POWELL INDUSTRIES INC Q4 FY2024 earnings call

• Powell had strong Q4 2024 performance with revenue up 32% y-o-y, helping achieve $1B full-year revenue.
• Key markets saw significant growth: oil and gas +53%, petrochemical +97%, commercial/other industrial +44%, electric utility +18%.
• Booked $267M in new orders in Q4, with strong utility sector activity and LNG facility capacity expansion booking.
• Full-year gross margin was 27%, an improvement of 590 basis points y-o-y.
• Net income in Q4 was $46.1M ($3.77 per diluted share), up 74% y-o-y; full-year net income was $150M ($12.29 per diluted share), nearly tripling fiscal 2023.
• Backlog steady at $1.3B.
• Acquired 9 acres of property near Houston, expanding manufacturing capacity; electrical products factory expansion on track for mid-fiscal 2025.
• R&D spend in fiscal 2024 up 52%, and new station breaker product launched with first order in October.

In fiscal 2024 Q4, revenue grew 32% to $275 million compared to the prior year. For the full year, revenue reached $1 billion, a 45% increase from fiscal 2023. Key market sectors: Oil and gas grew 53%, petrochemical 97%, commercial and other industrial 44%, and electric utility 18%. In Q4 2024, petrochemical sector revenues grew 112%, oil and gas 23%, electric utility down 5%, commercial and other industrial up 66%, and light rail traction power up 19%. Revenue contribution percentages weren't explicitly stated, but key sectors showed significant growth.

• Expect continued strength across end markets in fiscal 2025.
• Robust backlog, strong liquidity, and solid balance sheet suggest fiscal 2025 will be successful.
• Focus on carrying forward strong operational execution and commercial momentum into fiscal 2025.

• Competition and competitive pressures.
• Sensitivity to general economic and industry conditions.
• International political and economic risks.
• Availability and price of raw materials.
• Execution of business strategies.

Q: How did closeouts impact the gross margin on the quarter?

A: Margins were impacted by project closeouts (150-200 basis points uplift) and three project cancellations (60 bps upside), with normalization showing trailing 12-month margin at 27%.

Q: Are new jobs being written at higher profit margins than the past?

A: No significant change in price; watching for market changes but price held steady.

Q: How much was data center as a percent of fourth quarter sales?

A: Low double-digits, around 10% of total sales.

Q: How quickly do things start to move forward in the LNG sector after the pause?

A: Activity has picked up, momentum building positively into 2025-2027.

Q: Can the book and burn business get even better?

A: Always trying to improve, currently in $40-50M range, up from 30s.