Perma-Pipe Reports 28% Revenue Growth in Q2 2025, Net Income Declines

Perma-Pipe International Holdings, Inc. reported significant financial results for the second quarter of fiscal year 2025, ending July 31, 2025. The company achieved net sales of $47.9 million, a 28% increase from $37.5 million in the same period last year. For the first half of the fiscal year, net sales reached $94.6 million, up from $71.8 million in the prior year, reflecting a 32% growth. Gross profit for the quarter was $14.4 million, compared to $13.5 million a year earlier, while gross profit for the six-month period was $31.1 million, up from $24.0 million. However, net income attributable to common stock decreased to $0.9 million, or $0.11 per share, from $3.3 million, or $0.41 per share, in the prior year quarter.

The financial performance was impacted by increased general and administrative expenses, which rose to $10.0 million in the second quarter, up from $6.0 million in the same quarter last year. This increase was primarily due to higher payroll expenses and professional fees, including a one-time charge related to executive compensation. The company also reported a significant increase in operating expenses, totaling $11.2 million for the quarter, compared to $7.3 million in the previous year. Despite the rise in sales, the company's income from operations fell to $3.2 million from $6.1 million in the prior year quarter.

Operationally, Perma-Pipe has been expanding its market presence, particularly in the Middle East and North America, which contributed to the increased sales volumes. The company has also been actively involved in a joint venture with Gulf Insulation Group, which was established in June 2023, allowing for enhanced manufacturing and sales capabilities in Saudi Arabia, Kuwait, and Bahrain. This strategic move is expected to bolster the company's market share in the region.

As of July 31, 2025, Perma-Pipe's total assets increased to $189.0 million from $165.2 million at the beginning of the fiscal year. The company reported a working capital of $58.5 million, up from $54.7 million, with cash and cash equivalents rising to $17.3 million. However, net cash used in operating activities was $(1.3) million for the first half of the fiscal year, a decline from $2.7 million in the previous year, primarily due to changes in accounts receivable and unbilled accounts receivable.

Looking ahead, Perma-Pipe anticipates continued growth driven by increased demand for its specialty piping systems and coatings. The company is focused on addressing its internal control weaknesses, particularly in financial reporting, and is implementing a remediation plan to strengthen its controls. The management believes that the current financial position and strategic initiatives will support the company's operational and financial objectives in the coming quarters.