Powell Industries gets a charge out of making equipment and computer systems that monitor and control the flow of electricity in industrial, commercial, and government facilities. Products include switchgears (units that manage the flow of electricity to motors, transformers, and other equipment); bus ducts (insulated power conductors housed in a metal enclosure); process control systems for instrumentation, computer control, and communications; and data management systems. Powell sells to oil and gas producers and pipelines, refineries, utilities, paper mills, petrochemical plants, and transportation companies, among other customers. More than three-quarters of sales come from the US.
Powell sees its business as cyclical and in doing so it prepares for the ebb in demand that marks a downturn as customers delay projects. Based on results the company is experiencing the down cycle with revenue down from 2009 and reporting a loss in 2011 after a drop in net income in 2010. The company's backlog began dropping in 2009 but has grown to levels not seen since 2007 and providing a good sign for the company's future results.
While Powell's electrical power products account for most of the company's revenue, its Transdyn subsidiary steadily continues to deliver information management and process control systems for some of the world's most visible transportation facilities. Powell has supplied the Port Authority of New York and New Jersey with information systems for LaGuardia Airport, Newark Airport, the Trans Hudson Underground Commuter Railway, and the Lincoln and Holland Tunnels. Other projects that use Transdyn's systems include the Senate Subway Automatic Vehicle Operation System (for the Architect of the Capitol), the Cross Israel Highway Electronic Toll and Traffic Management System (for Raytheon), and the Boston Central Artery/Tunnel (better known as the Big Dig, for the Massachusetts Department of Transportation). Its systems are also used in water, wastewater, power and gas distribution, and industrial facilities.
Late in 2009 Powell acquired the Canadian business and assets of PowerComm, a company which manufactures custom-built electrical equipment and provides construction and maintenance services primarily for oil and gas facilities in western Canada. The purchase cost Powell about $24 million in cash, plus assumption of debt, with another possible $8 million payout based on performance. The acquisition will also include PowerComm's Kazakhstan business. The acquisition bolsters Powell's electrical power products business, and expands the company's geographic presence in western Canada and Eastern Europe.
Thomas Powell, son of the founder, owns about 23% of Powell Industries. – less