8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported):  September 14, 2023

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-32530	36-3922969
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

24900 Pitkin Road, Suite 309 , Spring, Texas 77386

(Address of principal executive offices, including zip code)

(847) 966-1000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	PPIH	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02.	Results of Operations and Financial Condition.

On September 14, 2023, Perma-Pipe International Holdings, Inc. issued a press release announcing its financial results for its second quarter ended July 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01.	Financial Statements and Exhibits.
(a)	Not applicable.
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(b)	Not applicable.
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(c)	Not applicable.
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(d)	Exhibits. The following exhibit is being furnished herewith:
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Exhibit

Number

(99.1)	Press Release of Perma-Pipe International Holdings, Inc., dated September 14, 2023, regarding its financial results for its second quarter ended July 31, 2023
(104)	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PERMA-PIPE INTERNATIONAL HOLDINGS, INC.
Date: September 14, 2023	By:	/s/ D. Bryan Norwood
		D. Bryan Norwood
		Vice President and Chief Financial Officer

ex_535558.htm

Exhibit 99.1

COMPANY:	Perma-Pipe International Holdings, Inc.
CONTACT:	David Mansfield, President and CEO
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Perma-Pipe Investor Relations

(847) 929-1200

investor@permapipe.com

Perma-Pipe International Holdings, Inc. Announces its Second Quarter Fiscal 2023 Financial Results

•        The Company generated net sales of $35.1 million as compared to $37.0 million in the first quarter of 2022

•        Income before income taxes of $2.1 million versus $2.8 million in the second quarter of 2022

•        Backlog of $63.9 million at July 31, 2023

SPRING, TX, September 14, 2023 - Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced today financial results for the second quarter ended July 31, 2023.

“Revenues for the second quarter were $35.1 million, a decrease of $1.9 million versus the same quarter last year. The resulting income from operations of $2.7 million was below the $3.3 million earned in the same quarter of 2022. Note that the results for this quarter however included a non-operating one-time tax expense of $0.5 million relating to the termination of a pension plan, and were adversely impacted by project schedules that slipped into a later period," note President and CEO David Mansfield.

"Backlog has continued to grow and now stands at $63.9 million after some significant awards in most Business Units.

Notable recent events include the commencement of operations on June 1, 2023 at our previously announced joint venture in Saudi Arabia which has begun favorably, and we are nearing completion of our Eastern Canada expansion. In addition, our efforts to expand into Qatar are progressing as expected," noted Mr. Mansfield.

“Net income shows the impact of taxation rates in the different countries we operate, and our inability to recognize the benefit of tax losses in the United States. The tax charge therefore continues to be disproportionate to the consolidated earnings,” concluded Mr. Mansfield.

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Second Quarter Fiscal 2023 Results

Net sales were $35.1 million and $37.0 million in the three months ended July 31, 2023 and 2022, respectively.  The decrease of $1.9 million, or 5%, was a result of lower volume activity in Canada.

Gross profit was $9.5 million, or 27% of net sales, and $9.9 million, or 28% of net sales, in the three months ended July 31, 2023 and 2022, respectively. The decrease of $0.4 million was primarily driven by lower sales volumes.

General and administrative expenses were $5.3 million and $5.2 million in the three months ended July 31, 2023 and 2022, respectively. The increase of $0.1 million, or 2%, was due to higher payroll costs in the quarter.

Selling expenses were $1.5 million and $1.3 in the three months ended July 31, 2023 and 2022, respectively.  The increase of $0.2 million was mainly the result of higher payroll costs in connection with the formation of the joint venture.

Net interest expense remained consistent and was $0.6 million and $0.5 million in the three months ended July 31, 2023 and 2022, respectively.

Other income was consistent and less than $0.1 million for the three months ended July 31, 2023 and 2022, respectively.

The Company's worldwide effective tax rates ("ETR") were 45.2% and 32.2% in the three months ended July 31, 2023 and 2022, respectively. The change in the ETR is due primarily to the inability to recognize tax benefits on losses in the United States due to a full valuation allowance and changes in the mix of income and loss in various jurisdictions.

Net income attributable to common stock was $1.0 million and $1.9 million in the three months ended July 31, 2023 and 2022, respectively. The decrease of $0.9 million was mainly due to lower sales activity in the quarter.

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  July 31, 2023, 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  July 31, 2023, 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.

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended July 31,					Six Months Ended July 31,
	2023		2022			2023			2022
Net sales	$	35,141	$	37,003		$	64,798		$	68,225
Gross profit		9,464		9,886			16,239			16,935
Total operating expenses		6,773		6,561			13,472			13,450
Income from operations		2,691		3,325			2,767			3,485
Interest expense		636		500			1,148			867
Other income (expense)		81		(62	)		154			(15	)
Income before income taxes		2,136		2,763			1,773			2,603
Income tax expense		966		893			1,725			1,620
Net income	$	1,170	$	1,870		$	48		$	983
Less: Net income attributable to non-controlling interests		148		0			148			0
Net income (loss) attributable to common stock	$	1,022	$	1,870		$	(100	)	$	983
Earnings (loss) per share attributable to common stock
Basic	$	0.13	$	0.23		$	(0.01	)	$	0.12
Diluted	$	0.13	$	0.23		$	(0.01	)	$	0.12

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	July 31, 2023		January 31, 2023
	(Unaudited)
ASSETS
Current assets	$	93,596	$	85,658
Long-term assets		49,711		37,308
Total assets	$	143,307	$	122,966
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities	$	57,768	$	43,790
Long-term liabilities		26,330		21,392
Total liabilities		84,098		65,182
Non-controlling interests		1,735		0
Stockholders' equity		57,474		57,784
Total liabilities and equity	$	143,307	$	122,966