Perma-Pipe International Holdings, Inc. Announces its Third Quarter and Year-to-Date Fiscal 2022 Financial Results

• The Company generated net sales of $37.9 million as compared to $35.2 million in the third quarter of 2021
• Income before income taxes of $2.9 million versus $1.5 million in the third quarter of 2021
• Fully funded pension plan was terminated and a related non-cash pre-tax charge of $0.9 million was recorded
• Backlog of $47.0 million at October 31, 2022 compared to $39.3 million at January 31, 2022

SPRING, Texas–(BUSINESS WIRE)–Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced today financial results for the third quarter ended October 31, 2022.

“Revenues for the third quarter were $37.9 million, an increase of $2.7 million versus the same quarter last year. The resulting income from operations of $2.9 million was also an increase from the $1.5 million earned in the same quarter of 2021, despite a $0.9 million non-cash pre-tax charge in the current quarter resulting from a pension plan termination,” noted President and CEO David Mansfield.

“While maintaining overhead cost management, pre-tax earnings for the year to date increased versus last year with revenues remaining stable throughout the year. We continue to see strong oil and gas demand in Canada and our other North American operations also improved substantially due to increased activity in the district heating and cooling market. Despite revenues at similar levels, the returns from our operations in Egypt have improved as we venture into new products and services.

“Backlog has grown $7.7 million largely because of contracts in Saudi Arabia, where activity levels there and elsewhere in the Middle East have increased.

“Year to date versus prior year both revenue and income from operations increased despite recognizing a non-cash pre-tax charge of $0.9 million for the termination of a pension plan, and after the cessation of government subsidies for COVID-19 received in the prior year. Excluding these non-recurring items year over year, pre-tax earnings increased by 45%,” concluded Mr. Mansfield.

Perma-Pipe International Holdings, Inc.

Perma-Pipe International Holdings, Inc. (the “Company”) is a global leader in pre-insulated piping and leak detection systems for oil and gas gathering, district heating and cooling, and other applications. It uses its extensive engineering and fabrication expertise to develop piping solutions that solve complex challenges regarding the safe and efficient transportation of many types of liquids. In total, the Company has operations at thirteen locations in six countries.

Forward-Looking Statements

Certain statements and other information contained in this press release that can be identified by the use of forward-looking terminology constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby, including, without limitation, statements regarding the expected future performance and operations of the Company. These statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties include, but are not limited to, the following: (i) the impact of the coronavirus (“COVID-19”) on the Company’s results of operations, financial condition and cash flows; (ii) fluctuations in the price of oil and natural gas and its impact on the customer order volume for the Company’s products; (iii) the impact of global economic weakness and volatility; (iv) fluctuations in steel prices and the Company’s ability to offset increases in steel prices through price increases in its products; (v) decreases in government spending on projects using the Company’s products, and challenges to the Company’s non-government customers’ liquidity and access to capital funds; (vi) the Company’s ability to repay its debt and renew expiring international credit facilities; (vii) the Company’s ability to effectively execute its strategic plan and achieve sustained profitability and positive cash flows; (viii) the Company’s ability to collect a long-term account receivable related to a project in the Middle East; (ix) the Company’s ability to interpret changes in tax regulations and legislation; (x) the Company’s ability to use its net operating loss carryforwards; (xi) reversals of previously recorded revenue and profits resulting from inaccurate estimates made in connection with the Company’s over-time revenue recognition; (xii) the Company’s failure to establish and maintain effective internal control over financial reporting; (xiii) the timing of order receipt, execution, delivery and acceptance for the Company’s products; (xiv) the Company’s ability to successfully negotiate progress-billing arrangements for its large contracts; (xv) aggressive pricing by existing competitors and the entrance of new competitors in the markets in which the Company operates; (xvi) the Company’s ability to purchase raw materials at favorable prices and to maintain beneficial relationships with its suppliers; (xvii) the Company’s ability to manufacture products free of latent defects and to recover from suppliers who may provide defective materials to the Company; (xviii) reductions or cancellations of orders included in the Company’s backlog; (xix) risks and uncertainties specific to the Company’s international business operations; (xx) the Company’s ability to attract and retain senior management and key personnel; (xxi) the Company’s ability to achieve the expected benefits of its growth initiatives; and (xxii) the impact of cybersecurity threats on the Company’s information technology systems. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at https://www.sec.gov and under the Investor Center section of our website (http://investors.permapipe.com.)

Additional information regarding the Company’s financial results for the three and nine months ended October 31, 2022, including management’s discussion and analysis of the Company’s financial condition and results of operations, is contained in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2022, which will be filed with the Securities and Exchange Commission on or about the date hereof and will be accessible at www.sec.gov and www.permapipe.com. For more information, visit the Company’s website.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
		Three Months Ended October 31,								Nine Months Ended October 31,
		2022				2021				2022				2021
Net sales		$	37,903			$	35,199			$	106,128			$	99,426
Gross profit			11,130				7,629				28,065				22,877
Total operating expenses			6,594				5,938				20,043				18,040
Income from operations			4,536				1,691				8,022				4,837
Interest expense, net			717				270				1,585				717
Other (expense)/income			(948	)			98				(963	)			997
Income before income taxes			2,871				1,519				5,474				5,117
Income tax expense			1,143				1,024				2,763				2,049
Net income		$	1,728			$	495			$	2,711			$	3,068
Earnings per share
Basic		$	0.22			$	0.06			$	0.33			$	0.38
Diluted		$	0.21			$	0.06			$	0.33			$	0.36
Note: Earnings per share calculations could be impacted by rounding.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
		October 31, 2022				January 31, 2022
		(Unaudited)
ASSETS
Current assets		$	89,392			$	78,389
Long-term assets			36,417				45,012
Total assets		$	125,809			$	123,401
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities		$	47,456			$	38,397
Long-term liabilities			23,562				30,547
Total liabilities			71,018				68,944
Stockholders’ equity			54,791				54,457
Total liabilities and stockholders’ equity		$	125,809			$	123,401

 

Contacts

Perma-Pipe International Holdings, Inc.
David Mansfield, President and CEO

Perma-Pipe Investor Relations
(847) 929-1200
investor@permapipe.com