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We make available, free of charge on or through our website, copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as is reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC).
−Removed: Additionally, all of our reports filed with the SEC are available via their website at http:// www.sec.gov.
+Added: Additionally, all of our reports filed with the SEC are available via their website at sec.gov .
References to Fiscal 2022, Fiscal 2021 and Fiscal 2020 used throughout this Annual Report relate to our fiscal years ended September 30, 2022, 2021 and 2020, respectively.
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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.
−Removed: 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 industrial markets.
−Removed: Our product scope includes designs tested to meet both U.S.
−Removed: and international standards, under both the American National Standards Institute (ANSI) and International Electrotechnical Commission (IEC).
−Removed: 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and repair, retrofit and retrofill components for existing systems and replacement circuit breakers for switchgear that is obsolete or that is no longer produced by the original manufacturer.
−Removed: We seek to establish long-term relationships with the end users of our systems as well as the design and construction engineering firms contracted by those end users.
−Removed: We believe that our culture of safety and focus on customer satisfaction, along with our financial strength, allow us to continue to capitalize on opportunities in the industries we serve.
+Added: 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 municipal, commercial and other industrial markets.
+Added: Our product scope includes designs tested to meet both United States (U.S.) and international standards, under both the American National Standards Institute (ANSI) and International Electrotechnical Commission (IEC).
+Added: We assist customers by providing field service inspection, installation, commissioning, modification, and repair services, as well as spare parts, retrofit and retrofill components for existing systems, and replacement circuit breakers for obsolete switchgear no longer produced by the original manufacturer.
+Added: We seek to establish long-term relationships with the end users of our systems as well as design and construction engineering firms contracted by those end users.
+Added: We believe that our exemplary culture of safety and focus on customer satisfaction, along with our financial strength, allow us to continue to capitalize on opportunities in the industries we serve.
Products and services are principally sold directly to the end user or to an engineering, procurement and construction (EPC) firm on behalf of the end user.
Each project is specifically engineered and manufactured to meet the exact specifications and requirements of the individual customer.
−Removed: Powell’s expertise is in the design and engineering, manufacturing, project management and integration of the various systems into a single, custom-engineered deliverable.
+Added: Powell’s expertise is in the design, engineering, manufacturing, project management and integration of assorted systems into a single, custom-engineered deliverable.
We market and sell our products and services, which are typically awarded in competitive bid situations, to a wide variety of customers and governmental agencies spanning across diverse markets and geographic regions.
Contracts often represent large-scale and complex projects with an individual customer.
−Removed: By their nature, these projects are typically nonrecurring.
+Added: By their nature, these projects are typically non-recurring.
Thus, multiple and/or continuous projects of similar magnitude with the same customer are not predictable.
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Occasionally our contracts may operate under a consortium or teaming arrangement.
−Removed: Typically, we enter into these arrangements with reputable companies with which we have conducted business with previously.
+Added: Typically, we enter into these arrangements with reputable companies with whom we have previously conducted business.
These arrangements are generally made to leverage competitive positioning, or where scale and/or size dictates the use of such arrangement.
Due to the nature and timing of large projects, a significant percentage of our revenues in a given period may result from one specific contract or customer.
−Removed: The large domestic industrial project that was awarded in Fiscal 2020 accounted for approximately 20% of our consolidated revenues in Fiscal 2021 and represents approximately 25% of our consolidated backlog going into Fiscal 2022.
+Added: The large domestic industrial project that was awarded in Fiscal 2020 accounted for approximately 15% and 20% of our consolidated revenues in Fiscal 2022 and 2021, respectively.
We believe the reduction in business volume from a particular industry or the loss of a major customer could have an adverse effect on our business.
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If during that time the customer were to experience financial distress, a decline in business or circumstances that would otherwise necessitate a cancellation of a project with us, our revenue could be adversely impacted.
−Removed: No customer accounted for more than 10% of our consolidated revenues in Fiscal 2020 or Fiscal 2019.
+Added: No customer accounted for more than 10% of our consolidated revenues in Fiscal 2020.
Research and development activities are critical to Powell’s future and are focused on both the development of new products and services as well as enhancing current product offerings.
−Removed: Our expertise in vacuum circuit breaker engineering is internationally recognized, and we have a sustained commitment to incorporating continuous product improvements that will ensure operational safety and reliability across the markets we serve.
−Removed: We strive to be the supplier of choice for custom-engineered system solutions and services to a variety of customers and markets.
−Removed: Our activities are predominantly in the oil and gas and electric utility industries, but also include other markets where customers need to manage, monitor and control large amounts of electrical energy through a complex network of electrical components and systems.
+Added: Our expertise in vacuum circuit breaker engineering is internationally recognized, and we commit to incorporating continuous product improvements that will ensure sustained operational safety and reliability across the markets we serve.
+Added: We strive to be the supplier of choice for custom-engineered system solutions and services to a broad array of customers and markets.
+Added: Demand for our services and products is driven predominantly by the oil and gas and electric utility industries, but we also serve other markets where customers need to manage, monitor and control large amounts of electrical energy through a complex network of electrical components and systems.
The majority of our business is in support of capital investment projects that are highly complex and competitively bid.
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We consider our engineering, project management, systems integration and technical support capabilities vital to the success of our business.
−Removed: Specific to the oil and gas sector (excluding petrochemical), we serve the upstream, midstream and downstream end markets.
−Removed: Within the downstream segment, our primary customers typically are engaged in refining activities and/or leveraging natural gas feedstocks for the production of petrochemical or LNG products.
−Removed: We have developed strong relationships with our customers over the years and strive to maintain our position as a preferred service provider to solve our customers' complex electrical needs.
+Added: Specific to the oil and gas sector, we serve the upstream, midstream and downstream end markets.
+Added: Within the downstream market, our primary customers typically are engaged in refining activities and/or leveraging natural gas feedstocks for the production of petrochemical or LNG products.
+Added: Strong relationships have developed with our customers over the years and we are recognized as a preferred service provider to solve our customers' complex electrical needs.
We believe that our products and services, integration capabilities, technical and project management acumen, application engineering expertise and specialty contracting experience, together with our financial strength and responsiveness to the needs of our customers, give us a sustainable competitive advantage in our markets.
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The competitive factors used during bid evaluation by our customers vary from project to project and may include technical support and application expertise, engineering and manufacturing capabilities, equipment rating, delivered value, scheduling and price.
−Removed: While projects are typically non-recurring, a significant portion of our business is from repeat customers and many times involves third-party EPC firms hired by the end user and with whom we also have long, established relationships.
+Added: While projects are typically non-recurring, a significant portion of our business is from repeat customers and many times involves third-party EPC firms hired by the end user and with whom we often have long, established relationships.
Ultimately, our competitive position is dependent upon our ability to provide quality custom-engineered products, services and systems on a timely basis at a competitive price.
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The principal raw materials used in our operations include steel, copper and aluminum and various electrical components.
−Removed: Material costs represented 49% of revenues in Fiscal 2021 and 47% of revenues in both Fiscal 2020 and Fiscal 2019.
+Added: Material costs represented 51% of revenues in Fiscal 2022, 49% of revenues in Fiscal 2021 and 47% of revenues in Fiscal 2020.
Unanticipated changes in material requirements, market conditions and disruptions in the supply chain or price increases could impact production costs and affect our consolidated results of operations.
+Added: Over the past two years, as a result of the challenges created by global economic uncertainty, the COVID-19 pandemic and commodity market volatility, we have experienced supply chain disruptions and anticipate that such disruptions, driven predominately by availability and cost volatility across our raw materials, components and labor force, may continue.
+Added: As we address disruptions, delays and increased costs, we continue to work with our suppliers of key components and commodities to ensure that we are able to meet our customer commitments.
+Added: While we have experienced some issues related to increased prices as well as increased delivery lead times for the purchase of key raw materials or components, we continue to monitor the availability (including transportation) and price of components and raw materials on a regular basis, as well as any potential impact on our operations.
Our supply base for certain key components and raw materials is limited.
+Added: Many of our products require raw materials and components supplied by a limited number of suppliers, and in some instances, a single supplier.
Changes in our design to accommodate similar components from other suppliers could be implemented to resolve a supply problem related to a sole-sourced component.
−Removed: In this circumstance, supply problems could result in delays in our ability to meet commitments to our customers.
+Added: Supply problems could result in delays in our ability to meet commitments to our customers and potentially result in delay damages assessed by our customers.
We believe that sources of supply for raw materials and components are generally sufficient, and we do not believe a temporary shortage of materials will cause any significant adverse impact in the future.
−Removed: While we are not dependent on any one supplier for the majority of our raw materials, we are highly dependent on our suppliers in order to meet commitments to our customers.
−Removed: During Fiscal 2021, as a result of the challenges created by global transportation issues, the COVID-19 pandemic and market volatility, we experienced minor supply disruptions and anticipate that supply disruptions and material shortages may continue.
−Removed: We continue to work with our key suppliers who have been impacted by these supply disruptions to ensure that we are able to meet our customer commitments.
−Removed: While we have not currently experienced significant issues in the purchase of key raw materials or components, we continue to monitor the availability (including transportation) and price of components and raw materials on a regular basis, as well as any potential impact on our operations.
Our business is subject to the effects of changing material prices.
−Removed: While raw material costs have been relatively stable in the past few years, during Fiscal 2021 we have begun to encounter availability constraints from key suppliers as well as cost increases driven by using alternate suppliers, increased commodity costs as well as higher logistics expense.
−Removed: While these availability challenges have not currently created execution challenges, we continue to monitor material availability closely.
−Removed: We cannot, however, provide assurance that we will continue to mitigate these material shortages, in which case our results of operations may be adversely affected.
−Removed: While the cost outlook for commodities used in the production of our products is not certain, we believe we can manage this volatility through contract pricing adjustments, with material-cost predictive estimating and by actively pursuing internal cost reduction efforts.
+Added: During Fiscal 2021 and 2022, we began to encounter availability constraints from key suppliers as well as cost increases driven by using alternate suppliers, increased commodity costs as well as higher logistics expense.
+Added: Supply chain disruptions driven by both availability and cost volatility have created project delivery challenges.
+Added: We continue to monitor material availability closely but cannot provide assurance that we will mitigate material shortages in the future, in which case our results of operations may be adversely affected.
+Added: While the cost outlook for commodities used in the production of our products is not certain, we believe we can manage this volatility through contract pricing adjustments, with material-cost predictive estimating, hedging and by actively pursuing internal cost reduction efforts.
+Added: During Fiscal 2022, we entered into a derivative contract to hedge a portion of our exposure to commodity price risk.
We did not enter into any derivative contracts to hedge our exposure to commodity price changes in Fiscal 2021 or 2020.
Human Capital
−Removed: At September 30, 2021, we had 1,892 full-time employees and 181 contract employees located primarily in the U.S., Canada and the U.K.
−Removed: Our employees are not represented by unions, and we believe that our relationship with our employees is good.
−Removed: Periodically, demand for qualified personnel increases in certain geographic areas due to increased construction or economic activity.
+Added: At September 30, 2022, we had 1,935 full-time employees and 236 contract employees located primarily in the U.S., Canada and the United Kingdom (U.K.) Our employees are not represented by unions, and we believe that our relationship with our employees is good.
+Added: Periodically, we find it challenging to source qualified personnel in certain geographic areas due to increased construction or economic activity.
We continue to monitor our demand for skilled and unskilled labor and provide training and competitive compensation packages in an effort to attract and retain skilled employees.
−Removed: Labor shortages or increased labor costs could impair our ability to maintain our business, meet customer commitments or grow our revenues, and may adversely impact our business and results of operations.
−Removed: Three of our top human capital priorities are workplace safety, internal promotion and key employee retention.
+Added: A decline in our employee relations, labor shortages or increased labor costs could impair our ability to maintain our business, meet customer commitments or grow our revenues, and may adversely impact our business and results of operations.
+Added: Our top human capital priorities include the well-being, health and safety, and retention of our employees, as well as enhanced learning and leadership training opportunities, workplace safety, internal promotion and key employee retention.
Powell emphasizes a culture of safety that runs throughout the Company.
−Removed: We establish annual goals and monthly operating metrics, which have resulted in a safety incident rate that is one-half the industry average across Powell.
−Removed: We believe that internal promotion and key employee retention are critical components to our long-term success.
−Removed: The average tenure of our employees is 11 years.
+Added: We establish annual goals and monthly operating metrics, which have resulted in a safety incident rate that is approximately one-half the industry average, according to the U.S.
+Added: Bureau of Labor Statistics.
+Added: We believe that the 11-year average tenure of our employees is a reflection of our inclusive and supportive culture, and focused efforts on internal promotion, key employee retention and succession planning.
Our annual Organizational Capabilities Review is focused on succession planning within our organization and is reviewed annually by our Board of Directors.
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However, weather and natural phenomena can temporarily impact the performance of our operations.
−Removed: Furthermore, quarterly operating results may fluctuate in our first fiscal quarter due to the reduction in the number of workdays related to the number of holidays in that fiscal quarter.
+Added: Furthermore, quarterly operating results may fluctuate in our first fiscal quarter due to the reduction in the number of workdays related to the number of holidays and paid time off that is taken in that fiscal quarter.
Government Regulations
−Removed: We are subject to various government regulations in the United States as well as various international locations where we operate.
+Added: We are subject to various government regulations in the U.S.
+Added: as well as various international locations where we operate.
These regulations cover diverse areas including environmental compliance, import and export controls, economic sanctions, data and privacy protection, transfer pricing rules, anti-bribery, anti-trafficking and anti-trust provisions.
Our policies mandate compliance with applicable laws and regulations administered by various state, federal and international agencies.
−Removed: We maintain various training programs to educate our employees on compliance with governmental regulations, as well as applied
−Removed: legal and ethical practices in our everyday work.
+Added: We have established a multi-faceted compliance program that includes educating employees and leadership, performing risk based due diligence and evaluating our supplier base.
+Added: We require legal and ethical practices in our everyday work.
We do not believe that compliance with governmental regulations will have a material impact on our capital expenditures, results of operations or competitive position.
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.