10-Q/A - Perma-Pipe International Holdings, Inc. (0000914122) (Filer)

Mon, Dec 23, 5:31 PM (21 days ago)

Perma-Pipe International Holdings, Inc. (PPIH) reported a significant improvement in quarterly performance for the period ending July 31, 2024. Net sales increased to $37.5 million from $35.1 million year-over-year, driven by higher sales volumes. Gross profit rose to $13.5 million, reflecting a gross margin expansion to 36%. Net income attributable to common stock surged to $3.3 million compared to $1.0 million in the previous year. Despite this positive trend, the company faced challenges related to material weaknesses in internal controls, particularly in IT governance and financial reporting processes. This led to a restatement of financials due to errors in recording invoices from a Middle Eastern subsidiary, impacting cash flow and asset valuations. Cash and cash equivalents improved to $9.5 million, and total debt rose to $27.9 million. The company maintained compliance with covenants under its credit agreements, which include a $18 million revolving credit facility. Future operations may be impacted by ongoing efforts to remediate identified internal control deficiencies. Overall, PPIH's financial health shows a positive trend, but uncertainties remain regarding operational controls and their effectiveness.