- Net sales of $28.9 million for the
quarter
- Operating results improved to a loss
of $1.1 million in the first quarter in 2018
- Backlog of $53.8 million increased
by 15% or $7.1 million since January 31, 2018
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced
today financial results for the first quarter ended April 30,
2018.
President and CEO David Mansfield commented, "Our revenues in
the first quarter are a significant improvement over the
corresponding quarter of the prior year. While some individual
market segments decreased, the increases in other market segments
more than offset this, and both of our geographic regions showed
improvements."
"The combination of increased revenues of $5.4 million together
with a sustained reduction in overhead costs has enabled us to
reduce our loss from operations by $2.8 million when compared to
the first quarter of the prior year."
"Some notable improvements to our earnings compared to last year
were meaningful increases to our leak detection business and to our
operations in India, both of which have recently received an
increased strategic focus from us," Mr. Mansfield continued.
"The current year has commenced generally in line with our
expectations, which are of gradually improving market conditions.
It was also an encouraging indication of the future that our new
contract awards during the first quarter have increased versus last
year and our backlog is now 15% higher than it was at January 31,"
concluded Mr. Mansfield.
First Quarter 2018 Results
Net sales increased 22.9% to $28.9 million in the first quarter
of 2018, from to $23.5 million during the same period in 2017.
Higher revenues resulted from increased sales in the domestic oil
and gas business, and in the Middle East.
Gross profit increased to $4.2 million in the first quarter of
2018, from $1.8 million during the same period in 2017. This 136.7%
improvement is due to increased volumes, North American product
mix, and the utilization of previously reserved inventory of $0.4
million.
Selling expenses decreased by 13.2% to $1.1 million in the first
quarter of 2018, from $1.3 million during the same period in 2017.
This improvement was due to management changes in the Middle East
and realignment of the North American sales organization. General
and administrative expenses decreased by 7.1% to $4.0 million in
the current quarter of 2018, from $4.3 million in the prior-year
quarter in 2017. In the prior-year quarter of 2017 the Company
recognized a $0.4 million realized foreign exchange loss on the
repayment of a loan extended to a foreign subsidiary.
Net interest expense increased to $0.3 million in the
current quarter from $0.2 million in the prior-year quarter
due to higher borrowings and higher interest rates, both domestic
and foreign.
Results from operations improved by $2.8 million to a pre-tax
loss of $1.2 million in the current quarter, from
$4.0 million in the prior-year quarter. The positive
contributing factors were increased sales, increased volume, and
utilization of previously reserved inventory of $0.4 million.
Cash flow for the first three months of 2018 were neutral,
compared to cash used in operations of $1.0 million during the
first three months of 2017. This represents an improvement of $1.0
million in cash generated by operations when compared to the prior
year.
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 seven locations in five 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
(“Exchange Act”), 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 Company’s ability to
effectively execute its strategic plan and achieve profitability
and positive cash flows; (ii) the impacts of global economic
weakness and volatility; (iii) fluctuations in steel prices
and the Company’s ability to offset increases in steel prices
through price increases in its products; (iv) the timing of
orders for the Company’s products; (v) decreases in United
States 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 successfully negotiate progress-billing arrangements for
its large contracts; (vii) fluctuations in crude oil and
natural gas prices risks and uncertainties related to the Company’s
international business operations; (viii) the Company’s
ability to repay its debt, refinance its current expiring United
States credit agreement, and renew expiring international credit
facilities; (ix) aggressive pricing by existing competitors
and the entrance of new competitors in the markets in which the
Company operates; (x) the Company’s ability to purchase raw
materials at favorable prices and to maintain beneficial
relationships with its suppliers; (xi) the Company’s ability
to manufacture products free of latent defects and to recover from
suppliers who may provide defective materials to the Company;
(xii) reductions or cancellations of orders included in the
Company’s backlog; (xiii) the Company’s ability to attract and
retain senior management and key personnel; (xiv) the
Company’s ability to achieve the expected benefits of its growth
initiatives; (xv) reversals of previously recorded revenue and
profits resulting from inaccurate estimates made in connection with
the Company’s percentage-of-completion revenue recognition;
(xvi) the Company’s failure to establish and maintain
effective internal control over financial reporting; and
(xvii) 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.)
Perma-Pipe’s Form 10-Q for the period ended April 30, 2018
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 2018
2017 Net sales $28,889 $23,501
Cost of sales $24,664 $21,716 Gross
profit $4,225 $1,785 Operating
expenses General and administrative expenses $3,982 $4,286 Selling
expenses 1,142 1,316 Total operating
expenses $5,124 $5,602 Loss from
operations ($899 ) ($3,817 ) Interest expense, net 266
157 Loss from operations before income
taxes (1,165 ) (3,974 ) Income tax benefit (48 ) (485 )
Loss from continuing operations (1,117
) (3,489 ) Net loss (1,117 )
(3,489 ) Weighted average common shares outstanding
Basic and diluted 7,718 7,610 Loss per share from continuing
operations Basic and diluted ($0.14) ($0.46 ) (Loss) earnings per
share from discontinued operations Basic and diluted $— $— Loss per
share Basic and diluted ($0.14) ($0.46 )
Note: Earnings per share calculations
could be impacted by rounding.
PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands except per share data)
April 30, 2018 January 31, 2018
ASSETS Unaudited Current assets Cash and cash
equivalents $9,879 $7,084 Restricted cash 1,101 1,237 Trade
accounts receivable, net 29,337 32,936 Inventories, net 15,804
16,856 Prepaid expenses and other current assets 4,609
4,205
Total current assets
60,730 62,318 Property, plant and equipment, net of accumulated
depreciation 33,097 34,509
Other assets Goodwill 2,321 2,423
Other assets 5,381 5,334
Total other
assets 7,702 7,757
Total assets
$101,529 $104,584
LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Trade accounts
payable $12,301 $14,186 Accrued compensation, incentives, and
payroll taxes liabilities 2,785 2,367 Current maturities of
long-term debt 11,163 8,026 Other current liabilities, including
customer deposits 11,722 14,601
Total
current liabilities 37,971 39,180
Long-term liabilities
Long-term debt, less current maturities 7,309 7,728 Other long-term
liabilities 5,945 5,864
Total long-term
liabilities 13,254 13,592
Stockholders' equity Total
stockholders' equity 50,304 51,812
Total liabilities and stockholders' equity $101,529
$104,584
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180612005248/en/
Perma-Pipe International Holdings, Inc.David Mansfield,
President and CEO(847) 966-1000orPerma-Pipe Investor Relations(847)
929-1200investor@permapipe.com
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