Perma-Pipe(US:PPIH)2024-12-23 17:33Financial Performance - Net sales for the quarter ended October 31, 2024, were $41,563 million, a decrease of 8.1% compared to $45,690 million in the same quarter of 2023[48]. - Gross profit increased to $14,086 million, up 6.8% from $13,184 million year-over-year[48]. - Operating expenses rose to $8,500 million, an increase of 19.0% from $7,145 million in the prior year[48]. - Net income attributable to common stock was $2,491 million, a significant increase of 28.7% compared to $1,935 million in the same quarter of 2023[48]. - Earnings per share attributable to common stock increased to $0.31 from $0.24 year-over-year[60]. - For the three months ended October 31, 2024, net income was $3,453 million, compared to $3,364 million for the same period in 2023, reflecting a year-over-year increase of approximately 2.6%[87]. - For the nine months ended October 31, 2024, net income totaled $9,526 million, up from $3,411 million in the same period of 2023[87]. - Net income attributable to common stock increased to $2.5 million in the three months ended October 31, 2024, up from $1.9 million in 2023, reflecting improved project execution[114]. - Net income attributable to common stock was $7.2 million for the nine months ended October 31, 2024, compared to $1.8 million for the same period in 2023, reflecting an increase of $5.4 million due to better project execution[217]. Cash and Liquidity - Cash, cash equivalents, and restricted cash at the end of the period totaled $14,726 million, up from $7,408 million at the end of the same quarter last year[70]. - Cash and cash equivalents increased to $13,307 million from $5,845 million, indicating a significant rise in liquidity[89]. - Cash and cash equivalents as of October 31, 2024, were $13.3 million, up from $5.8 million on January 31, 2024, with working capital increasing to $50.6 million from $41.1 million[198]. - The company experienced a net increase in cash of $7,486 million during the quarter, compared to an increase of $615 million in the same quarter last year[70]. - Net cash provided by operating activities was $7,906 million, compared to $7,617 million in the prior year[70]. - Net cash provided by operating activities was reported at $1.35 million, adjusted to $(73) thousand after the correction[97]. - Net cash used in investing activities decreased from $(8.2) million in 2023 to $(1.6) million in 2024, a reduction of $6.6 million due to fewer capital expenditures[116]. - The Company had approximately $1.0 million of unused borrowing availability as of October 31, 2024, under its revolving credit facilities[222]. Assets and Liabilities - As of October 31, 2024, total assets were reported at $155,740 million, a decrease of $1,423 million from the previous report[73]. - Total stockholders' equity at October 31, 2023, was $56,973 million, reflecting a decrease from $62,991 million at the beginning of the year[54]. - Total stockholders' equity increased to $71,211 million as of October 31, 2024, compared to $65,712 million at the end of January 31, 2024[89]. - Trade accounts payable decreased from $24,672 million to $23,249 million, a reduction of approximately 5.8%[73]. - Total current liabilities decreased from $59,410 million to $57,987 million, a decline of about 2.4%[73]. - The company reported costs incurred on uncompleted contracts of $15,742 million as of October 31, 2024, down from $21,912 million as of January 31, 2024[83]. - The carrying amount of the Company's assets from a joint venture totaled $31.8 million as of October 31, 2024[130]. - As of October 31, 2024, total debt amounted to $27.0 million, up from $25.7 million as of January 31, 2024[219]. Revenue and Sales - Total revenue for the three months ended October 31, 2024, was $41.563 million, a decrease of 6% compared to $45.690 million for the same period in 2023[134]. - Revenue recognized under the output method was $25.673 million, representing 62% of total revenue for the quarter[134]. - Revenue from specialty piping and coating systems for the nine months ended October 31, 2024, was $35.02 million, compared to $41.78 million in 2023, indicating a decrease in revenue share from 41% to 31%[103]. - For the nine months ended October 31, 2024, net sales were $113.4 million, an increase of $2.9 million or 3% from $110.5 million in 2023, driven by increased sales volumes in the Middle East[193]. Expenses and Costs - General and administrative expenses for the nine months ended October 31, 2024, were $19.5 million, an increase of $3.1 million compared to $16.4 million in 2023, primarily due to higher payroll expenses and professional fees[169]. - The effective tax rate (ETR) for the nine months ended October 31, 2024, was 28%, a significant decrease from 49% in the same period of 2023, due to the recognition of tax benefits on losses in the U.S.[196]. - Interest expense for the three months ended October 31, 2024, was $0.5 million, consistent with $0.6 million in the same period of 2023[190]. - Other expenses decreased to $0.1 million for the three months ended October 31, 2024, from $0.5 million in 2023, primarily due to exchange rate fluctuations[165]. Internal Controls and Compliance - The Company has identified material weaknesses in internal control over financial reporting, which could result in material misstatements in financial statements[210]. - The Company is implementing a remediation plan to address identified weaknesses, including enhancing controls and engaging outside consultants[212]. - No changes were identified in the internal control over financial reporting that materially affected the company during the fiscal quarter ended July 31, 2024[234]. Other Information - The Company received approximately $40.1 million from a project in the Middle East, with a remaining balance of $1.8 million due upon project commissioning[77]. - The Company received partial payments of $0.3 million and $0.6 million from a customer during the nine months ended October 31, 2024, and throughout 2023, respectively[99]. - The Company had an outstanding amount of $1.8 million due from a project completed in the Middle East, with $1.3 million classified in other long-term assets[227]. - The joint venture with Gulf Insulation Group, established on June 1, 2023, is expected to enhance market presence in Saudi Arabia, Kuwait, and Bahrain[157]. - Net income attributable to Gulf Insulation Group was $1.0 million for the three months ended October 31, 2024, compared to $1.4 million for the same period in 2023[158]. - The Company has several lease agreements with terms ranging from one to thirty years, with total rent expense of $0.6 million for the three months ended October 31, 2024[125]. - The weighted-average remaining lease term for finance leases is 2.5 years, while for operating leases it is 12.3 years[154]. - The company utilized the remaining $1.0 million authorized for share repurchases during the twelve months ended January 31, 2024[156]. - The company is evaluating the impact of new segment reporting disclosures effective for fiscal years beginning after December 15, 2023[155]. - During the three months ended October 31, 2024, no directors or executive officers adopted or terminated any trading arrangements under Rule 10b5-1[235].