Perma-Pipe(PPIH) - 2026 Q1 - Quarterly Report

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]