Perma-Pipe Stock Up 13% Since Q3 Earnings Rise Y/Y Amid Backlog Growth

Core Insights - Perma-Pipe International Holdings, Inc. (PPIH) shares have increased by 13% since the earnings report for the quarter ended October 31, 2024, outperforming the S&P 500 index, which grew by 1.1% during the same period [1] Financial Performance - Net sales for the quarter were $41.6 million, a decrease of 9% from $45.7 million in the same quarter last year, attributed to the timing of project execution [2] - Net income attributable to common stockholders rose to $2.5 million, up from $1.9 million in the prior year [3] - Earnings per share for the third quarter of fiscal 2024 were reported at 31 cents, compared to 24 cents in the previous year [7] Cost Management and Expenses - General and administrative expenses increased by 28% year over year to $7.3 million due to higher payroll and professional fees, while selling expenses decreased by 20% to $1.2 million, reflecting lower payroll costs [4] - Net interest expense remained stable, and other expenses fell by $0.4 million due to favorable foreign currency exchange rates [4] Strategic Outlook - CEO David Mansfield emphasized the robust growth in backlog, which stood at $114.2 million as of October 31, 2024, significantly up from $68.5 million as of January 31, 2024, indicating strong future revenue potential [5][10] - The backlog level is the highest since the company transitioned to Perma-Pipe from MFRI in 2017, equating to approximately nine months of revenue based on historical figures [10] Operational Efficiency - The company's results benefited from a favorable product mix, which improved gross margins to 34% from 29%, despite a decline in sales [6][8] - Increased activity in the Middle East and operational efficiencies contributed to improved financial performance, with the company effectively managing costs [6]