Perma-Pipe(PPIH) - 2026 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended October 31, 2025, increased to $61,148,000, a 47% increase from $41,563,000 in the same period of 2024[8] - Gross profit for the three months ended October 31, 2025, was $21,005,000, representing a 49% increase compared to $14,086,000 in the prior year[8] - Net income attributable to common stock for the three months ended October 31, 2025, was $6,315,000, up 153% from $2,491,000 in the same quarter of 2024[8] - Earnings per share attributable to common stock for the three months ended October 31, 2025, was $0.78, a significant increase from $0.31 in the same period of 2024[8] - Comprehensive income attributable to common stock for the three months ended October 31, 2025, was $5,853,000, compared to $2,306,000 in the prior year[10] - Income before income taxes for the three months ended October 31, 2025, was $10,900,000, up from $5,068,000 in the same quarter of 2024[8] - Net income for the nine months ended October 31, 2025, was $15,031,000, an increase of 58.5% compared to $9,526,000 for the same period in 2024[16] - For the nine months ended October 31, 2025, net sales reached $155.8 million, up from $113.4 million in 2024, an increase of 37% driven by similar regional sales growth[108] Assets and Equity - Total current assets as of October 31, 2025, were $151,576,000, an increase from $108,802,000 as of January 31, 2025[12] - Total assets increased to $216,985,000 as of October 31, 2025, compared to $165,241,000 as of January 31, 2025[12] - Total stockholders' equity rose to $85,753,000 as of October 31, 2025, up from $72,138,000 as of January 31, 2025[12] - Total stockholders' equity at October 31, 2025, was $85,753,000, up from $71,211,000 at October 31, 2024, representing a growth of 20.4%[14] Cash Flow and Debt - Operating cash flow for the nine months ended October 31, 2025, was $15,972,000, compared to $7,906,000 in 2024, reflecting a significant increase of 102.5%[16] - Cash, cash equivalents, and restricted cash at the end of the period on October 31, 2025, totaled $28,650,000, compared to $14,726,000 at the end of the same period in 2024, reflecting an increase of 94.5%[16] - As of October 31, 2025, the Company had a total debt of $29.744 million, an increase from $24.466 million as of January 31, 2025[53] - The Company had $29.9 million in total debt as of October 31, 2025, compared to $24.5 million on January 31, 2025, representing a 22% increase[119] Expenses - Operating expenses for the three months ended October 31, 2025, totaled $9,602,000, an increase from $8,500,000 in the same period of 2024[8] - General and administrative expenses increased to $8.3 million for the three months ended October 31, 2025, from $7.3 million in 2024, an increase of 14% attributed to higher payroll and professional fees[101] - Stock-based compensation expense for the nine months ended October 31, 2025, was $2,012,000, compared to $629,000 in 2024, indicating a substantial increase of 219.4%[16] Taxation - The worldwide effective tax rate for the three months ended October 31, 2025, was 27%, down from 32% in the same period of 2024[40] - The effective tax rate (ETR) decreased to 27% for the three months ended October 31, 2025, down from 32% in 2024, due to a favorable mix of income and losses across jurisdictions[104] Internal Controls and Remediation - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of October 31, 2025, due to material weaknesses in internal control over financial reporting[144] - Material weaknesses resulted in adjustments to property, plant, and equipment, trade accounts payable, trade accounts receivable, and the statement of cash flows, leading to revisions and restatements of financial statements for periods ended April 30, 2024, July 31, 2024, and October 31, 2024[146] - The Company has initiated a remediation plan to address material weaknesses, including performing an entity-wide risk assessment and engaging outside consultants for IT general controls[148] - Remediation plans include enhancing controls over manual journal entries, financial close processes, and business processes relevant to operating locations in the Middle East and North Africa (MENA)[151] - The Company anticipates that the actions taken will strengthen internal control over financial reporting, but material weaknesses cannot be considered fully remediated until controls are effectively implemented and tested[153]