POWELL INDUSTRIES INCPOWL

POWELL INDUSTRIES INC Leases Disclosure

10-KFiled Nov 19, 20252 min read
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 Cost202520242023
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 Leases20252024
Assets:
Operating lease assets, net$1,664 $1,216 
Liabilities:
Current operating lease liabilities882 595 
Long-term operating lease liabilities782 621 
Total lease liabilities$1,664 $1,216 
The following table provides the maturities of our operating lease liabilities as of September 30, 2025 (in thousands):

Operating Leases
2026$964 
2027590 
2028204 
202929 
2030— 
Thereafter— 
Total future minimum lease payments$1,787 
Less: present value discount (imputed interest)(123)
Present value of lease liabilities$1,664 
The weighted average discount rates as of September 30, 2025 and 2024 were 7.13% and 5.44%, respectively. The weighted average remaining lease term was 2.06 years and 2.47 years, respectively, at September 30, 2025 and 2024.

Historical Timeline

Fiscal YearFiled
2025Nov 19, 2025Showing above
2024Nov 20, 2024
2023Dec 6, 2023
2022Dec 6, 2022
2021Dec 8, 2021
2020Dec 9, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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