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having completed my first full year as cEO, I am even more encouraged by the potential of Powell Industries. During this past year, I found a solid company with unique capability to design and deliver high end, complex electrical power solutions. I was impressed with the rich culture and deep values of Powell, underlying dedicated teams serving our customers and an unrelenting drive to succeed. 

The challenge before us is to continue the success story, building upon our core strengths, and preparing the company for the next level of growth and performance. We have been implementing the first steps of this process over the past year all while delivering a solid level of financial and operational performance. 

## The Year in Review 

Powell enjoyed record orders during 2013, allowing us to start 2014 with a very solid and near all-time high backlog. This growth is largely driven by oil and gas capital investment, primarily in North America. Fueling this demand are large capital investments in the oil sands of Canada and in U.S. shale gas production that have lowered the cost of natural gas in North America and made domestic investment more attractive. 

We have invested nearly $100 million into new facilities and infrastructure to strengthen the core business. We completed the construction of two new production facilities this past year that will provide the capacity and expansion room needed to serve our growing North American markets. As of today our new 300,000 square foot facility in Houston, Texas is complete and operational, as is our 180,000 square foot manufacturing facility outside Edmonton, Alberta, Canada. Upgraded business systems and tools, to be fully implemented in 2014, will help drive additional process improvements and increase productivity in engineering, project management and production. 

