Powell Industries (POWL) 8-K Powell Industries Announces Fiscal 2006 Third Quarter Results

EXHIBIT 99.1

Press Release          

	Contacts:	Don R. Madison, CFO
FOR IMMEDIATE RELEASE		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 ANNOUNCES FISCAL 2006
THIRD QUARTER RESULTS

HOUSTON — SEPTEMBER 7, 2006 — 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 2006 third quarter ended July 31, 2006.

     Revenues for the third quarter of fiscal 2006 were $104.0 million, of which $13.8 million is attributable to business operations of the Company’s July 2005 acquisition of S&I, compared to revenues of $66.9 million for the third quarter of fiscal 2005. Third quarter revenue growth is primarily a result of ongoing, broad-based strengthening in the Electrical Power Products business. Net income for the third quarter was $1.8 million, or $0.16 per diluted share, compared to $2.1 million, or $0.19 per diluted share, in the same period a year ago. Net income and earnings per share for the third quarter were negatively impacted by approximately $1.1 million, or $0.10 per diluted share, for a one-time adjustment due to changes in non-cash stock option expenses and certain other non-operating costs.

     Thomas W. Powell, chairman and chief executive officer, stated, “We are pleased with our continued business growth. New orders in the quarter were up 50 percent over orders placed in the second quarter of 2006, and margins are continuing to improve. We are also pleased to report that in August we were awarded a $32 million contract to provide equipment on a large LNG project. In addition to our internal growth, we announced last month an acquisition and

commercial alliance with GE, which is expected to increase revenues by $75 million to $85 million in the first twelve months. With our strengthening backlog and new acquisitions, we expect the Company to continue its positive growth trend.”

     The Electrical Power Products segment recorded revenues of $96.9 million in the third quarter, of which $13.8 million is attributable to business operations of the Company’s July 2005 acquisition of S&I, compared to $58.2 million in the third quarter a year ago. Income before income taxes for Electrical Power Products totaled $2.9 million versus $1.0 million in last year’s third quarter.

     The Process Control Systems segment recorded revenues for the third quarter of $7.1 million compared to $8.7 million for the same period a year ago. Income before income taxes for Process Control Systems totaled $167,000 versus $1.8 million a year ago. Revenue and income before income taxes in the third quarter of fiscal 2005 were favorably impacted by $1.5 million from the settlement of the Company’s claim related to the Central Artery/Tunnel projects.

     The Company’s order backlog as of July 31, 2006 was $287 million compared to $251 million at the end of the third quarter a year ago and compared to $269 million at the end of the second quarter of fiscal 2006. New orders placed during the third quarter totaled $122 million compared to $135 million in the third quarter a year ago and $81 million in the second quarter of fiscal 2006.

NINE MONTH RESULTS

     Revenues through the first nine months of fiscal 2006 were $286.3 million, a 65 percent increase, compared to $173.5 million for the same period of fiscal 2005. Net income through nine months was $7.0 million, or $0.63 per diluted share, compared to $411,000, or $0.04 per diluted share, for the same period of fiscal 2005.

     The Electrical Power Products segment recorded revenues of $265.4 million for the first nine months of fiscal 2006 compared to $146.4 million in the first nine months of fiscal 2005. Income before income taxes for Electrical Power Products totaled $10.8 million versus a loss before income taxes of $3.1 million in the same period a year ago.

     The Process Control Systems segment recorded revenues for the first nine months of fiscal 2006 of $20.9 million compared to $27.2 million for the first nine months of fiscal 2005.

Income before income taxes for Process Control Systems totaled $893,000 compared to $2.9 million in the same period a year ago. Revenue and income before income taxes in the first nine months of fiscal 2005 were favorably impacted by $1.5 million from the settlement of the Company’s claim related to the Central Artery/Tunnel projects.

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. As previously announced, the Company will change its fiscal year-end to September 30 from October 31, effective September 30, 2006. Accordingly, the outlook provided for fiscal 2006 consists of two months in the fourth quarter and eleven months for the full year.

     Powell Industries expects fiscal 2006 fourth quarter, comprising two months, earnings to range between $0.12 and $0.17 per diluted share and full year 2006 earnings to range between $0.75 and $0.80 per diluted share. Fiscal 2006 revenue is expected to range between $325 million and $350 million.

CONFERENCE CALL

     Powell Industries has scheduled a conference call for Thursday, September 7, 2006, at 11:00 a.m. eastern time. To participate in the conference call, dial 303-262-2141 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 September 14, 2006. To access the replay, dial 303-590-3000 using a passcode of 11069243.

     Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visitinghttp://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 90 days athttp://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 visitwww.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						Nine Months Ended
	July 31,						July 31,
	2006			2005			2006			2005
(In thousands, except per share data)	(Unaudited)						(Unaudited)
Revenues	$	104,021		$	66,915		$	286,265		$	173,518
Cost of goods sold		84,928			54,354			231,652			145,556
Gross profit		19,093			12,561			54,613			27,962
Selling, general and administrative expenses		15,705			9,887			42,540			28,761
Income (loss) before interest, income taxes and minority interest		3,388			2,674			12,073			(799	)
Interest expense		476			130			1,137			346
Interest income		(197	)		(289	)		(736	)		(883	)
Income (loss) before income taxes and minority interest		3,109			2,833			11,672			(262	)
Income tax provision (benefit)		1,345			695			4,655			(680	)
Minority interest in net income		7			6			22			7
Net income	$	1,757		$	2,132		$	6,995		$	411
Net earnings per common share:
Basic	$	0.16		$	0.20		$	0.64		$	0.04
Diluted	$	0.16		$	0.19		$	0.63		$	0.04
Weighted average shares:
Basic		10,888			10,775			10,869			10,757
Diluted		11,140			10,939			11,090			10,886
SELECTED FINANCIAL DATA:
Capital expenditures	$	2,158		$	1,165		$	4,803		$	3,226
Depreciation and amortization	$	1,443		$	1,202		$	4,906		$	3,244

POWELL INDUSTRIES, INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	July 31,		October 31,
	2006		2005
(In thousands)	(Unaudited)
Assets:
Current assets	$	185,907	$	162,177
Property, plant and equipment (net)		56,591		55,678
Other assets		10,972		8,804
Total assets	$	253,470	$	226,659
Liabilities & stockholders’ equity:
Current liabilities	$	77,552	$	58,739
Long-term debt and capital lease obligations, net of current maturities		17,450		19,436
Deferred and other long-term liabilities		3,259		3,789
Stockholders’ equity and minority interest		155,209		144,695
Total liabilities and stockholders’ equity	$	253,470	$	226,659

POWELL INDUSTRIES, INC. & SUBSIDIARIES

BUSINESS SEGMENTS

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2006		2005		2006		2005
(In thousands)	(Unaudited)				(Unaudited)
Revenues:
Electrical Power Products	$	96,896	$	58,214	$	265,413	$	146,362
Process Control Systems		7,125		8,701		20,852		27,156
Total revenues	$	104,021	$	66,915	$	286,265	$	173,518
Income (loss) before income taxes:
Electrical Power Products	$	2,942	$	994	$	10,779	$	(3,140	)
Process Control Systems		167		1,839		893		2,878
Total income (loss) before income taxes	$	3,109	$	2,833	$	11,672	$	(262	)

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