• The Company generated Net sales of $24.3 million for
the first quarter
• Loss from operations before income taxes
of $1.2 million in the first quarter
• Backlog of $63.2 million as of April 30,
2019 an increase of 18% from $53.8 million on
April 30, 2018
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced
today financial results for the first quarter ended April 30,
2019.
President and CEO David Mansfield commented, "The annual
seasonal cyclicality of our business has always defined the first
quarter as the weakest quarter of that cycle. Compared to the first
quarter of last year, revenues were 16% lower at $24.3 million,
mostly due to continuing customer-driven delays in project
execution in the Middle East. Despite this decline in revenues
however, the operating result was unchanged from the first quarter
of last year as a result of our initiatives to better manage
operating costs and to improve profitability and efficiencies. The
impact of these efforts is reflected in a 5% improvement to our
gross margins."
"Backlog has continued to grow and stands at $63.2 million
reflecting an increase of 18% above the level at the end of the
first quarter of last year," concluded Mr. Mansfield.
First Quarter Fiscal 2019 Results
Net sales decreased $4.6 million to $24.3 million in the first
quarter of 2019, from $28.9 million in the prior year quarter.
Lower revenues resulted from delayed project timelines in the
Middle East.
Gross profit increased to 19.5%, or $4.7 million of net
sales in the first quarter of 2019 from 14.6%, or $4.2
million of net sales, in the prior year quarter. This
12% increase in gross profit was due to improved margins
resulting from operating cost improvement initiatives.
General and administrative expenses increased to $4.4
million in the first quarter of 2019, compared to $4.0 million in
the prior year quarter, which were a result of increases across
several cost categories, including increased headcount. Selling
expenses were $1.3 million in the first quarter of 2019,
compared to $1.1 million in the prior year quarter, which were
a result of increases across several cost categories.
Net interest expense decreased to $0.2 million in the first
quarter of 2019 from $0.3 million in the prior-year quarter due to
lower borrowings.
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,
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 impact 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;
(viii) risks and uncertainties related to the Company’s
international business operations; (ix) the Company’s ability
to repay its debt and renew expiring international credit
facilities; (x) aggressive pricing by existing competitors and
the entrance of new competitors in the markets in which the Company
operates; (xi) the Company’s ability to purchase raw materials
at favorable prices and to maintain beneficial relationships with
its suppliers; (xii) the Company’s ability to manufacture
products free of latent defects and to recover from suppliers who
may provide defective materials to the Company;
(xiii) reductions or cancellations of orders included in the
Company’s backlog; (xiv) the Company’s ability to attract and
retain senior management and key personnel; (xv) the Company’s
ability to achieve the expected benefits of its growth initiatives;
(xvi) the Company’s ability to interpret changes in tax
regulations and legislation; (xvii) reversals of previously
recorded revenue and profits resulting from inaccurate estimates
made in connection with the Company’s percentage-of-completion
revenue recognition; (xviii) the Company’s failure to
establish and maintain effective internal control over financial
reporting; and (xix) 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 quarter ended April
30, 2019 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,
2019 2018 Net sales $ 24,276 $
28,889 Cost of sales 19,554 24,664
Gross profit 4,722 4,225 Operating expenses General and
administrative expenses 4,442 3,982 Selling expenses 1,260
1,142 Total operating expenses 5,702 5,124
Loss from operations (980 ) (899 ) Interest expense,
net 210 266 Loss from operations before
income taxes (1,190 ) (1,165 ) Income tax expense/(benefit)
312 (48 ) Net loss $
(1,502 ) $ (1,117 ) Weighted average common shares
outstanding Basic and diluted 7,887
7,718 Loss per share Basic and diluted (0.19 ) (0.14 )
Note: Earnings per share calculations
could be impacted by rounding.
PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(unaudited) April 30, 2019
January 31,2019
ASSETS
Current assets Cash and cash equivalents $ 7,960 $
10,156 Restricted cash 2,602 2,581 Trade accounts receivable, less
allowance for doubtful accounts of $503 at April 30, 2019 and $536
at January 31, 2019 24,800 32,508 Inventories, net 16,126 12,289
Prepaid expenses and other current assets 3,682 3,773 Contract
assets 1,983 1,653
Total current
assets 57,153 62,960 Property, plant and equipment, net of
accumulated depreciation 29,568 30,398
Other assets
Operating lease right-of-use asset 10,323 - Deferred tax assets -
long-term 461 458 Goodwill 2,218 2,269 Other assets 6,791
6,120
Total other assets 19,793
8,847
Total assets $ 106,514
$ 102,205
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Trade accounts payable $ 11,582 $ 12,006
Accrued compensation and payroll taxes 1,476 1,544 Commissions and
management incentives payable 1,724 1,866 Revolving line North
America 5,642 8,890 Current maturities of long-term debt 1,125 640
Customers' deposits 3,524 3,708 Outside commissions payable 1,453
1,743 Contract liability 1,846 1,569 Operating lease liability
short-term 816 - Other accrued liabilities 4,355 3,856 Income taxes
payable 700 1,266
Total current
liabilities 34,243 37,088
Long-term liabilities Long-term debt, less current
maturities 6,484 6,751 Deferred compensation liabilities 3,666
3,883 Deferred tax liabilities long-term 1,417 1,435 Operating
lease liability long-term 9,493 - Other long-term liabilities
437 688
Total long-term
liabilities 21,497 12,757
Stockholders' equity Common stock, $.01 par value,
authorized 50,000 shares; 7,893 issued and outstanding at April 30,
2019 and 7,854 issued and outstanding at January 31, 2019 79 79
Additional paid-in capital 59,026 58,793 Accumulated deficit (5,134
) (3,632 ) Accumulated other comprehensive loss (3,197 )
(2,880 )
Total stockholders' equity
50,774 52,360
Total liabilities and
stockholders' equity $ 106,514 $ 102,205
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190611005026/en/
Perma-Pipe International Holdings, Inc.David
Mansfield, President and CEOPerma-Pipe Investor
Relations(847) 929-1200investor@permapipe.com
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