##### Table of Contents



SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)o

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year
    ended          .ORþ

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
    November 1, 2005 to September 30,
    2006.   Commission File Number
    001-12488
 Powell Industries,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

88-0106100(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)8550 Mosley Drive,
    Houston, Texas(Address of principal
    executive offices)

77075-1180(Zip Code)   Registrants telephone number, including area code:
 (713) 944-6900
  Securities registered pursuant to section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of
    Act:
  Common Stock, par value $.01 per share
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2). o þ
        Documents
    Incorporated By Reference
  Form 10-K.




---



##### 



POWELL
    INDUSTRIES, INC.
    TABLE OF CONTENTS
  PageCautionary
    Statement Regarding Forward-Looking Statements; Risk
    Factors


2PART IItem 1.


Business


3Item 1A.


Risk
    Factors


7Item 1B.


Unresolved Staff
    Comments


11Item 2.


Properties


11Item 3.


Legal
    Proceedings


11Item 4.


Submission of
    Matters to a Vote of Security Holders


12PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


12Item 6.


Selected Financial
    Data


13Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


14Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


24Item 8.


Financial
    Statements and Supplementary Data


25Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


58Item 9A.


Controls and
    Procedures


58Item 9B.


Other
    Information


58PART IIIItem 10.


Directors and
    Executive Officers of the Registrant


59Item 11.


Executive
    Compensation


59Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


59Item 13.


Certain
    Relationships and Related Transactions


59Item 14.


Principal
    Accountant Fees and Services


59PART IVItem 15.


Exhibits and
    Financial Statement Schedules


59Signatures


62Fourth Amendment to Credit AgreementSubsidiaries of the CompanyConsent of PricewaterhouseCoopers, LLPCertification of CEO Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)Certification of CEO Pursuant to Section 1350Certification of CFO Pursuant to Section 1350   1




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##### Table of Contents



CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS;
    RISK FACTORS  Forward-Looking
    Statements
  Form 10-K
   2




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##### Table of Contents



PART I  Item 1.
    Business  Overview
      www.powellind.com Form 10-K, Form 10-Q, Form 8-K,
      ® ® ®
   3




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##### Table of Contents



Electrical
    Power Products
  engineered-to-order
  ®
    engineered-to-order
  Customers
    and Markets
     4




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##### Table of Contents



Competition
  engineered-to-order
  Backlog
  ®
  Raw
    Materials and Suppliers
      Inflation
   5




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##### Table of Contents



Employees
    Research
    and Development
    Intellectual
    Property
    Process
    Control Systems
    Customers
    and Markets
  and/or
    Competition
     6




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##### Table of Contents



Backlog
    Employees
    Research
    and Development
    Intellectual
    Property
   Item 1A.Risk
    Factors    Our
    industry is highly competitive
    An
    economic downturn may lead to lower demand for our
    services
   7




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##### Table of Contents



International
    and political events may adversely affect our
    operations
    
    political and economic instability;
    social unrest, acts of terrorism, force majeure, war or other
    armed conflict;
    inflation;
    currency fluctuations, devaluations and conversion restrictions;
    governmental activities that limit or disrupt markets, restrict
    payments or limit the movement of funds; and
    trade restrictions and economic embargoes imposed by the United
    States or other countries.  Fluctuations
    in the price and supply of raw materials used to manufacture our
    products may reduce our profits
    Our
    dependence upon fixed-price contracts could result in reduced
    profits, or in some cases, losses, if costs increase above our
    estimates
    Our
    acquisition strategy involves a number of risks
    
    difficulties in the integration of operations and systems;
    the termination of relationships by key personnel and customers
    of the acquired company;
    a failure to add additional employees to handle the increased
    volume of business;
    additional financial and accounting challenges and complexities
    in areas such as tax planning, treasury management and financial
    reporting;
    risks and liabilities from our acquisitions, some of which may
    not be discovered during our due diligence;
    a disruption of our ongoing business or an inability of our
    ongoing business to receive sufficient management
    attention; and
    a failure to realize the cost savings or other financial
    benefits we anticipated. 8




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##### Table of Contents



Our
    use of
    percentage-of-completion
    accounting could result in a reduction or elimination of
    previously reported profits
  percentage-of-completion percentage-of-completion
  We may
    not be able to fully realize the revenue value reported in our
    backlog
    Our
    operating results may vary significantly from quarter to
    quarter
    
    changes in estimated costs or revenues under fixed price
    contracts;
    the timing and volume of work under new agreements;
    general economic conditions;
    the spending patterns of customers;
    variations in the margins of projects performed during any
    particular quarter;
    losses experienced in our operations not otherwise covered by
    insurance;
    a change in the demand or production of our products and our
    services caused by severe weather conditions;
    a change in the mix of our customers, contracts and business;
    increases in design and manufacturing costs;
    the ability of customers to pay their invoices owed to
    us; and
    disagreements with customers related to project performance on
    delivery.   9




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##### Table of Contents



We may
    be unsuccessful at generating internal growth
    
    attract new customers;
    increase the number or size of projects performed for existing
    customers;
    hire and retain employees; and
    increase volume utilizing our existing facilities.    The
    departure of key personnel could disrupt our
    business
    Our
    business requires skilled labor, and we may be unable to attract
    and retain qualified employees
    Unforeseen
    difficulties with the implementation or operation of our
    enterprise resource planning system could adversely affect our
    internal controls and our business
    Failure
    to successfully comply with Section 404 of the
    Sarbanes-Oxley Act of 2002 on a timely basis could seriously
    harm our business
    Actual
    and potential claims, lawsuits and proceedings could ultimately
    reduce our profitability and liquidity and weaken our financial
    condition
   10




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##### Table of Contents



Technological
    innovations by competitors may make existing products and
    production methods obsolete
   Item 1B.Unresolved
    Staff Comments    Item 2.
    Properties      Number





Approximate Square FootageLocation

of Facilities


Acres


Owned


LeasedElectrical Power
    Products:Houston, TX


3



78.1



430,600



138,600North Canton, OH


1



8.0



72,000



Northlake, IL


1



10.0



103,500



Bradford, United Kingdom


1



7.9



129,200



Process Control
    Systems:Pleasanton, CA


1











39,100Duluth, GA


1











29,700   ® ®
  month-to-month
  Item 3.
    Legal
    Proceedings   11




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders    PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Price
    Range of Common Stock
    High


LowFiscal Year 2005:First Quarter

$
18.93


$
15.95Second Quarter


19.67



16.84Third Quarter


23.80



17.03Fourth Quarter


23.98



19.28Fiscal Year 2006:First Quarter

$
23.64


$
17.57Second Quarter


27.72



20.75Third Quarter


25.94



21.28Fourth Quarter


24.00



18.42       Dividend
    Policy
   12




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K.
  ® ®
      11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004


2003


2002(In thousands, except per share data)Statements of
    Operations:Revenues

$
374,547


$
256,645


$
206,142


$
253,381


$
306,403Cost of goods sold


303,304



212,785



170,165



204,585



238,883Gross profit


71,243



43,860



35,977



48,796



67,520Selling, general and
    administrative expenses


55,345



41,846



35,357



35,339



39,031Gain on sale of land and building






(1,052
)










Income before interest, income
    taxes, minority interest, and cumulative effect of change in
    accounting principle


15,898



3,066



620



13,457



28,489Interest expense (income), net


698



(386
)


(744
)


(175
)


210Income tax provision (benefit)


5,383



1,138



(282
)


6,137



10,481Minority interest


(3
)


63



(23
)






Income from continuing operations
    before cumulative effect of change in accounting principle


9,820



2,251



1,669



7,495



17,798Cumulative effect of change in
    accounting principle, net of tax














(510
)


Net income

$
9,820


$
2,251


$
1,669


$
6,985


$
17,798Basic earnings per share

$
0.90


$
0.21


$
0.16


$
0.66


$
1.69Diluted earnings per share

$
0.89


$
0.21


$
0.15


$
0.65


$
1.66   13




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##### Table of Contents



As ofSeptember 30,


As of October 31,2006


2005


2004


2003


2002(In thousands)Balance Sheet Data:Cash and cash equivalents

$
10,495


$
24,844


$
8,974


$
11,863


$
9,362Marketable securities






8,200



54,208



30,452



5,000Property, plant and equipment, net


60,336



55,678



45,041



43,998



45,020Total assets


292,124



226,659



196,079



190,478



189,708Long-term debt and capital lease
    obligations, including current maturities


42,396



21,531



7,100



7,359



12,010Total stockholders equity


158,762



144,414



139,835



136,364



128,100Total liabilities and
    stockholders equity

$
292,124


$
226,659


$
196,079


$
190,478


$
189,708   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K.
  Overview
    ® ® 15-year ® ®
   14




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##### Table of Contents



Results
    of Operations
  Eleven
    Months Ended September 30, 2006 (Fiscal 2006)
    Compared to Twelve Months Ended October 31, 2005
    (Fiscal 2005)
  Revenue
    and Gross Profit
  ®
  Electrical
    Power Products
  ®
  start-up
  Process
    Control Systems
     15




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##### Table of Contents



Consolidated
    Selling, General and Administrative Expenses
  ®
  Interest
    Income and Expense
      Provision
    for Income Taxes
        Net
    Income
   16




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##### Table of Contents



Backlog
  ®
  Year
    ended October 31, 2005 Compared to Year Ended
    October 31, 2004
  Revenue
    and Gross Profit
    Electrical
    Power Products
      Process
    Control Systems
       17




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##### Table of Contents



Consolidated
    Selling, General and Administrative Expenses
    Interest
    Income and Expense
      Provision
    for Income Taxes
              Net
    Income
    Backlog
   18




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##### Table of Contents



Liquidity
    and Capital Resources
      Operating
    Activities
    Investing
    Activities
  ®
      Financing
    Activities
   19




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##### Table of Contents



Contractual
    Obligations
    Long-Term


Capital


OperatingAs of September 30, 2006,

Debt


Lease


LeasePayments Due by Period:

Obligations


Obligations


Obligations


TotalLess than 1 year

$
9,693


$
53


$
2,229


$
11,9751 to 3 years


19,203



66



2,072



21,3413 to 5 years


17,038







1,051



18,089More than 5 years


5,398







762



6,160Total long-term contractual
    obligations

$
51,332


$
119


$
6,114


$
57,565   Other
    Commercial Commitments
    As of September 30, 2006

Letters ofPayments Due by Period:

CreditLess than 1 year

$
9,1211 to 3 years


4,4683 to 5 years


More than 5 years


Total long-term commercial
    obligations

$
13,589     Outlook
    for Fiscal 2007
    ®
 20




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##### Table of Contents



Effects
    of Inflation
      Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
  percentage-of-completion 81-1, Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts (SOP 81-1).
  percentage-of-completion percentage-of-completion
 21




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##### Table of Contents



Revenue Recognition, Revised and Updated.
  Allowance
    for Doubtful Accounts
    Impairment
    of Long-Lived Assets
    Intangible
    Assets
  Goodwill and Other
    Intangible Assets.
  Accruals
    for Contingent Liabilities
    Accounting
    for Income Taxes
   22




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##### Table of Contents



Foreign
    Currency Translation
  Foreign Currency Translation.
  Hedging
    Activities
  Accounting for Derivative
    Instruments and Hedging Activities,
  New
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes Accounting for Income
    Taxes.
  Considering the Effects of Prior Year Misstatements
    when Quantifying Current Year Misstatements
  Fair Value Measurements,
 23




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##### Table of Contents



Employers Accounting for Defined Benefit Pension
    and Other Postretirement Benefits, an Amendment of
    SFAS No. 87, 88, 106 and 123R.
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
    Foreign
    Currency Transaction Risk
      Commodity
    Price Risk
  contract-by-contract
 24




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Index to Consolidated Financial Statements

PageFinancial Statements:Report of
    Independent Registered Public Accounting Firm


26Consolidated
    Balance Sheets as of September 30, 2006 and
    October 31, 2005


28Consolidated
    Statements of Operations for the 11 Months Ended
    September 30, 2006 and Years Ended October 31, 2005
    and 2004


29Consolidated
    Statements of Stockholders Equity for the 11 Months Ended
    September 30, 2006 and Years Ended October 31, 2005
    and 2004


30Consolidated
    Statements of Cash Flows for the 11 Months Ended
    September 30, 2006 and Years Ended October 31, 2005
    and 2004


31Notes to
    Consolidated Financial Statements


32  25




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      Consolidated
    financial statements
    Internal
    control over financial reporting
  Internal Control  Integrated Framework Internal Control 
    Integrated Framework
   26




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##### Table of Contents



® ® ®
  
    27




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 (In thousands, except share and per share data)
  September 30,


October 31,2006


2005ASSETSCurrent Assets:Cash and cash equivalents

$
10,495


$
24,844Marketable securities






8,200Accounts receivable, less
    allowance for doubtful accounts of $1,044 and $567, respectively


108,002



65,385Costs and estimated earnings in
    excess of billings on uncompleted contracts


43,067



35,328Inventories, net


28,940



21,616Income taxes receivable


44



507Deferred income taxes






1,836Prepaid expenses and other current
    assets


2,398



4,461Total Current Assets


192,946



162,177Property, plant and equipment, net


60,336



55,678Goodwill


1,084



203Intangible assets, net


32,263



3,505Other assets


5,495



5,096Total Assets

$
292,124


$
226,659LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent Liabilities:Current maturities of long-term
    debt and capital lease obligations

$
8,510


$
2,095Income taxes payable


156



1,185Accounts payable


44,377



22,104Accrued salaries, bonuses and
    commissions


13,183



9,820Billings in excess of costs and
    estimated earnings on uncompleted contracts


16,752



15,742Accrued product warranty


3,443



1,836Other accrued expenses


9,806



5,957Total Current Liabilities


96,227



58,739Long-term debt and capital lease
    obligations, net of current maturities


33,886



19,436Deferred compensation


1,735



1,918Other liabilities


1,236



1,871Total Liabilities


133,084



81,964Commitments and Contingencies
    (Note K)Minority Interest


278



281Stockholders Equity:Preferred stock, par value $.01;
    5,000,000 shares authorized; none issued






Common stock, par value $.01;
    30,000,000 shares authorized; 11,001,733 and
    11,001,733 shares issued, respectively; 10,924,046 and
    10,849,278 shares outstanding, respectively


110



110Additional paid-in capital


12,776



10,252Retained earnings


146,490



136,670Treasury stock, 77,687 and
    152,455 shares respectively, at cost


(525
)


(1,417
)Accumulated other comprehensive
    income (loss)


817



(11
)Deferred compensation


(906
)


(1,190
)Total Stockholders Equity


158,762



144,414Total Liabilities and
    Stockholders Equity

$
292,124


$
226,659    28




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
  11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Revenues

$
374,547


$
256,645


$
206,142Cost of goods sold


303,304



212,785



170,165Gross profit


71,243



43,860



35,977Selling, general and
    administrative expenses


55,345



41,846



35,357Gain on sale of land and building






(1,052
)


Income before interest, income
    taxes and minority interest


15,898



3,066



620Interest expense


1,625



721



136Interest income


(927
)


(1,107
)


(880
)Income before income taxes and
    minority interest


15,200



3,452



1,364Income tax provision (benefit)


5,383



1,138



(282
)Minority interest in net income
    (loss)


(3
)


63



(23
)Net income

$
9,820


$
2,251


$
1,669Net earnings per common share:Basic

$
0.90


$
0.21


$
0.16Diluted

$
0.89


$
0.21


$
0.15Weighted average shares:Basic


10,876



10,779



10,688Diluted


11,089



10,928



10,774    29




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 (In thousands)
  Accumu-latedOtherOther

















Compre-Compre -








Additional








hensive


Deferredhensive


Common Stock


Paid-In


Retained


Treasury


Income


Compen-Income


Shares


Amount


Capital


Earnings


Stock


(Loss)


sation


TotalBalance, October 31, 2003






10,994


$
110


$
8,961


$
132,750


$
(3,312
)

$
(118
)

$
(2,027
)

$
136,364Net income

$
1,669















1,669















1,669Foreign currency translation
    adjustments


17























17







17Change in value of marketable
    securities, net of $85 income taxes


155























155







155Amortization of deferred
    compensation-ESOP






























297



297Exercise of stock options














240







798











1,038Income tax benefit from stock
    options exercised














157



















157Amortization of restricted stock






























63



63Issuance of stock






6







75



















75Comprehensive Income

$
1,841Balance, October 31, 2004






11,000



110



9,433



134,419



(2,514
)


54



(1,667
)


139,835Net income

$
2,251















2,251















2,251Foreign currency translation
    adjustments


5























5







5Change in value of marketable
    securities, net of $9 income taxes


(26
)






















(26
)






(26
)Unrealized loss on fair value hedge


(44
)






















(44
)






(44
)Amortization of deferred
    compensation-ESOP






























317



317Exercise of stock options














433







1,097











1,530Income tax benefit from stock
    options exercised














354



















354Amortization of restricted stock






























160



160Issuance of stock






2







32



















32Comprehensive Income

$
2,186Balance, October 31, 2005

$
9,820



11,002



110



10,252



136,670



(1,417
)


(11
)


(1,190
)


144,414Net income


















9,820















9,820Foreign currency translation
    adjustments


784























784







784Realized loss on fair value hedge


44























44







44Amortization of deferred
    compensation-ESOP






























311



311Exercise of stock options














297







636











933Stock-based compensation














1,989



















1,989Income tax benefit from stock
    options exercised














204



















204Amortization of restricted stock














138















102



240Deferred compensation 
    restricted stock














(119
)














119



Issuance of restricted stock














15







256







(248
)


23Comprehensive Income

$
10,648Balance, September 30, 2006






11,002


$
110


$
12,776


$
146,490


$
(525
)

$
817


$
(906
)

$
158,762    30




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In thousands)
  11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Operating Activities:Net income

$
9,820


$
2,251


$
1,669Adjustments to reconcile net income
    to net cash provided by (used in) operating activities:Depreciation


5,188



4,623



4,310Amortization


1,310



643



159Amortization of unearned restricted
    stock


240



159



64Minority interest earnings (loss)


(3
)


63



(23
)Gain on disposition of assets


(20
)


(935
)


(184
)Loss on impairment of assets










535Net realized gain on sale of
    available-for-sale
    securities






(28
)


Stock-based compensation


1,989







Bad debt expense


477



9



498Deferred income taxes


(233
)


(207
)


(1,718
)Tax benefit from exercise of stock
    options






353



156Changes in operating assets and
    liabilities:Accounts receivable, net


(42,278
)


(17,979
)


2,122Costs and estimated earnings in
    excess of billings on uncompleted contracts


(7,514
)


(10,998
)


12,353Inventories


(7,116
)


(2,525
)


2,193Prepaid expenses and other current
    assets


1,962



(37
)


(728
)Other assets


1,093



(137
)


72Accounts payable and income taxes
    payable


20,888



1,722



(860
)Accrued liabilities


8,699



2,173



1,663Billings in excess of costs and
    estimated earnings on uncompleted contracts


898



(877
)


1,958Deferred compensation


152



506



491Other liabilities


(207
)


32



178Net cash provided by (used in)
    operating activities


(4,655
)


(21,189
)


24,908Investing Activities:Proceeds from sale of fixed assets


817



879



1,766Proceeds from maturities and sales
    of
    available-for-sale
    securities






3,817



2,773Purchases of property, plant and
    equipment


(8,435
)


(6,108
)


(6,472
)Purchase of additional interest in
    consolidated subsidiary










(66
)Proceeds from sale of short-term
    auction rate securities


8,200



48,569



31,225Purchases of short-term auction
    rate securities






(6,350
)


(56,585
)Purchases of marketable securities










(1,018
)S&I acquisition






(19,167
)


Louisiana acquisition


(1,524
)






Power/Vac acquisition


(9,745
)






Net cash provided by (used in)
    investing activities


(10,687
)


21,640



(28,377
)Financing Activities:Borrowings on US revolving line of
    credit


7,746



9,579



516Payments on US revolving line of
    credit


(4,746
)


(9,579
)


(516
)Borrowings on UK revolving line of
    credit






4,260



Payments on UK revolving line of
    credit


(2,037
)






Borrowings on UK term loan






10,598



Payments on UK term loan


(1,669
)






Payments on capital lease
    obligations


(82
)


(474
)


(458
)Proceeds from short-term financing


944







Payments on short-term financing


(320
)






Debt issuance costs


(75
)


(501
)


Proceeds from exercise of stock
    options


778



1,530



1,038Tax benefit from exercise of stock
    options


204







Net cash provided by financing
    activities


743



15,413



580Net increase (decrease) in cash and
    cash equivalents


(14,599
)


15,864



(2,889
)Effect of exchange rate changes on
    cash and cash equivalents


250



6



Cash and cash equivalents at
    beginning of year


24,844



8,974



11,863Cash and cash equivalents at end of
    year

$
10,495


$
24,844


$
8,974    31




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  A.
    Business
    and Organization        ® ®
      B.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
   32




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash
    and Cash Equivalents
    Supplemental
    Disclosures of Cash Flow Information (in
    thousands):
  11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Cash paid (received) during the
    period for:Interest

$
2,113


$
567


$
134Income taxes


4,395



(267
)


1,930Non-cash investing and financing
    activities:Change in fair value of marketable
    securities, net of $0, $9 and $85 income taxes, respectively






26



207Assets acquired under capital
    lease obligations










200Accrued property, plant and
    equipment additions






156



Note receivable from sale of
    property






1,350



Deferred acquisition payable


20,273







   Marketable
    Securities
  available-for-sale.
  Fair
    Value of Financial Instruments
      Accounts
    Receivable and Market Risk
   33




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Costs
    and Estimated Earnings in Excess of Billings on Uncompleted
    Contracts
  percentage-of-completion
      Inventories
  first-in,
  Property,
    Plant and Equipment
    Impairment
    of Long-Lived Assets
    Intangible
    Assets
  Goodwill and Other
    Intangible Assets.
 34




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Income
    Taxes
    Revenue
    Recognition
  percentage-of-completion 81-1, Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts (SOP 81-1).
  percentage-of-completion percentage-of-completion
  Revenue Recognition, Revised and Updated.
  Warranties
   35




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Research
    and Development Expense
    Foreign
    Currency Translation
  Foreign
    Currency Translation.
  Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-Based Compensation,
       36




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Years Ended October 31,2005


2004Net income as reported

$
2,251


$
1,669Less: Stock option compensation
    expense, net of taxes


(792
)


(802
)Net income, pro forma

$
1,459


$
867Basic earnings per share:As reported

$
0.21


$
0.16Pro forma

$
0.14


$
0.08Diluted earnings per share:As reported

$
0.21


$
0.15Pro forma

$
0.13


$
0.08   Hedging
    Activities
  Accounting for Derivative
    Instruments and Hedging Activities,
  Accumulated
    Other Comprehensive Income (Loss)
  available-for-sale
  available-for-sale
  October 31,2005Unrealized holding gains arising
    during period

$
2Less: Reclassification adjustment
    for gains included in net income


(28
)Net unrealized gains on marketable
    securities

$
(26
)  37




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  New
    Accounting Standards
  Accounting for Uncertainty in Income Taxes Accounting for Income
    Taxes.
  Considering the Effects of Prior Year Misstatements
    when Quantifying Current Year Misstatements
  Fair Value Measurements,
  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Benefits, an Amendment of FASB
    Statements No. 87, 88, 106 and 123R.
  C.
    Stock-Based
    Compensation     38




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       39




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    RemainingWeightedWeighted


Average


AggregateAverage


Contractual


IntrinsicStock


Exercise


Term


ValueOptions


Price


(Years)


(In thousands)Outstanding at October 31,
    2003


986,763


$
15.06Granted


27,000



16.38Exercised


(82,986
)


12.47Forfeited


(103,384
)


15.91Outstanding at October 31,
    2004


827,393



15.26Granted


275,000



18.42Exercised


(116,503
)


13.28Forfeited


(77,200
)


16.50Outstanding at October 31,
    2005


908,690



16.37Granted






Exercised


(66,400
)


14.05Forfeited


(109,520
)


11.06Outstanding at September 30,
    2006


732,770



17.37



4.44


$
3,207Exercisable at September 30,
    2006


540,290



17.32



3.97


$
2,373     Outstanding


ExercisableWeighted


Weighted





WeightedNumber


Average


Average


Number


AverageRange of


Outstanding at


Remaining


Exercise


Exercisable at


ExerciseExercise Prices


09/30/06


Contractual Life


Price


09/30/06


Price$
8.44 - $ 8.50



2,000



1.4


$
8.44



2,000


$
8.4413.06 - 15.10



212,883



4.4



15.09



161,403



15.0916.30 - 18.44



493,887



4.5



18.07



354,887



17.9823.48 - 27.10



24,000



3.1



23.91



22,000



23.92Total Options



732,770



4.4



17.37



540,290



17.32     D.
    Acquisitions  General
    Electric Companys Medium Voltage Switchgear and Circuit
    Breakers
    (Power/Vac®)
   40




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ®
        EstimatedAmount


LifeSupply agreement

$
17,570


15 yearsUnpatented technology


5,300


6 yearsNon-compete agreement


4,010


5 yearsTrademark


2,650


15 yearsEquipment, tools and dies


400


5 to 7 yearsGoodwill (tax deductible)


88


Total purchase price

$
30,018     Switchgear &
    Instrumentation Limited (S&I)
   41




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  engineered-to-order
    EstimatedAmount


LifeAccounts receivable

$
4,730


N/ACosts and estimated earnings in
    excess of billings


4,492


N/AInventories


3,745


N/APrepaid expenses and other current
    assets


379


N/AProperty, plant and equipment


9,542


3 to 25 yearsUnpatented technology


2,175


7 yearsTradenames


1,025


10 yearsBacklog


646


6 monthsAccounts payable


(5,793
)

N/ABillings in excess of costs and
    estimated earnings


(1,440
)

N/AOther accrued expenses


(334
)

N/ATotal purchase price

$
19,167     Pro
    Forma Results for
    Power/Vac®
    and S&I Acquisitions (Unaudited)
  ®
  11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Revenues

$
444,381


$
372,572


$
287,143Net income

$
11,720


$
1,770


$
4,133Net earnings per common share:Basic

$
1.08


$
0.16


$
0.39Diluted

$
1.06


$
0.16


$
0.38  42




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  ®
  Power/Vac®
    2006 and 2005
            S&I
    2005 and 2004
  1)
    Impact of additional interest expense related to the portion of
    the purchase price financed with the UK Term Loan and lower
    interest income as a result of the sale of
    available-for-sale
    securities used to fund the remainder of the purchase price;2)
    Elimination of the operating results of certain businesses of
    S&I which were not acquired;3)
    Elimination of lease expense and recording of additional
    depreciation expense related to assets which were previously
    leased from S&Is previous parent;4)
    Impact of amortization expense related to intangible
    assets; and5)
    Adjustment to the income tax provision to reflect the statutory
    rate in the United Kingdom.    percentage-of-completion percentage-of-completion SOP 81-1, Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts.
  Louisiana
    Acquisition
   43




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  E.
    Earnings
    Per Share    11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Numerator:Net income

$
9,820


$
2,251


$
1,669Denominator:Denominator for basic earnings per
    share-weighted average shares


10,876



10,779



10,688Dilutive effect of stock options
    and restricted stock


213



149



86Denominator for diluted earnings
    per share-adjusted weighted average shares with assumed
    conversions


11,089



10,928



10,774Net earnings per
    share:Basic

$
0.90


$
0.21


$
0.16Diluted

$
0.89


$
0.21


$
0.15     F.
    Detail of
    Selected Balance Sheet Accounts  Allowance
    for Doubtful Accounts
    September 30,


October 31,2006


2005Balance at beginning of period

$
567


$
617Adjustments to the allowance


468



9Deductions for uncollectible
    accounts written off, net of recoveries


6



(59
)Increase due to foreign currency
    translation


3



Balance at end of period

$
1,044


$
567   Warranty
    Accrual
    September 30,


October 31,2006


2005Balance at beginning of period

$
1,836


$
1,545Adjustments to the accrual


3,787



1,787Deductions for warranty charges


(2,223
)


(1,496
)Increase due to foreign currency
    translation


43



Balance at end of period

$
3,443


$
1,836  44




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Inventories
    September 30,


October 31,2006


2005Raw materials, parts and
    subassemblies

$
18,772


$
12,794Work-in-progress


10,168



8,822Total inventories

$
28,940


$
21,616   Cost
    and Estimated Earnings on Uncompleted Contracts
    September 30,


October 31,2006


2005Costs incurred on uncompleted
    contracts

$
300,247


$
293,741Estimated earnings


64,964



55,360365,211



349,101Less: Billings to date


338,896



329,515$
26,315


$
19,586Included in the accompanying
    balance sheets under the following captions:Costs and estimated earnings in
    excess of billings on uncompleted contracts

$
43,067


$
35,328Billings in excess of costs and
    estimated earnings on uncompleted contracts


(16,752
)


(15,742
)$
26,315


$
19,586   Property,
    Plant and Equipment
    September 30,


October 31,


Range of2006


2005


Asset LivesLand

$
7,716


$
7,559


Buildings and improvements


43,383



43,189


3-39 YearsMachinery and equipment


36,996



34,946


3-15 YearsFurniture and fixtures


2,385



2,135


3-10 YearsConstruction in process


9,672



2,980


100,152



90,809Less: Accumulated depreciation


(39,816
)


(35,131
)Total property, plant and
    equipment, net

$
60,336


$
55,678    45




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    G.
    Employee
    Benefit Plans  401(k)
    Plan
    Employee
    Stock Ownership Plan
    Retiree
    Medical Plan
     46




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    11 MonthsEnded


Years EndedSeptember 30,


October 31,2006


2005


2004Components of net periodic
    postretirement benefit expense:Service cost

$
42


$
75


$
75Interest cost


39



69



73Prior service cost


97



106



108Net gain recognized


(75
)


(33
)


(26
)Net periodic postretirement
    benefit expense

$
103


$
217


$
230Funded Status:Retirees

$
26


$
88


$
94Fully eligible active participants


285



277



507Other actual participants


521



447



754Accumulated postretirement benefit
    obligation


832



812



1,355Less unrecognized balances:Prior service cost


619



716



822Net actuarial gain


(933
)


(977
)


(544
)Net amount recognized

$
1,146


$
1,073


$
1,077Changes in accumulated
    postretirement benefit obligation:Balance at beginning of year

$
812


$
1,355


$
1,723Service cost


42



75



75Interest cost


39



69



73Actuarial gain


(30
)


(661
)


(316
)Curtailment gain










(150
)Benefits paid


(31
)


(26
)


(50
)Balance at end of year

$
832


$
812


$
1,355Fair value of plan assets

$



$



$
Weighted average assumptions:Discount rate


5.7
%


5.5
%


5.8
%    47




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ExpectedBenefitYear Ending September 30,

Payments2007

$
442008


572009


672010


832011


942012 through 2016


467   Employers Accounting for Postretirement Benefits Other
    Than Pensions,
  H.
    Long-Term
    Debt    September 30,


October 31,2006


2005US Revolver

$
3,000


$
UK Revolver


2,434



4,259UK Term Loan


9,550



10,646Deferred acquisition payable


20,273



Industrial development revenue
    bonds


6,400



6,400Capital lease obligations


115



168Other borrowings


624



58Subtotal long-term debt and
    capital lease obligations


42,396



21,531Less current portion


(8,510
)


(2,095
)Total long-term debt and capital
    lease obligations

$
33,886


$
19,436     Long-TermDebt


CapitalYear Ending September 30,

Maturities


Leases


Total2007

$
8,460


$
50


$
8,5102008


8,210



52



8,2622009


7,867



13



7,8802010


9,948







9,9482011


3,396







3,396Thereafter


4,400







4,400Total long-term debt maturities

$
42,281


$
115


$
42,396  48




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  US and
    UK Revolvers
  ®
      UK
    Term Loan
    Deferred
    Acquisition Payable
  ®
 49




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Tax
    Exempt Industrial Development Revenue Bonds
      Capital
    Leases and Other
    I.
    Income
    Taxes    September 30,


October 31,2006


2005Current deferred income taxes:Gross assets

$
4,044


$
3,931Gross liabilities


(4,374
)


(2,095
)Net current deferred income tax
    asset (liability)


(330
)


1,836Noncurrent deferred income taxes:Gross assets


3,026



2,240Gross liabilities


(1,388
)


(2,670
)Net noncurrent deferred income tax
    asset (liability)


1,638



(430
)Net deferred income tax asset

$
1,308


$
1,406    50




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 30,


October 31,2006


2005Allowance for doubtful accounts

$
234


$
217Stock-based compensation


507



Reserve for accrued employee
    benefits


1,429



1,388Warranty reserves


888



608Uncompleted long-term contracts


(4,374
)


(1,851
)Depreciation and amortization


113



(1,574
)Deferred compensation


623



781Postretirement benefits liability


449



473Accrued legal


165



382Uniform capitalization and
    inventory


1,269



1,389Software development costs


(472
)


(535
)Other


477



128Net deferred income tax asset

$
1,308


$
1,406     11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Current:Federal

$
3,533


$
506


$
1,318State


518



43



186Foreign


1,235



713



Deferred


97



(124
)


(1,786
)Total income tax provision
    (benefit)

$
5,383


$
1,138


$
(282
)     11 MonthsEndedSeptember 30,


Years Ended October 31,2006


2005


2004Statutory rate


35
%


34
%


34
%Revised state tax exposure






1



(15
)State income taxes, net of federal
    benefit


3



3



5Release of capital loss valuation
    allowance










(20
)Federal extraterritorial income
    exclusion


(1
)


(12
)


(27
)Non-taxable interest income


(1
)


(7
)


(8
)Other permanent tax items






15



8Foreign rate differential


(1
)






Other






(1
)


2Effective rate


35
%


33
%


(21
)%  51




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              J.
    Goodwill
    and Other Intangible Assets  Goodwill and Other Intangible Assets.
   52




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 30, 2006


October 31, 2005Historical


Accumulated


Historical


AccumulatedCost


Amortization


Cost


AmortizationGoodwill not subject to
    amortization

$
1,265


$
181


$
384


$
181Intangible assets subject to
    amortization:Supply agreement 
    Power/Vac®


17,570



195







Non-compete agreements


4,170



142







Patents and Trademarks


830



665



830



613Tradenames and unpatented
    technology


12,113



1,418



3,212



139Backlog  S&I


654



654



654



439Deferred loan costs


809



269



734



102     Years Ending September 30,

Total2007

$
3,7962008


3,7542009


3,6292010


3,5992011


3,401   K.
    Commitments
    and Contingencies  Long-Term
    Debt
    Leases
    OperatingYears Ending September 30,

Leases2007

$
2,2292008


1,2112009


8612010


5602011


491Thereafter


762Total lease commitments

$
6,114    53




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Letters
    of Credit and Bonds
    Litigation
    Other
    Contingencies
      L.
    Business
    Segments     54




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  ® ®
          11 MonthsEnded


Years EndedSeptember 30,


October 31,2006


2005


2004Revenues:Electrical Power Products

$
347,928


$
220,123


$
173,456Process Control Systems


26,619



36,522



32,686Total

$
374,547


$
256,645


$
206,142Gross profit:Electrical Power Products

$
63,678


$
33,361


$
29,122Process Control Systems


7,565



10,499



6,855Total

$
71,243


$
43,860


$
35,977Income (loss) before income taxes
    and minority interest:Electrical Power Products

$
13,458


$
(438
)

$
(87
)Process Control Systems


1,742



3,890



1,451Total

$
15,200


$
3,452


$
1,364   September 30,


October 31,2006


2005Identifiable tangible assets:Electrical Power Products

$
238,798


$
172,544Process Control Systems


8,813



10,762Corporate


10,626



39,013Total

$
258,237


$
222,319    55




---



##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Geographic
    Information
    11 MonthsEnded


Years EndedSeptember 30,


October 31,2006


2005


2004Europe (including former Soviet
    Union)

$
24,788


$
6,346


$
402Far East


32,722



18,729



5,550Middle East and Africa


29,278



10,103



12,384North, Central and South America
    (excluding U.S.)


24,676



29,762



10,675United States


263,083



191,705



177,131Total revenues

$
374,547


$
256,645


$
206,142     September 30,


October 31,2006


2005Long-lived assets:United States

$
50,994


$
46,695United Kingdom


9,290



8,950Other


52



33Total

$
60,336


$
55,678     M.
    Quarterly
    Results of Operations (Unaudited)    2006 QuartersFirst


Second


Third


Fourth (A)


2006 (A)Revenues

$
83,813


$
98,431


$
104,021


$
88,282


$
374,547Gross profit


14,777



20,743



19,093



16,630



71,243Net income


1,093



4,145



1,757



2,825



9,820Basic earnings per share


0.10



0.38



0.16



0.26



0.90Diluted earnings per share


0.10



0.37



0.16



0.25



0.89   2005 QuartersFirst


Second


Third


Fourth (B)


2005Revenues

$
47,689


$
58,914


$
66,915


$
83,127


$
256,645Gross profit


6,959



8,442



12,561



15,898



43,860Net income (loss)


(1,426
)


(295
)


2,132



1,840



2,251Basic earnings (loss) per share


(0.13
)


(0.03
)


0.20



0.17



0.21Diluted earnings (loss) per share


(0.13
)


(0.03
)


0.19



0.17



0.21  56




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##### Table of Contents



POWELL
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (A)
    
    The fourth quarter of 2006 includes two months of data and 2006
    fiscal year includes 11 months of data, as we changed our
    fiscal year end from October 31 to September 30
    effective September 30, 2006.(B)
    
    Net income includes a gain of approximately $1.1 million
    (pre-tax) related to the sale of a facility.  year-to-date
  N.
    Consolidation
    of Operations     57




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
      ®
   Item 9B.  Other
    Information   58




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##### Table of Contents



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements.
  Financial Statement Schedule.
  Exhibits.
  Number



Description of Exhibits2
.1



Agreement for the sale and
    purchase of certain assets and the assumption of certain
    liabilities of Switchgear & Instrumentation Limited,
    dated July 4, 2005 (filed as Exhibit 2.1 to our
    Form 8-K
    filed July 6, 2005, and incorporated herein by reference).2
.2



Agreement for the sale of freehold
    land at Ripley Road, Bradford, dated July 4, 2005 (filed as
    Exhibit 2.2 to our
    Form 8-K
    filed July 6, 2005, and incorporated herein by reference).**2
.3



Asset Purchase Agreement between
    the Company and General Electric Company dated August 7,
    2006 (filed as Exhibit 2.1 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).3
.1



Certificate of Incorporation of
    Powell Industries, Inc. filed with the Secretary of State of the
    State of Delaware on February 11, 2004 (filed as
    Exhibit 3.1 to our
    Form 8-A/A
    filed November 1, 2004, and incorporated herein by
    reference). 59




---



##### Table of Contents



Number



Description of Exhibits3
.2



By-laws of Powell Industries, Inc.
    (filed as Exhibit 3.2 to our
    Form 8-A/A
    filed November 1, 2004, and incorporated herein by
    reference).10
.1



Powell Industries, Inc., Incentive
    Compensation Plan (filed as Exhibit 10.1 to our
    Form 10-K
    for the fiscal year ended October 31, 2003, and
    incorporated herein by reference).10
.2



Description of Supplemental
    Executive Benefit Plan (filed as Exhibit 10 to our
    Form 10-K
    for the fiscal year ended October 31, 1984, and
    incorporated herein by reference).10
.3



1992 Powell Industries, Inc. Stock
    Option Plan (filed as an exhibit to our preliminary proxy
    statement dated January 24, 1992, and incorporated herein
    by reference).10
.4



Amendment to 1992 Powell
    Industries, Inc. Stock Option Plan (filed as Exhibit 10.8
    to our
    Form 10-Q
    for the quarter ended April 30, 1996, and incorporated
    herein by reference).10
.5



Amendment to 1992 Powell
    Industries, Inc. Stock Option Plan (the cover of the 1992 Powell
    Industries, Inc. Stock Option Plan has been noted to reflect the
    increase in the number of shares authorized for issuance under
    the Plan from 2,100,000 to 2,700,000, which increase was
    approved by the stockholders of the Company at the 2005 Annual
    Meeting of Stockholders).10
.6



Powell Industries, Inc.
    Directors Fees Program (filed as Exhibit 10.7 to our
    Form 10-K
    for the fiscal year ended October 31, 1992, and
    incorporated herein by reference).10
.7



Powell Industries, Inc. Executive
    Severance Protection Plan (filed as Exhibit 10.7 to our
    Form 10-K
    for the fiscal year ended October 31, 2002, and
    incorporated herein by reference).10
.8



Powell Industries, Inc.
    Non-Employee Directors Stock Option Plan (filed as
    Exhibit 10.9 to our
    Form 10-K
    for the fiscal year ended October 31, 2002, and
    incorporated herein by reference).10
.9



Powell Industries, Inc. Deferred
    Compensation Plan (filed as Exhibit 10.9 to our
    Form 10-K
    for the fiscal year ended October 31, 2002, and
    incorporated herein by reference).10
.10



Powell Industries, Inc.
    Non-Employee Director Restricted Stock Plan (filed as
    Exhibit 10.10 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference).10
.11



Amended Loan Agreement dated
    October 29, 2004, between Powell Industries, Inc. and Bank
    of America, N.A. (filed as Exhibit 10.10 to our
    Form 10-K
    for the fiscal year ended October 31, 2004, and
    incorporated herein by reference).10
.12



Credit and Reimbursement Agreement
    dated April 15, 2004, between Powell Industries, Inc. and
    Bank of America, N.A. (filed as Exhibit 10.11 to our
    Form 10-K
    for the fiscal year ended October 31, 2004, and
    incorporated herein by reference).10
.13



Credit Agreement dated
    June 29, 2005 among Powell Industries, Inc., Inhoco 3210
    Limited and Switchgear & Instrumentation Properties
    Limited, and Bank of America and the other lenders parties
    thereto (filed as Exhibit 10.1 to our
    Form 8-K
    filed July 6, 2005, and incorporated herein by reference).10
.14



First Amendment to Credit
    Agreement dated November 7, 2005 among Powell Industries,
    Inc., Inhoco 3210 Limited (n/k/a Switchgear &
    Instrumentation Limited), Switchgear & Instrumentation
    Properties Limited, Bank of America, N.A., and the other lenders
    parties thereto (filed as Exhibit 10.14 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference).10
.15



Second Amendment to Credit
    Agreement dated January 11, 2006 among Powell Industries,
    Inc., Switchgear & Instrumentation Limited,
    Switchgear & Instrumentation Properties Limited, Bank
    of America, N.A., and the other lenders parties thereto (filed
    as Exhibit 10.15 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference).10
.16



Third Amendment to Credit
    Agreement dated August 4, 2006 among Powell Industries,
    Inc., Switchgear & Instrumentation Limited,
    Switchgear & Instrumentation Properties Limited, Bank
    of America, N.A., and the other lenders parties thereto (filed
    as Exhibit 10.3 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).*10
.17



Fourth Amendment to Credit
    Agreement dated December 7, 2006 among Powell Industries,
    Inc., Switchgear & Instrumentation Limited,
    Switchgear & Instrumentation Properties Limited, Bank
    of America, N.A., and the other lenders parties thereto.10
.18



Banking facilities between HSBC
    Bank plc and Switchgear & Instrumentation Limited and
    Switchgear & Instrumentation Properties Limited dated
    September 12, 2005 (filed as Exhibit 10.16 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference). 60




---



##### Table of Contents



Number



Description of Exhibits**10
.19



Powell Supply Agreement between
    the Company and General Electric Company dated August 7,
    2006 (filed as Exhibit 10.1 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).10
.20



Lease Agreement between the
    Company and C&L Partnership, Ltd. dated April 19, 2006
    (filed as Exhibit 10.2 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).*21
.1



Subsidiaries of Powell Industries,
    Inc.*23
.2



Consent of PricewaterhouseCoopers,
    LLP.*31
.1



Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a).*31
.2



Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a).*32
.1



Certification of Chief Executive
    Officer Pursuant to Section 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.*32
.2



Certification of Chief Financial
    Officer Pursuant to Section 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith**
    
    Portions of this exhibit have been omitted based on a request
    for confidential treatment pursuant to
    Rule 24b-2
    of the Securities Exchange Act of 1934. Such omitted portions
    have been filed separately with the Commission. 61




---



##### Table of Contents



SIGNATURES      By:
    /s/  Thomas
    W. Powell      By:
    /s/  Don
    R. Madison        Signature

Title/s/  Thomas
    W. PowellThomas
    W. Powell

Chairman of the Board/s/  Joseph
    L. BechererJoseph
    L. Becherer

Director/s/  Eugene
    L. ButlerEugene
    L. Butler

Director/s/  James
    F. ClarkJames
    F. Clark

Director/s/  Stephen
    W. Seale, Jr.Stephen
    W. Seale, Jr.

Director/s/  Robert
    C. TranchonRobert
    C. Tranchon

Director/s/  Ronald
    J. WolnyRonald
    J. Wolny

Director    62




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##### Table of Contents



EXHIBIT INDEX
  Number



Exhibit Title2
.1



Agreement for the sale and
    purchase of certain assets and the assumption of certain
    liabilities of Switchgear & Instrumentation Limited,
    dated July 4, 2005 (filed as Exhibit 2.1 to our
    Form 8-K
    filed July 6, 2005, and incorporated herein by reference).2
.2



Agreement for the sale of freehold
    land at Ripley Road, Bradford, dated July 4, 2005 (filed as
    Exhibit 2.2 to our
    Form 8-K
    filed July 6, 2005, and incorporated herein by reference).**2
.3



Asset Purchase Agreement between
    the Company and General Electric Company dated August 7,
    2006 (filed as Exhibit 2.1 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).3
.1



Certificate of Incorporation of
    Powell Industries, Inc. filed with the Secretary of State of the
    State of Delaware on February 11, 2004 (filed as
    Exhibit 3.1 to our
    Form 8-A/A
    filed November 1, 2004, and incorporated herein by
    reference).3
.2



By-laws of Powell Industries, Inc.
    (filed as Exhibit 3.2 to our
    Form 8-A/A
    filed November 1, 2004, and incorporated herein by
    reference).10
.1



Powell Industries, Inc., Incentive
    Compensation Plan (filed as Exhibit 10.1 to our
    Form 10-K
    for the fiscal year ended October 31, 2003, and
    incorporated herein by reference).10
.2



Description of Supplemental
    Executive Benefit Plan (filed as Exhibit 10 to our
    Form 10-K
    for the fiscal year ended October 31, 1984, and
    incorporated herein by reference).10
.3



1992 Powell Industries, Inc. Stock
    Option Plan (filed as an exhibit to our preliminary proxy
    statement dated January 24, 1992, and incorporated herein
    by reference).10
.4



Amendment to 1992 Powell
    Industries, Inc. Stock Option Plan (filed as Exhibit 10.8
    to our
    Form 10-Q
    for the quarter ended April 30, 1996, and incorporated
    herein by reference).10
.5



Amendment to 1992 Powell
    Industries, Inc. Stock Option Plan (the cover of the 1992 Powell
    Industries, Inc. Stock Option Plan has been noted to reflect the
    increase in the number of shares authorized for issuance under
    the Plan from 2,100,000 to 2,700,000, which increase was
    approved by the stockholders of the Company at the 2005 Annual
    Meeting of Stockholders).10
.6



Powell Industries, Inc.
    Directors Fees Program (filed as Exhibit 10.7 to our
    Form 10-K
    for the fiscal year ended October 31, 1992, and
    incorporated herein by reference).10
.7



Powell Industries, Inc. Executive
    Severance Protection Plan (filed as Exhibit 10.7 to our
    Form 10-K
    for the fiscal year ended October 31, 2002, and
    incorporated herein by reference).10
.8



Powell Industries, Inc.
    Non-Employee Directors Stock Option Plan (filed as
    Exhibit 10.9 to our
    Form 10-K
    for the fiscal year ended October 31, 2002, and
    incorporated herein by reference).10
.9



Powell Industries, Inc. Deferred
    Compensation Plan (filed as Exhibit 10.9 to our
    Form 10-K
    for the fiscal year ended October 31, 2002, and
    incorporated herein by reference).10
.10



Powell Industries, Inc.
    Non-Employee Director Restricted Stock Plan (filed as
    Exhibit 10.10 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference).10
.11



Amended Loan Agreement dated
    October 29, 2004, between Powell Industries, Inc. and Bank
    of America, N.A. (filed as Exhibit 10.10 to our
    Form 10-K
    for the fiscal year ended October 31, 2004, and
    incorporated herein by reference).10
.12



Credit and Reimbursement Agreement
    dated April 15, 2004, between Powell Industries, Inc. and
    Bank of America, N.A. (filed as Exhibit 10.11 to our
    Form 10-K
    for the fiscal year ended October 31, 2004, and
    incorporated herein by reference).10
.13



Credit Agreement dated
    June 29, 2005 among Powell Industries, Inc., Inhoco 3210
    Limited, and Switchgear & Instrumentation Properties
    Limited, and Bank of America and the other lenders parties
    thereto (filed as Exhibit 10.1 to our
    Form 8-K
    filed July 6, 2005, and incorporated herein by reference).10
.14



First Amendment to Credit
    Agreement dated November 7, 2005 among Powell Industries,
    Inc., Inhoco 3210 Limited (n/k/a Switchgear &
    Instrumentation Limited.), Switchgear & Instrumentation
    Properties Limited, Bank of America, N.A., and the other lenders
    parties thereto (filed as Exhibit 10.14 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference). 63




---



##### Table of Contents



Number



Exhibit Title10
.15



Second Amendment to Credit
    Agreement dated January 11, 2006 among Powell Industries,
    Inc., Switchgear & Instrumentation Limited,
    Switchgear & Instrumentation Properties Limited, Bank
    of America, N.A., and the other lenders parties thereto (filed
    as Exhibit 10.15 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference).10
.16



Third Amendment to Credit
    Agreement dated August 4, 2006 among Powell Industries,
    Inc., Switchgear & Instrumentation Limited,
    Switchgear & Instrumentation Properties Limited, Bank
    of America, N.A., and the other lenders parties thereto (filed
    as Exhibit 10.3 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).*10
.17



Fourth Amendment to Credit
    Agreement dated December 7, 2006 among Powell Industries,
    Inc., Switchgear & Instrumentation Limited,
    Switchgear & Instrumentation Properties Limited, Bank
    of America, N.A., and the other lenders parties thereto.10
.18



Banking facilities between HSBC
    Bank plc and Switchgear & Instrumentation Limited and
    Switchgear & Instrumentation Properties Limited dated
    September 12, 2006 (filed as Exhibit 10.16 to our
    Form 10-K
    for the fiscal year ended October 31, 2005, and
    incorporated herein by reference).**10
.19



Powell Supply Agreement between
    the Company and General Electric Company dated August 7,
    2006 (filed as Exhibit 10.1 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).10
.20



Lease Agreement between the
    Company and C&L Partnership, Ltd. dated April 19, 2006
    (filed as Exhibit 10.2 to our
    Form 8-K
    filed August 9, 2006, and incorporated herein by reference).*21
.1



Subsidiaries of Powell Industries,
    Inc.*23
.2



Consent of PricewaterhouseCoopers,
    LLP.*31
.1



Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a).*31
.2



Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a).*32
.1



Certification of Chief Executive
    Officer Pursuant to Section 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.*32
.2



Certification of Chief Financial
    Officer Pursuant to Section 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith**
    
    Portions of this exhibit have been omitted based on a request
    for confidential treatment pursuant to
    Rule 24b-2
    of the Securities Exchange Act of 1934. Such omitted portions
    have been filed separately with the Commission. 64