Powell Industries, Inc.

Welcome to the PowerWell Industries earnings conference call. At this time, all participants will be in the listen-only mode. Should you need assistance, please signal an conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would like to turn the conference over to Ryan Coleman, investor relation. Thank you. You may begin.

Thank you, and good morning, everyone. Thank you for joining us for Powell Industries' conference call today to review fiscal year 2025 third quarter results. With me on the call are Brett Koch, Powell's chairman and CEO, and Mike Metcalf, Powell's CFO. There will be a replay of today's call, and it will be available via webcast by going to the company's website, powellind.com. or a telephonic replay will be available until August 13th. The information on how to access the replay was provided in yesterday's earnings release. Please note that information reported on this call speaks only as of today, August 6th, 2025, and therefore you are advised that any time-sensitive information may no longer be accurate at the time of replay listening or transcript reading. This conference call includes certain statements, including statements related to the company's expectations of its future operating results that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involves risks and uncertainties and that actual results may differ materially from those projected in these forward-looking statements. These risks and uncertainties include, but are not limited to, competition and competitive pressures, sensitivity to general economic and industry conditions, international political and economic risk, availability and price of raw materials, and execution of business strategies. For more information, please refer to the company's filings with the Securities and Exchange Commission. With that, I'll now turn the call over to Brett.

Thank you, Ryan, and good morning, everyone. Thank you for joining us today to review Powell's fiscal 2025 third quarter results. I will make a few comments and then turn the call over to Mike for more financial commentary before we take your questions. Powell delivered a strong third quarter as operationally the team continues to execute at a high level. Our gross profit dollars grew 8% despite roughly flat revenue, leading to a gross margin of 30.7%, which was 230 basis points higher than the prior year. We continue to benefit from favorable volume leverage, effective project execution, and the benefit of project closeouts. Revenue was largely unchanged compared to the prior year, as lower revenue levels from the oil and gas and petrochemical markets were mostly offset by strong growth in the electric utility, commercial and other industrial and traction markets. This was mainly a function of project timing, as our business can experience lumpiness in our project completion and delivery schedules from time to time. On the bottom line, we recorded net income of $48 million in the quarter, or $3.96 per diluted share, which was 4% higher than the prior year and a record quarterly EPS for Powell. We saw meaningful acceleration in order activity, highlighted by a book-to-bill ratio of 1.3 times, and sequential backlog growth of 7% to a total of $1.4 billion. The $362 million in new orders was well-balanced across the end markets we served, and included multiple substantial awards that I'll detail in a moment. We remain very comfortable with the project schedules and overall composition of our order book. Our backlog is balanced across the market sectors we serve as well as across the power manufacturing footprint. The backlog possesses a healthy mix of both larger projects as well as what we would consider to be core smaller to medium sized projects. I'd like to briefly highlight a few of the larger awards we received during the third quarter. In the oil and gas market, we booked two large orders for custom power control room modules, which have a combined total of over $80 million. Each of these projects will be deployed to separate offshore production locations, one in the Gulf of America and the second to be located offshore from the coast of Africa. We also booked a roughly $60 million order in the electric utility market for a new power generation facility. This project is the largest in Powell's history for this market sector and is a testament to our strategic efforts to diversify our business and establish ourselves as a trusted partner to our utility customers. Our growth in this market has been more than a decade in the making, and the investment of our time, effort, and capital continues to contribute meaningful returns. In fact, of the $362 million in new orders this past quarter, nearly half of the new awards are within the electric utility market. Lastly, we also booked a large traction order that totaled roughly $30 million. As we have shared over the last few years, we are committed to the traction market to take a highly selective approach in this market to ensure the alignment of the value we provide to our customers is well matched to our execution model. This particular project, which will be executed out of our Ohio facility, is with a customer with whom we are building a long-term, mutually beneficial relationship. We also continue to execute against our strategy as we pursue Powell's profitable growth and long-term success. A few weeks ago, we announced an agreement to acquire REMSDAC Limited, a UK-based manufacturer of SCADA remote terminal units for electrical substation control and automation and generation transmission, and distribution. For decades at Powell, we have delivered electrical distribution solutions to the market, with nearly all of our projects requiring some level of electrical automation. We typically purchase a large amount of automation hardware today as part of the overall solution that we deliver to our customers. REMSDAC Limited is an established name for electrical automation in the regulated utility market across the UK. The acquisition of REMSDAC people and technology immediately strengthens our electrical automation platform, enhancing our ability to meet an underserved demand with a solution that is accretive to power. In addition to the existing utility market that REMSDAC currently serves, the technology roadmap that the REMSDAC team has been working towards to support the next generation of SCADA remote terminal units for their existing markets provides a clear opportunity to leverage this next generation platform into our North American utility market. Today at Powell, we are able to influence the hardware side of our electrical automation solutions roughly 30% of the time. With the addition of REMSDAC, we will now be able to offer a 100% Powell-built solution to the utility market. And as the next generation of REMSDAC solution is released to the market, we'll look to qualify, offer, and implement Powell solutions to all of the markets served by Powell. In addition to the electrical automation pillar, our latest product initiatives and development activity are helping to build commercial momentum as we pursue further diversification and expansion of our product portfolio. As we discussed last quarter, we launched a few new and innovative products, including a grounding switch for our oil and gas market and a power control aisle, a compact substation that we are currently building in our recently expanded products factory in Houston. as well as our first design of a low voltage switchgear product targeted for inside the data center and associated commercial market. We believe that these new products will span multiple markets and serve as an important validation of our elevated R&D spend in recent years and the IP that we have developed. Most importantly, it furthers our aim of advancing our product centric strategy to improve the overall future mix of product versus project based revenues. Looking ahead, the outlook for each of our end markets remains positive. The fundamentals for the oil and gas markets support our expectation for continued order strength. Specific to the fundamentals of the U.S. natural gas market, the pipeline of LNG projects that we are tracking continues to support our expectation for continued momentum for both greenfield and brownfield activities as we continue to experience increased LNG activity as the moratorium on permitting activity was lifted earlier this year. Activity within our commercial and other industrial market also remains healthy and includes broad and increased activity within the data center market. Multiple data points over the last few months confirm the ongoing momentum in data center capacity growth, and we continue to see growing opportunities for Powell as we seek to further penetrate this market with new products. Lastly, the outlook for our electric utility market remains very strong and balanced across the customers and geographies we serve in this market. Overall, we remain very encouraged by the strong demand across the markets we serve and confident in our ability to deliver value for our customers and stakeholders alike. I'll now turn the call over to Mike to walk through our third quarter financials in more detail. Thank you, Brett, and good morning, everyone.