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Item 1. Financial Statements

2025-12-12 compared with 2025-09-15 · 184 added, 190 removed, 580 unchanged (39% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended July 31,

Six Months Ended July 31,

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

Three Months Ended October 31,

Nine Months Ended October 31,

Cost of sales

33,479 24,039 63,501 47,843

14,423 13,474 31,147 23,991

Operating expenses

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

$ 851 $ 3,289 $ 5,803 $ 4,732

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

$ 0.11 $ 0.41 $ 0.73 $ 0.60

$ 0.10 $ 0.40 $ 0.72 $ 0.59

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended July 31,

Six Months Ended July 31,

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

Three Months Ended October 31,

Nine Months Ended October 31,

Other comprehensive income

Foreign currency translation adjustments, net of tax

( 111 ) ( 192 ) 811 ( 1,607 )

Comprehensive income

$ 1,151 $ 4,092 $ 7,927 $ 4,466

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)

July 31, 2025

October 31, 2025

January 31, 2025

3 unchanged sentences

Restricted cash

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

Trade accounts receivable, less allowance for credit losses of $ 1,065 at October 31, 2025 and $ 703 at January 31, 2025

56,633 43,148

22 unchanged sentences

Commissions and management incentives payable

Revolving line - North America

Current maturities of long-term debt

4 unchanged sentences

Income taxes payable

Loan payable to GIG

Total current liabilities

2 unchanged sentences

Long-term debt, less current maturities

Long-term finance obligations

12,661 15,220

Deferred compensation liabilities

1 unchanged sentence

Operating lease liability long-term

Loan payable to GIG

Other long-term liabilities

6 unchanged sentences

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

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

8,094 issued and outstanding at October 31, 2025 and 7,983 at January 31, 2025

Additional paid-in capital

41 unchanged sentences

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

Net income attributable to common stock

- - 6,315 - - 6,315

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

1 ( 214 ) - - - ( 213 )

Stock-based compensation expense

- 320 - - - 320

Amount attributable to non-controlling interest

- ( 411 ) - - - ( 411 )

Foreign currency translation adjustment

- - - - ( 462 ) ( 462 )

Total stockholders' equity at October 31, 2025

$ 81 $ 61,298 $ 32,222 $ - $ ( 7,848 ) $ 85,753

Additional Paid-in Capital

4 unchanged sentences

Total stockholders' equity at January 31, 2024

$ 80 $ 60,063 $ 12,088 $ ( 968 ) $ ( 5,551 ) $ 65,712

Net income attributable to common stock

- - 1,443 - - 1,443

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

Stock-based compensation expense

- 228 - - - 228

Amount attributable to non-controlling interest

- ( 421 ) - - - ( 421 )

Foreign currency translation adjustment

- - - - ( 1,415 ) ( 1,415 )

Total stockholders' equity at April 30, 2024

$ 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

Net income attributable to common stock

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

Retirement of treasury stock

Stock-based compensation expense

Amount attributable to non-controlling interest

Foreign currency translation adjustment

Total stockholders' equity at October 31, 2024

Balances at beginning of year

7,982,568 8,016,781

Treasury stock retired

- ( 112,015 )

Shares issued, net of shares used for tax withholding

61,115 77,802

Balances at period end

8,043,683 7,982,568

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended July 31,

Nine Months Ended October 31,

Operating activities

$ 15,031 $ 9,526

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

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

2 unchanged sentences

Provision on uncollectible accounts

Loss from disposal of fixed assets

Changes in operating assets and liabilities

1 unchanged sentence

( 13,574 ) 6,047

( 2,822 ) ( 970 )

Costs and estimated earnings in excess of billings on uncompleted contracts

( 649 ) 1,452

Accounts payable

1 unchanged sentence

Accrued compensation and payroll taxes

( 47 ) ( 48 )

Customers' deposits

10,353 ( 894 )

Income taxes payable

( 4 ) ( 904 )

Prepaid expenses and other current assets

4 unchanged sentences

6,231 ( 2,161 )

Net cash (used in) provided by operating activities

( 1,308 ) 2,744

Net cash provided by operating activities

Investing activities

19 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash

( 144 ) ( 205 )

Net increase in cash, cash equivalents and restricted cash

6 unchanged sentences

Cash income taxes paid

$ 1,769 $ 2,436

Fixed assets acquired under finance leases - non-cash

Fixed assets acquired - non-cash

4 unchanged sentences

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 fairly state the financial position and results of operations for the periods presented.

The interim consolidated financial statements of Perma-Pipe International Holdings, Inc., and subsidiaries (collectively, "PPIH", "Company", "we", "our", or the "Registrant") are unaudited, but include all adjustments that the Company's management considers necessary to fairly state the financial position and results of operations for the periods presented.

These adjustments consist of normal recurring adjustments.

13 unchanged sentences

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

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

$ 61,148 $ 41,563 $ 155,796 $ 113,397

49 unchanged sentences

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

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 .

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

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

Note 4 - Revenue recognition

9 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 and six months ended July 31, 2025 and 2024 are as follows:

Three Months Ended July 31,

Six Months Ended July 31,

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

Three Months Ended October 31,

Nine Months Ended October 31,

$ 4,423 7 % $ 3,622 8 % $ 11,515 7 % $ 9,670 8 %

18 unchanged sentences

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

July 31, 2025

October 31, 2025

January 31, 2025

17 unchanged sentences

$ 2,335 $ 1,685

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

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

Unbilled accounts receivable

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 recorded $ 28.5 million and $ 18.9 million of unbilled accounts receivable on the consolidated balance sheet s as of October 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 July 31, 2025 will be billed within one year.

The Company anticipates that substantially all of the amounts included in unbilled accounts receivable as of October 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.

July 31, 2025

October 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 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's worldwide effective tax rates ("ETR") for the three months ended October 31, 2025 and 2024 were 27 % and 32 % , respectively.

The Company's ETR was 29 % and 28 % for the nine months ended October 31, 2025 and 2024 , respectively.

The lower ETR for the three months ended October 31, 2025 is due to 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.

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 July 31, 2025 related to these taxes.

As such, the Company has accrued a liability of $ 1.1 million as of October 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.

1 unchanged sentence

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.

The Company has undergone efforts in the third quarter to reasonably estimate the impact of the provisions effective during 2025 on our consolidated financial statements and there were no material impacts.

We are currently evaluating the potential impact of the OBBBA provisions effective after 2025 on our consolidated financial statements.

Note 7 - Goodwill

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.

All identifiable goodwill as of October 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 it is more likely than not that the fair value of the reporting unit did not exceed its carrying value, resulting in an impairment.

The following table provides a reconciliation of changes in the carrying amount of goodwill:

1 unchanged sentence

Foreign exchange change effect

July 31, 2025

October 31, 2025

$ 2,057 $ 71 $ 2,128

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

There were no triggering events identified during the three and nine months ended October 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 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.

At October 31, 2025 , the Company had reserved a total o f 197,151 shar es 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").

6 unchanged sentences

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

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

Restricted stock-based compensation expense

$ 320 $ 232 $ 2,012 $ 629

Stock options

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:

Weighted Average Exercise Price (Per share)

Weighted Average Remaining Contractual Term (In years)

Aggregate Intrinsic Value

Outstanding at January 31, 2025

1 $ 6.85 0.8 $ 4

Expired or forfeited

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 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 six months ended July 31, 2025 :

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

Restricted Shares

6 unchanged sentences

Forfeited or retired for taxes

Outstanding at July 31, 2025

Outstanding at October 31, 2025

187 $ 17.48 $ 3,245

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

As of October 31, 2025 , there was $ 1.8 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 2.2 years .

Note 9 - Earnings per share

Three Months Ended July 31,

Six Months Ended July 31,

Basic weighted average common shares outstanding at July 31, 2025

Three Months Ended October 31,

Nine Months Ended October 31,

Basic weighted average common shares outstanding at October 31, 2025

8,094 7,981 8,028 7,947

Dilutive effect of equity compensation plans

126 171 113 57

Weighted average common shares outstanding assuming full dilution

2 unchanged sentences

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

Debt consisted of the following:

October 31, 2025

January 31, 2025

Revolving credit agreement - North America, due September 2026

$ 10,289 $ 6,765

Revolving credit agreements - United Arab Emirates, due November 2025

Revolving credit agreement - Saudi Arabia, due April 2026

Revolving credit agreement - Egypt, due November 2025

Finance obligation - buildings and land, due April 2036

Mortgage payable, due December 2042

Loan payable to GIG

Finance leases

debt issuance costs

( 115 ) ( 116 )

29,744 24,466

current maturities of long-term debt

Long-term debt, net of current maturities

$ 12,661 $ 15,220

Revolving lines - North America .

3 unchanged sentences

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

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 October 31, 2025 , the Company had borrowed an aggregate of $ 10.3 million at a rate of 8.5 % and had $ 3.3 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 July 31, 2025 .

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

Finance obligation - buildings and land.

7 unchanged sentences

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 July 31, 2025

The current portion of the finance obligation of $ 0.3 million is recognized in current maturities of long-term debt and the long-term portion of $ 8.6 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of October 31, 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

July 31, 2025

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

July 31, 2025

, the facility has an interest rate of approximately

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.

$ 2.2 million at

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

October 31, 2025 , the facility has an interest rate of approximately

7.6% and expired in

November 2025, of which, the Company does

not intend to renew and extend this credit arrangement.

The Company had

no borrowings outstanding under this credit facility as of

October 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.

October 31, 2025 , this revolving line has been cancelled and there is

no further borrowing availability under this credit facility, and approximately

$ 1.6 million of unused borrowing availability at

January 31, 2025 .

The Company has a revolving line for

1 unchanged sentence

Dirhams (approximately $

July 31, 2025

October 31, 2025

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

July 31, 2025

October 31, 2025

, the facility has an interest rate of approximately

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

and expired in November 2025, of which, 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.

Company had borrowed an aggregate of $ 1.1 million

as of July 31, 2025

as of October 31, 2025

and $ 0.1 million

1 unchanged sentence

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

October 31, 2025

, approximately $ 1.9 million has been utilized in the form of a bank guarantee.

The Company had unused borrowing availability of approximately $ 1.8 million and $ 2.5 million as of

July 31, 2025 and January 31, 2025

October 31, 2025 and January 31, 2025

, respectively.

3 unchanged sentences

$ 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

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

October 31, 2025 , the facility has a minimum

8.0 % interest rate and expires

in December 2025, for which the Company intends to renew and extend this revolving credit facility.

October 31, 2025 and

January 31, 2025

, the Company had no borrowings outstanding with respect to this credit facility.

October 31, 2025

approximately $ 6.8 million has been utilized in the form of a bank guarantee.

The Company had unused borrowing availability of

$ 6.2 million and

$ 6.5 million as of

July 31, 2025 and

October 31, 2025 and

January 31, 2025 , respectively.

3 unchanged sentences

$ 13.2 million at

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

October 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

October 31, 2025 , approximately

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

4 unchanged sentences

$ 14.0 million at

July 31, 2025 ) which will incur an additional

October 31, 2025 ) which will incur an additional

0.8 % commission.

October 31, 2025 , there were

no borrowings outstanding with respect to this additional line of credit, and approximately

$ 14.0 million of unused availability.

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 100.0

million Egyptian Pounds (approximately $ 2.0

July 31, 2025

October 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.

July 31, 2025

October 31, 2025

, the facility has an interest rate of approximately

and expires in November 2025.

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.

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

Further, as of

July 31, 2025

October 31, 2025

January 31, 2025

, the Company had approximately $ 2.0 million of unused borrowing capacity with respect to 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 received collections, the facility has decreased to a current amount of

million Egyptian Pounds (approximately $ 0.1 million at

July 31, 2025

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

and, as of November 2022, is no longer available for borrowings by the Company.

The facility will expire in connection with final customer balance collections and the completion of the project.

The Company had no outstanding balance

July 31, 2025 and January 31, 2025

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 July 31, 2025 ).

, the Company had unused borrowing capacity of approximately $ 1.8 million and $ 2.0 million, respectively.

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 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.

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

The Company had borrowed an aggregate of $ 2.0 million and $ 1.5 million as of October 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 October 31, 2025 and January 31, 2025 , was $ 2.5 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 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.

As of October 31, 2025 and January 31, 2025 , the amount of foreign subsidiary debt guaranteed by the Company was approxim ately $ 6.2 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 October 31, 2025 .

Although certain arrangements have expired or 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 October 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 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 .

Based on these base rates, as of October 31, 2025 , the Company's interest rates ranged from 7.6 % to 20.8 %, with a weighted average rate of 8.0 %, and the Company had facility limits totaling $ 56.9 million under these credit arrangements.

As of October 31, 2025 , $ 25.0 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 October 31, 2025 , the Company had borrow ed $ 6.2 million and had an additional $ 28.5 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 October 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 ).

I n accordance with the promissory note, all principal is due and payable on the maturity date of April 9, 2026, with the option to prepay, in whole or in part, at any time prior to the maturity date, without premium or penalty.

This amount is presented as a component of current liabilities in the Company's consolidated balance sheets.

This amount is presented on the Company's consolidated balance sheets as a component of current maturities of long-term debt at October 31, 2025 , and as a component of long-term debt, net of current maturities at January 31, 2025 .

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, 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 .

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 July 31, 2025 and January 31, 2025 .

As of October 31, 2025 , the remaining balance on the mortgage in Canada is approximately CAD 5.5 million (approximately $ 3.9 million at October 31, 2025 ).

The interest rate is variable, and was 6.6 % at October 31, 2025 .

Note 11 - Leases

4 unchanged sentences

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 provides for annual lease payments of 0.3 million Qatari Riyals (approximately $ 0.1 million at October 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 has an initial lease term of three years with annual lease payments of 1.9 million Qatar Riyals (approximately $ 0.5 million at October 31, 2025 ), which includes an escalation clause of approximately 10 % for each year thereafter.

The agreement may be terminated at any time;

9 unchanged sentences

Total lease costs consist of the following:

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

Consolidated Statements of Operations Classification

10 unchanged sentences

Cost of sales, SG&A expenses

759 93 1,041 236

Total Lease costs

3 unchanged sentences

Operating and Finance leases

July 31, 2025

October 31, 2025

January 31, 2025

1 unchanged sentence

Property and Equipment - gross

$ 1,527 $ 899

Accumulated depreciation and amortization

15 unchanged sentences

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

July 31, 2025

October 31, 2025

Weighted-average remaining lease terms (in years):

5 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Six Months Ended July 31,

Nine Months Ended October 31,

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

5 unchanged sentences

$ 5,715 $ 1,718

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

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

Operating Leases Finance Leases

For the six months ending January 31, 2026

For the year ended January 31, 2027

For the year ended January 31, 2028

For the year ended January 31, 2029

For the year ended January 31, 2030

For the year ended January 31, 2031

Fiscal 2025 (remainder of fiscal year)

Total lease payments

2 unchanged sentences

( 12,821 ) ( 31 )

Total lease liabilities at July 31, 2025

Total lease liabilities at October 31, 2025

$ 13,057 $ 631

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

Rent expense attributable to operating leases was $ 1.2 million and $ 0.6 million for the three months ended October 31, 2025 and 2024 , respectively.

Note 12 - Cash, cash equivalents, and restricted cash

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

July 31, 2025

October 31, 2025

January 31, 2025

22 unchanged sentences

The Company is currently evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No.

2025 - 06, Intangibles - Goodwill and Other Internal-Use Software ( Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software, aimed at modernizing the guidance for internal-use software development.

This guidance removes reference to "development stages" and introduces a "probable-to-complete" recognition threshold to determine when to begin capitalizing software costs.

This guidance will be effective starting with our quarterly report ending April 30, 2028, with prospective, retrospective, or modified transition methods allowed and early adoption permitted.

We are currently evaluating the impact of this ASU, including our timing and method of adoption.

In December 2025, the FASB issued ASU No.

2025 - 11, Interim Reporting (Topic 270 ):

Narrow-Scope Improvements (“ASU 2025 - 11” ).

ASU 2025 - 11 is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This standard update will be effective for the interim reporting periods within annual reporting periods beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements.

We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures.

Note 15 - Noncontrolling interest

3 unchanged sentences

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 primary business activities of the JV include the manufacture and sale of 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 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 .

As of October 31, 2025 , t he carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $ 44.8 million and $ 21.4 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 $ 0.4 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 .

Net income attributable to GIG was $ 1.6 million and $ 1.0 million for the three months ended October 31, 2025 and 2024 , respectively.

Net income attributable to GIG was $ 2.9 and $ 2.3 million for the nine months ended October 31, 2025 and 2024 , respectively.

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 July 31, 2025 and January 31, 2025 , respectively.

The non-controlling interest as measured at fair value was $ 14.2 million and $ 11.0 million at October 31, 2025 and January 31, 2025 , respectively.

The change in non-controlling interest consists of $ 2.9 million in current year net income attributable to non-controlling interest, and approximately $ 0.4 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 July 31, 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 October 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