Perma-Pipe International Holdings, Inc. Announces Third Quarter Financial Results

24.12.2024 - 06:02:03

Business Wire India

The Company generated net sales of $41.6 million for the quarter and $113.4 million year-to-date
Income before income taxes of $5.1 million for the quarter and $13.2 million year-to-date
Backlog of $114.2 million at October 31, 2024, compared to $68.5 million at January 31, 2024

Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced today financial results for the second quarter and fiscal year-to-date period ended October 31, 2024.

"Net sales for the third quarter were $41.6 million, a decrease of $4.1 million, as compared to the same quarter last year. Net income attributable to common stock of $2.5 million was an increase of $0.5 million, or 29%, compared to $1.9 million in the third quarter of 2023. For the nine months ended October 31, 2024, net sales of $113.4 million represent an increase of 3% compared to the nine months ended October 31, 2023. The net income attributable to common stock of $7.2 million was an increase of $5.4 million, or 294%, compared to net income attributable to common stock of $1.8 million in the nine months ended October 31, 2023,” noted President and CEO David Mansfield.

“Backlog in the third quarter shows considerable growth and now stands at $114.2 million. This is the equivalent to approximately nine months revenue based upon prior years’ revenues. The continual strengthening of our backlog over the past two quarters is encouraging and provides a sense of optimism heading into next year. Additionally, backlog at the end of the third quarter represents the highest level since transitioning from MFRI to Perma-Pipe, which occurred in March 2017,” Mr. Mansfield continued.

“Our third quarter and fiscal 2024 year-to-date results continue to reflect exceptional performance, which has remained consistent throughout the year. It is worth noting that our net income attributable to common stock for the nine months ended October 31, 2024, represents the highest level of earnings on a year-to-date basis since transitioning from MFRI to Perma-Pipe,” said Mr. Mansfield.

“We are pleased with the level of business activity we have experienced and continue to see, as supported by the significant rise in backlog and share price. The increases in infrastructure spending in Saudi Arabia, India, and the U.A.E., represent key drivers of our overall improvement, for which the strength of our financial results further enables us to continue to execute on strategic initiatives,” concluded Mr. Mansfield.

Third Quarter Fiscal 2024 Results

Net sales were $41.6 million and $45.7 million in the three months ended October 31, 2024 and 2023, respectively. The decrease of $4.1 million, or 9%, was a result of the timing of project execution.

Gross profit was $14.1 million, or 34% of net sales, and $13.2 million, or 29% of net sales, in the three months ended October 31, 2024 and 2023, respectively. The increase of $0.9 million, was driven primarily by better margins due to product mix.

General and administrative expenses were $7.3 million and $5.7 million in the three months ended October 31, 2024 and 2023, respectively. The increase of $1.6 million, was due to higher payroll expenses and professional fees in the quarter.

Selling expenses were $1.2 million and $1.5 million in the three months ended October 31, 2024 and 2023, respectively. The decrease of $0.3 million, was due to lower payroll expense in the quarter.

Net interest expense remained consistent and was $0.5 million and $0.6 million in the three months ended October 31, 2024 and 2023, respectively.

Other expense was $0.1 million and $0.5 million in the three months ended October 31, 2024 and 2023, respectively. The decrease of $0.4 million, was due primarily to exchange rate fluctuations in foreign currency transactions.

The Company's ETR was 32% and 31% in the three months ended October 31, 2024 and 2023, respectively. The change in the ETR is due to the ability to recognize tax benefits on losses in the United States in the current year whereas the prior year had a full valuation allowance and changes to the mix of income and loss in various jurisdictions.

Net income attributable to common stock was $2.5 million and $1.9 million in the three months ended October 31, 2024 and 2023, respectively. The increase of $0.6 million, was mainly due to better project execution in the quarter.

Fiscal 2024 Year-to-Date Results

Net sales were $113.4 million and $110.5 million in the nine months ended October 31, 2024 and 2023, respectively. The increase of $2.9 million, or 3%, was a result of increased sales volumes in the Middle East.

Gross profit was $38.1 million, or 34% of net sales, and $29.4 million, or 27% of net sales, in the nine months ended October 31, 2024 and 2023, respectively. The increase of $8.7 million, was driven primarily by better margins due to product mix.

General and administrative expenses were $19.5 million and $16.4 million in the nine months ended October 31, 2024 and 2023, respectively. The increase of $3.1 million, was due to higher payroll expenses and professional fees.

Selling expenses were $3.8 million and $4.2 million in the nine months ended October 31, 2024 and 2023, respectively. The decrease of $0.4 million, was due to lower payroll expenses.

Net interest expense was $1.5 million and $1.8 million in the nine months ended October 31, 2024 and 2023, respectively. The decrease of $0.3 million, was due primarily to declining interest rates on certain variable rate debt.

Other expense was $0.2 million and $0.4 million in the nine months ended October 31, 2024 and 2023, respectively. The change was due primarily to exchange rate fluctuations in foreign currency transactions.

The Company's ETR was 28% and 49% in the nine months ended October 31, 2024 and 2023, respectively. The change in the ETR is due to the ability to recognize tax benefits on losses in the United States in the current year whereas the prior year had a full valuation allowance and changes to the mix of income and loss in various jurisdictions.

Net income attributable to common stock was $7.2 million and $1.8 million in the nine months ended October 31, 2024 and 2023, respectively. The increase of $5.4 million, was mainly due to better project execution during the year.

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 fourteen locations in six countries.

Forward-Looking Statements

and under the Investor Center section of our website (http://investors.permapipe.com.)

Additional information regarding the Company's financial results for the three months ended October 31, 2024, 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, 2024, 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
*(In thousands, except per share data)*
(Unaudited)


	Three Months Ended October 31,						Nine Months Ended October 31,
	2024			2023			2024			2023
Net sales	$	41,563		$	45,690		$	113,397		$	110,489
Gross profit		14,086			13,184			38,077			29,424

Total operating expenses		8,500			7,145			23,214			20,618

Income from operations		5,586			6,039			14,863			8,806

Interest expense		468			640			1,489			1,788
Other expense		(50	)		(502	)		(156	)		(350	)
Income before income taxes		5,068			4,897			13,218			6,668

Income tax expense		1,615			1,533			3,692			3,257

Net income	$	3,453		$	3,364		$	9,526		$	3,411
Less: Net income attributable to non-controlling interest		962			1,429			2,303			1,577
Net income attributable to common stock	$	2,491		$	1,935		$	7,223		$	1,834

Earnings per share attributable to common stock
Basic	$	0.31		$	0.24		$	0.91		$	0.23
Diluted	$	0.31		$	0.24		$	0.90		$	0.23

Note: Earnings per share calculations could be impacted by rounding.


PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
*(In thousands)*
(Unaudited)


	October 31, 2024		January 31, 2024
ASSETS
Current assets	$	104,405	$	98,818
Long-term assets		56,344		56,893
Total assets	$	160,749	$	155,711
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities	$	53,794	$	57,742
Long-term liabilities		26,792		25,991
Total liabilities		80,586		83,733
Non-controlling interests		8,952		6,266
Stockholders' equity		71,211		65,712
Total liabilities and equity	$	160,749	$	155,711