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 / ksdennard@drg-e.com
Karen Roan / kcroan@drg-e.com
DRG&E / 713-529-6600
POWELL INDUSTRIES REPORTS FISCAL 2003
FOURTH QUARTER AND YEAR END RESULTS
HOUSTON -- DECEMBER 9, 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 fourth quarter and year ended October 31, 2003.
Revenues for the fourth quarter of 2003 were $57.2 million compared to
revenues of $75.3 million for the fourth quarter of 2002. Net income from
continuing operations for the fourth quarter was $1.2 million, or $0.12 per
diluted share, compared to $5.1 million, or $0.48 per diluted share, for the
fourth quarter of fiscal 2002. The income tax provision for the fourth quarter
and full year includes a charge of $0.9 million for estimated state tax
exposures, net of federal income tax benefit, related to prior years. The
company generated $1.6 million in free cash flow (defined as total cash flow
from operations of $2.8 million less all capital expenditures of $1.2 million)
in the fourth quarter, and for the full year generated $31.9 million in free
cash flow. We use this measure because we believe that free cash flow is a good
indicator of operating efficiency.
Thomas W. Powell, chairman and chief executive officer, stated,
"Business remained challenging in our fourth quarter due to continued weakness
and depressed price levels in our electrical product markets. Our fourth quarter
saw an uptick in general business inquiries as the US economy showed signs of
expansion. We are optimistic that this new level of economic activity will
continue to expand our 2004 opportunities."
Revenues for fiscal 2003 were $253.4 million compared to revenues of
$306.4 million for fiscal 2002. Fiscal year 2003 net income from continuing
operations 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," was $7.1
million, or $0.67 per diluted share, versus $17.9 million, or $1.67 per diluted
share. Excluding the effect of a change in accounting principle, net income for
the year was $7.6 million, or $0.71 per diluted share, compared to $17.9
million, or $1.67 per diluted share.
The Electrical Power Products segment recorded revenues of $50.2
million in the fourth quarter compared to $69.6 million in the fourth quarter a
year ago. Income from continuing operations before income taxes for Electrical
Power Products totaled $3.1 million versus $7.7 million in last year's fourth
quarter.
Process Control Systems revenues for the fourth quarter were $7.0
million compared to $5.8 million for the same period a year ago. Income from
continuing operations before income taxes for Process Control Systems totaled
$0.5 million versus $0.7 million a year ago.
For fiscal 2003 the Electrical Power Products segment recorded revenues
of $227.0 million compared to $283.6 million in fiscal 2002. Income from
continuing operations before income taxes for Electrical Power Products was
$12.5 million versus $27.4 million in fiscal 2002.
Process Control Systems revenues for fiscal 2003 were $26.4 million
compared to $22.8 million last year. Income from continuing operations before
income taxes for Process Control Systems totaled $1.4 million versus $1.0
million a year ago.
The company's order backlog as of October 31, 2003, was $157.5 million,
compared to $178.4 million at the end of the third fiscal quarter of 2003 and
$189.4 million at the end of fiscal 2002. New orders placed during the fourth
quarter totaled $36.3 million versus $35.8 million in the third fiscal quarter
and compared to $49.3 million in the fourth 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.
Powell Industries expects fiscal 2004 first quarter earnings to range
between $0.08 and $0.13 per diluted share, and full year 2004 earnings to range
between $0.48 and $0.63 per diluted share. Fiscal 2004 revenue is expected to
range between $220.0 million and $235.0 million, and free cash flow, defined as
total cash flow from operations less all capital expenditures, is expected to
range between $5.0 million and $10.0 million.
CONFERENCE CALL
Powell Industries has scheduled a conference call for Tuesday, December
9, 2003, at 11:00 a.m. eastern time. To participate in the conference call, dial
(303) 262-2076 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 December
16, 2003. To access the replay, dial (303) 590-3000 using a passcode of 560919.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call over the Internet by visiting
http://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 YEAR ENDED
OCTOBER 31, OCTOBER 31,
(UNAUDITED) (UNAUDITED)
2003 2002 2003 2002
--------- --------- --------- ---------
(In thousands, except per share data)
REVENUES .............................................................. $57,218 $ 75,343 $ 253,381 $ 306,403
Cost of goods sold .................................................... 45,223 56,973 204,415 238,745
--------- --------- --------- ---------
Gross profit .......................................................... 11,995 18,370 48,966 67,658
Selling, general & administrative expenses ............................ 8,481 9,948 35,297 38,997
--------- --------- --------- ---------
Income from operations before interest and income taxes ............... 3,514 8,422 13,669 28,661
Interest expense ...................................................... 58 95 403 508
Interest income ....................................................... (191) (57) (578) (298)
--------- --------- --------- ---------
Income from continuing operations before income taxes
and cumulative effect of change in accounting principle .......... 3,647 8,384 13,844 28,451
Income tax provision .................................................. 2,407 3,250 6,216 10,546
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ............................. $ 1,240 $ 5,134 $ 7,628 $ 17,905
Cumulative effect of change in accounting principle, net of tax ....... $ -- $ -- $ (510) $ --
--------- --------- --------- ---------
NET INCOME ............................................................ $ 1,240 $ 5,134 $ 7,118 $ 17,905
========= ========= ========= =========
Net earnings per common share:
Basic:
Earnings from continuing operations ................................ $ 0.12 $ 0.48 $ 0.72 $ 1.70
Cumulative effect of change in accounting principle ................ -- -- (0.05) --
--------- --------- --------- ---------
Net earnings ....................................................... $ 0.12 $ 0.48 $ 0.67 $ 1.70
========= ========= ========= =========
Diluted:
Earnings from continuing operations ................................ $ 0.12 $ 0.48 $ 0.71 $ 1.67
Cumulative effect of change in accounting principle ................ -- -- (0.04) --
--------- --------- --------- ---------
Net earnings ....................................................... $ 0.12 $ 0.48 $ 0.67 $ 1.67
========= ========= ========= =========
Weighted average number of common
shares outstanding .................................................. 10,626 10,595 10,591 10,511
========= ========= ========= =========
Weighted average number of common and
common equivalent shares outstanding .............................. 10,744 10,700 10,681 10,698
========= ========= ========= =========
SELECTED FINANCIAL DATA:
Capital Expenditures .................................................. $ 1,151 $ 2,316 $ 4,541 $ 13,872
========= ========= ========= =========
Depreciation and amortization ......................................... $ 1,375 $ 1,352 $ 5,155 $ 4,898
========= ========= ========= =========
POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
OCTOBER 31, OCTOBER 31,
2003 2002
----------- -----------
(In thousands) (UNAUDITED)
Assets:
Current assets ........................................................ $141,313 $138,499
Property, plant & equipment (net) ..................................... 43,998 45,020
Other assets .......................................................... 5,029 6,124
-------- --------
Total assets ........................................... $190,340 $189,643
======== ========
Liabilities & stockholders' equity:
Current liabilities ................................................... $ 44,424 $ 52,033
Long-term debt and capital lease obligations, net of
current maturities ..................................... 6,891 7,264
Deferred & other long-term liabilities ................................ 2,421 2,139
Stockholders' equity .................................................. 136,604 128,207
-------- --------
Total liabilities and stockholders' equity ............. $190,340 $189,643
======== ========
POWELL INDUSTRIES, INC. & SUBSIDIARIES
BUSINESS SEGMENTS
THREE MONTHS ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
(UNAUDITED) (UNAUDITED)
2003 2002 2003 2002
-------- -------- -------- --------
(In thousands)
Revenues:
Electrical Power Products ........................................... $ 50,235 $ 69,557 $227,012 $283,592
Process Control Systems ............................................. 6,983 5,786 26,369 22,811
-------- -------- -------- --------
Total revenues ...................................................... $ 57,218 $ 75,343 $253,381 $306,403
======== ======== ======== ========
Income from continuing operations before income taxes and cumulative effect of
change in accounting principle:
Electrical Power Products ........................................... $ 3,124 $ 7,713 $ 12,491 $ 27,411
Process Control Systems ............................................. 523 671 1,353 1,040
-------- -------- -------- --------
Total income from continuing operations before income taxes
and cumulative effect of change in accounting principle .................. $ 3,647 $ 8,384 $ 13,844 $ 28,451
======== ======== ======== ========
OCTOBER 31, OCTOBER 31,
2003 2002
----------- -----------
(UNAUDITED)
Assets:
Electrical Power Products ......................................................... $127,721 $156,584
Process Control Systems ........................................................... 14,269 14,937
Corporate ......................................................................... 48,350 18,122
-------- --------
Total assets ....................................................... $190,340 $189,643
======== ========
Backlog:
Electrical Power Products ......................................................... $ 96,986 $151,632
Process Control Systems ........................................................... 60,473 37,721
-------- --------
Total backlog ...................................................... $157,459 $189,353
======== ========