- 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
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) fluctuations in the price of oil and natural gas and
its impact on customer order volume for the Company's products;
(ii) the Company’s ability to purchase raw materials at favorable
prices and to maintain beneficial relationships with its suppliers;
(iii) 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; (iv) the
Company’s ability to repay its debt and renew expiring
international credit facilities; (v) the Company’s ability to
effectively execute its strategic plan and achieve sustained
profitability and positive cash flows; (vi) the Company's ability
to collect a long-term account receivable related to a project in
the Middle East; (vii) the Company’s ability to interpret changes
in tax regulations and legislation; (viii) the Company's ability to
use its net operating loss carryforwards; (ix) reversals of
previously recorded revenue and profits resulting from inaccurate
estimates made in connection with the Company’s "over-time" revenue
recognition; (x) the Company’s failure to establish and maintain
effective internal control over financial reporting; (xi) the
timing of order receipt, execution, delivery and acceptance for the
Company’s products; (xii) the Company’s ability to successfully
negotiate progress-billing arrangements for its large contracts;
(xiii) aggressive pricing by existing competitors and the entrance
of new competitors in the markets in which the Company operates;
(xiv) the Company’s ability to manufacture products free of latent
defects and to recover from suppliers who may provide defective
materials to the Company; (xv) reductions or cancellations of
orders included in the Company’s backlog; (xvi) risks and
uncertainties specific to the Company's international business
operations; (xvii) the Company’s ability to attract and retain
senior management and key personnel; (xviii) the Company’s ability
to achieve the expected benefits of its growth initiatives; (xix)
the impact of pandemics and other public health crises on the
Company and its operations; and (xx) 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 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 EndedOctober 31, Nine Months
EndedOctober 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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241223777874/en/
Perma-Pipe International Holdings, Inc. David Mansfield,
President and CEO Perma-Pipe Investor Relations (847)
929-1200 investor@permapipe.com
Perma Pipe (NASDAQ:PPIH)
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