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Item 1. Financial Statements

2026-06-09 compared with 2025-12-12 · 313 added, 372 removed, 392 unchanged (64% of the section changed)

1 unchanged sentence

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

$ 50,265 $ 46,747

Cost of sales

35,629 30,023

14,636 16,724

Operating expenses

3 unchanged sentences

Income from operations

Interest expense

Other expense

Interest expense, net

Other expense, net

Income before income taxes

2 unchanged sentences

Net income attributable to common stock

$ 1,801 $ 4,952

Weighted average common shares outstanding

Earnings per share attributable to common stock

See accompanying notes to consolidated financial statements.

$ 0.22 $ 0.62

$ 0.22 $ 0.61

See accompanying notes to condensed consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended October 31,

Nine Months Ended October 31,

Other comprehensive income

Three Months Ended April 30,

$ 2,590 $ 5,854

Other comprehensive income (loss)

Foreign currency translation adjustments, net of tax

Comprehensive income

$ 2,254 $ 6,776

Comprehensive income attributable to non-controlling interests

Total comprehensive income attributable to common stock

See accompanying notes to consolidated financial statements.

$ 1,465 $ 5,874

See accompanying notes to condensed consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

October 31, 2025

April 30, 2026

January 31, 2026

3 unchanged sentences

Restricted cash

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

Trade accounts receivable, less allowance for credit losses of $ 1,564 at April 30, 2026 and $ 1,571 at January 31, 2026

51,243 66,023

Prepaid expenses and other current assets

18,427 18,115

Prepaid expenses

Unbilled accounts receivable

1 unchanged sentence

Costs and estimated earnings in excess of billings on uncompleted contracts

Other current assets

Total current assets

4 unchanged sentences

Operating lease right-of-use asset

16,308 13,054

Deferred tax assets

9 unchanged sentences

Commissions and management incentives payable

Current maturities of long-term debt

Short-term borrowings and current maturities of long-term debt

10,394 19,843

Customers' deposits

10,545 11,853

Operating lease liability short-term

6 unchanged sentences

Long-term debt, less current maturities

12,661 15,220

Long-term finance obligations

Deferred compensation liabilities

1 unchanged sentence

Operating lease liability long-term

15,136 12,125

Other long-term liabilities

1 unchanged sentence

49,496 31,396

Commitments and contingencies

Commitments and contingencies (See Part II, Item 1)

Non-controlling interest

2 unchanged sentences

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

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

8,123 issued and outstanding at April 30, 2026 and 8,122 at January 31, 2026

Additional paid-in capital

8 unchanged sentences

$ 221,603 $ 217,486

See accompanying notes to consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

1 unchanged sentence

Retained Earnings

Treasury Stock

Accumulated Other Comprehensive Loss

1 unchanged sentence

Total stockholders' equity at January 31, 2026

$ 80 $ 60,151 $ 20,104 $ - $ ( 8,197 ) $ 72,138

Net income attributable to common stock

- - 4,952 - - 4,952

Stock-based compensation expense

- 224 - - - 224

Amount attributable to non-controlling interest

- ( 369 ) - - - ( 369 )

Foreign currency translation adjustment

- - - - 922 922

Total stockholders' equity at April 30, 2026

$ 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

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

Retained Earnings

Treasury Stock

Accumulated Other Comprehensive Loss

2 unchanged sentences

Net income attributable to common stock

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

Stock-based compensation expense

2 unchanged sentences

Total stockholders' equity at April 30, 2025

Net income attributable to common stock

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

Stock-based compensation expense

Amount attributable to non-controlling interest

Foreign currency translation adjustment

Total stockholders' equity at July 31, 2024

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

Treasury stock retired

Opening balances at beginning of year (February 1)

Shares issued, net of shares used for tax withholding

Balances at period end

See accompanying notes to consolidated financial statements.

Closing balances at period end (April 30)

See accompanying notes to condensed consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine Months Ended October 31,

Three Months Ended April 30,

Operating activities

$ 15,031 $ 9,526

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

2 unchanged sentences

Stock-based compensation expense

Non-cash interest expense

Provision on uncollectible accounts

Loss from disposal of fixed assets

Changes in operating assets and liabilities

Accounts receivable

( 13,574 ) 6,047

( 2,822 ) ( 970 )

Costs and estimated earnings in excess of billings on uncompleted contracts

( 649 ) 1,452

Billings in excess of costs and estimated earnings on uncompleted contracts

Accounts payable

7,969 ( 3,954 )

Accrued compensation and payroll taxes

Customers' deposits

10,353 ( 894 )

Income taxes payable

( 4 ) ( 904 )

Prepaid expenses and other current assets

( 4,153 ) ( 952 )

Prepaid expenses

Unbilled accounts receivable

( 9,543 ) ( 3,708 )

Other assets and liabilities

6,231 ( 2,161 )

Net cash provided by operating activities

1 unchanged sentence

Capital expenditures

( 8,406 ) ( 1,555 )

Net cash used in investing activities

( 8,406 ) ( 1,555 )

Financing activities

Proceeds from revolving credit lines

67,395 57,637

Payments of debt on revolving credit lines

( 62,466 ) ( 55,765 )

Payments of principal on finance obligations

( 170 ) ( 138 )

Payments of other debt

( 167 ) ( 174 )

Decrease in drafts payable

Payments on finance lease obligations

( 45 ) ( 23 )

Stock options exercised and taxes paid related to restricted shares vested

( 509 ) ( 178 )

Debt issuance costs

Change in drafts payable

Proceeds from other financing activities

Payments of other financing activities

Net cash provided by financing activities

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

( 144 ) ( 205 )

Net increase in cash, cash equivalents and restricted cash

1 unchanged sentence

Cash, cash equivalents and restricted cash - end of period

$ 28,650 $ 14,726

Supplemental cash flow information

Cash interest paid

$ 1,249 $ 1,456

Cash income taxes paid

1 unchanged sentence

Fixed assets acquired - non-cash

See accompanying notes to consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data, or unless otherwise specified)

Note 1 - Basis of presentation

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.

The interim Condensed Consolidated Financial Statements of Perma-Pipe International Holdings, Inc., and subsidiaries (collectively, "PPIH", the "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.

Certain 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, 2025 is derived from the audited consolidated balance sheet as of that date.

The Condensed Consolidated Balance Sheet as of January 31, 2026 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.

2 unchanged sentences

Years and balances described as 2026 and 2025 are for the fiscal year ending January 31, 2027 and for the fiscal year ended January 31, 2026 , respectively.

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

These reclassifications had no impact on previously reported totals.

Amounts reported in thousands within this Quarterly Report on Form 10 -Q are computed based on the actual amounts.

As a result, the sum of the components may not equal the total amount reported in thousands due to rounding.

In addition, certain columns and rows within tables may not sum to the totals due to the use of rounded numbers.

Percentages presented are calculated from the underlying unrounded amounts.

Note 2 - Business segment reporting

5 unchanged sentences

Significant expenses represent amounts that are regularly provided to the CODM and included in consolidated net income attributable to common stock.

Additionally, the CODM regularly reviews asset information by our reporting segment in a manner that is consistent with the presentation on the Company's accompanying Condensed Consolidated Balance Sheets.

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

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

$ 50,265 $ 46,747

1 unchanged sentence

19,503 17,416

24,309 14,939 60,672 40,841

Depreciation and amortization

876 745 2,585 2,310

Other costs of sales

7,240 5,897 19,477 15,723

Total cost of sales

2 unchanged sentences

Salaries and wages

4,906 4,147 16,051 11,805

Depreciation and amortization

110 153 293 377

Other general and administrative expense

3,330 3,030 9,783 7,275

General and administrative expenses

8,346 7,330 26,127 19,457

Selling expense

1,256 1,170 3,545 3,757

Total operating expenses

9,602 8,500 29,672 23,214

Income from operations

11,403 5,586 22,479 14,863

Interest expense

497 468 1,318 1,489

Other expense

Interest expense, net

Other expense, net

Income before income tax

10,900 5,068 21,089 13,218

Income tax expense

2,986 1,615 6,058 3,692

7,914 3,453 15,031 9,526

Net income attributable to non-controlling interest

2 unchanged sentences

$ 1,801 $ 4,952

The CODM regularly reviews asset information by our reporting segment in a manner that is consistent with the presentation on the Company's accompanying consolidated balance sheets.

Note 3 - Accounts receivable

1 unchanged sentence

Credit is extended based on an evaluation of a customer's financial condition.

In the United States, collateral is not generally required.

In the United Arab Emirates ("U.A.E."), Saudi Arabia, Egypt and India, letters of credit are usually obtained for significant orders.

In North America, collateral is not generally required.

In the United Arab Emirates ("U.A.E."), Saudi Arabia, Egypt, Qatar and India, letters of credit are usually obtained for significant orders.

Accounts receivable are due within various time periods specified in the terms applicable to the specific customer and are stated as amounts due from customers net of an allowance for claims and credit losses.

6 unchanged sentences

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

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 .

As of April 30, 2026 , no individual customer accounted for more than 10% of the Company's accounts receivable.

For the three months ended April 30, 2026 , one customer represented approximately 14 % of total net sales.

The Company monitors the creditworthiness of this customer on an ongoing basis.

As of April 30, 2026 , no allowance for credit losses was deemed necessary as the Company expects to collect the full carrying value of the outstanding balance due from this customer.

As of April 30, 2025 , and for the three months then ended, no single customer accounted for more than 10% of total accounts receivable or net sales.

Note 4 - Revenue recognition

3 unchanged sentences

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

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.

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 exists:

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

Products - which include cables, leak detection products, heat trace products, materials/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 systems and coating revenue over time as the manufacturing process progresses if one of the following conditions exists:

the customer owns the material that is being coated, so the customer controls the asset and thus the work-in-process;

the customer controls the work-in-process due to the custom nature of the pre-insulated, fabricated system being manufactured, which has no alternative future use, and there is a right to payment for work performed to date plus profit margin.

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 nine months ended October 31, 2025 and 2024 are as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

Products revenue is recognized at a point in time when control of the promised goods is transferred to the customer, generally upon shipment, or as 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, 2026 and 2025 are as follows:

Three Months Ended April 30,

$ 3,082 6 % $ 3,640 8 %

5 unchanged sentences

$ 50,265 100 % $ 46,747 100 %

The input method as noted in ASC 606 - 10 - 55 - 20 is used by certain 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 "over time" 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 other direct costs incurred to satisfy the performance obligations of the contract.

Revenue recognition begins when projects 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 under the contract.

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.

The input method is used by certain operating entities to measure revenue by the costs incurred to date relative to the total estimated costs to satisfy the performance obligation.

Generally, these contracts are considered a single performance obligation satisfied over time.

Due to the custom nature of the goods and services, the Company believes this method is the most faithful depiction of the transfer of goods and services to the customer as it measures progress toward satisfaction of the performance obligation.

Costs include all material, labor, and direct costs incurred to satisfy the contract.

Revenue recognition begins when project costs are initially incurred.

Estimates of total contract costs are reviewed and revised periodically as work progresses.

The output method is used by all other operating entities to measure revenue based on the direct measurement of the value of goods or services transferred to date relative to the total goods or services promised under the contract.

Due to the requirements of certain customers, these contracts often require formal inspection protocols or specific export documentation for units produced.

Therefore, the Company believes the output method provides the most faithful depiction of the transfer of goods or services to the customer.

Depending on the terms of the contract, revenue is recognized upon the transfer of control, which may occur when units are produced, inspected, and held by the Company at the customer’s request, or when units are produced, inspected, and shipped.

Contract assets and liabilities

Contract assets represent revenue recognized in excess of amounts billed for 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 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.

In addition, contract assets include receivables or amounts that are billable beyond the passage of time.

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

October 31, 2025

Contract assets represent revenue recognized in excess of amounts billed for which the right to payment is conditional upon something other than the passage of time (such as the completion of additional performance milestones).

Contract liabilities represent billings or payments received in excess of revenue recognized to date, reflecting the Company's obligation to transfer remaining goods or services to the customer.

Both customer billings and the satisfaction of performance obligations occur throughout the contract term, thus impacting the period-end balances of these accounts.

Receivables are recorded separately when the Company’s right to consideration becomes unconditional, requiring only the passage of time before payment is due.

The following table shows the reconciliation of contract assets and contract liabilities:

April 30, 2026

January 31, 2026

2 unchanged sentences

Estimated earnings

12,759 12,721

Earned revenue

13 unchanged sentences

$ 3,239 $ 2,499

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

The Company anticipates that substantially all costs incurred on uncompleted contracts as of April 30, 2026 will be billed and collected within one year.

Sub stantially all of the $ 2.2 million contract liability balance at January 31, 2026 is expected to be recognized in revenue during the 2026 fiscal year.

Unbilled accounts receivable

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 October 31, 2025 will be billed within one year.

The Company has recorded $ 31.4 million and $ 28.8 million of unbilled accounts receivable on the Condensed Consolidated Balance Sheet s as of April 30, 2026 and January 31, 2026 , respectively, from revenues generated by certain of its subsidiaries.

In these instances, 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 the Company has an unconditional right to payment;

however, 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, 2026 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.

October 31, 2025

April 30, 2026

January 31, 2026

6 unchanged sentences

( 876 ) ( 810 )

$ 18,427 $ 18,115

The Company conducts periodic reviews of its inventory and records allowances for slow moving and obsolete items to reflect their net realizable value, which is primarily attributable to finished goods.

6 unchanged sentences

therefore, actual results could differ materially from projections.

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's effective tax rates ("ETR") for the three months ended April 30, 2026 and 2025 were 34 % and 21 %, respectively.

The change in the ETR is 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.

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 $ 1.1 million as of October 31, 2025 related to these taxes.

As such, the Company has accrued a liability of $ 1.4 million as of April 30, 2026 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.

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.

The Company has evaluated the provisions of the OBBBA and incorporated the initial impacts into its financial statements;

however, the adoption of this legislation did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

Note 7 - Goodwill

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.

All identifiable goodwill as of April 30, 2026 and January 31, 2026 , 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.

2 unchanged sentences

Foreign exchange change effect

October 31, 2025

April 30, 2026

$ 2,188 $ ( 3 ) $ 2,185

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

There were no triggering events identified during the three months ended April 30, 2026 .

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 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.

At April 30, 2026 , the Company had reserved a total of 20,465 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").

6 unchanged sentences

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

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

Restricted stock-based compensation expense

$ 320 $ 232 $ 2,012 $ 629

Total stock-based compensation expense

Restricted stock

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

The following table summarizes the Company's restricted stock activity for the three months ended April 30, 2026 :

Restricted Shares

4 unchanged sentences

Vested and issued

( 111 ) 10.99

Forfeited or retired for taxes

Outstanding at October 31, 2025

Outstanding at April 30, 2026

159 $ 19.32 $ 3,063

As of October 31, 2025 , there was $ 1.8 million of unrecognized compensation expense related to unvested restricted stock granted under the plans.

As of April 30, 2026 , there was $ 1.2 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 2.0 years.

Note 9 - Earnings per share

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

Three Months Ended April 30,

Basic weighted average common shares outstanding

Dilutive effect of equity compensation plans

Weighted average common shares outstanding assuming full dilution

8,179 8,027 8,129 7,991

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

Net income attributable to common stock

5 unchanged sentences

Debt consisted of the following:

October 31, 2025

April 30, 2026

January 31, 2026

Revolving credit agreement - North America, due September 2026

Short-term debt

Revolving credit agreement - North America

$ 666 $ 10,749

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

Revolving credit agreement - United Arab Emirates

Revolving credit agreement - Egypt

Revolving credit agreement - Saudi Arabia

Current maturities of long-term debt

Loan payable to GIG

Finance leases

debt issuance costs

Total short-term debt

$ 10,394 $ 19,843

Long-term debt

Revolving credit agreement - North America

Finance obligation - buildings and land

Mortgage note

Finance lease obligation

Unamortized debt issuance costs

( 108 ) ( 109 )

current maturities of long-term debt

Long-term debt, net of current maturities

Total long-term debt

$ 27,629 $ 12,696

Revolving lines - North America .

On September 20, 2018, and as amended, extended, or renewed subsequently thereafter, the Company and certain of its U.S.

and Canadian subsidiaries (collectively 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”).

The Credit Agreement with PNC was subsequently extended on September 17, 2021, 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 Renewed Senior Credit Facility matures on September 20, 2026.

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 October 31, 2025 .

Finance obligation - buildings and land.

On April 14, 2021, the Company entered into a purchase and sale agreement, pursuant to which 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 leases 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 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 $ 0.3 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.

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.

United Arab Emirates

The Company has a revolving line for

8.0 million U.A.E.

Dirhams (approximately

$ 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

million U.A.E.

Dirhams (approximately $

October 31, 2025

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

October 31, 2025

, the facility has an interest rate of approximately

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 October 31, 2025

and $ 0.1 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.

On April 8, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as borrower, the other loan parties thereto, and JPMorgan Chase Bank, N.A., as lender (the “Lender”).

The Credit Agreement effectively replaced the Company’s previous credit facility (the "PNC Credit Facility") with PNC Bank, National Association ("PNC").

On April 9, 2026, the Company drew $ 15.3 million under the Credit Agreement to pay off the remaining $ 15.2 million outstanding balance under the PNC Credit Facility and to fund $ 0.1 million of cash collateral required for cash management and purchasing card solutions.

As of January 31, 2026, the Company had borrowed an aggregate of $ 10.7 million at a rate of 7.8 % and had $ 2.7 million available under the PNC Credit Facility.

The Credit Agreement provides for a senior secured asset-based revolving credit facility with aggregate revolving commitments of $ 18.0 million, including a sublimit of up to $ 1.5 million for letters of credit.

The revolving credit facility matures on October 7, 2027, unless earlier terminated in accordance with its terms.

As of April 30, 2026 , the outstanding balance under the Credit Agreement was $ 15.3 million with a weighted-average interest rate of 8.8 % and there were no outstanding letters of credit under the sublimit.

Borrowings under the Credit Agreement are limited to the lesser of the revolving commitment and a borrowing base calculated as (i) 80% of eligible North American accounts receivable, plus (ii) 25% of eligible North American inventory (valued at the lower of cost or market), in each case subject to customary eligibility criteria and reserves established by the Lender.

As of April 30, 2026, the borrowing base calculation limited the maximum availability under the facility to an amount below the aggregate revolving commitment.

As a result, $ 0.7 million has been classified as current debt as of April 30, 2026 .

Loans under the Credit Agreement bear interest, at the Company’s election, at either (i) a rate based on the CB Floating Rate (as defined in the Credit Agreement) or (ii) an adjusted term SOFR rate, in each case plus an applicable margin determined by the Company’s leverage ratio.

The applicable margin for CB Floating Rate loans ranges from 1.50 % to 2.00 %, and for SOFR loans ranges from 2.50 % to 3.00 %.

In addition, the Company is required to pay a commitment fee ranging from 0.20 % to 0.30 % on the unused portion of the revolving commitment.

The obligations under the Credit Agreement are secured by substantially all North American assets of the Company and the guarantor subsidiaries, subject to customary exclusions, and are guaranteed on a joint and several basis by certain existing and future subsidiaries of the Company, subject to customary exceptions.

The Credit Agreement contains customary affirmative and negative covenants, including, among other things, limitations on additional indebtedness, liens, investments, acquisitions, asset sales, restricted payments, and transactions with affiliates.

The Credit Agreement also includes financial maintenance covenants requiring the Company to maintain both (

1 ) a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) and (

2 ) a maximum Leverage Ratio, which are tested upon the occurrence of certain availability thresholds.

The Credit Agreement includes customary events of default, including, among others, nonpayment of principal or interest, breaches of representations or covenants, cross‑defaults to other material indebtedness, insolvency events, judgments in excess of specified thresholds, certain ERISA and pension events, and a change in control.

Upon the occurrence of an event of default, the Lender

may terminate commitments, accelerate outstanding obligations, require cash collateralization of letters of credit, and exercise remedies against the collateral.

April 30, 2026

, the Company was in compliance with all covenants under the Credit Agreement.

Credit facilities - foreign.

The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt, and Saudi Arabia as further described below.

United Arab Emirates (“U.A.E.”)

The Company maintains a credit facility with a financial institution in the U.A.E.

totaling 65.2 million U.A.E.

Dirhams (“AED”) (approximately $ 17.7 million at

April 30, 2026 ).

Borrowings under the facility bear interest at the Emirates Inter Bank Offered Rate (“EIBOR”) plus

3.5 % per annum, subject to minimum interest rates ranging from

8.0 % per annum, depending on the type of financing utilized.

The facility is stratified by instrument type and expires at various dates through

October 2026.

, 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

October 31, 2025 and January 31, 2025

April 30, 2026

, the Company was in compliance with all covenants under this facility.

April 30, 2026 and

January 31, 2026 , the Company had outstanding borrowings

of 12.2 million AED (approximately $ 3.3 million) and 9.4 million AED (approximately $ 2.6 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets.

Additionally, as of

April 30, 2026

January 31, 2026

, the Company had issued guarantees totaling 31.9 million AED (approximately $ 8.7 million) and 30.9 million AED (approximately $ 8.4 million).

After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $ 5.7 million and $ 6.8 million under the credit facility as of

April 30, 2026

January 31, 2026

, respectively.

The Company has a revolving line for

47.7 million U.A.E.

Dirhams (approximately

The Company maintains a letter of credit facility with a financial institution in the U.A.E.

totaling 100.0 million AED (approximately $ 27.2 million at April 30, 2026 ), portions of which expire in July 2026, and a portion of which expired in April 2026.

The portion that expired in April 2026 remains in effect under the same terms.

T he 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.

The facility is non-interest bearing;

however, the Company incurs a commission ranging from 0.8 % to 1.0 % per annum on the face value of issued instruments and is required to maintain cash collateral (margins) ranging from 10 % to 15 % depending on the type of instrument utilized.

As of April 30, 2026 , the Company had outstanding guarantees under this facility of 39.3 million AED (approximately $ 10.7 million).

The remaining available balance under the facility was approximately $ 16.5 million as of April 30, 2026 .

June 2021, the Company's Egyptian subsidiary entered into a credit facility with a financial institution in Egypt, which has been subsequently amended.

The facility provides project-based financing and expires in

December 2026.

The facility has a maximum borrowing capacity of

120.0 million Egyptian Pounds (approximately

$ 2.4 million at

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

April 30, 2026

The line is secured by certain assets of the subsidiary, including accounts receivable, and contains various covenants, including a maximum leverage ratio and restrictions on incurring additional indebtedness.

Covenants under this facility are measured annually at year-end, and the Company was in compliance with all such covenants at its most recent measurement date.

April 30, 2026

, borrowings under the Company’s credit facility in Egypt bore interest at rates ranging from 15.0 % to 20.8 %.

The 15.0 % rate relates to specific government-sponsored initiatives, while the 20.8 % rate applies to our general facility limits.

The Company had $ 0.2 million outstanding under this arrangement as of both

April 30, 2026

January 31, 2026

, 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

October 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

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

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

1 % commission.

October 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

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

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.

October 31, 2025

, the facility has an interest rate of approximately

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

October 31, 2025

These amounts are included in "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets.

April 30, 2026

January 31, 2026

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

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 October 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 expires in April 2026.

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.

, the Company had unused availability of approximately $ 2.2 million.

In March 2022, the Company’s Saudi Arabian subsidiary entered into a credit arrangement with a financial institution in Saudi Arabia for a revolving line totaling 37.0 million Saudi Riyals (“SAR”) (approximately $ 9.9 million at April 30, 2026 ).

The credit arrangement provides project-based financing at interest rates competitive in Saudi Arabia and is secured by certain assets of the subsidiary including accounts receivable.

While the credit arrangement had a scheduled expiration date of April 27, 2026, the subsidiary continues to access the facility under the same terms while formal documentation of a renewal is being finalized with the lender.

As of April 30, 2026 , the facility bore interest at a rate of approximately 8.5 %.

As of April 30, 2026 and January 31, 2026 , the Company had outstanding borrowings of 8.3 million SAR (approximately $ 2.2 million) and 10.9 million SAR (approximately $ 2.9 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets.

Additionally, as of April 30, 2026 and January 31, 2026 , the Company had issued guarantees totaling 0.4 million SAR (approximately $ 0.1 million) and 6.3 million SAR (approximately $ 1.7 million), respectively.

After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $ 7.6 million and $ 5.3 million under the credit facility as of April 30, 2026 and January 31, 2026 , respectively.

Foreign credit facilities - overall

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 in some cases, a guarantee by the Company.

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.

1 unchanged sentence

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

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;

(ii) either the Central Bank of Egypt corporate loan rate plus 1.5 % to 3.5 % per annum or the stated interest rate in the agreements for the Egypt credit arrangements;

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

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 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 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 .

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 October 31, 2025 and January 31, 2025 .

As of April 30, 2026 and January 31, 2026 , the amount of foreign subsidiary debt guaranteed by the Company was approximately $ 8.5 million and $ 8.4 million, respectively.

The Company was in compliance with respect to the covenants under the foreign credit arrangements as of April 30, 2026 .

Certain of these arrangements are subject to periodic renewal;

while such renewals are being processed, the Company remains in regular communication with the lenders, and the arrangements have historically continued without interruption or penalty.

On April 30, 2026 , interest rates were based on (i) the EIBOR plus 3.5 % per annum for the U.A.E.

credit arrangements, which have minimum interest rates ranging from 4.5 % to 8.0 % per annum;

(ii) interest rates ranging from 15.0 % to 20.8 % for the Egypt credit arrangements;

and (iii) an interest rate of 8.5 % for the Saudi Arabia credit arrangement.

Based on these base rates, as of April 30, 2026 , the Company's interest rates ranged from 7.3 % to 20.8 %, with a weighted average rate of 7.9 %, and the Company had facility limits totaling $ 57.2 million under these credit arrangements.

As of April 30, 2026 , $ 19.5 million of the facility limits were utilized to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees.

Additionally, as of April 30, 2026 , the Company had borrowed $ 5.7 million and had an additional $ 32.0 million of borrowing availability remaining under the foreign revolving credit arrangements.

The foreign revolving lines balances were included as a component of "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets as of April 30, 2026 and January 31, 2026 .

Finance obli gation - buildings and land.

On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement") to sell its land and building in Lebanon, Tennessee (the "Property").

Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $ 10.4 million.

The transaction generated net cash proceeds of $ 9.1 million.

Concurrently with the sale of the Property, the Company paid off the approximately $ 0.9 million remaining on the mortgage note on the Property to its lender.

The Company used the remaining proceeds to repay its borrowings under the PNC 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 is leasing 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.

April 30, 2026

January 31, 2026

, the Company had a net book value relating to this asset of $ 1.6 million and $ 1.7 million, respectively.

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 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 $ 0.3 million is recognized in "Short-term borrowings and current maturities of long-term debt" and the long-term portion of $ 8.5 million is recognized in "Long-term finance obligation" on the Condensed Consolidated Balance Sheets as of

April 30, 2026

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

Mortgage Note.

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.

April 30, 2026 , the remaining balance on the mortgage in Canada is approximately

5.3 million Canadian Dollars ("CAD") (approximately

$ 3.9 million).

The interest rate is variable, and was

April 30, 2026 .

The principal balance is included as a component of "Short-term borrowings and current maturities of long-term debt" and "Long-term debt, less current maturities" on the Condensed Consolidated Balance Sheets and is presented net of issuance costs of

$ 0.1 million as of

April 30, 2026 and

January 31, 2026 .

Loan Payable to GIG.

In June 2023, in connection with the formation of a joint venture with Gulf Insulation Group (“GIG”), the Company assumed a promissory note with an aggregate principal amount of approximately $ 2.8 million, which matured on April 9, 2026.

The note that expired in April 2026 remains in effect under the same terms as of April 30, 2026 .

Through the date of this filing, the Company and GIG are engaged in constructive discussions to reach an agreement on renewal or settlement of the promissory note.

Because a definitive agreement has not been executed as of the balance sheet date, the Company did not possess a contractual, unconditional right to defer settlement of the obligation for at least twelve months following April 30, 2026 .

Accordingly, the full obligation is classified within “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets as of April 30, 2026 .

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.

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 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 October 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.

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.

The Company enters into lease agreements for real estate, including office space, production buildings, and land, as well as non-real estate assets such as heavy machinery, office equipment, and vehicles.

Our leases are classified as either operating or finance leases at the commencement date.

Operating leases consist of each of the above asset types, which have lease terms of 2 years to 30 years.

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities short-term, and operating lease liabilities long-term on the Condensed Consolidated Balance Sheets.

Finance leases consist primarily of heavy machinery with lease terms of 4 to 5 years.

Finance leases are included in property, plant, and equipment, net , current maturities of long-term debt , and long-term debt, less current maturities on the Condensed Consolidated Balance Sheets.

Our lease agreements may include options to extend or terminate the lease, as well as options to purchase the underlying asset.

These options are factored into the lease term and the measurement of right-of-use ("ROU") assets and lease liabilities when it is reasonably certain that the Company will exercise them.

These decisions are based on an assessment of economic incentives, such as the strategic importance of the underlying asset to our regional operations and the expected fair market value of the assets at the end of the lease term.

As most of our leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate ("IBR") to determine the present value of lease payments at lease commencement.

The IBR is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment.

In determining the ROU asset and corresponding lease liability, we evaluate whether a contract contains a lease by assessing if we have the right to control the use of an identified asset for a period of time in exchange for consideration.

For arrangements involving multiple components, we have elected the practical expedient to combine lease and non-lease components (such as common area maintenance and utility charges) into a single lease component for all underlying asset classes.

Certain of our real estate lease agreements include variable lease payments based on inflation rates, which are contractually capped.

These payments are not included in the measurement of the lease liability and are recognized in the period in which the obligation is incurred.

Our lease agreements do not typically include material residual value guarantees or restrictive covenants;

where present, they are not expected to result in material payments.

Furthermore, the Company has elected the short-term lease exception for all asset classes, whereby we do not recognize ROU assets or lease liabilities for leases with an initial term of 12 months or less that do not include a purchase option we are reasonably certain to exercise.

Total lease costs consist of the following:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

Consolidated Statements of Operations Classification

2 unchanged sentences

Cost of sales

$ 37 $ 25 $ 122 $ 100

Interest on lease liabilities

2 unchanged sentences

Cost of sales, SG&A expenses

724 463 2,027 1,361

Short-term lease costs (1)

5 unchanged sentences

Operating and Finance leases

October 31, 2025

April 30, 2026

January 31, 2026

Finance leases assets:

Finance lease assets:

Property and Equipment - gross

3 unchanged sentences

Property and Equipment - net

$ 1,366 $ 829

Finance lease liabilities:

2 unchanged sentences

Total finance lease liabilities

$ 1,237 $ 715

Operating lease assets:

5 unchanged sentences

Operating lease liability long-term

15,136 12,125

Total operating lease liabilities

1 unchanged sentence

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

October 31, 2025

April 30, 2026

Weighted-average remaining lease terms (in years):

5 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Nine Months Ended October 31,

Three Months Ended April 30,

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

3 unchanged sentences

ROU assets obtained in exchange for new lease obligations:

Finance leases liabilities

Operating leases liabilities

$ 5,715 $ 1,718

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

Maturities of lease liabilities as of April 30, 2026 , are as follows:

Operating Leases Finance Leases

Fiscal 2026 (remainder of fiscal year)

$ 2,727 $ 239

Total lease payments

2 unchanged sentences

( 13,176 ) ( 66 )

Total lease liabilities at October 31, 2025

Total lease liabilities at April 30, 2026

$ 17,756 $ 1,237

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.

Rent expense attributable to operating leases was $ 1.5 million and $ 0.9 million for the three months ended April 30, 2026 and 2025 , 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:

October 31, 2025

Restricted cash primarily relates to fixed deposits utilized as security deposits and financial guarantees.

April 30, 2026

January 31, 2026

8 unchanged sentences

Note 14 - Recent accounting pronouncements

In December 2023, the FASB issued ASU No.

2023 - 09, Income Taxes ( Topic 740 ):

Improvements to Income Tax Disclosures .

Pursuant to this standard update, companies are required to provide additional information, which is primarily attributable to the rate reconciliation and income taxes paid.

The standard update is to be applied prospectively, with retrospective application permitted.

The new income tax disclosures are effective for fiscal years beginning after December 15, 2024.

The Company is still evaluating this standard update but does not expect it to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No.

9 unchanged sentences

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.

This guidance will be effective starting with our quarterly report for the fiscal quarter 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.

3 unchanged sentences

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.

This standard update will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted 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.

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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 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.

Additionally, the Company presents the proportionate share that is attributable to the non-controlling interest as temporary equity within the consolidated balance sheets.

The balance sheets and operating activities of this investment are included in the Company's Condensed Consolidated Financial Statements.

As of April 30, 2026 , the carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $ 42.3 million and $ 10.3 million , respectively, and $ 44.2 million and $ 18.6 million, respectively, as of January 31, 2026 .

The Company adjusts net income in the Condensed Consolidated Statements of Operations to exclude the proportionate share of results that is attributable to the non-controlling interest.

Additionally, the Company presents the proportionate share that is attributable to the non-controlling interest as temporary equity within the Condensed Consolidated Balance Sheets.

This temporary equity presentation is the result of the non-controlling interest being subject to certain redemption rights that are not entirely within the Company's control.

Due to these redemption rights, at each balance sheet date, the Company is required to adjust the carrying value attributable to the non-controlling interest to fair value, which is limited to its original carrying value at the formation of the business arrangement.

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 $ 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 $ 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 October 31, 2025 and January 31, 2025 .

Adjustments made to reflect the change in the value of the redeemable non-controlling interest are offset against permanent equity within the Company's Condensed Consolidated Balance Sheets.

Net income attributable to GIG was $ 0.8 million and $ 0.9 million for the three months ended April 30, 2026 and 2025 , 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 Condensed Consolidated Statements of Operations.

The following table summarizes 2026 activity for the redeemable non-controlling interest:

Redeemable non-controlling interest balance at January 31, 2026

Net income attributable to redeemable non-controlling interest

Fair value adjustment (accretion to redemption value)

Distributions to redeemable non-controlling interest holders

Redeemable non-controlling interest balance at April 30, 2026

Note 16 - Accumulated other comprehensive loss

Accumulated other comprehensive loss represents the change in equity from non-owner transactions and consists of foreign currency translation.

Foreign Currency Translation Adjustments

Total Accumulated Other Comprehensive Loss

Balance as of January 31, 2026

$ ( 7,679 ) $ ( 7,679 )

Currency translation adjustments

( 337 ) ( 337 )

Tax effect of currency translation adjustments

Balance as of April 30, 2026

$ ( 8,015 ) $ ( 8,015 )

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