EXHIBIT 99.1
(POWELL INDUSTRIES, INC. LOGO) PRESS RELEASE
Contacts: Don R. Madison, CFO
Powell Industries, Inc.
713-947-4422
FOR IMMEDIATE RELEASE Ken Dennard/Karen Roan
DRG&E/713-529-6600
POWELL INDUSTRIES REPORTS
FISCAL 2003 THIRD QUARTER RESULTS
HOUSTON -- AUGUST 27, 2003 -- 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 2003 third quarter ended July 31, 2003.
Revenues for the third quarter of 2003 were $60.4 million compared to
revenues of $74.3 million for the third quarter of 2002. Net income from
continuing operations for the third quarter was $1.3 million, or $0.13 per
diluted share, compared to $4.5 million, or $0.42 per diluted share, for the
third quarter of fiscal 2002. Powell generated $14.3 million in free cash flow
(defined as total cash flow from operations of $14.9 million less all capital
expenditures of $588 thousand) in the third quarter. Year to date Powell has
generated $30.3 million in free cash flow.
"Business conditions remained difficult and competitive pressures
intense during our third quarter resulting in EPS at the bottom of our
projections," stated Thomas W. Powell, chairman and chief executive officer.
"However, it does appear that domestic opportunities and inquiry levels have
stabilized and international opportunities are improving. With more attention
now focused on the aging electric utility infrastructure, we see longer term
opportunities for the Company in the areas of increased power transmission,
generation, power quality and general systems upgrades."
Revenues through nine months of fiscal 2003 were $196.2 million
compared to revenues of $231.1 million for the same period of fiscal 2002. Net
income including the effect of a change in accounting principle of $510 thousand
for the adoption of Statement of Financial Accounting Standards (SFAS) No. 142,
"Goodwill and Other Intangible Assets," through nine months was $5.9 million, or
$0.55 per diluted share, versus $12.8 million, or $1.19 per diluted share.
Excluding the effect of a change in accounting principle, net income was $6.4
million, or $0.60 per diluted share, compared to $12.8 million, or $1.19 per
diluted share.
The Electrical Power Products segment recorded revenues of $53.1
million in the third quarter compared to $67.8 million in the third quarter a
year ago. Third quarter income from continuing operations before income taxes
for Electrical Power Products totaled $1.8 million versus $6.7 million in last
year's third quarter.
Process Control Systems revenues for the third quarter were $7.3
million compared to $6.5 million in last year's third quarter. Income from
continuing operations before income taxes for Process Control Systems totaled
$0.4 million versus $0.4 million a year ago.
The company's order backlog as of July 31, 2003, was $178.4 million,
compared to $203.0 million at the end of the second fiscal quarter of 2003 and
$215.3 million at the end of the third fiscal quarter one year ago. New orders
placed during the third quarter totaled $35.8 million versus $67.9 million in
the third quarter a year ago and compared to $98.7 million in the second fiscal
quarter, which included $37 million for the previously announced award for the
Lincoln and Holland tunnels.
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.
Powell Industries expects fiscal fourth quarter earnings to range
between $0.10 and $0.15 per diluted share and full year 2003 earnings from
continuing operations to range between $0.65 and $0.70 per diluted share, which
is the midpoint of our earlier guidance range of $0.60 to $0.75. Full year 2003
revenue is now expected to range between $250 million and $255 million, and free
cash flow, defined as total cash flow from operations less all capital
expenditures, is expected to range between $30 million and $33 million.
CONFERENCE CALL
Powell Industries has scheduled a conference call for Wednesday, August
27, 2003, at 11:00 a.m. eastern time. To participate in the conference call,
dial (303) 205-0033 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 Wednesday, September 3, 2003. To access the replay, dial (303) 590-3000
using a passcode of 549573.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call over the Internet by visiting
www.drg-e.com. To listen to the live call on the web, please visit the web site
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
web cast, an archive will be available shortly after the call and will remain
available for approximately 30 days at www.drg-e.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 STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
(UNAUDITED) (UNAUDITED)
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
(In thousands, except per share data)
REVENUES .............................................................. $ 60,382 $ 74,287 $ 196,163 $ 231,061
Cost of goods sold .................................................... 49,767 57,857 159,192 181,773
--------- --------- --------- ---------
Gross profit .......................................................... 10,615 16,430 36,971 49,288
Selling, general & administrative expenses ............................ 8,498 9,710 26,815 29,048
--------- --------- --------- ---------
Income from operations before interest and income taxes ............... 2,117 6,720 10,156 20,240
Interest expense ...................................................... 178 (263) 346 413
Interest income ....................................................... (207) (133) (387) (241)
--------- --------- --------- ---------
Income from continuing operations before income taxes
and cumulative effect of change in accounting principle ............ 2,146 7,116 10,197 20,068
Income tax provision .................................................. 810 2,593 3,810 7,295
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ............................. $ 1,336 $ 4,523 $ 6,387 $ 12,773
Cumulative effect of change in accounting principle, net of tax ....... $ -- $ -- $ (510) $ --
--------- --------- --------- ---------
NET INCOME ............................................................ $ 1,336 $ 4,523 $ 5,877 $ 12,773
========= ========= ========= =========
Net earnings per common share:
Basic:
Earnings from continuing operations ................................ $ 0.13 $ 0.43 $ 0.60 $ 1.22
Cumulative effect of change in accounting principle ................ -- -- (0.04) --
--------- --------- --------- ---------
Net earnings ....................................................... $ 0.13 $ 0.43 $ 0.56 $ 1.22
========= ========= ========= =========
Diluted:
Earnings from continuing operations ................................ $ 0.13 $ 0.42 $ 0.60 $ 1.19
Cumulative effect of change in accounting principle ................ -- -- (0.05) --
--------- --------- --------- ---------
Net earnings ....................................................... $ 0.13 $ 0.42 $ 0.55 $ 1.19
========= ========= ========= =========
Weighted average number of common
shares outstanding .................................................. 10,586 10,543 10,580 10,483
========= ========= ========= =========
Weighted average number of common and
common equivalent shares outstanding ................................ 10,662 10,742 10,672 10,699
========= ========= ========= =========
SELECTED FINANCIAL DATA:
Capital Expenditures .................................................. $ 588 $ 2,519 $ 3,390 $ 11,556
========= ========= ========= =========
Depreciation and amortization ......................................... $ 1,281 $ 1,231 $ 3,780 $ 3,546
========= ========= ========= =========
POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, October 31,
2003 2002
-------- -----------
(In thousands) (Unaudited)
Assets:
Current assets ..................................... $137,586 $138,499
Property, plant & equipment (net) .................. 44,635 45,020
Other assets ....................................... 5,461 6,124
-------- --------
Total assets ................................ $187,682 $189,643
======== ========
Liabilities & stockholders' equity:
Current liabilities ................................ $ 43,930 $ 52,033
Long-term debt and capital lease obligations, net of
current maturities .......................... 7,299 7,264
Deferred & other long-term liabilities ............. 2,104 2,139
Stockholders' equity ............................... 134,349 128,207
-------- --------
Total liabilities and stockholders' equity .. $187,682 $189,643
======== ========
POWELL INDUSTRIES, INC. & SUBSIDIARIES
BUSINESS SEGMENTS
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
(UNAUDITED) (UNAUDITED)
--------------------- ---------------------
2003 2002 2003 2002
-------- -------- -------- --------
(In thousands)
Revenues:
Electrical Power Products ........................................ $ 53,063 $ 67,804 $176,777 $214,036
Process Control Systems .......................................... 7,319 6,483 19,386 17,025
-------- -------- -------- --------
Total revenues ................................................... $ 60,382 $ 74,287 $196,163 $231,061
======== ======== ======== ========
Income from continuing operations before income taxes and cumulative effect of
change in accounting principle:
Electrical Power Products ........................................ $ 1,760 $ 6,737 $ 9,367 $ 19,698
Process Control Systems .......................................... 386 379 830 370
-------- -------- -------- --------
Total income from continuing operations before income taxes
and cumulative effect of change in accounting principle ..................... $ 2,146 $ 7,116 $ 10,197 $ 20,068
======== ======== ======== ========
July 31, October 31,
2003 2002
-------- -----------
(Unaudited)
Assets:
Electrical Power Products ....................................... $122,360 $156,584
Process Control Systems ......................................... 17,465 14,937
Corporate ....................................................... 47,857 18,122
-------- --------
Total assets .............................................. $187,682 $189,643
======== ========
Backlog:
Electrical Power Products ....................................... $112,629 $151,632
Process Control Systems ......................................... 65,756 37,721
-------- --------
Total backlog ............................................. $178,385 $189,353
======== ========