Facilities. We are fortunate to have with us today Brett Cope and CFO Michael Metcalf. Following the presentation, there'll be time for Q&A. Please utilize the Q&A icon to submit those questions, and I'll present them to management. Some of you may have to look at the three dot area to bring it to a surface, and then you can submit the questions. Having said that, gentlemen, thank you for being with us. The floor is yours.
Thank you, John. Appreciate you and the team at Sidoti & Company and the opportunity this afternoon to present at the conference, and thank you for all the participants joining. As John noted, I'm Brett Cope. I'm the CEO of the company, and joining me is Mike Metcalf, CFO. I'll start with a brief intro on some of the slides here on our deck and then pass it to Mike to cover some of the detail on the financials, and then we'll get to Q&A as quick as we can here. Jumping down here, slide three on our deck. Powell is just over $1 billion of revenue.
We are a manufacturer of electrical technology and solutions that help control the flow of power between the generating source, and we're agnostic to how the power is generated, to how you apply the power, throughout the facility or utility or in, you know, commercial, markets such as a data center. I'll come back to some of that in a little bit more detail here in a second. Founded in 1947. Mike and I are sitting here in Houston, Texas today. We are largely based around the ANSI electric standard. All but one of our facilities, seven manufacturing facilities in the U.S. and Canada, support the ANSI standard.
The rest of the world, when you get into Europe and Asia, you're gonna find the IEC standard, and we have one factory in the United Kingdom that supports, builds products and solutions for that part of the market. In the pie charts there, you can see, at the top, revenue by geography, we're largely here in North America. We grew up in Houston, so a lot of our market over the decades was based around the heavy industry of oil and gas and petrochem. I could go on to say any sort of heavy industry, pulp and paper facility, mining, anything where you're moving a lot of material, would be industrial.
More recently, in the last 10, 12 years, we've been growing out a strategy around electric utility, which today represents about a quarter of our business. More recently, commercial and other industrial, which includes a lot of diverse commercial markets, but definitely anchored by data centers, which is I know a pretty big topic these days. Here's a couple examples of things that we make. Again, to try to drive this down to the very basic metaphor. Example is wherever you live, in the place you live, apartment, town home, flat, house, somewhere you've got a gray, or most likely a gray panel. You open it up, and inside there are a bunch of breakers. Everything in that box we make at industrial scale.
On your screen, the gray and red breaker there with the wheels is an industrial version of a medium voltage breaker in this case that we fabricate here in Houston. All of our breakers for the globe are based. We have three facilities here in Houston alone, and we have one factory that's dedicated to production of these breakers. These breakers are just like the smaller version of the residential breaker, just at scale. They go into a box called a switchgear, which is in your middle picture, a big metal box that has three phases of copper bus for your different phases of electrical energy. It's produced on rotating equipment. Then there's a lot of protection and control devices.
Digital and electro-mechanical monitoring and control around the operation of the breaker and the switchgear, so it can safely power the various circuits that are running throughout the facility. Over the decades, Powell developed the ability to build and bring to market modular substations. This is on the far right of the slide. This is, in this case, a very heavy offshore multi-story building that we design and build. We do a lot of different flavors of these around the world, from offshore to onshore to, in Canada, we build it in a completely different design as we entered that market 10 years ago. That mechanical know-how has really evolved in the company.
As I shared, it allows us to deliver a modular solution that encompasses a lot of the products and solutions that we bring to market and further extend our reach into the markets that we serve. Our bookends for our products are low to medium voltage. On the low side, we start at 480 volt, and we top out at 38,000 volts at the top end of medium voltage. Those are the products that we aspire to put our knowledge and IP in to bring new products to market, to build within our factories. On the integration side, we'll extend those bookends and buy other products that go into the higher voltage for integration.
In terms of what we are interested in bringing to market organically or in the case of an inorganic strategy, we'll be looking in that 0%-38%. Very much ETO. Some of that market we're adding to it today on commercial market in terms of a little less ETO, a little bit more configure, but still today, largely 90%-95% ETO. And really in all of our three secular drivers, industrial, utility, and commercial, we aspire to build very long-term sticky relationships. So we're not just looking for the first project or opportunity. We're looking for a long-term relationship on both CapEx and OpEx opportunities. Short pictorial where we sort of fit in the whole transmission of energy.
Again, agnostic to the generating source. We pick up at the utility as the power is being generated, whether that's utility scale or, you know, now there's a lot of behind-the-meter solutions that are being thought about for the growing gap between available power and what's being generated. The other side, after bulk power, whether you're in an industrial facility or transit or anything commercial, you're gonna find Powell very applicable in the distribution of energy as it gets put to work. Note where there's two electrical standards in the world, having both been born and raised here in Houston, we are very tied to the ANSI standard. That's the U.S., Canada, parts of Latin America.
You'll find the standard in parts of the Middle East and parts of the Far East. The rest of the world is IEC, which is the factory we have in the U.K., all of mainland Europe, China, pretty much most of Australia, and then South America, especially up through Brazil, you're gonna find all IEC. It's the predominant standard globally speaking. Like I noted, we do have the one factory. We are predominantly ANSI in terms of power size. A couple examples. Another offshore example of a building here on the screen. The one on your left here, this is an onshore design. We build this type of building here in Houston at two of our facilities. At four of the facilities out in North America, we build the onshore design.
Growing in popularity, not only do you see this in industrial utility, this is really coming on in the commercial market now. You get into constructability and how to speed things up when you're building large power-consuming things like data centers as they grow in power. Inevitably, as the speed goes, it speeds up in the time to market. The more you can modularize and build in parallel and bring it together on site, this is where you start to see these solutions really become advantageous to have as part of your solution, to have more efficient capital in the build. Every one of these substations, in our case, we call a Power Control Room, very ETO.
What we mean by that is sitting here alone in Houston, where Mike and I are downstairs, we have 100 engineers between mechanical, electrical, and civil. We may spend a year doing drawings and design before we even cut one piece of steel. Very highly engineered. The more complex, the more engineering, the more time you're gonna spend in the drawing process, understanding that you got it right before you reduce it to a bill of materials. Then when it comes into Powell, what's a little different about our model is we are extremely vertically integrated, and that at each of our factory locations, you're gonna find raw materials, copper, steel, aluminum in one door, and then we fabricate in terms of laser, punches, brakes, welding, paint, finished product leaving the other door.
Breaker, switchgear, substations, kind of wholly owned factories at each of our locations. Control and monitoring, Powell has a rich history in applying automated solutions into the electrical space. This has really picked up speed over the last decade. The electric folks, our electric engineers that are maintaining a lot of our facilities, they like their meters, they like their O-scopes. But given the breadth and depth of the electrical kit that's coming online between the huge ramp and generation, the huge use and application, there's so many new things entering the market that the digital technology is making its way into our technology much faster than ever before, to help control safely the flow of electrical energy, and it's now pivoting into the asset management of these facilities.
Just fewer people helping to manage what is a logarithmically growing base of consuming energy assets. The only really way to solve that is gonna be through digital technology. Powell is right there with our competitors, bringing our unique solutions to market to help our clients maintain their assets and extend the capital life of their investments. Remsdaq, you know, people ask about Powell and our cash balance, super healthy company. Mike will touch on that here in a minute. We just did a tuck-in acquisition, again, in the context of a digital automation. This has been on our roadmap for a while, and we were able to close on this last August and kinda fell into this data center market. It's actually sped up our entrée of this solution into the North American market.
Pleased to report we're already taking orders ahead of schedule in North America, which was always our plan on the utility market, but with the strong commercial markets allowed us to speed up our plans. Primary end markets, again, very heavily weighted in the industrial market, oil and gas, petrochem, along with some of its, you know, gas to chemicals, pipelines, biofuels. We lump all that into oil and gas, sustainable aviation fuel, all that to us is an industrial facility. Utility, our second largest segment and growing over the last 12 years, really intentional strategy. Then more recently, the commercial and other which includes data centers and hospitals and pretty much any type of commercial facility.
Every day we wake up, we are competing with ABB, Eaton, Schneider, and Siemens, all four of those based in Europe. They'll use regional partners in certain geographies to help package and deliver substation-type solutions to the market. Those are typically more regional plays, and so we know both ends, the global competitors as well as the regional partners when we're going to market in the various geographies and market verticals where we compete. Final slide for me. This is the overarching slide on our strategy. We're looking to grow and become the electrical solutions of choice for distribution. When you think about distributing your energy safely between the 0 volt and 38,000 volt distribution need, Powell aspires to have the technology and the people, and the know-how to do that safely, bar none.
We want to add into their electrical automation for safe digital management of that energy solution. Then along with that, we aspire to be the company to help commission that equipment, but then also to pivot into helping you maintain that equipment over its 40, 50, 60-year operational life. With that, I'll pass it over to Mike.
Thanks. Thanks, Brett. From a capital allocation perspective, as Brett noted, we are adding to the product portfolio inorganically, i.e. Remsdaq, a small tuck-in, and, you know, we've got an active pipeline of targets of all shapes and sizes. That is definitely part of our strategic plan. Organically, whether it's R&D or allocating capital for capacity additions, these are all items that are top of mind for us. From a dividend perspective, we just hit our fiftieth consecutive quarter of dividend issuance here this last quarter. This is a topic that we review with the board quite frequently.
Further to that point, as people look at our cash balance, we get the question a lot, "You've got $500 million of cash, what are you gonna do with it?" If you think about the length, the lead time of the projects and backlog, you know, on average, probably 18-24 months lead time from the time you take the purchase order, you start getting milestone payments in to the time you output those products to the customer. Half, roughly half of that cash balance will be deployed at some point in the future to that $1.6 billion of backlog.
Once you think about the CapEx needs of the business, the dividends that I just mentioned, and the ongoing R&D, which typically runs about 1% of revenue per year, there's roughly $200 million-$225 million of cash that's available for other uses to grow the business. You can see on the right-hand side, last year was kind of a high watermark for us from a capital allocation perspective, given the acquisition of Remsdaq. Typically our organic CapEx needs are pretty modest across the business.
When you look at the historical financials across the business, you can clearly see over the last five years, a dramatic increase, not only in top line, which coincides with the backlog and the orders cadence that we've seen across all of our three main end markets, as Brett noted. The margins have increased dramatically from, you know, roughly 16% gross profit and 2.5% EBITDA back in 2021 to this latest fiscal year, 2025, at just under 30% gross profit, 29.4% and 20.4% EBITDA.
We've been able to really leverage up the business, the footprint, the utilization across our plants in predominantly in North America, Canada and the US, while maintaining and leveraging the SG&A, really managing that closely. CapEx, as I just mentioned, really quite modest, in the grand scheme of things. Last year, $13 million of productive and maintenance CapEx. We delivered $14.86 per share. You know, that was up from $12.29 per share the prior year. Now, this last quarter that we reported, typically seasonally the softest quarter of the year. Our first quarter, our first fiscal quarter, October, November and December, is typically the softest quarter of the four quarters.
We reported about $250 million of revenue. Had a great orders quarter, which I'll get into in a minute. The gross profit was 28.4%, and we generated $3.40 EPS, and just under $44 million of operating cash flow in the quarter. The last, you know, from 2023 forward, really fantastic execution across the business, coupled with a strong cycle from a macro perspective. I touched on the orders and backlog briefly on the prior page. I'd point to the upper left-hand quadrant. Backlog hit an all-time record high last quarter, $1.6 billion. That was fueled by a couple of large orders that came in.
We had a $100 million plus LNG order that we talked about on the call. That was what we call a mega order. We also had our first mega order in data centers. We called out a $75 million data center order last quarter as well, and that was a subset of overall better than $100 million of data center work that added to the order book last quarter. Orders last quarter were north of $400 million. Our book-to-bill last quarter was $1.7 million, which you can see on the lower left-hand quadrant. It didn't exceed where we were in mid-2023 when we booked five or six large industrial projects back-to-back quarters.
Really a very, very strong commercial orders quarter last quarter that will buoy the business here over the next year plus. From a backlog diversification perspective, given our emphasis on growing utility volume, which we've been on a very thoughtful, deliberate march to grow that segment of the business over the last decade plus. You can see going back to 2021, our backlog was $450 million, and of that just over 20%, 21% was electric utility. The commercial and other industrial, where the data center work sits, was 3%. Fast-forward to this last quarter that we reported, $1.6 billion of backlog. Our electric utility was roughly a third, 30%. Commercial and other industrial was better than 20%.
Probably data centers of that 22% was probably, you know, roughly 12%-15% of that total. It's grown dramatically, as has the absolute dollars of the backlog as well. I would also point out, in this strategic broadening of, you know, reaching into these different markets, you'll notice the percentage of oil and gas petrochem has gone down from in 2021 at a smaller base, clearly $450 million, it was over 60%. Today it's about 40%, and that's just a function of growing those other segments. We still get good volume in the oil and gas and petrochem sectors, as I noted with the LNG job that we just won, but the other sectors are quite active and increasing.
Just touching on the global bifurcation of our revenues. Brett mentioned we are predominantly ANSI, so North America standard. Our U.S. and Canadian operations are predominantly the major U.S. centers where we do most of our ANSI, you know, all of our ANSI business. So clearly U.S. revenues are nearly 80% of the total business. International, which includes Canada and the U.K. and rest of the world, is about 22%. When you break it up across the different end markets, you can clearly see of that $250 million, utility is steadily growing. It was 28% of the revenue that we booked in the first quarter, while the commercial and other industrial was holding at 16%.
The industrial businesses, petrochem and oil and gas were the other large segments as well. With that, John, I think I would turn it back to you, if there's any questions from the audience.
Fair enough. Thank you, Brett. Thank you, Mike. I'm gonna actually start off with the first question. Can you talk a little bit about the capacity expansion? What are you really trying to address with the expansion, and what's the timeline for finishing?
Last year, a year and a half ago, we started two expansions. One's largely finished. We finished a 50,000 sq ft facility add to our breaker factory. That was largely to help support some of the organic products that are launching out of R&D, largely focused on utility, as those come out of market to grab share of wallet and diversify some of the sector there. The one that's ongoing that we announced last year, it's gonna come on stream this summer, May, June. In the next few months is our offshore yard. We're actually doubling the usable space. We had a lot of land in reserve contiguous to the existing production facility, so nearly 335,000 sq ft of new productive capacity will come online.
That is largely justified and built to support the coming wave of large industrial oil and gas projects, mostly LNG and gas-related, gas chemical type projects located in the Gulf Coast from Louisiana down around to Mexico. Having this yard gives us a lot of optionality built to build extremely large substations that will ship by barge through water access. Having that yard on the Intracoastal Waterway here in the southeastern United States gives us a competitive advantage to build these large substations. Recently in the last quarterly call, we shared that we're starting to bring on some lease.
Properties, very efficient way to bring on some assembly and storage of WIP and inventory for largely the commercial market, but products and solutions that are more flow-based. Building a lot of one type of piece of kit that we make, that where the volumes are requiring us to move a little quicker in terms of unit velocity per month, per quarter in order to meet the needs of the market. I expect you'll, as we continue to find success in that market, we'll use those types of properties to efficiently expand while we consider, you know, more durable PP&E investments by Powell in the future.
Question from the audience. We're gonna move to that. You know, you mentioned your ANSI dominant. Why not or are there any plans to expand into IEC on a more global basis?
Yeah, we're all looking. We're developing some products that will certainly help us move beyond the markets we exist today based out of the U.K., largely oil and gas, and a lot of parallels to how Powell grew up, which attracted the management team at the time to acquire the IEC factory in 2006. We are doing some things organically, and then absolutely part of our inorganic funnel is to look at things out in the market that would allow us to add to the story IEC, but may also allow us to give us a head start on ANSI-fying something that we don't have today that exists in that market, that with some tweaks and touches we could bring here and maybe shorten the R&D cycle. Definitely absolutely part of the strategy.
Uh-
Great. I'm gonna combine some questions here. We call it an update on commodity prices. Copper is important to you. Oil prices have rebounded significantly since the last time we spoke on this, on a conference like this. Do you hedge copper? Have freight costs become an issue for you guys? Can you just kinda talk to those items?
Yeah. The first point, John, yes, we do hedge copper. We use a lot of copper, as you might imagine. We do have a hedging program with copper. I would also note we've got some very good partners from a supply chain perspective that we get our copper from, are very dependable and we've used them a long time and they're very good partners for Powell. The copper, when copper really spiked post-pandemic, you know, that was, you know, put the price of copper aside, but the availability was not a concern for Powell. We were able to get copper in pretty short order and at spot prices. That was not an issue.
Logistics, yeah, we keep with the current events happening in the Middle East. Of course, we're keeping our fingers on the pulse of logistical costs, i.e. fuel surcharges and the like. You know, today we haven't seen, in the short term anyway, any dramatic increases in our logistics or freight costs today. If things persist, you know, that may be an avenue that we'll have to make sure that we get some sort of recovery.
Got it. Along a similar vein, how long do you think it would take for elevated oil prices to actually impact the order book?
Well, I assume that means positively.
Yes.
Look, I have to believe, you know, unfortunately, the conflict is occurring. We could talk about that all night. I do think it will eventually affect the market. It's gonna affect the gas market. It will eventually affect, you know, between Qatar, the States and Australia, it's gonna affect some level of investment in the future in the gas market and how it continues to evolve and what gets built, what markets get capitalized, what attracts safe capital. In the near term, it will affect competition for what we do. There's a fair amount of modular substations built in the Middle East. We know the yards very well. Probably not the best place to place an order right now. That could have a near-term positive effect on Powell, quite frankly.
We don't have a yard there. We do compete there. We ship a lot there. We know the market very well. There could be some short-term effect. Again, haven't seen it, but I'm already hearing things about, you know, lots of people hiring trucks and driving across Saudi to the other side to safely ship things out the region. That's gonna have an effect.
Let's make this the final question because it merits consideration. Talk about your relative competitive strength versus really large companies such as ABB and Siemens.
Yeah. Look, at the end of the day, in competition, you have to execute. Powell's entire model for 80 years is a very front-end. We make the decisions for the client in the front end of the award. We manage the project with the client in the very front end. What I mean by that is our P&L decisions are managed in the project environment, and our factories are in support of that. We've had that model our entire history. If we execute and we win that client for the first time, the area we differentiate on competitively in our business day to day, and the part that I always like to draw investors to, is that piece of it. The minute you aren't hitting your numbers, you're gonna find companies move away from projects because they're not easy.
Powell does it very well. You find it in our cash, we recover our cash, and we have sticky customers. Just like we have in oil and gas, we've made our way now for 12 years in utility, growing an incredible amount of share in the ANSI market in the U.S. and Canada. That came competitively against those companies that we compete against. As we talk about data centers commercial, last quarter shows you with focus and execution, what we're doing in this commercial market. We will continue to make progress in that. I can't really worry about those other guys. I know where we're strong. As long as we control that, I believe the upside limit of Powell has got a long way to run.
Well said, Brett. With that, any closing remarks, gentlemen?
Well, look, we really appreciate people joining this afternoon and the interest in Powell. It is a compelling story. We are the last publicly traded company that does what we do here, actually makes the breaker, makes the switchgear domestically. That also has other implications. We talk about the military, we talk about those utilities that are getting incentivized for Buy America. For the first time ever, we're looking at a government affairs person. You know, I'm not anti-global, but I am pro Powell, so all's fair. Stay tuned. I can't wait to update you next quarter.
Sounds great. Thank you. Thank you very much for being with us today. Have a great day, everybody.
Thanks, guys.