- Net sales of $39.1 million for the quarter and $138.6
million for the year
- Net income of $3.0 million for the quarter and $6.1 million
for the year
- Backlog of $39.3 million at January 31, 2022
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced
today financial results for the fourth quarter and 2021 fiscal year
ended January 31, 2022.
"Revenue for the fourth quarter was $39.1 million, $17.8 million
above the same quarter last year, and net income of $3.0 million
was an increase of $5.5 million compared to the same quarter of
2020. For the year ended January 31, 2022, revenues of $138.6
million were $53.9 million higher than the prior year. The
resulting net income of $6.1 million was $13.7 million higher than
the prior year," noted President and CEO David Mansfield.
"The adverse impact of the COVID-19 pandemic began to recede in
the first quarter of fiscal 2021, resulting in an improvement in
business activity and profitability. With rebounding oil prices and
the recommencement of paused projects, we experienced profitability
improvements in all of our business units. This year's results also
benefitted from the Company's ability to continue to operate with a
lower overhead cost base that was implemented in response to the
downturn during the pandemic. In addition, the business recovery we
experienced this year allowed us to resume our focus on
implementing the growth plans that were paused in 2020. These
initiatives recommenced during 2021 and will be impactful to our
future results.
"In the past year we also enhanced our liquidity by entering
into a sale and leaseback agreement for our land and buildings in
Lebanon, Tennessee and by extending our $18 million North American
credit agreement for an additional five years. With liquidity
provided by these measures, we commenced a share repurchase program
in October of last year,” Mr. Mansfield continued.
“I am proud of how our employees and Board of Directors
responded to the challenges of the last two years. Their dedication
and resilience not only helped us weather the pandemic, but also
positioned us to respond quickly to the subsequent recovery,”
concluded Mr. Mansfield.
Fourth Quarter Fiscal 2021 Results
Net sales increased 84% to $39.1 million in the fourth quarter
from $21.3 million in the prior year quarter. This was a result of
increased sales volumes in all business units due largely to
recovery from the effects of the COVID-19 pandemic.
Gross profit increased to 25% of net sales, or $9.7 million in
the fourth quarter, from 11% of net sales, or $2.4 million, in the
prior year quarter. This increase was primarily driven by higher
sales volumes without a corresponding increase in fixed plant
costs.
General and administrative expenses increased to $5.3 million in
the fourth quarter, compared to $3.9 million in the prior year
quarter. This 35% increase was driven primarily by the increase in
headcount as well as incentive compensation associated with the
improved financial results in 2021.
Selling expenses were relatively consistent from the prior year
quarter to the fourth quarter.
Net interest expense increased to expense of $0.1 million in the
fourth quarter, compared to income of less than $0.1 million in the
prior year quarter. This increase is primarily related to the sale
and leaseback of the Company's land and buildings in Lebanon,
Tennessee in April 2021, whereby a portion of the Company's monthly
rent payments are recorded to interest expense.
Other income decreased to less than $0.1 million in the fourth
quarter from $0.3 million in the prior year quarter. This decrease
was primarily the result of income recorded in 2020 for funds
received under the Canadian Emergency Wage Subsidy ("CEWS") and
Canadian Emergency Rent Subsidy ("CERS") programs in Canada. The
CEWS and CERS grants ceased in the second quarter of 2021.
Net income/(loss) increased to income of $3.0 million in the
fourth quarter from a loss of ($2.5) million in the prior year
quarter. The increase was a result of increased sales volumes in
all business units due to recovery from the effects of the COVID-19
pandemic.
2021 Results
Net sales were $138.6 million in fiscal 2021, an increase of
$53.9 million, or 64%, from $84.7 million in fiscal 2020. The
increase was a result of increased sales volumes in all business
units due largely to recovery from the effects of the COVID-19
pandemic.
Gross profit increased to $32.5 million, or 24% of net sales, in
fiscal 2021. This was an increase of $21.4 million, or 191%, from
$11.2 million, or 13% of net sales, in fiscal 2020. This increase
was primarily driven by higher sales volumes without a
corresponding increase in fixed plant costs. In addition, the
Company's U.A.E. business benefitted for a full year from the
introduction of a high margin new product line in late 2020.
General and administrative expenses were $19.9 million in fiscal
2021 compared to $17.2 million in fiscal 2020, an increase of $2.7
million, or 16%. This increase was driven primarily by the increase
in headcount as well as incentive compensation associated with the
improved financial results in 2021.
Selling expenses decreased by $0.8 million, or 15%, from $5.3
million in 2020 to $4.5 million in 2021. This decrease was
primarily due to organizational changes during the year.
Interest expense increased to $0.8 million in fiscal 2021 from
$0.4 million in fiscal 2020. This increase is primarily related to
the sale and leaseback of the Company's land and buildings in
Lebanon, Tennessee in April 2021, whereby a portion of the
Company's monthly rent payments are recorded to interest
expense.
Other income was $1.1 million in 2021 compared to $4.0 million
in 2020, a decrease of $2.9 million. This decrease was primarily
the result of income recorded in 2020 for funds received under the
Paycheck Protection Program of $3.2 million. Funds received under
the CEWS and CERS programs in Canada during 2021 were also less
than in 2020, as CEWS and CERS grants ceased in the second quarter
of 2021.
Income tax expense increased to $2.3 million in fiscal 2021
compared to a benefit of $0.1 million in fiscal 2020. The increase
of $2.4 million was largely due to changes in the mix of income and
losses in various jurisdictions.
The resulting net income of $6.1 million in 2021 was a $13.7
million increase from the net loss of ($7.6) million in 2020. The
increase was a result of increased sales volumes in all business
units due to recovery from the effects of the COVID-19 pandemic. In
addition, the Company's U.A.E. business benefitted from the
introduction of a new product line in late 2020.
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 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 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.)
Perma-Pipe’s Form 10-K for the 2021 fiscal year ended January
31, 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)
Three months ended January
31,
Twelve months ended January
31,
(In thousands, except per share data)
2022
2021
2022
2021
Net sales
$
39,126
$
21,295
$
138,552
$
84,694
Cost of sales
29,472
18,885
106,022
73,515
Gross profit
9,654
2,410
32,530
11,179
Operating expenses:
General and administrative expense
5,250
3,902
19,893
17,222
Selling expense
1,131
1,182
4,526
5,334
Total operating expenses
6,381
5,084
24,419
22,556
Income/(loss) from operations
3,273
(2,674
)
8,111
(11,377
)
Interest expense, net
112
(30
)
828
381
Other income, net
47
311
1,044
3,983
Income/(loss) from operations before
income taxes
3,208
(2,333
)
8,327
(7,775
)
Income tax expense/(benefit)
216
206
2,265
(133
)
Net income/(loss)
$
2,992
$
(2,539
)
$
6,062
$
(7,642
)
Weighted average common shares
outstanding
Basic
8,091
8,165
8,133
8,126
Diluted
8,375
8,165
8,418
8,126
Income/(loss) per share
Basic
$
0.37
$
(0.31
)
$
0.75
$
(0.94
)
Diluted
$
0.36
$
(0.31
)
$
0.72
$
(0.94
)
Note: Earnings per share
calculations could be impacted by rounding.
PERMA-PIPE INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
January 31,
(In thousands, except per share data)
2022
2021
ASSETS
Current assets
Cash and cash equivalents
$
8,214
$
7,174
Restricted cash
1,557
1,201
Trade accounts receivable, less allowance
for doubtful accounts of $486 on January 31, 2022 and $474 on
January 31, 2021
44,449
25,226
Inventories, net
13,760
12,157
Prepaid expenses and other current
assets
5,444
3,863
Unbilled accounts receivable
2,656
247
Costs and estimated earnings in excess of
billings on uncompleted contracts
2,309
4,007
Total current assets
78,389
53,875
Property, plant and equipment, net of
accumulated depreciation
24,756
26,897
Other assets
Operating lease right-of-use assets
11,213
13,384
Deferred tax assets
811
823
Goodwill
2,342
2,332
Other assets
5,890
5,380
Total other assets
20,256
21,919
Total assets
$
123,401
$
102,691
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Trade accounts payable
$
13,618
$
10,365
Commissions and management incentives
payable
2,047
218
Accrued compensation and payroll taxes
1,612
1,448
Revolving line - North America
634
2,826
Current maturities of long-term debt
6,750
3,941
Customers' deposits
3,072
2,088
Outside commission liability
1,255
1,431
Operating lease liabilities short-term
1,496
1,402
Other accrued liabilities
4,616
2,616
Billings in excess of costs and estimated
earnings on uncompleted contracts
1,277
762
Income tax payable
2,020
1,155
Total current liabilities
38,397
28,252
Long-term liabilities
Long-term debt, less current
maturities
5,059
6,268
Long-term finance obligation
9,327
-
Deferred compensation liabilities
3,379
4,120
Deferred tax liabilities
712
914
Operating lease liabilities long-term
11,270
13,174
Other long-term liabilities
800
650
Total long-term liabilities
30,547
25,126
Stockholders' equity
Common stock, $.01 par value, authorized
50,000 shares; 8,152 issued and outstanding January 31, 2022 and
8,165 issued and outstanding January 31, 2021
82
82
Additional paid-in capital
61,766
60,875
Treasury Stock, 234 shares at January 31,
2022 and no shares at January 31, 2021
(1,992
)
-
Accumulated deficit
(2,295
)
(8,357
)
Accumulated other comprehensive loss
(3,104
)
(3,287
)
Total stockholders' equity
54,457
49,313
Total liabilities and stockholders'
equity
$
123,401
$
102,691
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220419005761/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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