During the six months ended March 31, 2024, we recognized revenue of $185.4 million that was related to contract liabilities outstanding at September 30, 2023.
The timing of our invoice process is typically dependent on the completion of certain milestones and contract terms and subject to agreement by our customer. Payment is typically expected within 30 days of invoice. Any uncollected invoiced amounts for our performance obligations recognized over time, including contract retentions, are recorded as accounts receivable in the Condensed Consolidated Balance Sheets. Certain contracts allow customers to withhold a small percentage of billings pursuant to retainage provisions, and such amounts are generally due upon completion of the contract and acceptance of the project by the customer. Based on our experience in recent years, the majority of these retainage balances are expected to be collected within approximately twelve months. As of both March 31, 2024 and September 30, 2023, we had retention amounts of $7.4 million. Of the retained amount at March 31, 2024, $7.1 million is expected to be collected in the next twelve months and is recorded in accounts receivable. The remaining $0.3 million is recorded in other assets.
Disaggregation of Revenue
The following tables present our disaggregated revenue by geographic destination and market sector for the three and six months ended March 31, 2024 and 2023 (in thousands):
Three months ended March 31,Six months ended March 31,
2024202320242023
United States$216,933 $134,161 $376,793 $234,273 
Canada24,160 21,995 44,510 40,491 
Europe8,265 7,953 14,797 12,087 
Middle East and Africa2,803 4,004 6,078 6,429 
Mexico, Central and South America2,159 1,543 4,816 2,458 
Asia/Pacific788 1,788 2,131 2,564 
     Total revenues by geographic destination$255,108 $171,444 $449,125 $298,302 

Three months ended March 31,Six months ended March 31,
2024202320242023
Oil and gas (excludes petrochemical)$103,820 $62,597 $187,456 $106,107 
Petrochemical50,070 25,887 78,437 48,377 
Electric utility47,502 42,668 88,205 71,075 
Commercial and other industrial34,894 22,270 59,566 39,320 
Light rail traction power4,517 7,317 8,862 14,389 
All others14,305 10,705 26,599 19,034 
     Total revenues by market sector$255,108 $171,444 $449,125 $298,302 



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E. Long-Term Debt

U.S. Revolver
On October 4, 2023, we entered into a third amendment (the Third Amendment) to our credit agreement with Bank of America, N.A. (as amended, the U.S. Revolver). The Third Amendment added Texas Capital Bank as Syndication Agent and a lender, increased the amount of the revolving line of credit from $125.0 million to $150.0 million, and extended the expiry date to October 4, 2028. The aggregate commitment of $150.0 million consists of $100.0 million committed by Bank of America and $50.0 million committed by Texas Capital Bank. As amended by the Third Amendment, the lesser of (a) $60 million, (b) 60% of available cash, and (c) the aggregate face amount of the issued but undrawn letters of credit that are not cash-secured, shall be deducted from consolidated funded indebtedness, when calculating the consolidated net leverage ratio. We have the option to cash collateralize all or a portion of the letters of credit outstanding, which would favorably impact the consolidated funded indebtedness calculation and the consolidated net leverage ratio. As of March 31, 2024, there were no amounts borrowed under the U.S. Revolver, and letters of credit outstanding were $87.8 million. There was $62.2 million available for the issuance of letters of credit and borrowings under the U.S. Revolver as of March 31, 2024.
As of March 31, 2024, we were in compliance with all of the financial covenants of the U.S. Revolver.


F. Commitments and Contingencies
Letters of Credit, Bank Guarantees and Bonds
Certain customers require us to post letters of credit, bank guarantees or surety bonds. These security instruments assure that we will perform under the terms of our contract. In the event of default, the counterparty may demand payment from the bank under a letter of credit or bank guarantee, or performance by the surety under a bond. To date, there have been no significant draws or claims related to security instruments for the periods reported. We were contingently liable for letters of credit of $87.8 million as of March 31, 2024. We also had surety bonds totaling $481.9 million that were outstanding, with additional bonding capacity of $718.1 million available, at March 31, 2024. We have strong surety relationships; however, a change in market conditions or the sureties' assessment of our financial position could cause the sureties to require cash collateralization for undischarged liabilities under the bonds.
We have an $18.9 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank that provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options. At March 31, 2024, we had outstanding guarantees totaling $7.4 million, with an additional capacity of $11.5 million available under this Facility Agreement. The Facility Agreement provides for customary events of default and carries cross-default provisions with the U.S. Revolver. If an event of default (as defined in the Facility Agreement) occurs and is continuing, per the terms and subject to the conditions set forth therein, obligations outstanding under the Facility Agreement may be accelerated and declared immediately due and payable. Additionally, we are required to maintain cash collateral for guarantees greater than two years. As of March 31, 2024, we were in compliance with all of the financial covenants of the Facility Agreement.
Litigation
We are involved in various legal proceedings, claims and other disputes arising from our commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and for which the outcomes are not predictable. Although we can give no assurances about the resolution of pending claims, litigation or other disputes, and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity.
Liquidated Damages
Certain of our customer contracts have schedule and performance obligation clauses that, if we fail to meet them, could require us to pay liquidated damages. Each individual contract defines the conditions under which the customer may make a claim against us. As of March 31, 2024, certain contracts had a probable exposure to liquidated damages claims of $1.7 million, which could possibly increase to $2.1 million under certain circumstances. Based on our actual or projected failure to meet these various contractual commitments, $1.0 million has been recorded as a reduction to revenue. We will attempt to obtain change orders, contract extensions or accelerate project completion, which may resolve the potential for any unrecorded liquidated damages claims. Should we fail to achieve relief on some or all of these contractual obligations, we could be required to pay additional liquidated damages, which could negatively impact our future operating results.
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G. Stock-Based Compensation
Refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 for a full description of our existing stock-based compensation plans.
Restricted Stock Units
We issue restricted stock units (RSUs) to certain officers and key employees of the Company. The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market on the grant dates. Typically, these grants vest over a three-year period from the date of issuance and are a blend of time-based and performance-based shares. The portion of the grant that is time-based typically vests over a three-year period on each anniversary of the grant date, based on continued employment. The performance-based shares vest based on the three-year earnings and safety performance of the Company following the grant date. At March 31, 2024, there were 193,346 RSUs outstanding. The RSUs do not have voting rights but do receive dividend equivalents upon vesting which are accrued quarterly. Additionally, the shares of common stock underlying the RSUs are not considered issued and outstanding until vested and common stock is issued.
Total RSU activity (number of shares) for the six months ended March 31, 2024 is summarized below:
Number of
Restricted
Stock
Units
Weighted
Average
Grant Value
Per Share
Outstanding at September 30, 2023292,497 $22.90 
Granted42,110 85.86 
Vested(141,261)26.02 
Forfeited/canceled  
Outstanding at March 31, 2024193,346 $34.34 
 
During the six months ended March 31, 2024 and 2023, we recorded compensation expense of $2.7 million and $2.5 million, respectively, related to the RSUs. 
Restricted Stock
In December 2023, the Company's Compensation and Human Capital Committee revised the non-employee directors' annual restricted stock compensation from a fixed-shares arrangement to a fixed-value arrangement, retrospectively effective on October 1, 2023. Prior to October 1, 2023, each non-employee director received 2,400 restricted shares of the Company’s common stock annually. Fifty percent of the restricted stock granted to each of our non-employee directors vested immediately, while the remaining fifty percent vested on the anniversary of the grant date. Compensation expense was recognized immediately for the first fifty percent of the restricted stock granted, while compensation expense for the remaining fifty percent was recognized over the remaining vesting period. Subsequent to October 1, 2023, each non-employee director shall receive restricted shares of the Company's common stock valued at $0.1 million annually. The number of granted shares is calculated by dividing the $0.1 million by the average of high and low prices of our common stock on the grant date. The shares shall vest on the earlier of the grant anniversary date or the date of the next annual meeting of stockholders, whichever occurs first. In February 2024, 4,620 shares of restricted stock were issued to our non-employee directors at a price of $153.81 per share. During the six months ended March 31, 2024 and 2023, we recorded compensation expense of $0.2 million and $0.5 million, respectively, related to restricted stock.  



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H. Fair Value Measurements
We measure certain financial assets and liabilities at fair value. Fair value is defined as an “exit price,” which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in valuing an asset or liability. The accounting guidance requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. As a basis for considering such assumptions and inputs, a fair value hierarchy has been established which identifies and prioritizes three levels of inputs to be used in measuring fair value.
The three levels of the fair value hierarchy are as follows:
Level 1 — Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 — Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market data and require the reporting entity to develop its own assumptions.
The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2024 (in thousands):
 
 Fair Value Measurements at March 31, 2024
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair Value at
March 31,
2024
Assets:    
Cash and cash equivalents$323,256 $ $ $323,256 
Short-term investments42,083   42,083 
Rabbi trust assets 11,549  11,549 
Liabilities:    
Deferred compensation 11,195  11,195 
The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2023 (in thousands):
 Fair Value Measurements at September 30, 2023
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair Value at
September 30,
2023
Assets:    
Cash and cash equivalents$245,875 $ $ $245,875 
Short-term investments33,134   33,134 
Rabbi trust assets 9,117  9,117 
Liabilities:    
Deferred compensation 9,145  9,145 

Fair value guidance requires certain fair value disclosures be presented in both interim and annual reports.  The estimated fair value amounts of financial instruments have been determined using available market information and valuation methodologies described below.
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Cash and cash equivalents – Cash and cash equivalents, primarily funds held in money market savings instruments, are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in our Condensed Consolidated Balance Sheets.
Short-term investments – Short-term investments include time deposits with original maturities of three months or more.
Rabbi trust assets and deferred compensation – We hold investments in an irrevocable rabbi trust for our deferred compensation plan. The assets are primarily related to company-owned life insurance policies and are included in other assets in the accompanying Condensed Consolidated Balance Sheets. Because the mutual funds and company-owned life insurance policies are combined in the plan, they are categorized as Level 2 in the fair value measurement hierarchy. The deferred compensation liability represents the investment options that the plan participants have designated to serve as the basis for measurement of the notional value of their accounts. Because the deferred compensation liability is intended to offset the plan assets, it is also categorized as Level 2 in the fair value measurement hierarchy.
There were no transfers between levels within the fair value measurement hierarchy during the quarter ended March 31, 2024.


I. Leases

Our leases consist primarily of office and construction equipment. All of our future lease obligations are related to non-cancelable operating leases. The following table provides a summary of lease cost components for the three and six months ended March 31, 2024 and 2023, respectively (in thousands):

Three months ended March 31,Six months ended March 31,
Lease Cost2024202320242023
Operating lease cost$249 $378 $505 $755 
     Less: sublease income (163) (324)
Variable lease cost(1)
23 88 53 195 
Short-term lease cost(2)
644 430 1,044 817 
Total lease cost$916 $733 $1,602 $1,443 

(1) Variable lease cost represents common area maintenance charges related to our Canadian office space lease.
(2) Short-term lease cost includes leases and rentals with initial terms of one year or less.

We recognize operating lease assets and operating lease liabilities representing the present value of the remaining lease payments for leases with initial terms greater than twelve months. Leases with initial terms of twelve months or less are not recorded in our Condensed Consolidated Balance Sheets. The following table provides a summary of the operating lease assets and operating lease liabilities included in our Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2023, respectively (in thousands):

Operating LeasesMarch 31, 2024September 30, 2023
Assets:
Operating lease assets, net$1,089 $1,436 
Liabilities:
Current operating lease liabilities573 773 
Long-term operating lease liabilities516 663 
Total lease liabilities$1,089 $1,436 

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The following table provides the maturities of our operating lease liabilities as of March 31, 2024 (in thousands):
Operating Leases
Remainder of 2024$275 
2025443 
2026222 
2027182 
202821 
Thereafter 
Total future minimum lease payments$1,143 
Less: present value discount (imputed interest)(54)
Present value of lease liabilities$1,089 

The weighted average discount rate as of March 31, 2024 was 3.81%. The weighted average remaining lease term was 2.57 years at March 31, 2024.


J. Income Taxes
The calculation of the effective tax rate is as follows (in thousands):
 Three months ended March 31,Six months ended March 31,
 2024202320242023
Income before income taxes$43,917 $10,973 $73,795 $12,587 
Income tax provision10,429 2,500 16,222 2,951 
Net income$33,488 $8,473 $57,573 $9,636 
Effective tax rate24 %23 %22 %23 %

Our income tax provision reflects an effective tax rate on pre-tax income of 24% and 22% for the three and six months ended March 31, 2024, respectively, compared to 23% for both the three and six months ended March 31, 2023. The effective tax rate for the three and six months ended March 31, 2024 was favorably impacted by the estimated Research and Development Tax Credit (R&D Tax Credit) as well as discrete items related to the vesting of RSUs and the release of a reserve for unrecognized tax benefits upon expiration of the statute of limitations. These items were offset by an inclusion related to U.S. global intangible income and the tax expense related to certain nondeductible expenses. The effective tax rate for the three and six months ended March 31, 2023 was favorably impacted by the estimated R&D Tax Credit and the projected utilization of net operating loss carryforwards in the U.K. that had been fully reserved with a valuation allowance. The favorable impacts were offset by state income tax expense, certain nondeductible expenses and an income inclusion related to U.S. global intangible income.


K. Subsequent Events
Quarterly Dividend Declared
On April 30, 2024, our Board of Directors declared a quarterly cash dividend on our common stock in the amount of $0.2650 per share. The dividend is payable on June 12, 2024 to stockholders of record at the close of business on May 15, 2024.





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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical fact, included in this report are forward-looking statements. Such forward-looking statements include, but are not limited to, projections and estimates concerning the timing and success of specific projects, our future backlog, revenues, income, acquisitions, liquidity, capital spending, results of operations and financial condition, as well as other statements that are not historical facts contained in or incorporated by reference into this report. Statements that contain words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “potential,” “possible,” “would,” “outlook,” “will” or similar expressions are forward-looking statements.
These forward-looking statements speak only as of the date of this report; we disclaim any obligation to update or revise these statements unless required by applicable law, whether as a result of new information, future events or otherwise; and we caution you not to unduly rely on them. We have based these forward-looking statements on expectations and assumptions of management at the time the statements were made. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties that could cause actual results to differ materially from those included in this report, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, but are not limited to, the factors detailed below, elsewhere herein and in our other SEC filings.
Risk Factors Related to our Business and Industry
Our business is subject to the cyclical nature of the end markets that we serve. This has had, and may continue to have, an adverse effect on our future operating results.
Our industry is highly competitive.
Our business requires skilled and unskilled labor, and we may be unable to attract and retain qualified employees.
Technological innovations may make existing products and production methods obsolete.
Unforeseen difficulties with expansions, relocations, or consolidations of existing facilities could adversely affect our operations.
Quality problems with our products could harm our reputation and erode our competitive position.
Growth and product diversification through strategic acquisitions involve a number of risks.
We are exposed to risks relating to the use of subcontractors.
Misconduct by our employees or subcontractors, or a failure to comply with laws or regulations, could harm our reputation, damage our relationships with customers and subject us to criminal and civil enforcement actions.
Unsatisfactory safety performance may subject us to penalties, negatively impact customer relationships, result in higher operating costs, and negatively impact employee morale and turnover.
Catastrophic events, including natural disasters, health epidemics, acts of war and terrorism, among others, could disrupt our business.
Risk Factors Related to our Financial Condition and Markets
Global economic uncertainty and financial market conditions may impact our customer base, suppliers and backlog.
Our backlog is subject to unexpected adjustments, cancellations and scope reductions and, therefore, may not be a reliable indicator of our future earnings.
Revenues recognized over time from our fixed-price contracts could result in volatility in our results of operations.
Many of our contracts contain performance obligations that may subject us to penalties or additional liabilities.
Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits and could adversely impact our ability to meet commitments to our customers.
Obtaining surety bonds, letters of credit, bank guarantees, or other financial assurances, may be necessary for us to successfully bid on and obtain certain contracts.
Failure to remain in compliance with covenants or obtain waivers or amendments under our credit agreement could adversely impact our business.
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We extend credit to customers in conjunction with our performance under fixed-price contracts which subjects us to potential credit risks.
A significant portion of our revenues may be concentrated among a small number of customers.
We carry insurance against many potential liabilities, but our management of risk may leave us exposed to unidentified or unanticipated risks.
Our international operations expose us to risks that are different from, or possibly greater than, the risks we are exposed to domestically and may adversely affect our operations.
Failures or weaknesses in our internal controls over financial reporting could adversely affect our ability to report on our financial condition and results of operations accurately and/or on a timely basis.
Risk Factors Related to our Common Stock
Our stock price could decline or fluctuate significantly due to unforeseen circumstances which may be outside of our control. These fluctuations may cause our stockholders to incur losses.
There can be no assurance that we will declare or pay future dividends on our common stock.
Risk Factors Related to Legal and Regulatory Matters
Our operations could be adversely impacted by the effects of government regulations.
Provisions of our charter documents or Delaware law could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders, and could make it more difficult to change management.
Significant developments arising from tariffs and other economic proposals could adversely impact our business.
General Risk Factors
A failure in our business systems or cybersecurity attacks on any of our facilities, or those of third parties, could adversely affect our business, results of operations and reputation.
Changes in and compliance with ESG initiatives could adversely impact our business.
Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition.
Changes in tax laws and regulations may change our effective tax rate and could have a material effect on our financial results.
The departure of key personnel could disrupt our business.
Refer to “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended September 30, 2023, which was filed with the SEC on December 6, 2023. We can provide no assurance that the forward-looking statements contained in this report will occur as expected, and actual results may differ materially from those included in this report.
Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investors section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated to this Quarterly Report on Form 10-Q.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, which was filed with the SEC on December 6, 2023 and is available on the SEC’s website at www.sec.gov.
Overview
We develop, design, manufacture and service custom-engineered equipment and systems that (1) distribute, control and monitor the flow of electrical energy and (2) provide protection to motors, transformers and other electrically powered equipment. We are headquartered in Houston, Texas, and serve the oil and gas and petrochemical markets, which include onshore and offshore production, liquefied natural gas (LNG) facilities and terminals, pipelines, refineries and petrochemical plants. Additional markets include electric utility, data centers, renewable energy, mining and metals, light rail traction power, pulp and paper, and other municipal, commercial and industrial markets. Revenues and costs are primarily related to custom engineered-to-order equipment and systems and are accounted for under percentage-of-completion accounting, which precludes us from providing detailed price and volume information. Our backlog includes various projects that typically take a number of months to produce.
The markets in which we participate are capital-intensive and cyclical in nature. Cyclicality is predominantly driven by customer demand, global economic and geopolitical conditions and anticipated environmental, safety or regulatory changes that affect the manner in which our customers proceed with capital investments. Our customers analyze various factors, including the demand and price for oil, gas and electrical energy, the overall economic and financial environment, governmental budgets, regulatory actions and environmental concerns. These factors influence the release of new capital projects by our customers, which are traditionally awarded in competitive bid situations. Scheduling of projects is matched to customer requirements, and projects typically take a number of months to produce. Schedules may change during the course of any particular project, and our operating results can, therefore, be impacted by factors outside of our control.
Within the industrial sector, specifically oil, gas and petrochemical, the demand for our electrical distribution solutions is very cyclical and closely correlated to the level of capital expenditures of our end-user customers as well as prevailing global economic conditions. The North American market is responding to increased international demand for LNG and gas-to-chemical processes utilizing low-cost gas feedstocks. As a result, we have been awarded a number of large LNG and petrochemical contracts in Fiscal 2023 that positively impact our backlog in Fiscal 2024.
One element of our strategic focus is to strengthen our project portfolio beyond our core oil, gas and petrochemical end market sectors. Diversification efforts outside of our core oil, gas and petrochemical end markets have resulted in a solid backlog across the electric utility and commercial and other industrial sectors in Fiscal 2023 and continuing throughout the first half of Fiscal 2024. As of March 31, 2024, our backlog remained at $1.3 billion.
Even though commodity prices remained stable throughout the first half of Fiscal 2024, we continue to experience supply chain delays for specific engineered components and are working with our suppliers to meet our customer commitments. In response to the increased cost environment and supply chain challenges, we strive to effectively manage our product pricing, delivery schedules and bid validity dates with our customers, as well as improve factory efficiencies and project execution.
Results of Operations
Quarter Ended March 31, 2024 Compared to the Quarter Ended March 31, 2023 (Unaudited)
Revenue and Gross Profit
Revenues increased by 49%, or $83.7 million, to $255.1 million in the second quarter of Fiscal 2024, primarily driven by the increase in project backlog resulting from large contracts awarded in Fiscal 2023 and solid bookings throughout the first half of Fiscal 2024. Domestic revenues increased by 62%, or $82.8 million, to $216.9 million in the second quarter of Fiscal 2024. International revenues increased by 2%, or $0.9 million, to $38.2 million in the second quarter of Fiscal 2024. Our international revenues include both revenues generated from our international facilities as well as revenues from export projects generated at our domestic facilities.
In the second quarter of Fiscal 2024, revenue from our core oil and gas market (excluding petrochemical) increased by 66%, or $41.2 million, to $103.8 million; petrochemical market revenue increased by 93%, or $24.2 million, to $50.1 million; revenue from our electric utility market increased by 11%, or $4.8 million, to $47.5 million; commercial and other industrial market revenue increased by 57%, or $12.6 million, to $34.9 million; and revenue from all other markets combined increased by 34%,
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or $3.6 million, to $14.3 million. These increases in revenue were driven by improved market conditions and increased capital spending in our core oil, gas and petrochemical markets, as well as our strategic effort to diversify our business into electric utility and commercial and other industrial markets. Revenue from our light rail traction power market decreased by 38%, or $2.8 million, to $4.5 million in the second quarter of Fiscal 2024 due to less project volume in this market.
Gross profit increased by 88%, or $29.3 million, to $62.7 million for the second quarter of Fiscal 2024. Gross profit as a percentage of revenues increased to 25% in the second quarter of Fiscal 2024, compared to 20% in the second quarter of Fiscal 2023. This increase in gross profit reflects the higher volume levels across our manufacturing facilities driving favorable volume leverage, efficient project execution, as well as our continuing effort to improve key factory efficiencies and to effectively manage product pricing that corresponds to current cost levels.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by 4%, or $0.9 million, to $20.9 million in the second quarter of Fiscal 2024, primarily due to a lower level of variable incentive compensation expenses. Selling, general and administrative expenses as a percentage of revenues decreased to 8% during the second quarter of Fiscal 2024 compared to 13% during the second quarter of Fiscal 2023, resulting from higher revenues on our existing cost structure.
Income Tax Provision
We recorded an income tax provision of $10.4 million in the second quarter of Fiscal 2024, compared to an income tax provision of $2.5 million in the second quarter of Fiscal 2023. The effective tax rate for the second quarter of Fiscal 2024 was 24%, compared to an effective tax rate of 23% for the second quarter of Fiscal 2023. For each of the three months ended March 31, 2024 and 2023, the effective tax rate was favorably impacted by the estimated Research and Development Tax Credit (R&D Tax Credit). Additionally, we recognized benefits related to discrete items for the vesting of restricted stock units (RSUs) and the release of a reserve for unrecognized tax benefits in the second quarter of Fiscal 2024 and a benefit related to the projected utilization of net operating loss carryforwards in the United Kingdom (the U.K.) that had been fully reserved with a valuation allowance in the second quarter of Fiscal 2023. For each of the three months ended March 31, 2024 and 2023, these benefits were offset by an income inclusion related to U.S. global intangible income and certain nondeductible expenses.
Net Income
In the second quarter of Fiscal 2024, we recorded net income of $33.5 million, or $2.75 per diluted share, compared to net income of $8.5 million, or $0.70 per diluted share, in the second quarter of Fiscal 2023. This increase in net income was primarily due to the strength and quality of our backlog at the end of Fiscal 2023, as well as solid bookings throughout the first half of Fiscal 2024, which has led to an increase in revenue coupled with improved project margins.
Backlog
The order backlog, which is our remaining unsatisfied performance obligations, represents the estimated transaction price for goods and services for which we have a material right, but work has not been performed. The order backlog at March 31, 2024 was $1.3 billion, consistent with our December 31, 2023 backlog, and an increase of 25% from $1.0 billion at March 31, 2023. Bookings, net of cancellations and scope reductions, decreased by 54% in the second quarter of Fiscal 2024 to $235.4 million, compared to $508.2 million in the second quarter of Fiscal 2023. Despite solid bookings in the second quarter of Fiscal 2024, the decrease was due to a normalization of the oil and gas sector and fewer large orders awarded during Fiscal 2024.

Six Months Ended March 31, 2024 Compared to Six Months Ended March 31, 2023 (Unaudited)
Revenue and Gross Profit
Revenues increased by 51%, or $150.8 million, to $449.1 million in the six months ended March 31, 2024, primarily driven by the increase in project backlog resulting from large contracts awarded throughout Fiscal 2023 and solid bookings throughout the first half of Fiscal 2024. Domestic revenues increased by 61%, or $142.5 million, to $376.8 million in the six months ended March 31, 2024. International revenues increased by 13%, or $8.3 million, to $72.3 million in the six months ended March 31, 2024. Our international revenues include both revenues generated from our international facilities as well as revenues from export projects generated at our domestic facilities.
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In the six months ended March 31, 2024, revenue from our core oil and gas market (excluding petrochemical) increased by 77%, or $81.3 million, to $187.5 million; petrochemical market revenue increased by 62%, or $30.1 million, to $78.4 million; revenue from our electric utility market increased by 24%, or $17.1 million, to $88.2 million; commercial and other industrial market revenue increased by 51%, or $20.2 million, to $59.6 million; and revenue from all other markets combined increased by 40%, or $7.6 million, to $26.6 million. These increases in revenue were driven by improved market conditions and increased capital spending in our core oil, gas and petrochemical markets, as well as our strategic effort to diversify our business into electric utility and commercial and other industrial markets. Revenue from our light rail traction power market decreased by 38%, or $5.5 million, to $8.9 million in the first half of Fiscal 2024 due to less project volume in this market.
Gross profit increased by 110%, or $58.0 million, to $110.9 million for the first half of Fiscal 2024. Gross profit as a percentage of revenues increased to 25% in the first half of Fiscal 2024, compared to 18% in the first half of Fiscal 2023. This increase in gross profit reflects the higher volume levels across our manufacturing facilities driving favorable volume, leverage, efficient project execution, as well as our continuing effort to improve key factory efficiencies and to effectively manage product pricing that corresponds to current cost levels.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by 7%, or $2.6 million, to $41.3 million in the six months ended March 31, 2024, primarily due to increased compensation expenses. Selling, general and administrative expenses as a percentage of revenues decreased to 9% during the first half of Fiscal 2024 compared to 13% during the first half of Fiscal 2023, resulting from higher revenues on our existing cost structure.
Income Tax Provision
We recorded an income tax provision of $16.2 million in the six months ended March 31, 2024, compared to an income tax provision of $3.0 million in the six months ended March 31, 2023. The effective tax rate for the six months ended March 31, 2024 was 22%, compared to an effective tax rate of 23% for the six months ended March 31, 2023. For each of the six months ended March 31, 2024 and 2023, the effective tax rate was favorably impacted by the estimated R&D Tax Credit. Additionally, we recognized benefits related to discrete items for the vesting of RSUs and the release of a reserve for unrecognized tax benefits in the six months ended March 31, 2024 and a benefit related to the projected utilization of net operating loss carryforwards in the U.K. that had been fully reserved with a valuation allowance in the six months ended March 31, 2023. In both periods, these benefits were offset by an income inclusion related to U.S. global intangible income and certain nondeductible expenses.
Net Income
In the six months ended March 31, 2024, we recorded net income of $57.6 million, or $4.73 per diluted share, compared to net income of $9.6 million, or $0.80 per diluted share, in the six months ended March 31, 2023. This increase in net income was primarily due to the strength and quality of our backlog at the end of Fiscal 2023, as well as solid bookings throughout the first half of Fiscal 2024, which has led to an increase in revenue coupled with improved project margins.
Backlog
The order backlog, which is our remaining unsatisfied performance obligations, represents the estimated transaction price for goods and services for which we have a material right, but work has not been performed. The order backlog at March 31, 2024 was $1.3 billion, consistent with our backlog at September 30, 2023. Bookings, net of cancellations and scope reductions, decreased by 40% during the six months ended March 31, 2024 to $433.0 million, compared to $720.0 million during the six months ended March 31, 2023. Despite solid bookings in the first half of Fiscal 2024, the decrease was due to a normalization of the oil and gas sector and fewer large orders awarded in Fiscal 2024.
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Outlook
Our order activity in most of our core markets remains active and diversification efforts outside of our core oil, gas and petrochemical markets continue to be a positive catalyst. We believe the fundamentals of the US natural gas market, through abundant supply and low cost, will continue to support investments in LNG, related gas processing, and petrochemical processes. We continue to monitor the Biden administration's pause of LNG export permitting by the Department of Energy, which may impact the timing of future project activity. We have achieved strong bookings in electric utility and commercial markets through the first half of Fiscal 2024 in the US, Canada and the U.K., largely driven by the markets where our operations are based. Our backlog remained at $1.3 billion as of March 31, 2024, of which approximately $733 million is expected to be recognized as revenue within the next twelve months. Although current commercial activity remains active in most of the sectors that we compete in, we remain attentive to the macro environment and geopolitical events that may have an impact on future market activity.
Our operating results are impacted by several factors such as the timing of new order awards, project backlog, changes in project cost estimates, customer approval of final engineering specifications and delays in customer construction schedules, all of which contribute to short-term earnings variability and the timing of project execution. Our operating results also have been, and may continue to be, impacted by the timing and resolution of change orders and the resolution of potential contract claims and liquidated damages, all of which could improve or deteriorate gross margins during the period in which these items are resolved with our customers. Disruptions in the global supply chain have negatively impacted and may continue to negatively impact our business and operating results due to the limited supply of, delays for and uncertainty in the timing of the receipt of key component parts and commodities. We continue to remain focused on the variables that impact our markets as well as cost management, labor availability and supply chain challenges.
We have planned capital spending of approximately $11.0 million on a facility expansion project at our products factory in Houston. We expect to complete the expansion project by mid-Fiscal 2025.

Liquidity and Capital Resources
As of March 31, 2024, current assets exceeded current liabilities by 1.6 times.
Cash, cash equivalents and short-term investments increased to $365.3 million at March 31, 2024, compared to $279.0 million at September 30, 2023. This increase in cash, cash equivalents and short-term investments was primarily driven by the increased project volume and favorable timing of contract billing milestones on many of our large projects. We typically allocate a significant percentage of the progress billing to the early stages of the contract. Our improved earnings, as well as favorable billing milestones largely contributed to the increase in our cash, cash equivalents and short-term investments at March 31, 2024. We believe that our cash, cash equivalents and short-term investments, as well as available borrowings under the U.S. Revolver, will be sufficient to support our future operating activities, working capital requirements, payment of dividends and capital spending, as well as research and development initiatives for the next twelve months and beyond.
On October 4, 2023, we entered into the Third Amendment to the U.S. Revolver. The Third Amendment added Texas Capital Bank as Syndication Agent and a lender, increased the amount of the revolving line of credit from $125.0 million to $150.0 million, and extended the expiry date to October 4, 2028. The aggregate commitment of $150.0 million consists of $100.0 million committed by Bank of America and $50.0 million committed by Texas Capital Bank. As amended by the Third Amendment, the lesser of (a) $60 million, (b) 60% of available cash, and (c) the aggregate face amount of the issued but undrawn letters of credit that are not cash-secured, shall be deducted from consolidated funded indebtedness, when calculating the consolidated net leverage ratio. We have the option to cash collateralize all or a portion of the letters of credit outstanding, which would favorably impact the consolidated funded indebtedness calculation and the consolidated net leverage ratio.
As of March 31, 2024, there were no amounts borrowed under the U.S. Revolver, and letters of credit outstanding were $87.8 million. There was $62.2 million available for the issuance of letters of credit and borrowings under the U.S. Revolver as of March 31, 2024. For further information regarding our debt, see Notes E and F of Notes to Condensed Consolidated Financial Statements.
Approximately $70.6 million of our cash, cash equivalents and short-term investments at March 31, 2024 was held outside of the U.S. for our international operations. It is our intention to indefinitely reinvest all current and future foreign earnings internationally in order to ensure sufficient working capital to support our international operations. In the event that we elect to repatriate some or all of the foreign earnings that were previously deemed to be indefinitely reinvested outside the U.S., we may incur additional tax expense upon such repatriation under current tax laws.
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Operating Activities
Operating activities provided net cash of $100.9 million during the six months ended March 31, 2024 and provided net cash of $55.5 million during the same period in Fiscal 2023. Cash flow from operations is primarily influenced by project volume and margins, as well as the associated working capital requirements, the timing of milestone payments from our customers, and payment terms with our suppliers. This increase in operating cash flow was primarily due to higher net income resulting from increased project volume and improved project margins.
Investing Activities
Investing activities used $11.2 million during the six months ended March 31, 2024 and provided $0.3 million during the same period in Fiscal 2023. The increase in cash used in investing activities was primarily due to net purchases of short-term investments of $8.9 million in the first half of Fiscal 2024 compared to net maturities of short-term investments of $3.7 million in the same period of Fiscal 2023. In December 2023, we acquired intellectual property for a total consideration of $0.5 million, of which $250 thousand was paid in cash.
Financing Activities
Net cash used in financing activities was $12.8 million during the six months ended March 31, 2024 and $6.8 million during the same period in Fiscal 2023. The increase in cash used in financing activities was primarily due to cash payments related to shares withheld in lieu of employee tax withholding, largely driven by the significant increase in our share price in the first half of Fiscal 2024 compared to the same period of Fiscal 2023.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will be consistent with those estimates.
There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, which was filed with the SEC on December 6, 2023.


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Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risks as of and for the three and six months ended March 31, 2024, as compared to the information previously reported under Part II, Item 7A within our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established and maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the SEC pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosures.
Management, with the participation of our CEO and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO have each concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that occurred during the second quarter of Fiscal 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION
 
Item 1. Legal Proceedings
We are involved in various legal proceedings, claims and other disputes arising from our commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and for which the outcomes are not predictable. Although we can give no assurances about the resolution of pending claims, litigation or other disputes, and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity.
 
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Item 5. Other Information
Insider Adoption or Termination of Trading Arrangements
On February 23, 2024, Michael W. Metcalf, Executive Vice President and Chief Financial Officer, adopted a “Rule 10b5-1 trading arrangement,” as the term is defined in Item 408(a) of Regulation S-K, for the sale of up to 10,100 shares of the Company’s common stock, subject to certain conditions, from June 7, 2024 through February 14, 2025.
On February 26, 2024, Brett A. Cope, President and Chief Executive Officer, adopted a “Rule 10b5-1 trading arrangement,” as the term is defined in Item 408(a) of Regulation S-K, for the sale of up to 11,000 shares of the Company’s common stock, subject to certain conditions, from June 14, 2024 through December 19, 2024.
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Item 6. Exhibits
 
Number Description of Exhibits
3.1 
   
3.2 
3.3 
*31.1
   
*31.2
   
**32.1
   
**32.2
   
*101
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets (Unaudited); (ii) Condensed Consolidated Statements of Operations (Unaudited); (iii) Condensed Consolidated Statements of Comprehensive Income (Unaudited); (iv) Condensed Consolidated Statements of Stockholders' Equity (Unaudited); (v) Condensed Consolidated Statements of Cash Flows (Unaudited); and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited), tagged as blocks of text and including detailed tags.
   
*104
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included as Exhibit 101).
* Filed herewith
** Furnished herewith


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 POWELL INDUSTRIES, INC.
 (Registrant)
   
Date: May 1, 2024By:/s/ Brett A. Cope
Brett A. Cope
  President and Chief Executive Officer
  (Principal Executive Officer)
   
Date: May 1, 2024By:/s/  Michael W. Metcalf
  Michael W. Metcalf
  Executive Vice President
  Chief Financial Officer
  (Principal Financial Officer)

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Document

EXHIBIT 31.1
 
CERTIFICATION
 
I, Brett A. Cope, certify that:
 
1.I have reviewed this Quarterly Report on Form 10-Q of Powell Industries, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
/s/ Brett A. Cope
Brett A. Cope
President and Chief Executive Officer
(Principal Executive Officer)

Date: May 01, 2024

Document

EXHIBIT 31.2
 
CERTIFICATION
 
I, Michael W. Metcalf, certify that:
 
1.I have reviewed this Quarterly Report on Form 10-Q of Powell Industries, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
/s/ Michael W. Metcalf 
Michael W. Metcalf
Executive Vice President
Chief Financial Officer
(Principal Financial Officer)

Date: May 01, 2024


Document

EXHIBIT 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with this Quarterly Report (the “Report”) on Form 10-Q of Powell Industries, Inc. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof, I, Brett A. Cope, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
 
/s/ Brett A. Cope
Brett A. Cope
President and Chief Executive Officer

Date: May 01, 2024



Document

EXHIBIT 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with this Quarterly Report (the “Report”) on Form 10-Q of Powell Industries, Inc. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof, I, Michael W. Metcalf, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael W. Metcalf 
Michael W. Metcalf
Executive Vice President
Chief Financial Officer

Date: May 01, 2024