- 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
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.
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.
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
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230914637302/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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