Perma-Pipe Reports 33% Revenue Growth to $210.9 Million in Fiscal Year 2026

Perma-Pipe International Holdings, Inc. reported significant financial growth in its fiscal year ending January 31, 2026, with net sales reaching $210.9 million, a 33% increase from $158.4 million in the previous year. The company's gross profit also rose to $69.5 million, representing 33% of net sales, compared to $53.2 million or 34% of net sales in the prior year. This increase in revenue was primarily driven by higher sales volumes in the Middle East, Canada, and the United States. Net income attributable to common stock surged to $17.0 million, up from $9.0 million in the previous fiscal year, reflecting a substantial improvement in profitability.

The company experienced a notable increase in general and administrative expenses, which rose to $35.3 million from $28.0 million, largely due to higher compensation costs and professional fees, including expenses related to compliance with Sarbanes-Oxley regulations. Additionally, the company incurred a one-time compensation charge of approximately $2.0 million associated with the departure of its previous CEO. Despite these increased costs, the overall financial performance was bolstered by improved sales and operational efficiencies.

Operationally, Perma-Pipe's backlog decreased to $121.6 million as of January 31, 2026, down from $138.1 million a year earlier, primarily due to the conversion of existing sales orders into revenue and the timing of new awards. The company continues to monitor its customer base, with one customer accounting for approximately 23% of total accounts receivable as of January 31, 2026, and 12% of total net sales for the year. The company has not deemed it necessary to establish an allowance for credit losses for this customer, as it expects to collect the full carrying value of the outstanding balance.

In terms of strategic developments, Perma-Pipe formed a joint venture with Gulf Insulation Group in June 2023, acquiring a 60% controlling interest. This partnership is expected to enhance the company's market presence in Saudi Arabia, Kuwait, and Bahrain, focusing on the manufacture and sale of pre-insulated piping systems. The company also entered into a new credit agreement with JPMorgan Chase Bank, providing a revolving credit facility of up to $18.0 million, which is intended to support ongoing working capital and general corporate needs.

Looking ahead, Perma-Pipe anticipates continued growth driven by its strategic initiatives and geographic expansion. However, the company acknowledges potential risks, including fluctuations in raw material prices, geopolitical tensions, and the need to maintain effective internal controls over financial reporting. Management is committed to addressing identified material weaknesses in internal controls and enhancing operational efficiencies to sustain profitability and support future growth.