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8-K - FORM 8-K - POWELL INDUSTRIES INC | h69066e8vk.htm |
EX-10.1 - EX-10.1 - POWELL INDUSTRIES INC | h69066exv10w1.htm |
Exhibit 99.1
Press Release | ||||||
FOR IMMEDIATE RELEASE |
||||||
Contacts: | Don R. Madison, CFO | |||||
Powell Industries, Inc. | ||||||
713-947-4422 | ||||||
Ken Dennard / ksdennard@drg-e.com | ||||||
Karen Roan / kcroan@drg-e.com | ||||||
DRG&E / 713-529-6600 |
POWELL INDUSTRIES ANNOUNCES CLOSING
OF POWERCOMM ACQUISITION
OF POWERCOMM ACQUISITION
Conference call at 11:00 a.m. eastern time today
HOUSTON DECEMBER 16, 2009 Powell Industries, Inc. (NASDAQ: POWL), a leading manufacturer of
equipment and systems for the management and control of electrical energy and other critical
processes, today announced the closing of the acquisition of the Canadian business and assets of
PowerComm Inc., effective December 15, 2009. The closing of the acquisition of PowerComms
business and assets operating in Kazakhstan will occur upon obtaining regulatory approval from the
Kazakhstan government, which is expected to be received on or before March 31, 2010. PowerComm is
a leading provider of electrical and instrumentation construction and maintenance services, as well
as a manufacturer of switchgear and related products, primarily serving the oil and gas industry in
western Canada. Closing documentation was signed and delivered pending delivery of funds this
morning. Powell is paying $24.2 million ($25.5 million CAD) in cash with a potential subsequent
payment of up to $7.6 million ($8.0 million CAD) based on earnings performance through March 31,
2010 and assumed certain liabilities including bank debt, accounts payable and obligations under
leases. All funds associated with the Kazakhstan business and assets will be held and released at
the closing of the Kazakhstan transaction.
Patrick L. McDonald, President and Chief Executive Officer, stated, We are excited to have
the PowerComm organization joining Powell and look forward to the opportunities that this provides
us to work together to serve the Canadian market, which has been a long-term objective of Powell.
This acquisition expands the scope and geographic reach of Powells existing
operations as a
leading supplier of engineered products, solutions and services in the electrical power products
business.
The Company expects incremental revenues from this acquisition to range between $62 and $71
million during the first 12 months of ownership. Before transaction costs, it expects the earnings
results to be anti-dilutive during the integration process, which is expected to last approximately
twelve months. Once the integration period is complete, Powell projects an annualized benefit from
the acquisition to EBITDA of approximately $4.8 to $6.7 million. EBITDA is a non-GAAP financial
measure, and a reconciliation of expected EBITDA from this transaction to the most directly
comparable GAAP measure, income before interest, income taxes and minority interest, can be found
at the end of this press release.
OUTLOOK
The following statements are based on the current expectations of the Company. These
statements are forward-looking, and actual results may differ materially as further elaborated in
the last paragraph below.
Don R. Madison, Executive Vice President and Chief Financial Officer, stated, Given the
current uncertainty surrounding the capital spending and project driven environment of our primary
markets, it is difficult to provide guidance with a high level of confidence. Based on our
existing backlog and current business conditions as well as the acquisition of PowerComm, we expect
full year fiscal 2010 revenues to range between $550 million and $600 million and full year fiscal
2010 earnings to range between $1.50 and $2.00 per diluted share. We continue to
maintain a strong balance sheet and expect to continue to generate solid cash flow in fiscal 2010.
We believe we are well positioned to meet the current uncertainties in the marketplace and to take
advantage of opportunities as they arise.
CONFERENCE CALL
Powell Industries has scheduled a conference call for Wednesday, December 16, 2009 at 11:00
a.m. eastern time. To participate in the conference call, dial 480-629-9866 at least 10 minutes
before the call begins and ask for the Powell Industries conference call. A replay of the call
will be available approximately two hours after the live broadcast ends and will be
accessible until December 23, 2009. To access the replay, dial 303-590-3030 using a passcode of
4185563#.
Investors, analysts and the general public will also have the opportunity to listen to the
conference call over the Internet by visiting http://www.powellind.com. To listen to the live call
on the web, please visit the website at least fifteen minutes before the call begins to register,
download and install any necessary audio software. For those who cannot listen to the live
webcast, an archive will be available shortly after the call and will remain available for
approximately 90 days at http://www.powellind.com.
Powell Industries, Inc., headquartered in Houston, designs, manufactures and packages systems
and equipment for the control, distribution and management of electrical energy and other dynamic
processes. Powell provides products and services to large industrial customers such as utilities,
oil and gas producers, refineries, petrochemical plants, pulp and paper producers, mining
operations, commuter railways and other vehicular transportation facilities. For more
information, please visit www.powellind.com.
Non-GAAP Financial Measures
The following table represents a reconciliation of the expected incremental EBITDA to Powell
for a twelve month period, to income before interest, income taxes and minority interest,
anticipated to be derived after the integration by the Company of PowerComms business.
Projected Annualized | ||||||||
EBITDA | ||||||||
Low | High | |||||||
(In millions USD) | Case | Case | ||||||
Income before interest, income taxes and minority interest |
$ | 2.1 | $ | 4.0 | ||||
Depreciation and amortization |
2.7 | 2.7 | ||||||
Expected EBITDA |
$ | 4.8 | $ | 6.7 |
EBITDA represents net income before income taxes, interest expense, depreciation, and amortization.
Other companies may define EBITDA differently. EBITDA should not be considered an alternative to
income from operations, net income or cash flows.
Any forward-looking statements in the preceding paragraphs of this release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are
cautioned that such forward-looking statements involve risks and uncertainties in that actual
results may differ materially from those projected in the forward-looking statements. In the
course of operations, we are subject to certain risk factors, competition and competitive
pressures, sensitivity to general economic and industrial conditions, international political and
economic risks, availability and price of raw materials and execution of business strategy, and in
connection with this transaction, we are subject to certain specific risks such as our ability to
successfully integrate the operations of the newly-acquired business into our current operations,
the performance of the newly-acquired operations going forward and acquisition approval of the
Kazakhstan interest by the Kazakhstan government. For further information, please refer to the
Companys filings with the Securities and Exchange Commission, copies of which are available from
the Company without charge.
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