Powell(POWL) - 2025 Q3 - Quarterly Report

Part I — Financial Information Item 1. Financial Statements Powell Industries, Inc.'s unaudited condensed consolidated financial statements show total assets of $1.04 billion and nine-month net income of $129.3 million Condensed Consolidated Balance Sheets Total assets increased to $1.04 billion by June 30, 2025, driven by cash growth, while stockholders' equity rose to $594.9 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Current Assets | $880,159 | $776,481 | | Total Assets | $1,042,216 | $928,180 | | Total Current Liabilities | $427,345 | $428,015 | | Total Liabilities | $447,311 | $445,107 | | Total Stockholders' Equity | $594,905 | $483,073 | Condensed Consolidated Statements of Operations Q3 2025 revenues were $286.3 million with net income of $48.2 million, while nine-month revenues grew to $806.3 million and net income rose to $129.3 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $286,273 | $288,168 | $806,335 | $737,293 | | Gross Profit | $87,899 | $81,740 | $230,855 | $192,654 | | Operating Income | $60,124 | $57,288 | $154,615 | $122,657 | | Net Income | $48,234 | $46,223 | $129,327 | $103,796 | | Diluted EPS | $3.96 | $3.79 | $10.63 | $8.52 | Condensed Consolidated Statements of Comprehensive Income Comprehensive income for Q3 2025 increased to $55.7 million, driven by foreign currency adjustments, with the nine-month total reaching $129.7 million Comprehensive Income (in thousands) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $48,234 | $46,223 | $129,327 | $103,796 | | Foreign currency translation adjustments | $7,479 | $(986) | $347 | $(170) | | Comprehensive Income | $55,713 | $45,237 | $129,674 | $103,626 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity grew to $594.9 million by June 30, 2025, primarily due to $129.3 million in net income, partially offset by dividends - The primary driver for the increase in stockholders' equity during the nine months ended June 30, 2025, was the net income of $129.3 million[16] Condensed Consolidated Statements of Cash Flows Nine-month operating cash flow was $106.9 million, with investing and financing activities using $4.2 million and $21.7 million respectively, leading to an $83.1 million increase in cash Cash Flow Summary (in thousands) | Activity | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $106,862 | $114,652 | | Net cash used in investing activities | $(4,215) | $(12,976) | | Net cash used in financing activities | $(21,670) | $(15,951) | | Net increase in cash and cash equivalents | $80,977 | $85,725 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, revenue recognition, and commitments, highlighting a $1.4 billion backlog, the Remsdaq Ltd. acquisition, and tax reform evaluation - The company's primary markets include oil and gas, petrochemical, electric utility, and other commercial and industrial sectors[25] - As of June 30, 2025, the company's backlog of remaining unsatisfied performance obligations was $1.4 billion, with approximately $913 million expected to be recognized as revenue within the next twelve months[45] - Subsequent to the quarter end, the company entered into a definitive agreement to acquire Remsdaq Ltd. for approximately $16.3 million, declared a quarterly dividend of $0.2675 per share, and is evaluating the impact of the new 'One Big Beautiful Bill Act' tax legislation[76][77][78] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, noting a $1.4 billion backlog, positive market outlook, and strong liquidity with $433.0 million in cash and short-term investments Executive Overview and Outlook Q3 2025 saw $286.3 million in revenues and $48.2 million net income, with a positive outlook driven by a $1.4 billion backlog and strong market activity - Backlog increased to $1.4 billion as of June 30, 2025, with approximately $913 million expected to be recognized as revenue within the next twelve months[94] - Key market drivers include: - Oil & Gas: Strong demand for LNG and related gas processing - Electric Utility: A record-sized award for a new power generation plant was won in Q3 - Commercial & Industrial: Strong growth from data centers supporting cloud computing and AI[95][96][97] Results of Operations Q3 2025 revenues were $286.3 million with a 31% gross margin, while nine-month revenues grew 9% to $806.3 million, and the order backlog reached $1.4 billion Q3 2025 vs. Q3 2024 Performance | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $286.3M | $288.2M | -1% | | Gross Profit | $87.9M | $81.7M | +8% | | Gross Margin | 31% | 28% | +300 bps | | Net Income | $48.2M | $46.2M | +4.3% | Nine Months 2025 vs. Nine Months 2024 Performance | Metric | 9M 2025 | 9M 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $806.3M | $737.3M | +9% | | Gross Profit | $230.9M | $192.7M | +20% | | Gross Margin | 29% | 26% | +300 bps | | Net Income | $129.3M | $103.8M | +24.6% | - The order backlog increased to $1.4 billion at June 30, 2025, up 7% from March 31, 2025, driven by electric utility, oil and gas, and light rail traction power markets[111] Liquidity and Capital Resources Liquidity remains strong with $433.0 million in cash and short-term investments, $106.9 million in nine-month operating cash flow, and $74.0 million available on the credit facility - Cash, cash equivalents, and short-term investments increased to $433.0 million at June 30, 2025, from $358.4 million at September 30, 2024, driven by improved earnings[123] - As of June 30, 2025, there were no amounts borrowed under the $150.0 million U.S. Revolver, with $74.0 million available for borrowings and letters of credit[127] - Net cash from operating activities decreased to $106.9 million for the nine months ended June 30, 2025, from $114.7 million in the prior year, primarily due to working capital impacts[128] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes to the company's market risks have occurred as of June 30, 2025, compared to the prior fiscal year's Form 10-K disclosures - There have been no material changes to the company's market risks from those disclosed in the fiscal year 2024 Form 10-K[134] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during Q3 Fiscal 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[136] - No changes occurred during the third quarter of Fiscal 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[137] Part II — Other Information Item 1. Legal Proceedings The company is involved in legal proceedings, but management anticipates no material adverse effect on financial position, results of operations, or liquidity - Management does not expect ongoing legal proceedings to have a material adverse effect on the company's financial condition or results[138] Item 1A. Risk Factors No material changes to the company's risk factors have occurred since the fiscal year 2024 Annual Report on Form 10-K - No material changes to risk factors have occurred since the last Annual Report on Form 10-K[139] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q3 Fiscal 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[140] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate documents and certifications from the Chief Executive Officer and Chief Financial Officer - The report includes certifications from the CEO and CFO as required by the Sarbanes-Oxley Act, along with financial statements formatted in Inline XBRL[141]