- The Company generated net sales of $36.4 million for the
quarter and $142.6 million for the year
- Income before income taxes of $4.1 million for the quarter
and $9.6 million for the year
- Net income of $3.2 million for the quarter and $5.9 million
for the year
- Backlog of $38.5 million at January 31, 2023
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced
today financial results for the fourth quarter and 2022 fiscal year
ended January 31, 2023.
"Revenues for the fourth quarter were $36.4 million, $2.7
million below the same quarter last year, and net income of $3.2
million was an increase of $0.2 million compared to the same
quarter of 2021. For the year ended January 31, 2023, revenues of
$142.6 million were $4.0 million higher than the prior year. The
resulting net income of $5.9 million was $0.1 million lower than
the prior year. This decrease occurs after a non-cash charge of
$0.9 million for the termination of a pension plan in 2022," noted
President and CEO David Mansfield.
“While revenue for the year increased only 3%, pre-tax income
before the pension plan charge increased by 25% after improved
margins were achieved,” Mr. Mansfield continued.
"We continued to see growth in business activity in our markets
during 2022. A buoyant oil and gas market in Canada that began in
2021 continued through last year as did increased infrastructure
spending in Saudi Arabia. We expect these markets to continue to
remain strong. In addition, our new product offerings in Egypt and
the U.A.E. resulted in improved margins during 2022, and we will
continue to pursue more opportunities in these markets,” noted Mr.
Mansfield.
"We have been executing our strategic plans, as demonstrated by
the recent approval of our joint venture with Gulf Insulation Group
(GIG) and the relocation of our U.A.E. operations to a new plant in
Abu Dhabi. The joint venture with GIG will better position us to
participate in the Saudi Arabian development plans, and the
relocation to Abu Dhabi brings us closer to our customers in the
oil and gas industry and provides us with a more efficient, state
of the art facility,” Mr. Mansfield concluded.
Fourth Quarter Fiscal 2022 Results
Net sales were $36.4 million and $39.1 million in the three
months ended January 31, 2023 and 2022, respectively. The decrease
of $2.7 million was primarily a result of the timing of execution
of certain large projects.
Gross profit was $10.2 million, or 28% of net sales and $9.7
million, or 25% of net sales, in the three months ended January 31,
2023 and 2022, respectively. The increase of $0.5 million was
driven by improved gross margins as a result of the mix of projects
globally.
General and administrative expenses were $5.8 million and $5.3
million in the three months ended January 31, 2023 and 2022,
respectively. The increase of $0.5 million was primarily related to
higher compensation costs.
Selling expenses were $1.3 million and $1.1 million in the three
months ended January 31, 2023 and 2022, respectively. The increase
of $0.2 million was due to the expansion of the Company's sales
force in the current period.
Net interest expense was $0.5 million and $0.1 million in the
three months ended January 31, 2023 and 2022, respectively. The
increase of $0.4 million was related to increased borrowings and
higher interest rates.
Net other income was $1.5 million in the three months ended
January 31, 2023 and less than $0.1 million in the three months
ended January 31, 2022. The increase of $1.5 million was due to the
release of the Company's liability for a past project as well as
insurance recovery income.
The Company's worldwide effective tax rates ("ETR") were 20.8%
and 6.7% in the three months ended January 31, 2023 and 2022,
respectively. The change in the ETR was primarily due to additional
United State tax expense due to the inclusion of income from
foreign jurisdictions with low effective tax rates, 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
the various tax jurisdictions.
Net income was $3.2 million and $3.0 million in the three months
ended January 31, 2023 and 2022, respectively. The increase in net
income was a result of the changes discussed above.
2022 Results
Net sales were $142.6 million and $138.6 million in the years
ended January 31, 2023 and 2022, respectively. The increase of $4.0
million was primarily a result of higher sales volumes in North
America and Saudi Arabia.
Gross profit was $38.3 million, or 27% of net sales and $32.5
million, or 23% of net sales, in the years ended January 31, 2023
and 2022, respectively. The increase of $5.8 million was driven by
higher sales volumes and improved gross margins as a result of the
mix of projects globally.
General and administrative expenses were $22.0 million and $19.9
million in the years ended January 31, 2023 and 2022, respectively.
The increase of $2.1 million was primarily related to higher
compensation costs.
Selling expenses were $5.2 million and $4.5 million in the years
ended January 31, 2023 and 2022, respectively. The increase of $0.7
million was due to the expansion of the Company's sales force in
the current period.
Net interest expense was $2.1 million and $0.8 million in the
years ended January 31, 2023 and 2022, respectively. The increase
of $1.3 million was related to increased borrowings and higher
interest rates.
Net other income was $0.5 million and $1.0 million in the years
ended January 31, 2023 and 2022, respectively. The current year
amount includes income from the release of the Company's liability
for a past project and insurance recovery income, partially offset
by a non-cash pre-tax settlement charge resulting from the
termination of the Company's pension plan. The prior year amount
includes the receipt of grants from the Canadian government in
response to the COVID-19 pandemic. Grants to the Company under
these programs ended in the second quarter of 2021.
The Company's worldwide ETR's were 37.8% and 27.2% in the years
ended January 31, 2023 and 2022, respectively. The change in the
ETR was primarily due to additional United State tax expense due to
the inclusion of income from foreign jurisdictions with low
effective tax rates, 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 the various tax jurisdictions.
Net income was $5.9 million and $6.1 million in the years ended
January 31, 2023 and 2022, respectively. The decrease in net income
was a result of the changes discussed above.
Percentages set forth above in this press release have been
rounded to the nearest percentage point, and may not correspond
exactly 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 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.)
Perma-Pipe’s Form 10-K for the 2022 fiscal year ended January
31, 2023 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 (Unaudited)
Three Months Ended January
31,
Year Ended January 31,
2023
2022
2023
2022
Net sales
$
36,441
$
39,126
$
142,569
$
138,552
Gross profit
10,236
9,654
38,301
32,530
Total operating expenses
7,115
6,381
27,157
24,419
Income from operations
3,121
3,273
11,144
8,111
Interest expense, net
534
112
2,119
828
Other income
1,498
47
533
1,044
Income before income taxes
4,085
3,208
9,558
8,327
Income tax expense
851
216
3,613
2,265
Net income
$
3,234
$
2,992
$
5,945
$
6,062
Weighted average common shares
outstanding
Basic
8,004
7,999
7,976
8,110
Diluted
8,214
8,284
8,116
8,395
Earnings per share
Basic
$
0.40
$
0.37
$
0.75
$
0.75
Diluted
$
0.39
$
0.36
$
0.73
$
0.72
Note: Earnings per share
calculations could be impacted by rounding.
PERMA-PIPE INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
January 31,
2023
2022
ASSETS
Current assets
$
85,658
$
78,389
Long-term assets
37,308
45,012
Total assets
$
122,966
$
123,401
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
$
43,790
$
38,397
Long-term liabilities
21,392
30,547
Total liabilities
65,182
68,944
Stockholders' equity
57,784
54,457
Total liabilities and stockholders'
equity
$
122,966
$
123,401
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005754/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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