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<SEC-DOCUMENT>0000950129-07-001169.txt : 20070827
<SEC-HEADER>0000950129-07-001169.hdr.sgml : 20070827
<ACCEPTANCE-DATETIME>20070305152957
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950129-07-001169
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070305

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			POWELL INDUSTRIES INC
		CENTRAL INDEX KEY:			0000080420
		STANDARD INDUSTRIAL CLASSIFICATION:	SWITCHGEAR & SWITCHBOARD APPARATUS [3613]
		IRS NUMBER:				880106100
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		8550 MOSLEY DR
		STREET 2:		POST OFFICE BOX 12818
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77075
		BUSINESS PHONE:		7139446900

	MAIL ADDRESS:	
		STREET 1:		8550 MOSLEY DRIVE P O BOX 12818
		STREET 2:		8550 MOSLEY DRIVE P O BOX 12818
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77075

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PROCESS SYSTEMS INC
		DATE OF NAME CHANGE:	19780926
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">March&nbsp;5, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
450 Fifth Street, N.W.<BR>
Washington, D.C. 20549

</DIV>
<DIV align="center">
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    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attention:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Kevin L. Vaughn<BR>
Branch Chief<BR><BR>
David Burton<BR>
Staff Accountant</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Re:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form&nbsp;10-K for the 11&nbsp;month Transition Period ended
September&nbsp;30, 2006,<BR>Filed December&nbsp;8, 2006<BR>
File No.&nbsp;001-12488</TD>
</TR>
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</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of this letter is to respond to the comments in your letter dated February&nbsp;20,
2007, regarding your review of the aforementioned filings with the Securities and Exchange
Commission (&#147;SEC&#148;). For ease of reference, each paragraph number in this letter corresponds to the
same paragraph number in your letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Form&nbsp;10-K for the Transition Period ended September&nbsp;30, 2006</I></B>
</DIV>

<DIV align="center">
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Comment 1.</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U><B>Note D. Acquisition &#151; Page 40</B></U></TD>
</TR>
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</TABLE>
</DIV>

<DIV align="center">
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<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>We note your disclosure that the estimates used to determine the amounts assigned
to intangible assets for the Power/Vac acquisition and the amounts assigned to
property plant and equipment for the S&#038;I acquisition are based on independent
appraisals. Please note that if you intend to incorporate your Form&nbsp;10-K by
reference into any registration statement, you will be required to identify the
appraisal firm in the &#147;Experts&#148; section and include its consent in the registration
statement. If true, you may revise the disclosure in future filings to clearly
indicate that management is responsible for the valuation and that management
considered a number of factors in estimating fair value. In this regard, you should
discuss the factors that management considered when estimating fair value.</B></DIV></TD>
</TR>
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</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="89%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD align="left" valign="top">Response:
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">In future filings we will expand our discussion regarding
management&#146;s responsibility for the valuation and the various
factors considered. Currently, the only outstanding shelf
registration statements we have are on Form&nbsp;S-8 which do not
have an &#147;Experts&#148; section, but we do make note of your comment
related to the &#147;Experts&#148; section for future registration
statements.</DIV></TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
March&nbsp;31, 2005<BR>
Page 2 of 3

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Comment 2.</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U><B>Switchgear and Instrumentation Limited (&#147;S&#038;I&#148;) &#151; Page 41</B></U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>We note your disclosure on page 43 that prior to the acquisition,
S&#038;I accounted for its revenue contracts on the completed contract method. We
note that you now account for these contracts on a percentage of completion
basis. Please explain to us how you considered the change in revenue
recognition in your purchase accounting. Discuss whether you recorded deferred
revenues and deferred costs at the acquisition date and if so, how you
determined the amounts to record.</B></DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD align="left" valign="top">Response:
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Powell recognizes its revenues from construction contracts under the percentage of
completion method in accordance with SOP 81-1. Paragraph .13 of SOP 81-1 details the types of
contracts covered by that accounting guidance, and as S&#038;I is a custom manufacturer of
specialty equipment to buyers&#146; specifications, these construction contracts are within the
guidance provided by ARB 45 and SOP 81-1. Long-term contracts are accounted for using the
percentage of completion method as this method presents more accurately the relationship
between gross profit from these contracts and the related period costs. As stated in SOP
81-1, paragraphs .22 and .23, percentage of completion is the preferable method of accounting
for construction contracts in circumstances where reasonably dependable estimates can be made,
the contractor and customer can reasonably be expected to satisfy their contractual
obligations, and the contracts include provisions that clearly specify the enforceable rights
regarding goods or services to be provided and received by the parties, the consideration to
be exchanged, and the manner and terms of settlement. As S&#038;I&#146;s long-term contracts meet these
requirements, percentage of completion accounting was determined to be the applicable method
for accounting for their long-term contracts.</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">In applying purchase accounting, long-term contracts which were
not completed as of the acquisition date were analyzed in accordance with the
guidance of SOP 81-1. We compared the labor costs incurred to the estimated
labor costs expected to be incurred to determine the percentage of completion
for each contract. We also determined the total expected costs to be incurred
for each contract and the total contract value to determine the total estimated
gross profit for each contract. Adjustments were recorded based on the
estimated revenues and profits to be recognized at the acquisition date with
corresponding adjustments to costs and estimated earnings in excess of billings
and billings in excess of costs and estimated earnings.</DIV></TD>
</TR>
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</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">As a result, we recorded deferred revenues and deferred costs at
the acquisition date in accordance with SOP 81-1. Please note the purchase
price allocation on Page 42 reflects &#147;costs and estimated earnings in excess of
billings&#148; of $4.5&nbsp;million (deferred costs) and &#147;billings in excess of costs and
estimated earnings&#148; of $1.4&nbsp;million (deferred revenues).</DIV></TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
March&nbsp;31, 2005<BR>
Page 3 of 3

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The company hereby acknowledges that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The company is responsible for the adequacy and accuracy of the disclosure in the
filings;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Staff comments or changes to disclosure in response to staff comments in the filings
reviewed by the staff do not foreclose the Commission from taking any action with
respect to the filing; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hope you find that we have been appropriately responsive to your comments and look forward
to enhancing our future periodic filings based on the comments you have provided. Please feel free
to call me at (713)&nbsp;944-6900 if you have any questions regarding this response.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Sincerely,<BR>
<BR>
<BR>
POWELL INDUSTRIES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ DON R. MADISON
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Don R. Madison       &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="left">Vice President, Chief Financial Officer, Secretary,<BR>Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Cc: Winstead PC (counsel to Powell Industries, Inc.)
</DIV>



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</DIV>


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