EXHIBIT 99.1
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 | PRESS RELEASE |
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FOR IMMEDIATE RELEASE | Contacts: | Don R. Madison, CFO
Powell Industries, Inc.
713-947-4422
Ken Dennard / ksdennard@drg-e.com
Karen Roan / kcroan@drg-e.com
DRG&E / 713-529-6600 |
POWELL INDUSTRIES REPORTS
FISCAL 2004 SECOND QUARTER RESULTS
HOUSTON – JUNE 3, 2004 – Powell Industries, Inc. (NASDAQ: POWL), a leading manufacturer of equipment and systems for the management and control of electrical energy and other critical processes, today announced results for the fiscal 2004 second quarter ended April 30, 2004.
Revenues for the second quarter of 2004 were $51.5 million compared to revenues of $64.2 million for the second quarter of 2003. Net income for the second quarter was $360,000, or $0.03 per diluted share, compared to $2.0 million, or $0.19 per diluted share, in the same period a year ago. The company generated $8.7 million in free cash flow, defined as total cash flow from operations of $10.3 million less all capital expenditures of $1.6 million, in the second quarter. The company uses this measure because it believes free cash flow is a good indicator of operating efficiency.
Revenues for the first six months of fiscal 2004 were $104.7 million compared to revenues of $135.8 million for the first six months of fiscal 2003. Net income for the first six months was $1.1 million, or $0.10 per diluted share, versus $4.5 million, or $0.43 per diluted share, including the effect of a change in accounting principle of $510,000 for the adoption of Statement of Financial Accounting Standards (SFAS) No.142, “Goodwill and Other Intangible Assets.” Excluding the effect of a change in accounting principle, net income for the first six months of 2003 was $5.1 million, or $0.47 per diluted share.
Thomas W. Powell, chairman and chief executive officer, stated, “We are pleased that the long awaited upturn in market opportunities is apparently here. New orders booked were up $12 million over the first quarter and we expect this encouraging booking trend to continue. While market volume is up, market price levels remain highly competitive on all fronts.” Mr. Powell added, “We currently have a very competitively priced order backlog that will continue to impact our earnings for the remainder of the year.”
The Electrical Power Products segment recorded revenues of $44.0 million in the second quarter compared to $58.2 million in the second quarter a year ago. Income from continuing operations before income taxes for Electrical Power Products totaled $0.3 million versus $3.0 million in last year’s second quarter.
Process Control Systems’ revenues for the second quarter were $7.5 million compared to $6.0 million for the same period a year ago. Income from continuing operations before income taxes for Process Control Systems totaled $0.3 million versus $0.2 million a year ago.
The company’s order backlog as of April 30, 2004, was $131.2 million, compared to $137.3 million at the end of the first quarter of 2004 and $203.0 million at the end of the second quarter one year ago. New orders placed during the second quarter of 2004 totaled $45.3 million versus $33.1 million in this year’s first quarter and $98.7 million in the second quarter a year ago.
OUTLOOK
The following statements are based on the current expectations of the company. These statements are forward-looking and actual results may differ materially as further elaborated in the last paragraph below.
Based on current booking trends, Powell Industries now expects fiscal 2004 third quarter earnings to range between $0.04 and $0.09 per diluted share, and full year 2004 earnings to range between $0.25 and $0.35 per diluted share. Fiscal 2004 revenue is expected to range between $205 million and $220 million, and free cash flow, defined as total cash flow from operations less all capital expenditures, is expected to range between $5 million and $10 million.
CONFERENCE CALL
Powell Industries has scheduled a conference call for Thursday, June 3, 2004, at 11:00 a.m. eastern time. To participate in the conference call, dial (303) 262-2211 at least 10 minutes before the call begins and ask for the Powell Industries conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until June 10, 2004. To access the replay, dial (303) 590-3000 using a passcode of 580254.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.powellind.com. To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 30 days at http://www.powellind.com.
Powell Industries, Inc., headquartered in Houston, TX, designs, manufactures and services equipment and systems for the management and control of electrical energy and other critical processes. Powell provides products and services to the transportation, environmental, industrial and utility industries. For more information, please visit www.powellind.com.
Any forward-looking statements in the preceding paragraphs of this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainty in that actual results may differ materially from those projected in the forward-looking statements. In the course of operations, we are subject to certain risk factors, including but not limited to competition and competitive pressures, sensitivity to general economic and industrial conditions, international political and economic risks, availability and price of raw materials and execution of business strategy. For further information, please refer to the Company's filings with the Securities and Exchange Commission, copies of which are available from the Company without charge.
– Tables to follow –
POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended
April 30, | | Six Months Ended
April 30, | |
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| | 2004 | | | 2003 | | | 2004 | | | 2003 | |
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| (Unaudited) | | (Unaudited) | |
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(In thousands, except per share data)
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| Revenues | | | $ | 51,476 | | $ | 64,201 | | $ | 104,703 | | $ | 135,781 | |
| Cost of goods sold | | | | 42,857 | | | 52,077 | | | 86,529 | | | 109,425 | |
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| Gross profit | | | | 8,619 | | | 12,124 | | | 18,174 | | | 26,356 | |
| Selling, general and administrative expenses | | | | 8,187 | | | 8,909 | | | 16,726 | | | 18,318 | |
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| Income before interest and income taxes | | | | 432 | | | 3,215 | | | 1,448 | | | 8,038 | |
| Interest expense | | | | 34 | | | 81 | | | 62 | | | 167 | |
| Interest income | | | | (175 | ) | | (88 | ) | | (367 | ) | | (180 | ) |
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| Income from continuing operations before income taxes and cumulative | | |
| effect of change in accounting principle | | | | 573 | | | 3,222 | | | 1,753 | | | 8,051 | |
| Income tax provision | | | | 213 | | | 1,204 | | | 646 | | | 2,999 | |
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| Income from continuing operations before cumulative effect of change | | |
in accounting principle
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| 360
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| 2,018
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| 1,107
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| 5,052
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| Cumulative effect of change in accounting principle, net of tax | | | $ | -- | | $ | -- | | $ | -- | | $ | (510 | ) |
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| Net income | | | $ | 360 | | $ | 2,018 | | $ | 1,107 | | $ | 4,542 | |
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Net earnings per common share:
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| Basic: | | |
| Earnings from continuing operations | | | $ | 0.03 | | $ | 0.19 | | $ | 0.10 | | $ | 0.48 | |
| Cumulative effect of change in accounting principle | | | | -- | | | -- | | | -- | | | (0.05 | ) |
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| Net earnings | | | $ | 0.03 | | $ | 0.19 | | $ | 0.10 | | $ | 0.43 | |
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| Diluted: | | |
| Earnings from continuing operations | | | $ | 0.03 | | $ | 0.19 | | $ | 0.10 | | $ | 0.47 | |
| Cumulative effect of change in accounting principle | | | | -- | | | -- | | | -- | | | (0.04 | ) |
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| Net earnings | | | $ | 0.03 | | $ | 0.19 | | $ | 0.10 | | $ | 0.43 | |
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| Weighted average number of common shares outstanding | | | | 10,676 | | | 10,580 | | | 10,664 | | | 10,577 | |
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| Weighted average number of common and common equivalent shares | | |
| outstanding | | | | 10,768 | | | 10,657 | | | 10,764 | | | 10,665 | |
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SELECTED FINANCIAL DATA:
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| Capital Expenditures | | | $ | 1,600 | | $ | 962 | | $ | 3,135 | | $ | 2,802 | |
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| Depreciation and amortization | | | $ | 1,197 | | $ | 1,232 | | $ | 2,339 | | $ | 2,499 | |
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POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| April 30,
2004 | | October 31,
2003 | |
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(In thousands)
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Assets:
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| Current assets | | | $ | 141,341 | | $ | 141,313 | |
Property, plant and equipment (net)
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45,087
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43,998
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| Other assets | | | | 5,310 | | | 5,029 | |
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| Total assets | | | $ | 191,738 | | $ | 190,340 | |
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Liabilities & stockholders’ equity:
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| Current liabilities | | | $ | 43,396 | | $ | 44,424 | |
Long-term debt and capital lease obligations, net of current maturities
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7,048
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6,891
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| Deferred and other long-term liabilities | | | | 2,670 | | | 2,421 | |
Stockholders’ equity | | | |
138,624 | | |
136,604 | |
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| Total liabilities and stockholders’ equity | | | $ | 191,738 | | $ | 190,340 | |
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POWELL INDUSTRIES, INC. & SUBSIDIARIES
BUSINESS SEGMENTS
| Three Months Ended
April 30, | | Six Months Ended
April 30, | |
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| | 2004 | | | 2003 | | | 2004 | | | 2003 | |
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| (In thousands) | (Unaudited) | | (Unaudited) | |
Revenues: | | | | | | | | | | | | | | |
| Electrical Power Products | | | $ | 43,993 | | $ | 58,153 | | $ | 90,152 | | $ | 123,714 | |
| Process Control Systems | | | | 7,483 | | | 6,048 | | | 14,551 | | | 12,067 | |
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| Total revenues | | | $ | 51,476 | | $ | 64,201 | | $ | 104,703 | | $ | 135,781 | |
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Income from continuing operations before income taxes and cumulative | | |
effect of change in accounting principle:
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| Electrical Power Products | | | $ | 270 | | $ | 2,993 | | $ | 1,201 | | $ | 7,606 | |
| Process Control Systems | | | | 303 | | | 229 | | | 552 | | | 445 | |
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| Total income from continuing operations before income taxes and | | |
| cumulative effect of change in accounting principle | | | $ | 573 | | $ | 3,222 | | $ | 1,753 | | $ | 8,051 | |
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| April 30,
2004 | | October 31,
2003 | |
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(In thousands)
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Assets:
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| Electrical Power Products | | | $ | 119,582 | | $ | 127,721 | |
| Process Control Systems | | | | 13,020 | | | 14,269 | |
| Corporate | | | | 59,136 | | | 48,350 | |
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| Total assets | | | $ | 191,738 | | $ | 190,340 | |
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Backlog:
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| Electrical Power Products | | | $ | 75,527 | | $ | 96,986 | |
| Process Control Systems | | | | 55,662 | | | 60,473 | |
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| Total backlog | | | $ | 131,189 | | $ | 157,459 | |
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