Perma-Pipe Reports Mixed Q3 Results with Increased Net Income and Sales Growth for Nine Months

Perma-Pipe International Holdings, Inc. reported its financial results for the third quarter and nine months ended October 31, 2024, revealing a mixed performance compared to the previous fiscal period. For the three months ended October 31, 2024, the company recorded net sales of $41.6 million, a decrease of 9% from $45.7 million in the same period last year. However, net income attributable to common stock increased to $2.5 million, up from $1.9 million, reflecting improved project execution. For the nine-month period, net sales rose to $113.4 million, a 3% increase from $110.5 million, while net income attributable to common stock surged to $7.2 million from $1.8 million.

The company's gross profit for the third quarter was $14.1 million, representing 34% of net sales, compared to $13.2 million or 29% of net sales in the prior year. This improvement was attributed to better margins resulting from a favorable product mix. Operating expenses increased, with general and administrative expenses rising to $7.3 million from $5.7 million, primarily due to higher payroll and professional fees. Selling expenses decreased slightly to $1.2 million from $1.5 million, reflecting lower payroll costs.

In terms of operational developments, Perma-Pipe has been actively involved in expanding its market presence, particularly in the Middle East. The company has engaged in ongoing efforts to collect outstanding balances from a significant project completed in 2015, with approximately $40.1 million received to date and a remaining balance of $1.8 million pending. The company has also formed a joint venture with Gulf Insulation Group, acquiring a 60% controlling interest, which is expected to enhance its market reach in Saudi Arabia, Kuwait, and Bahrain.

The company’s balance sheet showed total assets of $160.7 million as of October 31, 2024, up from $155.7 million at the beginning of the fiscal year. Cash and cash equivalents increased significantly to $13.3 million from $5.8 million, while working capital improved to $50.6 million. Perma-Pipe reported a total debt of $27.0 million, slightly up from $25.7 million, with compliance maintained on its credit agreements. Looking ahead, the company anticipates continued growth driven by increased sales volumes and improved project execution, although it remains cautious about market conditions and operational challenges.