Perma-Pipe International Holdings, Inc. 10-Q

Item 1. Financial Statements   PERMA-PIPE INTERNATIONAL HOLDINGS, INC.  CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)       Three Months Ended July 31,     Six Months Ended July 31,       2022     2021     2022     2021   Net sales   $ 37,003     $ 39,804     $ 68,225     $ 64,227   Cost of sales     27,117       29,061       51,290       48,979   Gross profit     9,886       10,743       16,935       15,248                                     Operating expenses                                 General and administrative expenses     5,246       5,602       10,897       10,008   Selling expenses     1,315       1,053       2,554       2,094   Total operating expenses     6,561       6,655       13,451       12,102                                     Income from operations     3,325       4,088       3,484       3,146                                     Interest expense, net     500       268       867       446   Other (expense)/income     ( 64 )     457       ( 14 )     899   Income from operations before income taxes     2,761       4,277       2,603       3,599                                     Income tax expense     893       861       1,620       1,026                                     Net income   $ 1,868     $ 3,416     $ 983     $ 2,573                                     Weighted average common shares outstanding                                 Basic     7,975       8,151       7,947       8,158   Diluted     8,186       8,321       8,062       8,290                                     Earnings per share                                 Basic     0.23       0.42       0.12       0.32   Diluted     0.23       0.41       0.12       0.31     See accompanying notes to consolidated financial statements. Note: Per share calculations could be impacted by rounding.     2 Table of Contents     PERMA-PIPE INTERNATIONAL HOLDINGS, INC.  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Unaudited) (In thousands)       Three Months Ended July 31,     Six Months Ended July 31,       2022     2021     2022     2021   Net income   $ 1,868     $ 3,416     $ 983     $ 2,573                                     Other comprehensive loss                                 Foreign currency translation adjustments, net of tax     ( 455 )     ( 150 )     ( 1,387 )     ( 110 ) Other comprehensive loss     ( 455 )     ( 150 )     ( 1,387 )     ( 110 )                                   Comprehensive income/(loss)   $ 1,413     $ 3,266     $ ( 404 )   $ 2,463     See accompanying notes to consolidated financial statements.   3 Table of Contents     PERMA-PIPE INTERNATIONAL HOLDINGS, INC.  CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)       July 31, 2022     January 31, 2022         (Unaudited)           ASSETS                 Current assets                 Cash and cash equivalents   $ 6,192     $ 8,214   Restricted cash     1,501       1,557   Trade accounts receivable, less allowance for doubtful accounts of $ 500 at July 31, 2022 and $ 486 at January 31, 2022     47,749       44,449   Inventories, net     16,348       13,760   Prepaid expenses and other current assets     5,801       5,444   Unbilled accounts receivable     8,023       2,656   Costs and estimated earnings in excess of billings on uncompleted contracts     5,946       2,309   Total current assets     91,560       78,389   Long-term assets                 Property, plant and equipment, net of accumulated depreciation     24,385       24,756   Operating lease right-of-use asset     7,176       11,213   Deferred tax assets     797       811   Goodwill     2,328       2,342   Other long-term assets     4,336       5,890   Total long-term assets     39,022       45,012   Total assets   $ 130,582     $ 123,401   LIABILITIES AND STOCKHOLDERS' EQUITY                 Current liabilities                 Trade accounts payable   $ 14,498     $ 13,618   Accrued compensation and payroll taxes     1,698       1,612   Commissions and management incentives payable     1,180       2,047   Revolving line - North America     8,632       634   Current maturities of long-term debt     9,421       6,750   Customers' deposits     3,671       3,072   Outside commission liability     2,425       1,255   Operating lease liability short-term     1,316       1,496   Other accrued liabilities     4,584       4,616   Billings in excess of costs and estimated earnings on uncompleted contracts     1,467       1,277   Income taxes payable     1,391       2,020   Total current liabilities     50,283       38,397   Long-term liabilities                 Long-term debt, less current maturities     4,734       5,059   Long-term finance obligation     9,271       9,327   Deferred compensation liabilities     3,431       3,379   Deferred tax liabilities     907       712   Operating lease liability long-term     6,775       11,270   Other long-term liabilities     882       800   Total long-term liabilities   $ 26,000     $ 30,547   Stockholders' equity                 Common stock, $.01 par value, authorized 50,000 shares; 8,003 issued and outstanding at July 31, 2022 and 8,152 issued and outstanding at January 31, 2022     80       82   Additional paid-in capital     62,055       61,766   Treasury Stock, no shares at July 31, 2022 and 234 shares at January 31, 2022     -       ( 1,992 ) Accumulated deficit     ( 3,345 )     ( 2,295 ) Accumulated other comprehensive loss     ( 4,491 )     ( 3,104 ) Total stockholders' equity     54,299       54,457   Total liabilities and stockholders' equity   $ 130,582     $ 123,401       See accompanying notes to consolidated financial statements.   4 Table of Contents   PERMA-PIPE INTERNATIONAL HOLDINGS, INC.  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (In thousands, except share data)       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         Common Stock     Additional Paid-in Capital     Accumulated Deficit     Treasury Stock     Accumulated Other Comprehensive Loss     Total Stockholders' Equity   Total stockholders' equity at January 31, 2021   $ 82     $ 60,875     $ ( 8,357 )   $ -     $ ( 3,287 )   $ 49,313                                                     Net loss     -       -       ( 843 )     -       -       ( 843 ) Stock-based compensation expense     -       272       -       -       -       272   Foreign currency translation adjustment     -       -       -       -       40       40   Total stockholders' equity at April 30, 2021   $ 82     $ 61,147     $ ( 9,200 )   $ -     $ ( 3,247 )   $ 48,782                                                     Net income     -       -       3,416       -       -       3,416   Common stock issued under stock plans, net of shares used for tax withholding     ( 1 )     ( 254 )     -       -       -       ( 255 ) Stock-based compensation expense     -       276       -       -       -       276   Foreign currency translation adjustment     -       -       -       -       ( 150 )     ( 150 ) Total stockholders' equity at July 31, 2021   $ 81     $ 61,169     $ ( 5,784 )   $ -     $ ( 3,397 )   $ 52,069     Shares   2022     2021   Balances at beginning of year     8,151,754       8,164,989   Treasury stock purchased     ( 4,887 )     ( 234,281 ) Shares issued, net of shares used for tax withholding     90,816       221,046   Prior period adjustments     ( 234,281 )     -   Balances at period end     8,003,402       8,151,754     See accompanying notes to consolidated financial statements.   5 Table of Contents     PERMA-PIPE INTERNATIONAL HOLDINGS, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   (In thousands)   Six Months Ended July 31,       2022     2021   Operating activities                 Net income   $ 983     $ 2,573   Adjustments to reconcile net income to net cash flows used in operating activities                 Depreciation and amortization     1,926       2,261   Deferred tax expense     236       73   Stock-based compensation expense     520       548   Provision on uncollectible accounts     14       45   Loss on disposal of fixed assets     16       21   Changes in operating assets and liabilities                 Accounts receivable     ( 5,860 )     ( 19,273 ) Inventories, net     ( 2,756 )     ( 2,421 ) Costs and estimated earnings in excess of billings on uncompleted contracts     ( 3,446 )     3,313   Accounts payable     850       6,372   Accrued compensation and payroll taxes     ( 716 )     1,422   Customers' deposits     1,380       692   Income taxes receivable and payable     ( 545 )     388   Prepaid expenses and other current assets     ( 403 )     ( 1,007 ) Unbilled accounts receivable     ( 5,622 )     ( 2,209 ) Other assets and liabilities     2,251       1,977   Net cash used in operating activities     ( 11,172 )     ( 5,225 ) Investing activities                 Capital expenditures     ( 2,030 )     ( 912 ) Proceeds from sales of property and equipment     69       12   Net cash used in investing activities     ( 1,961 )     ( 900 ) Financing activities                 Proceeds from revolving lines     42,813       2,317   Payments of debt on revolving lines     ( 31,482 )     ( 5,942 ) Payments of debt on mortgage     -       ( 892 ) Proceeds from finance obligation, net of issuance costs     -       9,538   Payments of principal on finance obligation     ( 44 )     ( 91 ) Payments of other debt     ( 146 )     ( 130 ) Increase/(decrease) in drafts payable     29       ( 1 ) Payments on finance lease obligations, net     ( 178 )     ( 203 ) Repurchase of common stock     ( 43 )     -   Stock options exercised and taxes paid related to restricted shares vested     ( 230 )     ( 255 ) Net cash provided by financing activities     10,719       4,341   Effect of exchange rate changes on cash, cash equivalents and restricted cash     336       135   Net decrease in cash, cash equivalents and restricted cash     ( 2,078 )     ( 1,649 ) Cash, cash equivalents and restricted cash - beginning of period     9,771       8,375   Cash, cash equivalents and restricted cash - end of period   $ 7,693     $ 6,726   Supplemental cash flow information                 Interest paid   $ 808     $ 400   Income taxes paid     1,970       446   Fixed assets acquired under capital leases - non-cash     -       201     See accompanying notes to consolidated financial statements.   6 Table of Contents   PERMA-PIPE INTERNATIONAL HOLDINGS, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) July 31, 2022 (Tabular amounts presented in thousands, except per share amounts)     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, 2022 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  2022 and  2021 are for the fiscal years ended January 31, 2023 and 2022 , respectively.   Significant New Accounting Policies   Refer to the Company's Annual Report on Form 10 -K for the year ended January 31, 2022  as filed with the SEC on April 19, 2022  for discussion of the Company's significant accounting policies. During the six months ended July 31, 2022, the following accounting policies were adopted.    Treasury Stock   In accordance with Accounting Standards Codification ("ASC") Topic 505, "Equity", the Company has accounted for the share repurchases under the cost method. This resulted in recognizing the shares as treasury stock, a reduction of stockholders' equity on the Company's consolidated balance sheets and on the Company's consolidated statements of stockholders' equity. These amounts included costs associated with the acqu isition of the shares. On  July 26, 2022, the Company retired all treasury stock previously repurchased under this 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 an increase to accumulated deficit in accordance with ASC 505 - 30, Equity -Treasury Stock.   Reclassifications     Certain reclassifications have been made to prior period financial statements to conform to current period presentation. Unbilled accounts receivable was segregated from prepaid expenses and other current assets and reclassified into its own line on the consolidated balance sheets and consolidated statements of cash flows.     Subsequent Events   The Company has evaluated subsequent events through September 7, 2022, the date the financial statements were issued. No  material subsequent events occurred during this time that would require recognition or disclosure in these financial statements.     Note 2 - Business segment reporting   The Company is engaged in the manufacture and sale of products in one segment: Piping Systems. The Company engineers, designs, manufactures and sells specialty piping systems, and leak detection systems. 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, and (iii) the coating and/or insulation of oil and gas gathering and transmission pipelines. 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 are due from geographically dispersed contractors and manufacturing companies. Credit is extended based on evaluations of customers' financial condition, including the availability of credit insurance. In the United States, collateral is not generally required. In the United Arab Emirates (the "U.A.E.") and Saudi Arabia, letters of credit are usually obtained for significant orders. Accounts receivable are due within various time periods specified in the terms applicable to each customer and are presented net of any allowance for claims and doubtful accounts. The allowance for doubtful accounts is based on specifically identified amounts in customers' accounts, where future collectability is deemed uncertain. Management exercises judgment in adjusting the allowance as a consequence of known events, such as current economic factors and credit trends. Past due trade accounts receivable balances are written off when the Company's collection efforts have been unsuccessful in collecting the amount due and the amount is deemed uncollectible. The write-off is recorded against the allowance for doubtful accounts.    One of the Company’s accounts receivable in the total amount of $ 2.7 million and $ 3.6 million as of July 31, 2022 and January 31, 2022 , respectively, has been outstanding for several years. As of July 31, 2022, the entire balance represents a retention receivable that is payable upon the commissioning of the system. Due to the long-term nature of the receivable, $ 1.1  million and $ 2.0 million were included other long-term assets as of July 31, 2022 and January 31, 2022 , respectively. The Company completed all of its deliverables in 2015 under the related contract, but the system has not yet been commissioned by the customer as additional activities must be completed prior to the overall system completion and commissioning. Nevertheless, the Company has been engaged in ongoing active efforts to collect this outstanding amount. The Company continues to engage with the customer to ensure full payment of open balances, and during April 2022 received an updated acknowledgment of the outstanding balances and assurances of payment from the customer. In June 2022, the Company received a partial payment to settle $ 0.9 million of the customer's outstanding balance. Further, the Company has been engaged by the customer to perform additional work in 2022 under customary trade credit terms that supports the continued cooperation between the Company and the customer. As a result, the Company did not reserve any allowance against this outstanding receivable as of July 31, 2022.  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 then uncollected amounts.   7 Table of Contents   For the three months ended  July 31, 2022 ,  no individual customer accounted for greater than  10% of the Company’s consolidated net sales. During the three months ended July 31, 2021, one individual customer accounted for 12 % of the Company's consolidated net sales.  For the six months ended July 31, 2022 and 2021, no individual customer accounted for more than 10% of the Company's consolidated net sales.   As of  July 31, 2022,  no individual customer accounted for 10%  of the Company's accounts receivable. As of  January 31, 2022  one customer accounted for 11.9 % of the Company's accounts receivable.    Note 4 - Revenue recognition    The Company accounts for its revenues under ASC Topic 606, "Revenue from Contracts with Customers" ("Topic 606" ).   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:     1 ) Systems and Coating - which include all bundled products in which Perma-Pipe designs, engineers, and manufactures pre-insulated specialty piping systems, insulates subsea flowline pipe, subsea oil production equipment, and land-lines. Additionally, this systems classification includes coating applied to pipes and structures.      2 ) Products - which include 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:     1 ) the customer owns the material that is being insulated or coated, so the customer controls the asset and thus the work-in-process; or     2 ) 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 seller’s profit margin for products that have no alternative use for 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, 2022 and 2021  are as follows (in thousands):       Three Months Ended July 31,     Six Months Ended July 31,       2022     2021     2022     2021       Sales     % to Total     Sales     % to Total     Sales     % to Total     Sales     % to Total   Products     3,868       11 %   $ 4,548       11 %     6,780       10 %   $ 7,135       11 %                                                                   Specialty Piping Systems and Coating                                                                 Revenue recognized under input method     12,707       34 %     13,999       35 %     23,325       34 %     23,952       37 % Revenue recognized under output method     20,428       55 %     21,257       54 %     38,120       56 %     33,140       52 % Total   $ 37,003       100 %   $ 39,804       100 %   $ 68,225       100 %   $ 64,227       100 %   The input method, as noted in ASC 606 - 10 - 55 - 20, is used by the U.S. 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 input 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 project costs are incurred.    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 for losses on uncompleted contracts are made in contract liabilities account in the period such losses are identified.   8 Table of Contents   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 Company anticipates that substantially all costs incurred for uncompleted contracts as of  July 31, 2022 will be billed and collected within one year.   During the year ended  January 31, 2021, one of the Company's customers in Qatar made a call on a performance bond held to secure one of the Company's contracts. The Company believes the customer's claims of non-performance under the contract are invalid and that the customer's actions were themselves a breach of the contract. The Company has engaged local counsel to seek reimbursement as well as additional compensation for lost profits suffered as a result of cancellation of certain work orders under the contract. The Company has recorded the expense related to the encashment of approximately $ 0.6 million in other (expense)/income in the consolidated statement of operations for the year ended January 31, 2021. No receivable has been recorded related to the potential reimbursement in the consolidated financial statements as of July 31, 2022.   The following table shows the reconciliation of the cost in excess of billings:    (In thousands)   July 31, 2022     January 31, 2022   Costs incurred on uncompleted contracts   $ 21,054     $ 20,021   Estimated earnings     11,422       12,030   Earned revenue     32,476       32,051   Less billings to date     27,997       31,019   Costs in excess of billings, net   $ 4,479     $ 1,032   Balance sheet classification                 Contract assets: Costs and estimated earnings in excess of billings on uncompleted contracts   $ 5,946     $ 2,309   Contract liabilities: Billings in excess of costs and estimated earnings on uncompleted contracts     ( 1,467 )     ( 1,277 ) Costs in excess of billings, net   $ 4,479     $ 1,032     Substantially all of the $ 0.8  million contract liabilities balance as of January 31, 2021  was recognized in revenues during 2021  and substantially all of the $ 1.3  million contract liabilities balance as of January 31, 2022  is expected to be recognized in revenues during 2022.   Unbilled accounts receivable:   The Company has recorded $ 8.0  million and $ 2.7  million of unbilled accounts receivable on the consolidated balance sheets as of July 31, 2022  and January 31, 2022, respectively, from revenues generated by its subsidiaries in the Middle East, North Africa and India. 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 await customer to pick up or arrange shipping for the product before billing can be made. All of the amounts included in unbilled accounts receivable as of July 31, 2022 are expected to be billed before October 31, 2022.   Practical expedients:   Costs to obtain a contract are not considered project costs as they are not usually incremental, nor does job duration span more than one year. 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 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.   9 Table of Contents     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 rate ("ETR") from operations for the three months ended July 31, 2022 and 2021 was 32 %  and 20 %, respectively. The Company's worldwide ETR was 62 % and 29 % for the six months ended July 31, 2022 and 2021, respectively. The change in the ETR is largely due to 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, including withholding taxes. As such, the Company has accrued a liability of $ 0.5  million as of July 31, 2022 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, 2022 , the Company performed a qualitative analysis assessment to determine if it was more likely than not that the fair values of the Company's long-lived assets exceeded their carrying values. The Company assessed three asset groups as part of this analysis: United States, Canada and Middle East. The qualitative assessment indicated that it was more likely than not that the fair values of the Company's long-lived assets exceeded their carrying values for all three  asset groups. Therefore, it was determined that there was  no impairment of the Company's long-lived assets for the three and six months ended July 31, 2022 and 2021 .   During July 2022, severe flooding in the United Arab Emirates negatively impacted the Company's facility in Fujairah. The Company is currently assessing the damage to the facility, equipment, inventory and the impact of time lost due to business interruption. As additional information becomes available, the Company will recognize any impact to the financial statements, including any potential impairment to long-lived assets. The Company expects that any losses will be recovered as a result of its pending insurance claim.   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, 2022 and January 31, 2022 was attributable to the purchase of Perma-Pipe Canada, Ltd., which occurred in 2016.   (In thousands)     January 31, 2022       Foreign exchange change effect       July 31, 2022   Goodwill   $ 2,342     $ ( 14 )   $ 2,328     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, 2022 , the Company elected to perform a qualitative analysis assessment to determine if it was more likely than not that the fair value of the Company's Canadian reporting unit exceeded its carrying value, including goodwill. The qualitative assessment did not  identify any triggering events that would indicate potential impairment of the Company's Canadian reporting unit. Therefore, it was determined that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment for the  three and six months ended July 31, 2022 and 2021 . The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.   10 Table of Contents     Note 7 - Stock-based compensation    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.   The Company’s 2017 Omnibus Stock Incentive Plan dated June 13, 2017, as amended, which the Company's stockholders approved in June 2017 ( "2017 Plan"), expired in June 2020. While the 2017 Plan 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 Company issued only restricted shares and restricted stock units under the 2017 Plan. The 2017 Plan authorized awards to officers, employees, consultants and independent directors.   The Company has prior incentive plans under which previously granted awards remain outstanding, including the 2017 Plan, but under which no new awards may be granted. At July 31, 2022 the Company had reserved a total of 293,075  shares for grants and issuances under these incentive stock plans, which includes a reserve for issuances pursuant to unvested or unexercised prior awards.   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)   2022     2021     2022     2021   Restricted stock-based compensation expense     284       276       520       548   Total stock-based compensation expense   $ 284     $ 276     $ 520     $ 548     Stock Options   The Company did not grant any stock options during the three or six months ended July 31, 2022 . The following table summarizes the Company's stock option activity:   (Shares in thousands)   Options     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term     Aggregate Intrinsic Value   Outstanding at January 31, 2022     67     $ 9.51       1.7     $ 63   Exercised     ( 12 )     6.60       -       46   Expired or forfeited     ( 9 )     10.62       -       -   Outstanding at July 31, 2022     46       10.62       1.7       22                                     Options exercisable at July 31, 2022     46     $ 10.62       1.7     $ 22     There was no vesting, expiration or forfeiture of previously unvested stock options during the si x months ended July 31 , 2022. As of July 31 , 2022, there were no remaining unvested stock options outstanding, and therefore no unrecognized compensation expense related to unvested stock options.   11 Table of Contents   Restricted stock   The following table summarizes the Company's restricted stock activity for the  six months ended July 31, 2022 :   (Shares in thousands)   Restricted Shares     Weighted Average Price     Aggregate Intrinsic Value   Outstanding at January 31, 2022     354     $ 7.48     $ 2,652   Granted     82       10.96           Vested and issued     ( 147 )     7.30           Forfeited or retired for taxes     ( 42 )     6.87           Outstanding at July 31, 2022     247     $ 8.38     $ 2,074     As of July 31, 2022 , there was $ 1.4  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 2.0  years .     Note 8 - Earnings per share       Three Months Ended July 31,     Six Months Ended July 31,   (In thousands, except per share data)   2022     2021     2022     2021   Basic weighted average common shares outstanding     7,975       8,151       7,947       8,158   Dilutive effect of equity compensation plans     211       170       115       132   Weighted average common shares outstanding assuming full dilution     8,186       8,321       8,062       8,290                                     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     19       166       115       203   Stock options and restricted stock with exercise prices or grant date prices below the average market prices     211       170       115       132                                     Net income   $ 1,868     $ 3,416     $ 983     $ 2,573                                     Income per share                                 Basic     0.23       0.42       0.12       0.32   Diluted     0.23       0.41       0.12       0.31         12 Table of Contents   Note 9 - Debt   Debt totaled $ 32.1 million and $ 21.9 million at July 31, 2022  and January 31, 2022 , 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. is a borrower under the Renewed Senior Credit Facility (collectively, the “Borrowers”).   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 bears interest at a rate equal to an alternate base rate, London Inter-Bank Offered Rate ("LIBOR") or a LIBOR successor rate index, 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 LIBOR or LIBOR successor rate borrowings is the LIBOR rate (as defined in the Renewed Senior Credit Facility) plus an applicable margin ranging from 2.00 % to 2.50 %, based on the FCCR in the most recently reported 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 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 a free cash flow financial covenant (the "FCCR covenant") requiring the North American Loan Parties to achieve a ratio of its EBITDA 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 to be 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, 2022, the calculated ratio was greater than 1.10 to 1.00. In order to cure any future breach of the FCCR covenant 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 Company’s Consolidated EBITDA, would result in pro forma compliance with the FCCR covenant. The Company was in compliance with these covenants as of July 31, 2022.   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.   13 Table of Contents   As of July 31, 2022,  the Company had borrowed an aggregate of $ 8.6  million at a rate of 6.50 % and had $ 5 .9  million available under the Renewed Senior Credit Facility. As of January 31, 2022, the Company had borrowed an aggregate of $ 0.6  million and had $ 8.5  million available under the Renewed Senior Credit Facility.   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 will lease 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 Topic 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 $ 9.3  million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of July 31 , 2022.  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.   The Company has a revolving line for 8.0  million U.A.E. Dirhams (approximately $ 2.2  million at July 31, 2022 ) from a bank in the U.A.E. The facility has an interest rate of approximately 5.05 % and was originally set to expire in  November 2020, however, the expiration was extended due to the COVID- 19 pandemic. The facility was renewed in July 2022 and is now set to expire in July 2025.   The Company has a revolving line for 17.5  million U.A.E. Dirhams (approximately $ 4.8  million at July 31, 2022 ) from a bank in the U.A.E. The facility has an interest rate of approximately 5.78 % and is set to expire in  January 2023.   The Company has a credit agreement for project financing with a bank in the U.A.E. for 1.0  million U.A.E. Dirhams (approximately $ 0.3  million at July 31, 2022 ). This credit arrangement is in the form of project financing at rates competitive in the U.A.E. The line is secured by the contract for a project being financed by the Company's U.A.E. subsidiary. The facility has an interest rate of approximately 5.78 % and is expected to expire in  June 2023 in connection with the completion of the project.   The Company has a credit agreement for project financing with a bank in the U.A.E. for 2.0  million U.A.E. Dirhams (approximately $ 0.5  million at July 31, 2022 ). This credit arrangement is in the form of project financing at rates competitive in the U.A.E. The line is secured by the contract for a project being financed by the Company's U.A.E. subsidiary. The facility has an interest rate of approximately 6.53% and is expected to expire in  May 2024 in connection with the completion of the project.   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 $5. 3  million at July 31, 2022 ). 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. The facility has an interest rate of approximately 8.00 % and expired in June 2022, however t he Company has started the renewal process for this credit arrangement.   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 22.7 million Egyptian Pounds (approximatel y $1. 2  mi llion at July 31, 2022). 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 8.00 % and is expected to expire in November 2022 in connection with the completion of the project.   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 20.0 million Saudi Riyal (approximately $ 5.3 million at July 31, 2022). 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 has an interest rate of approximately 6.5 % and is set to expire in April 2023.   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, 2022, the amount of foreign subsidiary debt guaranteed by the Company was approxim ately $ 0.6  million.    14 Table of Contents   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, 2022 . On July 31, 2022 , interest rates were based on 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, based on the stated interest rate in the agreement for the Egypt credit arrangement, and based on the Saudi Inter Bank Offered Rate plus 3.5 % for the Saudi Arabia credit arrangement. Based on these base rates, as of July 31, 2022 , the Company's interest rates ranged from 5.05 % to 8.0 %, with a weighted average rate of 7.21 %, and the Company had facility limits totaling $ 19.6  million under these credit arrangements. As of July 31, 2022 ,  $ 2.6  million o f availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of July 31, 2022 , the Company had borrow ed $ 8.7  million  and had an additional $ 8.2  million of borrowing remaining available under the foreign revolving credit arrangements. The foreign revolving lines balances as of July 31, 2022 and January 31, 2022 , 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, 2022, the remaining balance on the mortgage in Canada is approximately CAD 6.5 million (approximately $ 5.1 million at July 31, 2022).  The interest rate is variable, and was 6.55 % at July 31, 2022 . Principal payments began in January 2018.   On June  19, 2012, the Company borrowed $ 1.8 million under a mortgage note secured by its manufacturing facility in Lebanon, Tennessee. The proceeds were used for repayment of amounts borrowed. O n April 14, 2021, the Company entered into the Purchase and Sale Agreement discussed above. Concurrently with the sale, the Company paid off the approximately $ 0.9 million remaining on the mortgage note on the Property to its lender.   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 annual payments are initially expected to be approximately 1.2 million U.A.E. Dirhams (approximately $ 0.3 million at July 31 , 2022 ), inclusive of rent and common charges, with escalation clauses in the agreement. Rent payments were deferred until August 2022 and have now commenced. The lease expires in August 2050.    In March 2022, the Company served a Notice of Termination to its lessor for a portion of the Company's lease of certain land and buildings in Fujairah in the U.A.E. The termination will take effect in September 2022. The Company served the Notice of Termination in connection with the Company's intended relocation to a different facility under a new lease in Abu Dhabi. The Company is required to pay an additional amount equal to three months' rent after the 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, 2022. 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 April 30, 2022. The termination also resulted in a decrease in rent expense of $ 0.8 million i n the consolidated statement of operations for the three months ended April 30, 2022. The Company will continue to lease the remaining land and buildings under the Fujairah lease until 2032.   Finance Leases. In 2019,  the Company obtained two finance leases for a total of CAD 1.1 million (approximately $ 0.8 million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these finance leases were 8.0 % per annum with monthly principal and interest payments of less than $ 0.1 million. These leases mature in August 2023.  In 2017, the Company obtained three finance leases for a total of CAD 1.1 million (approximately $ 0.8 million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these finance leases range from 4.0 % to 7.8 % per annum with monthly principal and interest payments of less than $ 0.1 million. Two of these leases matured in April  2021 and new leases have been entered into in May 2021 to replace the matured leases. The remaining lease matures in September  2022.   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, 2022 , the Company had total operating lease liabilities of $ 8.1   million and operating ROU assets of $7. 2  million , which are reflected in the consolidated balance sheets. At July 31, 2022 , the Company also had total finance lease liabilities of $ 0.3 million included in current maturities of long-term debt and long-term debt less current maturities, and total finance ROU assets of $ 0.6 million which were included in property plant and equipment, net of accumulated depreciation in the consolidated balance sheets.   15 Table of Contents   Supplemental balance sheet information related to leases is as follows (in thousands):    Operating and Finance leases:   July 31, 2022     January 31, 2022   Finance leases assets:                 Property and Equipment - gross   $ 1,214     $ 1,221   Accumulated depreciation and amortization     ( 613 )     ( 490 ) Property and Equipment - net   $ 601     $ 731                     Finance lease liabilities:                 Finance lease liability short-term   $ 326     $ 357   Finance lease liability long-term     21       173   Total finance lease liabilities   $ 347     $ 530                     Operating lease assets:                 Operating lease ROU assets   $ 7,176     $ 11,213                     Operating lease liabilities:                 Operating lease liability short-term   $ 1,316     $ 1,496   Operating lease liability long-term     6,775       11,270   Total operating lease liabilities   $ 8,091     $ 12,766     Total lease costs consist of the following (in thousands):    Lease costs Consolidated Statements of Operations Classification   Three Months Ended July 31, 2022     Three Months Ended July 31, 2021     Six Months Ended July 31, 2022     Six Months Ended July 31, 2021   Finance Lease Costs                                   Amortization of ROU assets Cost of sales   $ 62     $ 65     $ 125     $ 119   Interest on lease liabilities Interest expense     8       15       18       28   Operating lease costs Cost of sales, SG&A expenses     694       625       587       1,273   Short-term lease costs (1) Cost of sales, SG&A expenses     13       102       72       195   Sub-lease income SG&A expenses     ( 27 )     ( 20 )     ( 40 )     ( 40 ) Total Lease costs   $ 750     $ 787     $ 762     $ 1,575     ( 1 ) Includes variable lease costs, which are immaterial.   16 Table of Contents   Supplemental cash flow information related to leases is as follows (in thousands):       Six Months Ended July 31, 2022     Six Months Ended July 31, 2021   Cash paid for amounts included in the measurement of lease liabilities:                 Financing cash outflows from finance leases   $ 178     $ 117   Operating cash outflows from finance leases     18       13   Operating cash outflows from operating leases     696       501         Six Months Ended July 31, 2022     Six Months Ended July 31, 2021   ROU Assets obtained in exchange for new lease obligations:                 Finance leases liabilities   $ -     $ -   Operating leases liabilities     -       52     Weighted-average lease terms and discount rates are as follows:        July 31, 2022   Weighted-average remaining lease terms (in years):         Finance leases     1.0   Operating leases     16.0             Weighted-average discount rates:         Finance leases     9.4 % Operating leases     7.8 %   Maturities of lease liabilities as of July 31, 2022 , are as follows (in thousands):   Year:   Operating Leases     Finance Leases   For the six months ended January 31, 2023   $ 1,639     $ 186   For the year ended January 31, 2024     1,761       176   For the year ended January 31, 2025     935       -   For the year ended January 31, 2026     725       -   For the year ended January 31, 2027     725       -   For the year ended January 31, 2028     689       -                     Thereafter     8,975       -   Total lease payments     15,449       362   Less: amount representing interest     ( 7,358 )     ( 15 ) Total lease liabilities at July 31, 2022   $ 8,091     $ 347     Rent expense on operating leases, which is recorded on straight-line basis, was $ 0. 7  million for the three months ended  July 31, 2022  and 2021 .    17 Table of Contents     Note 11  - Restricted cash   Restricted cash held by foreign subsidiaries was $ 1.5  million and $ 1.2 million as of July 31, 2022 and 2021 , respectively, and is related to fixed deposits that also serve as security deposits and guarantees.    (In thousands)     July 31, 2022       July 31, 2021   Cash and cash equivalents   $ 6,192     $ 5,509   Restricted cash     1,501       1,217   Cash, cash equivalents and restricted cash shown in the statement of cash flows   $ 7,693     $ 6,726       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 line 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   In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020 - 04,   Reference Rate Reform (Topic 848 ), which provides guidance designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements necessitated by the scheduled discontinuation of LIBOR on December 31, 2021. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. The ASU provides the option to account for and present a modification that meets the scope of the standard as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination required under the relevant topic or subtopic. This ASU is effective for all entities; however, application of the guidance is optional, is only available in certain situations and is only available for companies to apply from March 12, 2020 until December 31, 2022. In April 2022,  the FASB proposed to extend the effective date through December 31, 2024; however, a final ruling has not been issued.  The Company's Renewed Senior Credit Facility, which matures on September 20, 2026,  bears interest at a rate equal to an alternate base rate, LIBOR or a LIBOR successor rate index, plus, in each case, an applicable margin. Based on the inclusion of the LIBOR successor rate index in the Renewed Senior Credit Facility, the Company does not expect a material impact from the adoption of this standard on the financial statements of the Company.   In June 2016, the FASB issued ASU No. 2016 - 13, Financial Instruments-Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments. The 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. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. A recently adopted amendment has delayed the effective date until fiscal years beginning after December 15, 2022.  The Company is currently evaluating this standard and the impact to the financial statements of the Company.    The Company evaluated other recent accounting pronouncements and does not expect them to have a material impact on its consolidated financial statements or related disclosures.     Note 14 - Treasury stock   On  October 4, 2021,  the Company's Board of Directors approved a stock repurchase program, which authorizes the Company to use up to $ 3.0  million for the purchase of its outstanding shares of common stock. Stock repurchases are permitted to be executed through open market or privately negotiated transactions over the course of  12  months, depending upon current market conditions and other factors. As of July 31, 2022, the Company has used $ 2.0 million of the $3.0 million authorized to repurchase its outstanding shares of common stock.   The following table sets forth information with respect to repurchases by the Company of its shares of common stock during the three months ended July 31, 2022:   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, 2022 - May 31, 2022     -       -       -       1,008,444   June 1, 2022 - June 30, 2022     -       -       -       1,008,444   July 1, 2022 - July 31, 2022     4,887       8.85       4,887       964,496   Total     4,887               4,887             On  July 26, 2022, the Company retired all treasury stock previously repurchased under this 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 an increase to accumulated deficit in accordance with ASC 505 - 30, Equity -Treasury Stock.   18 Table of Contents