Powell Industries, Inc. (NASDAQ:POWL) Q3 2018 Earnings Conference Call - Final Transcript
Aug 08, 2018 • 11:00 am ET
Greetings, and welcome to the Powell Industries Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Natalie Hairston with Dennard Lascar, IR. Thank you. Ms. Hairston, you may begin.
Thank you, operator, and good morning, everyone. We appreciate you joining us for Powell Industries' conference call today to review the full year 2018 third quarter results. With me on the call are Brett Cope, Powell's CEO; and Don Madison, CFO.
Before I turn the call over to management, I have the usual details to cover. If you didn't receive an e-mail and news release issued yesterday and would like one, please call our offices at Dennard Lascar, we will get that to you. The number is (713) 529-6600. Also if you want to be on the e-mail distribution list for Powell releases, please relay that information to us.
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 15. The information on how to access these replay features was provided in yesterday's earnings release. Please note that information reported on this call speaks only as of today, August 8th, 2018, and therefore, you're advised that any time-sensitive information may no longer be accurate at the time of replay listening or transcript reading.
(Forward-Looking Cautionary Statements)
Now I'll turn the call over to Brett. Brett?
Thank you, Natalie, and good morning, everyone. I will make a few comments, and then I will turn the call over to Don for more financial commentary before we take your questions.
Powell's fiscal third quarter results are highlighted by improvements in both operational performance and market activity across our domestic operations. Our improved revenue and gross margins are a result of increasing volumes as well as improvements in operating efficiencies. During the quarter, we continued to make steady progress towards completing lower margin projects that were booked under more extreme competitive pressures throughout last year and into early 2018.
We experienced continued strength in new bookings. Market strength again is primarily from the US notable in the quarter was increased activity from downstream and midstream markets. However, as we reported over the last several quarters, new orders continued to be driven largely by an overall increase volume of small brownfield and maintenance projects. We are experiencing modest activity for larger orders with only a handful of awards in our third quarter over $5 million and only one project over 10 million across the company.
We continue to be encouraged by improved bidding activity across a variety of end markets. We've also seen the planning for several larger projects continue to move towards key milestones. We continue to be prudent in today's market environment. We are unafraid to push back or even