Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 001-32530

Perma-Pipe International Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	36-3922969
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

24900 Pitkin Road, Suite 309, Spring, Texas	77386
(Address of principal executive offices)	(Zip Code)

(847) 966-1000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	PPIH	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On September 14, 2023, there were 8,063,501 shares of the registrant's common stock outstanding.

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Perma-Pipe International Holdings, Inc.

FORM 10-Q

For the fiscal quarter ended July 31, 2023

TABLE OF CONTENTS

Item		Page

Part I	Financial Information

1.	Financial Statements
	Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended July 31, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Six Months Ended July 31, 2023 and 2022	3
	Consolidated Balance Sheets as of July 31, 2023 (Unaudited) and January 31, 2023	4
	Consolidated Statements of Stockholders' Equity (Unaudited) for the Three and Six Months Ended July 31, 2023 and 2022	5
	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended July 31, 2023 and 2022	6
	Notes to Consolidated Financial Statements (Unaudited)	7

2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

4.	Controls and Procedures	26

Part II	Other Information

2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

6.	Exhibits	27

Signatures		28

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PART I FINANCIAL INFORMATION

Item 1.

Financial Statements

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

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
Cost of sales		25,677		27,117			48,559			51,290
Gross profit		9,464		9,886			16,239			16,935

Operating expenses
General and administrative expenses		5,283		5,248			10,742			10,897
Selling expenses		1,490		1,313			2,730			2,553
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		-			148			-
Net income (loss) attributable to common stock	$	1,022	$	1,870		$	(100	)	$	983

Weighted average common shares outstanding
Basic		8,029		7,975			8,017			7,947
Diluted		8,139		8,186			8,017			8,062

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

See accompanying notes to consolidated financial statements.

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	*Three Months Ended July 31,*					*Six Months Ended July 31,*
	*2023*		*2022*			*2023*			*2022*
Net income	$	1,170	$	1,870		$	48		$	983

Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax		339		(455	)		(98	)		(1,387	)
Comprehensive income (loss)	$	1,509	$	1,415		$	(50	)	$	(404	)
Less: Comprehensive income attributable to non-controlling interests		148		-			148			-
Total comprehensive income (loss) attributable to common stock	$	1,361	$	1,415		$	(198	)	$	(404	)

See accompanying notes to consolidated financial statements.

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	*July 31, 2023*			*January 31, 2023*
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	6,103		$	5,773
Restricted cash		1,224			1,020
Trade accounts receivable, less allowance for credit losses of $620 at July 31, 2023 and $612 at January 31, 2023		51,844			42,010
Inventories		13,877			14,738
Prepaid expenses and other current assets		7,135			7,357
Unbilled accounts receivable		11,557			11,634
Costs and estimated earnings in excess of billings on uncompleted contracts		1,856			3,126
Total current assets		93,596			85,658
Long-term assets
Property, plant and equipment, net of accumulated depreciation		35,936			26,518
Operating lease right-of-use asset		7,404			4,527
Deferred tax assets		570			696
Goodwill		2,256			2,227
Other long-term assets		3,545			3,340
Total long-term assets		49,711			37,308
Total assets	$	143,307		$	122,966
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	23,486		$	14,754
Accrued compensation and payroll taxes		1,584			1,179
Commissions and management incentives payable		504			2,735
Revolving line - North America		7,232			4,387
Current maturities of long-term debt		8,302			6,227
Customers' deposits		2,483			1,951
Outside commission liability		2,462			2,029
Operating lease liability short-term		1,148			912
Other accrued liabilities		5,718			5,549
Billings in excess of costs and estimated earnings on uncompleted contracts		2,968			1,743
Income taxes payable		1,881			2,324
Total current liabilities		57,768			43,790
Long-term liabilities
Long-term debt, less current maturities		4,427			4,389
Long-term finance obligation		9,148			9,215
Deferred compensation liabilities		928			1,608
Deferred tax liabilities		975			909
Operating lease liability long-term		6,952			4,252
Other long-term liabilities		3,900			1,019
Total long-term liabilities		26,330			21,392
Non-controlling interests		1,735			-
Stockholders' equity
Common stock, $.01 par value, authorized 50,000 shares; 8,024 issued and outstanding at July 31, 2023 and 8,004 at January 31, 2023		81			80
Additional paid-in capital		62,762			62,562
Treasury stock, 37 shares at July 31, 2023 and 3 shares at January 31, 2023		(338	)		(26	)
Retained earnings		1,516			1,617
Accumulated other comprehensive loss		(6,547	)		(6,449	)
Total stockholders' equity		57,474			57,784
Total liabilities and stockholders' equity	$	143,307		$	122,966

See accompanying notes to consolidated financial statements.

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

	*Common Stock*		*Additional Paid-in Capital*			*Retained Earnings*			*Treasury Stock*			*Accumulated Other Comprehensive Loss*			*Total Stockholders' Equity*
Total stockholders' equity at January 31, 2023	$	80	$	62,562		$	1,617		$	(26	)	$	(6,449	)	$	57,784

Net loss		-		-			(1,123	)		-			-			(1,123	)
Stock-based compensation expense		-		229			-			-			-			229
Foreign currency translation adjustment		-		-			-			-			(437	)		(437	)
Total stockholders' equity at April 30, 2023	$	80	$	62,791		$	494		$	(26	)	$	(6,886	)	$	56,453

Net income		-		-			1,022			-			-			1,022
Common stock issued under stock plans, net of shares used for tax withholding		-		(274	)		-			-			-			(274	)
Repurchase of common stock		1		-			-			(312	)		-			(311	)
Stock-based compensation expense		-		245			-			-			-			245
Foreign currency translation adjustment		-		-			-			-			339			339
Total stockholders' equity at July 31, 2023	$	81	$	62,762		$	1,516		$	(338	)	$	(6,547	)	$	57,474

	Common Stock			Additional Paid-in Capital			Accumulated Deficit			Treasury Stock			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
Total stockholders' equity at January 31, 2022	$	82		$	61,766		$	(2,295	)	$	(1,992	)	$	(3,104	)	$	54,457

Net loss		-			-			(885	)		-			-			(885	)
Common stock issued under stock plans, net of shares used for tax withholding		-			16			-			-			-			16
Stock-based compensation expense		-			236			-			-			-			236
Foreign currency translation adjustment		-			-			-			-			(932	)		(932	)
Total stockholders' equity at April 30, 2022	$	82		$	62,018		$	(3,180	)	$	(1,992	)	$	(4,036	)	$	52,892

Net income		-			-			1,868			-			-			1,868
Common stock issued under stock plans, net of shares used for tax withholding		-			(247	)		-			-			-			(247	)
Repurchase of common stock		-			-			-			(43	)		-			(43	)
Retirement of treasury stock		(2	)		-			(2,033	)		2,035			-			-
Stock-based compensation expense		-			284			-			-			-			284
Foreign currency translation adjustment		-			-			-			-			(455	)		(455	)
Total stockholders' equity at July 31, 2022	$	80		$	62,055		$	(3,345	)	$	-		$	(4,491	)	$	54,299

Shares	*2023*			*2022*
Balances at beginning of year		8,007,002			8,151,754
Treasury stock purchased		(36,651	)		(4,887	)
Shares issued, net of shares used for tax withholding		93,150			94,416
Prior period adjustments		-			(234,281	)
Balances at period end		8,063,501			8,007,002

See accompanying notes to consolidated financial statements.

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

(In thousands)	*Six Months Ended July 31,*
	*2023*			*2022*
Operating activities
Net income	$	48		$	983
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		1,791			1,926
Deferred tax expense		191			236
Stock-based compensation expense		456			520
Provision on uncollectible accounts		8			14
Gain (loss) from disposal of fixed assets		(5	)		16
Changes in operating assets and liabilities
Accounts receivable		(9,865	)		(5,860	)
Inventories		882			(2,756	)
Costs and estimated earnings in excess of billings on uncompleted contracts		2,495			(3,446	)
Accounts payable		8,044			850
Accrued compensation and payroll taxes		(1,650	)		(716	)
Customers' deposits		534			1,380
Income taxes receivable and payable		(766	)		(545	)
Prepaid expenses and other current assets		989			(403	)
Unbilled accounts receivable		(8	)		(5,622	)
Other assets and liabilities		389			2,251
Net cash provided by (used in) operating activities		3,533			(11,172	)
Investing activities
Capital expenditures		(6,797	)		(2,030	)
Proceeds from insurance recovery for property and equipment		5			-
Proceeds from sales of property and equipment		-			69
Net cash used in investing activities		(6,792	)		(1,961	)
Financing activities
Proceeds from revolving credit lines		96,920			42,813
Payments of debt on revolving credit lines		(92,091	)		(31,482	)
Payments of principal on finance obligation		(56	)		(44	)
Payments of other debt		(124	)		(146	)
(Decrease) increase in drafts payable		(178	)		29
Payments on finance lease obligations		(154	)		(178	)
Repurchase of common stock		(312	)		(43	)
Stock options exercised and taxes paid related to restricted shares vested		(273	)		(230	)
Net cash provided by financing activities		3,732			10,719
Effect of exchange rate changes on cash, cash equivalents and restricted cash		61			336
Net increase (decrease) in cash, cash equivalents and restricted cash		534			(2,078	)
Cash, cash equivalents and restricted cash - beginning of period		6,793			9,771
Cash, cash equivalents and restricted cash - end of period	$	7,327		$	7,693
Supplemental cash flow information
Cash interest paid	$	1,302		$	808
Cash income taxes paid		2,234			1,970
Fixed assets acquired under finance leases - non-cash		139			-
Fixed assets acquired from non affiliates - non-cash		4,357			-

See accompanying notes to consolidated financial statements.

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PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2023

(Tabular amounts presented in thousands, except per share amounts)

(Unaudited)

Note 1 - Basis of presentation

The interim consolidated financial statements of Perma-Pipe International Holdings, Inc., and subsidiaries (collectively, "PPIH", "Company", or "Registrant") are unaudited, but include all adjustments that the Company's management considers necessary to present fairly the financial position and results of operations for the periods presented. These adjustments consist of normal recurring adjustments. Information and footnote disclosures have been omitted pursuant to Securities and Exchange Commission ("SEC") rules and regulations. The consolidated balance sheet as of January 31, 2023 is derived from the audited consolidated balance sheet as of that date. The results of operations for any interim period are not necessarily indicative of future or annual results. Interim financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. The Company's fiscal year ends on January 31. Years and balances described as 2023 and 2022 are for the fiscal year ending January 31, 2024 and for the fiscal year ended January 31, 2023, respectively.

Significant New Accounting Policies

Refer to the Company's Annual Report on Form 10-K for the year ended January 31, 2023 as filed with the SEC on April 27, 2023 for discussion of the Company's significant accounting policies. During the six months ended July 31, 2023, the following accounting policy was adopted:

Current Expected Credit Loss

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amended guidance requires the application of a current expected credit loss (“CECL”) model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company adopted this guidance effective February 1, 2023, which was not material to the consolidated financial statements for the six months ended July 31, 2023.

Subsequent Events

The Company has evaluated subsequent events through September 14, 2023, the date the financial statements were issued. Any material subsequent events that occurred during this time have been properly recognized and/or disclosed in these consolidated financial statements.

Note 2 - Business segment reporting

The Company is engaged in the manufacture and sale of products in one reportable segment: Piping Systems. The Company engineers, manufactures and sells pre-insulated specialty piping systems, and leak detection systems. Pre-insulated specialty piping systems include: (i) insulated and jacketed district heating and cooling piping systems for efficient energy distribution from central energy plants to multiple locations, (ii) primary and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products, (iii) the coating and/or insulation of oil and gas gathering and transmission pipelines, and (iv) liquid and powder based anti-corrosion coatings applied both to the external and internal surfaces of steel pipe, including shapes like bends, reducers, tees, and other spools/fittings used in pipelines for the transportation of oil and gas products and potable water. The Company's leak detection systems are sold with its piping systems or on a stand-alone basis to monitor areas where fluid intrusion may contaminate the environment, endanger personal safety, cause a fire hazard, impair essential services or damage equipment or property.

Note 3 - Accounts receivable

The majority of the Company's accounts receivable consist of geographically dispersed contractors and manufacturing companies. Credit is extended based on an evaluation of a customer's financial condition. In the United States, collateral is not generally required. In the United Arab Emirates ("U.A.E."), Saudi Arabia, Egypt and India, letters of credit are obtained for significant orders. Accounts receivable are due within various time periods specified in the terms applicable to the specific contract and are stated at amounts due from customers net of any allowance for claims and credit losses. The allowance for credit losses is based on specifically identified amounts in customers' accounts, where future collectability is deemed uncertain. Management exercises its judgment in adjusting the provision as a consequence of known items, such as current economic factors and credit trends. Past due trade accounts receivable balances are written off when an amount is deemed uncollectible and all attempts to collect have been exhausted. The write-off is recorded against the allowance for credit losses.

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In 2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately $41.9 million. The system has not yet been commissioned by the customer. Nevertheless, the Company has settled approximately $39.1 million as of July 31, 2023, with a remaining balance due in the amount of $2.8 million, all of which pertains to retention clauses within the agreements with the Company's customer, and which become payable by the customer when this project is fully tested and commissioned. Of this amount, $1.6 million is classified in other long-term assets on the Company's consolidated balance sheets.

Regardless of the contractual due date for payment, the Company has been actively engaged in ongoing efforts to collect this outstanding balance. The Company continues to engage with the customer to ensure full payment of the open balances, and during June 2022, a partial payment was received to settle $0.9 million of the customer's outstanding balances. Further, the Company has been engaged by the customer to perform additional work in 2022 and 2023 under customary trade terms that supports the continued cooperation between the Company and the customer. As a result, the Company did not reserve any allowance against the remaining outstanding balances as of July 31, 2023. However, if the Company’s efforts to collect on this account are not successful, the Company may recognize an allowance for all, or substantially all, of any such uncollected amounts.

For the three months ended July 31, 2023, one customer accounted for 18.8% of the Company's consolidated net sales, and during the same period in 2022, no individual customer accounted for greater than 10% of the Company’s consolidated net sales.

As of July 31, 2023 and January 31, 2023, one customer accounted for 14.2% and 11.9% of the Company's accounts receivable, respectively.

Note 4 - Revenue recognition

The Company accounts for its revenues under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers.

Revenue from contracts with customers

The Company defines a contract as an agreement that has approval and commitment from both parties, defined rights and identifiable payment terms, which ensures the contract has commercial substance and that collectability is reasonably assured.

The Company’s standard revenue transactions are classified into two main categories:

Systems and Coating - Includes all bundled products in which PPIH engineers and manufactures pre-insulated specialty piping systems, provides insulation and anti-corrosion coatings to pipes used in land-lines and subsea flowlines, and to subsea oil production equipment.

Products - Includes cables, leak detection products, heat trace products, material/goods not bundled with piping or flowline systems, and field services not bundled into a project contract.

In accordance with ASC 606-10-25-27 through 29, the Company recognizes specialty piping and coating systems revenue over time as the manufacturing process progresses because one of the following conditions exist:

the customer owns the material that is being coated, so the customer controls the asset and thus the work-in-process; or

the customer controls the work-in-process due to the custom nature of the pre-insulated, fabricated system being manufactured as evidenced by the Company’s right to payment for work performed to date plus profit margin for products that have no alternative use to the Company.

Products revenue is recognized when goods are shipped or services are performed (ASC 606-10-25-30).

A breakdown of the Company's revenues by revenue class for the three and six months ended July 31, 2023 and 2022 are as follows (in thousands):

	*Three Months Ended July 31,*										*Six Months Ended July 31,*
	*2023*					*2022*					*2023*					*2022*
	*Sales*		*% of Total*			*Sales*		*% of Total*			*Sales*		*% of Total*			*Sales*		*% of Total*
Products	$	2,146		7	%	$	3,869		11	%	$	4,988		7	%	$	6,780		10	%

Specialty Piping Systems and Coating
Revenue recognized under input method		12,801		36	%		12,707		34	%		23,139		36	%		23,325		34	%
Revenue recognized under output method		20,194		57	%		20,427		55	%		36,671		57	%		38,120		56	%
Total	$	35,141		100	%	$	37,003		100	%	$	64,798		100	%	$	68,225		100	%

The input method as noted in ASC 606-10-55-20 is used by certain operating entities to measure revenue by the costs incurred to date relative to the estimated costs to satisfy the contract over time. Generally, these contracts are considered a single performance obligation satisfied over time and due to the custom nature of the goods and services, the "over time" method is the most faithful depiction of the Company’s performance as it measures the value of the goods and services transferred to the customer. Costs include all material, labor, and direct costs incurred to satisfy the performance obligations of the contract. Revenue recognition begins when projects costs are incurred.

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The output method as noted in ASC 606-10-55-17 is used by all other operating entities to measure revenue by the direct measurement of the outputs produced relative to the remaining goods promised under the contract. Due to the types of end customers, generally these contracts require formal inspection protocols or specific export documentation for units produced, or produced and shipped, therefore, the output method is the most faithful depiction of the Company’s performance. Depending on the conditions of the contract, revenue may be recognized based on units produced, inspected and held by the Company prior to shipment or on units produced, inspected and shipped.

Some of the Company’s operating entities invoice and collect milestones or other contractual obligations prior to the transfer of goods and services, but do not recognize revenue until the performance obligations are satisfied under the methods discussed above.

Contract modifications that occur prior to the start of the manufacturing process will supersede the original contract and revenue is recognized using the modified contract value. Contract modifications that occur during the manufacturing process (changes in scope of work, job performance, material costs, and/or final contract settlements) are recognized in the period in which the revisions are known. Provisions are made for estimated losses on uncompleted contracts in the contract liabilities account in the period in which such losses are determined.

Contract assets and liabilities

Contract assets represent revenue recognized in excess of amounts billed for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Contract liabilities represent billings in excess of costs for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Both customer billings and the satisfaction (or partial satisfaction) of the performance obligation(s) occur throughout the manufacturing process and impact the period end balances in these accounts.

The following table shows the reconciliation of costs in excess of billings and billings in excess of costs:

(In thousands)	*July 31, 2023*			*January 31, 2023*
Costs incurred on uncompleted contracts	$	21,871		$	18,342
Estimated earnings		12,366			9,370
Earned revenue		34,237			27,712
Less billings to date		35,349			26,329
(Billings in excess of costs) costs in excess of billings, net	$	(1,112	)	$	1,383
Balance sheet classification
Contract assets: Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,856		$	3,126
Contract liabilities: Billings in excess of costs and estimated earnings on uncompleted contracts		(2,968	)		(1,743	)
(Billings in excess of costs) costs in excess of billings, net	$	(1,112	)	$	1,383

The Company anticipates that substantially all costs incurred on uncompleted contracts as of July 31, 2023 will be billed and collected within one year, and all billings on uncompleted contracts as of July 31, 2023 will be satisfied and collected within one year.

Unbilled accounts receivable

The Company has recorded $11.6 millionof unbilled accounts receivable on the consolidated balance sheets as of July 31, 2023 and January 31, 2023, from revenues generated by certain of its subsidiaries. The Company has fulfilled all performance obligations and has recorded revenue under the respective contracts. The deliverables under these contracts have been accepted by the customer and billing will be made once the customer takes possession of or arranges shipping for the products over time. The Company anticipates that substantially all of the amounts included in unbilled accounts receivable as of July 31, 2023 will be billed within one year.

Practical expedients

Costs to obtain a contract are not considered to be incremental or material, and project duration generally does not span more than one year. Accordingly, the Company applies the practical expedient for these types of costs and as such, are expensed in the period incurred.

As the Company's contracts are generally less than one year, the Company has applied the practical expedient regarding disclosure of the aggregate amount and future timing of performance obligations that are unsatisfied or partially satisfied as of the end of the reporting period.

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Note 5 - Income taxes

The determination of the consolidated provision for income taxes, deferred tax assets and liabilities and related valuation allowances requires management to make judgments and estimates. As a company with subsidiaries in foreign jurisdictions, the process of calculating income taxes involves estimating current tax obligations and exposures in each jurisdiction as well as making judgments regarding the future recoverability of deferred tax assets. Income earned in the U.A.E. is not subject to local country income tax. Additionally, the relative proportion of taxable income earned domestically versus internationally can fluctuate significantly from period to period. Changes in the estimated level of annual pre-tax income, tax laws and the results of tax audits can affect the overall effective income tax rate, which impacts the level of income tax expense and net income. Judgments and estimates related to the Company's projections and assumptions are inherently uncertain; therefore, actual results could differ materially from projections.

The Company's worldwide effective tax rates ("ETR") for the three months ended July 31, 2023 and 2022 were 45.2% and 32.2%, 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.

The Company expects that future distributions from foreign subsidiaries will not be subject to incremental U.S. federal tax as they will either be remittances of previously taxed earnings and profits or eligible for a full dividends received deduction. Current and future earnings in the Company's subsidiaries in Canada and Egypt are not permanently reinvested. The earnings from these subsidiaries are subject to tax in their local jurisdiction, and withholding taxes in these jurisdictions are considered. The Company's liability was $0.6 million as of July 31, 2023 related to these taxes.

Note 6 - Impairment of long-lived assets

The Company's assessment of long-lived assets, and other identifiable intangibles is based upon factors that market participants would use in accordance with the accounting guidance for the fair value measurement of assets. At July 31, 2023, the Company assessed whether there were any triggering events that may have occurred which could indicate that more likely than not that the fair values of the Company's long-lived assets exceeded their carrying values, and an impairment may exist. Based on this assessment, the Company determined that it was more likely than not that the fair values of the Company's long-lived assets exceeded their carrying values, and no impairment indicator exists with respect to the Company's long-lived assets for the three and six months ended July 31, 2023 and 2022. The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.

Goodwill. The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. All identifiable goodwill as of July 31, 2023 and January 31, 2023 was attributable to the purchase of the remaining 50% interest in Perma-Pipe Canada, Ltd., which occurred in 2016.

(In thousands)

January 31, 2023

Foreign exchange change effect

July 31, 2023

Goodwill

$2,227

$29

$2,256

The Company performs an impairment assessment of goodwill annually as of January 31, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. At July 31, 2023, the Company assessed potential triggering events that may have occurred which could indicate that more likely than not that the fair value of recognized goodwill exceeded its carrying value, and an impairment may exist. In performing this assessment, the Company determined that the fair value exceeded its carrying value, and no potential impairment exists with respect to the Company's goodwill for the three or six months ended July 31, 2023. The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.

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Note 7 - Stock-based compensation

The Company has prior incentive plans under which previously granted awards remain outstanding but under which no new awards may be granted. At July 31, 2023 the Company had reserved a total of 307,446 shares for grants and issuances under these incentive stock plans, which includes a reserve for issuances pursuant to unvested or unexercised prior awards.

The Company's prior incentive plans provided for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section 422 of the Internal Revenue Code. The prior incentive plans authorized awards to officers, employees, consultants, and independent directors.

The Company's 2021 Omnibus Stock Incentive Plan dated May 26, 2021 was approved by the Company's stockholders in May 2021 ("2021 Plan"). The 2021 Plan will expire in May 2024. The 2021 Plan authorizes awards to officers, employees, consultants and independent directors. Grants were made to the Company's employees, officers and independent directors under the 2021 Plan, as described below.

Stock-based compensation expense

The Company has granted stock-based compensation awards to eligible employees, officers or independent directors. The Company recognized the following stock-based compensation expense for the periods presented:

Three Months Ended July 31,

Six Months Ended July 31,

(In thousands)

2023

2022

2023

2022

Restricted stock-based compensation expense

$227

$284

$456

$520

Stock Options

The Company did not grant any stock options during the three or six months ended July 31, 2023. The following table summarizes the Company's stock option activity:

(Shares in thousands)	*Options*			*Weighted Average Exercise Price (Per share)*		*Weighted Average Remaining Contractual Term (In years)*		*Aggregate Intrinsic Value*
Outstanding at January 31, 2023		40		$	10.85		1.1	$	19
Exercised		(1	)		6.85		-		2
Expired or forfeited		(17	)		10.60		-		-
Outstanding and exercisable at July 31, 2023		22		$	11.15		1.2	$	6

There was no vesting, expiration or forfeiture of previously unvested stock options during the six months ended July 31, 2023. As of July 31, 2023, there were no remaining unvested stock options outstanding, and therefore no unrecognized compensation expense related to unvested stock options.

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Restricted stock

The following table summarizes the Company's restricted stock activity for the six months ended July 31, 2023:

(Shares in thousands)	*Restricted Shares*			*Weighted Average Price (Per share)*		*Aggregate Intrinsic Value*
Outstanding at January 31, 2023		267		$	8.55	$	2,286
Granted		91			10.26
Vested and issued		(84	)		8.43
Forfeited or retired for taxes		(47	)		9.23
Outstanding at July 31, 2023		228		$	9.35	$	2,133

As of July 31, 2023, there was $1.5 million of unrecognized compensation expense related to unvested restricted stock granted under the plans. That cost is expected to be recognized over a weighted average period of 2.1 years.

Note 8 - Earnings (loss) per share

	*Three Months Ended July 31,*				*Six Months Ended July 31,*
(In thousands, except per share data)	*2023*		*2022*		*2023*			*2022*
Basic weighted average common shares outstanding at July 31, 2023		8,029		7,975		8,017			7,947
Dilutive effect of equity compensation plans		110		211		-			115
Weighted average common shares outstanding assuming full dilution		8,139		8,186		8,017			8,062

Stock options and restricted stock not included in the computation of diluted earnings per share of common stock because the option exercise prices or grant date prices exceeded the average market prices of the common shares		79		19		18			115
Stock options and restricted stock with exercise prices or grant date prices below the average market prices		110		211		170			115

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

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Note 9 - Debt

Debt totaled $29.2 million and $24.3 million at July 31, 2023 and January 31, 2023, respectively.

Revolving lines - North America. On September 20, 2018, the Company and certain of its U.S. and Canadian subsidiaries (collectively, together with the Company, the “North American Loan Parties”) entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association ("PNC"), as administrative agent and lender, providing for a three-year $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Senior Credit Facility”).

On September 17, 2021, the North American Loan Parties executed an extension of the Credit Agreement with PNC, providing for a new five-year $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Renewed Senior Credit Facility”). The Company's obligations under the Renewed Senior Credit Facility are currently guaranteed by Perma-Pipe Canada, Inc. Each of the North American Loan Parties other than Perma-Pipe Canada, Inc. (collectively, the "Borrowers") is a borrower under the Renewed Senior Credit Facility.

The Borrowers have used and will continue to use borrowings under the Renewed Senior Credit Facility (i) to fund future capital expenditures; (ii) to fund ongoing working capital needs; and (iii) for other corporate purposes, including potentially additional stock repurchases. Borrowings under the Renewed Senior Credit Facility bear interest at a rate equal to an alternate base rate or the Secured Overnight Financing Rate (as defined in the Renewed Senior Credit Facility, "SOFR"), plus, in each case, an applicable margin. The applicable margin is based on a fixed charge coverage ratio ("FCCR") range. Interest on alternate base rate borrowings is the alternate base rate (as defined in the Renewed Senior Credit Facility) plus an applicable margin, ranging from 1.00% to 1.50%, based on the FCCR in the most recently reported period. Interest on SOFR borrowings is SOFR plus an applicable margin ranging from 2.00% to 2.50%, based on the FCCR in the most recently reported period, as well as an additional SOFR adjustment ranging from 0.10% to 0.25%, based on the term of the interest period. Additionally, the Borrowers pay a 0.25% per annum facility fee on the unused portion of the Renewed Senior Credit Facility.

Subject to certain exceptions, borrowings under the Renewed Senior Credit Facility are secured by substantially all of the North American Loan Parties’ assets. The Renewed Senior Credit Facility matures on September 20, 2026. Subject to certain qualifications and exceptions, the Renewed Senior Credit Facility contains covenants that, among other things, restrict the North American Loan Parties’ ability to create liens, merge or consolidate, consummate acquisitions, make investments, dispose of assets, incur debt, and pay dividends and other distributions. In addition, the North American Loan Parties may not make capital expenditures in excess of $5.0 million annually, plus a limited carryover of any unused amounts. Further, the North American Loan Parties may not make repurchases of the Company's common stock in excess of $3.0 million.

The Renewed Senior Credit Facility also contains financial covenants requiring the North American Loan Parties to achieve a ratio of its EBITDA (as defined in the Renewed Senior Credit Facility) to the sum of scheduled cash principal payments on indebtedness for borrowed money and interest payments on the advances under the Renewed Senior Credit Facility of not less than 1.10 to 1.00 for any five consecutive days in which the undrawn availability is less than $3.0 million or any day in which the undrawn availability is less than $2.0 million. As of July 31, 2023, the calculated ratio was less than 1.10 to 1.00. In order to cure any future breach of these covenants by the North American Loan Parties, the Company may repatriate cash from any of its foreign subsidiaries that are otherwise not a party to the Renewed Senior Credit Facility in an amount which, when added to the amount of the North American Loan Parties' EBITDA, would result in compliance on a pro forma basis. The Company was in compliance with respect to these covenants as of July 31, 2023.

The Renewed Senior Credit Facility contains customary events of default. If an event of default occurs and is continuing, then PNC may terminate all commitments to extend further credit and declare all amounts outstanding under the Renewed Senior Credit Facility due and payable immediately. In addition, if any of the North American Loan Parties or certain of their subsidiaries become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Renewed Senior Credit Facility will automatically become immediately due and payable. Loans outstanding under the Renewed Senior Credit Facility will bear interest at a rate of 2.00% per annum in excess of the otherwise applicable rate (i) while a bankruptcy event of default exists or (ii) upon the lender's request, during the continuance of any other event of default.

As of July 31, 2023, the Company had borrowed an aggregate of $7.2 million at a rate of 10.0% and had $5.3 million available under the Renewed Senior Credit Facility. As of January 31, 2023, the Company had borrowed an aggregate of $4.4 million and had $9.9 million available under the Renewed Senior Credit Facility.

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Finance obligation - buildings and land. On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement"). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold its land and buildings in Lebanon, Tennessee (the "Property") for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale, the Company paid off the approximately $0.9 million mortgage note on the Property to its lender. The Company used the remaining proceeds to repay its borrowings under the Senior Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into a fifteen-year lease agreement (the “Lease Agreement”), whereby the Company leases back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option.

In accordance with ASC 842, Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially the fair value of the underlying assets. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.1 million is recognized in current maturities of long-term debt and the long-term portion of $9.1 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of July 31, 2023. The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.

Revolving lines - foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt and Saudi Arabia as discussed further below.

United Arab Emirates

The Company has a revolving line for 8.0 million U.A.E. Dirhams (approximately $2.2 million at July 31, 2023) from a bank in the U.A.E. As of July 31, 2023 the facility has an interest rate of approximately 8.4% and is set to expire in May 2024.

The Company has a revolving line for 17.5 million U.A.E. Dirhams (approximately $4.8 million at July 31, 2023) from a bank in the U.A.E. As of July 31, 2023 the facility has an interest rate of approximately 8.5% and is set to expire in May 2024.

The Company has a credit agreement for capital expenditure financing with a bank in the U.A.E. for 2.0 million U.A.E. Dirhams (approximately $0.5 million at July 31, 2023). As of July 31, 2023 the facility has an interest rate of approximately 8.5% and is expected to expire in October 2023.

Egypt

In June 2021, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $3.2 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable and restricted the Company's Egyptian subsidiary's ability to undertake any additional debt. As of July 31, 2023 the facility has an interest rate of approximately 8.0% and expired in June 2022, however the Company has started the renewal process for this credit arrangement. The Company is in regular communication with the bank throughout the renewal process and the facility has continued without interruption or penalty.

In December 2021, the Company entered into a credit arrangement for project financing with a bank in Egypt for 28.2 million Egyptian Pounds. As this project has progressed and the Company has made collections, the facility has decreased to a current amount of 8.9 million Egyptian Pounds (approximately $0.3 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by the contract for a project being financed by the Company's Egyptian subsidiary. The facility has an interest rate of approximately 20.8% and, as of November 2022, is no longer available for borrowings by the Company. The facility will expire in connection with final customer balance collections and the completion of the project.

In August 2022, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $3.2 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable, to be tested annually at fiscal year-end. As of July 31, 2023 the facility has an interest rate of approximately 20.8% and is set to expire in August 2023.

Saudi Arabia

In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of 37.0 million Saudi Riyal (approximately $9.9 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia. The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary. The facility was renewed in May 2023, and the line was increased to 37.0 million Saudi Riyal (approximately $9.9 million at July 31, 2023). As of July 31, 2023, the facility has an interest rate of approximately 9.3% and is set to expire in May 2024.

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These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of July 31, 2023, the amount of foreign subsidiary debt guaranteed by the Company was approximately $0.7 million.

The Company was in compliance with the covenants under the credit arrangements in the U.A.E., Egypt and Saudi Arabia as of July 31, 2023, with the exception of those arrangements that have expired and have not yet been renewed. Although certain of the arrangements have expired and the borrowings could be required to be repaid immediately by the banks, the Company is in regular communication with the respective banks throughout the renewal process and all of the arrangements have continued without interruption or penalty. On July 31, 2023, interest rates were based on (i) the Emirates Inter Bank Offered Rate plus 3.0% to 3.5% per annum for the U.A.E. credit arrangements, two of which have a minimum interest rate of 4.5% per annum; (ii) either the Central Bank of Egypt corporate loan rate plus 1.5% to 3.5% per annum or the stated interest rate in the agreements for the Egypt credit arrangements; and (iii) the Saudi Inter Bank Offered Rate plus 3.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of July 31, 2023, the Company's interest rates ranged from 8.0% to 20.8%, with a weighted average rate of 12.3%, and the Company had facility limits totaling $24.4 million under these credit arrangements. As of July 31, 2023, $2.9 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of July 31, 2023, the Company had borrowed $8.1 million and had an additional $13.7 million of borrowing remaining available under the foreign revolving credit arrangements. The foreign revolving lines balances as of July 31, 2023 and January 31, 2023, were included as current maturities of long-term debt in the Company's consolidated balance sheets.

Mortgages. On July 28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December 23, 2042. As of July 31, 2023, the remaining balance on the mortgage in Canada is approximately CAD 6.2 million (approximately $4.7 million at July 31, 2023). The interest rate is variable, and was 9.1% at July 31, 2023. Principal payments began in January 2018.

Note 10 - Leases

Operating Leases. In August 2020, the Company entered into a new lease in Abu Dhabi for land upon which the Company intends to build a facility. The initial annual payments were approximately 1.2 million U.A.E. Dirhams (approximately $0.8 million at July 31, 2023), inclusive of rent, escalation clauses, and other common charges contained in the agreement. Rent payments previously deferred until August 2022 have commenced, and the lease expires in August 2050.

In March and December 2022, the Company served Notices of Termination to its lessor for the Company's lease of land and buildings in Fujairah in the U.A.E. The Company served the Notices of Termination in connection with the Company's intended relocation to a different facility in Abu Dhabi. The Company vacated portions of the leased space in December 2022 and expects to vacate the remaining space in 2023. The first Notice of Termination required that the Company pay an additional amount equal to three months' rent after that termination to enable the lessor to prepare the assets for lease by another party. As a result of the termination, the Company has recognized adjustments to the amounts recorded in the consolidated financial statements as of July 31, 2023. The termination resulted in decreases of $0.3 million, $4.0 million and $3.6 million to operating lease liability short-term, operating lease liability long-term and operating lease right-of-use asset, respectively, in the consolidated balance sheets as of July 31, 2023. The termination also resulted in a decrease in rent expense of $1.1 million in the consolidated statement of operations for the year ended January 31, 2023.

Finance Leases. The Company has several significant operating lease agreements, with lease terms of one to thirty years, which consist of real estate, vehicles and office equipment leases. These leases do not require any contingent rental payments, impose any financial restrictions or contain any residual value guarantees. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right-of-use ("ROU") assets as the Company is not reasonably certain to exercise the options. The Company does not have any arrangements where it acts as a lessor, other than one sub-lease arrangement.

At July 31, 2023, the Company had total operating lease liabilities of $8.1 million and operating ROU assets of $7.4 million, which are reflected in the consolidated balance sheets. At July 31, 2023, the Company also had total finance lease liabilities of $0.2 million included in current maturities of long-term debt, and total finance ROU assets of $0.5 million which were included in property plant and equipment, net of accumulated depreciation in the consolidated balance sheets.

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Supplemental balance sheet information related to leases is as follows (in thousands):

Operating and Finance leases:	*July 31, 2023*			*January 31, 2023*
Finance leases assets:
Property and Equipment - gross	$	985		$	1,161
Accumulated depreciation and amortization		(467	)		(700	)
Property and Equipment - net	$	519		$	461

Finance lease liabilities:
Finance lease liability short-term	$	52		$	164
Total finance lease liabilities	$	151		$	164

Operating lease assets:
Operating lease ROU assets	$	7,404		$	4,527

Operating lease liabilities:
Operating lease liability short-term	$	1,148		$	912
Operating lease liability long-term		6,952			4,252
Total operating lease liabilities	$	8,100		$	5,164

Total lease costs consist of the following (in thousands):

		*Three Months Ended July 31,*						*Six Months Ended July 31,*
Lease costs	*Consolidated Statements of Operations Classification*	*2023*			*2022*			*2023*			*2022*
Finance Lease Costs
Amortization of ROU assets	Cost of sales	$	33		$	62		$	87		$	125
Interest on lease liabilities	Interest expense		3			8			5			18
Operating lease costs	Cost of sales, SG&A expenses		426			694			882			587
Short-term lease costs (1)	Cost of sales, SG&A expenses		59			13			245			72
Sub-lease income	SG&A expenses		(20	)		(27	)		(40	)		(40	)
Total Lease costs		$	501		$	750		$	1,179		$	762

(1) Includes variable lease costs, which are immaterial.

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Supplemental cash flow information related to leases is as follows (in thousands):

	*Six Months Ended July 31,*
	*2023*		*2022*
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash outflows from finance leases	$	154	$	178
Operating cash outflows from finance leases		5		18
Operating cash outflows from operating leases		890		696

ROU liabilities obtained in exchange for new lease obligations:
Operating leases liabilities	$	3,484	$	-

	*Six Months Ended July 31,*
	*2023*		*2022*
ROU liabilities obtained in exchange for new lease obligations:
Finance leases liabilities	$	139	$	-
Operating leases liabilities		3,484		-

Weighted-average lease terms and discount rates are as follows:

	*July 31, 2023*
Weighted-average remaining lease terms (in years):
Finance leases		3.3
Operating leases		14.8

Weighted-average discount rates:
Finance leases		10.2	%
Operating leases		8.4	%

Maturities of lease liabilities as of July 31, 2023, are as follows (in thousands):

	Operating Leases			Finance Leases
For the six months ending January 31, 2024	$	1,054		$	168
For the year ending January 31, 2025		1,441			-
For the year ending January 31, 2026		1,272			-
For the year ending January 31, 2027		1,249			-
For the year ending January 31, 2028		1,221			-
For the year ending January 31, 2029		927			-
Thereafter		7,280			-
Total lease payments	$	14,444		$	168
Less: amount representing interest		(6,344	)		(17	)
Total lease liabilities at July 31, 2023	$	8,100		$	151

Rent expense on operating leases, which is recorded on straight-line basis, was $0.7 million and $0.9 millionfor the three months ended July 31, 2023 and 2022, respectively.

Note 11 - Restricted cash

Restricted cash held by foreign subsidiaries is related to fixed deposits that also serve as security deposits and guarantees.

(In thousands)	*July 31, 2023*	*January 31, 2023*
Cash and cash equivalents	$6,103	$5,773
Restricted cash	1,224	1,020
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$7,327	$6,793

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Note 12 - Fair value

The carrying values of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair value due to their short-term nature. The carrying amount of the Company's short-term debt, revolving lines of credit and long-term debt approximate fair value because the majority of the amounts outstanding accrue interest at variable market rates.

Note 13 - Recent accounting pronouncements

The Company evaluated recent accounting pronouncements and does not expect any to have a material impact on its consolidated financial statements or related disclosures.

Note 14 - Treasury stock

The repurchase program approved on October 4, 2021 authorized the Company to use up to $3.0 million for the purchase of its outstanding shares of common stock. Stock repurchases were permitted to be executed through open market or privately negotiated transactions, depending upon current market conditions and other factors. On December 7, 2022 the Board of Directors authorized the use of $1.0 million remaining under the share repurchase program previously approved on October 4, 2021 that expired on October 3, 2022. Share repurchases may be executed through open market or in privately negotiated transactions over the course of the 12 months following the Board of Directors authorization. During the three months ended July 31, 2023 the Company used $0.3 million of the $1.0 million authorized to repurchase its outstanding shares of common stock.

The following table sets forth the repurchase activity with respect to the Company's shares of common stock during the three months ended July 31, 2023 (in thousands, except per share information):

Period	*Total number of shares purchased*		*Average price paid (per share)*		*Total number of shares purchased as part of publicly announced plans or programs*		*Approximate dollar value of shares that may yet be purchased under the plans or programs*
May 1, 2023 - May 31, 2023		-	$	-		-	$	939
June 1, 2023 - June 30, 2023		-		-		-		939
July 1, 2023 - July 31, 2023		37		8.51		312		627
Total		37				312

On July 26, 2022, the Company retired 239,168 shares of treasury stock previously repurchased under the stock repurchase program. The retirement was recorded as a reduction to common stock based on the par value of the shares, and the excess over par value was recorded as a decrease to retained earnings in accordance with ASC 505-30, Equity - Treasury Stock.

Note 15 - Noncontrolling interests

The Company has a controlling financial interest in certain investments which are not considered wholly owned subsidiaries. Accordingly, there remains a minority portion of the equity interest that is owned by a third party. Pursuant to the applicable guidance contained in ASC 810, Consolidations, the balance sheet and operating activities of these investments are included in the Company's consolidated financial statements. The Company adjusts the net income in the consolidated statements of operations to exclude the proportionate share of results that is attributable to non-controlling interests. Additionally, the Company presents the proportionate share that is attributable to redeemable non-controlling interests as temporary equity within our consolidated balance sheet. This mezzanine presentation is the result of the non-controlling interests being subject to a put option that is not solely within the Company's control and in connection with the equity shares of the business arrangement that is redeemable any time after five years following the date of incorporation. Further, the put option did not meet the definition of a derivative due to not containing a net settlement provision and the shares not being readily convertible to cash, thereby being considered embedded with respect to the non-controlling interests.

On June 1, 2023, the Company closed on its formation of the joint venture ("The JV Agreement") with Gulf Insulation Group ("GIG") a leading provider of pre-insulated piping systems, leak detection systems, and pipe fabrication, in which the Company acquired a 60% controlling interest in exchange for consideration of $2.7 million in the form of land and equipment. The Company expects this collaborative business arrangement to result in expanding its market presence in Saudi Arabia, Kuwait, and Bahrain. Pursuant to the applicable guidance in ASC 805, Business Combinations and Noncontrolling Interests, the Company determined that the transaction did not meet the necessary conditions to be considered a business combination. As such, the assets transferred by the Company were recorded at historical cost, and no gain was recognized as a result of this exchange. Further, the other party to this business arrangement acquired a 40% non-controlling interest by contributing assets of approximately $2.7 million, mainly consisting of land and equipment. The non-controlling interests attributable to the other party was recorded at its estimated fair value as of the investment date, and no gain was recognized as a result of this exchange. The Company had non-controlling interests of $1.7 million and $0.0 million recorded within temporary equity as of July 31, 2023 and January 31, 2023, respectively. The proportionate share of net income was accounted for as a reduction in deriving net income attributable to common stock in the Company's consolidated statements of operations.

Net income attributable to GIG was $0.1 million and $0.0 million for the three months ended July 31, 2023 and 2022, respectively.

In connection with the joint venture, at the formation of the JV Agreement, the Company agreed to a promissory note in the principal amount $2.7 million payable to the related party contained in this agreement. The principal amount is presented within the other long-term liabilities caption in the Company's consolidated balance sheet.

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

The statements contained in this MD&A and other information contained elsewhere in this quarterly report, which can be identified by the use of forward-looking terminology such as "may," "will," "expect," "continue," "remains," "intend," "aim," "should," "prospects," "could," "future," "potential," "believes," "plans," "likely" and "probable" or the negative thereof or other variations thereon or comparable 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. 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 could cause actual results to differ materially from those projected as a result of many factors, including, but not limited to, those under the heading Item 1A. Risk Factors included in the Company's latest Annual Report on Form 10-K. The Company's fiscal year ends on January 31. Years and balances described as 2023 and 2022 are for the fiscal year ending January 31, 2024 and the fiscal year ended January 31, 2023, respectively.

This MD&A should be read in conjunction with the Company’s consolidated financial statements, including the notes thereto, contained elsewhere in this report. Percentages set forth below in this MD&A have been rounded to the nearest percentage point.

Supply Chain Constraints and Inflationary Impacts

Due to the current inflationary environment, raw material supply shortages and transportation delays, the Company may experience delays and increased prices for raw materials used in the production processes. To mitigate these impacts, the Company has implemented several strategies, including purchasing from alternative suppliers and planning for material purchases further in advance to ensure the Company has materials when needed. The Company has also updated its pricing to customers to offset the impacts of the raw material price increases. These impacts are expected to continue throughout 2023.

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RESULTS OF OPERATIONS

The Company is engaged in the manufacture and sale of products in one reportable segment. Since the Company focuses on discrete projects, operating results can be significantly impacted as a result of large variations in the level of project activity in reporting periods.

($ in thousands)	Three Months Ended July 31,														Six Months Ended July 31,
	2023					2022						Change favorable (unfavorable)			2023						2022						Change favorable (unfavorable)
	Amount		Percent of Net Sales			Amount			Percent of Net Sales			Amount			Amount			Percent of Net Sales			Amount			Percent of Net Sales			Amount
Net sales	$	35,141				$	37,003					$	(1,862	)	$	64,798					$	68,225					$	(3,427	)

Gross profit		9,464		27	%		9,886			27	%		(422	)		16,239			25	%		16,935			25	%		(696	)

General and administrative expenses		5,283		15	%		5,248			14	%		(35	)		10,742			17	%		10,897			16	%		155

Selling expense		1,490		4	%		1,313			4	%		(177	)		2,730			4	%		2,553			4	%		(177	)

Interest expense		636					500						(136	)		1,148						867						(281	)

Other income (expense)		81					(62	)					143			154						(15	)					169

Income before income taxes		2,136					2,763						(627	)		1,773						2,603						(830	)

Income tax expense		966					893						(73	)		1,725						1,620						(105	)

Net income (loss)		1,170					1,870						(700	)		48						983						(935	)

Less: Net income attributable to noncontrolling interests		148					-						(148	)		148						-						(148	)

Net income (loss) attributable to common stock		1,022					1,870						(848	)		(100	)					983						(1,083	)

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Three months ended July 31, 2023 vs. Three months ended July 31, 2022

Net sales:

Net sales were $ 35.1 million and $ 37.0 million in the three months ended July 31, 2023 and 2022, respectively. The decrease o f $1.9 million, or 5% , was a result of lower sales volumes in North America.

Gross profit:

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:

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:

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 the quarter.

Interest expense:

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 (expense):

Other income was consistent and less than $0.1 million for the three months ended July 31, 2023 and 2022, respectively.

Income tax expense:

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.

For further information, see Note 5 - Income taxes, in the Notes to Consolidated Financial Statements.

Net income attributable to common stock:

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.

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Six months ended July 31, 2023 vs. Six months ended July 31, 2022

Net sales:

Net sales were $ 64.8 million and $ 68.2 million in the six months ended July 31, 2023 and 2022 , respectively. The decrease of $ 3.4 million, or 5% was a result of lower sales volumes in North America.

Gross profit:

Gross profit was $16.2 million, or 25% of net sales, and $16.9 million, or 26% of net sales, in the six months ended July 31, 2023 and 2022, respectively. The decrease of $0.7 million was driven by lower sales volumes.

General and administrative expenses:

General and administrative expenses were $10.7 million and $10.9 million in the six months ended July 31, 2023 and 2022, respectively. The decrease of $0.2 million, or 2% was due to lower payroll costs.

Selling expenses:

Selling expenses were $2.7 million and $2.6 million in the six months ended July 31, 2023 and 2022, respectively. The increase of $0.1 million was due to higher payroll costs.

Interest expense:

Net interest expense remained consistent and was $1.1 million and $0.9 million in the six months ended July 31, 2023 and 2022, respectively. The increase of $0.2 million was attributable to rate increases during the year.

Other income (expense):

Other income (expense) was consistent and less than $0.2 million for the six months ended July 31, 2023 and 2022, respectively.

Income tax expense:

The Company's worldwide effective tax rates ("ETR") were 45.2% and 32.2% in the six 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.

For further information, see Note 5 - Income taxes, in the Notes to Consolidated Financial Statements.

Net income (loss) attributable to common stock:

Net income (loss) attributable to common stock was $(0.1) million and $1.0 million in the six months ended July 31, 2023 and 2022, respectively. The decrease of $1.1 million was mainly due to a reduction in gross profit as a result of lower sales volumes.

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Liquidity and capital resources

Cash and cash equivalents as of July 31, 2023 were $6.1 million compared to $5.8 million on January 31, 2023. On July 31, 2023, $0.3 million was held in the United States, and $5.8 million was held at the Company's foreign subsidiaries. The Company's working capital was $35.8 million on July 31, 2023 compared to $41.9 million on January 31, 2023. Of the working capital components, accounts receivable increased by $9.8 million and cash and cash equivalents increased by $0.3 million as the result of the movements discussed below. As of July 31, 2023, the Company had $5.3 million of borrowing capacity under the Renewed Senior Credit Facility in North America and $13.7 million of borrowing capacity under its foreign revolving credit agreements. The Company had $7.2 million borrowed under the Renewed Senior Credit Facility and $8.1 million borrowed under its foreign revolving credit agreements at July 31, 2023.

Net cash provided by operating activities was $3.5 million and net cash used in operating activities was $11.2 million in the six months ended July 31, 2023 and 2022, respectively. The increase of $14.7 million was due primarily attributable to decreases in unbilled accounts receivable, inventory and costs and estimated earnings in excess of billings on uncompleted contracts, partially offset by changes to accounts receivable and accounts payable.

Net cash used in investing activities in the six months ended July 31, 2023 and 2022 was $6.8 million and $2.0 million, respectively. The increase of $4.8 million was due primarily to investments in the Middle East and Canada.

Net cash provided by financing activities in the six months ended July 31, 2023 and 2022 was $3.7 million and $10.7 million, respectively. The main source of cash from financing activities during the six months ended July 31, 2023 was net proceeds from borrowings of approximately $4.8 million under the Company's credit facilities, as compared to the six months ended July 31, 2022, when net proceeds were approximately $11.3 million. Debt totaled $29.2 million and $24.3 million as of July 31, 2023 and January 31, 2023, respectively. See Note 9 - Debt, in the Notes to Consolidated Financial Statements for further discussion relating to this topic.

Treasury stock. On December 7, 2022 the Board of Directors authorized the use of $1.0 million remaining under the share repurchase program previously approved on October 4, 2021 that expired on October 3, 2022. Share repurchases may be executed through open market or in privately negotiated transactions over the course of the 12 months following the Board of Directors authorization. See Note 14 - Treasury stock, for further discussion relating to this topic.

Revolving lines - North America. On September 20, 2018, the Company and certain of its U.S. and Canadian subsidiaries (collectively, together with the Company, the “North American Loan Parties”) entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association ("PNC"), as administrative agent and lender, providing for a three-year $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Senior Credit Facility”).

On September 17, 2021, the North American Loan Parties executed an extension of the Credit Agreement with PNC, providing for a new five-year $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Renewed Senior Credit Facility”). The Company's obligations under the Renewed Senior Credit Facility are currently guaranteed by Perma-Pipe Canada, Inc. Each of the North American Loan Parties other than Perma-Pipe Canada, Inc. (collectively, the "Borrowers") is a borrower under the Renewed Senior Credit Facility.

Subject to certain exceptions, borrowings under the Renewed Senior Credit Facility are secured by substantially all of the North American Loan Parties’ assets. The Renewed Senior Credit Facility matures on September 20, 2026. Subject to certain qualifications and exceptions, the Renewed Senior Credit Facility contains covenants that, among other things, restrict the North American Loan Parties’ ability to create liens, merge or consolidate, consummate acquisitions, make investments, dispose of assets, incur debt, and pay dividends and other distributions. In addition, the North American Loan Parties may not make capital expenditures in excess of $5.0 million annually, plus a limited carryover of any unused amounts. Further, the North American Loan Parties may not make repurchases of the Company's common stock in excess of $3.0 million.

The Renewed Senior Credit Facility also contains financial covenants requiring the North American Loan Parties to achieve a ratio of its EBITDA (as defined in the Renewed Senior Credit Facility) to the sum of scheduled cash principal payments on indebtedness for borrowed money and interest payments on the advances under the Renewed Senior Credit Facility of not less than 1.10 to 1.00 for any five consecutive days in which the undrawn availability is less than $3.0 million or any day in which the undrawn availability is less than $2.0 million. As of July 31, 2023, the calculated ratio was less than 1.10 to 1.00. In order to cure any future breach of these covenants by the North American Loan Parties, the Company may repatriate cash from any of its foreign subsidiaries that are otherwise not a party to the Renewed Senior Credit Facility in an amount which, when added to the amount of the North American Loan Parties' EBITDA, would result in compliance on a pro forma basis. The Company was in compliance with respect to these covenants as of July 31, 2023.

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The Renewed Senior Credit Facility contains customary events of default. If an event of default occurs and is continuing, then PNC may terminate all commitments to extend further credit and declare all amounts outstanding under the Renewed Senior Credit Facility due and payable immediately. In addition, if any of the North American Loan Parties or certain of their subsidiaries become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Renewed Senior Credit Facility will automatically become immediately due and payable. Loans outstanding under the Renewed Senior Credit Facility will bear interest at a rate of 2.00% per annum in excess of the otherwise applicable rate (i) while a bankruptcy event of default exists or (ii) upon the lender's request, during the continuance of any other event of default.

As of July 31, 2023, the Company had borrowed an aggregate of $7.2 million at a rate of 10.0% and had $5.3 million available under the Renewed Senior Credit Facility. As of January 31, 2023, the Company had borrowed an aggregate of $4.4 million and had $9.9 million available under the Renewed Senior Credit Facility.

Revolving lines - foreign . The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt, and Saudi Arabia as discussed further below.

United Arab Emirates

The Company has a revolving line for 8.0 million U.A.E. Dirhams (approximately $2.2 million at July 31, 2023) from a bank in the U.A.E. As of July 31, 2023 the facility has an interest rate of approximately 8.4% and is set to expire in May 2024.

The Company has a revolving line for 17.5 million U.A.E. Dirhams (approximately $4.8 million at July 31, 2023) from a bank in the U.A.E. As of July 31, 2023 the facility has an interest rate of approximately 8.5% and is set to expire in May 2024.

The Company has a credit agreement for capital expenditure financing with a bank in the U.A.E. for 2.0 million U.A.E. Dirhams (approximately $0.5 million at July 31, 2023). As of July 31, 2023 the facility has an interest rate of approximately 8.5% and is expected to expire in October 2023.

Egypt

In June 2021, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $3.2 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable and restricted the Company's Egyptian subsidiary's ability to undertake any additional debt. As of July 31, 2023 the facility has an interest rate of approximately 8.0% and expired in June 2022, however the Company has started the renewal process for this credit arrangement. The Company is in regular communication with the bank throughout the renewal process and the facility has continued without interruption or penalty.

In December 2021, the Company entered into a credit arrangement for project financing with a bank in Egypt for 28.2 million Egyptian Pounds. As this project has progressed and the Company has made collections, the facility has decreased to a current amount of 8.9 million Egyptian Pounds (approximately $0.3 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by the contract for a project being financed by the Company's Egyptian subsidiary. The facility has an interest rate of approximately 20.8% and, as of November 2022, is no longer available for borrowings by the Company. The facility will expire in connection with final customer balance collections and the completion of the project.

In August 2022, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $3.2 million at July 31, 2023). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable, to be tested annually at fiscal year-end. As of July 31, 2023 the facility has an interest rate of approximately 20.8% and is set to expire in August 2023.

Saudi Arabia

In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of 37.0 million Saudi Riyal (approximately $9.9 million at July 31, 2023) This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia. The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary. The facility was renewed in May 2023, and the line was increased to 37.0 million Saudi Riyal (approximately $9.9 million at July 31, 2023). As of July 31, 2023 the facility has an interest rate of approximately 9.3% and is set to expire in May 2024.

These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of July 31, 2023, the amount of foreign subsidiary debt guaranteed by the Company was approximately $0.7 million.

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The Company was in compliance with the covenants under the credit arrangements in the U.A.E., Egypt and Saudi Arabia as of July 31, 2023, with the exception of those arrangements that have expired and have not yet been renewed. Although certain of the arrangements have expired and the borrowings could be required to be repaid immediately by the banks, the Company is in regular communication with the respective banks throughout the renewal process and all of the arrangements have continued without interruption or penalty. On July 31, 2023, interest rates were based on (i) the Emirates Inter Bank Offered Rate plus 3.0% to 3.5% per annum for the U.A.E. credit arrangements, two of which have a minimum interest rate of 4.5% per annum; (ii) either the Central Bank of Egypt corporate loan rate plus 3.5% per annum or the stated interest rate in the agreements for the Egypt credit arrangements; and (iii) the Saudi Inter Bank Offered Rate plus 3.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of July 31, 2023, the Company's interest rates ranged from 8.0% to 20.8%, with a weighted average rate of 12.3%, and the Company had facility limits totaling $24.4 million under these credit arrangements. As of July 31, 2023, $2.9 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of July 31, 2023, the Company had borrowed $8.1 million and had an additional $13.7 million of borrowing remaining available under the foreign revolving credit arrangements. The foreign revolving lines balances as of July 31, 2023 and January 31, 2023, were included as current maturities of long-term debt in the Company's consolidated balance sheets.

Finance obligation - buildings and land. On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement"). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale of the Property, the Company paid off the approximately $0.9 million remaining on the mortgage note on the Property to its lender. The Company used the remaining proceeds to repay its borrowings under the Senior Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into a 15-year lease agreement (the “Lease Agreement”), whereby the Company leases back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option.

In accordance with ASC 842, Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially all of the fair value of the underlying asset. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.1 million is recognized in current maturities of long-term debt and the long-term portion of $9.1 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of July 31, 2023. The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.

Accounts receivable:

In 2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately $41.9 million. The system has not yet been commissioned by the customer. Nevertheless, the Company has settled approximately $39.1 million as of July 31, 2023, with a remaining balance due in the amount of $2.8 million, all of which pertains to retention clauses within the agreements with the Company's customer, and which become payable by the customer when this project is fully tested and commissioned. Of this retention amount, $1.6 million is classified in a long-term receivable account.

Regardless of the contractual due date for payment, the Company has been actively engaged in ongoing efforts to collect the outstanding amount. The Company continues to engage with the customer to ensure full payment of open balances, and during June 2022, a partial payment was received to settle $0.9 million of the customer's outstanding balances. Further, the Company has been engaged by the customer to perform additional work in 2022 and 2023 under customary trade terms that supports the continued cooperation between the Company and the customer. As a result, the Company did not reserve any allowance against the remaining outstanding balances as of July 31, 2023. However, if the Company’s efforts to collect on this account are not successful, the Company may recognize an allowance for all, or substantially all, of any such uncollected amounts.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies are described in Item 7. MD&A and in the Notes to the Consolidated Financial Statements for the year ended January 31, 2023 contained in the Company's latest Annual Report on Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of critical accounting policies may require management to make assumptions, judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

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Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of July 31, 2023. This evaluation included consideration of the controls, processes and procedures that are designed to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, the certifying officers have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective because of the material weakness described below.

Management has previously reported on a material weakness in the Company's internal control over financial reporting regarding the design and operating effectiveness of controls related to the existence of inventory during the fiscal year ended January 31, 2023. Specifically, the Company failed to appropriately perform cycle count procedures at one of the Company's operating facilities, resulting in a significant adjustment during the full physical inventory count at period end. Further, management review of the process and resulting adjustments on a periodic basis failed to identify the issue. These deficiencies led management to conclude that a material weakness existed with respect to the Company's internal control over financial reporting. The material weakness did not result in any material misstatements to the Company’s consolidated financial statements. As a result, at January 31, 2023, the Company's internal control over financial reporting was not effective. Subsequent to the fiscal year end, the Company established a plan to remediate the material weakness in internal control over financial reporting. As of July 31, 2023, and on the date of this Quarterly Report on Form 10-Q, the Company's remediation plan is ongoing.

Notwithstanding the material weakness described above, the Company's management, including the Chief Executive Officer and Chief Financial Officer, has concluded that the financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the Company's financial position, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

Changes in Internal Control over Financial Reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified a material weakness in the Company's internal control over financial reporting regarding the design and operating effectiveness of controls related to the existence of inventory during the fiscal year ended January 31, 2023. As a result of the material weakness identified, the Company has begun updating its internal control over financial reporting as discussed in its remediation plan update below.

Remediation Plan for the Material Weakness in Internal Control over Financial Reporting. To address the material weakness, the Company has implemented its remediation plan. Specifically, the Company has:

●	Hired additional personnel with significant experience in inventory management to oversee the process at the Lebanon, Tennessee facility;
●	Engaged outside consultants to assist in reviewing and updating policies, procedures and controls over inventory management;
●	Redesigned cycle count procedures to better identify higher value and more active inventory parts, as well as to include additional review of results prior to recording of any adjustments; and
●	Performed updates with respect to the Company's physical inventory and inventory management system.

The Company anticipates the actions described above and resulting improvements in controls will strengthen the Company's processes, procedures and controls related to inventory management and will address the related material weakness described above. However, the material weakness cannot be considered fully remediated until the remediation processes have been in operation for a period of time, are successfully tested and management concludes that these processes and controls are operating effectively. The Company will continue to monitor the effectiveness of its remediation measures in connection with its future assessments of the effectiveness of internal control over financial reporting and disclosure controls and procedures, and management will make any changes to the design of the Company's plan and take such other actions deemed appropriate given the circumstances.

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PART II OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The repurchase program approved on October 4, 2021 authorized the Company to use up to $3.0 million for the purchase of its outstanding shares of common stock. Stock repurchases were permitted to be executed through open market or privately negotiated transactions, depending upon current market conditions and other factors. On December 7, 2022 the Board of Directors authorized the use of $1.0 million remaining under the share repurchase program previously approved on October 4, 2021 that expired on October 3, 2022. Share repurchases may be executed through open market or in privately negotiated transactions over the course of the 12 months following the Board of Directors authorization. During the three months ended July 31, 2023 the Company used $0.3 million of the $1.0 million authorized to repurchase its outstanding shares of common stock.

The following table sets forth the repurchase activity with respect to the Company's shares of common stock during the three months ended July 31, 2023 (in thousands, except per share information):

Period	Total number of shares purchased		Average price paid (per share)		Total number of shares purchased as part of publicly announced plans or programs		Approximate dollar value of shares that may yet be purchased under the plans or programs
May 1, 2023 - May 31, 2023		-	$	-		-	$	939
June 1, 2023 - June 30, 2023		-		-		-		939
July 1, 2023 - July 31, 2023		37	$	8.51		312	$	627
Total		37				312

Item 6.

Exhibits

31.1	Rule 13a - 14(a)/15d - 14(a) Certifications (1) Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Rule 13a - 14(a)/15d - 14(a) Certifications (2) Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Section 1350 Certifications (Chief Executive Officer and Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
101.INS	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation
101.DEF	Inline XBRL Taxonomy Extension Definition
101.LAB	Inline XBRL Taxonomy Extension Labels
101.PRE	Inline XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Perma-Pipe International Holdings, Inc.


Date:	September 14, 2023	By: /s/ David J. Mansfield
		David J. Mansfield
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	September 14, 2023	By: /s/ D. Bryan Norwood
		D. Bryan Norwood
		Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

I, David J. Mansfield, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Perma-Pipe International Holdings, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:

September 14, 2023

/s/ David J. Mansfield

David J. Mansfield

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

I, D. Bryan Norwood, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Perma-Pipe International Holdings, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:

September 14, 2023

/s/ D. Bryan Norwood

D. Bryan Norwood

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

Exhibit 32

Certification of Principal Executive Officers

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

The undersigned, in their capacities as Chief Executive Officer and Chief Financial Officer of Perma-Pipe International Holdings, Inc. (the “Registrant") certify that, to the best of their knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended July 31, 2023 of the Registrant, (the “Report”):

(1)

The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ David J. Mansfield

David J. Mansfield

President and Chief Executive Officer

(Principal Executive Officer)

/s/ D. Bryan Norwood

D. Bryan Norwood

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

September 14, 2023

A signed original of this written statement required by Section 906 has been provided by Perma-Pipe International Holdings, Inc. and will be retained by Perma-Pipe International Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Jul. 31, 2023	Sep. 14, 2023
Document Information [Line Items]
Entity Central Index Key	0000914122
Entity Registrant Name	Perma-Pipe International Holdings, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--01-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 31, 2023
Document Transition Report	false
Entity File Number	001-32530
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-3922969
Entity Address, Address Line One	24900 Pitkin Road, Suite 309
Entity Address, City or Town	Spring
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77386
City Area Code	847
Local Phone Number	966-1000
Title of 12(b) Security	Common Stock, $.01 par value per share
Trading Symbol	PPIH
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,063,501

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022	Jul. 31, 2023	Jul. 31, 2022
Net sales	$ 35,141	$ 37,003	$ 64,798	$ 68,225
Cost of sales	25,677	27,117	48,559	51,290
Gross profit	9,464	9,886	16,239	16,935
Operating expenses
General and administrative expenses	5,283	5,248	10,742	10,897
Selling expenses	1,490	1,313	2,730	2,553
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	$ 1,868	$ (100)	$ 983
Weighted average common shares outstanding
Basic (in shares)	8,029	7,975	8,017	7,947
Diluted (in shares)	8,139	8,186	8,017	8,062
Earnings (loss) per share attributable to common stock
Basic (in dollars per share)	$ 0.13	$ 0.23	$ (0.01)	$ 0.12
Diluted (in dollars per share)	$ 0.13	$ 0.23	$ (0.01)	$ 0.12

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022	Jul. 31, 2023	Jul. 31, 2022
Net income	$ 1,170	$ 1,870	$ 48	$ 983
Other comprehensive income (loss)
Foreign currency translation adjustment	339	(455)	(98)	(1,387)
Comprehensive income (loss)	1,509	1,415	(50)	(404)
Less: Comprehensive income attributable to non-controlling interests	148	0	148	0
Total comprehensive income (loss) attributable to common stock	$ 1,361	$ 1,415	$ (198)	$ (404)

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jul. 31, 2023	Jan. 31, 2023
Current assets
Cash and cash equivalents	$ 6,103	$ 5,773
Restricted cash	1,224	1,020
Trade accounts receivable, less allowance for credit losses of $620 at July 31, 2023 and $612 at January 31, 2023	51,844	42,010
Inventories	13,877	14,738
Prepaid expenses and other current assets	7,135	7,357
Unbilled accounts receivable	11,557	11,634
Costs and estimated earnings in excess of billings on uncompleted contracts	1,856	3,126
Total current assets	93,596	85,658
Long-term assets
Property, plant and equipment, net of accumulated depreciation	35,936	26,518
Operating lease right-of-use asset	7,404	4,527
Deferred tax assets	570	696
Goodwill	2,256	2,227
Other long-term assets	3,545	3,340
Total long-term assets	49,711	37,308
Total assets	143,307	122,966
Current liabilities
Trade accounts payable	23,486	14,754
Accrued compensation and payroll taxes	1,584	1,179
Commissions and management incentives payable	504	2,735
Revolving line - North America	7,232	4,387
Current maturities of long-term debt	8,302	6,227
Customers' deposits	2,483	1,951
Outside commission liability	2,462	2,029
Operating lease liability short-term	1,148	912
Other accrued liabilities	5,718	5,549
Billings in excess of costs and estimated earnings on uncompleted contracts	2,968	1,743
Income taxes payable	1,881	2,324
Total current liabilities	57,768	43,790
Long-term liabilities
Long-term debt, less current maturities	4,427	4,389
Deferred compensation liabilities	928	1,608
Deferred tax liabilities	975	909
Operating lease liability long-term	6,952	4,252
Other long-term liabilities	3,900	1,019
Total long-term liabilities	26,330	21,392
Non-controlling interests	1,735	0
Stockholders' equity
Common stock, $.01 par value, authorized 50,000 shares; 8,024 issued and outstanding at July 31, 2023 and 8,004 at January 31, 2023	81	80
Additional paid-in capital	62,762	62,562
Treasury stock, 37 shares at July 31, 2023 and 3 shares at January 31, 2023	(338)	(26)
Retained earnings	1,516	1,617
Accumulated other comprehensive loss	(6,547)	(6,449)
Total stockholders' equity	57,474	57,784
Total liabilities and stockholders' equity	143,307	122,966
Land and Buildings in Lebanon, Tennessee [Member]
Long-term liabilities
Long-term finance obligation	$ 9,148	$ 9,215

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands	Jul. 31, 2023	Jan. 31, 2023
Allowance for doubtful accounts	$ 620	$ 612
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	50,000	50,000
Common stock, issued (in shares)	8,024	8,004
Common stock, outstanding (in shares)	8,024	8,004
Treasury stock (in shares)	37	3

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member] Revision of Prior Period, Adjustment [Member]	Treasury Stock, Common [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Jan. 31, 2022	$ 82	$ 61,766	$ (2,295)		$ (1,992)	$ (3,104)	$ 54,457
Net loss	0	0	(885)		0	0	(885)
Stock-based compensation expense	0	236	0		0	0	236
Foreign currency translation adjustment	0	0	0		0	(932)	(932)
Common stock issued under stock plans, net of shares used for tax withholding	0	16	0		0	0	16
Balance at Apr. 30, 2022	$ 82	62,018	(3,180)		(1,992)	(4,036)	52,892
Balances (in shares) at Jan. 31, 2022	8,151,754			(234,281)
Balance at Jan. 31, 2022	$ 82	61,766	(2,295)		(1,992)	(3,104)	54,457
Net loss							983
Foreign currency translation adjustment							(1,387)
Balance at Jul. 31, 2022	$ 80	62,055	(3,345)		$ 0	(4,491)	54,299
Balances (in shares) at Jan. 31, 2022	8,151,754			(234,281)
Treasury stock purchased (in shares)					(4,887)
Shares issued, net of shares used for tax withholding (in shares)	94,416
Balances (in shares) at Jul. 31, 2022	8,007,002
Balance at Apr. 30, 2022	$ 82	62,018	(3,180)		$ (1,992)	(4,036)	52,892
Net loss	0	0	1,868		0	0	1,868
Stock-based compensation expense	0	284	0		0	0	284
Foreign currency translation adjustment	0	0	0		0	(455)	(455)
Common stock issued under stock plans, net of shares used for tax withholding	0	(247)	0		0	0	(247)
Repurchase of common stock	0	0	0		(43)	0	(43)
Retirement of treasury stock	(2)	0	(2,033)		2,035	0	0
Balance at Jul. 31, 2022	$ 80	62,055	(3,345)		0	(4,491)	54,299
Balances (in shares) at Jul. 31, 2022	8,007,002
Balance at Jan. 31, 2023	$ 80	62,562	1,617		(26)	(6,449)	57,784
Net loss	0	0	(1,123)		0	0	(1,123)
Stock-based compensation expense	0	229	0		0	0	229
Foreign currency translation adjustment	0	0	0		0	(437)	(437)
Common stock issued under stock plans, net of shares used for tax withholding	0	(274)	0		0	0	(274)
Balance at Apr. 30, 2023	$ 80	62,791	494		(26)	(6,886)	56,453
Balances (in shares) at Jan. 31, 2023	8,007,002			0
Balance at Jan. 31, 2023	$ 80	62,562	1,617		(26)	(6,449)	57,784
Net loss							(100)
Foreign currency translation adjustment							(98)
Balance at Jul. 31, 2023	$ 81	62,762	1,516		$ (338)	(6,547)	57,474
Balances (in shares) at Jan. 31, 2023	8,007,002			0
Treasury stock purchased (in shares)					(36,651)
Shares issued, net of shares used for tax withholding (in shares)	93,150
Balances (in shares) at Jul. 31, 2023	8,063,501
Balance at Apr. 30, 2023	$ 80	62,791	494		$ (26)	(6,886)	56,453
Net loss	0	0	1,022		0	0	1,022
Stock-based compensation expense	0	245	0		0	0	245
Foreign currency translation adjustment	0	0	0		0	339	339
Repurchase of common stock	1
Repurchase of common stock		0	0		(312)	0	(311)
Balance at Jul. 31, 2023	$ 81	$ 62,762	$ 1,516		$ (338)	$ (6,547)	$ 57,474
Treasury stock purchased (in shares)							(37)
Balances (in shares) at Jul. 31, 2023	8,063,501

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022
Operating activities
Net income	$ 48	$ 983
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization	1,791	1,926
Deferred tax expense	191	236
Stock-based compensation expense	456	520
Provision on uncollectible accounts	8	14
Gain (loss) from disposal of fixed assets	(5)	16
Changes in operating assets and liabilities
Accounts receivable	(9,865)	(5,860)
Inventories	882	(2,756)
Costs and estimated earnings in excess of billings on uncompleted contracts	2,495	(3,446)
Accounts payable	8,044	850
Accrued compensation and payroll taxes	(1,650)	(716)
Customers' deposits	534	1,380
Income taxes receivable and payable	(766)	(545)
Prepaid expenses and other current assets	989	(403)
Other assets and liabilities	389	2,251
Net cash provided by (used in) operating activities	3,533	(11,172)
Investing activities
Capital expenditures	(6,797)	(2,030)
Proceeds from insurance recovery for property and equipment	5	0
Proceeds from sales of property and equipment	0	69
Net cash used in investing activities	(6,792)	(1,961)
Financing activities
Proceeds from revolving credit lines	96,920	42,813
Payments of debt on revolving credit lines	(92,091)	(31,482)
Payments of other debt	(124)	(146)
(Decrease) increase in drafts payable	(178)	29
Repurchase of common stock	(312)	(43)
Stock options exercised and taxes paid related to restricted shares vested	(273)	(230)
Net cash provided by financing activities	3,732	10,719
Effect of exchange rate changes on cash, cash equivalents and restricted cash	61	336
Net increase (decrease) in cash, cash equivalents and restricted cash	534	(2,078)
Cash, cash equivalents and restricted cash - beginning of period	6,793	9,771
Cash, cash equivalents and restricted cash - end of period	7,327	7,693
Supplemental cash flow information
Cash interest paid	1,302	808
Cash income taxes paid	2,234	1,970
Fixed assets acquired under finance leases - non-cash	139	0
Fixed assets acquired from non affiliates - non-cash	4,357	0
Finance Lease Obligations [Member]
Financing activities
Payments of principal on finance obligation	(154)	(178)
Land and Buildings in Lebanon, Tennessee [Member]
Financing activities
Payments of principal on finance obligation	(56)	(44)
Unbilled Revenues [Member]
Changes in operating assets and liabilities
Unbilled accounts receivable	$ (8)	$ (5,622)

Note 1 - Basis of Presentation

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - Basis of presentation

Significant New Accounting Policies

Current Expected Credit Loss

Subsequent Events

Note 2 - Business Segment Reporting

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 2 - Business segment reporting

Note 3 - Accounts Receivable

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 - Accounts receivable

As of July 31, 2023 and January 31, 2023, one customer accounted for 14.2% and 11.9% of the Company's accounts receivable, respectively.

Note 4 - Revenue Recognition

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note 4 - Revenue recognition

The Company accounts for its revenues under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers.

Revenue from contracts with customers

The Company’s standard revenue transactions are classified into two main categories:

Products - Includes cables, leak detection products, heat trace products, material/goods not bundled with piping or flowline systems, and field services not bundled into a project contract.

the customer owns the material that is being coated, so the customer controls the asset and thus the work-in-process; or

Products revenue is recognized when goods are shipped or services are performed (ASC 606-10-25-30).

A breakdown of the Company's revenues by revenue class for the three and six months ended July 31, 2023 and 2022 are as follows (in thousands):

	*Three Months Ended July 31,*										*Six Months Ended July 31,*
	*2023*					*2022*					*2023*					*2022*
	*Sales*		*% of Total*			*Sales*		*% of Total*			*Sales*		*% of Total*			*Sales*		*% of Total*
Products	$	2,146		7	%	$	3,869		11	%	$	4,988		7	%	$	6,780		10	%

Specialty Piping Systems and Coating
Revenue recognized under input method		12,801		36	%		12,707		34	%		23,139		36	%		23,325		34	%
Revenue recognized under output method		20,194		57	%		20,427		55	%		36,671		57	%		38,120		56	%
Total	$	35,141		100	%	$	37,003		100	%	$	64,798		100	%	$	68,225		100	%

Contract assets and liabilities

The following table shows the reconciliation of costs in excess of billings and billings in excess of costs:

(In thousands)	*July 31, 2023*			*January 31, 2023*
Costs incurred on uncompleted contracts	$	21,871		$	18,342
Estimated earnings		12,366			9,370
Earned revenue		34,237			27,712
Less billings to date		35,349			26,329
(Billings in excess of costs) costs in excess of billings, net	$	(1,112	)	$	1,383
Balance sheet classification
Contract assets: Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,856		$	3,126
Contract liabilities: Billings in excess of costs and estimated earnings on uncompleted contracts		(2,968	)		(1,743	)
(Billings in excess of costs) costs in excess of billings, net	$	(1,112	)	$	1,383

Unbilled accounts receivable

Practical expedients

Note 5 - Income Taxes

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 5 - Income taxes

Note 6 - Impairment of Long-lived Assets

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Asset Impairment Charges [Text Block]

Note 6 - Impairment of long-lived assets

(In thousands)

January 31, 2023

Foreign exchange change effect

July 31, 2023

Goodwill

$2,227

$29

$2,256

Note 7 - Stock-based Compensation

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 7 - Stock-based compensation

Stock-based compensation expense

Three Months Ended July 31,

Six Months Ended July 31,

(In thousands)

2023

2022

2023

2022

Restricted stock-based compensation expense

$227

$284

$456

$520

Stock Options

The Company did not grant any stock options during the three or six months ended July 31, 2023. The following table summarizes the Company's stock option activity:

(Shares in thousands)	*Options*			*Weighted Average Exercise Price (Per share)*		*Weighted Average Remaining Contractual Term (In years)*		*Aggregate Intrinsic Value*
Outstanding at January 31, 2023		40		$	10.85		1.1	$	19
Exercised		(1	)		6.85		-		2
Expired or forfeited		(17	)		10.60		-		-
Outstanding and exercisable at July 31, 2023		22		$	11.15		1.2	$	6

Restricted stock

The following table summarizes the Company's restricted stock activity for the six months ended July 31, 2023:

(Shares in thousands)	*Restricted Shares*			*Weighted Average Price (Per share)*		*Aggregate Intrinsic Value*
Outstanding at January 31, 2023		267		$	8.55	$	2,286
Granted		91			10.26
Vested and issued		(84	)		8.43
Forfeited or retired for taxes		(47	)		9.23
Outstanding at July 31, 2023		228		$	9.35	$	2,133

Note 8 - Earnings (Loss) Per Share

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 8 - Earnings (loss) per share

	*Three Months Ended July 31,*				*Six Months Ended July 31,*
(In thousands, except per share data)	*2023*		*2022*		*2023*			*2022*
Basic weighted average common shares outstanding at July 31, 2023		8,029		7,975		8,017			7,947
Dilutive effect of equity compensation plans		110		211		-			115
Weighted average common shares outstanding assuming full dilution		8,139		8,186		8,017			8,062

Stock options and restricted stock not included in the computation of diluted earnings per share of common stock because the option exercise prices or grant date prices exceeded the average market prices of the common shares		79		19		18			115
Stock options and restricted stock with exercise prices or grant date prices below the average market prices		110		211		170			115

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

Note 9 - Debt

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 9 - Debt

Debt totaled $29.2 million and $24.3 million at July 31, 2023 and January 31, 2023, respectively.

Revolving lines - foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt and Saudi Arabia as discussed further below.

United Arab Emirates

Egypt

Saudi Arabia

Note 10 - Leases

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

Note 10 - Leases

Supplemental balance sheet information related to leases is as follows (in thousands):

Operating and Finance leases:	*July 31, 2023*			*January 31, 2023*
Finance leases assets:
Property and Equipment - gross	$	985		$	1,161
Accumulated depreciation and amortization		(467	)		(700	)
Property and Equipment - net	$	519		$	461

Finance lease liabilities:
Finance lease liability short-term	$	52		$	164
Total finance lease liabilities	$	151		$	164

Operating lease assets:
Operating lease ROU assets	$	7,404		$	4,527

Operating lease liabilities:
Operating lease liability short-term	$	1,148		$	912
Operating lease liability long-term		6,952			4,252
Total operating lease liabilities	$	8,100		$	5,164

Total lease costs consist of the following (in thousands):

		*Three Months Ended July 31,*						*Six Months Ended July 31,*
Lease costs	*Consolidated Statements of Operations Classification*	*2023*			*2022*			*2023*			*2022*
Finance Lease Costs
Amortization of ROU assets	Cost of sales	$	33		$	62		$	87		$	125
Interest on lease liabilities	Interest expense		3			8			5			18
Operating lease costs	Cost of sales, SG&A expenses		426			694			882			587
Short-term lease costs (1)	Cost of sales, SG&A expenses		59			13			245			72
Sub-lease income	SG&A expenses		(20	)		(27	)		(40	)		(40	)
Total Lease costs		$	501		$	750		$	1,179		$	762

(1) Includes variable lease costs, which are immaterial.

Supplemental cash flow information related to leases is as follows (in thousands):

	*Six Months Ended July 31,*
	*2023*		*2022*
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash outflows from finance leases	$	154	$	178
Operating cash outflows from finance leases		5		18
Operating cash outflows from operating leases		890		696

ROU liabilities obtained in exchange for new lease obligations:
Operating leases liabilities	$	3,484	$	-

	*Six Months Ended July 31,*
	*2023*		*2022*
ROU liabilities obtained in exchange for new lease obligations:
Finance leases liabilities	$	139	$	-
Operating leases liabilities		3,484		-

Weighted-average lease terms and discount rates are as follows:

	*July 31, 2023*
Weighted-average remaining lease terms (in years):
Finance leases		3.3
Operating leases		14.8

Weighted-average discount rates:
Finance leases		10.2	%
Operating leases		8.4	%

Maturities of lease liabilities as of July 31, 2023, are as follows (in thousands):

	Operating Leases			Finance Leases
For the six months ending January 31, 2024	$	1,054		$	168
For the year ending January 31, 2025		1,441			-
For the year ending January 31, 2026		1,272			-
For the year ending January 31, 2027		1,249			-
For the year ending January 31, 2028		1,221			-
For the year ending January 31, 2029		927			-
Thereafter		7,280			-
Total lease payments	$	14,444		$	168
Less: amount representing interest		(6,344	)		(17	)
Total lease liabilities at July 31, 2023	$	8,100		$	151

Rent expense on operating leases, which is recorded on straight-line basis, was $0.7 million and $0.9 millionfor the three months ended July 31, 2023 and 2022, respectively.

Note 11 - Restricted Cash

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Cash and Cash Equivalents Disclosure [Text Block]

Note 11 - Restricted cash

Restricted cash held by foreign subsidiaries is related to fixed deposits that also serve as security deposits and guarantees.

(In thousands)	*July 31, 2023*	*January 31, 2023*
Cash and cash equivalents	$6,103	$5,773
Restricted cash	1,224	1,020
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$7,327	$6,793

Note 12 - Fair Value

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 12 - Fair value

Note 13 - Recent Accounting Pronouncements

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

Note 13 - Recent accounting pronouncements

The Company evaluated recent accounting pronouncements and does not expect any to have a material impact on its consolidated financial statements or related disclosures.

Note 14 - Treasury Stock

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Treasury Stock [Text Block]

Note 14 - Treasury stock

Period	*Total number of shares purchased*		*Average price paid (per share)*		*Total number of shares purchased as part of publicly announced plans or programs*		*Approximate dollar value of shares that may yet be purchased under the plans or programs*
May 1, 2023 - May 31, 2023		-	$	-		-	$	939
June 1, 2023 - June 30, 2023		-		-		-		939
July 1, 2023 - July 31, 2023		37		8.51		312		627
Total		37				312

Note 15 - Noncontrolling Interests

6 Months Ended

Jul. 31, 2023

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

Note 15 - Noncontrolling interests

Net income attributable to GIG was $0.1 million and $0.0 million for the three months ended July 31, 2023 and 2022, respectively.

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Jul. 31, 2023
Accounting Policies [Abstract]
New Accounting Pronouncements, Policy [Policy Text Block]	Current Expected Credit Loss In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amended guidance requires the application of a current expected credit loss (“CECL”) model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company adopted this guidance effective February 1, 2023, which was not material to the consolidated financial statements for the six months ended July 31, 2023.
Subsequent Events, Policy [Policy Text Block]	Subsequent Events The Company has evaluated subsequent events through September 14, 2023, the date the financial statements were issued. Any material subsequent events that occurred during this time have been properly recognized and/or disclosed in these consolidated financial statements.

Note 4 - Revenue Recognition (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Disaggregation of Revenue [Table Text Block]

	*Three Months Ended July 31,*										*Six Months Ended July 31,*
	*2023*					*2022*					*2023*					*2022*
	*Sales*		*% of Total*			*Sales*		*% of Total*			*Sales*		*% of Total*			*Sales*		*% of Total*
Products	$	2,146		7	%	$	3,869		11	%	$	4,988		7	%	$	6,780		10	%

Specialty Piping Systems and Coating
Revenue recognized under input method		12,801		36	%		12,707		34	%		23,139		36	%		23,325		34	%
Revenue recognized under output method		20,194		57	%		20,427		55	%		36,671		57	%		38,120		56	%
Total	$	35,141		100	%	$	37,003		100	%	$	64,798		100	%	$	68,225		100	%

Schedule of Assumptions for Long-Duration Contracts by Product and Guarantee [Table Text Block]

(In thousands)	*July 31, 2023*			*January 31, 2023*
Costs incurred on uncompleted contracts	$	21,871		$	18,342
Estimated earnings		12,366			9,370
Earned revenue		34,237			27,712
Less billings to date		35,349			26,329
(Billings in excess of costs) costs in excess of billings, net	$	(1,112	)	$	1,383
Balance sheet classification
Contract assets: Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,856		$	3,126
Contract liabilities: Billings in excess of costs and estimated earnings on uncompleted contracts		(2,968	)		(1,743	)
(Billings in excess of costs) costs in excess of billings, net	$	(1,112	)	$	1,383

Note 6 - Impairment of Long-lived Assets (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Schedule of Goodwill [Table Text Block]

(In thousands)

January 31, 2023

Foreign exchange change effect

July 31, 2023

Goodwill

$2,227

$29

$2,256

Note 7 - Stock-based Compensation (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

Three Months Ended July 31,

Six Months Ended July 31,

(In thousands)

2023

2022

2023

2022

Restricted stock-based compensation expense

$227

$284

$456

$520

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

(Shares in thousands)	*Options*			*Weighted Average Exercise Price (Per share)*		*Weighted Average Remaining Contractual Term (In years)*		*Aggregate Intrinsic Value*
Outstanding at January 31, 2023		40		$	10.85		1.1	$	19
Exercised		(1	)		6.85		-		2
Expired or forfeited		(17	)		10.60		-		-
Outstanding and exercisable at July 31, 2023		22		$	11.15		1.2	$	6

Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block]

(Shares in thousands)	*Restricted Shares*			*Weighted Average Price (Per share)*		*Aggregate Intrinsic Value*
Outstanding at January 31, 2023		267		$	8.55	$	2,286
Granted		91			10.26
Vested and issued		(84	)		8.43
Forfeited or retired for taxes		(47	)		9.23
Outstanding at July 31, 2023		228		$	9.35	$	2,133

Note 8 - Earnings (Loss) Per Share (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	*Three Months Ended July 31,*				*Six Months Ended July 31,*
(In thousands, except per share data)	*2023*		*2022*		*2023*			*2022*
Basic weighted average common shares outstanding at July 31, 2023		8,029		7,975		8,017			7,947
Dilutive effect of equity compensation plans		110		211		-			115
Weighted average common shares outstanding assuming full dilution		8,139		8,186		8,017			8,062

Stock options and restricted stock not included in the computation of diluted earnings per share of common stock because the option exercise prices or grant date prices exceeded the average market prices of the common shares		79		19		18			115
Stock options and restricted stock with exercise prices or grant date prices below the average market prices		110		211		170			115

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

Note 10 - Leases (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Supplemental Balance Sheet Information Related to Leases [Table Text Block]

Operating and Finance leases:	*July 31, 2023*			*January 31, 2023*
Finance leases assets:
Property and Equipment - gross	$	985		$	1,161
Accumulated depreciation and amortization		(467	)		(700	)
Property and Equipment - net	$	519		$	461

Finance lease liabilities:
Finance lease liability short-term	$	52		$	164
Total finance lease liabilities	$	151		$	164

Operating lease assets:
Operating lease ROU assets	$	7,404		$	4,527

Operating lease liabilities:
Operating lease liability short-term	$	1,148		$	912
Operating lease liability long-term		6,952			4,252
Total operating lease liabilities	$	8,100		$	5,164

Lease, Cost [Table Text Block]

		*Three Months Ended July 31,*						*Six Months Ended July 31,*
Lease costs	*Consolidated Statements of Operations Classification*	*2023*			*2022*			*2023*			*2022*
Finance Lease Costs
Amortization of ROU assets	Cost of sales	$	33		$	62		$	87		$	125
Interest on lease liabilities	Interest expense		3			8			5			18
Operating lease costs	Cost of sales, SG&A expenses		426			694			882			587
Short-term lease costs (1)	Cost of sales, SG&A expenses		59			13			245			72
Sub-lease income	SG&A expenses		(20	)		(27	)		(40	)		(40	)
Total Lease costs		$	501		$	750		$	1,179		$	762

Supplemental Cash Flow Information Related Leases [Table Text Block]

	*Six Months Ended July 31,*
	*2023*		*2022*
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash outflows from finance leases	$	154	$	178
Operating cash outflows from finance leases		5		18
Operating cash outflows from operating leases		890		696

ROU liabilities obtained in exchange for new lease obligations:
Operating leases liabilities	$	3,484	$	-

	*Six Months Ended July 31,*
	*2023*		*2022*
ROU liabilities obtained in exchange for new lease obligations:
Finance leases liabilities	$	139	$	-
Operating leases liabilities		3,484		-

Weighted-average Lease Terms and Discount Rates [Table Text Block]

	*July 31, 2023*
Weighted-average remaining lease terms (in years):
Finance leases		3.3
Operating leases		14.8

Weighted-average discount rates:
Finance leases		10.2	%
Operating leases		8.4	%

Finance and Operating Lease, Liability, Maturity [Table Text Block]

	Operating Leases			Finance Leases
For the six months ending January 31, 2024	$	1,054		$	168
For the year ending January 31, 2025		1,441			-
For the year ending January 31, 2026		1,272			-
For the year ending January 31, 2027		1,249			-
For the year ending January 31, 2028		1,221			-
For the year ending January 31, 2029		927			-
Thereafter		7,280			-
Total lease payments	$	14,444		$	168
Less: amount representing interest		(6,344	)		(17	)
Total lease liabilities at July 31, 2023	$	8,100		$	151

Note 11 - Restricted Cash (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Restrictions on Cash and Cash Equivalents [Table Text Block]

(In thousands)	*July 31, 2023*	*January 31, 2023*
Cash and cash equivalents	$6,103	$5,773
Restricted cash	1,224	1,020
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$7,327	$6,793

Note 14 - Treasury Stock (Tables)

6 Months Ended

Jul. 31, 2023

Notes Tables

Class of Treasury Stock [Table Text Block]

Period	*Total number of shares purchased*		*Average price paid (per share)*		*Total number of shares purchased as part of publicly announced plans or programs*		*Approximate dollar value of shares that may yet be purchased under the plans or programs*
May 1, 2023 - May 31, 2023		-	$	-		-	$	939
June 1, 2023 - June 30, 2023		-		-		-		939
July 1, 2023 - July 31, 2023		37		8.51		312		627
Total		37				312

Note 2 - Business Segment Reporting (Details Textual)	6 Months Ended
Note 2 - Business Segment Reporting (Details Textual)	Jul. 31, 2023
Number of Reportable Segments	1

Note 3 - Accounts Receivable (Details Textual) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022 USD ($)	Jul. 31, 2023 USD ($)	Jul. 31, 2022	Jul. 31, 2023 USD ($)	Jul. 31, 2022 USD ($)	Jan. 31, 2023	Jan. 31, 2022	Dec. 31, 2015 USD ($)
Increase (Decrease) in Accounts Receivable				$ 9,865	$ 5,860
Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Number of Major Customers		1	0
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| One Customer [Member]
Concentration Risk, Percentage		18.80%
Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Number of Major Customers				1			1
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| One Customer [Member]
Concentration Risk, Percentage				14.20%		11.90%
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Accounts Receivable, after Allowance for Credit Loss		$ 2,800		$ 2,800				$ 41,900
Increase (Decrease) in Accounts Receivable	$ (900)			(39,100)
Accounts Receivable, Allowance for Credit Loss		0		0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] \| Other Noncurrent Assets [Member]
Accounts Receivable, after Allowance for Credit Loss, Noncurrent		$ 1,600		$ 1,600

Note 4 - Revenue Recognition (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2023	Jan. 31, 2023
Costs Incurred for Uncompleted Contracts, Anticipated Collection Period (Year)	1 year
Unbilled Receivables, Current	$ 11,557	$ 11,634
Middle East [Member]
Unbilled Receivables, Current		$ 11,600

Note 4 - Revenue Recognition - Revenues by Revenue Class (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022	Jul. 31, 2023	Jul. 31, 2022
Sales by product	$ 35,141	$ 37,003	$ 64,798	$ 68,225
Sales by product, percent	100.00%	100.00%	100.00%	100.00%
Product [Member] \| Transferred at Point in Time [Member]
Sales by product	$ 2,146	$ 3,869	$ 4,988	$ 6,780
Sales by product, percent	7.00%	11.00%	7.00%	10.00%
Specialty Piping Systems And Coating [Member] \| Transferred at Point in Time Using Input Method [Member]
Sales by product	$ 12,801	$ 12,707	$ 23,139	$ 23,325
Sales by product, percent	36.00%	34.00%	36.00%	34.00%
Specialty Piping Systems And Coating [Member] \| Transferred at Point in Time Using Output Method [Member]
Sales by product	$ 20,194	$ 20,427	$ 36,671	$ 38,120
Sales by product, percent	57.00%	55.00%	57.00%	56.00%

Note 4 - Revenue Recognition - Reconciliation of the Cost in Excess of Billings (Details) - USD ($) $ in Thousands	Jul. 31, 2023	Jan. 31, 2023
Costs incurred on uncompleted contracts	$ 21,871	$ 18,342
Estimated earnings	12,366	9,370
Earned revenue	34,237	27,712
Less billings to date	35,349	26,329
(Billings in excess of costs) costs in excess of billings, net	(1,112)	1,383
Contract assets: Costs and estimated earnings in excess of billings on uncompleted contracts	1,856	3,126
Contract liabilities: Billings in excess of costs and estimated earnings on uncompleted contracts	$ (2,968)	$ (1,743)

Note 5 - Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2023	Jul. 31, 2022
Effective Income Tax Rate Reconciliation, Percent	45.20%	32.20%
Undistributed Earnings of Foreign Subsidiaries	$ 0.6

Note 6 - Impairment of Long-lived Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022	Jul. 31, 2023	Jul. 31, 2022	Dec. 31, 2016
Impairment, Long-Lived Asset, Held-for-Use	$ 0	$ 0	$ 0	$ 0
Goodwill, Impairment Loss	$ 0		$ 0
Perma-Pipe Canada, Ltd [Member]
Business Combination, Step Acquisition, Equity Interest in Acquiree, Including Subsequent Acquisition, Percentage					50.00%

Note 6 - Impairment of Long-lived Assets - Goodwill (Details) $ in Thousands	6 Months Ended
	Jul. 31, 2023 USD ($)
Goodwill	$ 2,227
Goodwill, foreign exchange change effect	29
Goodwill	$ 2,256

Note 7 - Stock-based Compensation (Details Textual) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 31, 2023 USD ($) shares	Jul. 31, 2023 USD ($) shares
Common Stock, Capital Shares Reserved for Future Issuance (in shares)	307,446	307,446
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	0	0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Number of Shares (in shares)		0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period (in shares)		0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Nonvested, Number of Shares (in shares)	0	0
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period (in shares)		17,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount \| $	$ 0	$ 0
Restricted Stock [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount \| $	$ 1,500	$ 1,500
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)		2 years 1 month 6 days

Note 7 - Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022	Jul. 31, 2023	Jul. 31, 2022
Restricted Stock [Member]
Stock-based compensation expense	$ 227	$ 284	$ 456	$ 520

Note 7 - Stock-based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 31, 2023	Jan. 31, 2023
Expired or forfeited, options (in shares)	0
Share-Based Payment Arrangement, Option [Member]
Outstanding, options (in shares)	40
Outstanding, weighted average exercise price (in dollars per share)	$ 10.85
Outstanding, weighted average remaining contractual term (Year)	1 year 2 months 12 days	1 year 1 month 6 days
Outstanding, aggregate intrinsic value	$ 6	$ 19
Exercised, options (in shares)	(1)
Exercised, weighted average exercise price (in dollars per share)	$ 6.85
Exercised, aggregate intrinsic value	$ 2
Expired or forfeited, options (in shares)	(17)
Expired or forfeited, weighted average exercise price (in dollars per share)	$ 10.60
Outstanding, options (in shares)	22	40
Outstanding, weighted average exercise price (in dollars per share)	$ 11.15	$ 10.85

Note 7 - Stock-based Compensation - Restricted Stock Activity (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jul. 31, 2023	Jan. 31, 2023
Outstanding (in shares)	267
Outstanding, weighted average price (in dollars per share)	$ 8.55
Outstanding, aggregate intrinsic value	$ 2,133	$ 2,286
Granted (in shares)	91
Granted, weighted average price (in dollars per share)	$ 10.26
Vested and issued (in shares)	(84)
Vested and issued, weighted average price (in dollars per share)	$ 8.43
Forfeited or retired for taxes (in shares)	(47)
Forfeited or retired for taxes (in dollars per share)	$ 9.23
Outstanding (in shares)	228
Outstanding, weighted average price (in dollars per share)	$ 9.35

Note 8 - Earnings (Loss) Per Share - Summary of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 31, 2023	Apr. 30, 2023	Jul. 31, 2022	Apr. 30, 2022	Jul. 31, 2023	Jul. 31, 2022
Basic (in shares)	8,029		7,975		8,017	7,947
Dilutive effect of equity compensation plans (in shares)	110		211		0	115
Weighted average common shares outstanding assuming full dilution (in shares)	8,139		8,186		8,017	8,062
Stock options and restricted stock not included in the computation of diluted earnings per share of common stock because the option exercise prices or grant date prices exceeded the average market prices of the common shares (in shares)	79		19		18	115
Stock options and restricted stock with exercise prices or grant date prices below the average market prices (in shares)	110		211		170	115
Net loss	$ 1,022	$ (1,123)	$ 1,868	$ (885)	$ (100)	$ 983
Basic (in dollars per share)	$ 0.13		$ 0.23		$ (0.01)	$ 0.12
Diluted (in dollars per share)	$ 0.13		$ 0.23		$ (0.01)	$ 0.12

Note 9 - Debt (Details Textual) $ in Thousands, ر.س in Millions, د.إ in Millions, ج.م. in Millions, $ in Millions					3 Months Ended	6 Months Ended
	Sep. 17, 2021 USD ($)	Apr. 14, 2021 USD ($)	Sep. 20, 2018 USD ($)	Jul. 28, 2016	Apr. 30, 2023	Jul. 31, 2023 USD ($)	Jul. 31, 2023 CAD ($)	Jul. 31, 2022 USD ($)	Jul. 31, 2023 AED (د.إ)	Jul. 31, 2023 EGP (ج.م.)	May 31, 2023 SAR (ر.س)	Jan. 31, 2023 USD ($)	Nov. 30, 2022 USD ($)	Aug. 31, 2022 EGP (ج.م.)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 EGP (ج.م.)	Jun. 30, 2021 USD ($)	Jun. 30, 2021 EGP (ج.م.)
Debt and Lease Obligation						$ 29,200						$ 24,300
Line of Credit, Current						7,232						4,387
Proceeds from Sale of Property, Plant, and Equipment, Total						0		$ 69
UNITED ARAB EMIRATES
Foreign Earnings Repatriated		$ 800
Land and Buildings in Lebanon, Tennessee [Member]
Lessee, Finance Lease, Term of Contract (Year)		15 years
Lessee, Finance Lease, Annual Rent Increase, Percentage		2.00%
Lessee, Finance Lease, Number of Options to Extend		4
Lessee, Finance Lease, Renewal Term (Year)		5 years
Lessee, Finance Lease, Discount Rate		8.00%
Finance Lease, Liability, Noncurrent						9,148						9,215
Mortgage Note Secured by Tennessee Manufacturing Facility [Member]
Repayments of Secured Debt		$ 900
Canadian Mortgage Note [Member]
Debt Instrument, Maturity Date				Dec. 23, 2042
Proceeds from Issuance of Secured Debt						$ 4,700	$ 6.2
Debt Instrument, Interest Rate, Effective Percentage						9.10%			9.10%	9.10%
Land and Buildings in Lebanon, Tennessee [Member]
Disposal Group, Including Discontinued Operation, Consideration		10,400
Proceeds from Sale of Property, Plant, and Equipment, Total		$ 9,100
Maximum [Member]
Foreign Earnings Repatriated						$ 100
Revolving Lines, North America [Member]
Debt Instrument, Term (Year)	5 years		3 years
Line of Credit Facility, Maximum Borrowing Capacity	$ 18,000		$ 18,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Line of Credit, Current						$ 7,200						4,400
Line of Credit Facility, Interest Rate at Period End						10.00%			10.00%	10.00%
Line of Credit Facility, Current Borrowing Capacity						$ 5,300						$ 9,900
Revolving Lines, North America [Member] \| North American Loan Parties [Member]
Line of Credit Facility, Capital Expenditures Restrictions	$ 5,000
Line of Credit Facility, Common Stock Repurchase Restrictions	$ 3,000
Line of Credit Facility, Fixed Charge Coverage Ratio Required	1.10				1.10
Line of Credit Facility, Covenant Terms, EBITDA Ratio, Minimum Undrawn Availability for Five Consecutive Days	$ 3,000
Line of Credit Facility, Covenant Terms, EBITDA Ratio, Minimum Undrawn Availability	$ 2,000
Line of Credit Facility, Default, Additional Interest Rate	2.00%
Revolving Lines, North America [Member] \| Base Rate [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	1.00%
Revolving Lines, North America [Member] \| Base Rate [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Revolving Lines, North America [Member] \| Secured Overnight Financing Rate (SOFR) [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Revolving Lines, North America [Member] \| Secured Overnight Financing Rate (SOFR) [Member] \| Minimum [Member] \| Additional SOFR Adjustment Based on Interest Period [Member]
Debt Instrument, Basis Spread on Variable Rate	0.10%
Revolving Lines, North America [Member] \| Secured Overnight Financing Rate (SOFR) [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.50%
Revolving Lines, North America [Member] \| Secured Overnight Financing Rate (SOFR) [Member] \| Maximum [Member] \| Additional SOFR Adjustment Based on Interest Period [Member]
Debt Instrument, Basis Spread on Variable Rate	0.25%
Foreign Revolving Lines [Member]
Line of Credit Facility, Maximum Borrowing Capacity						24,400
Line of Credit Facility, Guaranteed Amount						700
Letters of Credit Outstanding, Amount						2,900
Proceeds from Issuance of Debt						8,100
Line of Credit Facility, Remaining Borrowing Capacity						13,700
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Middle Eastern Subsidiaries, 1 [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 2,200			د.إ 8.0
Line of Credit Facility, Interest Rate at Period End						8.40%			8.40%	8.40%
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Middle Eastern Subsidiaries, 2 [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 4,800			د.إ 17.5
Line of Credit Facility, Interest Rate at Period End						8.50%			8.50%	8.50%
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Middle Eastern Subsidiaries, 4 [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 500			د.إ 2.0
Line of Credit Facility, Interest Rate at Period End						8.50%			8.50%	8.50%
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Egypt Subsidiaries [Member]
Line of Credit Facility, Maximum Borrowing Capacity																	$ 3,200	ج.م. 100.0
Line of Credit Facility, Interest Rate at Period End						8.00%			8.00%	8.00%
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Egypt Subsidiaries 2 [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 300				ج.م. 8.9			$ 0			ج.م. 28.2
Line of Credit Facility, Interest Rate at Period End						20.80%			20.80%	20.80%
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Egypt Subsidiaries 3 [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 3,200								ج.م. 100.0
Line of Credit Facility, Interest Rate at Period End						20.80%			20.80%	20.80%
Foreign Revolving Lines [Member] \| Revolving Credit Lines Used by Saudi Arabian Subsidiary [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 9,900									$ 37,000
Foreign Revolving Lines [Member] \| Renewal of Revolving Credit Lines Used by Saudi Arabian Subsidiary [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 9,900					ر.س 37
Line of Credit Facility, Interest Rate at Period End						9.30%			9.30%	9.30%
Foreign Revolving Lines [Member] \| Minimum [Member]
Line of Credit Facility, Interest Rate at Period End						8.00%			8.00%	8.00%
Debt Instrument, Interest Rate, Stated Percentage						4.50%			4.50%	4.50%
Foreign Revolving Lines [Member] \| Maximum [Member]
Line of Credit Facility, Interest Rate at Period End						20.80%			20.80%	20.80%
Foreign Revolving Lines [Member] \| Weighted Average [Member]
Line of Credit Facility, Interest Rate at Period End						12.30%			12.30%	12.30%
Foreign Revolving Lines [Member] \| EIBOR [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate						3.00%	3.00%
Foreign Revolving Lines [Member] \| EIBOR [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate						3.50%	3.50%
Foreign Revolving Lines [Member] \| Central Bank of Eqypt (CBE) Rate [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate						1.50%	1.50%
Foreign Revolving Lines [Member] \| Central Bank of Eqypt (CBE) Rate [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate						3.50%	3.50%
Foreign Revolving Lines [Member] \| SIBOR [Member]
Debt Instrument, Basis Spread on Variable Rate						3.50%	3.50%

Note 10 - Leases (Details Textual) $ in Thousands, د.إ in Millions	3 Months Ended		6 Months Ended	12 Months Ended
	Jul. 31, 2023 USD ($)	Jul. 31, 2022 USD ($)	Jul. 31, 2023 USD ($)	Jan. 31, 2023 USD ($)	Jan. 31, 2023 AED (د.إ)
Operating Lease, Liability	$ 8,100		$ 8,100	$ 5,164
Operating Lease, Right-of-Use Asset	7,404		7,404	4,527
Finance Lease, Right-of-Use Asset, after Accumulated Amortization	500		500
Operating Lease, Expense	700	$ 900
Current Maturities of Long-term Debt [Member]
Finance Lease, Liability, Current	$ 200		$ 200
Minimum [Member]
Lessee, Operating Lease, Term of Contract (Year)	1 year		1 year
Maximum [Member]
Lessee, Operating Lease, Term of Contract (Year)	30 years		30 years
Abu Dhabi Land Lease [Member]
Lessee, Operating Lease, Annual Payment			$ 800		د.إ 1.2
Decrease in Operating Lease Liability, Current	$ 300		300
Decrease in Operating Lease Liability, Noncurrent	4,000		4,000
Decrease in Operating Lease Right-of-use Asset	$ 3,600		$ 3,600
Decrease in Operating Lease Expense				$ 1,100

Note 10 - Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Jul. 31, 2023	Jan. 31, 2023
Property and Equipment - net	$ 35,936	$ 26,518
Total finance lease liabilities	151	164
Operating Lease, Right-of-Use Asset	7,404	4,527
Operating lease liability short-term	1,148	912
Operating lease liability long-term	6,952	4,252
Total operating lease liabilities	8,100	5,164
Other Current Liabilities [Member]
Finance lease liability short-term	52	164
Operating lease liability short-term	1,148	912
Other Noncurrent Liabilities [Member]
Operating lease liability long-term	6,952	4,252
Finance Leases Assets [Member]
Property and Equipment - gross	985	1,161
Accumulated depreciation and amortization	(467)	(700)
Property and Equipment - net	$ 519	$ 461

Note 10 - Leases - Lease Costs (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jul. 31, 2023

Jul. 31, 2022

Jul. 31, 2023

Jul. 31, 2022

Amortization of ROU assets

$ 33

$ 62

$ 87

$ 125

Interest on lease liabilities

Operating lease costs

426

694

882

587

Short-term lease costs (1)

^[1]

245

Sub-lease income

(20)

(27)

(40)

Total Lease costs

$ 501

$ 750

$ 1,179

$ 762

[1]	Includes variable lease costs, which are immaterial.

Note 10 - Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2023	Jul. 31, 2022
Operating cash outflows from finance leases	$ 5	$ 18
Operating cash outflows from operating leases	890	696
Operating leases liabilities	3,484	0
Fixed assets acquired under finance leases - non-cash	139	0
Finance Lease Obligations [Member]
Financing cash outflows from finance leases	$ 154	$ 178

Note 10 - Leases - Weighted-average Lease Terms and Discount Rates (Details)	Jul. 31, 2023
Finance leases (Year)	3 years 3 months 18 days
Operating leases (Year)	14 years 9 months 18 days
Finance leases	10.20%
Operating leases	8.40%

Note 10 - Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Jul. 31, 2023	Jan. 31, 2023
For the six months ending January 31, 2024, operating leases	$ 1,054
For the six months ending January 31, 2024, finance leases	168
For the year ending January 31, 2025, operating leases	1,441
For the year ending January 31, 2025, finance leases	0
For the year ending January 31, 2026, operating leases	1,272
For the year ending January 31, 2026, finance leases	0
For the year ending January 31, 2027, operating leases	1,249
For the year ending January 31, 2027, finance leases	0
For the year ending January 31, 2028, operating leases	1,221
For the year ending January 31, 2028, finance leases	0
For the year ending January 31, 2029, operating leases	927
For the year ending January 31, 2029, finance leases	0
Thereafter, operating leases	7,280
Thereafter, finance leases	0
Total lease payments, operating leases	14,444
Total lease payments, finance leases	168
Less: amount representing interest, operating leases	(6,344)
Less: amount representing interest, finance leases	(17)
Total lease liabilities, operating leases	8,100	$ 5,164
Total lease liabilities, finance leases	$ 151	$ 164

Note 11 - Restricted Cash - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Jul. 31, 2023	Jan. 31, 2023
Cash and cash equivalents	$ 6,103	$ 5,773
Restricted cash	1,224	1,020
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 7,327	$ 6,793

Note 14 - Treasury Stock (Details Textual) - USD ($) $ in Millions	Jul. 26, 2022	Jul. 31, 2023	Dec. 07, 2022	Oct. 04, 2021
Stock Repurchase Program, Authorized Amount			$ 1.0	$ 3.0
Stock Repurchase Program, Authorized Repurchase Amount Used		$ 0.3
Treasury Stock, Shares, Retired (in shares)	239,168

Note 14 - Treasury Stock - Repurchases of Common Stock (Details) - $ / shares	1 Months Ended			3 Months Ended
	Jul. 31, 2023	Jun. 30, 2023	May 31, 2023	Jul. 31, 2023
Total number of shares purchased (in shares)	37	0	0	37
Average price paid per share (in dollars per share)	$ 8.51	$ 0	$ 0
Approximate dollar value of shares that may yet be purchased under the plans or programs (in shares)	627	939	939	627
Publicly Announced Share Repurchase Program [Member]
Total number of shares purchased (in shares)	312	0	0	312

Note 15 - Noncontrolling Interests (Details Textual) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Jun. 01, 2023	Jul. 31, 2023	Jul. 31, 2022	Jul. 31, 2023	Jul. 31, 2022	Jan. 31, 2023
Redeemable Noncontrolling Interest, Equity, Carrying Amount		$ 1,735		$ 1,735		$ 0
Net Income (Loss) Attributable to Noncontrolling Interest		148	$ 0	148	$ 0
Related Party [Member] \| Other Noncurrent Liabilities [Member]
Notes Payable		2,700		$ 2,700
Gulf Insulation Group [Member]
Net Income (Loss) Attributable to Noncontrolling Interest		$ 100	$ 0
Joint Venture [Member]
Subsidiary, Ownership Percentage, Parent	60.00%
Assets Transferred To Acquire Noncontrolling Interest	$ 2,700
Joint Venture [Member] \| Gulf Insulation Group [Member]
Assets Transferred To Acquire Noncontrolling Interest	$ 2,700
Subsidiary, Ownership Percentage, Noncontrolling Owner	40.00%