UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM 10-Q

(Mark one)

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended January 31, 2003

[ ] 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 0-6050

POWELL INDUSTRIES, INC.

- --------------------------------------------------------------------------------

(Exact name of registrant as specified in its charter)

<Table>

NEVADA 88-0106100
- ------------------------------------------------------------------- -------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

8550 Mosley Drive, Houston, Texas 77075-1180
- ------------------------------------------------------------------- -------------------------------------------------------
(Address of principal executive offices) (Zip Code)
</Table>

Registrant's telephone number, including area code (713) 944-6900
--------------

Indicate by "X" 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 X No
----- -----

Common Stock, par value $.01 per share; 10,580,201 shares outstanding as of
February 28, 2003.

Powell Industries, Inc. and Subsidiaries

<Table>

Part I - Financial Information

Item 1. Condensed Consolidated Financial Statements...........................................3

Item 2. Management's Discussion and Analysis of
Financial Condition and
Results of Operations.............................................................12

Item 3. Quantitative and Qualitative Disclosures
About Market Risk.................................................................16

Item 4. Controls and Procedures..............................................................17

Part II - Other Information and Signatures..............................................................18
</Table>

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<Table>
<Caption>
JANUARY 31, OCTOBER 31,
2003 2002
----------- -----------
(UNAUDITED)

ASSETS
Current Assets:
Cash and cash equivalents ..................................................................... $ 12,091 $ 14,362
Accounts receivable, less allowance for doubtful accounts of
$1,165 and $1,209, respectively ........................................................... 70,982 69,521
Costs and estimated earnings in excess of billings ............................................ 30,050 32,828
Inventories ................................................................................... 23,767 19,558
Prepaid expenses and other current assets ..................................................... 4,250 2,230
----------- -----------
Total Current Assets ...................................................................... 141,140 138,499

Property, plant and equipment, net ................................................................. 45,610 45,020
Other assets ....................................................................................... 5,447 6,124
----------- -----------
Total Assets .............................................................................. $ 192,197 $ 189,643
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt and capital lease obligations ............................ $ 4,388 $ 4,746
Accounts and income taxes payable ............................................................. 17,961 15,030
Accrued salaries, bonuses and commissions ..................................................... 5,897 9,774
Billings in excess of costs and estimated earnings ............................................ 15,337 13,478
Accrued product warranty ...................................................................... 2,114 2,123
Other accrued expenses ........................................................................ 6,205 6,882
----------- -----------
Total Current Liabilities ................................................................. 51,902 52,033

Long-term debt and capital lease obligations, net of current maturities ............................ 7,248 7,264
Deferred compensation expense ...................................................................... 1,613 1,522
Other liabilities .................................................................................. 601 617
----------- -----------
Total Liabilities ......................................................................... 61,364 61,436

Commitments and contingencies

Stockholders' Equity:
Preferred stock, par value $.01; 5,000,000 shares authorized; none issued
Common stock, par value $.01; 30,000,000 shares authorized; 10,985,000 and 10,979,000
shares issued, respectively; 10,580,000 and 10,595,000 shares outstanding, respectively ... 110 110
Additional paid-in capital .................................................................... 8,348 8,345
Retained earnings ............................................................................. 128,396 125,872
Treasury stock, 404,875 shares and 383,920 shares respectively, at cost ....................... (3,914) (3,925)
Accumulated other comprehensive (loss): fair value of interest rate swap ...................... (66) (87)
Deferred compensation-ESOP .................................................................... (2,041) (2,108)
----------- -----------

Total Stockholders' Equity ................................................................ 130,833 128,207
----------- -----------

Total Liabilities and Stockholders' Equity ................................................ $ 192,197 $ 189,643
=========== ===========
</Table>

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

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
THREE MONTHS ENDED JANUARY 31,
2003 2002
----------- -----------

Revenues ................................................................................. $ 71,580 $ 76,487

Cost of goods sold ....................................................................... 57,348 60,896
----------- -----------

Gross profit ............................................................................. 14,232 15,591

Selling, general and administrative expenses ............................................. 9,409 9,422
----------- -----------

Earnings before interest and income taxes ................................................ 4,823 6,169

Interest expense ......................................................................... 86 359

Interest income .......................................................................... (92) (54)
----------- -----------

Earnings from continuing operations before income taxes and cumulative effect of
change in accounting principle ........................................................ 4,829 5,864

Income tax provision ..................................................................... 1,795 2,130
----------- -----------

Earnings from continuing operations before cumulative effect of change in
accounting principle .................................................................. $ 3,034 $ 3,734

Cumulative effect of change in accounting principle, net of $285 tax ..................... $ (510) $ --
----------- -----------

Net earnings ............................................................................. $ 2,524 $ 3,734
=========== ===========

Net earnings per common share:

Basic:
Earnings from continuing operations ................................................... $ 0.29 $ 0.36
Cumulative effect of change in accounting principle ................................... $ (0.05) --
----------- -----------
Net earnings .......................................................................... $ 0.24 $ 0.36
=========== ===========

Diluted:
Earnings from continuing operations ................................................... $ 0.28 $ 0.35
Cumulative effect of change in accounting principle ................................... $ (0.04) --
----------- -----------
Net earnings .......................................................................... $ 0.24 $ 0.35
=========== ===========

Weighted average number of common shares outstanding ..................................... 10,574 10,448
=========== ===========

Weighted average number of common and common equivalent shares outstanding ............... 10,676 10,680
=========== ===========
</Table>

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

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)

<Table>
<Caption>
THREE MONTHS ENDED JANUARY 31,
2003 2002
----------- -----------

Operating Activities:
Net earnings ........................................................................ $ 2,524 $ 3,734
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Cumulative effect of change in accounting principle, net of tax ................. 510 --
Depreciation and amortization ................................................... 1,267 1,173
Loss on disposition of assets ................................................... -- 24
Deferred income tax provision (benefit) ......................................... 820 (207)
Changes in operating assets and liabilities:
Accounts receivable, net ................................................... (1,461) 10,588
Costs and estimated earnings in excess of billings ......................... 2,778 579
Inventories ................................................................ (4,209) (1,828)
Prepaid expenses and other current assets .................................. (2,020) (1,737)
Other assets ............................................................... (99) (320)
Accounts payable and income taxes payable .................................. 3,219 796
Accrued liabilities ........................................................ (5,419) (2,812)
Billings in excess of costs and estimated earnings ......................... 1,859 2,704
Deferred compensation expense .............................................. 159 111
Other liabilities .......................................................... (12) (13)
----------- -----------
Net cash provided by (used in) operating activities .................... (84) 12,792

Investing Activities:
Purchases of property, plant and equipment .......................................... (1,840) (5,520)
----------- -----------
Net cash used in investing activities .................................. (1,840) (5,520)
----------- -----------

Financing Activities:
Repayments of debt .................................................................. (357) (9,357)
Proceeds from exercise of stock options ............................................. 10 123
----------- -----------
Net cash used in financing activities .................................. (347) (9,234)
----------- -----------

Net decrease in cash and cash equivalents ................................................ (2,271) (1,962)
Cash and cash equivalents at beginning of period ......................................... 14,362 6,520
----------- -----------

Cash and cash equivalents at end of period ............................................... $ 12,091 $ 4,558
=========== ===========

Supplemental disclosures of cash flow information (in thousands):

Cash paid during the period for:
Interest ........................................................................ $ 96 $ 156
=========== ===========

Income taxes .................................................................... $ 860 $ --
=========== ===========

Non-cash investing and financing activities:
Change in fair value of interest rate swap during the period, net of $11 and
$20 income taxes, respectively ............................................. $ 21 $ 35
=========== ===========
</Table>

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

Part I
Item 1

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q. Certain
information in the notes to the consolidated financial statements normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America has been
condensed or omitted pursuant to these rules and regulations. In the opinion
of management, these condensed consolidated financial statements include all
adjustments, consisting of normal recurring adjustments, which are necessary
for a fair presentation of the Company's financial position, results of
operations, and cash flows. These financial statements should be read in
conjunction with the financial statements and related footnotes included in
the Company's annual report on Form 10-K for the year ended October 31, 2002.
The interim period results are not necessarily indicative of the results to
be expected for the full fiscal year.

Effective November 1, 2002, we adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets". Under the
new rules, goodwill and other intangible assets with indefinite useful lives
are no longer subject to amortization. As a result, we discontinued the
amortization of goodwill beginning November 1, 2002. Upon adoption of SFAS
No. 142, we performed an impairment analysis to assess the fair value of our
reporting units as compared to their carrying values. As a result of this
analysis, we recorded an impairment charge to write-off impaired goodwill
amounts as a cumulative effect of a change in accounting principle. For
additional information regarding the effect of the adoption of SFAS No. 142
and the pro forma net earnings and earnings per share for the three months
ended January 31, 2002 as if SFAS No. 142 had been adopted as of the
beginning of 2002, see Note F of these Notes to Condensed Consolidated
Financial Statements.

New Accounting Standards

In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supercedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." SFAS No. 144 establishes a single
accounting model for long-lived assets to be disposed of by sale and requires
that those long-lived assets be measured at the lower of carrying amount or
fair value less cost to sell, whether reported in continuing operations or in
discontinued operations. We adopted SFAS No. 144 on November 1, 2002. The
adoption of SFAS No. 144 did not have a material impact on our financial
statements.

In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This statement rescinds SFAS No. 4, "Reporting Gains and Losses
from Extinguishment of Debt," and an amendment of that statement, SFAS No.
44, "Accounting for Intangible Assets of Motor Carriers," and SFAS No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". This
statement amends SFAS No. 13, "Accounting for Leases," to eliminate
inconsistencies between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. Also,
this statement amends other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their
applicability under changed conditions. Provisions of SFAS No. 145 related to
the rescission of SFAS No. 4 were effective for the Company on November 1,
2002 and provisions affecting SFAS No. 13 were effective for transactions
occurring after May 15, 2002. The adoption of SFAS No. 145 did not have a
material impact on our financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This statement covers restructuring type
activities beginning with plans initiated after December 31, 2002. Activities
covered by this standard that are entered into after that date will be
recorded in accordance with the provisions of SFAS No. 146. We have adopted
SFAS No. 146 and there has been no impact on our consolidated financial
position or results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45 "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 requires that upon
issuance of a

guarantee, a guarantor must recognize a liability for the fair value of the
obligation assumed under the guarantee. FIN 45 also requires additional
disclosures about guarantees in the interim and annual financial statements.
The provisions of FIN 45 related to initial recognition and measurement of
guarantee agreements were effective for any guarantees issued or modified
after December 31, 2002. The adoption of these recognition and measurement
provisions did not have any impact on our consolidated financial position or
results of operations. In accordance with the disclosure provisions of FIN
45, we have included in Note C a reconciliation of the changes in our product
warranty liability for the three months ended January 31, 2003 and 2002. We
provide for estimated warranty costs at the time of sale based upon
historical experience rates. Our products contain warranties for parts and
service for the earlier of 18 months from the date of shipment or 12 months
from the date of initial operations.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure, an amendment of FASB Statement No.
123." This statement provides alternative methods of transition for a
voluntary change in the method of accounting for stock-based employee
compensation to the fair value method. The statement also amends the
disclosure requirements of SFAS No. 123, "Accounting for Stock-Based
Compensation." Under SFAS No. 148, annual and interim financial statements
are required to have prominent disclosures about the method of accounting for
stock-based employee compensation and the effect of the method used on
reported results. These disclosure requirements are effective for our second
quarter 2003 10-Q.

B. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
per share (in thousands, except per share data):

<Table>
<Caption>
Three Months Ended January 31,
2003 2002
----------- -----------

Numerator:
Net earnings from continuing operations available to common
stockholders ............................................................ $ 3,034 $ 3,734
Cumulative effect of change in accounting principle ........................ (510) --
----------- -----------

Net earnings available to common stockholders .............................. $ 2,524 $ 3,734
=========== ===========

Denominator:
Denominator for basic earnings per share-weighted average shares ........... 10,574 10,448
Dilutive effect of stock options ........................................... 102 232
----------- -----------
Denominator for diluted earnings per share-adjusted weighted average
shares with assumed conversions .......................................... 10,676 10,680
=========== ===========

Basic earnings per share:
From continuing operations ................................................. $ 0.29 $ 0.36
Cumulative effect of change in accounting principle ........................ (0.05) --
----------- -----------

Net earnings per share ..................................................... $ 0.24 $ 0.36
=========== ===========

Diluted earnings per share:
From continuing operations ................................................. $ 0.28 $ 0.35
Cumulative effect of change in accounting principle ........................ (0.04) --
----------- -----------

Net earnings per share ..................................................... $ 0.24 $ 0.35
=========== ===========
</Table>

For the quarters ended January 31, 2003 and 2002 outstanding stock options of
381 thousand and none respectively, were excluded from the computation of
diluted earnings per share because the options' exercise prices were greater
than the average market price of the common stock.

C. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Activity in our allowance for doubtful accounts receivable consists of the
following (in thousands):

<Table>
<Caption>
Three Months Ended January 31,
2003 2002
----------- -----------

Balance at beginning of period ...................................................... $ 1,209 $ 551
Adjustments to the reserve .......................................................... (42) 22
Deductions for uncollectible accounts written off, net of recoveries ................ (2) (72)
----------- -----------
Balance at end of period ............................................................ $ 1,165 $ 501
=========== ===========
</Table>

Activity in our accrued product warranty account consists of the following
(in thousands):

<Table>
<Caption>
Three Months Ended January 31,
2003 2002
----------- -----------

Balance at beginning of period ...................................................... $ 2,123 $ 1,860
Adjustments to the reserve .......................................................... 524 692
Deductions for uncollectible accounts written off, net of recoveries ................ (533) (423)
----------- -----------
Balance at end of period ............................................................ $ 2,114 $ 2,129
=========== ===========
</Table>

The components of inventories are summarized below (in thousands):

<Table>
<Caption>
January 31, October 31,
2003 2002
----------- -----------

Raw materials, parts and subassemblies .............................................. $ 17,771 $ 14,111
Work-in-process ..................................................................... 5,996 5,447
----------- -----------
Total inventories ............................................................... $ 23,767 $ 19,558
=========== ===========
</Table>

Property, plant and equipment is summarized below (in thousands):

<Table>
<Caption>
January 31, October 31,
2003 2002
----------- -----------

Land ................................................................................ $ 5,073 $ 5,093
Buildings and improvements .......................................................... 37,056 35,791
Machinery and equipment ............................................................. 38,480 37,191
Furniture & fixtures ................................................................ 3,012 3,012
Construction in process ............................................................. 5,769 6,463
----------- -----------
89,390 87,550
Less-accumulated depreciation ....................................................... (43,780) (42,530)
----------- -----------
Total property, plant and equipment, net ............................................ $ 45,610 $ 45,020
=========== ===========
</Table>

The components of costs and estimated earnings in excess of billings (in
thousands):

<Table>
<Caption>
January 31, October 31,
2003 2002
----------- -----------

Costs and estimated earnings ........................................................ $ 181,880 $ 190,106
Progress billings ................................................................... (151,830) (157,278)
----------- -----------
Total costs and estimated earnings in excess of billings ........................ $ 30,050 $ 32,828
=========== ===========
</Table>

The components of billings in excess of costs and estimated earnings (in
thousands):

<Table>
<Caption>
January 31, October 31,
2003 2002
----------- -----------

Progress billings ................................................................... $ 44,271 $ 131,840
Costs and estimated earnings ........................................................ (28,934) (118,362)
----------- -----------
Total billings in excess of costs and estimated earnings ........................ $ 15,337 $ 13,478
=========== ===========
</Table>

D. COMPREHENSIVE INCOME

We adopted SFAS No. 133 as amended on November 1, 2000. Accordingly, at that
time, we recorded the fair value of our interest rate swap agreement which is
used as a cash flow hedge in the management of interest rate exposure. We
realized this amount as a component of comprehensive income (loss). Our
comprehensive income (loss), which encompasses net income and the change in
fair value of hedge instruments, is as follows (in thousands):

<Table>
<Caption>
Three Months Ended January 31,
2003 2002
----------- -----------

Net income .......................................................................... $ 2,524 $ 3,734
Change in fair value of hedge instrument ............................................ 21 35
----------- -----------
Comprehensive income ................................................................ $ 2,545 $ 3,769
=========== ===========
</Table>

E. BUSINESS SEGMENTS

We manage our business through operating subsidiaries, which are combined
into two reportable business segments: Electrical Power Products and Process
Control Systems. Electrical Power Products includes equipment and systems for
the distribution and control of electrical energy. Process Control Systems
consists principally of instrumentation, computer controls, communications
and data management systems.

Our "Electrical Power Products" segment serves the electrical utility and
various industrial markets with equipment and systems. Electrical Power
Products was previously reported as two separate segments: "Switchgear" and
"Bus Duct". Because these segments share basic characteristics, including
common raw materials, engineering techniques and manufacturing processes, and
operate in the same competitive environment with substantially similar
general economic and industrial conditions, we determined that reporting the
business activities of Switchgear and Bus Duct products as one segment -
"Electrical Power Products" - more accurately reflects our business
operations. Historically, we reported our "Electrical Power Products" segment
as two segments principally as a reflection of our organizational structure.
The three months ended January 31, 2002 have been restated to conform to the
new segment structure.

The tables below reflect certain information relating to our operations by
segment. Substantially all revenues represent sales from unaffiliated
customers. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies included in our
annual report on Form 10-K for the year ended October 31, 2002. For purposes
of this presentation, all general corporate expenses have been allocated
among operating segments based primarily on revenues. In addition, the
corporate assets are mainly cash and cash equivalents transferred to the
corporate office from the segments.

Detailed information regarding our business segments is shown below (in
thousands):

<Table>
<Caption>
Three Months Ended January 31,
2003 2002
----------- -----------

Revenues
Electrical Power Products ........................................................ $ 65,561 $ 71,127
Process Control Systems .......................................................... 6,019 5,360
----------- -----------
Total Revenues ................................................................... $ 71,580 $ 76,487
=========== ===========

Earnings from continuing operations before income taxes and cumulative
effect of change in accounting principle
Electrical Power Products ........................................................ $ 4,614 $ 5,642
Process Control Systems .......................................................... 215 222
----------- -----------
Total earnings from continuing operations before income taxes and
cumulative effect of change in accounting principle ............................. $ 4,829 $ 5,864
=========== ===========

</Table>

January 31, October 31,
2003 2002
----------- -----------

Assets
Electrical Power Products ........................................................ $ 161,346 $ 156,584
Process Control Systems .......................................................... 14,218 14,937
Corporate ........................................................................ 16,633 18,122
----------- -----------
Total Assets ..................................................................... $ 192,197 $ 189,643
=========== ===========
</Table>

F. GOODWILL AND OTHER INTANGIBLE ASSETS

Effective November 1, 2002, we adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets". Under the
new rules, goodwill and other intangible assets with indefinite useful lives
are no longer subject to amortization. As a result, we discontinued the
amortization of goodwill beginning November 1, 2002, and the first quarter
2003 results were favorably impacted by this reduction in amortization
expense by $23 thousand, net of $13 thousand taxes, or less than $0.01 per
common share. The statement requires a test for impairment to be performed
annually, or immediately if conditions indicate that impairment could exist.
Intangible assets with definite useful lives will continue to be amortized
over their estimated useful lives.

We estimated the fair value of our reporting units using a present value
method that discounted estimated future cash flows. The cash flow estimates
incorporated assumptions on future cash flow growth, terminal values and
discount rates. Because the fair value of some reporting units was below
their carrying value, application of SFAS No. 142 required us to complete the
second step of the goodwill impairment test and compare the implied fair
value of each reporting unit's goodwill with the carrying value. As a result
of completing the impairment test, we recorded an impairment charge of $510
thousand, net of $285 thousand taxes, to write-off the impaired goodwill
amounts as a cumulative effect of a change in accounting principle. We
recorded an impairment charge of $380 thousand, net of $214 thousand taxes,
in our Process Control Systems segment. In our Electrical Power Products
segment, we recorded an impairment charge of $130 thousand, net of $71
thousand taxes.

The following pro forma information is presented to reflect the net earnings
and net earnings per share to exclude amortization of goodwill for the three
month period ended January 31, 2002, as if SFAS No. 142 had been adopted as
of the beginning of that year (in thousands, except per share data):

<Table>
<Caption>
Three Months Ended January 31,
2003 2002
----------- -----------

Earnings from continuing operations before cumulative effect of change in
accounting principle ............................................................ $ 3,034 $ 3,734
Cumulative effect of change in accounting principle ................................. (510) --
----------- -----------
Reported net income ................................................................. 2,524 3,734
Addback: Amortization of goodwill, net of $13 taxes ................................ -- 23
----------- -----------
Adjusted net earnings ............................................................... $ 2,524 $ 3,757
=========== ===========

Basic earnings per share:
Net earnings per share - as reported ............................................ $ 0.24 $ 0.36
Amortization of goodwill ........................................................ -- --
Adjusted net earnings ........................................................ 0.24 0.36
Diluted earnings per share:
Net earnings per share - as reported ............................................ $ 0.24 $ 0.35
Amortization of goodwill ........................................................ -- --
Adjusted net earnings ........................................................ 0.24 0.35
</Table>

A summary of goodwill and other intangible assets follows:

<Table>
<Caption>
January 31, 2003 October 31, 2002
--------------------------- ---------------------------
Historical Accumulated Historical Accumulated
Cost Amortization Cost Amortization
------------ ------------ ------------ ------------

Goodwill ........................................................ $ 304 $ 181 $ 2,133 $ 1,215

Intangible assets subject to amortization:
Deferred loan costs ......................................... 233 15 233 12
Patents and Trademarks ...................................... 837 458 837 444
</Table>

The above intangible assets are included in other assets on the consolidated
balance sheet. Amortization expense related to intangible assets subject to
amortization for the three months ended January 31, 2003 was $17,000.

G. COMMITMENTS AND CONTINGENCIES

Certain customers require us to post a bank letter of credit guarantee or
performance bonds issued by a surety. These assure our customers that we will
perform under terms of our contract and with associated vendors and
subcontractors. In the event of default the customer may demand payment from
the bank under a letter of credit or performance by the surety under a
performance bond. To date there have been no significant expenses related to
either for the periods reported. We were contingently liable for secured and
unsecured letters of credit of $11.9 million as of January 31, 2003. We
also had performance bonds totaling approximately $152.6 million that were
outstanding at January 31, 2003.

The Company is a partner in a joint venture (the "Joint Venture"),which
provided process control systems to the Central Artery/Tunnel Project (the
"Project") in Boston, Massachusetts, under a contract with the Massachusetts
Turnpike Authority (the "MTA"). The Joint Venture has submitted claims
against the MTA seeking additional reimbursement for work done by the Joint
Venture on the project. In a separate matter, the Joint Venture received
notice dated May 9, 2002 (the "Notice") from the MTA that a follow-on
contractor has asserted a claim against the MTA in connection with work done
or to be done by the follow-on contractor on the project. One component of
the Project involved the Joint Venture performing specific work that the MTA
then bid for the follow-on contractor to complete. Part of the follow-on
contractor's claim contains unsubstantiated allegations that such work
performed by the Joint Venture was insufficient and defective, thus possibly
contributing to the follow-on contractor's claims for damages against the
MTA. In the Notice of the potential claim, the MTA advised the Joint Venture
that if it is required to pay the follow-on contractor additional amounts and
such payment is the result of defective work by the Joint Venture; the MTA
will seek indemnification from the Joint Venture for such additional amounts.

The Joint Venture has no reason to believe the systems it delivered under
contract to the MTA were defective and accordingly it intends to vigorously
defend any such allegations. The ultimate disposition of the Joint Venture's
claim against the MTA and the MTA's potential claim for indemnification based
on the follow-on contractor's claims are not presently determinable. Although
an unfavorable outcome to the follow-on contractor's claim could have a
material adverse effect on the Company's financial condition, results of
operations, and cash flows, the Company believes that an unfavorable outcome
with respect to these matters, under the circumstances and on the basis of
the information now available, is unlikely.

Part I
Item 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with the accompanying
condensed consolidated financial statements and related notes. 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
industry conditions, international political and economic risks, availability
and price of raw materials and execution of business strategy. Any
forward-looking statements made by or on our behalf are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Readers are cautioned that such forward-looking statements involve risks and
uncertainties in that the actual results may differ materially from those
projected in the forward-looking statements.

RESULTS OF OPERATIONS

Revenue and Gross Profit

Revenues decreased 6% to $71.6 million in the first quarter of fiscal 2003 as
compared to the first quarter of fiscal year 2002. Our Electrical Power Products
segment recorded revenues in the quarter of $65.6 million compared to $71.1
million in the same quarter last year. This decrease in revenues was primarily
due to lower net investments in electrical products by the power generation
market. In addition, during the first quarter of 2003, we received requests for
delayed shipments by several key customers, some of which impacted projects in
production and halted work in process. Revenues in our Process Control Systems
segment were $6.0 million compared to $5.4 million in first quarter 2002.
Increased billable hours and costs incurred on percentage of completion projects
during the quarter resulted in higher revenue recognition for this segment as
compared to the same quarter of the previous year.

International revenues increased 68% in the first quarter 2003 to $9.6 million
from $5.7 million in the same quarter of the prior year. Revenues outside of the
United States accounted for 13% of consolidated revenues in the first quarter of
fiscal 2003 compared to 7% in the same period last year. Worldwide investments
in oil and gas production facilities have strengthened our export sales.

Gross profit as a percentage of revenues during the first quarter of 2003
decreased to 19.9% from 20.4% in the first quarter of 2002. The gross profit was
adversely impacted by the incremental production costs associated with the
disruptions caused by requests for delayed shipments. As a result of the
depressed market, competitive pricing has also begun to affect gross profit.

Operating Expenses

Selling, general and administrative expenses, including research and development
expenditures, were $9.4 million (13.1% of revenues) in the first quarter of 2003
compared to $9.4 million (12.3% of revenues) in the first quarter of fiscal
2002. As volumes decreased in the first quarter of 2003, our expenditures
remained constant. As a result, the ratio of selling, general, and
administrative expenses to revenues increased.

Interest Income and Expense

During the first quarter of 2003, we incurred $86 thousand in interest expense
on our term debt and outstanding industrial revenue bonds. The reduction in
interest expense from the $359 thousand incurred for the quarter ended January
31, 2002 is due to lower levels of debt. In addition, during the first quarter
of 2002, estimates of variable interest expense were recorded which required an
adjustment in the third quarter of 2002 as the estimates of variable interest
expense were higher than actual interest incurred.

Interest income increased by $38 thousand to $92 thousand for the first quarter
2003 compared to the same period of the previous year. The lower interest rate
environment has been offset by our higher level of invested funds during 2003.

Provision for Income Taxes

Our provision for income taxes reflects an effective income tax rate on earnings
before income taxes of 37.2% in the first quarter of fiscal 2003 compared to
36.3% in the first quarter of fiscal 2002. The increase in our effective tax
rate is primarily a result of incremental increases in our federal tax rate
compared to the previous year as well as higher state taxes.

Net Earnings from continuing operations before cumulative effect of change in
accounting principle

Net earnings from continuing operations before cumulative effect of change in
accounting principle was $3.0 million, or $.28 per diluted share, in the first
quarter of fiscal year 2003 compared to $3.7 million, or $.35 per diluted share
in the first quarter of fiscal year 2002. Declines in business volume resulted
in earnings weakening in the first quarter of fiscal 2003 versus the first
quarter of fiscal 2002.

Cumulative effect of change in accounting principle

As a result of the adoption of Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets", we recorded a goodwill
impairment loss of $510 thousand, net of $285 thousand taxes, as a cumulative
effect of a change in accounting principle during the first quarter of 2003. The
goodwill impairment charge accounted for a loss of $0.04 per diluted share.

Net Earnings

Net earnings were $2.5 million, or $.24 per diluted share, in the first quarter
of fiscal year 2003 compared to $3.7 million, or $.35 per diluted share in the
first quarter of fiscal year 2002. A decline in business volume and lower gross
profits resulted in earnings weakening in the first quarter of fiscal 2003 along
with the goodwill impairment charge versus the first quarter of fiscal 2002.

Backlog

The order backlog on January 31, 2003, was $168.5 million, compared to $189.4
million at fiscal year end 2002 and $213.3 million at the end of the first
quarter one year ago. New orders placed during the first quarter totaled $50.7
million versus $49.3 million in our fourth quarter 2002 and $80.9 million for
the same period last year.

LIQUIDITY AND CAPITAL RESOURCES

We have maintained a strong liquidity position. Working capital was $89.2
million at January 31, 2003 compared to $86.5 million at October 31, 2002. As of
January 31, 2003, current assets exceeded current liabilities by 2.7 times and
our debt to capitalization ratio was less than 0.1 to 1.

As of January 31, 2003, we had cash and cash equivalents of $12.1 million, a
slight decrease from year end 2002. Long-term debt, including current
maturities, totaled $11.6 million at January 31, 2003 compared to $12.0 million
at October 31, 2002. In addition to our long-term debt, we have a $25.0 million
revolving credit agreement expiring February 2005. As of January 31, 2003, there
were no borrowings under this line of credit.

Operating Activities

Operating activities used $84 thousand in the first quarter of fiscal 2003. A
net increase in operating assets and liabilities used $5.2 million. This use of
cash was offset by net earnings adjusted for non-cash costs such as
depreciation, amortization and the cumulative effect of a change in accounting
principle. For the three months ended January 31, 2002, operating activities
provided $12.8 million. The primary difference between the periods is due to the
use of cash during the first quarter of 2003 from increases in operating assets
such as accounts receivable and inventories.

Investing Activities

Cash used for the purchase of property, plant and equipment during the first
quarter of fiscal 2003 was $1.8 million, as compared to $5.5 million in the
first quarter fiscal 2002. The majority of our first quarter 2003 capital
expenditures were to increase our manufacturing capabilities available for the
manufacture of electrical power control modules. These modules are provided to
the oil and gas industry for use on offshore platforms. During 2002, we
completed a new facility in Northlake, IL for the manufacture of our isolated
phase bus duct product line. The expansion of our North Canton, OH facility,
which is used in the manufacture of electrical power products, was also
completed. These expansions during 2002, as well as capital expenditures to
support process improvements throughout our manufacturing operations, accounted
for the increased capital expenditures in the first quarter 2002.

Financing Activities

Financing activities used $0.3 million in fiscal 2002. Approximately $0.4
million was used for net repayments on our long-term debt. Other financing
activities were limited to the exercise of stock options. Net cash used in
financing activities for the three months ended January 31, 2002 was $9.2
million. The decrease in cash used in financing activities during the first
quarter 2003 as compared to the same period in 2002 is due to lower levels of
debt during 2003.

OUTLOOK FOR FISCAL 2003

Due to the current economic environment and the outlook for the markets we
serve, we anticipate consolidated revenues to decline in 2003. We anticipate new
investments in oil and gas facilities to strengthen our export sales during the
coming year. However, additional investments in power generation facilities have
already begun to soften in 2003.

For the second quarter of 2003, we expect earnings from continuing operations to
range between $0.21 and $0.26 per diluted share. For the fiscal year 2003, we
expect earnings from continuing operations to range between $1.05 and $1.15 per
diluted share. Fiscal year 2003 revenue is expected to range between $250
million and $265 million.

We will continue to invest in our manufacturing capabilities and expect capital
expenditures during fiscal year 2003 to range between $5.0 million and $8.0
million. Of this amount, approximately $4.0 million will be needed to complete a
project to increase our manufacturing capacity available for the manufacture of
electrical power control modules. This project was initiated during 2002 and
will be completed in 2003.

As a result of our internal operating efficiencies, cost containment, and low
levels of debt, we anticipate that our cash position will continue to grow
during 2003. We believe that working capital, borrowing capabilities, and funds
generated from operations should be sufficient to finance anticipated
operational activities, capital improvements, debt repayment and possible future
acquisitions for the foreseeable future.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make estimates and judgments with respect to the selection and
application of accounting policies that affect the reported amounts of assets,
liabilities, revenues and expenses, and the disclosures of contingent assets and
liabilities. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.

We believe the following critical accounting policy has the greatest impact on
the preparation of our consolidated financial statements.

Revenue Recognition

We recognize revenues from product sales upon transfer of title at the time of
shipment or delivery according to terms of the contract, when all significant
contractual obligations have been satisfied, the price is fixed or determinable,
and collectibility is reasonably assured. Contract revenues are recognized on a
percentage-of-completion basis primarily using the ratio of labor dollars or
hours incurred to date to total estimated labor dollars or hours to measure the
stage of completion. Contract costs include direct material and labor, and
certain indirect costs. Revenues are not recognized on change orders until
customer approval is obtained. Provisions for total estimated losses on
uncompleted contracts are recorded in the period in which such losses are
estimable. Conditions such as changes in job performance, job conditions,
estimated contract costs and profitability may result in revisions to original
assumptions in the period in which the change becomes evident. Thus, actual
results could differ from original assumptions, resulting in a different outcome
for profits or losses than anticipated.

Part 1
Item 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks arising from transactions we have entered
into in the normal course of business. These risks primarily relate to
fluctuations in interest rates, foreign exchange rates, and commodity prices.

We manage our exposure to changes in interest rates by optimizing the use of
variable and fixed rate debt and an interest rate hedge. A 1.0% increase in
interest rates would result in an annual increase in interest expense of less
than $100 thousand. We believe that changes in interest rates will not have a
material near-term impact on our future earnings or cash flows.

We manage our exposure to changes in foreign exchange rates primarily through
arranging compensation in U.S. dollars. Risks associated with changes in
commodity prices are primarily managed through utilizing contracts with
suppliers. Risks related to foreign exchange rates and commodity prices are
monitored and actions could be taken to hedge these risks in the future. We
believe that fluctuations in foreign exchange rates and commodity prices will
not have a material near-term effect on our future earnings and cash flows.

Part 1
Item 4

CONTROLS AND PROCEDURES

Our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-4(c) and 15d-14(c) of the Securities Exchange Act of 1934,
as amended) as of a date ("Evaluation Date") within 90 days prior to the filing
date of this quarterly report. Based on such evaluation, our CEO and CFO have
each concluded that as of the Evaluation Date, our disclosure controls and
procedures were effective to ensure that information required to be disclosed by
us in reports that we file or submit under the Securities Exchange Act of 1934,
as amended, is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
There were no significant changes in our internal controls or in other factors
that could significantly affect the internal controls subsequent to the
Evaluation Date.

Part II

OTHER INFORMATION

ITEM 1. Legal Proceedings

The Company is a party to disputes arising in the ordinary
course of business. Management does not believe that the
ultimate outcome of these disputes will materially affect the
financial position of results of operations of the Company.

ITEM 2. Changes in Securities and Use of Proceeds

None

ITEM 3. Defaults Upon Senior Securities

Not applicable

ITEM 4. Submission of Matters to a Vote of Security Holders

None

ITEM 5. Other Information

None

ITEM 6. Exhibits and Reports on Form 8-K

a. Exhibits

99.1 -Certification Pursuant to Section 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

99.2 -Certification Pursuant to Section 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

b. Reports on Form 8-K

None

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

March 4, 2003 /s/ THOMAS W. POWELL
- ------------- ------------------------------------------
Date Thomas W. Powell
President and Chief Executive Officer
(Principal Executive Officer)

March 4, 2003 /s/ DON R. MADISON
- ------------- ------------------------------------------
Date Don R. Madison
Vice President and Chief Financial Officer
(Principal Financial Officer)

CERTIFICATION

I, Thomas W. Powell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Powell
Industries, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and
have:

a) designed such disclosure controls and procedures 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
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: March 4, 2003

/s/ THOMAS W. POWELL
---------------------------------------
Thomas W. Powell,
President and Chief Executive Officer
(Principal Executive Officer)

CERTIFICATION

I, Don R. Madison, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Powell
Industries, Inc.;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

Date: March 4, 2003

/s/ DON R. MADISON
---------------------------------------------
Don R. Madison
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

99.1 -Certification Pursuant to Section 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

99.2 -Certification Pursuant to Section 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
</Table>