Powell(POWL) - 2025 Q2 - Quarterly Report

Part I — Financial Information This part presents the company's unaudited quarterly financial statements and management's analysis of performance Financial Statements This section presents the unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2025 Condensed Consolidated Balance Sheets Balance Sheet Summary | | March 31, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $810,630 | $776,481 | | Total Assets | $965,368 | $928,180 | | Total Current Liabilities | $404,844 | $428,015 | | Total Liabilities | $424,005 | $445,107 | | Total Stockholders' Equity | $541,363 | $483,073 | - Cash and cash equivalents increased to $359.5 million as of March 31, 2025, from $315.3 million at September 30, 2024[9] Condensed Consolidated Statements of Operations Three-Month Performance | Metric | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Revenues | $278,631 | $255,108 | | Gross Profit | $83,432 | $62,720 | | Operating Income | $58,919 | $39,489 | | Net Income | $46,330 | $33,488 | | Diluted EPS | $3.81 | $2.75 | Six-Month Performance | Metric | Six Months Ended Mar 31, 2025 (in thousands) | Six Months Ended Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Revenues | $520,062 | $449,125 | | Net Income | $81,093 | $57,573 | | Diluted EPS | $6.67 | $4.73 | Condensed Consolidated Statements of Comprehensive Income Comprehensive Income Summary | Metric | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net Income | $46,330 | $33,488 | | Comprehensive Income | $47,267 | $31,219 | Condensed Consolidated Statements of Stockholders' Equity - Total stockholders' equity increased from $483.1 million at September 30, 2024, to $541.4 million at March 31, 2025, driven by net income of $81.1 million[17] Condensed Consolidated Statements of Cash Flows Cash Flow Summary | Cash Flow Activity (Six months ended Mar 31) | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $59,480 | $100,891 | | Net cash provided by (used in) investing activities | $4,564 | $(11,248) | | Net cash used in financing activities | $(18,407) | $(12,775) | | Net increase in cash and cash equivalents | $45,637 | $76,868 | Notes to Condensed Consolidated Financial Statements - The company develops, designs, manufactures, and services custom-engineered equipment for electrical energy distribution, primarily for industrial markets[22][23] - Revenue from custom-engineered products and services, recognized over time, accounted for approximately 95% of total revenues for the three months ended March 31, 2025[38] - As of March 31, 2025, the company's backlog of remaining unsatisfied performance obligations was $1.3 billion, with approximately $831 million expected to be recognized as revenue within the next twelve months[43][44] Revenue by Market Sector | Revenue by Market Sector (Three months ended Mar 31, 2025) | Amount (in thousands) | | :--- | :--- | | Oil and gas | $101,167 | | Petrochemical | $43,704 | | Electric utility | $70,339 | | Commercial and other industrial | $40,369 | | Light rail traction power | $10,008 | | All others | $13,044 | - On May 6, 2025, the Board of Directors declared a quarterly cash dividend of $0.2675 per share[74] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses financial performance, condition, and outlook for the second quarter of Fiscal 2025 Executive Overview and Outlook - The company's backlog remained strong at $1.3 billion as of March 31, 2025, with approximately $831 million expected to be recognized as revenue within the next twelve months[88] - Management sees continued investment opportunities driven by international demand for Liquefied Natural Gas (LNG) and expansion into clean energy markets[89] - Strong growth is being experienced in commercial and industrial markets, particularly from data centers supporting cloud computing and AI[91] Results of Operations Q2 Fiscal 2025 vs Q2 Fiscal 2024 | Metric (Q2 FY25 vs Q2 FY24) | Change | Detail | | :--- | :--- | :--- | | Revenues | +9% | Increased by $23.5 million to $278.6 million | | Gross Profit | +33% | Increased by $20.7 million to $83.4 million | | Gross Margin | +500 bps | Increased to 30% from 25% | - For Q2 2025, revenue from the electric utility market grew 48% and the light rail traction power market grew 122%, reflecting strategic diversification efforts[97] Six Months Fiscal 2025 vs Fiscal 2024 | Metric (Six Months FY25 vs FY24) | Change | Detail | | :--- | :--- | :--- | | Revenues | +16% | Increased by $70.9 million to $520.1 million | | Gross Profit | +29% | Increased by $32.0 million to $143.0 million | | Gross Margin | +200 bps | Increased to 27% from 25% | - Bookings increased by 6% in Q2 2025 and 20% in the first six months of Fiscal 2025 compared to the same periods in the prior year[102][109] Liquidity and Capital Resources - Cash, cash equivalents, and short-term investments increased to $389.3 million at March 31, 2025, from $358.4 million at September 30, 2024, driven by improved earnings[111] - The company has a $150.0 million U.S. Revolver with $85.6 million available as of March 31, 2025, with no amounts borrowed[113][114] - Net cash from operating activities for the first six months of Fiscal 2025 was $59.5 million, a decrease from $100.9 million in the prior-year period due to working capital impacts[115] Quantitative and Qualitative Disclosures About Market Risk Confirms no material changes to the company's market risks since the last annual report - No material changes to market risks were reported for the period ended March 31, 2025, as compared to the information in the last Form 10-K[121] Controls and Procedures Management confirms the effectiveness of disclosure controls and procedures as of the reporting period end - Based on an evaluation by management, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[123] - No changes in internal control over financial reporting occurred during the second quarter of Fiscal 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[124] Part II — Other Information This part covers legal proceedings, risk factors, and other required corporate disclosures Legal Proceedings Reports no material adverse effect is expected from ongoing legal proceedings - Management believes that the ultimate liability from various ongoing legal proceedings will not have a material adverse effect on the company's consolidated financial position, results of operations, or liquidity[125] Risk Factors States no material changes from previously disclosed risk factors in the last annual report - 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, 2024[126] Other Information Notes no new Rule 10b5-1 trading arrangements were adopted by directors or officers during the quarter - During the second quarter of Fiscal 2025, none of the company's directors or officers adopted or terminated any "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements"[127] Exhibits Lists all exhibits filed with the report, including required officer certifications and XBRL data - This section lists the exhibits filed with the report, which include certifications from the CEO and CFO, as well as financial statements formatted in Inline XBRL[129]