Why are you using "-Append" as a parameter on the Out-File cmdlet? If you're just copying the contents of those five files into one file it's unnecessary.
If you use the "-Append" you're adding the content of those five files to whatever is in the target file.
Your uses of the ">" isn't the same as "-Append". If you want the equivalent, use ">>".
As for the encoding, you have control of that. Just add "-Encoding X" to the "Out-File". If you want ASCII then use that in place of the "X". If you want Unicode, use that. UTF8, OEM, etc. are there for you to use as necessary.
The -Encoding parameter is also available with the Get-Content cmd. Perhaps that's where the problem lies?