- The Company generated net sales of $40.2 million for the
quarter and $150.7 million for the year
- Income before income taxes of $3.2 million for the quarter
and $9.9 million for the year
- Net income of $8.6 million for the quarter and $10.5 million
for the year
- Backlog of $68.4 million at January 31, 2024, compared to
$38.5 million at January 31,2023
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced
today financial results for the fourth quarter and 2023 fiscal year
ended January 31, 2024.
"Net sales for the fourth quarter were $40.2 million, an
increase of $3.8 million as compared to the same quarter last year,
and net income of $8.6 million was an increase of $5.4 million
compared to $3.2 million in the same quarter of 2022. For the year
ended January 31, 2024, net sales of $150.7 million represents an
increase of $8.1 million or 6%, as compared to net sales of $142.6
million in the prior year. The resulting net income of $10.5
million was an increase of $4.6 million or 78%, as compared to net
income of $5.9 million in the prior year. This was the result of
increased net sales during the year, along with a favorable tax
benefit of $5.9 million due to a partial release of a valuation
allowance attributable to net operating loss carryforwards,
partially offset by a one-time charge of $0.7 million relating to a
litigation matter that arose relating to certain projects that were
executed between 2007 and 2011," noted President and CEO David
Mansfield.
"Backlog has shown considerable growth and now stands at $68.4
million, resulting in a 78% increase, as compared to $38.5 million
in the prior year," Mr. Mansfield continued.
"We continue to experience growth in business activity in
various markets during the year, exemplified by the overall growth
in net sales. This was driven by increases in infrastructure
spending in Saudi Arabia, India, and the U.A.E. These trends in
infrastructure spending remain in line with 2030 initiatives. The
recently formed joint venture exceeded expectations during the
year, further contributing to the growth in both net sales and
margins. We are pleased with the success of the joint venture thus
far and are encouraged with the level of performance we are
experiencing," noted Mr. Mansfield.
"We also continue to execute on our strategic initiatives, such
as our plans to expand into Qatar in 2024 in connection with our
acceptance into the Tawteen program, as announced in a press
release issued earlier in the year. The joint venture has allowed
us to establish a greater presence in Saudi Arabia which enables us
to better participate in development plans. In addition, we believe
that the Company is well positioned to participate in significant
developments occurring in the Qatari market, of which, the Tawteen
program further strengthens our ability to penetrate this market,"
Mr. Mansfield concluded.
Fourth Quarter Fiscal 2023 Results
Net sales were $40.2 million and $36.4 million in the three
months ended January 31, 2024 and 2023, respectively. The increase
of $3.8 million was primarily a result of increased sales volumes
in Saudi Arabia.
Gross profit was $12.0 million, or 30% of net sales and $10.2
million, or 28% of net sales, in the three months ended January 31,
2024 and 2023, respectively. The increase of $1.8 million was
driven by improved gross margins as a result of the mix of
projects.
General and administrative expenses were $6.2 million and $5.8
million in the three months ended January 31, 2024 and 2023,
respectively. The increase of $0.4 million was primarily related to
higher compensation costs.
Selling expenses remained consistent with the prior year
expenses of $1.3 million in the three months ended January 31, 2024
and 2023, respectively.
Interest expense remained consistent and was $0.5 million in the
three months ended January 31, 2024 and 2023, respectively.
Other expense was $0.9 million, compared to other income of $1.5
million in the three months ended January 31, 2024 and 2023,
respectively. The current quarter amount includes certain one-time
adjustments, including a charge associated with the termination of
the Company's pension plan and the settlement of a legal
proceeding. The prior year amount includes income from the release
of the Company's liability for a past project.
The Company's worldwide effective tax rates ("ETR") were (204%)
and 21% in the three months ended January 31, 2024 and 2023,
respectively. The change in the ETR was primarily due to a partial
release of a U.S. valuation allowance and changes in the mix of
income and loss in various tax jurisdictions.
Net income was $8.6 million and $3.2 million in the three months
ended January 31, 2024 and 2023, respectively. The increase in net
income was a result of the changes discussed above, less amounts
attributable to non-controlling interest.
2023 Results
Net sales were $150.7 million and $142.6 million in the years
ended January 31, 2024 and 2023, respectively. The increase of $8.1
million was primarily a result of higher sales volumes in Saudi
Arabia.
Gross profit was $41.5 million, or 28% of net sales and $38.3
million, or 27% of net sales, in the years ended January 31, 2024
and 2023, respectively. The increase of $3.2 million was driven
primarily by higher sales volumes and improved gross margins in
Saudi Arabia
General and administrative expenses were $22.6 million and $22.0
million in the years ended January 31, 2024 and 2023, respectively.
The increase of $0.6 million was primarily related to higher
compensation costs.
Selling expenses were $5.5 million and $5.2 million in the years
ended January 31, 2024 and 2023, respectively. The increase of $0.3
million was driven by higher payroll expenses.
Interest expense remained consistent and was $2.3 million and
$2.1 million in the years ended January 31, 2024 and 2023,
respectively. The increase of $0.2 million was related to increased
borrowings and, to a lesser extent, higher interest rates.
Other expense was $1.2 million, as compared to other income of
$0.5 million in the years ended January 31, 2024 and 2023,
respectively. The current year amount includes certain one-time
adjustments, including a charge associated with the termination of
the Company's pension plan and the settlement of a legal
proceeding. The prior year amount includes income from the release
of the Company's liability for a past project and insurance
recovery income, partially offset by a non-cash pre-tax settlement
charge resulting from the termination of the Company's pension
plan.
The Company's worldwide ETR's were (34%) and 38% in the years
ended January 31, 2024 and 2023, respectively. The change in the
ETR was largely due to a partial release of the U.S. valuation
allowance and changes in the mix of income and loss in various tax
jurisdictions.
Net income attributable to common stock was $10.5 million and
$5.9 million in the years ended January 31, 2024 and 2023,
respectively. The increase in net income was a result of the
changes discussed above, less amounts attributable to
non-controlling interest.
Percentages set forth above in this press release have been
rounded to the nearest percentage point, and may not correspond
exactly to the comparative data presented.
Perma-Pipe International Holdings, Inc.
Perma-Pipe International Holdings 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,
Perma-Pipe 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.)
The Company's fiscal year ends on January 31. Years, results and
balances described as 2024, 2023, and 2022 are for the fiscal year
ending January 31, 2025, and the fiscal years ended January 31,
2024 and 2023, respectively.
Perma-Pipe’s Form 10-K for the 2023 fiscal year ended January
31, 2024 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 January
31,
Year Ended January 31,
2024
2023
2024
2023
Net sales
$
40,179
$
36,441
$
150,668
$
142,569
Gross profit
12,035
10,236
41,458
38,301
Total operating expenses
7,482
7,115
28,099
27,157
Income from operations
4,553
3,121
13,359
11,144
Interest expense, net
478
534
2,266
2,119
Other (expense)/income
(852
)
1,498
(1,202
)
533
Income before income taxes
3,223
4,085
9,891
9,558
Income tax (benefit)/expense
(6,578
)
851
(3,320
)
3,613
Net income
$
9,801
$
3,234
$
13,211
$
5,945
Less: Net income attributable to
non-controlling interest
1,163
-
2,740
-
Net income attributable to common
stock
$
8,638
$
3,234
$
10,471
$
5,945
Weighted average common shares
outstanding
Basic
7,920
8,004
7,977
7,976
Diluted
7,986
8,214
8,073
8,116
Earnings per share
Basic
$
1.09
$
0.40
$
1.31
$
0.75
Diluted
$
1.08
$
0.39
$
1.30
$
0.73
Note: Earnings per share calculations
could be impacted by rounding.
PERMA-PIPE INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
January 31,
2024
2023
ASSETS
Current assets
$
98,818
$
85,658
Long-term assets
56,893
37,308
Total assets
$
155,711
$
122,966
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
$
57,742
$
43,790
Long-term liabilities
25,991
21,392
Total liabilities
83,733
65,182
Non-controlling interests
6,266
-
Stockholders' equity
65,712
57,784
Total liabilities and stockholders'
equity
$
155,711
$
122,966
PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND
SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE ADJUSTED INCOME BEFORE TAX (In thousands)
(Unaudited)
The following information contains a reconciliation of the
non-GAAP financial measure of adjusted income before income tax and
income before tax prepared in accordance with generally accepted
accounting principles ("GAAP") for the twelve months ended January
31, 2024, and 2023, respectively. This reconciliation is intended
to provide investors with useful information in evaluating the
Company's performance. Adjusted income before tax includes certain
adjustments as identified below. This measure is not considered an
alternative to income before tax or other financial measures of
performance that are prepared in accordance with GAAP. The Company
believes that the exclusion of certain items from income before tax
allows investors to more effectively evaluate the Company's
operating performance and identify trends that might not be
apparent due to the variability and infrequent nature of these
items. In addition, the Company believes this measure provides
meaningful information to investors in comparing results between
periods and in comparing performance with respect to the Company's
peers.
Adjustments made for certain items are further described as
follows: (i) one-time charge to terminate the Company's pension
plan; (ii) one-time charge relating to a litigation settlement that
arose from projects executed between 2007 and 2011; (iii) one-time
adjustment from the release of the Company's liability for a past
project. As a result of these adjustments, some items that affect
income before tax, may not be comparable to similar measures of
other companies.
The following table provides a reconciliation of the GAAP and
non-GAAP financial measure:
For the twelve months ended
January 31, 2024
January 31, 2023
Income before income tax (GAAP as
reported)
$
9,891
$
9,558
Pension plan termination
479
1,133
Litigation settlement
709
74
Project release adjustment
-
(930
)
Adjusted income before tax
$
11,079
$
9,835
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240426849864/en/
Perma-Pipe International Holdings, Inc. David
Mansfield, President and CEO
Perma-Pipe Investor Relations (847) 929-1200
investor@permapipe.com
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