ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 88-0106100 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
8550 Mosley Road Houston, Texas | 77075-1180 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ¨ | Accelerated filer x | Non-accelerated filer ¨ | Smaller reporting company ¨ |
(Do not check if a smaller reporting company) |
Page | |
December 31, 2016 | September 30, 2016 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 80,582 | $ | 97,720 | |||
Short-term investments | 14,874 | — | |||||
Accounts receivable, less allowance for doubtful accounts of $664 and $811 | 88,487 | 101,048 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 59,951 | 66,106 | |||||
Inventories | 23,976 | 26,521 | |||||
Income taxes receivable | 3,066 | 1,713 | |||||
Deferred income taxes | 4,347 | 4,006 | |||||
Prepaid expenses | 3,830 | 4,569 | |||||
Other current assets | 2,608 | 2,457 | |||||
Total Current Assets | 281,721 | 304,140 | |||||
Property, plant and equipment, net | 141,450 | 144,977 | |||||
Goodwill and intangible assets, net | 1,971 | 2,059 | |||||
Other assets | 11,850 | 11,340 | |||||
Total Assets | $ | 436,992 | $ | 462,516 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Current maturities of long-term debt | $ | 400 | $ | 400 | |||
Income taxes payable | 1,477 | 1,459 | |||||
Accounts payable | 32,670 | 34,985 | |||||
Accrued salaries, bonuses and commissions | 12,295 | 22,550 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 40,208 | 43,974 | |||||
Accrued product warranty | 4,230 | 4,639 | |||||
Other accrued expenses | 5,266 | 8,212 | |||||
Deferred credit ─ short term (Note D) | 2,029 | 2,029 | |||||
Total Current Liabilities | 98,575 | 118,248 | |||||
Long-term debt, net of current maturities | 1,600 | 2,000 | |||||
Deferred compensation | 4,815 | 4,840 | |||||
Deferred income taxes | 472 | 138 | |||||
Other long-term liabilities | 1,479 | 1,466 | |||||
Deferred credit ─ long term (Note D) | — | 507 | |||||
Total Liabilities | 106,941 | 127,199 | |||||
Commitments and Contingencies (Note F) | |||||||
Stockholders' Equity: | |||||||
Preferred stock, par value $.01; 5,000,000 shares authorized; none issued | — | — | |||||
Common stock, par value $.01; 30,000,000 shares authorized; 12,217,656 and 12,199,511 shares issued, respectively | 122 | 122 | |||||
Additional paid-in capital | 52,614 | 52,003 | |||||
Retained earnings | 328,693 | 331,959 | |||||
Treasury stock, 806,018 shares at cost | (24,999 | ) | (24,999 | ) | |||
Accumulated other comprehensive loss | (26,379 | ) | (23,768 | ) | |||
Total Stockholders' Equity | 330,051 | 335,317 | |||||
Total Liabilities and Stockholders' Equity | $ | 436,992 | $ | 462,516 |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Revenues | $ | 110,341 | $ | 149,977 | |||
Cost of goods sold | 95,342 | 126,827 | |||||
Gross profit | 14,999 | 23,150 | |||||
Selling, general and administrative expenses | 15,698 | 19,400 | |||||
Research and development expenses | 1,469 | 1,854 | |||||
Amortization of intangible assets | 88 | 88 | |||||
Restructuring and separation expenses | — | 3,797 | |||||
Operating loss | (2,256 | ) | (1,989 | ) | |||
Other income | (507 | ) | (507 | ) | |||
Interest expense | 34 | 24 | |||||
Interest income | (42 | ) | — | ||||
Loss before income taxes | (1,741 | ) | (1,506 | ) | |||
Income tax benefit | (1,441 | ) | (1,047 | ) | |||
Net loss | $ | (300 | ) | $ | (459 | ) | |
Loss per share: | |||||||
Basic | $ | (0.03 | ) | $ | (0.04 | ) | |
Diluted | $ | (0.03 | ) | $ | (0.04 | ) | |
Weighted average shares: | |||||||
Basic | 11,438 | 11,395 | |||||
Diluted | 11,438 | 11,395 | |||||
Dividends per share | $ | 0.26 | $ | 0.26 |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Net loss | $ | (300 | ) | $ | (459 | ) | |
Foreign currency translation adjustments | (2,611 | ) | (2,538 | ) | |||
Comprehensive loss | $ | (2,911 | ) | $ | (2,997 | ) |
Accumulated | |||||||||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||||||||
Common Stock | Paid-in | Retained | Treasury Stock | Comprehensive | |||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Shares | Amount | Loss | Total | ||||||||||||||||||||||
Balance, September 30, 2016 | 12,199 | $ | 122 | $ | 52,003 | $ | 331,959 | (806 | ) | $ | (24,999 | ) | $ | (23,768 | ) | $ | 335,317 | ||||||||||||
Net loss | — | — | — | (300 | ) | — | — | — | (300 | ) | |||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (2,611 | ) | (2,611 | ) | |||||||||||||||||||
Stock-based compensation | 19 | — | 1,009 | — | — | — | — | 1,009 | |||||||||||||||||||||
Shares withheld in lieu of employee tax withholding | — | — | (398 | ) | — | — | — | — | (398 | ) | |||||||||||||||||||
Issuance of restricted stock | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Dividends paid | — | — | — | (2,966 | ) | — | — | — | (2,966 | ) | |||||||||||||||||||
Balance, December 31, 2016 | 12,218 | $ | 122 | $ | 52,614 | $ | 328,693 | (806 | ) | $ | (24,999 | ) | $ | (26,379 | ) | $ | 330,051 |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Operating Activities: | |||||||
Net loss | $ | (300 | ) | $ | (459 | ) | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 3,063 | 3,196 | |||||
Amortization | 88 | 88 | |||||
Stock-based compensation | 1,009 | 2,343 | |||||
Bad debt expense (recovery) | (113 | ) | 248 | ||||
Deferred income tax expense | (7 | ) | 48 | ||||
Gain on amended supply agreement | (507 | ) | (507 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 12,234 | 18,603 | |||||
Costs and billings in excess of estimated earnings on uncompleted contracts | 2,236 | 6,921 | |||||
Inventories | 2,444 | (1,478 | ) | ||||
Prepaid expenses and other current assets | (799 | ) | (1,522 | ) | |||
Accounts payable and income taxes payable | (2,051 | ) | (1,874 | ) | |||
Accrued liabilities | (13,398 | ) | (1,898 | ) | |||
Other, net | (525 | ) | 356 | ||||
Net cash provided by operating activities | 3,374 | 24,065 | |||||
Investing Activities: | |||||||
Proceeds from sale of property, plant and equipment | — | 12 | |||||
Increase in short-term investments | (14,874 | ) | — | ||||
Purchases of property, plant and equipment | (928 | ) | (629 | ) | |||
Net cash used in investing activities | (15,802 | ) | (617 | ) | |||
Financing Activities: | |||||||
Payments on industrial development revenue bonds | (400 | ) | (400 | ) | |||
Shares withheld in lieu of employee tax withholding | (398 | ) | (795 | ) | |||
Purchase of treasury shares | — | (3,740 | ) | ||||
Dividends paid | (2,966 | ) | (2,992 | ) | |||
Net cash used in financing activities | (3,764 | ) | (7,927 | ) | |||
Net increase (decrease) in cash and cash equivalents | (16,192 | ) | 15,521 | ||||
Effect of exchange rate changes on cash and cash equivalents | (946 | ) | (166 | ) | |||
Cash and cash equivalents, beginning of period | 97,720 | 43,569 | |||||
Cash and cash equivalents, end of period | $ | 80,582 | $ | 58,924 |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Numerator: | |||||||
Net loss | $ | (300 | ) | $ | (459 | ) | |
Denominator: | |||||||
Weighted average basic shares | 11,438 | 11,395 | |||||
Dilutive effect of restricted stock units | — | — | |||||
Weighted average diluted shares with assumed conversions | 11,438 | 11,395 | |||||
Net loss per share: | |||||||
Basic | $ | (0.03 | ) | $ | (0.04 | ) | |
Diluted | $ | (0.03 | ) | $ | (0.04 | ) |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Balance at beginning of period | $ | 811 | $ | 746 | |||
Bad debt expense (recovery) | (113 | ) | 248 | ||||
Uncollectible accounts written off, net of recoveries | (28 | ) | 26 | ||||
Change due to foreign currency translation | (6 | ) | (10 | ) | |||
Balance at end of period | $ | 664 | $ | 1,010 |
December 31, 2016 | September 30, 2016 | ||||||
Raw materials, parts and subassemblies, net | $ | 23,161 | $ | 25,525 | |||
Work-in-progress | 815 | 996 | |||||
Total inventories | $ | 23,976 | $ | 26,521 |
December 31, 2016 | September 30, 2016 | ||||||
Costs incurred on uncompleted contracts | $ | 1,090,422 | $ | 1,088,921 | |||
Estimated earnings | 350,185 | 350,125 | |||||
1,440,607 | 1,439,046 | ||||||
Less: Billings to date | (1,420,864 | ) | (1,416,914 | ) | |||
Net underbilled position | $ | 19,743 | $ | 22,132 | |||
Included in the accompanying balance sheets under the following captions: | |||||||
Costs and estimated earnings in excess of billings on uncompleted contracts – underbilled | $ | 59,951 | $ | 66,106 | |||
Billings in excess of costs and estimated earnings on uncompleted contracts – overbilled | (40,208 | ) | (43,974 | ) | |||
Net underbilled position | $ | 19,743 | $ | 22,132 |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Balance at beginning of period | $ | 4,639 | $ | 4,930 | |||
Increase to warranty expense | 370 | 1,326 | |||||
Deduction for warranty charges | (725 | ) | (1,100 | ) | |||
Change due to foreign currency translation | (54 | ) | (51 | ) | |||
Balance at end of period | $ | 4,230 | $ | 5,105 |
December 31, 2016 | September 30, 2016 | ||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||
Purchased technology | $ | 11,749 | $ | (10,782 | ) | $ | 967 | $ | 11,749 | $ | (10,693 | ) | $ | 1,056 |
December 31 2016 | September 30 2016 | ||||||
Industrial development revenue bonds | $ | 2,000 | $ | 2,400 | |||
Less current portion | (400 | ) | (400 | ) | |||
Total long-term debt and capital lease obligations | $ | 1,600 | $ | 2,000 |
Number of Restricted Stock Units | Weighted Average Fair Value Per Share | |||||
Outstanding at September 30, 2016 | 159,988 | $ | 43.12 | |||
Granted | 61,100 | 39.65 | ||||
Vested | (27,551 | ) | 39.08 | |||
Outstanding at December 31, 2016 | 193,537 | $ | 42.60 |
Fair Value Measurements at December 31, 2016 | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at December 31, 2016 | ||||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 23,110 | $ | — | $ | — | $ | 23,110 | |||||||
Short-term investments | 14,874 | — | — | 14,874 | |||||||||||
Deferred compensation | — | 5,703 | — | 5,703 | |||||||||||
Liabilities: | |||||||||||||||
Deferred compensation | — | 4,441 | — | 4,441 |
Fair Value Measurements at September 30, 2016 | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at September 30, 2016 | ||||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 435 | $ | — | $ | — | $ | 435 | |||||||
Deferred compensation | 1,643 | 4,130 | — | 5,773 | |||||||||||
Liabilities: | |||||||||||||||
Deferred compensation | — | 4,449 | — | 4,449 |
Three months ended December 31, | |||||||
2016 | 2015 | ||||||
Loss before income taxes | $ | (1,741 | ) | $ | (1,506 | ) | |
Income tax benefit | (1,441 | ) | (1,047 | ) | |||
Net loss | $ | (300 | ) | $ | (459 | ) | |
Effective tax rate | 83 | % | 70 | % |
Three months ended December 31, | |||||
2016 | 2015 | ||||
Statutory rate | 35 | % | 35 | % | |
Foreign valuation allowance | 15 | (11 | ) | ||
Research and development credit | 22 | 45 | |||
State income taxes, net of federal benefit | 2 | 3 | |||
Rate differential and other | 9 | (2 | ) | ||
Effective tax rate | 83 | % | 70 | % |
• | Due to the cyclical nature of the oil and gas industry, our business may be adversely impacted by extended periods of low oil or gas prices or unsuccessful exploration efforts which may decrease our customers' spending and therefore our results in the future. |
• | Economic uncertainty and financial market conditions may impact our customer base, suppliers and backlog. |
• | Our stock price could decline or fluctuate significantly due to unforeseen circumstances. These fluctuations may cause our stockholders to incur losses. |
• | Our backlog is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of our future earnings. |
• | The use of percentage-of-completion accounting on our fixed-price contracts could result in volatility in our results of operations. |
• | The majority of our contracts contain performance obligations that may subject us to penalties or additional liabilities. |
• | Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits and could materially impact our ability to meet commitments to our customers. |
• | Our industry is highly competitive. |
• | Our operations could be adversely impacted by the effects of government regulations, including regulations related to conflict minerals. |
• | Changes in tax laws and regulations may change our effective tax rate and could have a material effect on our financial results. |
• | Our international operations expose us to risks that are different from, or possibly greater than, the risks we are exposed to domestically and may adversely affect our operations. |
• | Our operating results may vary significantly from quarter to quarter. |
• | The departure of key personnel could disrupt our business |
• | Our business requires skilled labor and we may be unable to attract and retain qualified employees. |
• | Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition. |
• | Quality problems with our products could harm our reputation and erode our competitive position. |
• | A failure in our business systems or cyber security attacks on any of our facilities, or those of third parties, could adversely affect our business and our internal controls. |
• | We carry insurance against many potential liabilities, but our management of risk may leave us exposed to unidentified or unanticipated risks. |
• | Changes in and compliance with environmental laws could adversely impact our financial results. |
• | Technological innovations by competitors may make existing products and production methods obsolete. |
• | Catastrophic events could disrupt our business. |
• | Unforeseen difficulties with expansions, relocations or consolidations of existing facilities could adversely affect our operations. |
• | Acquisitions involve a number of risks. |
Number | Description of Exhibits | ||
3.1 | — | Certificate of Incorporation of Powell Industries, Inc. filed with the Secretary of State of the State of Delaware on February 11, 2004 (filed as Exhibit 3.1 to our Form 8-A/A filed November 1, 2004, and incorporated herein by reference). | |
3.2 | — | Amended and Restated Bylaws of Powell Industries, Inc. (filed as Exhibit 3.1 to our Form 8-K filed October 12, 2012, and incorporated herein by reference). | |
*31.1 | — | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
*31.2 | — | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
*32.1 | — | Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
*32.2 | — | Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
*101.INS | — | XBRL Instance Document | |
*101.SCH | — | XBRL Taxonomy Extension Schema Document | |
*101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document | |
*101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document | |
*101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document | |
*101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document | |
* Filed herewith |
POWELL INDUSTRIES, INC. | ||
(Registrant) | ||
Date: February 8, 2017 | By: | /s/ Brett A. Cope |
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: | /s/ Don R. Madison | |
Don R. Madison | ||
Executive Vice President | ||
Chief Financial and Administrative Officer | ||
(Principal Financial Officer) |
Number | Exhibit Title | ||
3.1 | — | Certificate of Incorporation of Powell Industries, Inc. filed with the Secretary of State of the State of Delaware on February 11, 2004 (filed as Exhibit 3.1 to our Form 8-A/A filed November 1, 2004, and incorporated herein by reference). | |
3.2 | — | Amended and Restated Bylaws of Powell Industries, Inc. (filed as Exhibit 3.1 to our Form 8-K filed October 12, 2012, and incorporated herein by reference). | |
*31.1 | — | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
*31.2 | — | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
*32.1 | — | Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
*32.2 | — | Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
*101.INS | — | XBRL Instance Document | |
*101.SCH | — | XBRL Taxonomy Extension Schema Document | |
*101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document | |
*101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document | |
*101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document | |
*101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document | |
* Filed herewith |
1. | I have reviewed this Quarterly Report on Form 10-Q of Powell Industries, Inc.; |
2. | Based on my knowledge, this 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Brett A. Cope Brett A. Cope President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Powell Industries, Inc.; |
2. | Based on my knowledge, this 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Don R. Madison Don R. Madison Executive Vice President Chief Financial and Administrative Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Brett A. Cope Brett A. Cope President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Don R. Madison Don R. Madison Executive Vice President Chief Financial and Administrative Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Feb. 03, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | POWELL INDUSTRIES INC | |
Entity Central Index Key | 0000080420 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | powl | |
Entity Common Stock, Shares Outstanding | 11,411,638 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 664 | $ 811 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value ( in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 12,217,656 | 12,199,511 |
Treasury stock, shares | 806,018 | 806,018 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Statement [Abstract] | ||
Revenues | $ 110,341 | $ 149,977 |
Cost of goods sold | 95,342 | 126,827 |
Gross profit | 14,999 | 23,150 |
Selling, general and administrative expenses | 15,698 | 19,400 |
Research and development expenses | 1,469 | 1,854 |
Amortization of intangible assets | 88 | 88 |
Restructuring and separation expenses | 0 | 3,797 |
Operating loss | (2,256) | (1,989) |
Other income | (507) | (507) |
Interest expense | 34 | 24 |
Interest income | (42) | 0 |
Loss before income taxes | (1,741) | (1,506) |
Income tax benefit | (1,441) | (1,047) |
Net loss | $ (300) | $ (459) |
Loss per share: | ||
Basic (in dollars per share) | $ (0.03) | $ (0.04) |
Diluted (in dollars per share) | $ (0.03) | $ (0.04) |
Weighted average shares: | ||
Basic (in shares) | 11,438 | 11,395 |
Diluted (in shares) | 11,438 | 11,395 |
Dividends per share (in dollars per share) | $ 0.26 | $ 0.26 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Dec. 31, 2016 |
Dec. 31, 2015 |
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Consolidated Statement of Comprehensive Loss [Abstract] | ||
Net loss | $ (300) | $ (459) |
Foreign currency translation adjustments | (2,611) | (2,538) |
Comprehensive loss | $ (2,911) | $ (2,997) |
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 3 months ended Dec. 31, 2016 - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
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Balance at Sep. 30, 2016 | $ 335,317 | $ 122 | $ 52,003 | $ 331,959 | $ (24,999) | $ (23,768) |
Balance, shares at Sep. 30, 2016 | 12,199 | 806 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (300) | (300) | ||||
Foreign currency translation adjustments | (2,611) | (2,611) | ||||
Stock-based compensation | 1,009 | 1,009 | ||||
Stock-based compensation, shares | 19 | |||||
Shares withheld in lieu of employee tax withholding | (398) | (398) | ||||
Issuance of restricted stock | 0 | $ 0 | ||||
Issuance of restricted stock, shares | 0 | |||||
Dividends paid | (2,966) | (2,966) | ||||
Balance at Dec. 31, 2016 | $ 330,051 | $ 122 | $ 52,614 | $ 328,693 | $ (24,999) | $ (26,379) |
Balance, shares at Dec. 31, 2016 | 12,218 | 806 |
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview 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 corporation 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. We develop, design, manufacture and service custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy. Headquartered in Houston, Texas, we serve the 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 industrial markets. Basis of Presentation These unaudited condensed consolidated financial statements include the accounts of Powell and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP), have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. We believe that these financial statements contain all adjustments necessary so that they are not misleading. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Powell and its subsidiaries included in Powell’s Annual Report on Form 10-K for the year ended September 30, 2016, which was filed with the Securities and Exchange Commission (SEC) on December 7, 2016. References to Fiscal 2017, Fiscal 2016 and Fiscal 2015 used throughout this report shall mean our fiscal years ended September 30, 2017, 2016 and 2015, respectively. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying footnotes. The most significant estimates used in our condensed consolidated financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, provision for excess and obsolete inventory, self-insurance, warranty accruals, liquidated damages and income taxes. The amounts recorded for insurance claims, warranties, legal, liquidated damages, income taxes 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. Estimates may change as new events occur, additional information becomes available or operating environments change. Actual results may differ from our estimates. New Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard on revenue recognition that supersedes previously issued revenue recognition guidance. This standard provides a five-step approach to be applied to all contracts with customers and requires expanded disclosures about the nature, amount, timing and uncertainty of revenue (and the related cash flows) arising from customer contracts, significant judgments and changes in judgments used in applying the revenue model and the assets recognized from costs incurred to obtain or fulfill a contract. This guidance is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, which would be our fiscal year ending September 30, 2019. The standard permits the use of either the full retrospective or modified retrospective transition method; therefore, we are evaluating the effect that this new guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In August 2014, the FASB issued guidance to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This update requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations and management’s plans that are intended to mitigate those conditions or events. This guidance impacts the disclosure and presentation of any substantial doubt about our ability to continue as a going concern, if such substantial doubt were to exist. This guidance is effective for our first quarter ended December 31, 2016 and does not have an impact on disclosures in our condensed consolidated financial statements. In November 2015, the FASB issued an amendment to the topic regarding income taxes which requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in the statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This amendment is effective for annual reporting periods beginning after December 15, 2016, which would be our fiscal year ending September 30, 2018. We have no plans for early adoption. The adoption of this guidance is not expected to have a material impact on our consolidated financial position or results of operations. In February 2016, the FASB issued a new topic on leases which requires lessees to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. This would be our fiscal year ending September 30, 2020. We are currently evaluating the impact of our pending adoption of the new standard, but do not expect it to have a material impact on our consolidated financial position or results of operations. In March 2016, the FASB issued new guidance on stock-based compensation, which includes amendments to existing guidance for employee share-based payment accounting. We elected to early adopt this new guidance in the first quarter of Fiscal 2017. Beginning with this quarter, stock-based compensation excess tax benefits or deficiencies are reflected in the Condensed Consolidated Statement of Operations as a component of income taxes, whereas they were previously recorded in additional paid in capital in the Condensed Consolidated Statement of Stockholders’ Equity. Additionally, we will now present excess tax benefits as an operating activity in the Condensed Consolidated Statements of Cash Flows, and prior periods will be adjusted accordingly. Finally, we will continue to account for forfeitures as they occur, rather than estimate expected forfeitures. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE We compute basic earnings per share by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common share includes the weighted average of additional shares associated with the incremental effect of dilutive restricted stock and restricted stock units, as prescribed by the FASB guidance on earnings per share. The following table reconciles basic and diluted weighted average shares used in the computation of earnings per share (in thousands, except per share data):
For the quarters ended December 31, 2016 and 2015, we incurred net losses and therefore all potential common shares were deemed to be anti-dilutive. |
DETAIL OF SELECTED BALANCE SHEET ACCOUNTS |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DETAIL OF SELECTED BALANCE SHEET ACCOUNTS | DETAIL OF SELECTED BALANCE SHEET ACCOUNTS Allowance for Doubtful Accounts Activity in our allowance for doubtful accounts receivable consisted of the following (in thousands):
Inventories: The components of inventories are summarized below (in thousands):
Cost and Estimated Earnings on Uncompleted Contracts The components of costs and estimated earnings and related amounts billed on uncompleted contracts are summarized below (in thousands):
Warranty Accrual Activity in our product warranty accrual consisted of the following (in thousands):
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Our intangible assets consist of goodwill, which is not being amortized, and purchased technology, which is amortized over its estimated useful life. Intangible assets balances, subject to amortization, at December 31, 2016 and September 30, 2016 consisted of the following (in thousands):
Amortization of intangible assets was $0.1 million for the three months ended December 31, 2016 and 2015. On August 7, 2006, we purchased certain assets related to the manufacturing of ANSI medium-voltage switchgear and circuit breaker business from General Electric Company (GE). In connection with the acquisition, we entered into a 15-year supply agreement with GE pursuant to which GE would purchase from us all of their requirements for ANSI medium-voltage switchgear and circuit breakers and other related equipment and components (the Products). In connection with the acquisition, we recorded an intangible asset related to this supply agreement. On December 30, 2013, we and GE amended the supply agreement to allow GE to manufacture similar Products for sale immediately and allow them to begin purchasing Products from other suppliers beginning December 31, 2014. In return, GE paid us $10 million upon execution of the amended supply agreement and agreed to pay an additional $7 million over three years, beginning March 2015. As of December 31, 2016, the remaining balance of $2.3 million is classified as other current assets. We wrote off the intangible asset related to the original supply agreement and recorded a deferred credit in the amount of $8.1 million at December 31, 2013, the amount by which the proceeds from GE exceeded the unamortized balance of our intangible asset. We are amortizing this deferred credit over the four-year life of the agreement and have recognized gains in other income of $0.5 million for the three months ended December 31, 2016 and 2015. |
LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following (in thousands):
U.S. Revolver We have a $75.0 million revolving credit facility (U.S. Revolver) to provide working capital support and letters of credit. The interest rate for amounts outstanding under the U.S. Revolver is a floating rate based upon the higher of the Federal Funds Rate plus 0.5%, the bank’s prime rate, or the Eurocurrency rate plus 1.00%. Once the applicable rate is determined, a margin ranging up to 1.75%, as determined by our consolidated leverage ratio, is added to the applicable rate. The U.S. Revolver provides for the issuance of letters of credit which reduce the amounts that may be borrowed under this revolver. The amount available under the U.S. Revolver was reduced by $20.3 million for our outstanding letters of credit at December 31, 2016. There were no borrowings outstanding under the U.S. Revolver as of December 31, 2016. Amounts available under the U.S. Revolver were $54.7 million at December 31, 2016. The U.S. Revolver expires on December 31, 2018. The U.S. Revolver contains certain restrictive and maintenance-type covenants, such as restrictions on the amount of capital expenditures allowed. It also contains financial covenants defining various financial measures and the levels of these measures with which we must comply, as well as a “material adverse change” clause. A “material adverse change” is defined as a material change in our operations, business, properties, liabilities or condition (financial or otherwise) or a material impairment of our ability to perform our obligations under our credit agreements. The U.S. Revolver is collateralized by a pledge of 100% of the voting capital stock of each of our domestic subsidiaries and 65% of the voting capital stock of each non-domestic subsidiary, excluding Powell Canada Inc. The U.S. Revolver provides for customary events of default and carries cross-default provisions with other existing debt agreements. If an event of default (as defined in the U.S. Revolver) occurs and is continuing, on the terms and subject to the conditions set forth in the U.S. Revolver, amounts outstanding under the U.S. Revolver may be accelerated and may become immediately due and payable. As of December 31, 2016, we were in compliance with all of the financial covenants of the U.S. Revolver. Canadian Revolver We have a $7.4 million credit agreement with a major international bank in Canada (the Canadian Revolver) to provide working capital support and letters of credit for our operations in Canada. The Canadian Revolver provides for the issuance of letters of credit which reduce the amounts that may be borrowed under this revolver. There were no outstanding letters of credit under the Canadian Revolver at December 31, 2016. The interest rate for amounts outstanding under the Canadian Revolver is a floating interest rate based upon either the Canadian Prime Rate, or the lender’s Bankers’ Acceptance Rate. Once the applicable rate is determined, a margin of 0.50% to 1.75%, as determined by our consolidated leverage ratio, is added to the applicable rate. There were no borrowings outstanding under the Canadian Revolver as of December 31, 2016 and amounts available under the Canadian Revolver were $7.4 million at December 31, 2016. The Canadian Revolver expires on March 31, 2018. The principal financial covenants are consistent with those described in our U.S. Revolver. The Canadian Revolver contains a “material adverse effect” clause. A “material adverse effect” is defined as a material change in the operations of Powell or Powell Canada Inc. in relation to our financial condition, property, business operations, expected net cash flows, liabilities or capitalization. The Canadian Revolver is secured by the assets of our Canadian operations and provides for customary events of default and carries cross-default provisions with our existing debt agreements. If an event of default (as defined in the Canadian Revolver) occurs and is continuing, per the terms and subject to the conditions set forth in the Canadian Revolver, amounts outstanding under the Canadian Revolver may be accelerated and may become immediately due and payable. As of December 31, 2016, we were in compliance with all of the financial covenants of the Canadian Revolver. Industrial Development Revenue Bonds We borrowed $8.0 million in October 2001 through a loan agreement funded with proceeds from tax-exempt industrial development revenue bonds (Bonds). These Bonds were issued by the Illinois Development Finance Authority and were used for the completion of our Northlake, Illinois facility. Pursuant to the Bond issuance, a reimbursement agreement between us and a major domestic bank required an issuance by the bank of an irrevocable direct-pay letter of credit (Bond LC), as collateral, to the Bonds’ trustee to guarantee payment of the Bonds’ principal and interest when due. The Bond LC is subject to both early termination and extension provisions customary to such agreements, as well as various covenants, for which we were in compliance at December 31, 2016. While the Bonds mature in 2021, the reimbursement agreement requires annual redemptions of $0.4 million that commenced on October 25, 2002. A sinking fund is used for the redemption of the Bonds. The Bonds bear interest at a floating rate determined weekly by the Bonds’ remarketing agent, which was the underwriter for the Bonds and is an affiliate of the bank. This interest rate was 0.90% as of December 31, 2016. |
COMMITMENTS AND CONTINGENCIES |
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Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Long-Term Debt See Note E herein for discussion of our long-term debt. Letters of Credit and Surety Bonds Certain customers require us to post bank letter of credit guarantees or surety bonds. These guarantees and surety bonds assure that we will perform under the terms of our contract. In the event of default, the counterparty may demand payment from the bank under a letter of credit or performance by the surety under a bond. To date, there have been no significant expenses related to either letters of credit or surety bonds for the periods reported. We were contingently liable for secured and unsecured letters of credit of $20.3 million as of December 31, 2016. We also had surety bonds totaling $229.4 million that were outstanding, with additional bonding capacity of $520.6 million available, at December 31, 2016. We have a $6.2 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank. This Facility Agreement provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options. At December 31, 2016, we had outstanding guarantees totaling $4.8 million under this Facility Agreement and amounts available under this Facility Agreement were $1.4 million. This facility expires in May 2017. The Facility Agreement provides for financial covenants and customary events of default, and carries cross-default provisions with our U.S. Revolver. If an event of default (as defined in the Facility Agreement) occurs and is continuing, per the terms and subject to the conditions set forth therein, obligations outstanding under the Facility Agreement may be accelerated and may become or be declared immediately due and payable. As of December 31, 2016, we were in compliance with all of the financial covenants of the Facility Agreement. Litigation We are involved in various legal proceedings, claims and other disputes arising from our commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. Although we can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity. Liquidated Damages Certain of our customer contracts have schedule and performance obligation clauses that, if we fail to meet them, could require us to pay liquidated damages. Each individual contract defines the conditions under which the customer may make a claim against us. As of December 31, 2016, our exposure to possible liquidated damages was $2.7 million, of which approximately $1.7 million is probable. Based on our actual or projected failure to meet these various contractual commitments, $1.5 million has been recorded as a reduction to revenue. We will attempt to obtain change orders, contract extensions or accelerate project completion which may resolve the potential for any unaccrued liquidated damage. Should we fail to achieve relief on some or all of these contractual obligations, we could be required to pay additional liquidated damages, which could negatively impact our future operating results. |
STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 for a full description of our existing stock-based compensation plans. Restricted Stock Units We issue restricted stock units (RSUs) to certain officers and key employees of the Company. The fair value of the RSUs is based on the closing price of our common stock as reported on the NASDAQ Global Market on the grant dates. These grants vest over a three-year period from their date of issuance. Sixty percent of the grant is time-based and vests over a three-year period on each anniversary of the grant date, based on continued employment. The remaining forty percent of the grant will be earned based on the three-year earnings performance of the Company following the grant date. At December 31, 2016, there were 193,537 RSUs outstanding. The RSUs do not have voting rights but do receive dividend equivalents upon vesting; additionally, the shares of common stock underlying the RSUs are not considered issued and outstanding until vested and common stock is issued. RSU activity (number of shares) for the three months ended December 31, 2016 is summarized below:
During the three months ended December 31, 2016 and 2015, we recorded compensation expense of $0.9 million and $2.1 million, respectively, related to the RSUs. The higher compensation expense recorded in the three months ended December 31, 2015 was primarily due to the departure of our former Chief Executive Officer in December 2015 which included the accelerated vesting of 60,909 shares. Restricted Stock Restricted stock grants vest equally over their respective vesting period on each anniversary of the grant date and compensation expense is recognized over their respective vesting periods based on the price per share on the grant date. During the first quarter of Fiscal 2017 and Fiscal 2016, there was no restricted stock granted. During the three months ended December 31, 2016 and 2015, we recorded compensation expense of $0.1 million and $0.2 million, respectively, related to restricted stock grants. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We measure certain financial assets and liabilities at fair value. Fair value is defined as an “exit price” which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in valuing an asset or liability. The accounting guidance requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. As a basis for considering such assumptions and inputs, a fair value hierarchy has been established which identifies and prioritizes three levels of inputs to be used in measuring fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including: quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market data and require the reporting entity to develop its own assumptions. The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2016 (in thousands):
The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2016 (in thousands):
Cash equivalents, primarily funds held in money market savings instruments, are reported at their current carrying value which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in our Condensed Consolidated Balance Sheets. Fair Value of Other Financial Instruments Fair value guidance requires certain fair value disclosures be presented in both interim and annual reports. The estimated fair value amounts of financial instruments have been determined using available market information and valuation methodologies described below. Deferred Compensation – We hold investments in an irrevocable Rabbi Trust for our deferred compensation plan. These assets include both mutual fund investments and company-owned life insurance policies. Under the plan, participants designate investment options to serve as the basis for measurement of the notional value of their accounts. The fair values of the underlying securities of these funds are based on quoted market prices and are categorized as Level 1 in the fair value measurement hierarchy. The company-owned life insurance policies are valued at cash surrender value and are therefore categorized as Level 2 in the fair value measurement hierarchy. Industrial Development Revenue Bonds– The fair value of our long-term debt depends primarily on the coupon rate of our industrial development revenue bonds. The carrying value of our long-term debt at December 31, 2016, approximates fair value based on the current coupon rate of the bonds, which is reset weekly. It is classified as a Level 2 input in the fair value measurement hierarchy as there is an active market for the trading of these industrial development revenue bonds. There were no transfers between levels within the fair value measurement hierarchy during the three months ended December 31, 2016. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The calculation of the effective tax rate is as follows (in thousands):
We recorded an income tax benefit of $1.4 million for the three months ended December 31, 2016, compared to an income tax benefit of $1.0 million for the three months ended December 31, 2015. Our income tax benefit reflects an effective tax rate on the pre-tax loss of 83% for the three months ended December 31, 2016 compared to 70% for the three months ended December 31, 2015. The effective tax rates for the first quarter of Fiscal 2017 and 2016 were favorably impacted by the lower tax rate in the United Kingdom, the relative amounts of income/loss recognized in various jurisdictions, as well as the utilization of net operating loss carryforwards in Canada that are fully reserved with a valuation allowance. We also completed an IRS audit during the first quarter of Fiscal 2017 which favorably impacted the effective tax rate due to the release of a $0.3 million FIN 48 reserve relating to the Research and Development Tax Credit (R&D Tax Credit). The effective tax rate for the three months ended December 31, 2015 was also favorably impacted by a discrete item of $0.8 million related to the retroactive reinstatement of the R&D Tax Credit to January 31, 2016. |
RESTRUCTURING AND SEPARATION COSTS |
3 Months Ended |
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Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND SEPARATION COSTS | RESTRUCTURING AND SEPARATION COSTS We did not incur any restructuring or separation costs in the first quarter of Fiscal 2017, however in the first quarter of Fiscal 2016, we incurred $3.8 million of separation costs related to the departure of our former Chief Executive Officer in December 2015. This included stock-based compensation, as well as future cash payments. |
Overview and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Overview | Overview 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 corporation 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. We develop, design, manufacture and service custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy. Headquartered in Houston, Texas, we serve the 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 industrial markets. |
Basis of Presentation | Basis of Presentation These unaudited condensed consolidated financial statements include the accounts of Powell and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP), have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. We believe that these financial statements contain all adjustments necessary so that they are not misleading. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Powell and its subsidiaries included in Powell’s Annual Report on Form 10-K for the year ended September 30, 2016, which was filed with the Securities and Exchange Commission (SEC) on December 7, 2016. References to Fiscal 2017, Fiscal 2016 and Fiscal 2015 used throughout this report shall mean our fiscal years ended September 30, 2017, 2016 and 2015, respectively. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying footnotes. The most significant estimates used in our condensed consolidated financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, provision for excess and obsolete inventory, self-insurance, warranty accruals, liquidated damages and income taxes. The amounts recorded for insurance claims, warranties, legal, liquidated damages, income taxes 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. Estimates may change as new events occur, additional information becomes available or operating environments change. Actual results may differ from our estimates. |
New Accounting Standards | New Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard on revenue recognition that supersedes previously issued revenue recognition guidance. This standard provides a five-step approach to be applied to all contracts with customers and requires expanded disclosures about the nature, amount, timing and uncertainty of revenue (and the related cash flows) arising from customer contracts, significant judgments and changes in judgments used in applying the revenue model and the assets recognized from costs incurred to obtain or fulfill a contract. This guidance is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, which would be our fiscal year ending September 30, 2019. The standard permits the use of either the full retrospective or modified retrospective transition method; therefore, we are evaluating the effect that this new guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In August 2014, the FASB issued guidance to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This update requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations and management’s plans that are intended to mitigate those conditions or events. This guidance impacts the disclosure and presentation of any substantial doubt about our ability to continue as a going concern, if such substantial doubt were to exist. This guidance is effective for our first quarter ended December 31, 2016 and does not have an impact on disclosures in our condensed consolidated financial statements. In November 2015, the FASB issued an amendment to the topic regarding income taxes which requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in the statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This amendment is effective for annual reporting periods beginning after December 15, 2016, which would be our fiscal year ending September 30, 2018. We have no plans for early adoption. The adoption of this guidance is not expected to have a material impact on our consolidated financial position or results of operations. In February 2016, the FASB issued a new topic on leases which requires lessees to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. This would be our fiscal year ending September 30, 2020. We are currently evaluating the impact of our pending adoption of the new standard, but do not expect it to have a material impact on our consolidated financial position or results of operations. In March 2016, the FASB issued new guidance on stock-based compensation, which includes amendments to existing guidance for employee share-based payment accounting. We elected to early adopt this new guidance in the first quarter of Fiscal 2017. Beginning with this quarter, stock-based compensation excess tax benefits or deficiencies are reflected in the Condensed Consolidated Statement of Operations as a component of income taxes, whereas they were previously recorded in additional paid in capital in the Condensed Consolidated Statement of Stockholders’ Equity. Additionally, we will now present excess tax benefits as an operating activity in the Condensed Consolidated Statements of Cash Flows, and prior periods will be adjusted accordingly. Finally, we will continue to account for forfeitures as they occur, rather than estimate expected forfeitures. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table reconciles basic and diluted weighted average shares used in the computation of earnings per share (in thousands, except per share data):
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Detail of Selected Balance Sheet Accounts (Tables) |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in allowance for doubtful accounts | Activity in our allowance for doubtful accounts receivable consisted of the following (in thousands):
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Components of inventories | The components of inventories are summarized below (in thousands):
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Cost and estimated earnings on uncompleted contracts | The components of costs and estimated earnings and related amounts billed on uncompleted contracts are summarized below (in thousands):
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Activity in product warranty accrual | Activity in our product warranty accrual consisted of the following (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Schedule of intangible assets subject to amortization | Intangible assets balances, subject to amortization, at December 31, 2016 and September 30, 2016 consisted of the following (in thousands):
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Components of Long-term debt | Long-term debt consisted of the following (in thousands):
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Stock-Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Units Activity | RSU activity (number of shares) for the three months ended December 31, 2016 is summarized below:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2016 (in thousands):
The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2016 (in thousands):
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate | The calculation of the effective tax rate is as follows (in thousands):
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Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
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Dec. 31, 2016 |
Dec. 31, 2015 |
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Numerator: | ||
Net loss | $ (300) | $ (459) |
Denominator: | ||
Weighted average basic shares | 11,438 | 11,395 |
Dilutive effect of restricted stock units | 0 | 0 |
Weighted average diluted shares with assumed conversions | 11,438 | 11,395 |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.03) | $ (0.04) |
Diluted (in dollars per share) | $ (0.03) | $ (0.04) |
Detail of Selected Balance Sheet Accounts (Activity in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Dec. 31, 2016 |
Dec. 31, 2015 |
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Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of period | $ 811 | $ 746 |
Bad debt expense (recovery) | 248 | |
Uncollectible accounts written off, net of recoveries | (28) | 26 |
Change due to foreign currency translation | (6) | (10) |
Balance at end of period | $ 664 | $ 1,010 |
Detail of Selected Balance Sheet Accounts (Components of Inventories) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
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Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Raw materials, parts and subassemblies, net | $ 23,161 | $ 25,525 |
Work-in-progress | 815 | 996 |
Total inventories | $ 23,976 | $ 26,521 |
Detail of Selected Balance Sheet Accounts (Cost and Estimated Earnings on Uncompleted Contracts) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
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Balance Sheet Related Disclosures [Abstract] | ||
Costs incurred on uncompleted contracts | $ 1,090,422 | $ 1,088,921 |
Estimated earnings | 350,185 | 350,125 |
Total | 1,440,607 | 1,439,046 |
Less: Billings to date | (1,420,864) | (1,416,914) |
Net underbilled position | 19,743 | 22,132 |
Included in the accompanying balance sheets under the following captions: | ||
Costs and estimated earnings in excess of billings on uncompleted contracts – underbilled | 59,951 | 66,106 |
Billings in excess of costs and estimated earnings on uncompleted contracts – overbilled | (40,208) | (43,974) |
Net underbilled position | $ 19,743 | $ 22,132 |
Detail of Selected Balance Sheet Accounts (Activity in Product Warranty Accrual) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Dec. 31, 2016 |
Dec. 31, 2015 |
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Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 4,639 | $ 4,930 |
Increase to warranty expense | 370 | 1,326 |
Deduction for warranty charges | (725) | (1,100) |
Change due to foreign currency translation | (54) | (51) |
Balance at end of period | $ 4,230 | $ 5,105 |
Goodwill and Intangible Assets (Schedule of Intangible Assets Subject to Amortization) (Details) - Purchased Technology - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
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Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 11,749 | $ 11,749 |
Accumulated Amortization | (10,782) | (10,693) |
Net Carrying Value | $ 967 | $ 1,056 |
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2013 |
Jun. 30, 2015 |
Sep. 30, 2016 |
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Finite Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 88 | $ 88 | |||
Other current assets | $ 2,608 | $ 2,457 | |||
Deferred credit amortization period | 4 years | ||||
Gains in other income | $ 507 | 507 | |||
General Electric Company | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Cash received from amended supply agreement | $ 10,000 | ||||
Additional amount paid on execution of agreement | $ 7,000 | ||||
Acquired finite-lived intangible assets, period | 3 years | ||||
Other current assets | 2,300 | ||||
Deferred credit | $ 8,100 | ||||
General Electric Company | Other Income | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gains in other income | $ 500 | $ 500 | |||
Supply Agreement | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible asset | 15 years |
Long-Term Debt (Components of Long-Term Debt) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
Industrial development revenue bonds | $ 2,000 | $ 2,400 |
Less current portion | (400) | (400) |
Total long-term debt and capital lease obligations | $ 1,600 | $ 2,000 |
Commitments and Contingencies (Narrative) (Details) |
3 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Guarantee Obligations [Line Items] | |
Additional bonding capacity | $ 520,600,000 |
Liquidated damages | 2,700,000 |
Probable liquidated damages | 1,700,000 |
Loss contingency, estimate of actual or projected loss | 1,500,000 |
Facility Agreement | Powell (UK) Limited | |
Guarantee Obligations [Line Items] | |
Guarantee liability | 4,800,000 |
Revolving credit facility | 6,168,000 |
Amount of credit facility remaining borrowing capacity | 1,400,000 |
Financial Standby Letter of Credit | |
Guarantee Obligations [Line Items] | |
Guarantee liability | 20,300,000 |
Surety Bonds | |
Guarantee Obligations [Line Items] | |
Guarantee liability | $ 229,400,000 |
Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2016 |
|
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unvested restricted stock outstanding | 193,537 | 159,988 | ||
Compensation expense | $ 0.9 | $ 2.1 | ||
Restricted Stock Units (RSUs) | Time Based Restricted Stock Unit | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Actual amount of RSUs earned based on cumulative earnings | 60.00% | |||
Vesting period | 3 years | |||
Restricted Stock Units (RSUs) | Performance Based Restricted Stock Unit | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Target RSUs granted range | 40.00% | |||
Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Compensation expense | $ 0.1 | $ 0.2 |
Stock-Based Compensation (Schedule of Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs) |
3 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding Beginning Balance, Number of Restricted Stock Units | shares | 159,988 |
Granted, Number of Restricted Stock Units | shares | 61,100 |
Vested, Number of Restricted Stock Units | shares | (27,551) |
Outstanding Ending Balance, Number of Restricted Stock Units | shares | 193,537 |
Outstanding Beginning Balance, Weighted Average Fair Value Per Share | $ / shares | $ 43.12 |
Granted, Weighted Average Fair Value Per Share | $ / shares | 39.65 |
Vested, Weighted Average Fair Value Per Share | $ / shares | 39.08 |
Outstanding Ending Balance, Weighted Average Fair Value Per Share | $ / shares | $ 42.60 |
Stock-Based Compensation (Schedule of Restricted Stock Units Activity) (Details 2) - USD ($) |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 29, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted stock granted | $ 0 | $ 0 | |
Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Restricted Stock Units (RSUs) | Chief Executive Officer | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation accelerated vesting shares | 60,909 | ||
Time Based Restricted Stock Unit | Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 3 years |
Fair Value Measurements (Fair Value of Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Assets: | ||
Cash equivalents | $ 23,110 | $ 435 |
Short-term investments | 14,874,000 | |
Deferred compensation | 5,703 | 5,773 |
Liabilities: | ||
Deferred compensation | 4,441 | 4,449 |
Fair Value, Inputs, Level 1 | ||
Assets: | ||
Cash equivalents | 23,110 | 435 |
Short-term investments | 14,874,000 | |
Deferred compensation | 0 | 1,643 |
Fair Value, Inputs, Level 2 | ||
Assets: | ||
Deferred compensation | 5,703 | 4,130 |
Liabilities: | ||
Deferred compensation | $ 4,441 | $ 4,449 |
Fair Value Measurements (Narrative) (Details) |
3 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Fair Value Disclosures [Abstract] | |
Transfers between measurement levels | $ 0 |
Income Taxes (Schedule of Effective Tax Rate) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Loss before income taxes | $ (1,741) | $ (1,506) |
Income tax benefit | (1,441) | (1,047) |
Net loss | $ (300) | $ (459) |
Effective tax rate | 83.00% | 70.00% |
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Statutory rate | 35.00% | 35.00% |
Foreign valuation allowance | 15.00% | (11.00%) |
Research and development credit | 22.00% | 45.00% |
State income taxes, net of federal benefit | 2.00% | 3.00% |
Rate differential and other | 9.00% | (2.00%) |
Effective tax rate | 83.00% | 70.00% |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ (1,441) | $ (1,047) |
Effective tax rate | 83.00% | 70.00% |
Unrecognized tax benefits, decrease resulting from prior period tax positions | $ 300 | $ 800 |
Restructuring and Separation Costs (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restructuring and Related Activities [Abstract] | ||
Restructuring and separation costs | $ 0 | $ 3,797 |
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