Perma-Pipe(PPIH) - 2026 Q2 - Quarterly Report

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]