2018 Q3 Form 10-K Financial Statement

#000008042018000036 Filed on December 12, 2018

View on sec.gov

Income Statement

Concept 2018 Q3 2018 2017 Q3
Revenue $134.9M $448.7M $94.96M
YoY Change 42.05% 13.34% -26.84%
Cost Of Revenue $110.9M $383.4M $84.10M
YoY Change 31.87% 11.07% -19.21%
Gross Profit $24.01M $65.36M $10.89M
YoY Change 120.35% 28.73% -57.57%
Gross Profit Margin 17.8% 14.56% 11.47%
Selling, General & Admin $18.30M $66.77M $15.10M
YoY Change 21.19% 8.52% -11.7%
% of Gross Profit 76.23% 102.16% 138.61%
Research & Development $1.800M $6.700M $2.100M
YoY Change -14.29% -2.9% 61.54%
% of Gross Profit 7.5% 10.25% 19.28%
Depreciation & Amortization $3.200M $12.90M $3.300M
YoY Change -3.03% 1.16% 0.0%
% of Gross Profit 13.33% 19.74% 30.29%
Operating Expenses $20.10M $73.47M $17.20M
YoY Change 16.86% 7.37% -7.53%
Operating Profit $3.905M -$9.122M -$6.306M
YoY Change -161.93% -52.83% -189.12%
Interest Expense $100.0K $207.0K $200.0K
YoY Change -50.0% 23.21%
% of Operating Profit 2.56%
Other Income/Expense, Net $200.0K $747.0K $500.0K
YoY Change -60.0% -63.18% 0.0%
Pretax Income $3.400M -$7.699M -$6.100M
YoY Change -155.74% -54.49% -188.41%
Income Tax $2.100M -$547.0K -$1.000M
% Of Pretax Income 61.76%
Net Earnings $1.539M -$7.152M -$5.142M
YoY Change -129.93% -24.6% -193.36%
Net Earnings / Revenue 1.14% -1.59% -5.41%
Basic Earnings Per Share $0.13 -$0.62 -$0.45
Diluted Earnings Per Share $0.13 -$0.62 -$0.45
COMMON SHARES
Basic Shares Outstanding 11.47M shares 11.51M shares 11.43M shares
Diluted Shares Outstanding 11.51M shares

Balance Sheet

Concept 2018 Q3 2018 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $49.80M $49.80M $95.20M
YoY Change -47.69% -47.69% -2.56%
Cash & Equivalents $36.58M $36.60M $68.36M
Short-Term Investments $13.20M $13.20M $26.80M
Other Short-Term Assets $630.0K $23.60M $463.0K
YoY Change 36.07% 3.51% -81.16%
Inventory $21.35M $103.9M $18.45M
Prepaid Expenses $3.775M $3.701M
Receivables $92.55M $92.50M $53.85M
Other Receivables $7.000M $7.000M $8.200M
Total Short-Term Assets $276.7M $276.7M $250.1M
YoY Change 10.63% 10.64% -17.78%
LONG-TERM ASSETS
Property, Plant & Equipment $128.8M $128.8M $139.4M
YoY Change -7.64% -7.6% -3.83%
Goodwill $1.000M $1.000M
YoY Change 0.0%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $11.09M $23.00M $13.80M
YoY Change -19.66% -3.36% 21.69%
Total Long-Term Assets $153.3M $153.3M $164.9M
YoY Change -7.05% -7.03% 4.13%
TOTAL ASSETS
Total Short-Term Assets $276.7M $276.7M $250.1M
Total Long-Term Assets $153.3M $153.3M $164.9M
Total Assets $430.0M $430.0M $415.0M
YoY Change 3.61% 3.61% -10.28%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $40.71M $40.70M $33.27M
YoY Change 22.38% 22.22% -4.9%
Accrued Expenses $24.90M $24.90M $18.20M
YoY Change 36.81% 36.81% -33.09%
Deferred Revenue $43.17M
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $400.0K $400.0K $400.0K
YoY Change 0.0% 0.0% 0.0%
Total Short-Term Liabilities $117.8M $117.8M $85.58M
YoY Change 37.71% 37.62% -27.63%
LONG-TERM LIABILITIES
Long-Term Debt $1.200M $1.200M $1.600M
YoY Change -25.0% -25.0% -20.0%
Other Long-Term Liabilities $3.356M $9.300M $1.197M
YoY Change 180.37% 43.08% -18.35%
Total Long-Term Liabilities $4.556M $10.50M $2.797M
YoY Change 62.89% 29.63% -19.3%
TOTAL LIABILITIES
Total Short-Term Liabilities $117.8M $117.8M $85.58M
Total Long-Term Liabilities $4.556M $10.50M $2.797M
Total Liabilities $128.3M $128.3M $93.69M
YoY Change 36.95% 36.93% -26.34%
SHAREHOLDERS EQUITY
Retained Earnings $291.5M $310.6M
YoY Change -6.14% -6.43%
Common Stock $56.77M $54.33M
YoY Change 4.49% 4.47%
Preferred Stock
YoY Change
Treasury Stock (at cost) $25.00M $25.00M
YoY Change 0.0% 0.0%
Treasury Stock Shares 806.0K shares 806.0K shares
Shareholders Equity $301.6M $301.6M $321.3M
YoY Change
Total Liabilities & Shareholders Equity $430.0M $430.0M $415.0M
YoY Change 3.61% 3.61% -10.28%

Cashflow Statement

Concept 2018 Q3 2018 2017 Q3
OPERATING ACTIVITIES
Net Income $1.539M -$7.152M -$5.142M
YoY Change -129.93% -24.6% -193.36%
Depreciation, Depletion And Amortization $3.200M $12.90M $3.300M
YoY Change -3.03% 1.16% 0.0%
Cash From Operating Activities -$2.400M -$28.54M $9.700M
YoY Change -124.74% -177.53% -25.95%
INVESTING ACTIVITIES
Capital Expenditures -$500.0K $4.415M -$1.100M
YoY Change -54.55% 21.83% 10.0%
Acquisitions
YoY Change
Other Investing Activities $4.100M $14.80M $29.00M
YoY Change -85.86% -155.22% 28900.0%
Cash From Investing Activities $3.600M $10.43M $27.90M
YoY Change -87.1% -134.26% -2890.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00
YoY Change
Debt Paid & Issued, Net $400.0K
YoY Change 0.0%
Cash From Financing Activities -3.100M -$13.03M -3.000M
YoY Change 3.33% 2.8% -11.76%
NET CHANGE
Cash From Operating Activities -2.400M -$28.54M 9.700M
Cash From Investing Activities 3.600M $10.43M 27.90M
Cash From Financing Activities -3.100M -$13.03M -3.000M
Net Change In Cash -1.900M -$31.14M 34.60M
YoY Change -105.49% 393.39% 297.7%
FREE CASH FLOW
Cash From Operating Activities -$2.400M -$28.54M $9.700M
Capital Expenditures -$500.0K $4.415M -$1.100M
Free Cash Flow -$1.900M -$32.96M $10.80M
YoY Change -117.59% -199.3% -23.4%

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0 USD
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892000 USD
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448000 USD
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2800000 USD
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0.00
CY2017 us-gaap Effective Income Tax Rate Reconciliation Change In Deferred Tax Assets Valuation Allowance
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0.00
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-0.04
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0.00
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0.00
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0.01
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0.01
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0.02
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0.02
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0 USD
CY2018 us-gaap Excess Tax Benefit From Share Based Compensation Financing Activities
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0 USD
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CY2017 us-gaap Excess Tax Benefit From Share Based Compensation Operating Activities
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0 USD
CY2018 us-gaap Excess Tax Benefit From Share Based Compensation Operating Activities
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177000 USD
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156000 USD
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177000 USD
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P4Y
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507000 USD
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17793000 USD
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500000 USD
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37176000 USD
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-195000 USD
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CY2018 us-gaap Increase Decrease In Accrued Income Taxes Payable
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996000 USD
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3927000 USD
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8859000 USD
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4291000 USD
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600000 USD
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1080000 USD
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156000 USD
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558000 USD
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883000 USD
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414986000 USD
CY2018Q3 us-gaap Liabilities And Stockholders Equity
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429951000 USD
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3023000 USD
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1101000 USD
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1950000 USD
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-453000 USD
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237000 USD
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3270000 USD
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14117000 USD
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0 USD
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24851000 USD
CY2018 us-gaap Increase In Restricted Cash
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290000 USD
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31000 shares
CY2017 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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0 shares
CY2018 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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0 shares
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1719000 USD
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1514000 USD
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149000 USD
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168000 USD
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207000 USD
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18448000 USD
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21352000 USD
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22100000 USD
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24563000 USD
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4252000 USD
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117849000 USD
CY2017Q3 us-gaap Long Term Debt
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2000000 USD
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1600000 USD
CY2017Q3 us-gaap Long Term Debt And Capital Lease Obligations
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1600000 USD
CY2018Q3 us-gaap Long Term Debt And Capital Lease Obligations
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1200000 USD
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400000 USD
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400000 USD
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400000 USD
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400000 USD
CY2018Q3 us-gaap Long Term Debt Current
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400000 USD
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400000 USD
CY2018Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Five
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0 USD
CY2018Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Four
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Business and Organization</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Powell Industries, Inc. (we, us, our, Powell or the Company) was incorporated in the state of Delaware in 2004 as a successor to a Nevada company incorporated in 1968. The Nevada company was the successor to a company founded by William E. Powell in 1947, which merged into the Company in 1977. Our major subsidiaries, all of which are wholly owned, include: Powell Electrical Systems, Inc.; Powell (UK) Limited; Powell Canada Inc. and Powell Industries International, B.V.</font></div><div style="line-height:120%;padding-top:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We develop, design, manufacture and service custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy designed to (1) distribute, control and monitor the flow of electrical energy and (2) provide protection to motors, transformers and other electrically powered equipment. Our principal products include integrated power control room substations (PCRs&#174;), custom-engineered modules, electrical houses (E-Houses), traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers and bus duct systems. These products are designed for application voltages ranging from </font><font style="font-family:inherit;font-size:10pt;">480</font><font style="font-family:inherit;font-size:10pt;"> volts to </font><font style="font-family:inherit;font-size:10pt;">38,000</font><font style="font-family:inherit;font-size:10pt;"> volts and are used in oil and gas refining, offshore oil and gas production, petrochemical, pipeline, terminal, mining and metals, light rail traction power, electric utility, pulp and paper and other heavy industrial markets. Our product scope includes designs tested to meet both U.S.&#160;and international standards, under both the American National Standards Institute and International Electrotechnical Commission. We assist customers by providing value-added services such as spare parts, field service inspection, installation, commissioning, modification and repair, retrofit and retrofill components for existing systems and replacement circuit breakers for switchgear that is obsolete or that is no longer produced by the original manufacturer. We seek to establish long-term relationships with the end users of our systems as well as the design and construction engineering firms contracted by those end users.</font></div><div style="line-height:120%;padding-top:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">References to Fiscal </font><font style="font-family:inherit;font-size:10pt;">2018</font><font style="font-family:inherit;font-size:10pt;">, Fiscal </font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;"> and Fiscal </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;"> used throughout these Notes to Consolidated Financial Statements relate to our fiscal years ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div></div>
CY2018 us-gaap Revenue Recognition Accounting Policy Gross And Net Revenue Disclosure
RevenueRecognitionAccountingPolicyGrossAndNetRevenueDisclosure
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Revenue Recognition</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our revenues are primarily generated from the engineering and manufacturing of custom products under long-term contracts that may last from </font><font style="font-family:inherit;font-size:10pt;">one</font><font style="font-family:inherit;font-size:10pt;"> month to several years, depending on the contract. Revenues from long-term contracts are recognized on the percentage-of-completion method of accounting. Occasionally a contract may require that we segment the project into specific deliverables for revenue recognition. Segmenting a contract may result in different interim rates of profitability for each scope of service than if we had recognized revenue on a combined basis.</font></div><div style="line-height:120%;padding-top:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under the percentage-of-completion method of accounting, revenues are recognized as work is performed. The revenue earned to date is calculated by multiplying the total contract price by the percentage of performance to date, which is based on total costs or total labor dollars incurred to date compared to the total estimated costs or total labor dollars estimated at completion. The method used to determine the percentage of completion is typically the cost method, unless the labor method is a more accurate method of measuring the progress of the project. Application of the percentage-of-completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. Contract costs include all direct material costs, direct labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and all costs associated with operation of equipment. The cost estimation process is based upon the professional knowledge and experience of our engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays on our project performance and the recoverability of any claims. Changes in job performance, job conditions, estimated profitability and final contract settlements, including our estimate of liquidated damages, if any, may result in revisions to costs and income, with their effects being recognized in the period in which the revisions are determined. Whenever revisions of estimated contract costs and contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period.</font></div><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Revenues associated with maintenance, repair and service contracts are recognized when the services are performed. Expenses related to these types of services are recognized as incurred.</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S.&#160;GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, provision for excess and obsolete inventory, warranty accruals and income taxes. The amounts recorded for warranties, legal, income taxes, impairment of long-lived assets (when applicable) and other contingent liabilities require judgments regarding the amount of expenses that will ultimately be incurred. We base our estimates on historical experience and on various other assumptions, as well as the specific circumstances surrounding these contingent liabilities, in evaluating the amount of liability that should be recorded. Additionally, the recognition of deferred tax assets requires estimates related to future income and other assumptions regarding timing and future profitability.&#160;Estimates may change as new events occur, additional information becomes available or operating environments change. Actual results may differ from our estimates.</font></div></div>

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