What changed in this filing

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Item 1. Financial Statements

2025-09-15 compared with 2025-06-13 · 244 added, 146 removed, 526 unchanged (43% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

$ 47,902 $ 37,513 $ 94,648 $ 71,834

4 unchanged sentences

General and administrative expenses

10,033 5,979 17,781 12,128

Selling expenses

1,203 1,353 2,289 2,588

Total operating expenses

11,236 7,332 20,070 14,716

Income from operations

3,187 6,142 11,077 9,275

Interest expense

415 514 821 1,021

Other expense

Income before income taxes

2,751 5,590 10,186 8,149

Income tax expense

1,489 1,306 3,070 2,076

1,262 4,284 7,116 6,073

Net income attributable to non-controlling interest

411 995 1,313 1,341

Net income attributable to common stock

1 unchanged sentence

Weighted average common shares outstanding

8,007 7,954 7,995 7,930

8,133 8,125 8,108 7,987

Earnings per share attributable to common stock

5 unchanged sentences

(In thousands)

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

$ 1,262 $ 4,284 $ 7,116 $ 6,073

5 unchanged sentences

Comprehensive income attributable to non-controlling interests

411 995 1,313 1,341

Total comprehensive income attributable to common stock

$ 740 $ 3,097 $ 6,614 $ 3,125

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(In thousands, except per share data)

April 30, 2025

July 31, 2025

January 31, 2025

3 unchanged sentences

Restricted cash

Trade accounts receivable, less allowance for credit losses of $ 914 at April 30, 2025 and $ 703 at January 31, 2025

Trade accounts receivable, less allowance for credit losses of $ 1,064 at July 31, 2025 and $ 703 at January 31, 2025

47,206 43,148

47 unchanged sentences

Common stock, $ .01 par value, authorized 50,000 shares;

7,983 issued and outstanding at April 30, 2025 and January 31, 2025

8,044 issued and outstanding at July 31, 2025 and 7,983 at January 31, 2025

Additional paid-in capital

29 unchanged sentences

$ 80 $ 60,006 $ 25,056 $ - $ ( 7,275 ) $ 77,867

Net income attributable to common stock

- - 851 - - 851

Common stock issued under stock plans, net of shares used for tax withholding

- ( 295 ) - - - ( 295 )

Stock-based compensation expense

- 1,468 - - - 1,468

Amount attributable to non-controlling interest

- 424 - - - 424

Foreign currency translation adjustment

- - - - ( 111 ) ( 111 )

Total stockholders' equity at July 31, 2025

$ 80 $ 61,603 $ 25,907 $ - $ ( 7,386 ) $ 80,204

Additional Paid-in Capital

15 unchanged sentences

$ 80 $ 59,870 $ 13,531 $ ( 968 ) $ ( 6,966 ) $ 65,547

Net income attributable to common stock

- - 3,289 - - 3,289

Common stock issued under stock plans, net of shares used for tax withholding

1 ( 210 ) - - - ( 209 )

Stock-based compensation expense

- 177 - - - 177

Amount attributable to non-controlling interest

- ( 29 ) - - - ( 29 )

Foreign currency translation adjustment

- - - - ( 192 ) ( 192 )

Total stockholders' equity at July 31, 2024

$ 81 $ 59,808 $ 16,820 $ ( 968 ) $ ( 7,158 ) $ 68,583

Balances at beginning of year

3 unchanged sentences

Shares issued, net of shares used for tax withholding

61,115 77,802

Balances at period end

4 unchanged sentences

(In thousands)

Three Months Ended April 30,

Six Months Ended July 31,

Operating activities

$ 7,116 $ 6,073

Adjustments to reconcile net income to net cash provided by (used in) operating activities

Adjustments to reconcile net income to net cash (used in) provided by operating activities

Depreciation and amortization

Deferred tax expense (benefit)

Deferred tax expense

Stock-based compensation expense

Provision on uncollectible accounts

Loss (gain) from disposal of fixed assets

Changes in operating assets and liabilities

1 unchanged sentence

( 4,024 ) 6,454

1,870 ( 359 )

Costs and estimated earnings in excess of billings on uncompleted contracts

( 796 ) 1,191

Accounts payable

1 unchanged sentence

Accrued compensation and payroll taxes

( 47 ) ( 48 )

Customers' deposits

6 unchanged sentences

1,295 ( 3,409 )

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

( 1,308 ) 2,744

Investing activities

14 unchanged sentences

Payments on finance lease obligations

( 17 ) ( 16 )

Stock options exercised and taxes paid related to restricted shares vested

( 295 ) ( 201 )

Net cash provided by financing activities

6 unchanged sentences

Cash interest paid

$ 801 $ 1,000

Cash income taxes paid

$ 1,769 $ 2,436

Fixed assets acquired - non-cash

12 unchanged sentences

Years and balances described as 2025 and 2024 are for the fiscal year ending January 31, 2026 and for the fiscal year ended January 31, 2025 , respectively.

Revision of Previously Issued Financial Statements

During 2024, the Company had identified and corrected an error relating to a subsidiary in the Middle East that incorrectly recorded a duplicate invoice related to the purchase of property, plant, and equipment ("PP&E"), which caused an overstatement of PP&E and trade accounts payable, and resulted in an overstatement of net cash provided by operating activities and net cash used in investing activities of approximately $ 1.4 million in the consolidated statement of cash flows during the three months ended April 30, 2024.

The Company determined that the error was not material to the unaudited consolidated financial statements in its Quarterly Report on Form 10 -Q for the three months ended April 30, 2024.

However, in order to correctly present the unaudited consolidated financial statements, the Company revised the unaudited consolidated financial statements as of and for the three months ended April 30, 2024.

The following tables summarize the impact of this correction as of and for the three months ended April 30, 2024:

April 30, 2024

Consolidated Balance Sheet

Property, plant and equipment, net of accumulated depreciation

$ 38,211 $ ( 1,423 ) $ 36,788

$ 157,163 $ ( 1,423 ) $ 155,740

Trade accounts payable

$ 24,672 ( 1,423 ) $ 23,249

Total current liabilities

$ 59,410 $ ( 1,423 ) $ 57,987

April 30, 2024

Consolidated Statement of Cash Flows

Operating activities

Accounts payable

( 268 ) ( 1,423 ) ( 1,691 )

Net cash provided by operating activities

$ 1,350 $ ( 1,423 ) $ ( 73 )

Investing activities

Capital expenditures

$ ( 2,012 ) $ 1,423 $ ( 589 )

Net cash used in investing activities

$ ( 2,012 ) $ 1,423 $ ( 589 )

Note 2 - Business segment reporting

6 unchanged sentences

The following table summarizes the Company's revenues, net income attributable to common stock, and significant expenses:

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

$ 47,902 $ 37,513 $ 94,648 $ 71,834

1 unchanged sentence

6,904 5,312 13,193 10,550

18,947 12,719 36,363 25,902

Depreciation and amortization

860 738 1,710 1,472

Other costs of sales

6,768 5,270 12,235 9,919

Total cost of sales

2 unchanged sentences

Salaries and wages

6,928 4,284 11,145 7,658

Depreciation and amortization

95 142 184 245

Other general and administrative expense

3,010 1,553 6,452 4,225

General and administrative expenses

10,033 5,979 17,781 12,128

Selling expense

1,203 1,353 2,289 2,588

Total operating expenses

11,236 7,332 20,070 14,716

Income from operations

3,187 6,142 11,077 9,275

Interest expense

415 514 821 1,021

Other expense

Income before income tax

2,751 5,590 10,186 8,149

Income tax expense

1,489 1,306 3,070 2,076

1,262 4,284 7,116 6,073

Net income attributable to non-controlling interest

411 995 1,313 1,341

Net income attributable to common stock

14 unchanged sentences

The write off is recorded against the allowance for credit losses.

For the three months ended April 30, 2025 and 2024 , no individual customer accounted for more than 10% of the Company's consolidated net sales.

As of April 30, 2025 and January 31, 2025 , no individual customer accounted for more than 10% of the Company's accounts receivable .

For the three and six months ended July 31, 2025 and 2024 , no individual customer accounted for more than 10% of the Company's consolidated net sales.

As of July 31, 2025 and January 31, 2025 , no individual customer accounted for more than 10% of the Company's accounts receivable .

Note 4 - Revenue recognition

3 unchanged sentences

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

Systems and Coating - which include all bundled products in which the Company engineers, and manufactures pre-insulated specialty piping systems mainly relating to the district heating and cooling and oil & gas markets.

Specialty Piping Systems and Coating - which include all bundled products in which the Company engineers, and manufactures pre-insulated specialty piping systems mainly relating to the district heating and cooling and oil & gas markets.

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.

3 unchanged sentences

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 months ended April 30, 2025 are as follows:

Three Months Ended April 30,

A breakdown of the Company's revenues by revenue class for the three and six months ended July 31, 2025 and 2024 are as follows:

Three Months Ended July 31,

Six Months Ended July 31,

$ 3,451 7 % $ 2,795 7 % $ 7,091 8 % $ 6,048 8 %

18 unchanged sentences

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

April 30, 2025

July 31, 2025

January 31, 2025

17 unchanged sentences

$ 1,928 $ 1,685

The Company anticipates that substantially all costs incurred on uncompleted contracts as of April 30, 2025 will be billed and collected within one year .

The Company anticipates that substantially all costs incurred on uncompleted contracts as of July 31, 2025 will be billed and collected within one year .

Unbilled accounts receivable

The Company has recorded $ 23.3 million and $ 18.9 million of unbilled accounts receivable on the consolidated balance sheet s as of April 30, 2025 and January 31, 2025 , respectively, from revenues generated by certain of its subsidiaries.

The Company has recorded $ 27.7 million and $ 18.9 million of unbilled accounts receivable on the consolidated balance sheet s as of July 31, 2025 and January 31, 2025 , respectively, 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 billings will be made once the customer takes possession of or arranges shipping for the products.

The Company anticipates that substantially all of the amounts included in unbilled accounts receivable as of April 30, 2025 will be billed within one year.

The Company anticipates that substantially all of the amounts included in unbilled accounts receivable as of July 31, 2025 will be billed within one year.

Note 5 - Inventories

1 unchanged sentence

Cost is determined using the first -in, first -out method for all inventories.

April 30, 2025

July 31, 2025

January 31, 2025

14 unchanged sentences

therefore, actual results could differ materially from projections.

The Company's worldwide effective tax rates ("ETR") for the three months ended April 30, 2025 and 2024 were 21 % and 30 % , respectively.

The change in the ETR is due to changes to the mix of income and loss in various jurisdictions.

The Company's worldwide effective tax rates ("ETR") for the three months ended July 31, 2025 and 2024 were 54 % and 23 % , respectively.

The Company's ETR was 30 % and 25 % for the six months ended July 31, 2025 and 2024 , respectively.

The change in the ETR is due to the mix of income and loss in various jurisdictions, primarily an increase in income in UAE, and a tax deduction limitation that was attributable to an acceleration of certain executive compensation.

The Company expects that future distributions from foreign subsidiaries will not be subject to incremental U.S.

3 unchanged sentences

The earnings from these subsidiaries are subject to tax in their local jurisdiction and withholding taxes in these jurisdictions are considered.

As such, the Company has accrued a liability of $ 1.0 million as of April 30, 2025 related to these taxes.

As such, the Company has accrued a liability of $ 1.0 million as of July 31, 2025 related to these taxes.

On July 4, 2025, new tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.

In addition, the OBBBA makes changes to certain U.S.

corporate tax provisions, but many are generally not effective until 2026.

Due to the timing of enactment within our current period end, the Company has undergone efforts to reasonably estimate the impact of the Act on our condensed consolidated financial statements and there were no material impacts to the financial statements.

We will continue to evaluate the full impact of these legislative changes as more guidance becomes available.

Note 7 - Goodwill

All identifiable goodwill as of April 30, 2025 and January 31, 2025 , is attributable to the purchase of the remaining 50 % interest in Perma-Pipe Canada, Ltd., which occurred in 2016.

All identifiable goodwill as of July 31, 2025 and January 31, 2025 , is attributable to the purchase of the remaining 50 % interest in Perma-Pipe Canada, Ltd., which occurred in 2016.

The Company performs an impairment assessment of goodwill annually as of January 31, or more frequently if triggering events occur that could indicate that more likely than not that the fair value of the reporting unit did not exceed its carrying value, resulting in an impairment.

2 unchanged sentences

Foreign exchange change effect

April 30, 2025

July 31, 2025

$ 2,057 $ 97 $ 2,154

There were no triggering events identified during the three months ended April 30, 2025 .

There were no triggering events identified during the three and six months ended July 31, 2025 .

Note 8 - 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, including the Company's 2021 Omnibus Stock Incentive Plan, which expired in May 2024.

At April 30, 2025 , the Company had reserved a total of 197,026 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards.

At July 31, 2025 , the Company had reserved a total of 197,026 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards.

The Company's 2024 Omnibus Stock Incentive Plan, dated May 28, 2024, was approved by the Company's stockholders in July 2024 ( "2024 Plan").

4 unchanged sentences

Stock-based compensation expense

The Company has granted stock-based compensation awards to eligible employees, officers or independent directors.

The Company has granted stock-based compensation awards to eligible employees, officers and independent directors.

The Company recognized the following stock-based compensation expense for the periods presented:

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

Restricted stock-based compensation expense

$ 1,468 $ 177 $ 1,692 $ 396

Stock options

The Company did not grant any stock options during the three months ended April 30, 2025 .

The Company did not grant any stock options during the three or six months ended July 31, 2025 .

The following table summarizes the Company's stock option activity:

5 unchanged sentences

Expired or forfeited

Outstanding and exercisable at April 30, 2025

Outstanding and exercisable at July 31, 2025

1 $ 7.33 0.8 $ 2

There was no vesting, expiration or forfeiture of previously unvested stock options during the three months ended April 30, 2025 .

There was no vesting, expiration or forfeiture of previously unvested stock options during the six months ended July 31, 2025 .

In addition , there were no remaining unvested stock options outstanding, and therefore no unrecognized compensation expense related to unvested stock options.

Restricted stock

The following table summarizes the Company's restricted stock activity for the three months ended April 30, 2025 :

The following table summarizes the Company's restricted stock activity for the six months ended July 31, 2025 :

Restricted Shares

4 unchanged sentences

Vested and issued

( 111 ) 10.99

Forfeited or retired for taxes

Outstanding at April 30, 2025

Outstanding at July 31, 2025

187 $ 17.48 $ 2,228

As of April 30, 2025 , there was $ 0.8 million of unrecognized compensation expense related to unvested restricted stock granted under the plans.

As of July 31, 2025 , there was $ 2.1 million of unrecognized compensation expense related to unvested restricted stock granted under the plans.

These costs are expected to be recognized over a weighted average period of 2.3 years .

Note 9 - Earnings per share

Three Months Ended April 30,

Basic weighted average common shares outstanding at April 30, 2025

Three Months Ended July 31,

Six Months Ended July 31,

Basic weighted average common shares outstanding at July 31, 2025

8,007 7,954 7,995 7,930

Dilutive effect of equity compensation plans

126 171 113 57

Weighted average common shares outstanding assuming full dilution

8,133 8,125 8,108 7,987

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

Stock options and restricted stock with exercise prices or grant date prices below the average market prices

126 171 113 57

Net income attributable to common stock

4 unchanged sentences

Note 10 - Debt

Debt totaled $ 27.9 million and $ 24.5 million at April 30, 2025 and January 31, 2025 , respectively.

Debt totaled $ 31.3 million and $ 24.5 million at July 31, 2025 and January 31, 2025 , respectively.

Revolving lines - North America .

3 unchanged sentences

The Renewed Senior Credit Facility matures on September 20, 2026.

As of April 30, 2025 , the Company had borrowed an aggregate of $ 8.5 million at a rate of 9.0 % and had $ 5.0 million available under the Renewed Senior Credit Facility.

As of July 31, 2025 , the Company had borrowed an aggregate of $ 9.7 million at a rate of 9.0 % and had $ 3.0 million available under the Renewed Senior Credit Facility.

As of January 31, 2025 , the Company had borrowed an aggregate of $ 6.8 million and had $ 3.7 million available under the Renewed Senior Credit Facility.

The Company was in compliance with respect to the covenants under the Credit Agreement as of April 30, 2025 .

The Company was in compliance with respect to the covenants under the Credit Agreement as of July 31, 2025 .

Finance obligation - buildings and land.

5 unchanged sentences

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.

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 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 $ 0.2 million is recognized in current maturities of long-term debt and the long-term portion of $ 8.7 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of April 30, 2025 .

The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.

6 unchanged sentences

Dirhams (approximately $

April 30, 2025

July 31, 2025

) from a bank in the U.A.E.

April 30, 2025

July 31, 2025

, the facility has an interest rate of approximately

and expires in July 2025.

The Company had borrowed an aggregate of $ 0.5 million

as of April 30, 2025

and January 31, 2025

, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

April 30, 2025 and January 31, 2025

and expires in November 2025, of which, the Company has started the process to renew and extend this credit arrangement.

The Company had no borrowings outstanding under the credit facility

as of July 31, 2025

, and $ 0.4 million

as of January 31, 2025

, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

July 31, 2025 and January 31, 2025

, the Company had unused borrowing availability of approximately $ 2.2 million and $ 1.6 million, respectively.

2 unchanged sentences

Dirhams (approximately $

April 30, 2025

July 31, 2025

) from a bank in the U.A.E.

April 30, 2025

July 31, 2025

, the facility has an interest rate of approximately

and expires in August 2025.

Company had no outstanding balance

as of April 30, 2025

and expires in November 2025, of which, the Company has started the process to renew and extend this credit arrangement.

Company had borrowed an aggregate of $ 2.4 million

as of July 31, 2025

and $ 0.1 million

2 unchanged sentences

The Company had unused borrowing availability of approximately $ 0.3 million and $ 2.5 million as of

April 30, 2025 and January 31, 2025

July 31, 2025 and January 31, 2025

, respectively.

The Company has a revolving line for

47.7 million U.A.E.

Dirhams (approximately

$ 13.0 million at

July 31, 2025 ) from a bank in the U.A.E.

July 31, 2025 , the facility has a minimum

8 % interest rate and expires in

December 2025.

The Company had unused borrowing availability

$ 5.3 million and

$ 6.5 million as of

July 31, 2025 and

January 31, 2025 , respectively.

The Company has a guarantee for

48.6 million U.A.E.

Dirhams (approximately

$ 13.2 million at

July 31, 2025 ) from a bank in the U.A.E.

no interest rate on this facility, however, it earns a

1 % commission.

July 31, 2025 , approximately

$ 11.0 million has been utilized in the form of a bank guarantee, with

$ 2.2 million of availability remaining.

Additionally, in

August 2025, a line of credit was added to the agreement for

51.4 million U.A.E Dirhams (approximately

$ 14.0 million at

July 31, 2025 ) which will incur an additional

.8% commission.

In June 2021, and as renewed or amended subsequently thereafter, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of

million Egyptian Pounds (approximately $

April 30, 2025

July 31, 2025

This credit arrangement is in the form of project financing, for which 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.

April 30, 2025

July 31, 2025

, the facility has an interest rate of approximately

and expires in November 2025.

As of April 30, 2025 and January 31, 2025 , the Company had an immaterial amount outstanding, which is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

As of July 31, 2025 and January 31, 2025 , the Company had an immaterial amount outstanding, which is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

Further, as of

April 30, 2025

July 31, 2025

January 31, 2025

3 unchanged sentences

million Egyptian Pounds (approximately $ 0.1 million at

April 30, 2025

July 31, 2025

This credit arrangement is in the form of project financing at rates competitive in Egypt.

4 unchanged sentences

The Company had no outstanding balance

April 30, 2025 and January 31, 2025

, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

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 Riyals (approximately $ 9.9 million at April 30, 2025 ).

July 31, 2025 and January 31, 2025

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, and expired in May 2025.

The Company is in the process of renewing this credit arrangement with substantially the same terms and conditions and is in regular communication with the bank throughout this process ensuring the facility continues without interruption or penalty.

As of April 30, 2025 , the facility has an interest rate of approximately 8.9 % .

The Company had borrowed an aggregate of $ 3.1 million and $ 1.5 million as of April 30, 2025 and January 31, 2025 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

The unused borrowing availability attributable to this credit arrangement at April 30, 2025 and January 31, 2025 , was $ 2.3 million and $ 3.0 million, respectively.

The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary, and expires in April 2026.

As of July 31, 2025 , the facility has an interest rate of approximately 9.0 % .

The Company had borrowed an aggregate of $ 3.3 million and $ 1.5 million as of July 31, 2025 and January 31, 2025 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

The unused borrowing availability attributable to this credit arrangement at July 31, 2025 and January 31, 2025 , was $ 2.9 million and $ 3.0 million, respectively.

These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates.

3 unchanged sentences

The Company guarantees only a portion of the subsidiaries' debt, including foreign debt.

As of April 30, 2025 and January 31, 2025 , the amount of foreign subsidiary debt guaranteed by the Company was approxim ately $ 10.0 million.

The Company was in compliance with respect to the covenants under the credit arrangements in the U.A.E., Egypt, and Saudi Arabia as of April 30, 2025 , with the exception of an arrangement that has expired and has not yet been renewed.

Although a certain arrangement has expired and the borrowings could be required to be repaid immediately by the bank, the Company is in regular communication with the bank throughout the renewal process and the arrangement has continued without interruption or penalty.

On April 30, 2025 , 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.

As of July 31, 2025 and January 31, 2025 , the amount of foreign subsidiary debt guaranteed by the Company was approxim ately $ 8.6 million and $ 4.8 million, respectively.

The Company was in compliance with respect to the covenants under the credit arrangements in the U.A.E., Egypt, and Saudi Arabia as of July 31, 2025 .

Although certain arrangements are set to expire and the borrowings could be required to be repaid immediately by the bank, the Company is in regular communication with the bank throughout the renewal process and the arrangements have continued without interruption or penalty.

On July 31, 2025 , 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;

1 unchanged sentence

and (iii) the Saudi Inter-Bank Offered Rate plus 3.5 % for the Saudi Arabia credit arrangement.

Based on these base rates, as of April 30, 2025 , the Company's interest rates ranged from 7.5 % to 20.8 %, with a weighted average rate of 8.4 %, and the Company had facility limits totaling $ 31.8 million under these credit arrangements.

As of April 30, 2025 , $ 16.6 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 April 30, 2025 , the Company had borrow ed $ 6.3 million and had an additional $ 14.5 million of borrowing remaining available under the foreign revolving credit arrangements.

The foreign revolving lines balances were included as a component of current maturities of long-term debt in the Company's consolidated balance sheets as of April 30, 2025 and January 31, 2025 .

Based on these base rates, as of July 31, 2025 , the Company's interest rates ranged from 7.6 % to 20.8 %, with a weighted average rate of 8.4 %, and the Company had facility limits totaling $ 45.0 million under these credit arrangements.

As of July 31, 2025 , $ 24.4 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, 2025 , the Company had borrow ed $ 5.8 million and had an additional $ 14.9 million of borrowing availability remaining under the foreign revolving credit arrangements.

The foreign revolving lines balances were included as a component of current maturities of long-term debt in the Company's consolidated balance sheets as of July 31, 2025 and January 31, 2025 .

In June 2023, the Company assumed a promissory note of approximately $ 2.8 million in connection with the formation of the joint venture with Gulf Insulation Group (see Note 15 ).

2 unchanged sentences

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 April 30, 2025 , the remaining balance on the mortgage in Canada is approximately CAD 5.7 million (approximately $ 4.1 million at April 30, 2025 ).

The interest rate is variable, and was 6.8 % at April 30, 2025 .

The principal balance is included as a component of long-term debt, less current maturities in the Company's consolidated balance sheets and is presented net of issuance costs of $ 0.1 million as of April 30, 2025 and January 31, 2025 .

As of July 31, 2025 , the remaining balance on the mortgage in Canada is approximately CAD 5.6 million (approximately $ 4 million at July 31, 2025 ).

The interest rate is variable, and was 6.8 % at July 31, 2025 .

Note 11 - Leases

The Company accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheets, with the exception of leases with an initial term of 12 months or less in accordance with an accounting policy election, for which rent expense is recognized on a straight-line basis over the lease term.

Operating Leases.

In August 2020, the Company entered into a new lease in Abu Dhabi for land upon which the Company built a facility.

The initial annual payments were approximately 1.2 million U.A.E.

Dirhams (approximatel y $ 0.3 million at April 30, 2025 ), inclusive of rent, escalation clauses, and other common charges contained in the agreement.

The lease expires in August 2050.

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities short-term, and operating lease liabilities long-term in the Company's consolidated balance sheets.

In January 2025, the Company entered into a lease in Qatar for land upon which the Company intends to build a facility.

The agreement provides for annual lease payments of 0.3 million Qatari Riyals (approximately $ 0.1 million at July 31, 2025), which is inclusive of certain escalation clauses and other variable consideration contained in the agreement.

The agreement has an initial lease term of twenty years, which includes the option to terminate the lease agreement after ten years, and the ability to renew the lease at the end of the initial lease term.

In July 2025, the Company entered into an additional lease agreement in Qatar for land and a building.

The agreement has an initial lease term of three years with annual lease payments of 1.9 million Qatar Riyals (approximately $ 0.5 million at July 31, 2025), which includes an escalation clause of approximately 10 % for each year thereafter.

The agreement may be terminated at any time;

however, the Company will be obligated to pay any unpaid balance through the remainder of the lease term.

Finance Leases.

At April 30, 2025 , the Company had finance lease liabilities of $ 0.1 million included in current maturities of long-term debt and long-term debt less current maturities , and financial ROU assets of $ 0.2 million which were included in property plant and equipment , net of accumulated depreciation in the consolidated balance sheets.

Finance leases are included in property, plant and equipment, current maturities of long-term debt, and long-term debt less current maturities in the Company's consolidated balance sheets.

The Company has several lease agreements, with lease terms of one to fifteen 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 ROU assets as the Company is not reasonably certain to exercise these options.

Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

The Company does not have any arrangements where it acts as a lessor, other than one sub-lease arrangement, which is not material.

Total lease costs consist of the following:

Three Months Ended July 31,

Six Months Ended July 31,

Consolidated Statements of Operations Classification

Finance Lease Costs

Amortization of ROU assets

Cost of sales

$ 25 $ 37 $ 75 $ 75

Interest on lease liabilities

Interest expense

Operating lease costs

Cost of sales, SG&A expenses

701 438 1,303 893

Short-term lease costs (1)

Cost of sales, SG&A expenses

759 93 1,041 236

Total Lease costs

$ 1,486 $ 570 $ 2,421 $ 1,207

( 1 ) Includes variable lease costs, which are not material.

Supplemental balance sheet information related to leases is as follows:

Operating and Finance leases

April 30, 2025

July 31, 2025

January 31, 2025

17 unchanged sentences

$ 12,808 $ 8,784

Total lease costs consist of the following:

Three Months Ended April 30,

Consolidated Statements of Operations Classification

Finance Lease Costs

Amortization of ROU assets

Cost of sales

Interest on lease liabilities

Interest expense

Operating lease costs

Cost of sales, SG&A expenses

Short-term lease costs (1)

Cost of sales, SG&A expenses

Total Lease costs

( 1 ) Includes variable lease costs, which are not material.

Supplemental cash flow information related to leases is as follows:

Three Months Ended April 30,

Cash paid for amounts included in the measurement of lease liabilities:

Financing cash outflows from finance leases

Operating cash outflows from finance leases

Operating cash outflows from operating leases

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

April 30, 2025

July 31, 2025

Weighted-average remaining lease terms (in years):

4 unchanged sentences

Operating leases

Maturities of lease liabilities as of April 30, 2025 , are as follows:

Supplemental cash flow information related to leases is as follows:

Six Months Ended July 31,

Cash paid for amounts included in the measurement of lease liabilities:

Financing cash outflows from finance leases

Operating cash outflows from finance leases

Operating cash outflows from operating leases

ROU assets obtained in exchange for new lease obligations:

Operating leases liabilities

$ 5,242 $ 1,041

Maturities of lease liabilities as of July 31, 2025 , are as follows:

Operating Leases Finance Leases

For the year ended January 31, 2026

For the six months ending January 31, 2026

For the year ended January 31, 2027

7 unchanged sentences

( 13,010 ) ( 4 )

Total lease liabilities at April 30, 2025

Rent expense attributable to operating leases was $ 0.9 million and $ 0.6 million for the three months ended April 30, 2025 and 2024 , respectively.

Total lease liabilities at July 31, 2025

$ 12,808 $ 61

Rent expense attributable to operating leases was $ 1.5 million and $ 0.6 million for the three months ended July 31, 2025 and 2024 , respectively.

Note 12 - Restricted cash

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

April 30, 2025

July 31, 2025

January 31, 2025

26 unchanged sentences

The JV's capital is comprised of ordinary shares with 60 % owned by the Company and the remaining 40 % owned by GIG.

The Company expects this collaborative business arrangement to result in expanding its market presence in Saudi Arabia, Kuwait, and Bahrain.

This collaborative business arrangement results in expanding the Company's market presence in Saudi Arabia, Kuwait, and Bahrain.

The primary business activities of the JV include the manufacture and sale of the pre-insulated piping systems and pipe coating services.

The balance sheets and operating activities of this investment are included in the Company's consolidated financial statements.

As of April 30, 2025 , t he carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $ 39.6 million and $ 20.6 million, respectively, and $ 39.1 million and $ 22.1 million, respectively, as of January 31, 2025 .

As of July 31, 2025 , t he carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $ 39.8 million and $ 19.9 million, respectively, and $ 39.1 million and $ 22.1 million, respectively, as of January 31, 2025 .

The Company adjusts net income in the consolidated statements of operations to exclude the proportionate share of results that is attributable to the non-controlling interest.

3 unchanged sentences

Adjustments made to reflect the change in the value of the redeemable non-controlling interest are offset against permanent equity within the Company's consolidated balance sheets.

Net income attributable to GIG was $ 0.9 million and $ 0.3 million for the three months ended April 30, 2025 and 2024 , respectively.

Net income attributable to GIG was $ 0.4 million and $ 1.0 million for the three months ended July 31, 2025 and 2024 , respectively.

Net income attributable to GIG was $ 1.3 million for the six months ended July 31, 2025 and 2024 .

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.

The non-controlling interest as measured at fair value was $ 12.2 million and $ 11.0 million at April 30, 2025 and January 31, 2025 , respectively.

The non-controlling interest as measured at fair value was $ 12.2 million and $ 11.0 million at July 31, 2025 and January 31, 2025 , respectively.

The change in non-controlling interest consists of $ 1.3 million in current year net income attributable to non-controlling interest, and approximately $( 0.1 ) million as an adjustment to the carrying value of the redeemable non-controlling interest pertaining to the business arrangement.

In addition, there were no dividends or any other form of distributions from non-controlling interest for the periods ended April 30, 2025 and January 31, 2025 .

In addition, there were no dividends or any other form of distributions from non-controlling interest for the periods ended July 31, 2025 and January 31, 2025 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements