Powell Industries at Sidoti’s Conference: Strategic Growth and Expansion

On Thursday, 12 June 2025, Powell Industries (NASDAQ:POWL) presented at Sidoti’s Small-Cap Virtual Conference, outlining its strategic direction and financial performance. The company, a key player in manufacturing electrical solutions, highlighted its robust revenue growth and expansion into new markets, while also addressing challenges in capacity management and market diversification.

Key Takeaways

• Powell Industries reported nearly doubling its revenue over the past five to six years, reaching $520 million in the first half of fiscal year 2025.
• The company is expanding its presence in the utility sector, which now represents 29% of its backlog.
• Powell is investing heavily in research and development, doubling its spending in recent years.
• The company ended fiscal year 2023 with a $1.3 billion backlog, showcasing strong demand for its products.
• Despite running at 85% capacity, Powell plans to manage growth through increased shift work and technological applications.

Financial Results

• Revenue: Powell Industries achieved a 16% revenue growth, reaching $520 million in the first half of fiscal year 2025.
• Gross Profit: The company reported a gross profit margin of 27.5% for the first half of fiscal year 2025, with fluctuations from 24.5% in the first quarter to 30% in February.
• EBITDA: Powell maintained an EBITDA margin just under 19% for the same period.
• Cash Position: The company held $389 million in cash at the end of the second fiscal quarter.
• Backlog: Powell’s backlog stood at $1.3 billion at the end of fiscal year 2023, with utility projects accounting for 29%.

Operational Updates

• Market Focus: Oil and gas remain significant, contributing 50-60% of revenue, while the utility sector and data centers are emerging as growth areas.
• Manufacturing: Facilities in North America handle ANSI volume, while the UK facility manages IEC volume.
• Capacity Utilization: Existing facilities are operating at approximately 85% capacity, with plans to enhance capacity through strategic operational adjustments.
• New Products: Powell introduced three new products in the last quarter, enhancing its market offerings.

Future Outlook

• Strategy: Powell is focusing on organic growth, technology investments, and expanding its services beyond installation and commissioning.
• Capital Allocation: The company emphasizes organic growth, R&D, shareholder returns, and exploring inorganic growth opportunities.
• Market Opportunities: Significant potential exists in the LNG market, utility sector, and data center market, driven by strategic demand growth.
• Operational Expansion: Powell is considering expanding its 60-acre construction yard and enhancing engineering capabilities with a new center in West Houston.

Q&A Highlights

• Battery Storage: Powell sees active opportunities in energy storage projects, though battery specification inconsistencies pose challenges.
• Margins: The company aims to maintain gross profit margins in the 26-27% range, with potential upside through disciplined project execution.
• Data Centers: Powell continues to innovate in data center construction, recently releasing a new version of a low voltage breaker.
• LNG Market: The potential in the LNG market is substantial, with opportunities for expansions and new greenfield projects over the next five to seven years.

Readers are encouraged to refer to the full transcript for a detailed account of Powell Industries’ conference presentation and strategic insights.

Full transcript - Sidoti’s Small-Cap Virtual Conference:

John Franzreb, Senior Analyst, Sidoti and Company: My name is John Franzreb. I’m a senior analyst at Sidoti and Company. Our next presentation for the day is Powell Industries, ticker p o w l. For those who not familiar with the company, Powell’s manufacturer of products that manage and control the flow of electricity in medium to large facilities. We’re fortunate to have with us today CEO, Brett Cope, and CFO, Michael Metcalf.

Following the presentation, there will be time for q and a. Please utilize the u the q and a icon to submit your questions, and I will present them to management. That said, gentlemen, thank you for being with us. The floor is yours.

Brett Cope, CEO and Chairman, Powell Industries: Thank you, John, and good morning to everybody. Thank you to the Sidoti team, John Franzreb, for, giving us the opportunity this morning. As John noted, I’m Brett Cope, CEO and chairman of the company, and with me is Mike Metcalf, CFO of the company. I’ll start with a little bit of an overview of the company on the slide deck and then, hand it over to Mike to, cover some more in-depth on the on the business. So as John noted, we are a manufacturer of electrical products and solutions and, large substations, which I’ll come back to, that help control the flow of energy safely.

We generally are agnostic to the generating source, and we are agnostic to how you use the energy. Just like in your place of residence, you have a circuit panel. We build the big, utility industrial scale version of those breaker panels, the breaker, the switch gear, and the box they live in. On this slide here, we are largely an ANSI, company. We have seven manufacturing facilities, six of them in The US and Canada, one in The, UK.

I’ll come back to that in a minute. So in in The US, North American market, very, very prevalent and, able to kinda do some do some things in terms of history and and, and market presence. We are largely oil and gas driven. That’s historically how we grew up here in Houston. It it accounts for roughly 50% of our number over time, in terms of backlog and revenue.

We are driving into the utility market in our home countries of The US, Canada, and, The UK. And more recently, in the middle of your slide there, there’s a there’s a commercial and other industrial that perhaps is showing up as a yellowish orange. It’s currently 15% growing. More recently around the the pandemic, that that sector was released by Mike and the team as it’s, it’s getting a lot of attention in the market today. I’ll go to the next one here.

So just a picture of what we do. You know, the the the gray and red thing on your screen there, if it’s, the big breaker, that’s just a big version, 500 pound version of a fifteen, twenty, 30 amp breaker that you might find in your in your local residential electrical panel. We take that breaker and we fabricate we fabricate all that, by the way, right here in Houston, Texas. We procure the metal, from raw copper, steel, aluminum, fiberglass, and we manufacture every 270 parts that go into that breaker right here and and assemble it. We take that.

We put it into a switch gear, which is a bigger metal box, which is in your middle picture. That metal box will have the breaker. We’ll have a lot of copper bussing. That that, that breaker is controlling the flow of energy. And then there’s a lot of a lot of instrumentation and and measuring devices that help control the flow of that.

Lot of digital technology that’s on the front of the gear, a lot of wiring and know how that go into the development of that that, IP. And then we take that, and frequently will develop deliver a large substation. The the one on your on your picture there, it happens to be a very, very heavy build that we do at a facility about 20 miles from here. That’s an offshore specific design in that particular picture, but I’ll show you a few other ones here in a Our market focus is zero to 38,000 volts. So we don’t do residential, but once you get into four eighty, six ninety volt, and up to 38,000 volts, which is utility scale distribution, That’s that’s our our key focus.

We are generally, engineered to order. We are, just about all long cycle project POC accounting on our on our model from PO to full conversion of revenue, and we enjoy, very complex. We carry a lot of engineering know how at Powell. When when our partners bring an RFQ, we bid on it, and we go into the delivery process. We generate thousands and thousands of drawings, whether that’s a million dollar order or $200,000,000 order.

It takes a lot of engineering to get it to the floor and start cutting metal. Just a quick pictorial to show you a couple areas in a very simplistic graphic where we exist. Again, agnostic to generation, and we exist in the utility world to step up that energy to the transformer before you get into bulk power transmission at the top of the picture here. When you get to the other side of distribution, whether that’s utility or, say, a a micro grid or a turbine at an industrial facility, lots of distribution on the other side to to provide energy to the the the the drives and the motors in an industrial facility or, you know, the servers in a data center. Noted here, the the two standards.

This is the world, the one on your left. We grew up under the anti standard. That is the predominant part. We do have the single factory in The UK where we compete with an IEC factory. That’s root that’s that allows us to serve global customers, especially as we grow up oil and gas.

You think about tier one suppliers, ExxonMobil, Chevron, BP. They’re around the world that allows us to to build agreements and deliver power solutions to to their to them and their projects and their facilities. Here’s a here’s another example. Still the offshore module on your right, but, you’ll find the predominant substation that we build is more of an onshore design. This one this power control room is a trademark design that Paul’s been building for nearly fifty years.

This is modified quite a bit. Just in the fifteen years I’ve been at Powell, energy codes, mechanical, sourcing codes around, minerals, conflict minerals, making sure we’re safely sourcing steel appropriately. Lots of regulation today, in in The US, 50 states, the provinces of Canada. When I I just sometimes tell people when I got to Powell, the wall in that building was about three inches. Today, it’s about seven to 10 inches because energy codes have become, much more intense.

What we do generates a lot of heat, So we we do a lot of, a lot of HVAC calculations, lot of HVAC loads. We do a lot of thermal management, in the mechanical structure. And then you think about data centers that are generating even that much more heat. Interesting, how we can apply our our value added to that developing scenario. Typical power control room when we when we’re asked to deliver the entire solution.

Again, the the advantages of this is you’re not doing brick and mortar build. So as you’re building the facility, either brown or ground brownfield or greenfield, you’re able to do the construction timeline to do the pier and do the cement work. And the modular folks can build off-site, and it allows you to speed up the overall build of the facility as you as you are deploying deploying the capital. We do this start to finish when we bring a client in and and have the opportunity to build the whole control room. You know, the the goal here is to have this substation leave your circuit panel.

It gets to the site. You plug in the external wires, and you’ve got an operating system to distribute power safely throughout your facility. This is a a growing area for Powell. It’s on our strategy slide, which I’ll end with here in a Electrical automation is is is it’s not the process control side. The electric world is is a little behind in applying digital technologies.

We feel like we have a great story here to tell. We’ve been investing in asset management as well as our application side of controlling power efficiently and applying new technologies to this space as it is really growing log rhythmically. And we think there’s a there’s a bright future here for the company on developing and applying this technology to the future distribution assets, the DERs out in the world. Talk a little bit about primary markets. Again, we grew up oil, gas, petrochemical.

But in that, even in the last couple years with some of the newer technologies that are coming on, green diesel, sustainable air fuel, SAF, the hydrogen, probably more blue today, maybe not as much green, and then even carbon capture. The we we would we would put all those types of projects into that vertical. And and then in our c and I, you’re gonna capture some of the other, other things going on in mining. We just announced a big a nice job up in Canada, last quarter in the mining area, along with anything that would happen direct or indirect on the data center piece. And then at the top there on the right, utility is has been a really good theme for Powell over the last ten years, and we expect and believe that’ll be a a continuing area of growth for the company over the long term.

Mentioned this a minute ago. You know, as the energy side of things is really evolving, we’re participating. So we’re able to take a lot and have taken a lot of our know how in oil and gas and our our our taking that into these other developing areas. You know, an oil and gas facility or refinery of old is a large complex industrial facility. If you think about that complexity in any vein of making anything, there’s a lot of similarity in that.

And so we’ve we can take quickly what we know how to do and apply it to these other industries, and and I think that’s what you’re seeing over the last couple years as Paula’s really broken out with some of the growth of the company. This this is how we view our competition. You know, every engagement that we go into, there’s always some some or all of the folks there on the left. ABB, Eaton, Schneider, Siemens, I would note they’re all based in Europe. We’re the only US based manufacturer, publicly traded that is, here, but we always see these folks.

They know us. We know them. Where we start to differentiate, again, is how we make our things. We’re completely integrated in our factory for our electrical products. And then on the substation, four of our facilities here in North America, we make these buildings in various capacities and designs for the local market.

They largely don’t up until recently. They’re, you know, Eaton just announced an interesting acquisition of somebody that was previously on the right side, a company called Fiberbond, but largely regional players on the packaging side, where we do it all on the roof. Largely largely, our competition will go out in the market and and work with those folks in in a relationship, but we take on the entire responsibility of Powell. And then I’ll end with this slide. Our strategy really going forward is in three areas.

It’s as a manufacturer of technology starting from the bottom of your slide. We are we are investing capital organically into developing and solving problems for our customer, bringing more products to market to grow share of wallet. We are absolutely investing in our services business to go beyond install and commissioning, to be more relevant in OpEx, and maybe even on the upfront design side, leveraging our engineering capability. And then I noted earlier on the electrical automation piece, really us and a lot of our competition are all looking at this, and and and there’s just demographically less electrical engineers available to the world. And yet we have this huge expansion of electrical assets and distributed electrical generation and and need, and you’ve gotta maintain it.

And if you don’t have the people to do it and you’re gonna use your scopes and your meters like the electrical engineers like to do, then you gotta solve it another way, and the end of that equation is automation. So lots of opportunity here, and and we’re working on defining our our piece of that for the future, right now. And, we we believe that’s a good area of growth for the company. With that, I’ll pass to Mike here.

Michael Metcalf, CFO, Powell Industries: Thanks, Brett. Just on the on the heels of of that last slide that, that Brett spoke to, we we spend a lot of, a lot of our, heartbeats talking about capital allocation. You know, as we exited, the second fiscal quarter, we, we had three about $389,000,000 of cash on the balance sheet, albeit 50% of that will be deployed to working capital. But we, our liquidity position is very, very good. So we we do recognize what we, what we have to deploy to working capital.

We are spending a lot of time on, driving growth organically. We’ve doubled our r and d over the last couple of years along with, along with the revenue. We spent about a a point of a a point of our our of revenue on, on r and d, and, we did just announce three new products this last, this last quarter that are entering the market. And, shareholder return and inorganic growth are always, top of mind as well. So, you know, we’re we’re looking to deploy capital to grow the business as we as we look forward.

Now when, when we look at the financial picture, clearly, the last five or six years, we have, experienced tremendous growth, nearly doubled our our revenue, as you can see. Through the first first half of this year, we’re starting, fiscal twenty five very, very strong, $520,000,000 at 27 and a half percent gross profit that, you know, in the in the first quarter, we were about 24 and a half. It’s a seasonally softer quarter. Last quarter, February, we ended at about 30%. So on a six month basis, about 27 and a half percent, resulting in just under 19% EBITDA.

And cash is also a very good story. You can see over the last, you know, two and a half years, substantial cash cash growth. And, again, a lot of that is due to advanced payments for these large projects that we’re we’re executing, but, terrific cash performance, really driven by t’s and c’s and and milestones and execution. When you when you look at what’s happened over the last few years, you can clearly see in the in the bottom left, the book to bill. In fiscal twenty three, we experienced four consecutive quarters of mega order bookings.

So by mega, we define mega as anything over 50,000,000, and these were all well over that that hurdle rate. You can see in February and 03/2023, both of those quarters, we booked two mega two large mega orders respectively in each quarter. None in 2024 fiscal twenty twenty four. So fiscal twenty twenty four was, just a lot of nice, strong $10.20, $30,000,000 jobs. No no mega orders.

And as we enter, the half of this year, albeit, on the smaller size of mega, but we have, announced, three mega orders, through the six months of, of this year. So, our backlog, we ended ’23 at 1,300,000,000.0. We, maintain that level, while we grow our top line. Orders through the six months have grown 20%. Revenue’s grown 16%.

So we’re chewing through our backlog at a faster clip and increasing our our book to bill, the stuff that doesn’t necessarily impact backlog. So we’re we are generating more throughput in the business. As Brett as Brett alluded to the ANSI, the IEC, this is kind of a pictorial view of the ANSI world, which is in the blue in that, that peach color. And you can see it’s it’s mostly North America, some parts of, of South America, Latin America, Middle East, Southeast Asia. The rest of the world is all IEC, which is fed, as Brett said, by our UK facility.

The ANSI the ANSI volume is all fed by our North America North America facilities. Thus, you see most of our revenue is generated in The United States. The international revenue is much lighter. Most of that is is really generated out of Canada and, to a lesser extent, The UK. When you slice our revenue by vertical, if you will, Clearly, we are 50 to 60% oil and gas, petrochem, you know, core industrial volume where where Powell is is is clearly dominant.

Electric utility has grown substantially over the last five or so years. And if you took a look at our backlog, and I noted this on our last call, our backlog 29% of our backlog is represented by utility, electrical utility work. So it is it is a growing theme within the business, for a couple of different reasons. The say the commercial and other industrial, as as Brett said, we we broke this out in fiscal twenty two because data center work is captured in that in that segment, and that was that exceeded a 10 our 10% threshold. So we did we did break break that out.

And if you took about half of that that slice of the the revenue, that’s probably attributable to to data centers. Just from a a profitability perspective, you know, I I mentioned on the the page, really doing quite well on gross profit. We finished the year, last year at 27%. We’re, we’re we’re slightly higher than that through the first first half of this year due due really to operational leverage in the business, and we maintain we’re levering our s g and a, which falls down to EBITDA as well. We there’s nothing crazy going on in in s g and a other than, you know, we do spend a bit about a point on on r and d, is which is in that number, but very good cost management on the OpEx side.

Finally, on the on the on the balance sheet, this is we we have a a very, very stellar balance sheet. We as I said, we finished the quarter at $389,000,000 of of cash, zero debt. We did have few years ago, we did have a industrial revenue bond that we had in, for our Chicago facility. We retired that. Working capital, that is that is probably the, you know, the heaviest use of of capital deployment that the that the that the business does require.

As I said, about 50% of that $390,000,000 will at some point over the next, you know, twelve to eighteen months be deployed to working capital, whether it’s things we don’t make, HVAC systems, battery systems, you know, or or just commodities, steel, aluminum, thing things of that nature. So we do we do we are capital intensive, and we do deploy a large amount of that, of that cash to our to our projects, but we’ve gotten very good at, at levering our t’s and c’s such that we are not paying for that. The customer’s paying for that upfront. We’ll sit on that cash for, like I said, up to, twelve months until we need to deploy that cash. And it generates very good working capital turns, and and and return on equity over the past couple of couple of years.

On a trailing twelve month basis, we’ve returned over 30% on on on the equity on the equity value. So that’s, that kinda wraps it up from the financial perspective, John. And, if there’s any questions on the line, we’d be willing to take those.

John Franzreb, Senior Analyst, Sidoti and Company: Okay. If anybody has a question, please utilize the, q and a icon, and I’ll present the management. We do have a couple lined up already, gentlemen. Let’s start with the one. Question about, do you foresee battery storage at power plants as a large business opportunity for power?

Brett Cope, CEO and Chairman, Powell Industries: It is an active opportunity. I’m not quite sure how large it’ll be because one of the things in the electric side of what we do is very code driven. So in the battery world, we’ve debated should you know, years ago, should we go into this? Should we actually take it on? You know, the two key pieces of that are the specification on the battery and the inverter, neither of which we make.

And the fact that you don’t have a consistent spec on the battery, it’s kind of a free for all for how they apply it. But that said, you’re switching power, again, no matter the source. So we actually have some ongoing energy storage projects that are growing in size, kinda like data centers. The power as the power level goes up ten, twenty, 30 megawatt hour, it’s attractive to us from a distribution standpoint. So, yes, I I I don’t know how big it’ll be, but we like the business.

John Franzreb, Senior Analyst, Sidoti and Company: Interesting. Question about the gross margin and, EBITDA margin. They’re at multiyear highs. Is this a new normal, or do you expect a bit of a pullback?

Michael Metcalf, CFO, Powell Industries: I mean, look. We, when we exited COVID and we were sitting on backlog, you know, at margins in the that we sold in probably the mid teens and then, the the inflation escalation really it really it really stung us. I think in the fourth quarter of twenty two, we we exited the the quarter at 12 and a half percent gross profit because we I mean, we we didn’t have any recourse to to go reprice our projects. We have since taken a number of commercial and operational actions, whether it’s shortening the, the validity time on our proposals or it’s hedging copper or passing through the the engineer component costs from our our our suppliers onto the the customer, we have generated a lot of, processes within the business that have have helped buoy that, that gross that gross profit. That’s in conjunction with, you know, the pricing action.

If you took a look at price over the last three or four years, it’s not only offsetting it’s not only offsetting the inflation that we’re experiencing, but we’re also getting incremental price due to the capacity constraints in the in the market. Thirdly, we have a very large footprint in Canada, 350,000 square feet here, half a million square feet under under roof, and we’ve just got a very large footprint. And when you fill that footprint up, you generate tremendous amounts of operating leverage, and that’s what we’re seeing, over the over the course of the last couple years. And then you couple that with just fantastic project execution and risk mitigation, that’s that’s culminating into into the margins that we’re seeing. I noted on the last, the last earnings call, that we experienced through the first half of this year in that 27 and a half percent, roughly a 125 bps of project closeouts.

Those project closeouts are over and above what we sell the project at because there are inherent risks in the project. So our base case is in the ’26 to 27% range. Once you strip that 125 bps out, if you can maintain the the the discipline and the excellent project execution going forward, which we aspire to do, there will be some upside to that base case.

John Franzreb, Senior Analyst, Sidoti and Company: Certainly. It’s been great so far. About you you touched on this in your prepared comments about the data center market. Maybe just a little bit color of what you actually do the data center market.

Brett Cope, CEO and Chairman, Powell Industries: Yeah. That we we’ve always built data centers. And if you go back to the pre pandemic time, post pandemic, really when the world became constrained on supply, the ships off the heliport, which made the news, they all started coming here. So name brand, colos, their engineering partners, really more of what we would call contractors, companies like Clayco, Holder, Rossenden. We do the outside of the data center really well.

So the energy pipe utility generation genset that’s going into the data center is primarily media voltage, and that’s the sweet spot for power. When you get inside the data center, there is some media voltage, but there is a lot. And from what we can tell, a growing, requirement for low voltage, which we do make. We just don’t make the particular kind that they like. Again, spec driven.

We make a withdrawal breaker. It’s called a UL fifteen fifty eight. Most of the specs come out. It’s called a UL eight ninety one. Most of the multinationals we compete have a version of this.

We just released our version one noted on the call last month. So we are allocating some capital to that space, looking for for opportunity to match up and find our way thoughtfully in this space as it as it is big. And the more we learn about it, it is you it’s also a speed element to the construction that is very, very fast. And I’m sure, you might be hearing that from others in the space. It’s an unbelievably fast cycle in the build.

So we are interested in it. We are turning the whole company to it because we’ve got some really good things going in other verticals, especially utility. And we already see some data center pieces coming from the demand growth through the utility piece indirectly, but we are we are interested into it, and I and I believe we’ll continue to find positive momentum in this market over time.

John Franzreb, Senior Analyst, Sidoti and Company: Fair enough. Question about the book to bill. We touched on this also in your prepared comments. It was over two two years ago. Now it’s running about 1.1.

You talked about the mega projects. Maybe just some color on the opportunity profile. What’s the what’s the demand profile across the industry on on a go forward basis?

Brett Cope, CEO and Chairman, Powell Industries: Okay. So in the oil and gas petrochem sector, I mean, gas fundamentals have continued to be solid. You know, with the current administration, Chris Wright, DOE, it’s clear activity really started getting going right after the election, and it just has continued to amplify it in the months since. So it’s always, you know, timing and certainty around FID and funding and financing. But, you know, behind the scenes, estimating and engineering what ifs, It’s, it’s very broad and very very and I made a comment last last, earnings call about maybe having to invest in one of our facilities that does really well when you have coastal facilities, large substation requirements accessed by water.

We have a a very large 60 acre construction yard that has available land that we picked up a deck over a decade ago. We may we’ve done two expansions over the last six, seven years. We we may we may be looking at another one here if if we can be convinced that the the timing of this thing, this next tranche gets gets real. Utility piece, you know, again, I I I I’m very tuned to this market. I have been, as I noted up my entire time at Powell.

It’s great it’s great conversation. I mean, to see the utility folks engaging us and I’m sure our competitors and much more strategic discussion about the demand grow growth over the next ten to twenty years, not something I’ve experienced before. You know, a lot of questions on the regulated side of how quick they can really move, and then there’s a lot of conversation about behind the meter opportunities to quickly move and fill gaps. So those are going on outside of the utility piece, but, you know, it’s it’s a broad conversation, and it’s it’s it’s very active. And then as I already noted on the C and I side, you know, it’s still opportunistic for Powell, but we are investing in it.

And hard to predict how far that can go, but if any one of our products that we’re rolling out now, as we expect, will be successful in the market, we’ll be we’ll be challenged with capacity, you know, in the near midterm of doing the next thing.

John Franzreb, Senior Analyst, Sidoti and Company: Question from the audience on, the LNG market. What are you seeing now with the moratorium lifted?

Brett Cope, CEO and Chairman, Powell Industries: Yeah. The the the potential is it’s big. One of isn’t John, Sadoti, but I do get asked on the calls about, you know, how much are out there? Is there more out there? What inning are we in?

From an MPTA standpoint, in terms of what we’ve executed as Powell, I haven’t really done the math on, like, all available MPTA produced in the North American market. But I suspect there’s more into to to total that’s being considered at least going forward than it’s already been produced. That’s through expansions and new greenfields. Because some of these expansions that are being considered are pretty large, and you can almost call them their independent greenfield. So I don’t know if they’ll all get through because you gotta build these things and a lot of resources on the construction side.

You know, each one of these when they’re built are anywhere from three to 7,000 people at peak. So you need a lot of resources, but the potential is is very large over the next,

John Franzreb, Senior Analyst, Sidoti and Company: you know, five to seven years. Definitely sounds so. We’ll sneak one more question in. After the phenomenal growth in recent years, are there any operational constraints? You also touched on this, Brett.

Labor capacity, supply chain that could maybe delay execution.

Brett Cope, CEO and Chairman, Powell Industries: No. I don’t think so. I mean, we we have shared that we are you know, the growth of the backlog and the revenue profile, existing facilities, fixed assets, we’re probably running 85%. We continue to look at our shift work. How do we work more thoughtfully?

Mike noted on the productivity piece. Really, still opportunity productivity wise, applying technologies and and machine learning and and AI in our facilities. We’re we’re working on that, through our manufacturing teams. The products that we’re launching now into the space that just came online, the 56,000 square feet, we expect, hope, expect to be challenged with the next capacity need. We are building playbooks of what that means about buying or building out in the world and and, and how we would do that, efficiently.

And then on the long cycle stuff that makes pow pow today and historically, you know, we’ve shared that we’ve solved, we think, the next step of engineering, that front end work that you’ve gotta do to produce thousands and thousands of drawings. That’s the piece in everything we do. So we’ve now grown beyond our facilities. We opened up a center here in West West Houston that is growing nicely. We’re engaging, some low cost engineering relationships that we’ve been in for a long time.

In other parts of the world, what can they do and how we grow their capability beyond just take off engineering to now engineering start to finish certain elements of the product to enhance productivity. So no. We we think that we’re addressing all that all the way through the factory fabrication. And so we’re we’ve got plans in place to continue to, pull the trigger at the right time, spend the capital. So we are well positioned to take on as much as we can as as the market’s gonna give.

John Franzreb, Senior Analyst, Sidoti and Company: Okay, gentlemen. We are out of time. Any closing comments?

Brett Cope, CEO and Chairman, Powell Industries: Look. Again, we appreciate the opportunity. Really, thank you for the to the participation today. I I always like to focus on the people of Powell. You know, the long cycle project business is not easy.

I’ve spent my career in it at ABB twenty years and the fifteen years I’ve been here at Powell. I can’t say enough of how important it is that you also analyze that part. To take a project over three years and deliver it and and get all your cash as a supplier, it’s not easy. I can point to engineering companies that have gotten chewed up in this business. I can point to suppliers.

Powell’s the best. We do it really well. It isn’t easy. It takes a lot of effort, and, it is a differentiating factor for our model.

John Franzreb, Senior Analyst, Sidoti and Company: Well said, Brett. Thank you both. Enjoy the rest of your day. We appreciate you here at Sidoti and Company. Have a great one, guys.

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