Financial Analysis

Business Acquisition On August 15, 2025, Powell UK Limited, a fully owned subsidiary of Powell Industries, Inc. completed the previously announced business acquisition of all outstanding equity interests in Remsdaq, a U.K.-based manufacturer of SCADA RTUs for electrical substation control and automation in generation, transmission and distribution, for a total consideration of $18.4 million including cash acquired of $4.6 million. Cash payment of $15.2 million, including cash acquired of $4.6 million, was made on the acquisition date and deferred payments of $3.2 million are contingent upon Remsdaq meeting certain technical and financial milestones. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of August 15, 2025. In September 2025, Remsdaq achieved its financial milestone and accordingly, we made cash payments of $0.9 million and reduced the fair value of the deferred payments to $2.3 million. We incurred total acquisition-related costs of approximately $1.4 million, including legal, accounting, valuation, and other professional fees. These costs were expensed as incurred and included within Selling, General and Administrative Expenses in the Consolidated Statements of Operations. The aggregate purchase price allocation at the acquisition date was as follows (in thousands): Purchase Price Allocation Fair value of assets acquired Cash and cash equivalents $ 4,565 Receivab …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies Letters of Credit, Bank Guarantees and Bonds Certain customers require us to post letters of credit, bank guarantees or surety bonds. These security instruments assure that we will perform under the terms of our contract. In the event of default, the counterparty may demand payment from the bank under a letter of credit or bank guarantee, or performance by the surety under a bond. To date, there have been no significant draws or claims related to security instruments for the periods reported. We were contingently liable for letters of credit of $77.5 million as of September 30, 2025. We also had outstanding surety bonds totaling $417.3 million, with additional bonding capacity of $782.7 million available, at September 30, 2025. We have strong surety relationships; however, a change in market conditions or the sureties assessment of our financial position could cause the sureties to require cash collateralization for undischarged liabilities under the bonds. We have a $20.2 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank that provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options. At September 30, 2025, we had outstanding guarantees totaling $3.9 million, with additional capacity of $16.3 million available under this Facility Agreement. The Facility Agreement provides for customary events of default and carries cros …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present our disaggregated revenue by geographic destination and market sector for the years ended September 30, 2025, 2024 and 2023 (in thousands): 2025 2024 2023 United States $ 880,222 $ 846,526 $ 557,934 Canada 157,191 106,521 84,090 Middle East and Africa 27,440 13,440 14,998 Europe 25,072 31,388 26,699 Asia/Pacific 9,283 6,850 6,188 Mexico, Central and South America 5,110 7,631 9,399 Total revenues by geographic destination $ 1,104,318 $ 1,012,356 $ 699,308 2025 2024 2023 Oil and gas (excludes petrochemical) $ 406,565 $ 417,170 $ 273,117 Electric utility 278,988 186,547 158,400 Commercial and other industrial 178,222 149,899 103,966 Petrochemical 151,166 185,606 94,188 Light rail traction power 41,264 22,019 28,112 All others 48,113 51,115 41,525 Total revenues by market sector $ 1,104,318 $ 1,012,356 $ 699,308

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Stock-Based Compensation We have the following stock-based compensation plans: Restricted Stock Units In February 2014, our stockholders approved and adopted at the Annual Meeting of Stockholders the 2014 Equity Incentive Plan (the 2014 Plan), which replaced our 2006 Equity Compensation Plan (2006 Plan). Persons eligible to receive awards under the 2014 Plan include our officers and employees. The 2014 Plan authorizes stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs) and performance-based awards, as well as certain other awards. In February 2023, our stockholders approved an amendment to the 2014 Plan that extended the term of the 2014 Plan by five years and increased the number of shares of common stock that may be issued under the plan by 600,000 shares for a total of 1,350,000 shares. In accordance with the 2014 Plan, the Compensation and Human Capital Committee has authorized grants of RSUs to certain officers and key employees of the Company. The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market during a specified period prior to the grant dates. Typically, these grants vest over a three-year period from the date of issuance and are a blend of time-based and performance-based shares. Fifty percent of the grant is time-based and typically vests over a three-year period on each anniversary of the grant date, based on continued employment. The remaining fifty percent of the grant …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements We measure certain financial assets and liabilities at fair value. Fair value is defined as an exit price, which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in valuing an asset or liability. The accounting guidance requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. As a basis for considering such assumptions and inputs, a fair value hierarchy has been established that identifies and prioritizes three levels of inputs to be used in measuring fair value. The three levels of the fair value hierarchy are as follows: Level 1 Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 Unobservable inputs that are supported by little or no market data and require the reporting entity …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Other Intangible Assets Our intangible assets include goodwill of $6.1 million, which is not being amortized, and other intangible assets of $6.1 million being amortized over their estimated useful lives. No impairment expense has been recorded for the last three fiscal years. The changes in the carrying amount of goodwill for our single reporting segment are as follows (in thousands): Total Balance at September 30, 2024 and 2023 $ 1,003 Goodwill related to Remsdaq acquisition (1) 5,143 Foreign currency translation adjustment (21) Balance at September 30, 2025 $ 6,125 (1) See Note P. Business Acquisition for additional information. Intangible asset balances, subject to amortization, at September 30, 2025 and 2024 consisted of the following (in thousands): September 30, 2025 September 30, 2024 Weighted Average Remaining Useful Lives in Years Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Customer relationships 12 $ 2,202 $ (23) $ 2,179 $ $ $ Technologies 5 3,518 (76) 3,442 500 500 Trademarks 10 475 (6) 469 Order backlog 1 55 (7) 48 Total intangible assets $ 6,250 $ (112) $ 6,138 $ 500 $ $ 500 Net carrying value of intangible assets attributable to the Remsdaq acquisition was $5.6 million at September 30, 2025, consisting of customer relationships, technologies, trademarks and order backlog. The amortization expense for all amortized intangible assets was $0.1 million in Fiscal 2025. …

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Income Taxes The components of the income tax provision were as follows (in thousands): Year Ended September 30, 2025 2024 2023 Current: Federal $ 40,543 $ 45,271 $ 18,129 State 9,052 8,101 4,036 Foreign 8,076 342 107 57,671 53,714 22,272 Deferred: Federal (5,083) (11,872) (7,458) State (1,144) (1,620) (1,499) Foreign 1,359 6,018 1,110 (4,868) (7,474) (7,847) Total income tax provision $ 52,803 $ 46,240 $ 14,425 Income before income taxes was as follows (in thousands): Year Ended September 30, 2025 2024 2023 U.S. $ 193,656 $ 167,887 $ 56,923 Foreign 39,894 28,201 12,027 Income before income taxes $ 233,550 $ 196,088 $ 68,950 A reconciliation of the statutory U.S. income tax rate and the effective income tax rate, as computed on earnings before income tax provision (benefit) in each of the three years presented in the Consolidated Statements of Operations, was as follows: Year Ended September 30, 2025 2024 2023 Statutory rate 21 % 21 % 21 % State income taxes, net of federal benefit 3 3 3 Research and development credit (1) (1) (2) Foreign rate differential 1 Valuation allowance (3) Non-deductible expenses 2 1 1 Impact of U.S. global intangible taxes and benefits 1 1 Stock-based compensation (3) (1) Effective rate 23 % 24 % 21 % Our income tax provision reflects an effective tax rate on pre-tax results of 23% in Fiscal 2025 compared to 24% and 21% in Fiscal 2024 and 2023, respectively. The income tax provision for Fiscal 2025 was favorably impacted by benefits related to the v …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Our leases consist primarily of office space and construction equipment. All of our future lease obligations are related to non-cancelable operating leases. The following table provides a summary of lease cost components for the years ended September 30, 2025, 2024 and 2023 respectively (in thousands): Lease Cost 2025 2024 2023 Operating lease cost $ 932 $ 920 $ 1,457 Less: sublease income (515) Variable lease cost (1) 188 108 369 Short-term lease cost (2) 2,422 2,476 1,864 Total lease cost $ 3,542 $ 3,504 $ 3,175 (1) Variable lease cost represents common area maintenance charges related to our Canadian office space lease. (2) Short-term lease cost includes leases and rentals with initial terms of one year or less. We recognize operating lease assets and operating lease liabilities representing the present value of the remaining lease payments for leases with initial terms greater than twelve months. Leases with initial terms of twelve months or less are not recorded in our Consolidated Balance Sheets. The following table provides a summary of the operating lease assets and operating lease liabilities included in our Consolidated Balance Sheets as of September 30, 2025 and 2024, respectively (in thousands): September 30, Operating Leases 2025 2024 Assets: Operating lease assets, net $ 1,664 $ 1,216 Liabilities: Current operating lease liabilities 882 595 Long-term operating lease liabilities 782 621 Total lease liabilities $ 1,664 $ 1,216 The following table provides t …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Long-Term Debt U.S. Revolver On October 4, 2023, we entered into a third amendment (the Third Amendment) to our credit agreement with Bank of America, N.A. (as amended, the U.S. Revolver). The Third Amendment, which added Texas Capital Bank as Syndication Agent and a lender, increased the amount of the revolving line of credit from $125.0 million to $150.0 million, and extended the expiry date to October 4, 2028. The aggregate commitment of $150.0 million consists of $100.0 million committed by Bank of America and $50.0 million committed by Texas Capital Bank. As amended by the Third Amendment, the lesser of (a) $60.0 million, (b) 60% of available cash, and (c) the aggregate face amount of the issued but undrawn letters of credit that are not cash-secured shall be deducted from consolidated funded indebtedness when calculating the consolidated net leverage ratio. We have the option to cash collateralize all or a portion of the letters of credit outstanding, which would favorably impact the consolidated funded indebtedness calculation and the consolidated net leverage ratio. On June 26, 2024, in connection with the expected discontinuation of the publication of the Canadian Dollar Offered Rate (CDOR), we further amended the U.S. Revolver by entering into a Canadian benchmark replacement conforming changes amendment with Bank of America, N.A. that added and amended certain terms related to the replacement of the CDOR as a benchmark rate with the forward-looking term rate based …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recently Adopted Accounting Standards Update In November 2023, the Financial Accounting Standard Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires that public entities disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) on an annual and interim basis. It also requires that public entities disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures in assessing segment performance and resource allocation. Additionally, it requires that all existing annual disclosures about segment profit or loss and assets must be provided on an interim basis and clarifies that single reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety. ASU 2023-07 was effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years beginning after December 15, 2024. A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Early adoption was permitted. We have adopted the new standard with an effective date of October 1, 2024. See Note N. Segment Information for additional information. Accounting Standards Updates and Disclosure Rules Issued but Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , whic …

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Employee Benefit Plans Retirement Plans We have defined employee contribution plans for substantially all of our U.S. employees (401k plan) and our Canadian employees (Registered Retirement Savings Plan). We recognized expenses under these plans primarily related to matching contributions of $5.3 million, $4.4 million and $3.4 million in Fiscal 2025, 2024 and 2023, respectively. Deferred Compensation We offer a non-qualified deferred compensation plan to a select group of highly compensated individuals (as defined). The plan permits the deferral of up to 50% of a participants base salary and 90% of a participants annual incentive. The deferrals are held in a separate irrevocable rabbi trust (the Rabbi Trust), which has been established to administer the plan. The Rabbi Trust is intended to be used as a source of funds to match respective funding obligations to participants. The assets of the trust are subject to the claims of our creditors in the event that we become insolvent. Consequently, the Rabbi Trust qualifies as a grantor trust for income tax purposes. We make periodic payments into company-owned life insurance policies held in the Rabbi Trust to fund the expected obligations arising under this plan. Changes in the deferred compensation balance are recorded to compensation expense and reflected within the selling, general and administrative expenses line in the Consolidated Statements of Operations. The plan is not qualified under Section 401 of the Internal Revenue C …

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Revenue Revenue Recognition Our revenues are primarily generated from the manufacturing of custom-engineered products and systems under long-term fixed-price contracts under which we agree to manufacture various products such as traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers, switches and bus duct systems. These products may be sold separately as an engineered solution but are typically integrated into custom-built enclosures which we also build. These enclosures are referred to as power control room substations (PCRs ), custom-engineered modules or electrical houses (E-Houses). Some contracts may also include the installation and the commissioning of these enclosures. Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We believe that this method is the most accurate representation of our performance because it directly measures the value of the services transferred to the customer over time as we incur costs on our contracts. Contract costs include all direct materials, labor and indirect costs related to contract performance, which may include indirect labor, supplies, tools, repairs and depreciation co …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Information We manage our business as one reportable, operating segment and our revenues are primarily generated from the development, design, manufacturing and servicing of custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy. Our chief operating decision maker (CODM) is our chief executive officer. The CODM manages and allocates resources on a total consolidated basis by assessing performance of revenues and earnings before interest and taxes (EBIT) using actual-to-actual, actual-to-plan and actual-to-forecast variance analysis. The measure of segment profit and loss regularly provided to the CODM that is most consistent with GAAP is consolidated net income, as presented in our Consolidated Statements of Operations. The CODM does not manage cost components by product, customer type or service type, nor does the CODM regularly receive disaggregated information at this level. For the years ended September 30, 2025, 2024 and 2023, the summary of segment net income, including segment expenses, for our single reportable segment were as follows (in thousands): Year Ended September 30, 2025 2024 2023 Revenues $ 1,104,318 $ 1,012,356 $ 699,308 Segment operating expenses: Cost of goods sold 779,937 739,268 551,755 General and administrative expenses 65,569 57,037 52,819 Sales and marketing expenses 29,551 27,063 25,642 Research and development expenses 11,008 9,427 6,220 Other expense (1) 393 788 352 Total segment operatin …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of Powell and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. The most significant estimates used in our consolidated financial statements affect revenue recognition and estimated cost recognition on our customer contracts, allowance for credit losses, provision for excess and obsolete inventory, warranty accruals and income taxes. The amounts recorded for warranties, legal, income taxes, impairment of long-lived assets (when applicable), liquidated damages and other contingent liabilities require judgments regarding the amount of expenses that will ultimately be incurred. We base our estimates on historical experience, forecasts and various other assumptions, as well as the specific circumstances surrounding these contingent liabilities, in evaluating the amount of liability that should be recorded. Additionally, the basis for recognition of deferred tax assets requires estimates related to future income and other assumptions regarding timing and future profitability because the ulti …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Subsequent Event Quarterly Dividend Declared On November 4, 2025, our Board of Directors declared a quarterly cash dividend on our common stock in the amount of $0.2675 per share. The dividend is payable on December 17, 2025 to shareholders of record at the close of business on November 19, 2025.

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Commitments and Contingencies Letters of Credit, Bank Guarantees and Bonds Certain customers require us to post letters of credit, bank guarantees or surety bonds. These security instruments assure that we will perform under the terms of our contract. In the event of default, the counterparty may demand payment from the bank under a letter of credit or bank guarantee, or performance by the surety under a bond. To date, there have been no significant draws or claims related to security instruments for the periods reported. We were contingently liable for letters of credit of $65.1 million as of December 31, 2025. We also had surety bonds totaling $433.8 million that were outstanding, with additional bonding capacity of $766.2 million available, at December 31, 2025. We have strong surety relationships; however, a change in market conditions or the sureties assessment of our financial position could cause the sureties to require cash collateralization for undischarged liabilities under the bonds. We have a $20.2 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank that provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options. At December 31, 2025, we had outstanding guarantees totaling $7.6 million, with an additional capacity of $12.6 million available under this Facility Agreement. The Facility Agreement provides for customary events of default and ca …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present our disaggregated revenue by geographic destination and market sector for the three months ended December 31, 2025 and 2024 (in thousands): Three months ended December 31, 2025 2024 United States $ 194,878 $ 197,772 Canada 32,459 31,694 Middle East and Africa 9,872 4,558 Europe 8,226 5,528 Asia/Pacific 5,303 1,580 Mexico, Central and South America 446 299 Total revenues by geographic destination $ 251,184 $ 241,431 Three months ended December 31, 2025 2024 Oil and gas (excludes petrochemical) $ 97,889 $ 95,679 Electric utility 69,273 51,240 Commercial and other industrial 40,625 44,300 Petrochemical 22,778 33,183 Light rail traction power 8,614 8,228 All others 12,005 8,801 Total revenues by market sector $ 251,184 $ 241,431

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Stock-Based Compensation Refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 for a full description of our existing stock-based compensation plans. Restricted Stock Units We issue restricted stock units (RSUs) to certain officers and key employees of the Company. The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market during a specified period prior to the grant dates. Typically, these grants vest over a three-year period from the date of issuance and are a blend of time-based and performance-based shares. The portion of the grant that is time-based typically vests over a three-year period on each anniversary of the grant date, based on continued employment. The performance-based shares vest based on the three-year revenue growth, earnings and safety performance of the Company following the grant date. At December 31, 2025, there were 54,504 RSUs outstanding. The RSUs do not have voting rights but do receive dividend equivalents upon vesting, which are accrued quarterly. Additionally, the shares of common stock underlying the RSUs are not considered issued and outstanding until vested and common stock is issued. Total RSU activity (number of shares) for the three months ended December 31, 2025 is summarized below: Number of Restricted Stock Units Weighted Average Grant Value Per Share Outstanding at September 30, 2025 116,886 $ 64.79 Granted 15,495 287.28 Vested (77,877) 32.67 Forfeited/canc …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements We measure certain financial assets and liabilities at fair value. Fair value is defined as an exit price, which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in valuing an asset or liability. The accounting guidance requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. As a basis for considering such assumptions and inputs, a fair value hierarchy has been established which identifies and prioritizes three levels of inputs to be used in measuring fair value. The three levels of the fair value hierarchy are as follows: Level 1 Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 Unobservable inputs that are supported by little or no market data and require the reporting entity …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Other Intangible Assets Our intangible assets include goodwill of $6.1 million, which is not being amortized, and other intangible assets of $5.9 million being amortized over their estimated useful lives. No impairment expense has been recorded for the last three fiscal years. Goodwill The changes in the carrying amount of goodwill for the three months ended December 31, 2025 for our single reporting segment are as follows (in thousands): Total Balance as of September 30, 2025 $ 6,125 Foreign currency translation adjustment 5 Balance as of December 31, 2025 $ 6,130 Other Intangible Assets Intangible asset balances, subject to amortization, at December 31, 2025 and September 30, 2025 consisted of the following (in thousands): December 31, 2025 Weighted Average Remaining Useful Lives in Years Gross Carrying Value Accumulated Amortization Net Carrying Value Customer relationships 12 $ 2,204 $ (69) $ 2,135 Technologies 5 3,521 (227) 3,294 Trademarks 10 475 (18) 457 Order backlog 1 55 (20) 35 Total intangible assets $ 6,255 $ (334) $ 5,921 September 30, 2025 Weighted Average Remaining Useful Lives in Years Gross Carrying Value Accumulated Amortization Net Carrying Value Customer relationships 12 $ 2,202 $ (23) $ 2,179 Technologies 5 3,518 (76) 3,442 Trademarks 10 475 (6) 469 Order backlog 1 55 (7) 48 Total intangible assets $ 6,250 $ (112) $ 6,138 We have an additional technology intangible asset of $0.5 million associated with an intellectual property acquired in Dec …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes The calculation of the effective tax rate is as follows (in thousands): Three months ended December 31, 2025 2024 Income before income taxes $ 47,036 $ 39,437 Income tax provision 5,646 4,674 Net income $ 41,390 $ 34,763 Effective tax rate 12 % 12 % Our income tax provision reflects an effective tax rate on pre-tax income of 12% for both the three months ended December 31, 2025 and 2024. The effective tax rates for the first quarters of Fiscal 2026 and Fiscal 2025 were favorably impacted by discrete items related to the vesting of RSUs and the estimated Research and Development (R&D) Tax Credit, which were partially offset by the tax expense related to certain nondeductible items.

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Leases Our leases consist primarily of office and warehouse space and construction equipment. All of our future lease obligations are related to non-cancelable operating leases. The following table provides a summary of lease cost components for the three months ended December 31, 2025 and 2024, respectively (in thousands): Three months ended December 31, Lease Cost 2025 2024 Operating lease cost $ 284 $ 198 Variable lease cost (1) 43 34 Short-term lease cost (2) 591 639 Total lease cost $ 918 $ 871 (1) Variable lease cost represents common area maintenance charges related to our Canadian office space lease. (2) Short-term lease cost includes leases and rentals with initial terms of one year or less. We recognize operating lease assets and operating lease liabilities representing the present value of the remaining lease payments for leases with initial terms greater than twelve months. Leases with initial terms of twelve months or less are not recorded in our Condensed Consolidated Balance Sheets. The following table provides a summary of the operating lease assets and operating lease liabilities included in our Condensed Consolidated Balance Sheets as of December 31, 2025 and September 30, 2025, respectively (in thousands): Operating Leases December 31, 2025 September 30, 2025 Assets: Operating lease assets, net $ 1,458 $ 1,664 Liabilities: Current operating lease liabilities 796 882 Long-term operating lease liabilities 662 782 Total lease liabilities $ 1,458 $ 1,664 The fo …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Long-Term Debt U.S. Revolver We have a credit agreement with Bank of America, N.A. and Texas Capital Bank with an aggregate commitment of $150.0 million, consisting of $100.0 million committed by Bank of America and $50.0 million committed by Texas Capital Bank (the U.S. Revolver). The U.S. Revolver has an expiration date of October 4, 2028. As of December 31, 2025, there were no amounts borrowed under the U.S. Revolver, and letters of credit outstanding were $65.1 million. There was $84.9 million available for the issuance of letters of credit and borrowings under the U.S. Revolver as of December 31, 2025. As of December 31, 2025, we were in compliance with all of the financial covenants of the U.S. Revolver.

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Recently Adopted Accounting Standards Update The Company adopted the Financial Accounting Standard Board (FASB) Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , effective October 1, 2024, on a retrospective basis. This standard requires expanded annual and interim segment disclosures, including significant segment expenses regularly reviewed by the chief operating decision maker (CODM), along with disclosure of the CODMs title and how segment information is used in evaluating performance and allocating resources. It also clarifies that entities with a single reportable segment must provide all required Topic 280 disclosures. Adoption of the standard did not have a material impact on the unaudited condensed consolidated financial statements . Additional details are included in Note K. Segment Information. Accounting Standards Updates Issued but Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which enhances the transparency of income tax disclosures. It requires greater disaggregation of information in the tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, and should be applied on a prospective basis. Retrospective application and early adoption were permitted. We are currently evaluating the impacts of the new standard. In November 2024, the FASB issu …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Revenue Revenue Recognition Our revenues are primarily generated from the manufacturing of custom-engineered products and systems under long-term fixed-price contracts under which we agree to manufacture various products such as traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers, switches and bus duct systems. These products may be sold separately as an engineered solution but are typically integrated into custom-built enclosures which we also build. These enclosures are referred to as power control room substations (PCRs ), custom-engineered modules or electrical houses (E-Houses). Some contracts may also include the installation and the commissioning of these enclosures. Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We believe that this method is the most accurate representation of our performance because it directly measures the value of the services transferred to the customer over time as we incur costs on our contracts. Contract costs include all direct materials, labor and indirect costs related to contract performance, which may include indirect labor, supplies, tools, repairs and depreciation co …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Information We manage our business as one reportable operating segment and our revenues are primarily generated from the development, design, manufacturing and servicing of custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy. Our chief operating decision maker (CODM) is our chief executive officer. The CODM manages and allocates resources on a total consolidated basis by assessing performance of revenues and earnings before interest and taxes (EBIT) using actual-to-actual, actual-to-plan and actual-to-forecast variance analysis. The measure of segment profit and loss regularly provided to the CODM that is most consistent with GAAP is consolidated net income, as presented in our Consolidated Statements of Operations. The CODM does not manage cost components by product, customer type or service type, nor does the CODM regularly receive disaggregated information at this level. For the three months ended December 31, 2025 and 2024, the summary of segment net income, including segment expenses, for our single reportable segment were as follows (in thousands): Three months ended December 31, 2025 2024 Revenues $ 251,184 $ 241,431 Segment operating expenses: Cost of goods sold 179,766 181,907 General and administrative expenses 17,292 14,851 Sales and marketing expenses 7,745 6,731 Research and development expenses 3,267 2,476 Other expense (income) (1) 343 (106) Total segment operating expenses 208,413 205,859 Operating …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Events Quarterly Dividend Declared On February 3, 2026, our Board of Directors approved an increase to the quarterly cash dividend on our common stock to $0.27 per share, equating to an annualized dividend of $1.08 per share from the current amount of $1.07 per share. The dividend is payable on March 18, 2026 to shareholders of record at the close of business on February 18, 2026.

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