##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 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
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)8550 Mosley Drive,Houston, Texas
    
    77075-1180(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
 (713) 944-6900
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



POWELL INDUSTRIES, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 PagePart I  Financial InformationItem 1. Condensed Consolidated Financial Statements
    
    3Condensed Consolidated Balance Sheets
    
    3Condensed Consolidated Statements of Operations
    
    4Condensed Consolidated Statements of Cash Flows
    
    5Notes to Condensed Consolidated Financial Statements
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    27Item 4. Controls and Procedures
    
    28Part II  Other Information
    
    29Item 1. Legal Proceedings
    
    29Item 1A. Risk Factors
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    30Item 6. Exhibits
    
    31Signatures
    
    32EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Condensed Consolidated Financial Statements
 POWELL INDUSTRIES, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
 (In thousands, except share and per share data)
 March 31,
    
    
    September 30,2009
    
    
    2008(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    60,142
    
    
    $
    10,134Accounts receivable, less allowance for doubtful accounts of $1,609 and $1,180, respectively
    
    
    125,952
    
    
    
    132,446Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    55,380
    
    
    
    82,574Inventories, net
    
    
    59,338
    
    
    
    72,679Income taxes receivable
    
    
    135
    
    
    
    149Deferred income taxes
    
    
    3,508
    
    
    
    1,518Prepaid expenses and other current assets
    
    
    2,859
    
    
    
    3,935Total Current Assets
    
    
    307,314
    
    
    
    303,435Property, plant and equipment, net
    
    
    58,884
    
    
    
    61,546Goodwill
    
    
    1,084
    
    
    
    1,084Intangible assets, net
    
    
    22,872
    
    
    
    25,014Other assets
    
    
    6,296
    
    
    
    6,555Total Assets
    
    $
    396,450
    
    
    $
    397,634LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Current maturities of long-term debt and capital lease obligations
    
    $
    6,398
    
    
    $
    7,814Income taxes payable
    
    
    6,306
    
    
    
    7,223Accounts payable
    
    
    48,976
    
    
    
    54,168Accrued salaries, bonuses and commissions
    
    
    19,818
    
    
    
    26,361Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    65,038
    
    
    
    39,336Accrued product warranty
    
    
    6,336
    
    
    
    6,793Other accrued expenses
    
    
    12,451
    
    
    
    11,041Total Current Liabilities
    
    
    165,323
    
    
    
    152,736Long-term debt and capital lease obligations, net of current maturities
    
    
    8,211
    
    
    
    33,944Deferred compensation
    
    
    2,707
    
    
    
    2,821Postretirement benefit obligation
    
    
    857
    
    
    
    807Other liabilities
    
    
    210
    
    
    
    204Total Liabilities
    
    
    177,308
    
    
    
    190,512Commitments and Contingencies (Note G)Minority Interest
    
    
    278
    
    
    
    248Stockholders Equity:Preferred stock, par value $.01; 5,000,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock, par value $.01; 30,000,000 shares authorized; 11,436,060 and 11,403,687
shares issued, respectively; 11,436,060 and 11,403,687 shares outstanding, respectively
    
    
    114
    
    
    
    114Additional paid-in capital
    
    
    27,947
    
    
    
    26,921Retained earnings
    
    
    196,949
    
    
    
    180,244Accumulated other comprehensive income (loss)
    
    
    (5,877
    )
    
    
    335Deferred compensation
    
    
    (269
    )
    
    
    (740
    )Total Stockholders Equity
    
    
    218,864
    
    
    
    206,874Total Liabilities and Stockholders Equity
    
    $
    396,450
    
    
    $
    397,634
  3




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##### Table of Contents



POWELL INDUSTRIES, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations (Unaudited)
 (In thousands, except per share data)
 Three Months Ended
    
    
    Six Months EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2009
    
    
    March 31, 2008Revenues
    
    $
    164,099
    
    
    $
    160,333
    
    
    $
    334,588
    
    
    $
    307,454Cost of goods sold
    
    
    130,255
    
    
    
    129,641
    
    
    
    266,242
    
    
    
    250,067Gross profit
    
    
    33,844
    
    
    
    30,692
    
    
    
    68,346
    
    
    
    57,387Selling, general and administrative expenses
    
    
    20,323
    
    
    
    20,961
    
    
    
    41,884
    
    
    
    41,072Income before interest, income taxes and minority interest
    
    
    13,521
    
    
    
    9,731
    
    
    
    26,462
    
    
    
    16,315Interest expense
    
    
    262
    
    
    
    771
    
    
    
    734
    
    
    
    1,636Interest income
    
    
    (3
    )
    
    
    (86
    )
    
    
    (60
    )
    
    
    (201
    )Income before income taxes and minority interest
    
    
    13,262
    
    
    
    9,046
    
    
    
    25,788
    
    
    
    14,880Income tax provision
    
    
    4,655
    
    
    
    3,236
    
    
    
    9,052
    
    
    
    5,365Minority interest
    
    
    (245
    )
    
    
    (219
    )
    
    
    31
    
    
    
    (100
    )Net income
    
    $
    8,852
    
    
    $
    6,029
    
    
    $
    16,705
    
    
    $
    9,615Net earnings per common share:Basic
    
    $
    0.78
    
    
    $
    0.54
    
    
    $
    1.46
    
    
    $
    0.86Diluted
    
    $
    0.77
    
    
    $
    0.53
    
    
    $
    1.45
    
    
    $
    0.84Weighted average shares:Basic
    
    
    11,413
    
    
    
    11,232
    
    
    
    11,413
    
    
    
    11,194Diluted
    
    
    11,495
    
    
    
    11,416
    
    
    
    11,487
    
    
    
    11,398
  4




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POWELL INDUSTRIES, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
 (In thousands)
 Six Months EndedMarch 31, 2009
    
    
    March 31, 2008Operating Activities:Net income
    
    $
    16,705
    
    
    $
    9,615Adjustments to reconcile net income to net cash used in operating activities:Depreciation
    
    
    3,764
    
    
    
    4,057Amortization
    
    
    1,738
    
    
    
    1,895Stock-based compensation
    
    
    1,253
    
    
    
    1,860Minority interest
    
    
    31
    
    
    
    (100
    )Loss on disposition of assets
    
    
    8
    
    
    
    11Bad debt expense
    
    
    1,088
    
    
    
    436Deferred income taxes
    
    
    (1,726
    )
    
    
    2,362Changes in operating assets and liabilities:Accounts receivable, net
    
    
    2,083
    
    
    
    (11,342
    )Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    26,249
    
    
    
    (9,084
    )Inventories
    
    
    12,386
    
    
    
    (15,251
    )Prepaid expenses and other current assets
    
    
    1,105
    
    
    
    (2,263
    )Other assets
    
    
    (21
    )
    
    
    (76
    )Accounts payable and income taxes payable
    
    
    (4,699
    )
    
    
    (8,344
    )Accrued liabilities
    
    
    (6,723
    )
    
    
    645Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    26,490
    
    
    
    15,736Deferred compensation
    
    
    45
    
    
    
    169Other liabilities
    
    
    55
    
    
    
    63Net cash provided by (used in) operating activities
    
    
    79,831
    
    
    
    (9,611
    )Investing Activities:Proceeds from sale of fixed assets
    
    
    1
    
    
    
    Purchases of property, plant and equipment
    
    
    (2,981
    )
    
    
    (1,530
    )Net cash used in investing activities
    
    
    (2,980
    )
    
    
    (1,530
    )Financing Activities:Borrowings on US revolving line of credit
    
    
    50,953
    
    
    
    80,503Payments on US revolving line of credit
    
    
    (69,953
    )
    
    
    (66,879
    )Payments on UK revolving line of credit
    
    
    
    
    
    
    (1,596
    )Payments on UK term loan
    
    
    (860
    )
    
    
    (1,212
    )Payments on industrial development revenue bonds
    
    
    (400
    )
    
    
    (400
    )Payments on deferred acquisition payable
    
    
    (5,220
    )
    
    
    Proceeds from exercise of stock options
    
    
    53
    
    
    
    2,288Tax benefit from exercise of stock options
    
    
    32
    
    
    
    1,016Payments on short-term and other financing
    
    
    (13
    )
    
    
    (26
    )Net cash (used in) provided by financing activities
    
    
    (25,408
    )
    
    
    13,694Net increase in cash and cash equivalents
    
    
    51,443
    
    
    
    2,553Effect of exchange rate changes on cash and cash equivalents
    
    
    (1,435
    )
    
    
    (24
    )Cash and cash equivalents at beginning of period
    
    
    10,134
    
    
    
    5,257Cash and cash equivalents at end of period
    
    $
    60,142
    
    
    $
    7,786
  5




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##### Table of Contents



POWELL INDUSTRIES, INC. AND SUBSIDIARIES
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
  Overview
   Basis of Presentation
    Use of Estimates
  Fair Value Measurements
 Fair Value Measurements
 6




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Application of FASB Statement No. 157 to FASB Statement No. 13 and
Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease
Classification or Measurement under Statement 13 Effective Date of
FASB Statement No. 157 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Foreign Currency Translation
 Foreign
Currency Translation
 Derivative Financial Instruments
   Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133 Accounting for Derivative Instruments and
Hedging Activities
 7




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Accumulated Other Comprehensive Income (Loss)
  Income Taxes
  Accounting for Uncertainty in
Income Taxes  an Interpretation of FASB Statement No. 109
     New Accounting Standards
 Business Combinations
 8




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##### Table of Contents



Noncontrolling Interests in Consolidated Financial
Statements an amendment of Accounting Research Bulletin 51
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities Earnings per
Share
 Determining the Fair Value of a Financial Asset in a Market That is Not Active Accounting Change and Error Corrections
 Equity Method Investment Considerations
 9




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Employers Disclosures about Postretirement
Benefit Plan Assets Employers
Disclosures about Pensions and Other Postretirement Benefits
 Amendments to the Impairment Guidance of
EITF Issue No. 99-20
 Interim Disclosures about Fair Value of Financial Instruments, Disclosures about Fair Value of Financial Instruments, Interim Financial Reporting
 Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies Accounting for Contingencies Reasonable Estimation
of the Amount of a Loss
 Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly
 10




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Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Numerator:Net income
    
    $
    8,852
    
    
    $
    6,029
    
    
    $
    16,705
    
    
    $
    9,615Denominator:Denominator for basic earnings per share-weighted average shares
    
    
    11,413
    
    
    
    11,232
    
    
    
    11,413
    
    
    
    11,194Dilutive effect of stock options and restricted stock
    
    
    82
    
    
    
    184
    
    
    
    74
    
    
    
    204Denominator for diluted earnings per share-adjusted weighted
average shares with assumed conversions
    
    
    11,495
    
    
    
    11,416
    
    
    
    11,487
    
    
    
    11,398Net earnings per share:Basic
    
    $
    0.78
    
    
    $
    0.54
    
    
    $
    1.46
    
    
    $
    0.86Diluted
    
    $
    0.77
    
    
    $
    0.53
    
    
    $
    1.45
    
    
    $
    0.84
   Overview and Summary of Significant Accounting Policies
      Fair Value Measurements Using InputsConsidered as
    
    
    Fair Value atLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    March 31, 2009AssetsCash equivalents
    
    $
    19,148
    
    
    $
    
    
    
    $
    
    
    
    $
    19,148Foreign currency forward contracts
    
    
    
    
    
    $
    89
    
    
    $
    
    
    
    
    89Total
    
    $
    19,148
    
    
    $
    89
    
    
    $
    
    
    
    $
    19,237LiabilitiesForeign currency forward contracts
    
    $
    
    
    
    $
    2,928
    
    
    $
    
    
    
    $
    2,928Total
    
    $
    
    
    
    $
    2,928
    
    
    $
    
    
    
    $
    2,928
 11




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Allowance for Doubtful Accounts
  Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    1,082
    
    
    $
    1,668
    
    
    $
    1,180
    
    
    $
    1,739Accrued bad debt expense
    
    
    754
    
    
    
    366
    
    
    
    1,088
    
    
    
    436Deductions for uncollectible accounts written off, net of recoveries
    
    
    (181
    )
    
    
    (999
    )
    
    
    (566
    )
    
    
    (1,133
    )Decrease due to foreign currency translation
    
    
    (46
    )
    
    
    
    
    
    
    (93
    )
    
    
    (7
    )Balance at end of period
    
    $
    1,609
    
    
    $
    1,035
    
    
    $
    1,609
    
    
    $
    1,035
 Warranty Accrual
  Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    7,291
    
    
    $
    6,162
    
    
    $
    6,793
    
    
    $
    5,787Accrued warranty expense
    
    
    627
    
    
    
    1,301
    
    
    
    2,175
    
    
    
    2,426Deductions for warranty charges
    
    
    (1,564
    )
    
    
    (595
    )
    
    
    (2,208
    )
    
    
    (1,307
    )Decrease due to foreign currency translation
    
    
    (18
    )
    
    
    (2
    )
    
    
    (424
    )
    
    
    (40
    )Balance at end of period
    
    $
    6,336
    
    
    $
    6,866
    
    
    $
    6,336
    
    
    $
    6,866
 Inventories
  March 31,
    
    
    September 30,2009
    
    
    2008Raw materials, parts and subassemblies
    
    $
    40,501
    
    
    $
    57,742Work-in-progress
    
    
    18,837
    
    
    
    14,937Total inventories
    
    $
    59,338
    
    
    $
    72,679
 12




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Cost and Estimated Earnings on Uncompleted Contracts
  March 31,
    
    
    September 30,2009
    
    
    2008Costs incurred on uncompleted contracts
    
    $
    525,223
    
    
    $
    513,549Estimated earnings
    
    
    137,785
    
    
    
    120,571663,008
    
    
    
    634,120Less: Billings to date
    
    
    672,666
    
    
    
    590,882Net (overbilled) underbilled position
    
    $
    (9,658
    )
    
    $
    43,238Included in the accompanying balance sheets under the following captions:Costs and estimated earnings in excess of billings on uncompleted contracts  underbilled
    
    $
    55,380
    
    
    $
    82,574Billings in excess of costs and estimated earnings on uncompleted contracts  overbilled
    
    
    (65,038
    )
    
    
    (39,336
    )Net (overbilled) underbilled position
    
    $
    (9,658
    )
    
    $
    43,238
   Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    8,852
    
    
    $
    6,029
    
    
    $
    16,705
    
    
    $
    9,615Unrealized loss on foreign currency translation, net of tax
    
    
    (259
    )
    
    
    
    
    
    
    (4,279
    )
    
    
    (486
    )Unrealized loss on derivative contracts
    
    
    (202
    )
    
    
    
    
    
    
    (1,933
    )
    
    
    Comprehensive income
    
    $
    8,391
    
    
    $
    6,029
    
    
    $
    10,493
    
    
    $
    9,129
   March 31,
    
    
    September 30,2009
    
    
    2008US Revolver
    
    $
    
    
    
    $
    19,000UK Revolver
    
    
    2,132
    
    
    
    2,726UK Term Loan
    
    
    2,985
    
    
    
    4,907Deferred acquisition payable
    
    
    4,292
    
    
    
    9,512Industrial development revenue bonds
    
    
    5,200
    
    
    
    5,600Capital lease obligations
    
    
    
    
    
    
    13Subtotal long-term debt and capital lease obligations
    
    
    14,609
    
    
    
    41,758Less current portion
    
    
    (6,398
    )
    
    
    (7,814
    )Total long-term debt and capital lease obligations
    
    $
    8,211
    
    
    $
    33,944
 US and UK Revolvers
   13




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Minimum Tangible Net Worth
 Minimum Fixed Charge Coverage Ratio
 Maximum Leverage Ratio
  UK Term Loan
  14




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Deferred Acquisition Payable
 ®
 Industrial Development Revenue Bonds
   Letters of Credit and Bonds
    Litigation
  15




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##### Table of Contents



Other Contingencies
       Restricted Stock Units
   16




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##### Table of Contents



Stock Options
  RemainingWeighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateStock
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    
    Price
    
    
    Term (Years)
    
    
    Value(In thousands)Outstanding at September 30, 2008
    
    
    267,300
    
    
    $
    17.14Granted
    
    
    
    
    
    
    Exercised
    
    
    (3,400
    )
    
    
    15.49Forfeited / Cancelled
    
    
    
    
    
    
    Outstanding at March 31, 2009
    
    
    263,900
    
    
    $
    17.16
    
    
    
    2.43
    
    
    $
    4,529Exercisable at March 31, 2009
    
    
    185,900
    
    
    $
    16.62
    
    
    
    2.09
    
    
    $
    3,090
  Accounting for
Certain Derivatives and Certain Hedging Activities
 Hedging  General: Assessing
Hedge Effectiveness of Fair Value and Cash Flow Hedges Period-by-Period or Cumulatively under
a Dollar-Offset Approach
   Asset Derivatives
    
    
    Liability DerivativesFair
    
    
    
    
    FairBalance Sheet Location
    
    Value
    
    
    Balance Sheet Location
    
    Value(in thousands)Derivatives designated as
hedging instruments under FAS
133:Foreign exchange forwards
    
    Prepaid expenses and other current assets
    
    $
    89
    
    
    Other accrued expenses
    
    $
    2,928Foreign exchange forwards
    
    Deferred income taxes
    
    
    1,045
    
    
    Other liabilities
    
    
    Total derivatives
    
    
    
    $
    1,134
    
    
    
    
    $
    2,928
 17




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The following table presents the amounts affecting the Condensed Consolidated Statement of
Operations for the three and six month periods ended March 31, 2009:
 Amount of Gain (Loss)Amount of Gain (Loss)
    
    
    
    
    Reclassified fromRecognized in Other
    
    
    
    
    Accumulated OtherComprehensive Income on
    
    
    
    
    Comprehensive IncomeDerivatives1
    
    
    
    
    into Income1Three
    
    
    
    
    
    
    
    
    Three
    
    
    SixMonths
    
    
    Six Months
    
    
    Location of Gain (Loss)
    
    Months
    
    
    MonthsEnded
    
    
    Ended
    
    
    Reclassified from Accumulated
    
    Ended
    
    
    EndedMarch 31,
    
    
    March 31,
    
    
    Other comprehensive Income
    
    March 31,
    
    
    March 31,Derivatives designated under FAS 133
    
    2009
    
    
    2009
    
    
    into Income
    
    2009
    
    
    2009( in thousands)
    
    
    
    
    (in thousands)Derivatives designated as cash flow
hedges:Foreign exchange forwards
    
    $
    (311
    )
    
    $
    (2,978
    )
    
    Other income (expense)
    
    $
    8
    
    
    $
    8Total designated cash flow hedges
    
    $
    (311
    )
    
    $
    (2,978
    )
    
    
    
    $
    8
    
    
    $
    8
 
 1
    
    For the three and six month periods ended March 31, 2009, the Company recorded in
other (income) expense an immaterial amount of ineffectiveness from cash flow hedges.  Cash Flow Hedges
      18




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##### Table of Contents



Credit Risk
      Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Electrical Power Products
    
    $
    158,291
    
    
    $
    154,094
    
    
    $
    322,201
    
    
    $
    295,183Process Control Systems
    
    
    5,808
    
    
    
    6,239
    
    
    
    12,387
    
    
    
    12,271Total
    
    $
    164,099
    
    
    $
    160,333
    
    
    $
    334,588
    
    
    $
    307,454Gross profit:Electrical Power Products
    
    $
    31,960
    
    
    $
    28,458
    
    
    $
    64,132
    
    
    $
    53,302Process Control Systems
    
    
    1,884
    
    
    
    2,234
    
    
    
    4,214
    
    
    
    4,085Total
    
    $
    33,844
    
    
    $
    30,692
    
    
    $
    68,346
    
    
    $
    57,387Income before income taxes and minority interest:Electrical Power Products
    
    $
    13,143
    
    
    $
    8,425
    
    
    $
    25,262
    
    
    $
    14,039Process Control Systems
    
    
    119
    
    
    
    621
    
    
    
    526
    
    
    
    841Total
    
    $
    13,262
    
    
    $
    9,046
    
    
    $
    25,788
    
    
    $
    14,880
 March 31, 2009
    
    
    September 30, 2008Identifiable tangible assets:Electrical Power Products
    
    $
    292,854
    
    
    $
    342,105Process Control Systems
    
    
    7,032
    
    
    
    8,734Corporate
    
    
    72,410
    
    
    
    20,507Total
    
    $
    372,296
    
    
    $
    371,346
  19




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of our financial condition and results of operations should
be read in conjunction with the accompanying condensed consolidated financial statements and
related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report
on Form 10-K for the year ended September 30, 2008, which was filed with the Securities and
Exchange Commission on December 10, 2008 and is available on the SECs website at www.sec.gov.
 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
    
    
    The current worldwide financial crisis and economic downturn may likely affect our
customer base and suppliers, and could materially affect our backlog and profits.
    
    The U.S. governments proposed plan to address the financial crisis may not be effective
to stabilize the financial markets or to increase the availability of credit.
    
    Our industry is highly competitive.
    
    International and political events may adversely affect our operations.
    
    Fluctuations in the price and supply of raw materials used to manufacture our products
may reduce our profits.
    
    Our use of percentage-of-completion accounting could result in a reduction or elimination
of previously reported 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.
    
    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.
    
    We may be unsuccessful at generating internal growth.
    
    The departure of key personnel could disrupt our business.
 20




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##### Table of Contents




    
    Our business requires skilled labor, and we may be unable to attract and retain qualified
employees.
    
    Failure to successfully comply with Section 404 of the Sarbanes-Oxley Act of 2002 could
negatively impact our business.
    
    Actual and potential claims, lawsuits and proceedings could ultimately reduce our
profitability and liquidity and weaken our financial condition.
    
    We carry insurance against many potential liabilities, and our risk management program
may leave us exposed to unidentified or unanticipated risks.
    
    Technological innovations by competitors may make existing products and production
methods obsolete.
    
    Catastrophic events could disrupt our business.
  Overview
   Results of Operations
 Revenue and Gross Profit
   21




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##### Table of Contents



Electrical Power Products
     Process Control Systems
    Consolidated Selling, General and Administrative Expenses
  22




---



##### Table of Contents



Interest Expense and Income
   Provision for Income Taxes
   Net Income
  Backlog
  Liquidity and Capital Resources
   23




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##### Table of Contents



Operating Activities
  Investing Activities
  Financing Activities
  New Accounting Standards
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements an amendment of Accounting Research Bulletin 51
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 24




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##### Table of Contents



The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities Earnings per
Share
 Determining the Fair Value of a Financial Asset in a Market That is Not Active Accounting Change and Error Corrections
 Equity Method Investment Considerations
 Employers Disclosures about Postretirement
Benefit Plan Assets Employers
Disclosures about Pensions and Other Postretirement Benefits
 Amendments to the Impairment Guidance of
EITF Issue No. 99-20
 25




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##### Table of Contents



Interim Disclosures about Fair Value of Financial Instruments, Disclosures about Fair Value of Financial Instruments, Interim Financial Reporting
 Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies Accounting for Contingencies Reasonable
Estimation of the Amount of a Loss
 Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly
 Critical Accounting Policies
   Outlook for Fiscal 2009
 ®
 26




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  Foreign Currency Transaction Risk
   27




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##### Table of Contents



Commodity Price Risk
  Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Internal Control over Financial Reporting
  28




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##### Table of Contents



Design and Operation of Control Systems
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
     
 Item 1A. Risk Factors
  29




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  Votes CastNominee
    
    Votes Cast For
    
    Against
    
    Votes Withheld
    
    Abstentions
    
    Non-VotesJames F. Clark
    
    
    10,648,478
    
    
    
    
    
    
    
    125,670
    
    
    
    
    
    
    
    Stephen W. Seale, Jr.
    
    
    10,468,109
    
    
    
    
    
    
    
    306,039
    
    
    
    
    
    
    
    Robert C. Tranchon
    
    
    9,991,960
    
    
    
    
    
    
    
    782,188
    
    
    
    
    
    
    
    
 30




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##### Table of Contents



Item 6. Exhibits
 Number
    
    
    
    Description of Exhibits3.1
    
    
    
    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
    
    
    
    Form of Indemnification Agreement for Directors and Named Executive Officers
(filed as Exhibit 10.1 to our Form 8-K filed on March 5, 2009 and incorporated
herein by reference).*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 31




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##### Table of Contents



SIGNATURES
  POWELL INDUSTRIES, INC.(Registrant)May 6, 2009

Date
    
    By:
    
    /s/ Patrick L. McDonald

Patrick L. McDonaldPresident and Chief Executive Officer(Principal Executive Officer)May 6, 2009
    
    By:
    
    /s/ Don R. MadisonDate
    
    
    
    Don R. MadisonExecutive Vice PresidentChief Financial and Administrative Officer(Principal Financial and Accounting Officer)
 32




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    
    
    Exhibit Title3.1
    
    
    
    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
    
    
    
    Form of Indemnification Agreement for Directors and Named Executive Officers
(filed as Exhibit 10.1 to our Form 8-K filed on March 5, 2009 and
incorporated herein by reference).*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 33