Perma-Pipe International Holdings, Inc 10-K for FY2025

Perma-Pipe International Holdings, Inc. (PPIH)

10-K 2025-05-01 For: 2025-01-31

Added on April 06, 2026

About this 10-K

Perma-Pipe International Holdings, Inc filed this 10-K on May 1, 2025, covering the fiscal year ended January 31, 2025 (FY2025).

Headline figures

Fiscal year ended January 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $158.38M; up 5.1% from $150.67M a year earlier
Net income: $8.98M; down 14.2% from net income of $10.47M a year earlier
Diluted EPS: $1.12; down 13.8% from $1.30 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Delaware	36-3922969
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
25025 I-45, Suite 200, The Woodlands, Texas	77380
(Address of principal executive offices)	(Zip Code)
(281) 598-6222
(Registrant's telephone number, including area code)

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

		Page
PART I
ITEM 1.	Business	2
ITEM 1A.	Risk Factors	5
ITEM 1B.	Unresolved Staff Comments	9
ITEM 1C.	Cybersecurity	10
ITEM 2.	Properties	11
ITEM 3.	Legal Proceedings	11
ITEM 4.	Mine Safety Disclosures	11

PART II
ITEM 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12
ITEM 6.	[Reserved]	13
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 8.	Financial Statements and Supplementary Data	20
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
ITEM 9A.	Controls and Procedures	21
ITEM 9B.	Other Information	22
ITEM 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	22

PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	23
ITEM 11.	Executive Compensation	23
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	23
ITEM 14.	Principal Accountant Fees and Services	23

PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	23
ITEM 16.	Form 10-K Summary	57
	Signatures	58

	•	fluctuations in the price of oil and natural gas and its impact on customer order volume for the Company's products;
	•	the Company’s ability to purchase raw materials at favorable prices and to maintain beneficial relationships with its suppliers, which could result in a shortage of supply, or increased pricing;
	•	decreases in government spending on projects using the Company’s products, and challenges to the Company’s customers’ liquidity and access to capital funds;

	•	the Company's ability to maintain sustained levels of profitability or positive cash flows in the future;
	•	the Company’s ability to effectively execute its strategic plan and achieve sustained profitability and positive cash flows;

	•	the timing of order receipt, execution, delivery and acceptance for the Company’s products;
	•	the Company’s ability to successfully negotiate progress-billing arrangements for its large contracts;
	•	aggressive pricing by existing competitors and the entrance of new competitors in the markets in which the Company operates;
	•	the Company’s ability to manufacture products free of latent defects and to recover from suppliers who may provide defective materials to the Company;
	•	reductions or cancellations of orders included in the Company’s backlog;
	•	risks and uncertainties specific to the Company's international business operations;

Perma-Pipe, Inc.	Perma-Pipe Middle East LLC
Rolling Meadows, IL	Abu Dhabi, United Arab Emirates
New Iberia, LA	Perma-Pipe Middle East FZC
Lebanon, TN	Fujairah, United Arab Emirates
Perma-Pipe Canada, Ltd.	Perma-Pipe Saudi Arabia, LLC
Camrose, Alberta, Canada	Perma-Pipe Gulf Arabia, LLC
Vars, Ontario, Canada	Dammam, Kingdom of Saudi Arabia
Perma-Pipe Egypt for Metal Fabrication and Insulation Industries (Perma-Pipe Egypt) S.A.E.	Riyadh, Kingdom of Saudi Arabia
Beni Suef, Egypt	Medina, Kingdom of Saudi Arabia
Perma-Pipe India Pvt. Ltd
Gandhidham, India

		Executive officer of the
Name	Offices and Positions; Age	Company since
David J. Mansfield	Director, Chief Executive Officer; Age 65	2016

Saleh Sagr	President; Age 55	2025

Matthew E. Lewicki	Vice President and Chief Financial Officer; Age 42	2023

Location	Leased and/or Owned
Illinois	Leased building and office space
Louisiana	Owned building and leased land
Tennessee	Leased building, office space, and land
Texas	Leased office space
Camrose, Alberta, Canada	Owned building with office space on owned land; leased land and leased office space
Vars, Ontario, Canada	Leased building, office space, and land
India	Leased building, office space, and land
Dammam, Kingdom of Saudi Arabia	Owned building and office space on leased land
Riyadh, Kingdom of Saudi Arabia	Leased building and office space
United Arab Emirates	Leased office space and building on leased land; owned building with office space on leased land
Egypt	Leased building and office space on leased land

	Year Ended January 31,
	2025					2024						Change favorable (unfavorable)
	Amount		Percent of Net Sales			Amount			Percent of Net Sales			Amount
Net sales	$	158,384				$	150,668					$	7,716

Gross profit		53,248		34	%		41,458			28	%		11,790

General and administrative expenses		28,000		18	%		22,591			15	%		(5,409	)

Selling expense		4,947		3	%		5,508			4	%		561

Interest expense		1,940					2,266						326

Other income (expense)		107					(1,202	)					1,309

Income before income tax		18,468					9,891						8,577

Income tax expense (benefit)		5,377					(3,320	)					(8,697	)

Net income		13,091					13,211						(120	)

Less: Net income attributable to non-controlling interest		4,108					2,740						1,368

Net income attributable to common stock		8,983					10,471						(1,488	)

	Year Ending January 31,
Contractual obligations	Total		2025		2026		2027		2028		2029		Thereafter
Revolving line - North America (1)	$	6,765	$	6,765	$	-	$	-	$	-	$	-	$	-
Mortgage note (2)		3,956		221		221		221		221		221		2,853
Revolving lines - foreign (3)		2,010		2,010		-		-		-		-		-
Long-term finance obligation (4)		9,023		225		263		305		349		400		7,481
Subtotal		21,754		9,221		484		526		570		621		10,334
Finance lease obligations		75		32		34		9		-		-		(0	)
Operating lease obligations (5)		15,966		1,900		2,094		2,120		1,791		899		7,162
Uncertain tax position obligations (6)		1,225		-		-		-		-		-		1,225
Loan payable to GIG (7)		2,753		-		-		-		-		-		2,753
Total	$	41,773	$	11,153	$	2,612	$	2,655	$	2,361	$	1,520	$	21,474

(6)	Refer to Note 7 - Income taxes, in the Notes to Consolidated Financial Statements for a description of the uncertain tax position obligations.
(7)	Refer to Note 12 - Non-controlling interest, in the Notes to Consolidated Financial Statements for further discussion regarding the loan payable to Gulf Insulation Group ("GIG").

	•	We did not design and maintain effective controls in response ot the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement in financial reporting. This contributed to the following material weaknesses;
	•	We did not design and maintain effective certain controls over financial reporting relating to the review and approval of manual journal entries, review of the financial close process, including the statement of cash flows, and review of certain financial policies and procedures;
	•	We did not design and maintain effective controls at operating locations in the Middle East and North Africa ("MENA"), including not maintaining sufficient documentation to support an evaluation that controls over business processes were designed and operating effectively.

	Number of shares to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a))
Plan Category	(a)(1)	(b)(1)	(c)(2)
Equity compensation plans approved by stockholders	600	$6.85	422,445

	*Year ended January 31,*
	*2025*		*2024*

Net sales	$	158,384	$	150,668
Cost of sales		105,136		109,210
Gross profit		53,248		41,458

Operating expenses
General and administrative expenses		28,000		22,591
Selling expense		4,947		5,508
Total operating expenses		32,947		28,099

Income from operations		20,301		13,359

Interest expense		1,940		2,266
Other income (expense)		107		(1,202	)
Income before income tax		18,468		9,891

Income tax expense (benefit)		5,377		(3,320	)

Net income		13,091		13,211
Less: Net income attributable to non-controlling interest		4,108		2,740
Net income attributable to common stock	$	8,983	$	10,471

Weighted average common shares outstanding
Basic		7,956		7,977
Diluted		8,015		8,073

Earnings per share attributable to common stock
Basic	$	1.13	$	1.31
Diluted	$	1.12	$	1.30

	*January 31,*
	*2025*			*2024*
ASSETS
Current assets
Cash and cash equivalents	$	15,716		$	5,845
Restricted cash		1,401			1,395
Trade accounts receivable, less allowance for doubtful accounts of $703 at January 31, 2025 and $699 at January 31, 2024		43,148			46,646
Inventories		16,622			15,541
Prepaid expenses and other current assets		10,045			9,697
Unbilled accounts receivable		18,936			16,597
Costs and estimated earnings in excess of billings on uncompleted contracts		2,934			3,097
Total current assets		108,802			98,818
Long-term assets
Property, plant and equipment, net of accumulated depreciation		35,365			37,620
Operating lease right-of-use asset		8,199			6,467
Deferred tax assets		6,639			7,919
Goodwill		2,057			2,222
Other long-term assets		4,179			2,665
Total long-term assets		56,439			56,893
Total assets	$	165,241		$	155,711
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	23,691		$	25,323
Accrued compensation and payroll taxes		1,388			1,214
Commissions and management incentives payable		5,840			4,523
Revolving line - North America		6,765			5,519
Current maturities of long-term debt		2,481			4,071
Customers' deposits		2,506			4,264
Operating lease liability short-term		1,071			914
Other accrued liabilities		6,697			9,039
Billings in excess of costs and estimated earnings on uncompleted contracts		1,249			495
Income taxes payable		2,375			2,380
Total current liabilities		54,063			57,742
Long-term liabilities
Long-term debt, less current maturities		3,669			4,229
Long-term finance obligation		11,551			11,788
Deferred compensation liabilities		1,689			1,212
Deferred tax liabilities		1,320			1,217
Operating lease liability long-term		7,713			6,270
Other long-term liabilities		2,131			1,275
Total long-term liabilities		28,073			25,991
Non-controlling interest		10,967			6,266
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value, authorized 50,000 shares; 7,983 issued and outstanding at January 31, 2025 and 8,017 issued and outstanding at January 31, 2024		80			80
Additional paid-in capital		60,151			60,063
Treasury stock, no shares at January 31, 2025 and 112 shares at January 31, 2024		-			(968	)
Retained earnings		20,104			12,088
Accumulated other comprehensive loss		(8,197	)		(5,551	)
Total stockholders' equity		72,138			65,712
Total liabilities and stockholders' equity	$	165,241		$	155,711

	*Common Stock*			*Additional Paid-in Capital*			*Retained Earnings*			*Treasury Stock*			*Accumulated Other Comprehensive Loss*			*Total Stockholders' Equity*
Total stockholders' equity on January 31, 2023	$	80		$	62,562		$	1,617		$	(26	)	$	(6,449	)	$	57,784

Net income		-			-			10,471			-			-			10,471
Common stock issued under stock plans, net of shares used for tax withholding		-			(274	)		-			-			-			(274	)
Repurchase of common stock		-			-			-			(942	)		-			(942	)
Stock-based compensation expense		-			913			-			-			-			913
Acquisition-related adjustment		-			(3,138	)		-			-			-			(3,138	)
Foreign currency translation adjustment		-			-			-			-			898			898
Total stockholders' equity on January 31, 2024	$	80		$	60,063		$	12,088		$	(968	)	$	(5,551	)	$	65,712

Net income		-			-			8,983			-			-			8,983
Common stock issued under stock plans, net of shares used for tax withholding		1			(126	)		-			-			-			(125	)
Retirement of treasury stock		(1	)		-			(967	)		968			-			-
Stock-based compensation expense		-			860			-			-			-			860
Amount attributable to non-controlling interest		-			(646	)		-			-			-			(646	)
Foreign currency translation adjustment		-			-			-			-			(2,646	)		(2,646	)
Total stockholders' equity on January 31, 2025	$	80		$	60,151		$	20,104		$	-		$	(8,197	)	$	72,138

Shares	*2024*			*2023*
Balances at beginning of year		8,016,781			8,007,002
Treasury stock retired		(112,015	)		-
Shares issued, net of shares used for tax withholding		77,802			66,726
Prior year adjustments		-			(56,947	)
Balance end of year		7,982,568			8,016,781

	*2024*		*2023*
Net sales
United States	$	52,956	$	51,893
Canada		31,002		31,351
Middle East/North Africa/India		74,014		63,880
Europe		333		559
Other		79		2,985
Total net sales	$	158,384	$	150,668

Property, plant and equipment, net of accumulated depreciation
United States	$	4,650	$	5,600
Canada		9,622		10,775
Middle East/North Africa/India		21,093		21,245
Total property, plant and equipment, net of accumulated depreciation	$	35,365	$	37,620

	*2024*			*2023*
Equity adjustment foreign currency, gross	$	(8,522	)	$	(5,804	)
Tax effect of equity adjustment foreign currency		325			253
Total accumulated other comprehensive loss	$	(8,197	)	$	(5,551	)

	*2024*		*2023*
Raw materials	$	16,374	$	13,787
Work in process		745		611
Finished goods		366		2,022
Subtotal		17,485		16,420
Less allowance		863		879
Inventories	$	16,622	$	15,541

	*Useful Life (Years)*		*2024*		*2023*
Land, buildings and improvements		3 - 30	$	26,276	$	25,620
Machinery and equipment		3 - 10		50,360		56,411
Furniture, office equipment and computer systems		3 - 7		3,218		3,169
Transportation equipment		3		1,184		2,293
Subtotal				81,038		87,493
Less accumulated depreciation				45,673		49,873
Property, plant and equipment, net of accumulated depreciation			$	35,365	$	37,620

	*2024*			*2023*
Balance at beginning of year	$	2,222		$	2,227
Foreign exchange adjustment		(165	)		(5	)
Balance at end of year	$	2,057		$	2,222

Basic weighted average number of common shares outstanding	*2024*		*2023*
Basic weighted average number of common shares outstanding		7,956		7,977
Dilutive effect of stock options and restricted stock units		59		96
Weighted average number of common shares outstanding assuming full dilution		8,015		8,073

Restricted stock and stock options not included in the computation of diluted EPS of common stock because the option exercise prices exceeded the average market prices		1		87
Canceled options during the year		-		(17	)
Restricted stock and stock options with an exercise price below the average stock price		59		96

	*2024*					*2023*
	*Sales*		*% to Total*			*Sales*		*% to Total*
Products	$	12,801		8	%	$	10,368		7	%

Specialty Piping Systems and Coating
Revenue recognized under input method		45,606		29	%		51,977		34	%
Revenue recognized under output method		99,977		63	%		88,323		59	%
Total	$	158,384		100	%	$	150,668		100	%

	*2024*			*2023*
Costs incurred on uncompleted contracts	$	11,621		$	21,912
Estimated earnings		9,366			11,270
Earned revenue		20,987			33,182
Less billings to date		19,302			30,580
Costs in excess of billings, net	$	1,685		$	2,602
Balance sheet classification
Contract assets: Costs and estimated earnings in excess of billings on uncompleted contracts	$	2,934		$	3,097
Contract liabilities: Billings in excess of costs and estimated earnings on uncompleted contracts		(1,249	)		(495	)
Costs in excess of billings, net	$	1,685		$	2,602

	*Total*		*2025*		*2026*		*2027*		*2028*		*2029*		*Thereafter*
Revolving line - North America	$	6,765	$	6,765	$	-	$	-	$	-	$	-		-
Mortgage note		3,956		221		221		221		221		221		2,853
Revolving lines - foreign		2,010		2,010		-		-		-		-		-
Long-term finance obligation		9,023		225		263		305		349		400		7,481
Loan payable to GIG		2,753		-		-		-		-		-		2,753
Finance lease obligations		75		32		34		9		-		-		(0	)
Total	$	24,582	$	9,253	$	518	$	535	$	570	$	621	$	13,087

Operating and Finance leases	January 31, 2025			January 31, 2024
Finance lease assets
Property and Equipment - gross	$	899		$	970
Accumulated depreciation and amortization		(626	)		(536	)
Property and Equipment - net	$	273		$	434

Finance lease liabilities
Finance lease liability short-term	$	75		$	113
Total finance lease liabilities	$	75		$	113

Operating lease assets
Operating lease ROU assets	$	8,199		$	6,467

Operating lease liabilities
Operating lease liability short-term	$	1,071		$	914
Operating lease liability long-term		7,713			6,270
Total operating lease liabilities	$	8,784		$	7,184

Lease costs	*Consolidated Statements of Operations Classification*	*Year Ended January 31, 2025*		*Year Ended January 31, 2024*

Finance Lease Costs
Amortization of ROU assets	Cost of sales	$	131	$	162
Interest on lease liabilities	Interest expense		6		9
Operating lease costs	Cost of sales, SG&A expenses		1,873		1,888
Short-term lease costs (1)	Cost of sales, SG&A expenses		667		530
Sub-lease income	SG&A expenses		-		(61	)
Total Lease costs		$	2,677	$	2,528

	*January 31, 2025*			*January 31, 2024*

Weighted-average remaining lease terms (in years)
Finance leases		2.3			3.3
Operating leases	11.5				13.7

Weighted-average discount rates
Finance leases		6.4	%		6.8	%
Operating leases		10.0	%		9.3	%

Year	*Operating Leases*			*Finance Leases*
For the year ended January 31, 2026	$	1,900		$	36
For the year ended January 31, 2027		2,094			36
For the year ended January 31, 2028		2,120			9
For the year ended January 31, 2029		1,791			-
For the year ended January 31, 2030		899			-
Thereafter		7,162			-
Total lease payments		15,966			81
Less: amount representing interest		(7,182	)		(6	)
Total lease liabilities at January 31, 2025	$	8,784		$	75

Income from continuing operations before income taxes	*2024*			*2023*
Domestic (1)	$	(4,682	)	$	(8,541	)
Foreign		23,150			18,432
Total	$	18,468		$	9,891

Components of income tax expense (benefit)	*2024*			*2023*
Current
Federal	$	(4	)	$	(21	)
Foreign		3,614			3,351
State and other		150			270
Total current income tax expense		3,760			3,600
Deferred
Federal		1,048			(7,311	)
Foreign		569			391
Total deferred income tax expense (benefit)		1,617			(6,920	)
Total income tax expense	$	5,377		$	(3,320	)

	2024			2023
Tax expense at federal statutory rate	$	3,882		$	2,083
State expense, net of federal income tax effect		68			159
Domestic return to provision	(82		)	247
Domestic valuation allowance		(468	)		(8,065	)
Global Intangible Low-Taxed Income inclusion		2,201			2,202
State NOL expirations	-			1,375
Permanent differences other	176			258
Valuation allowance for state NOLs		56			(1,314	)
Differences in foreign tax rate		(796	)		(598	)
Reductions of uncertain tax positions of prior years	-			(239		)
Deferred tax on unremitted earnings		152			195
Foreign withholding taxes		31			135
Research tax credit		265			247
All other, net expense		(108	)		(5	)
Total income tax (benefit) expense	$	5,377		$	(3,320	)

Components of deferred income tax assets	*2024*			*2023*
U.S. Federal NOL carryforward	$	4,870		$	6,173
Deferred compensation		222			241
Research tax credit		1,240			1,505
Foreign NOL carryforward		255			258
Foreign tax credit		2,580			2,580
Stock compensation		-			21
Other accruals not yet deducted		202			500
State NOL carryforward		1,544			1,495
Accrued commissions and incentives		1020			845
Inventory reserve		118			70
Lease liability		1034			878
Deferred tax assets, gross		13,085			14,566
Valuation allowance		(5,277	)		(5,689	)
Total deferred tax assets, net of valuation allowances	$	7,808		$	8,877

Components of the deferred income tax liability
Depreciation	$	(530	)	$	(370	)
Foreign subsidiaries unremitted earnings		(813	)		(783	)
Prepaid		(77	)		(94	)
Right of use asset		(999	)		(855	)
Other		(70	)		(73	)
Total deferred tax liabilities	$	(2,489	)	$	(2,175	)

Deferred tax assets, net	$	5,319		$	6,702

Balance sheet classification
Long-term assets	$	6,639		$	7,919
Long-term liability		(1,320	)		(1,217	)
Total deferred tax assets, net of valuation allowances	$	5,319		$	6,702