POWL - Earnings call transcript Q3 2022

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Operator

Good day, and welcome to the Powell Industries Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Ryan Coleman, Investor Relations. Thank you.

begin. may You

Ryan Coleman

be execution competition risks, in and raw to, forward-looking political and These limited risks international, at statements. its uncertainties Investors price involve include, time availability of forward-looking economic replay or going cautioned call to the results replay competitive good August materially including from will today, for may are available the this business and and via Fiscal risks are that Thank for within call, the no includes company's and of of that conference earnings Metcalf, to will August on as you XXXX will and it the Litigation that Powell's website, that Thank of statements, may and and and telephonic general by on time-sensitive a how was not actual the CEO; information Industries statements morning, Act replay these speaks Securities note the be Conference of webcast us Mike Reform you the me conditions, that transcript and forward-looking Private With operating yesterday's Powell those Quarter and future longer until differ CFO. advised review available any meaning of powellind.com, Brett The access Call listening a expectations pressures, joining Cope, X, reading. economic statements on to XXXX. in the Third certain strategies. Chairman information related results There release. materials XXXX, statements call XX. This Please future you, only accurate of Powell's Results. everyone. projected therefore, are industry may be information call today reported replay company's considered be Year but today's sensitivity to be to uncertainties and provided and such or of are

filings with more Brett. turn Commission. For the that, With information, I'll to over please Exchange and Securities to the company's the now refer call

Brett Cope

Good you Thank today Fiscal turn and to Results. make you, for I a Thank the joining financial to everyone. comments few Mike will review Quarter Third call commentary then questions. Ryan. your us more XXXX for we before over Powell's take morning,

and ways, Our the a markets over we activity end business the market many continuation recover our and to services the past Order and in our diversify yielding a quarters. over third last stronger are and trends new quarters to to was, continue Meanwhile, quarter strengthen. operational markets built of in across build and operated few have efforts offering industrial results. several momentum the our robust to remains encouraging compete in markets

result XX% of order $X million, and strong experienced select highest the experience our $XXX new million, within in broad our of scope as the decline a improved was which for Order XX.X% to consecutive project compete. chain back quarterly labor availability and of X the markets was X%. slight of challenging, as timing, size our our of a to those order XX% year the new been prior all our Traction material revenue project positive to customer while year-to-date On end utility $XX strong in quarter third to is the years million while grew XX.X% of compared that XX% figure order unchanged. prices, from keep our activity and such demand and X representing I cost of book-to-bill factors $XX by macroeconomic to from XXXX total secured the the encouraging as path the the being quarter, was headwinds as global we over orders team's would growth activity million and We million While third quarter. a new we year and year gross ability marks industrial That in in continue quarters pleased very We we the basis, step over XX% straight Total activity. X. note have a million. as improved quarter grew the equally was was Powell and remain with and across where a navigate and prior of the compared $XX higher supply relatively was Revenue quarter, revenue momentum. encountered was higher to geographies executed gross in a to I revenue XX.X%, gas activity X project million traction and of Book-to-bill sound on over in fiscal $XXX saw petrochemical compared mainly towards with range. growth X.Xx prior sequential is markets ratio revenue profitability. very and from of of to quarter we projects a challenges in project oil our divisions. markets second U.S. And within a the recorded $XX margin largest rising

pleased just remain our XX% all Overall, of level Excluding quarter. the margin the these did projects, we of and experience to in impact of we with continued focus throughout over operations. execution expansion the

which loss Moving third or of $X.XX reported profit. million $X.XX or share to contribute line We million per compared share million in benefited the in net combined net from prior a quarter $X.XX share per net income nonoperational net per to $X.X in the of The bottom income of X line. $X to $X.X the year. quarter, or the events

or these quarter. diluted net Mike to $X.XX the per elaborate these in nonoperational shortly. more third income items share $X.X items, Excluding was million will context on provide

our from a XX% XX% a the company, diligently key total Overall, of marked the quarter of Across environment. markets. effects working another third to continue mitigate of the the we quarter recovery a XXXX. in standpoint, we our of backlog the growth we to commercial encouraging cost end where step ended fiscal Lastly, the return higher higher last million, was and quarter $XXX and ended sequential with compared which is than

our quarter, the environment the productivity through make continue macro to and an in operational our progress both to effort During pricing navigating headwinds initiatives. margins of the protect positive towards teams

we on have pullback a slight of and volatility. experienced While We recently as cost of in longer-term input prices focused such steel. disciplined the supply view and copper commodities, and key remain a

risks these ensure our of both success We for Powell. continue and process availability engineered we will and present closely a to and component challenge provide customers components in the project monitoring help seek in are both as bid also the engineered that to identify early options these for supply price, select

Our many strategic working diligently sourcing the and over several and quarters. putting purchasing in hours last teams have been long

suppliers with and would working exist future so their that we our like engaged extraordinary assess to and collaboratively actively business. backlog for this where team are downside actions to times. the are to future take to secure and ensure thank needs to mitigate understand can risks We specifically these cost pressures recognize our efforts appropriate inflationary I early the through

with market from with our new company opportunities participation as end remain markets. robust broad out Looking levels are across as market our segments well aligned traditional that Inquiry both the goals. strategic across

and customers, core oil, positive spending our below gas levels. modestly remains the capital pre-pandemic While trend petrochemical for is

remains the gas and sectors chemicals opportunities projects continue to to nation remain However, more related attractive pipeline gas within and and to renewable active. commercial LNG,

technical and of projects. mid-rail strong priorities been leverage objectives. to revenue on to utility that the continues with the in with Our quarter And the pleased our progress execution solutions offset balanced continue remain we've and light Meanwhile, strong performance, past third against solid and markets measuring the commercial results we end date. commercial services industrial risk team in set Reflecting forth, strength the years. strategic proven to to our capability deliver remain for management have our sector, within global over prudent decline line against X strategic and traction we our and

As as complement focused our well both services the expanding a into existing following we diversifying that automation scope growing our technologies. expanding new of tangential broadening our and our applications reminder, portfolio product electrical our on product existing targeting as franchise; platform; catalog through product offerings have the attributes:

the to results. financial With we I'll our see over and initiative. to that, to benefits as our materialize efforts, result forward each these beginning Mike additional within call success the of of around are turn examples look sharing detail We to a more provide

Michael Metcalf

year, and million, Brett, good XXXX, fiscal the morning, you, everyone. by higher sequentially XX% prior higher X%. third versus Thank by $XXX or and quarter of period of the In reported in million revenue the same $XX we

New orders booked year the million $XX sequentially. quarter higher $XX $XXX higher versus were million, of million third prior fiscal the and XXXX for

prior $XX is XX% million same higher year prior by our quarter versus of $XXX million while result, a to Backlog were to international X.Xx revenues year-over-year compared ago, From period. the third million and revenues as at on revenues Compared book-to-bill domestic ratio $XXX current quarter. to higher compared period in X end higher versus were XX% perspective, international were the third oil a prior In and year, the gas $XX across the by sectors the utility our by higher basis. sector petrochemical Canadian sector driven strong operations. total, XX% U.K. and million, year were fiscal As revenues by the and was to year XX% higher across a while fiscal activity in a ago. the year, the market was the was our

was X other the third year-over-year million miscellaneous by our end million markets, and the predominantly fiscal data third new the ago other to large Additionally, was sector projects. XXXX in the Gross XXXX. we in Offsetting of quarter driven same volume lower increases, centers, versus is experienced product across higher sector this which quarter increased the commercial XX% these the $X on fiscal versus third quarter. volume The applications by profit $XX power also across timing of traction increasing infrastructure. XX% period universities traction year versus commercial fiscal of by

gross headwind pleased profit year during X margin out in very with of our points our revenue, This operational the XX basis we challenges As a this positive executed prior to points being environment. a projects Overall, decreased are the select U.S. by as fiscal gross on XXX XX.X% margin encountered and third facilities. of of basis generated accretion of we versus a percentage progress level roughly quarter. on profit dynamic

overhead costs. As continue in materials, experience to prior and raw logistics other elevated buyout periods, from components, costs we

have to pricing that are recognize actions into past the We models the our incrementally incorporated over beginning year. been offsetting

were cost to quarter compared and a a and increased as million diligent leverage. current the general percentage continuing third efficiencies loss quarter X focus cost fiscal to factory period versus the $X.X nonrecurring of revenue per well net initiatives of expenses the X% share XX% the $X.XX of same XXXX. fiscal We a XXXX, or $X net current of reported impacting ago. share As year quarter Selling, net loss did diluted lower management. and SG&A revenues as the per on income through In higher decreased of to per third share. the of earnings in in we administrative $XX a items million have volume on and $X.XX quarter income million or in notable third quarter, diluted

a do cash to $X the will operating on diluted per quarter. quarter, future our $X.X the the during repair within a sale after-tax of We Canada business Powell have and disposition impact of million million of anticipate and $X.XX the this not third First, recognized share a This valve our an of gain transaction results. gain generated fiscal servicing industrial entity. in business non-core material

result our or diversify have these sustainable against project that tax current years. of period. positive was past we have coupled a efforts the on previously Canadian $X.X strong evidence results results, $X.XX established positive per a share recognized allowance and assets, with as operating X we valuation Based operations Secondly, in Canadian tax sufficient benefit noncash the markets execution, strategically our to diluted their generating over to million release ongoing the deferred

was cadence reflecting During higher the orders operating and third used $XX continues capital, the of backlog. to as cash working net of levels quarter million business XXXX, in fiscal increased build activities the

backlog cash and critical had in million property, components equipment The of year-to-date holds year-end X XXXX, short-term invested in holding million, stock execution. capital debt. orders than $XX of plant $XX order in $XX company totaled and basis, fiscal million have At fiscal extra investments Investments position. XXXX safety resulting on long-term a we and $XXX,XXX. materials We to growth support June working XX, from lower our including and

the profitability. our operational continued the and provide commercial timing of do on anticipate Powell challenges also across considering sustainable with strength level improvements consistent however, We execute execution, healthy closing, the of In along we the focus our in environment backlog, XXXX. be most we while open will customers. current and well execute project to sustained the commercial our strong to We foundation remain Looking business targeting a markets forward, will for and and across With effectively are performance improved of our out we end strength we order book fiscal backlog, fiscal fiscal into and the attributes these the line of close focused positioned where we a to XXXX. operational the financial in presence, activity XXXX to as recognize that on deliver happy for the typical mix, priorities expect questions. look regions up balance forward we as the has that, sheet for

Brett Cope

you, Thank Matt.

resiliency we robust another as sheet of We look quarter. coming global forward With a in strong the over positive to and your are that, significant we Powell our an speaking continued on end today's allow call, face incredibly in stated quarters. next recovery, our in appreciate to on backlog you headwinds. possess As optimistic team, interest marked quarter results talented to and evaluate your the step of a balance markets We participation call. execute we the and today's with you us and for the third thank

Operator

concluded. has you presentation. attending now Thank conference The today's for

may now disconnect. You

Ryan Coleman	Alpha IR Group
Brett Cope	Chairman, President & CEO
Michael Metcalf	EVP, CFO, Secretary & Treasurer

Powell Industries (POWL) 7 Aug 222022 Q3 Earnings call transcript