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Powell in 1947.
−Removed: We develop, design, manufacture and service custom-engineered equipment and systems which (1) distribute, control and monitor the flow of electrical energy and (2) provide protection to motors, transformers and other electrically powered equipment.
−Removed: We are headquartered in Houston, Texas, and our major subsidiaries, all of which are wholly owned, include:
−Removed: Powell Electrical Systems, Inc.;
+Added: We develop, design, manufacture and service custom-engineered equipment and systems that (1) distribute, control and monitor the flow of electrical energy and (2) provide protection to motors, transformers and other electrically powered equipment.
+Added: We are headquartered in Houston, Texas, and our major subsidiaries, all of which are wholly owned, include Powell Electrical Systems, Inc.;
Powell (UK) Limited;
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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 municipal, commercial and other industrial markets.
+Added: These products are designed for application voltages ranging from 480 volts to 38,000 volts.
+Added: We are headquartered in Houston, Texas and serve the oil and gas and petrochemical markets, which include onshore and offshore production, liquefied natural gas (LNG) facilities and terminals, pipelines, refineries and petrochemical plants.
+Added: Additional markets include electric utility, light rail traction power as well as mining and metals, pulp and paper, data centers and other municipal, commercial and industrial markets.
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).
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Powell’s expertise is in the design, engineering, manufacturing, project management and integration of assorted systems into a single, custom-engineered deliverable.
−Removed: 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.
+Added: 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 diverse markets and geographic regions.
Contracts often represent large-scale and complex projects with an individual customer.
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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 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.
+Added: No single customer accounted for more than 10% of our consolidated revenues in Fiscal 2023.
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 commit to incorporating continuous product improvements that will ensure sustained operational safety and reliability across the markets we serve.
+Added: Our expertise in vacuum circuit breaker engineering is internationally recognized, and we are committed to incorporating continuous product improvements that will ensure sustained operational safety and reliability across the markets we serve.
We strive to be the supplier of choice for custom-engineered system solutions and services to a broad array of customers and markets.
−Removed: 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.
+Added: Demand for our products and services is driven predominantly by the oil and gas, petrochemical and electric utility industries, but we also serve other commercial and industrial 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, we serve the upstream, midstream and downstream end markets.
+Added: In the oil, gas and petrochemical markets, we serve the upstream, midstream and downstream end markets.
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: The North American market is responding to increased international demand for LNG and gas-to-chemical processes utilizing low-cost gas feedstocks.
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.
+Added: One element of our strategic focus is to strengthen our project portfolio beyond our core oil, gas and petrochemical markets.
+Added: Diversification efforts outside of our core oil, gas and petrochemical markets have resulted in an increase in backlog across the utility and commercial and other industrial markets.
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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Our backlog will be recognized as revenue as we complete the remaining performance obligations.
−Removed: Our backlog does not include service and maintenance type contracts for which we have the rights to invoice as services are performed.
+Added: Our backlog does not include service and maintenance-type contracts for which we have the right to invoice as services are performed.
Typically, our contracts may have an early termination for convenience clause at the discretion of our customers;
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Our methodology for determining backlog may not be comparable to the methodology used by other companies.
−Removed: Our backlog at September 30, 2022 totaled $592.2 million compared to $414.9 million at September 30, 2021.
+Added: Our backlog at September 30, 2023 totaled $1.3 billion compared to $592.2 million at September 30, 2022.
+Added: The increase in our backlog is across all of our end markets, and particularly driven by our core oil, gas and petrochemical markets.
We anticipate that approximately $648 million of Fiscal 2023 ending backlog will be fulfilled during our fiscal year ending September 30, 2024.
−Removed: Backlog may not be indicative of future operating results as orders in our backlog may be cancelled or modified by our customers and may not be indicative of continuing revenue performance over future fiscal quarters.
+Added: Backlog may not be indicative of future operating results as orders may be cancelled or modified by our customers and may not be indicative of continuing revenue performance over future fiscal quarters.
Raw Materials
−Removed: The principal raw materials used in our operations include steel, copper and aluminum and various electrical components.
+Added: The principal raw materials used in our operations include steel, copper and aluminum, as well as various engineered electrical components.
Material costs represented 49% of revenues in Fiscal 2023, 51% of revenues in Fiscal 2022, and 49% of revenues in Fiscal 2021.
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: The equipment and materials that we use in our business are subject to availability and price fluctuations due to customer demand, producer capacity and market conditions.
+Added: Uncertainty and demand disruptions have, in the past, resulted in considerable volatility across commodity markets.
+Added: We have experienced supply chain disruptions driven predominately by availability and cost volatility across our raw materials, engineered components and labor force.
+Added: As our procurement function seeks to address specific supply chain challenges, we continue working with our suppliers of key components and commodities to meet our customer commitments.
+Added: While we have experienced, and may continue to experience, issues related to increased lead times for the purchase and delivery 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.
+Added: Additionally, we have adjusted our product pricing with our customers in response to the increased cost environment which has made a positive impact on our gross margins in Fiscal 2023.
+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.
Our supply base for certain key components and raw materials is limited.
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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.
−Removed: 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: Our business is subject to the effects of changing material prices.
−Removed: 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.
−Removed: Supply chain disruptions driven by both availability and cost volatility have created project delivery challenges.
−Removed: 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.
−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, hedging and by actively pursuing internal cost reduction efforts.
−Removed: During Fiscal 2022, we entered into a derivative contract to hedge a portion of our exposure to commodity price risk.
−Removed: We did not enter into any derivative contracts to hedge our exposure to commodity price changes in Fiscal 2021 or 2020.
+Added: 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 to our business and results of operations in the future.
Human Capital
−Removed: 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: At September 30, 2023, we had 2,363 full-time employees and 362 contract employees located primarily in the U.S., Canada and the United Kingdom (U.K.).
+Added: Our employees are not represented by unions, and we believe that our relationship with our employees is good.
Periodically, we find it challenging to source qualified personnel in certain geographic areas due to increased construction or economic activity.
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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 approximately one-half the industry average, according to the U.S.
+Added: We establish annual goals and monthly operating metrics, which have resulted in a safety incident rate of 0.7 which is below the industry average, according to the U.S.
Bureau of Labor Statistics.
−Removed: 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.
+Added: We believe that the nine-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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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.