What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-12-08 compared with 2020-12-09 · 164 added, 160 removed, 775 unchanged (29% of the section changed)

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Consolidated Statements of Operations for the Years Ended September 30, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended September 30, 2020, 2019 and 2018

Consolidated Statements of Comprehensive Income for the Years Ended September 30, 2021, 2020 and 2019

Consolidated Statements of Stockholders’ Equity for the Years Ended September 30, 2021, 2020 and 2019

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We have audited the accompanying consolidated balance sheets of Powell Industries, Inc.

and its subsidiaries (the “Company”) as of September 30, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended September 30, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of September 30, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended September 30, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Change in Accounting Principle

As discussed in Notes B and M to the consolidated financial statements, the Company changed the manner in which it accounts for leases in the year ended September 30, 2020.

As discussed in Note B to the consolidated financial statements, the Company changed the manner in which it accounts for leases in the year ended September 30, 2020.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit of internal control over financial reporting included

obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Long-term fixed priced contracts

As described in Notes B and E to the consolidated financial statements, the majority of the Company’s total revenue of $470.6 million for the year ended September 30, 2021 was generated from the manufacturing of custom-engineered products and systems under long-term fixed-price contracts.

Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method to measure the extent of progress toward the completion of the performance obligation and the recognition of revenue over time.

Management believes that this method is the most accurate representation of performance, because it directly measures the value of the services transferred to the customer over time as costs are incurred on the contracts.

Contract costs include all direct materials, labor, and indirect costs related to contract performance, which may include indirect labor, supplies, tools, repairs and depreciation costs.

Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

Due to the nature of the contracts, estimating total cost and revenue can be complex and subject to variability due to change orders, back charges, spare parts, early completion bonuses, customer

allowances and liquidated damages.

Management estimates the amount of variable consideration based on the expected value method, which is the sum of the probability-weighted amount, or the most likely amount method which uses various factors including experience with similar transactions and assessment of anticipated performance.

The principal considerations for our determination that performing procedures relating to revenue recognized over time utilizing the cost to cost method is a critical audit matter are the significant judgment by management when determining the estimated total cost and revenue, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and in evaluating management’s judgment about assumptions related to the estimates of costs to complete and liquidated damages.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of total estimated costs at completion of the performance obligation and determination of total contract price.

The procedures also included, among others, evaluating and testing management’s process for determining the estimated total cost and revenue for a sample of contracts, which included (i) obtaining executed purchase orders and agreements, (ii) evaluating the appropriateness of the method to measure estimated total cost and revenue, (iii) testing the completeness and accuracy of the underlying data used by management, and (iv) evaluating the reasonableness of significant assumptions related to the total estimated costs at completion and liquidated damages used by management and considering the factors that can affect the accuracy of those estimates.

Evaluating the reasonableness of significant assumptions related to estimated total cost involved assessing management’s ability to reasonably estimate total costs to complete and liquidated damages by testing management’s process to evaluate the remaining direct materials, labor, and indirect costs related to the performance obligation and evaluating the timely identification of circumstances which may warrant a modification to the total estimated costs or liquidated damages.

/s/ PricewaterhouseCoopers LLP

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Restructuring and other, net — 1,400 11

Operating income (loss) 19,071 11,461 ( 9,122 )

Operating income 1,019 19,071 11,461

Other income — ( 506 ) —

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Interest income ( 277 ) ( 981 ) ( 1,103 )

Income (loss) before income taxes 20,330 12,334 ( 7,699 )

Income tax provision (benefit) 3,670 2,444 ( 547 )

Net income (loss) $ 16,660 $ 9,890 $ ( 7,152 )

Earnings (loss) per share:

Income before income taxes 1,092 20,330 12,334

Income tax provision 461 3,670 2,444

Net income $ 631 $ 16,660 $ 9,890

Earnings per share:

Basic $ 0.05 $ 1.43 $ 0.85

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

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2021 2020 2019

Net income (loss) $ 16,660 $ 9,890 $ ( 7,152 )

Net income $ 631 $ 16,660 $ 9,890

Foreign currency translation adjustments 4,253 60 ( 2,743 )

Postretirement benefit adjustment, net of tax ( 96 ) ( 26 ) ( 25 )

Comprehensive income (loss) $ 16,694 $ 7,122 $ ( 10,177 )

Comprehensive income $ 4,788 $ 16,694 $ 7,122

The accompanying notes are an integral part of these consolidated financial statements.

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Balance, September 30, 2018 12,281 $ 123 $ 56,769 $ 291,530 ( 806 ) $ ( 24,999 ) $ ( 21,779 ) $ 301,644

Net loss — — — ( 7,152 ) — — — ( 7,152 )

Net income — — — 9,890 — — — 9,890

Foreign currency translation adjustments — — — — — — ( 2,743 ) ( 2,743 )

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Shares withheld in lieu of employee tax withholding — — ( 1,454 ) — — — — ( 1,454 )

Issuance of restricted stock 15 1 — — — — — 1

Dividends paid — — — ( 11,998 ) — — — ( 11,998 )

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Shares withheld in lieu of employee tax withholding — — ( 629 ) — — — — ( 629 )

Issuance of restricted stock 14 — — — — — — —

Dividends paid — — — ( 12,066 ) — — — ( 12,066 )

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Shares withheld in lieu of employee tax withholding — — ( 632 ) — — — — ( 632 )

Issuance of restricted stock 16 — — — — — — —

Dividends paid — — — ( 12,142 ) — — — ( 12,142 )

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Operating Activities:

Net income (loss) $ 16,660 $ 9,890 $ ( 7,152 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income $ 631 $ 16,660 $ 9,890

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 10,335 10,538 12,032

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Deferred income taxes ( 995 ) 1,473 820

Gain on amended supply agreement — — ( 507 )

Gain on cash surrender value of life insurance — ( 506 ) —

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Our principal products include integrated power control room substations (PCRs®), 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, switches and bus duct systems.

These products are designed for application voltages ranging from 480 volts to 38,000 volts and are used in oil and gas refining, onshore and offshore oil and gas production, petrochemical, liquefied natural gas (LNG) terminals, pipeline, terminal, mining and metals, light rail traction power, electric utility, pulp and paper and other heavy industrial markets.

These products are designed for application voltages ranging from 480 volts to 38,000 volts.

Our products are used in the oil and gas markets, onshore and offshore production, liquefied natural gas (LNG) facilities and terminals, pipeline, refineries and petrochemical plants.

Additionally, we manufacture products for the electric utility, light rail traction power as well as mining and metals, pulp and paper and other municipal, commercial and industrial markets.

Our product scope includes designs tested to meet both U.S.

and international standards, under both the American National Standards Institute (ANSI) and International Electrotechnical Commission.

and international standards, under both the American National Standards Institute (ANSI) and International Electrotechnical Commission (IEC).

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.

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Impact of the COVID-19 Pandemic and Oil and Gas Commodity Market Volatility on Powell

The spread of COVID-19 has created significant uncertainty and economic disruption across the world during the second half of Fiscal 2020 and continuing into Fiscal 2021.

This pandemic has negatively impacted energy demand, which in turn has resulted in considerable volatility across the oil and gas commodity markets.

The COVID-19 pandemic continues to impact global energy markets.

This pandemic has negatively impacted demand, which in turn has resulted in considerable volatility across the oil and gas commodity markets.

As a result, some of our industrial customers are deferring or suspending their planned capital expenditures.

Certain of our customers have asked that we delay our manufacturing on their projects as their operations have been negatively impacted by this pandemic and the reduced oil and gas demand.

Certain of our customers have asked that we delay or cancel our manufacturing on their projects as their operations have been negatively impacted by this pandemic and the reduced oil and gas demand which has resulted in recognition of cancellation fees based on contract terms and the extent of our progress on the projects.

We continue to work with and review the contracts with our key suppliers who have been impacted by this pandemic to ensure that we are able to meet our customer commitments.

From an operational standpoint, although our facilities are located in areas that have been or continue to be subject to stay-at-home orders, we have not closed any of our facilities for an extended amount of time and have continued to operate as an "essential business" under these orders across all of our locations.

We continue to take the necessary steps to ensure the safety of our employees, customers and vendors.

These steps include, among others, promoting increased social distancing practices and enhanced cleaning efforts in our offices and facilities.

We are also using technology across our operations to further enhance social distancing and improve safety.

These increased safety precautions may have an adverse impact on our efficiency and productivity going forward.

As a result of the circumstances noted above, we anticipate that a decrease in commercial activity will negatively impact our business, results of operations and cash flows going forward.

We have and may need to continue to adjust our workforce and labor costs to correspond to the reduced customer demand.

The consequences of a prolonged global economic decline could include, but are not limited to, a continued reduction in commercial and industrial activity.

Accordingly, the Company cannot reasonably estimate the duration or severity of this pandemic, or the extent to which the disruption may materially impact our business, results of operations or cash flows.

We will take prudent measures to maintain our strong liquidity and cash position, which may include reducing our capital expenditures and research and development costs, as well as reducing or eliminating future dividend payments.

However, the extent to which the COVID-19 pandemic specifically will impact our business will depend on numerous factors that are hard to predict, some of which include:

the duration, spread and severity of the pandemic;

governmental actions in response to the pandemic, including travel restrictions and quarantine or related governmental orders;

any closures of our offices and facilities or those of our suppliers as a result of the pandemic, and how quickly and to what extent normal economic and operating conditions can resume.

Therefore, the magnitude of the impact on our business, results of operations and cash flows is not currently known.

Summary of Significant Accounting Policies

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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 recognition and estimated cost recognition on our customer 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.

The most significant estimates used in our consolidated financial statements

affect revenue recognition and estimated cost recognition on our customer contracts, the allowance for credit losses, 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), liquidated damages and other contingent liabilities require judgments regarding the amount of expenses that will ultimately be incurred.

We base our estimates on historical experience, forecasts and 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 because the ultimate realization of net deferred tax assets is dependent on the generation of future taxable income during periods in which temporary differences become deductible.

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Cash and Investments

Cash and cash equivalents

Cash and 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 Consolidated Balance Sheets.

Cash and cash equivalents - Cash and 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 Consolidated Balance Sheets.

Short-term Investments - Short-term investments include time deposits with original maturities of three months or more.

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Accounts Receivable

Accounts receivable are stated net of allowances for doubtful accounts.

We maintain and continually assess the adequacy of the allowance for doubtful accounts representing our estimate for losses resulting from the inability of our customers to pay amounts due to us.

Accounts receivable are stated net of allowances for credit losses.

We maintain and continually assess the adequacy of the allowance for credit losses representing our estimate for losses resulting from the inability of our customers to pay amounts due to us.

This estimated allowance is based on historical experience of uncollected accounts, the level of past due accounts, the overall level of outstanding accounts receivable, information about specific customers with respect to their inability to make payments and expectations of future conditions that could impact the collectability of accounts receivable.

Future changes in our customers’ operating performance and cash flows, or in general economic conditions, could have an impact on their ability to fully pay these amounts, which could have a material impact on our operating results.

In most cases,

receivables are not collateralized.

In most cases, receivables are not collateralized.

However, we utilize letters of credit to secure payment on projects when possible.

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Developing our provision for income taxes requires significant judgment and expertise in federal, international and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets.

In assessing the extent to

which net deferred tax assets may be realized, we consider whether it is more likely than not that some portion or all of the net deferred tax assets may not be realized.

In assessing the extent to which net deferred tax assets may be realized, we consider whether it is more likely than not that some portion or all of the net deferred tax assets may not be realized.

The ultimate realization of net deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible.

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Accounting literature also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures.

Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns.

Judgment is required in

assessing the future tax consequences of events that have been recognized in our financial statements or tax returns.

Variations in the actual outcome of these future tax consequences could materially impact our financial statements.

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Our revenues are primarily generated from the manufacturing of custom-engineered products and systems under long-term fixed-price contracts that may last from one month to several years, depending on the contract.

Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method.

We believe that this method is the most accurate representation of our performance because it directly measures the value of the services transferred to the customer over time as we incur costs on our contracts.

Contract costs include all direct materials, labor and indirect costs related to contract performance, which may include indirect labor, supplies, tools, repairs and depreciation costs.

We enter into contracts to provide value-added services such as field service inspection, installation, commissioning, modification and repair, as well as retrofit and retrofill components for existing systems.

As a practical expedient, if the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our performance completed to date (i.e., a service contract in which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount with which we have the right to invoice.

We also have contracts to provide value-added services such as field service inspection, installation, commissioning, modification and repair, as well as retrofit and retrofill components for existing systems.

If the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our performance completed to date (i.e., a service contract in which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount with which we have the right to invoice.

Our performance obligations are satisfied as the work progresses.

We also have sales orders for spare parts and replacement circuit breakers for switchgear that are obsolete or that are no longer produced by the original manufacturer.

Revenues from these sales orders are recognized at a point in time when we fulfill our performance obligation to the customer, which is typically upon shipment.

Revenues from these sales orders are recognized at the time we fulfill our performance obligation to the customer, which is typically upon shipment.

Additionally, some contracts may contain a cancellation clause that could limit the amount of revenue we are able to recognize over time.

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We periodically utilize a third-party sales agent to obtain a contract and will pay a commission to that agent.

We record the full commission liability to the third-party sales agent at the order date, with a corresponding deferred asset.

We record the full commission liability to the third-party sales agents at the order date, with a corresponding deferred asset.

As the project progresses, we record commission expense based on percentage of completion rates that correlate to the project and reduce the deferred asset.

Once we have been paid by the customer, we pay the commission, and the deferred liability is reduced.

Once we have been paid by the customer, we pay the commission and the liability is reduced.

Warranty Costs

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In addition, specific provisions are made when product failures are projected outside historical experience.

Our standard terms and conditions of sale include a warranty for parts and service for the earlier of 18 months from the date of shipment or 12 months from the date of energization, whichever occurs first.

Our standard terms and conditions of sale include a warranty for parts and service for one year.

Occasionally, we provide service-type warranties that will extend the warranty period.

Actual results could differ from our estimate.

Occasionally projects require warranty terms that are longer than our standard terms due to the nature of the project.

Projects may require, on occasion, warranty terms that are longer than our standard terms due to the nature of the project.

Extended warranty terms may be negotiated and included in our contracts.

The allocated revenue associated with the extended warranty is deferred and recorded as a contract liability and recognized over the extended warranty period.

The allocated revenue associated with the extended warranty is deferred and recorded as a contract liability and recognized as revenue over the extended warranty period.

Research and Development Expense

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Under the new topic, an entity recognizes as an allowance its estimate of expected credit losses with the intention of improving financial reporting by requiring timelier recognition of such losses.

Enhanced disclosure of information regarding how a company developed its allowance, including changes in the factors that influenced management's estimate of expected credit losses and the reasons for those changes, will be required upon adoption.

We are still evaluating the impact this new topic will have on our consolidated financial statements which will be adopted in Fiscal 2021.

In November 2016, the FASB issued a new topic on the statement of cash flows that changes the presentation of restricted cash and cash equivalents on the statement of cash flows.

Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

We adopted this topic in Fiscal 2019, and our Consolidated Cash Flow Statements for all periods reflect this presentation.

We adopted this topic on October 1, 2020 and such adoption did not have a material impact on our consolidated financial statements.

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.

We compute basic earnings per share by dividing net income 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.

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2021 2020 2019

Net income (loss) $ 16,660 $ 9,890 $ ( 7,152 )

Net income $ 631 $ 16,660 $ 9,890

Weighted average basic shares 11,705 11,624 11,571

Dilutive effect of restricted stock units 84 69 63

Weighted average diluted shares with assumed conversions 11,693 11,634 11,507

Earnings (loss) per share:

Weighted average diluted shares 11,789 11,693 11,634

Earnings per share:

Basic $ 0.05 $ 1.43 $ 0.85

Diluted $ 0.05 $ 1.42 $ 0.85

For the year ended September 30, 2018, we incurred a net loss;

therefore, all potential common shares were deemed to be anti-dilutive.

Detail of Selected Balance Sheet Accounts

Allowance for Doubtful Accounts

Activity in our allowance for doubtful accounts consisted of the following (in thousands):

Allowance for Credit Losses

Activity in our allowance for credit losses consisted of the following (in thousands):

September 30,

Balance at beginning of period $ 510 $ 301

Bad debt expense 258 233

Bad debt expense, net 48 258

Uncollectible accounts written off, net of recoveries ( 242 ) ( 32 )

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Balance at end of period $ 2,531 $ 2,771

On October 1, 2018, we adopted the new revenue recognition standard using the modified retrospective transition method.

We applied the guidance in the standard to customer contracts that were not substantially complete at that time and we determined that no adjustment to retained earnings was necessary.

Financial results for reporting periods after October 1, 2018 are reported under the new standard;

however, financial results for prior periods were not adjusted and will continue to be presented in accordance with the previous standard.

Revenue Recognition

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Some contracts may also include the installation and the commissioning of these enclosures.

Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method.

We believe that this method is the most accurate representation of our performance, because it directly measures the value of the services transferred to the customer over time as we incur costs on our contracts.

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As a practical expedient, if the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our

performance completed to date (i.e., a service contract in which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount that we have the right to invoice.

Our performance obligations are satisfied as the work progresses.

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We periodically utilize a third-party sales agent to obtain a contract and will pay a commission to that agent.

We record the full commission liability to the third-party sales agent at the order date, with a corresponding deferred asset.

We record the full commission liability to the third-party sales agents at the order date, with a corresponding deferred asset.

As the project progresses, we record commission expense based on percentage of completion rates that correlate to the project and reduce the deferred asset.

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The majority of our contracts have a single performance obligation where multiple engineered products and services are combined into a single custom-engineered solution.

Our contracts generally include a standard assurance warranty that typically ends 18 months after shipment.

Our contracts include a standard one-year assurance warranty.

Occasionally, we provide service-type warranties that will extend the warranty period.

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As of September 30, 2021, we had backlog of $ 414.9 million, of which approximately $ 291.0 million is expected to be recognized as revenue within the next twelve months.

Backlog may not be indicative of future operating results as orders may be cancelled or modified by our customers.

Backlog may not be indicative of future operating results as orders may be cancelled or modified by our

Our backlog does not include service and maintenance-type contracts for which we have the right to invoice as services are performed.

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We periodically review our job performance, job conditions, estimated profitability and final contract settlements, including our estimate of total costs and make revisions to costs and income in the period in which the revisions are probable and reasonably estimable.

We bear the risk of cost overruns in most of our contracts, which may result in reduced profits.

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.

For the years ended September 30, 2021 and 2020, our operating results were positively impacted by $ 12.5 million and $ 11.3 million, respectively, as a result of changes in contract estimates related to projects in progress at the beginning of the respective period.

These changes in estimates resulted primarily from favorable project execution and negotiations of variable consideration, discussed below, as well as other changes in facts and circumstances during these periods.

These changes in estimates resulted primarily from favorable project execution and negotiations of variable consideration, discussed below, as well as revenue and reduced costs recognized from project cancellations and other changes in facts and circumstances during these periods.

Variable Consideration

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Due to the nature of our contracts, estimating total cost and revenue can be complex and subject to variability due to change orders, back charges, spare parts, early completion bonuses, customer allowances and liquidated damages.

We estimate the amount of variable consideration based on the expected value method, which is the sum of probability-weighted amount, or the most likely amount method which uses various factors including experience with similar transactions and assessment of our anticipated performance.

We estimate the amount of variable consideration based on the expected value method, which is the sum of the probability-weighted amounts, or the most likely amount method which uses various factors including experience with similar transactions and assessment of our anticipated performance.

Variable consideration is included in the transaction price if legally enforceable and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is resolved.

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Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period and are generally classified as current.

The timing of contract billing milestones related to our Fiscal 2020 contract award for a large industrial project contributed significantly to our net contract liability at September 31, 2020.

Contract assets and liabilities as of September 30, 2021 and September 30, 2020 are summarized below (in thousands):

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Contract liabilities ( 42,433 ) ( 79,445 )

Net contract liability $ ( 28,450 ) $ ( 16,090 )

The increase in net contract liability at September 30, 2020 from September 30, 2019 was primarily due to our progress towards completion on our projects and the timing of contract billing milestones and new orders.

This increase was primarily driven by the timing of contract billing milestones related to our recent contract award for a large industrial project in the United States.

Net contract asset (liability) $ 11,766 $ ( 28,450 )

The increase in net contract asset at September 30, 2021 from September 30, 2020 was primarily due to the timing of contract billing milestones and new orders as well as cash used on our large industrial project awarded in Fiscal 2020.

To determine the amount of revenue recognized during the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance.

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Any uncollected invoiced amounts for our performance obligations recognized over time, including contract retentions, are recorded as accounts receivable in the Consolidated Balance Sheets.

Certain contracts contain retention provisions that become due upon completion of contractual requirements.

Certain contracts allow customers to withhold a small percentage of billings pursuant to retainage provisions, and such amounts are generally due upon completion of the contract and acceptance of the project by the customer.

Based on our experience in recent years, the majority of these retainage balances are expected to be collected within approximately twelve months.

As of September 30, 2021 and September 30, 2020, accounts receivable included retention amounts of $ 9.6 million and $ 6.9 million, respectively.

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Total revenues by geographic destination $ 470,559 $ 518,499

Oil and gas $ 195,209 $ 242,291

Oil and gas (excludes petrochemical) $ 187,660 $ 195,209

Petrochemical 58,986 126,698

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Goodwill and Intangible Assets

Our intangible assets consist of goodwill of $ 1.0 million, which is not being amortized, and purchased technology of $ 0.2 million, which is amortized over its estimated useful life.

Our intangible assets consist of goodwill of $ 1.0 million, which is not being amortized.

In Fiscal 2021, our purchased technology was fully amortized.

No impairment expense has been recorded for the last three fiscal years.

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Amortization of intangible assets recorded for the years ended September 30, 2021, 2020 and 2019 was $ 0.2 million, $ 0.2 million and $ 0.2 million, respectively.

Estimated amortization expense for each of the five subsequent fiscal years is expected to be (in thousands):

Years Ended September 30, Total

Long-Term Debt

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Total long-term debt $ — $ 400

The annual maturities of long-term debt as of September 30, 2020, were as follows (in thousands):

Year Ending September 30, Long‑Term

Total long-term debt maturities $ 400

On September 27, 2019, we entered into an Amended and Restated Credit Agreement with Bank of America, N.A.

Revolver"), which replaced our prior credit agreement.

Revolver is a $ 75.0 million revolving credit facility, which is available for both borrowings and letters of credit and expires September 2024.

As of September 30, 2020, there were no amounts borrowed under this facility, and letters of credit outstanding were $ 38.7 million.

We have a credit agreement with Bank of America, N.A.

Revolver"), which is a $ 75.0 million revolving credit facility that is available for both borrowings and letters of credit and expires September 27, 2024.

On March 12, 2021, we entered into a first amendment to the U.S.

Revolver which, among other things, amended certain terms related to the calculation of the consolidated leverage ratio from gross leverage to net leverage.

As a result of the first amendment, up to $ 30 million may be deducted from the amount of letters of credit outstanding (not to be less than zero ) when calculating the consolidated funded indebtedness which is a component of the consolidated net leverage ratio.

Additionally, we have the option to cash collateralize all or a portion of the letters of credit outstanding, which would favorably impact the consolidated funded indebtedness calculation and the consolidated net leverage ratio.

As of September 30, 2021, there were no amounts borrowed under the U.S.

Revolver, and letters of credit outstanding were $ 34.8 million.

There was $ 40.2 million available for the issuance of letters of credit and borrowings under the U.S.

Revolver as of September 30, 2021.

We are required to maintain certain financial covenants, the most significant of which are a consolidated leverage ratio less than 3.0 to 1.0 and a consolidated interest coverage ratio of greater than 3.0 to 1.0.

The consolidated leverage ratio is our most restrictive covenant and a decrease in our earnings before interest, taxes, depreciation and amortization (EBITDA) could restrict our ability to issue letters of credit under the U.S.

Additionally, we must maintain a consolidated cash balance of $ 30 million at all times.

We are required to maintain certain financial covenants, the most significant of which are a consolidated net leverage ratio less than 3.0 to 1.0 and a consolidated interest coverage ratio of greater than 3.0 to 1.0.

Our most restrictive covenant, the consolidated net leverage ratio, is the ratio of earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDAS) to funded indebtedness.

An increase in indebtedness, which includes letters of credit, or a decrease in EBITDAS could restrict our ability to issue letters of credit or borrow under the U.S.

Additionally, we must maintain a consolidated cash balance of $ 30 million at all times, which can be deducted from the letters of credit outstanding as noted above.

Revolver also contains a "material adverse effect" clause which is 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.

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The base rate is generally the highest of (a) the federal funds rate plus 0.50 %, (b) the Bank of America prime rate or (c) the London Interbank Offered Rate (LIBOR) plus 1.00 %.

The applicable rate is generally a range from ( 0.25 )% to 1.75 % depending on the type of loan and the Company's consolidated leverage ratio.

The applicable rate is generally a range from ( 0.25 )% to 1.75 % depending on the type of loan and the Company's consolidated net leverage ratio.

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.

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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 September 30, 2020.

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 annual principal payment.

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 0.27 % as of September 30, 2020.

We borrowed $ 8.0 million in October 2001 through a loan agreement funded with proceeds from tax-exempt industrial development revenue bonds (Bonds) for the completion of our Northlake, Illinois facility.

The Bonds are subject to various covenants, for which we were in compliance at September 30, 2021.

The interest rate of the Bonds was 0.14 % as of September 30, 2021.

On October 1, 2021, the Bonds matured and our final redemption of $ 0.4 million was made.

Commitments and Contingencies

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To date, there have been no significant draws or claims related to security instruments for the periods reported.

We were contingently liable for letters of credit of

$ 38.7 million as of September 30, 2020.

We were contingently liable for letters of credit of $ 34.8 million as of September 30, 2021.

We also had surety bonds totaling $ 143.0 million that were outstanding, with additional bonding capacity of $ 457.0 million available, at September 30, 2021.

At present, we have strong surety relationships;

however, a change in market conditions or the sureties' assessment of our financial position could cause the sureties to require cash collateralization for undischarged liabilities under the bonds.

We have a $ 9.4 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank that provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options.

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The Facility Agreement provides for financial covenants and customary events of default, and carries cross-default provisions with our U.S.

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.

Additionally, we are required to maintain cash collateral for guarantees greater than two years .

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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.

The components of the income tax provision (benefit) were as follows (in thousands):

The components of the income tax provision were as follows (in thousands):

Year Ended September 30,

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( 995 ) 1,473 820

Total income tax provision (benefit) $ 3,670 $ 2,444 $ ( 547 )

Total income tax provision $ 461 $ 3,670 $ 2,444

Income (loss) before income taxes was as follows (in thousands):

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Foreign ( 1,984 ) ( 913 ) 475

Income (loss) before income taxes $ 20,330 $ 12,334 $ ( 7,699 )

Income before income taxes $ 1,092 $ 20,330 $ 12,334

A reconciliation of the statutory U.S.

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Foreign rate differential 10 — 1

Foreign withholding — 1 ( 3 )

Foreign taxes 10 — 1

Valuation allowance 62 4 ( 2 )

Deferred tax rate differential ( 19 ) — —

Non-deductible expenses (1)

Effective rate 42 % 18 % 20 %

On December 22, 2017, the new tax law lowered the corporate tax rate from 35% to 21% effective January 1, 2018.

As a result, the U.S.

federal statutory rate for Fiscal 2020 and 2019 is 21%, compared to the blended statutory rate of 24.5 % effective for Fiscal 2018.

Our income tax provision (benefit) reflects an effective tax rate on pre-tax results of 18 % in Fiscal 2020 compared to 20 % and 7 % in Fiscal 2019 and 2018, respectively.

(1) Certain prior year amounts have been reclassified for consistency with the current year presentation.

Our income tax provision reflects an effective tax rate on pre-tax results of 42 % in Fiscal 2021 compared to 18 % and 20 % in Fiscal 2020 and 2019, respectively.

The reduction in pre-tax book income as compared to prior years caused tax adjustments to yield a greater impact to the effective tax rate in Fiscal 2021.

The effective tax rate of 42 % for Fiscal 2021 was favorably impacted by the current year estimated Research and Development Tax Credit (R&D Tax Credit) as well as the utilization of net operating loss carryforwards in Canada that were fully reserved with a valuation allowance.

Likewise, the discrete items recorded in the third quarter of Fiscal 2020 in the amount of $ 1.7 million associated with the release of reserves for unrecognized tax benefits as a result of the expiration of statutes of limitations and the IRS audit settlement favorably impacted the effective tax rate.

The effective tax rate was negatively impacted by the losses recognized in other foreign jurisdictions, primarily in the U.K., that were reserved with a valuation allowance as well as the establishment of a valuation allowance against the deferred tax assets in Mexico in the amount of $ 0.1 million.

The effective tax rate of 18 % for Fiscal 2020 was favorably impacted by the estimated R&D Tax Credit as well as the utilization of net operating loss carryforwards in Canada that were fully reserved with a valuation allowance.

Likewise, the

discrete items recorded in the third quarter of Fiscal 2020 in the amount of $ 1.7 million associated with the release of reserves for unrecognized tax benefits as a result of the expiration of statutes of limitations and the IRS audit settlement favorably impacted the effective tax rate.

The effective tax rate was negatively impacted by the discrete item recorded in the second quarter of Fiscal 2020 for the valuation allowance against our U.K.

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federal statutory rate as favorable adjustments related to the utilization of net operating loss carryforwards in Canada that were fully reserved with a valuation allowance, and the R&D Tax Credit were largely offset by unfavorable adjustments primarily related to state income taxes and other permanent items.

Due to the loss position in Fiscal 2018, the effective tax rate was negatively impacted by foreign losses reserved for with a valuation allowance as well as $ 0.5 million of tax expense related to the re-measurement of U.S.

deferred tax assets as a result of tax reform.

During our assessment of deferred income taxes, in the second quarter of Fiscal 2020, we recorded a valuation allowance of $ 0.5 million against our U.K.

net deferred tax assets.

Similarly, we recorded a valuation allowance of $ 0.1 million against our Mexican net deferred tax assets during the fourth quarter of Fiscal 2021 as a result of our assessment of deferred income taxes.

In assessing the realizability of net deferred tax assets, we determined it was more-likely-than-not that the net deferred tax assets may not be realized based upon recent U.K.

tax losses and anticipated results in the near term.

and Mexican tax losses and anticipated results in the near term.

Estimates may change as new events occur, estimates of future taxable income are reduced or increased, additional information becomes available, or operating environments change, which may result in a full or partial reversal of the valuation allowance.

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The majority of these tax credit carryforwards expire beginning in 2031.

In addition, we had international net operating loss carryforwards of $ 0.8 million that were not reserved with a valuation allowance available to offset future taxable income in the respective jurisdictions, with approximately $ 0.2 million expiring in 2029 and 2030 and the remainder having an indefinite carryforward period.

In addition, we had international net operating loss carryforwards of $ 0.5 million that were not reserved with a valuation allowance available to offset future taxable income in the respective jurisdictions, with an indefinite carryforward period.

We have established a valuation allowance in the amount of $ 10.5 million primarily related to the Canadian and U.K.

net deferred tax assets.

The net change in the total valuation allowance during the year was $ 0.8 million which was largely a result of the establishment of a valuation allowance on the net deferred tax assets of the U.K.

The net increase in the total valuation allowance during the year was $ 1.5 million which was largely a result of the current year loss recognized in the U.K.

In assessing the realizability of net deferred tax assets, we consider whether it is more-likely-than-not that some portion or all of the net deferred tax assets may not be realized.

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The amount of interest and penalty expense recorded for the year ended September 30, 2021 was not material.

Due to the expiration of certain federal statutes of limitations and the settlement of the IRS audit discussed above, management believes that, within the next twelve months, it is reasonably possible that the unrecognized tax benefits will decrease by approximately $ 0.1 million due to the settlement with taxing authorities related to voluntary filings.

We are unable to make reasonably reliable estimates regarding the timing of future cash outflows, if any, associated with the remaining unrecognized tax benefits for the open periods of Fiscal 2018 – 2020.

Management believes that, within the next twelve months, it is reasonably possible that the unrecognized tax benefits will decrease by approximately $ 0.3 million due to the expiration of certain federal statutes of limitations.

We are unable to make

reasonably reliable estimates regarding the timing of future cash outflows, if any, associated with the remaining unrecognized tax benefits for the open periods of Fiscal 2018 – 2021.

Management believes that an adequate provision has been made for any adjustments that may result from tax examinations.

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We recorded net compensation expense adjustments of $ 0.4 million related to this plan in Fiscal 2021.

At September 30, 2020, total assets held by the trustee were $ 7.4 million and recorded in other assets and the liability was $ 6.6 million and recorded in other long-term liabilities in our Consolidated Balance Sheets.

Of the $ 7.4 million of assets held by the trustee, $ 7.2 million is invested in company-owned life insurance policies and the remainder in mutual funds.

At September 30, 2021, total assets held by the trustee were $ 9.1 million and recorded in other assets and the liability was $ 8.5 million and recorded in deferred compensation in our Consolidated Balance Sheets.

The $ 9.1 million of assets held by the trustee is invested in company-owned life insurance policies.

Certain former executives were provided an executive benefit plan that provides for fixed payments upon normal retirement on or after age 65 and the completion of at least 10 years of continuous employment.

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In accordance with the 2014 Plan, the Compensation Committee has authorized grants of 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.

Typically, these grants vest over a three -year period from their date of issuance.

The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market on the grant dates.

Typically, these grants vest over a three -year period from the date of issuance and are a blend of time-based and performance-based shares.

Fifty to 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.

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Under this 2014 Director Plan, in February 2021, 16,800 shares of restricted stock were issued to our non-employee directors at a price of $ 31.33 per share.

In February 2019, we issued 14,000 shares of restricted stock to our non-employee directors at a

price of $ 34.02 per share.

In February 2020, we issued 16,800 shares of restricted stock to our non-employee directors at a price of $ 36.25 per share.

The total number of shares of common stock available for future awards under the 2014 Director plan was 23,000 shares as of September 30, 2021.

At September 30, 2020 and 2019, there were 8,400 and 7,000 shares of unvested restricted stock outstanding, respectively.

At both September 30, 2021 and 2020, there were 8,400 shares of unvested restricted stock outstanding.

Compensation Expense

Total compensation expense related to restricted stock grants under all plans was $ 0.5 million, $ 0.6 million and $ 0.5 million for the years ended September 30, 2021, 2020 and 2019, respectively.

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The deferred compensation liability represents the investment options that the plan participants have designated to serve as the basis for measurement of the notional value of their accounts.

Because the deferred compensation liability is intended to offset the plan assets, it is therefore also categorized as Level 2 in the fair value measurement hierarchy.

Because the deferred compensation liability is intended to offset the plan assets, it is also categorized as Level 2 in the fair value measurement hierarchy.

There were no transfers between levels within the fair value measurement hierarchy during the year ended September 30, 2021.

Our leases consist primarily of office and manufacturing space, construction equipment and office equipment.

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We currently sublease the majority of these Canadian facilities.

The following table provides a summary of lease cost components for the year ended September 30, 2020 (in thousands):

The following table provides a summary of lease cost components for the years ended September 30, 2021 and 2020, respectively (in thousands):

Lease Cost 2021 2020

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(2) Short-term lease cost includes leases and rentals with initial terms of one year or less.

For the years ended September 30, 2019 and 2018, rent expense related to operating leases was $ 3.5 million and $ 3.4 million;

however, these amounts did not include rent expense related to leases and rentals with initial terms of one year or less, which are included in short-term cost in the table above.

For the years ended September 30, 2019 and 2018, sublease income from third parties was $ 1.3 million and $ 1.5 million;

however, these amounts included common area maintenance charges, which are included in variable lease cost in the table above.

For the year ended September 30, 2019, rent expense related to operating leases was $ 3.5 million;

however, this amount did not include rent expense related to leases and rentals with initial terms of one year or less, which are included in short-term cost in the table above.

For the year ended September 30, 2019, sublease income from third parties was $ 1.3 million;

however, this amount included common area maintenance charges, which are included in variable lease cost in the table above.

In Fiscal 2019, we recorded additional lease expense of $ 0.7 million related to certain facility leases in Canada that are no longer utilized in our operations.

In Fiscal 2018, we incurred approximately $ 0.8 million due to anticipated losses on the sublet of a Canadian facility we exited in a prior period.

We recognize operating lease assets and operating lease liabilities representing the present value of the remaining lease payments for leases with initial terms greater than twelve months.

Leases with initial terms of twelve months or less are not recorded in our Consolidated Balance Sheets.

Our operating lease assets have been reduced by a lease accrual of $ 0.6 million related to certain unused facility leases in Canada.

The following table provides a summary of the operating lease assets and operating lease liabilities included in our Consolidated Balance Sheets as of September 30, 2020 (in thousands):

Operating Leases September 30, 2020

As of September 30, 2021 and 2020, our operating lease assets have been reduced by a lease accrual of $ 0.4 million and $ 0.6 million, respectively, related to certain unused facility leases in Canada.

The following table provides a summary of the operating lease assets and operating lease liabilities included in our Consolidated Balance Sheets as of September 30, 2021 and 2020, respectively (in thousands):

September 30,

Operating Leases 2021 2020

Operating lease assets, net $ 3,453 $ 5,217

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Middle East and Africa 26,615 18,162 18,420

Far East 18,079 11,405 12,976

Asia/Pacific 8,889 18,079 11,405

Europe 13,027 15,866 13,746

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2021 Quarters

Revenues $ 106,575 $ 118,716 $ 115,813 $ 129,455 $ 470,559

Gross profit 18,271 17,153 17,167 22,472 75,063

Net income (loss) ( 364 ) ( 225 ) ( 2,041 ) 3,261 631

Earnings (loss) per share:

Basic $ ( 0.03 ) $ ( 0.02 ) $ ( 0.17 ) $ 0.28 $ 0.05

Diluted $ ( 0.03 ) $ ( 0.02 ) $ ( 0.17 ) $ 0.28 $ 0.05

(1) The results for the first quarter of Fiscal 2021 demonstrated normal seasonality and were negatively impacted by holidays and work schedules related to other quarterly periods.

Gross profit continued to decrease during the first three quarters of Fiscal 2021 as compared to Fiscal 2020 quarterly gross profit due to a decrease in orders as well as project delays and cancellations of potential projects associated with the global economic impact resulting from the COVID-19 pandemic and associated reduction in demand across our industrial end markets.

(2) The results for the fourth quarter of Fiscal 2021 were positively impacted by higher volume and favorable productivity across the service and manufacturing entities.

2020 Quarters

Third (1) (2)

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(3) The results for the fourth quarter of Fiscal 2020 were positively impacted by other income of $ 0.5 million related to a death benefit received from our company-owned life insurance policy related to a retired employee.

2019 Quarters

Third (1) (2)

Revenues $ 109,351 $ 123,737 $ 135,588 $ 148,504 $ 517,180

Gross profit 14,631 20,075 23,715 28,555 86,976

Net income (loss) ( 2,695 ) 958 5,089 6,538 9,890

Earnings (loss) per share:

Basic $ ( 0.23 ) $ 0.08 $ 0.44 $ 0.56 $ 0.85

Diluted $ ( 0.23 ) $ 0.08 $ 0.44 $ 0.56 $ 0.85

(1) The results for the first quarter of Fiscal 2019 demonstrated normal seasonality and were negatively impacted by holidays and work schedules relative to other quarterly periods.

The results for the subsequent quarters of Fiscal 2019 improved due to the timing of orders and execution of backlog.

(2) The results for the third quarter of Fiscal 2019 were favorably impacted by the receipt of a $ 1.0 million non-recurring business interruption insurance settlement recognized within operating income.

The sum of the individual earnings per share amounts may not agree with year-to-date earnings per share as each period’s computation is based on the weighted-average number of shares outstanding during the period.

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Subsequent Events

Long-Term Debt Repayment

On October 1, 2021, our long-term debt fully matured and our final bond redemption of $ 0.4 million was made.

See Note G for additional disclosure regarding our industrial revenue development bonds.

Quarterly Dividend Declared

On November 2, 2021, our Board of Directors declared a quarterly cash dividend on our common stock in the amount of $ 0.26 per share.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data