Perma-Pipe(PPIH) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the three months ended April 30, 2024, increased to $34,321,000, up 15% from $29,657,000 in the same period of 2023[8] - Gross profit rose to $10,517,000, representing a 55% increase compared to $6,774,000 in the prior year[8] - Net income attributable to common stock was $1,443,000, a significant recovery from a net loss of $1,123,000 in the same quarter of 2023[8] - Earnings per share attributable to common stock improved to $0.18, compared to a loss of $0.14 per share in the previous year[8] - For the three months ended April 30, 2024, total revenue was $34.321 million, a 15% increase from $29.657 million in the same period of 2023[33] - Net income attributable to common stock increased to $1.4 million in Q2 2024 from a loss of $(1.1) million in Q2 2023, representing a $2.5 million improvement due to increased sales activity and better project execution[124] Assets and Liabilities - Total current assets as of April 30, 2024, were $98,991,000, slightly up from $98,818,000 at January 31, 2024[13] - Total assets reached $157,163,000, compared to $155,711,000 at the end of January 2024[13] - As of April 30, 2024, total debt increased to $27.3 million from $25.7 million on January 31, 2024[62] - The Company had total operating lease liabilities of $6.9 million and operating ROU assets of $6.2 million as of April 30, 2024[90] - The current portion of the finance obligation related to the leaseback of the sold property is $0.2 million, with a long-term portion of $9.0 million recognized on the balance sheet as of April 30, 2024[150] Cash Flow - Net cash provided by operating activities was $1,350,000, down from $3,811,000 in the prior year[19] - Cash and cash equivalents increased to $7,674,000 from $5,845,000 at the end of January 2024[13] - Net cash from operating activities decreased to $1.4 million in Q2 2024 from $3.8 million in Q2 2023, a decline of $2.5 million primarily due to increases in prepaid expenses and inventory[127] - Net cash from investing activities was $2.0 million in Q2 2024, down from $3.2 million in Q2 2023, reflecting fewer investments in the U.S. and Canada[128] Taxation - The worldwide effective tax rate for the three months ended April 30, 2024, was 30%, a significant change from (208%) in the same period of 2023[48] - The effective tax rate improved to 30% in Q2 2024 from (208%) in Q2 2023, attributed to changes in the mix of income and loss across jurisdictions[122] Customer and Revenue Concentration - As of April 30, 2024, one customer accounted for 11% of the company's accounts receivable, highlighting customer concentration risk[29] - The company recorded $15.7 million in unbilled accounts receivable as of April 30, 2024, indicating strong revenue generation from ongoing contracts[42] Expenses - General and administrative expenses increased by $0.6 million, or 11%, to $6.1 million for the three months ended April 30, 2024, attributed to higher professional service fees[118] - Interest expense remained stable at $0.5 million for both the three months ended April 30, 2024, and 2023[120] Credit Arrangements - The Company had borrowed an aggregate of $5.3 million under the Renewed Senior Credit Facility at a rate of 10.0% as of April 30, 2024[69] - The Company has a revolving line of credit in the U.A.E. for 8.0 million Dirhams (approximately $2.2 million) with an interest rate of approximately 8.8%[73] - The Company has a second revolving line of credit in the U.A.E. for 20.5 million Dirhams (approximately $5.6 million) with an interest rate of approximately 8.7%[74] - The Company had $5.0 million of borrowing capacity under the Renewed Senior Credit Facility and $13.0 million under foreign revolving credit agreements as of April 30, 2024[126] - The Company had unused borrowing availability of approximately $1.9 million under its U.A.E. credit arrangements as of April 30, 2024[141] Internal Controls - The Company reported material weaknesses in internal control over financial reporting, particularly in IT general controls and financial reporting processes[157] - A remediation plan is being implemented to address identified weaknesses, including engaging outside consultants and enhancing internal controls[159] - The Company anticipates improvements in controls will strengthen processes and address material weaknesses, but full remediation will take time[161]