• The Company generated net sales of $31.2 million for the
first quarter
• Income from operations improved $1.1 million versus the
first quarter of 2021
• Backlog of $59.2 million at April 30, 2022 compared to
$39.3 million on January 31, 2022
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced
today financial results for the first quarter ended April 30,
2022.
“Revenues for the first quarter of $31.2 million increased 28%
from the $24.4 million for the same quarter last year. The
resulting income from operations of $0.2 million was also above the
$0.9 million loss incurred in the same quarter of 2021," noted
President and CEO David Mansfield. "While both revenues and margins
improved, there was a corresponding increase to operating expenses,
which was partly due to personnel costs and driven by the increased
levels of activity."
"During the first quarter of 2022, the oil and gas market in
Canada has been returning to increased levels of investment, and
the industry outlooks are positive. There has also been a notable
improvement to our results in Saudi Arabia, where investments in
construction projects are expected to return to pre-pandemic
levels.
"Our current backlog of $59.2 million is 50% higher than our
January 31, 2022 backlog. After a significant amount of new awards
during the quarter, including in Saudi Arabia and the United
States, our backlog is at approximately the same level as it was
this time last year, and it is distributed very similarly between
our different business units.
"The net income from our results does not reflect the same
period improvement as is described above, since there is
inconsistency in the rates of taxation in the different countries
where we operate, and also because we are not recognizing the full
tax benefit of past losses. This makes the calculation of effective
tax rates extremely inconsistent from period to period, and this is
highlighted in the tax charge for this quarter,” concluded Mr.
Mansfield.
First Quarter Fiscal 2022 Results
Net sales were $31.2 million in the current quarter, an increase
of $6.8 million, or 28%, from $24.4 million in the prior year
quarter. The increase was a result of increased sales volumes,
partly due to recovery from the effects of the COVID-19
pandemic.
Gross profit increased to $7.0 million, or 23% of net sales, in
the current quarter from $4.5 million, or 18% of net sales, in the
prior year quarter. This increase was driven by higher sales
volumes and project and product mix.
General and administrative expenses increased $1.2 million, or
28%, from $4.4 million in the prior year quarter to $5.7 million in
the current quarter. Approximately $0.9 million of this increase
was the result of increased incentive compensation. This amount was
based on 2021 actual payouts as compared to estimated amounts
previously accrued in addition to accruals made for 2022 forecasted
results as compared to the prior year quarter, where no incentive
compensation was recorded. The remainder of the increase was due to
additions to headcount in support of the Company's business
growth.
Selling expenses were relatively consistent, increasing slightly
to $1.2 million in the current quarter, compared to $1.0 million in
the prior year quarter.
Net interest expense increased to $0.4 million in the current
quarter from $0.2 million in the prior year quarter. This increase
was related primarily to the sale leaseback transaction for our
operating facility in Tennessee entered into in April 2021.
Other income, net decreased to an income of less than $0.1
million in the current quarter, compared to approximately $0.4
million in the prior year quarter. In the prior year quarter, the
Company received grants from the Canadian government under the
Canadian Emergency Wage Subsidy ("CEWS") and Canadian Emergency
Rent Subsidy ("CERS") programs. The Company was approved for and
received approximately $0.3 million and $0.1 million in grants
under the CEWS and CERS programs, respectively, during the prior
year quarter. Grants to the Company under both programs ended in
the second quarter of 2021.
Loss from operations before income taxes decreased by $0.5
million to a loss of $(0.2) million in the current quarter from a
loss of $(0.7) million in the prior year quarter. The improvement
was a result of increased sales volumes and margins as described
above.
The Company's worldwide effective tax rates ("ETR") were
(455.9%) and (24.3%) in the current quarter and the prior year
quarter, respectively. The change in the ETR from the prior year
quarter to the current year quarter is largely due to changes in
the mix of income and loss in various jurisdictions.
The resulting net loss of $(0.9) million in the current quarter
was relatively consistent with the net loss of $(0.8) million in
the prior year quarter.
Percentages set forth above in this press release have been
rounded to the nearest percentage point and may not exactly
correspond to the comparative data presented.
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 thirteen 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) the impact of the coronavirus ("COVID-19") on the
Company's results of operations, financial condition and cash
flows; (ii) fluctuations in the price of oil and natural gas and
its impact on the customer order volume for the Company's products;
(iii) the impact of global economic weakness and volatility; (iv)
fluctuations in steel prices and the Company’s ability to offset
increases in steel prices through price increases in its products;
(v) 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; (vi) the
Company’s ability to repay its debt and renew expiring
international credit facilities; (vii) the Company’s ability to
effectively execute its strategic plan and achieve sustained
profitability and positive cash flows; (viii) the Company's ability
to collect a long-term account receivable related to a project in
the Middle East; (ix) the Company’s ability to interpret changes in
tax regulations and legislation; (x) the Company's ability to use
its net operating loss carryforwards; (xi) reversals of previously
recorded revenue and profits resulting from inaccurate estimates
made in connection with the Company’s over-time revenue
recognition; (xii) the Company’s failure to establish and maintain
effective internal control over financial reporting; (xiii) the
timing of order receipt, execution, delivery and acceptance for the
Company’s products; (xiv) the Company’s ability to successfully
negotiate progress-billing arrangements for its large contracts;
(xv) aggressive pricing by existing competitors and the entrance of
new competitors in the markets in which the Company operates; (xvi)
the Company’s ability to purchase raw materials at favorable prices
and to maintain beneficial relationships with its suppliers; (xvii)
the Company’s ability to manufacture products free of latent
defects and to recover from suppliers who may provide defective
materials to the Company; (xviii) reductions or cancellations of
orders included in the Company’s backlog; (xix) risks and
uncertainties specific to the Company's international business
operations; (xx) the Company’s ability to attract and retain senior
management and key personnel; (xxi) the Company’s ability to
achieve the expected benefits of its growth initiatives; and (xxii)
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 Form 10-Q for the quarter ended April 30, 2022
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
CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)
(In thousands, except per share
data)
Three Months Ended April
30,
2022
2021
Net sales
$
31,222
$
24,423
Cost of sales
24,173
19,918
Gross profit
7,049
4,505
Operating expenses
General and administrative expenses
5,650
4,404
Selling expenses
1,239
1,042
Total operating expenses
6,889
5,446
Income/(loss) from operations
160
(941
)
Interest expense, net
368
178
Other income, net
49
441
Loss from operations before income
taxes
(159
)
(678
)
Income tax expense
726
165
Net loss
$
(885
)
$
(843
)
Weighted average common shares
outstanding
Basic
7,919
8,165
Diluted
7,919
8,165
Loss per share
Basic
(0.11
)
(0.10
)
Diluted
(0.11
)
(0.10
)
Note: Per share calculations could be impacted
by rounding.
PERMA-PIPE INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per share
data)
April 30, 2022
January 31, 2022
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
6,375
$
8,214
Restricted cash
1,524
1,557
Trade accounts receivable, less allowance
for doubtful accounts of $461 at April 30, 2022 and $486 at January
31, 2022
38,816
44,449
Inventories, net
15,401
13,760
Prepaid expenses and other current
assets
6,609
5,444
Unbilled accounts receivable
6,730
2,656
Costs and estimated earnings in excess of
billings on uncompleted contracts
6,004
2,309
Total current assets
81,459
78,389
Property, plant and equipment, net of
accumulated depreciation
23,754
24,756
Other assets
Operating lease right-of-use asset
7,712
11,213
Deferred tax assets
823
811
Goodwill
2,318
2,342
Other assets
5,853
5,890
Total other assets
16,706
20,256
Total assets
$
121,919
$
123,401
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Trade accounts payable
$
15,631
$
13,618
Accrued compensation and payroll taxes
1,768
1,612
Commissions and management incentives
payable
1,408
2,047
Revolving line - North America
5,246
634
Current maturities of long-term debt
6,778
6,750
Customers' deposits
2,826
3,072
Outside commission liability
1,856
1,255
Operating lease liability short-term
1,527
1,496
Other accrued liabilities
3,238
4,616
Billings in excess of costs and estimated
earnings on uncompleted contracts
1,173
1,277
Income taxes payable
1,310
2,020
Total current liabilities
42,761
38,397
Long-term liabilities
Long-term debt, less current
maturities
4,837
5,059
Long-term finance obligation
9,301
9,327
Deferred compensation liabilities
3,374
3,379
Deferred tax liabilities
865
712
Operating lease liability long-term
7,042
11,270
Other long-term liabilities
847
800
Total long-term liabilities
$
26,266
$
30,547
Stockholders' equity
Common stock, $.01 par value, authorized
50,000 shares; 8,154 issued and outstanding at April 30, 2022 and
8,152 issued and outstanding at January 31, 2022
82
82
Additional paid-in capital
62,018
61,766
Treasury Stock, 234 shares at April 30,
2022 and January 31, 2022
(1,992
)
(1,992
)
Accumulated deficit
(3,180
)
(2,295
)
Accumulated other comprehensive loss
(4,036
)
(3,104
)
Total stockholders' equity
52,892
54,457
Total liabilities and stockholders'
equity
$
121,919
$
123,401
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220607005192/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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