Financial Performance - For the three months ended July 31, 2025, net sales were $47.9 million, an increase of $10.4 million, or 27.7%, compared to $37.5 million in the prior-year quarter[2]. - Gross profit for the same period was $14.4 million, up $0.9 million from $13.5 million last year, reflecting higher activity levels[2]. - Net income attributable to common stock was $0.9 million, down from $3.3 million in the second quarter of fiscal 2024, a decrease of $2.4 million[12]. - For the six months ended July 31, 2025, net sales were $94.6 million, an increase of $22.8 million, or 31.8%, compared to $71.8 million in the prior-year period[3]. - Net income attributable to common stock for the three months ended July 31, 2025, was $851 million, a decrease of 74.1% from $3,289 million in 2024[23]. - Adjusted income before tax for the three months ended July 31, 2025, was $4,857 million, compared to $5,590 million in 2024, reflecting a decrease of 13.1%[28]. Expenses and Liabilities - General and administrative expenses increased to $10.0 million from $6.0 million, primarily due to higher payroll and a one-time charge of $2.1 million related to executive compensation[2]. - Total operating expenses increased to $11,236 million, up 53.5% from $7,332 million in the prior year[23]. - Current liabilities increased to $66,815 million, up 23.6% from $54,063 million in the previous period[25]. - Interest expense for the three months ended July 31, 2025, was $415 million, a decrease of 19.3% from $514 million in 2024[23]. Taxation - The effective tax rate for the quarter was 54%, compared to 23% in the prior-year quarter, influenced by the one-time compensation charge[2]. Strategic Initiatives - The Company is exploring strategic alternatives to maximize shareholder value, including a potential sale of divisions or the entire Company[5]. - The Company has made strategic investments in establishing a new manufacturing facility in Qatar, supported by over $5 million in new awards to be delivered before year-end[4]. Backlog and Assets - Backlog stood at $157.8 million at July 31, 2025, an increase of $19.7 million, or 14.3%, from January 31, 2025, and an increase of $82.3 million, or 109.0%, from July 31, 2024[4]. - Total assets as of July 31, 2025, were $188,990 million, an increase of 14.4% from $165,241 million as of January 31, 2025[25]. - Stockholders' equity rose to $80,204 million, an increase of 11.5% from $72,138 million[25]. Earnings Per Share - Earnings per share attributable to common stock for the three months ended July 31, 2025, were $0.11, down from $0.41 in the same period of 2024[23].

Financial Performance - Net sales for the three months ended July 31, 2025, increased to $47,902,000, a 27.6% rise from $37,513,000 in the same period of 2024[8] - Gross profit for the six months ended July 31, 2025, was $31,147,000, up 29.8% from $23,991,000 in 2024[8] - Net income attributable to common stock for the three months ended July 31, 2025, was $851,000, a decrease of 74.1% compared to $3,289,000 in 2024[8] - Net income for the six months ended July 31, 2025, increased to $7,116,000, up from $6,073,000 in 2024, representing a growth of 17.2%[20] - Net sales for the six months ended July 31, 2025, were $94,648,000, compared to $71,834,000 in 2024, reflecting a year-over-year increase of 31.8%[20] - Gross profit rose to $31.1 million in the six months ended July 31, 2025, compared to $24.0 million in 2024, an increase of 29.6% driven by higher sales volumes and improved margins[104] - Net income attributable to common stock was $5.8 million for the six months ended July 31, 2025, up from $4.7 million in 2024, reflecting a growth of 23.4%[110] Expenses and Costs - Operating expenses for the three months ended July 31, 2025, were $11,236,000, a 53.5% increase from $7,332,000 in the same period of 2024[8] - Operating expenses for the six months ended July 31, 2025, increased to $20,070,000 from $14,716,000 in 2024, marking a 36.4% increase[20] - General and administrative expenses increased to $17.8 million in the six months ended July 31, 2025, from $12.1 million in 2024, a rise of 47.1% primarily due to higher payroll expenses[105] Assets and Equity - Total assets as of July 31, 2025, reached $188,990,000, an increase of 14.4% from $165,241,000 at January 31, 2025[12] - Total stockholders' equity increased to $80,204,000 as of July 31, 2025, compared to $72,138,000 at January 31, 2025, reflecting a growth of 11.1%[12] - Cash and cash equivalents as of July 31, 2025, were $17,258,000, up from $15,716,000 at January 31, 2025[12] Cash Flow and Debt - The company reported a net cash used in operating activities of $(1,308,000) for the six months ended July 31, 2025, compared to $2,744,000 provided in 2024[16] - The company had $31.3 million in total debt as of July 31, 2025, compared to $24.5 million on January 31, 2025, reflecting an increase of 28.0%[115] - The company believes its cash and committed debt facilities are sufficient to meet future business requirements for at least the next 12 months[116] Taxation - The effective tax rate for the three months ended July 31, 2025, was 54%, a significant increase from 23% for the same period in 2024, primarily due to a mix of income and loss in various jurisdictions[38] - The effective tax rate (ETR) increased to 30% in the six months ended July 31, 2025, compared to 25% in 2024, due to changes in income mix and tax deduction limitations[108] Inventory and Receivables - The company’s inventories decreased to $15.9 million as of July 31, 2025, from $16.6 million as of January 31, 2025, reflecting a reduction in finished goods[35] - As of July 31, 2025, the company recorded $27.7 million in unbilled accounts receivable, up from $18.9 million as of January 31, 2025, indicating a significant increase in revenue generation from subsidiaries[33] Joint Ventures and Subsidiaries - The joint venture with Gulf Insulation Group resulted in a 60% controlling interest, expanding the company's market presence in Saudi Arabia, Kuwait, and Bahrain[82] - The carrying amount of the assets of the joint venture was $39.8 million as of July 31, 2025[83] - Net income attributable to non-controlling interest was $0.4 million for the three months ended July 31, 2025, compared to $1.0 million for the same period in 2024[85] Internal Controls and Compliance - The Company reported material weaknesses in internal control over financial reporting, which could result in material misstatements of financial statements[144] - Remediation plans are being implemented to strengthen internal controls, including engaging outside consultants and enhancing the design of controls over financial reporting[147] - The Company anticipates that the remediation actions will address the identified material weaknesses, but full remediation will require time and effective operation of the new controls[150] - The company has complied with the Sarbanes-Oxley Act of 2002, with certifications from both the Chief Executive Officer and Chief Financial Officer[31.1][31.2][32] Financing and Credit Arrangements - The Company has a revolving line of credit totaling approximately $45.0 million across various facilities, with interest rates ranging from 7.6% to 20.8% as of July 31, 2025[66] - The Company had unused borrowing availability of approximately $2.2 million and $1.6 million as of July 31, 2025 and January 31, 2025, respectively, under one of its U.A.E. credit facilities[58] - The Company had an aggregate borrowing of $3.3 million under its Saudi Arabian credit arrangement as of July 31, 2025, with $2.9 million of unused borrowing availability[64] Financial Reporting Enhancements - The report includes Inline XBRL documents for enhanced financial data presentation and analysis[101.INS][101.SCH][101.CAL][101.DEF][101.LAB][101.PRE][104]

Group 1 - The individual is pursuing an MBA and is inspired by renowned investors such as Warren Buffett, Peter Lynch, and Terry Smith, focusing on quality companies at reasonable valuations [1] - The belief is that long-term fundamentals drive share prices, with a focus on predicting earnings per share for businesses [1]

Core Insights - Perma-Pipe International Holdings, Inc. (PPIH) shares increased by 45.5% following the release of its earnings for the quarter ended April 30, 2025, significantly outperforming the S&P 500 index, which declined by 1% during the same period [1] - The company reported earnings per share of 61 cents, a substantial increase from 18 cents in the prior-year quarter, driven by volume growth and improved project execution [2] - Net sales reached $46.7 million, reflecting a 36.2% increase from $34.3 million in the same quarter last year, while net income attributable to common stock surged to $5 million, up 243% year-over-year [2] Financial Performance - Gross profit improved to $16.7 million, representing 36% of net sales, compared to 31% in the previous year, indicating enhanced operational efficiency [2] - Income from operations more than doubled to $7.9 million, showcasing improved operational leverage [2] - General and administrative costs rose by $1.6 million to $7.7 million, primarily due to increased payroll and professional fees, while selling expenses remained stable [4] Operational Highlights - The performance was supported by increased sales volumes in both the Middle East and North America, indicating diversified demand across key regions [3] - Management noted that the Americas and MENA region delivered comparable results, contributing significantly to overall performance [3] - Improved margins were attributed to a favorable product mix and enhanced project management practices, despite inflationary and geopolitical challenges [7] Management Commentary - The CEO characterized the quarter as "unprecedented," with first-quarter net income representing approximately 55% of total earnings for fiscal 2024, indicating strong momentum for fiscal 2025 [5] - Confidence in competitive positioning and strategy was expressed, particularly regarding development initiatives in the MENA region and market share expansion in North America [6] Future Outlook - Management provided a bullish outlook for the remainder of fiscal 2025, citing a strong sales pipeline and sustained market activity across regions [8] - The backlog as of April 30, 2025, stood at $131.1 million, more than double the $63.1 million reported at the same time last year, signaling robust demand [9] - The year-over-year growth of 108% in backlog underpins management's optimism about near-term business prospects [10]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $46.7 million, an increase of $12.4 million, or 36%, compared to $34.3 million in the same quarter last year[2] - Net income attributable to common stock was $5.0 million, representing an increase of $3.6 million, or 243%, compared to $1.4 million in the first quarter of the prior year[2] - Gross profit for the first quarter was $16.7 million, or 36% of net sales, compared to $10.5 million, or 31% of net sales, in the same period last year[9] - Income before income taxes was $7.4 million, compared to $2.6 million in the first quarter of 2024[7] - The company reported earnings per share attributable to common stock of $0.62 for the first quarter, compared to $0.18 in the same quarter of 2024[17] - The first quarter results represent the highest levels of performance since the transition from MFRI to Perma-Pipe in 2017, with net income for the quarter being approximately 55% of the full year fiscal 2024 results[4] Backlog and Market Outlook - The backlog as of April 30, 2025, was $131.1 million, a decrease of $7.0 million from $138.1 million at January 31, 2025, but an increase of $68.0 million, or 108%, compared to $63.1 million at April 30, 2024[3] - The company is optimistic about continued growth in the MENA region and gaining additional market share in North America[6] Expenses and Tax Rate - General and administrative expenses increased to $7.7 million from $6.1 million in the same quarter last year, primarily due to higher payroll expenses and professional fees[10] - The effective tax rate (ETR) was 21% for the first quarter of 2025, down from 30% in the same period last year[12]

Financial Performance - Net sales for the three months ended April 30, 2025, increased to $46,747,000, a 36.3% increase from $34,321,000 in the same period of 2024[8] - Gross profit for the same period rose to $16,724,000, up 58.7% from $10,517,000 year-over-year[8] - Net income attributable to common stock reached $4,952,000, compared to $1,443,000 in the prior year, representing a 243.5% increase[8] - Earnings per share attributable to common stock increased to $0.62 (basic) and $0.61 (diluted), compared to $0.18 for both in the same quarter of 2024[8] - Operating income for the quarter was $7,889,000, a substantial increase from $3,134,000 in the prior year, indicating a growth of 151.5%[8] - Comprehensive income attributable to common stock for the three months ended April 30, 2025, was $5,874,000, compared to $28,000 in the same period of 2024[11] - Net income attributable to common stock for the three months ended April 30, 2025, was $4.952 million, a significant increase from $1.443 million in 2024, representing a growth of 243%[27] - Gross profit rose to $16.7 million, accounting for 36% of net sales, compared to $10.5 million or 31% in the previous year, an increase of $6.2 million[95] Assets and Liabilities - Total assets as of April 30, 2025, were $178,315,000, up from $165,241,000 at the end of January 2025, reflecting a growth of 7.0%[13] - Total stockholders' equity increased to $77,867,000 as of April 30, 2025, from $72,138,000 at the end of January 2025, reflecting a growth of 7.6%[13] - The Company had total debt of $27.9 million as of April 30, 2025, up from $24.5 million as of January 31, 2025[55] - The current portion of the finance obligation is $0.2 million, with a long-term portion of $8.7 million recognized on the balance sheet as of April 30, 2025[122] Cash Flow - The company reported a net cash provided by operating activities of $733,000, compared to a net cash used of $73,000 in the same quarter of 2024[19] - Cash and cash equivalents increased to $20,254,000 from $9,064,000 year-over-year, marking a significant rise of 123.5%[19] - Cash and cash equivalents, including restricted cash, totaled $20.254 million as of April 30, 2025, compared to $17.117 million at January 31, 2025[79] - Net cash provided by operating activities was $0.7 million in Q2 2025, compared to a net cash used of $(0.1) million in Q2 2024, an increase of $0.8 million[104] Tax and Expenses - The company's effective tax rate for the three months ended April 30, 2025, was 21%, down from 30% in the same period of 2024, due to changes in the mix of income and loss in various jurisdictions[44] - General and administrative expenses increased by $1.6 million to $7.7 million due to higher payroll and professional fees[96] - The effective tax rate (ETR) improved to 21% in Q2 2025 from 30% in Q2 2024, influenced by the income mix across jurisdictions[100] Internal Controls and Compliance - The Company reported material weaknesses in internal control over financial reporting, which could result in material misstatements in financial statements[132] - Adjustments due to material weaknesses affected property, plant, and equipment, trade accounts payable, and trade accounts receivable, leading to revisions of financial statements for prior periods[133] - The Company is implementing a remediation plan to strengthen internal controls, including risk assessments and engaging outside consultants for IT general controls[136] - The Company anticipates that remediation actions will address identified material weaknesses, but full remediation cannot be confirmed until controls are effectively operating[139] - The company maintained compliance with covenants under its credit agreements as of April 30, 2025[109] Investments and Joint Ventures - The Company entered into a joint venture with Gulf Insulation Group, assuming a promissory note of approximately $2.8 million, with a maturity date of April 9, 2026[71][83] - The Company expects the joint venture to expand its market presence in Saudi Arabia, Kuwait, and Bahrain, focusing on pre-insulated piping systems[83] Other Financial Information - The Company sold its land and buildings in Lebanon, Tennessee for $10.4 million, generating net cash proceeds of $9.1 million after paying off a $0.9 million mortgage[121] - The Company entered into a fifteen-year lease agreement with an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%[121] - The Company had finance lease liabilities of $0.1 million and operating lease liabilities totaling $9.302 million as of April 30, 2025[74][78] - The Company had unused borrowing availability of approximately $1.7 million under its U.A.E. Dirhams credit arrangement as of April 30, 2025[63] - The Company had an aggregate of $3.1 million borrowed under its Saudi Arabian credit arrangement as of April 30, 2025[67]

Core Viewpoint - Perma-Pipe International Holdings is a niche player in the international energy infrastructure sector, focusing on piping and leak-detection systems across various markets, including oil and gas [1] Financial Performance - The company reported a significant increase in profit margin and a record-high backlog of $167.5 million, up from $138.1 million at the previous year-end [2] - The current share price of around $13 is considered a fair valuation, leading to a HOLD rating for the stock [2] Oil Price Exposure - Perma-Pipe's stock is closely correlated with Brent crude oil prices, as demand is linked to the Middle East energy markets [3] - Oil prices experienced volatility, exceeding $100 per barrel in 2022 due to geopolitical tensions, before settling at nearly $86 per barrel by year-end [4] - In 2023, oil prices fluctuated between the low $70s and nearly $100, influenced by supply concerns and OPEC+ cuts, before declining again [5]

Core Insights - Perma-Pipe International Holdings, Inc. (PPIH) shares have increased by 14% since the earnings report for the quarter ended January 31, 2025, outperforming the S&P 500's 0.8% growth during the same period [1] - The company reported fiscal 2024 earnings of $1.12 per share, down from $1.30 in the previous year, but net sales increased to $158.4 million, a $7.7 million rise attributed to higher volumes in the Middle East and Canada [2] - Gross profit improved to $53.2 million, representing 34% of net sales, compared to 28% the previous year, driven by product mix optimization and regional margin gains [2] Financial Performance - Operating income surged to $20.3 million from $13.4 million the prior year, while adjusted income before taxes reached $19 million, up from $11.1 million in fiscal 2023 [3] - In Q4, net sales were $45 million, an increase of $4.8 million from the prior year, but net income after taxes fell to $1.5 million due to the absence of a one-time non-cash tax benefit of $5.9 million recorded in the previous year [4] - Excluding the one-time benefit, adjusted net income would have increased by $4.4 million year-over-year [4] Management Commentary - CEO David Mansfield highlighted fiscal 2024 as a year of strategic execution and operational gains, attributing improved performance to a focus on higher-margin products and services, as well as contributions from a joint venture in Saudi Arabia [5] - The ramp-up at the Vars, Ontario facility in Canada and recent project wins were noted as sources of strong momentum heading into fiscal 2025 [5] Factors Influencing Results - The rise in gross profit was largely due to increased sales volumes and stronger margins in key international markets, while selling expenses declined by $0.6 million due to lower payroll costs [6] - General and administrative expenses increased by $5.4 million, reflecting higher compensation and professional service fees [6] - Interest expenses decreased by $0.4 million due to reduced borrowing levels and favorable interest rates, and other income turned positive at $0.1 million compared to a $1.2 million loss in the prior year [7] Taxation - The effective tax rate returned to a normalized level of 29.1%, up from a negative 33.6% the previous year, which was impacted by the release of a domestic valuation allowance [8]

Financial Performance - Net sales for the fourth quarter and full year 2024 were $45.0 million and $158.4 million, representing increases of $4.8 million and $7.7 million compared to the prior year[2]. - Income before taxes was $5.3 million for the fourth quarter and $18.5 million for the full year 2024, an increase of $2.1 million and $8.6 million year-over-year[3]. - Net income after taxes for the fourth quarter and full year 2024 was $1.5 million and $9.0 million, with a decrease of $1.5 million compared to $10.5 million last year, primarily due to a one-time non-cash tax benefit in the prior year[4]. - Adjusted income before tax for the year was $19.0 million, up from $11.1 million in the previous year, reflecting improved operational performance[26]. Backlog and Project Awards - The backlog increased significantly to $138.1 million, a 102% increase compared to $68.4 million at the same time last year[5]. - The company secured several large-scale project awards, positioning itself for future mega-projects, particularly in Qatar and Saudi Arabia[7]. Profitability and Expenses - Gross profit for the year was $53.2 million, or 34% of net sales, compared to $41.5 million, or 28% of net sales in the previous year, driven by higher sales volumes and improved margins[9]. - General and administrative expenses rose to $28.0 million from $22.6 million, primarily due to higher compensation costs and professional fees[10]. - Interest expense decreased to $1.9 million from $2.3 million, attributed to reduced borrowings and lower interest rates[11]. Taxation - The effective tax rate for the year was 29.1%, a change from (33.6%) in the prior year, largely due to changes in income mix across tax jurisdictions[13].

Backlog and Awards - The Company's backlog as of January 31, 2025, was $138.1 million, up from $68.4 million on January 31, 2024, indicating a significant increase in new awards year-over-year[24]. Employee Count - The Company had approximately 175 full-time employees in the United States and around 575 full-time employees at international locations as of January 31, 2025[33]. Supply Chain Management - The Company has implemented strategies to mitigate the impacts of raw material supply shortages and price increases due to inflation, including purchasing from alternative suppliers and adjusting customer pricing[29]. - The Company maintains adequate supplies of raw materials necessary for production, including pipes and tubes made of various materials[27]. Customer Base - The Company operates a diverse customer base with no single customer accounting for more than 10% of consolidated net sales or accounts receivable for the years ended January 31, 2025, and 2024[22][23]. Research and Development - The Company focuses its research and development efforts on meeting product specifications mandated by customers and the industry[31]. Intellectual Property - The Company owns various patents related to its piping and electronic leak detection systems, although these patents are not considered material to its overall sales[26]. Competitive Position - The Company believes it has a more comprehensive product line than any competitor in the highly competitive piping systems market[30]. Contractual Obligations - The Company’s contracts typically have a duration of less than one year, affecting the disclosure of future performance obligations[25]. Product Offerings - The Company provides insulated pipe for district energy systems, which are designed to improve energy efficiency and reduce operating costs[32].