- Net sales increased by 19% to $32.8 million for the third
quarter, and by 21% to $94.0 million year-to-date
- Year over year Income from operations improved by 132% to $0.8
million in the third quarter of 2018
- Backlog of $70.1 million as of October 31, 2018 increased by
50%, or $23.4 million, since January 31, 2018
- Finalized new $18 million credit facility
NILES, Ill.--(BUSINESS WIRE)--
Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced today
financial results for the third quarter and year-to-date ended
October 31, 2018.
President and CEO David Mansfield commented, “While third quarter
revenues of $32.8 million were consistent with those achieved in the
second quarter, income from operations increased by 121% over the same
periods. The improvement in gross profit reflects the impact of our
initiatives which resulted in an increase to 21% versus 12% in the same
quarter last year. On a year to date basis versus the same period last
year, revenue grew $16.2 million or 21%, while income from operations
improved by $8.7 million. This increase in operating performance was
achieved despite the adverse impact on our revenues caused by
customer-driven delays to project schedules in the Middle East.
“We are also pleased to see that the continued focus on growing our leak
detection business generated significantly improved results during the
quarter,” Mr. Mansfield continued.
“Backlog has continued to grow and now stands at more than $70 million,
an increase of 50% since the beginning of the year. This level of
backlog is a record for the Company and is driven by increases in all
areas combined with the aforementioned project delays in the Middle East.
“As previously announced, during this quarter we entered into a new $18
million credit facility with PNC Bank that will provide enhanced
liquidity to our North American operations,” added Mr. Mansfield.
“Overall, we continue to see encouraging results from our strategies to
return the Company to profitability and we believe we are continuing to
make progress toward achieving this objective,” concluded Mr. Mansfield.
Third Quarter 2018 Results
Net sales increased 19% to $32.8 million in the current quarter, from
$27.5 million in the prior year quarter. Higher revenues resulted from
increased sales in North America.
Gross profit increased to 21%, or $6.9 million of net sales, in the
current quarter from 12%, or $3.3 million of net sales, in the prior
year quarter. This 107% improvement was due to increased volumes and
improved margins, which are a result of strategic initiative
improvements.
General and administrative expenses were slightly lower at $4.2 million
in the current quarter, compared to $4.3 million in the prior year
quarter. Selling expenses were $1.6 million in the current quarter,
compared to $1.3 million in the prior quarter. This increase is due to
commissions related to increased sales.
Net interest expense increased to $0.3 million in the current quarter,
from $0.2 million in the prior-year quarter due to higher borrowings and
higher effective interest rates, both domestic and foreign.
Year-to-Date 2018 Results
Net sales increased 21% to $94.0 million in the current year-to-date,
from $77.9 million in the prior year year-to-date. Higher revenues
resulted from increased sales in all geographic regions.
Gross profit increased to 18%, or $17.0 million of sales, in the current
year-to-date from 10%, or $8.2 million of sales, in the prior year
year-to-date. This improvement was due to increased volumes and improved
margins.
General and administrative expenses decreased by 2% to $12.2 million in
the current year-to-date, from $12.5 million in the prior year
year-to-date. In the prior year year-to-date, the Company recognized
foreign exchange losses on the payback of an intercompany loan extended
to a foreign subsidiary.
Selling expenses increased by 2% to $4.0 million in the current
year-to-date from $3.9 million the prior year year-to-date. Current year
expenses included higher commissions related to increased sales.
Net interest expense increased to $0.8 million in the current
year-to-date, from $0.5 million in the prior year year-to-date due to
higher borrowings and higher effective interest rates, both domestic and
foreign.
Percentages set forth above in this press release have been rounded to
the nearest percentage point, and may not exactly correspond to the
comparative data presented.
Perma-Pipe International Holdings, Inc.
Perma-Pipe International Holdings is a global leader in pre-insulated
piping and leak detection systems for oil and gas gathering, district
heating and cooling, and other applications. It uses its extensive
engineering and fabrication expertise to develop piping solutions that
solve complex challenges regarding the safe and efficient transportation
of many types of liquids. In total, Perma-Pipe has operations at seven
locations in five countries.
Forward-Looking Statements
Certain statements and other information contained in this press release
that can be identified by the use of forward-looking terminology
constitute “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), and are
subject to the safe harbors created thereby, including, without
limitation, statements regarding the expected future performance and
operations of the Company. These statements should be considered as
subject to the many risks and uncertainties that exist in the Company's
operations and business environment. Such risks and uncertainties
include, but are not limited to, the following: (i) the Company’s
ability to effectively execute its strategic plan and achieve
profitability and positive cash flows; (ii) the impacts of global
economic weakness and volatility; (iii) fluctuations in steel prices and
the Company’s ability to offset increases in steel prices through price
increases in its products; (iv) the timing of orders for the Company’s
products; (v) decreases in United States government spending on projects
using the Company’s products, and challenges to the Company’s
non-government customers’ liquidity and access to capital funds;
(vi) the Company’s ability to successfully negotiate progress-billing
arrangements for its large contracts; (vii) fluctuations in crude oil
and natural gas prices risks and uncertainties related to the Company’s
international business operations; (viii) the Company’s ability to repay
its debt, and renew expiring international credit facilities;
(ix) aggressive pricing by existing competitors and the entrance of new
competitors in the markets in which the Company operates; (x) the
Company’s ability to purchase raw materials at favorable prices and to
maintain beneficial relationships with its suppliers; (xi) the Company’s
ability to manufacture products free of latent defects and to recover
from suppliers who may provide defective materials to the Company;
(xii) reductions or cancellations of orders included in the Company’s
backlog; (xiii) the Company’s ability to attract and retain senior
management and key personnel; (xiv) the Company’s ability to achieve the
expected benefits of its growth initiatives; (xv) reversals of
previously recorded revenue and profits resulting from inaccurate
estimates made in connection with the Company’s percentage-of-completion
revenue recognition; (xvi) the Company’s failure to establish and
maintain effective internal control over financial reporting; and
(xvii) the impact of cybersecurity threats on the Company’s information
technology systems. Shareholders, potential investors and other readers
are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue reliance
on such forward-looking statements. The forward-looking statements made
herein are made only as of the date of this press release and we
undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise. More detailed information about factors that may affect our
performance may be found in our filings with the Securities and Exchange
Commission, which are available at https://www.sec.gov
and under the Investor Center section of our website (http://investors.permapipe.com).
Perma-Pipe’s Form 10-Qfor the period ended October 31, 2018 will
be accessible at www.sec.gov
and www.permapipe.com.
For more information, visit the Company's website.
|
| |
| |
| | | |
|
PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) |
| | | |
|
| | | |
|
| | Three Months Ended October 31, | | Nine Months Ended October 31, |
| | 2018 |
| 2017 |
| 2018 |
| 2017 |
|
Net sales
| |
$
|
32,806
| |
|
$
|
27,498
| | |
$
|
94,020
| |
|
$
|
77,851
| |
|
Cost of sales
| |
|
25,923
|
|
|
|
24,178
|
|
|
|
77,019
|
|
|
|
69,688
|
|
|
Gross profit
| | |
6,883
| | | |
3,320
| | | |
17,001
| | | |
8,163
| |
| | | | | | | | | | | | | | | |
|
|
Operating expenses
| | | | | | | | | | | | | | | | |
|
General and administrative expenses
| | |
4,247
| | | |
4,314
| | | |
12,153
| | | |
12,456
| |
|
Selling expenses
| |
|
1,554
|
|
|
|
1,297
|
|
|
|
4,017
|
|
|
|
3,920
|
|
|
Total operating expenses
| | |
5,801
| | | |
5,611
| | | |
16,170
| | | |
16,376
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from operations
| | |
1,082
| | | |
(2,291
|
)
| | |
831
| | | |
(8,213
|
)
|
| | | | | | | | | | | | | | | |
|
|
Interest expense, net
| |
|
280
|
|
|
|
193
|
|
|
|
830
|
|
|
|
507
|
|
|
Income/(loss) from operations before income taxes
| | |
802
| | | |
(2,484
|
)
| | |
1
| | | |
(8,720
|
)
|
| | | | | | | | | | | | | | | |
|
|
Income tax expense/(benefit)
| | |
934
| | | |
808
| | | |
1,525
| | | |
(241
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
| |
$
|
(132
|
)
|
|
$
|
(3,292
|
)
|
|
$
|
(1,524
|
)
|
|
$
|
(8,479
|
)
|
| | | | | | | | | | | | | | | |
|
|
Weighted average common shares outstanding
| | | | | | | | | | | | | | | | |
|
Basic and diluted
| | |
7,877
| | | |
7,714
| | | |
7,806
| | | |
7,668
| |
| | | | | | | | | | | | | | | |
|
|
Loss per share
| | | | | | | | | | | | | | | | |
|
Basic and diluted
| | |
(0.02
|
)
| | |
(0.43
|
)
| | |
(0.20
|
)
| | |
(1.11
|
)
|
| | | | | | | | | | | | | | | |
|
See accompanying notes to consolidated financial statements.
Note: Earnings per share calculations could be impacted by
rounding.
|
|
| | |
| | |
| | | | | |
|
PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) |
| | | | | |
|
| | | | | |
|
| (In thousands except per share data) | | October 31, 2018 |
|
| January 31, 2018 |
|
| ASSETS | | Unaudited | | | | | |
| Current assets | | | | | | | | |
|
Cash and cash equivalents
| |
$
|
9,582
| | |
$
|
7,084
| |
|
Restricted cash
| | |
2,536
| | | |
1,237
| |
|
Trade accounts receivable, less allowance for doubtful accounts of
$480 at October 31, 2018 and $469 at January 31, 2018 | | |
32,280
| | | |
32,936
| |
|
Inventories, net
| | |
14,330
| | | |
16,856
| |
|
Prepaid expenses and other current assets
| | |
3,345
| | | |
2,703
| |
|
Contract assets
| |
|
2,357
|
|
|
|
1,502
|
|
| Total current assets | | |
64,430
| | | |
62,318
| |
|
Property, plant and equipment, net of accumulated depreciation
| | |
31,020
| | | |
34,509
| |
| Other assets | | | | | | | | |
|
Deferred tax assets - long-term
| | |
45
| | | |
391
| |
| Goodwill | | |
2,269
| | | |
2,423
| |
|
Other assets
| |
|
5,966
|
|
|
|
4,943
|
|
| Total other assets | |
|
8,280
|
|
|
|
7,757
|
|
| Total assets | |
$
|
103,730
|
|
|
$
|
104,584
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Current liabilities | | | | | | | | |
|
Trade accounts payable
| |
$
|
9,788
| | |
$
|
14,186
| |
|
Accrued compensation and payroll taxes
| | |
1,893
| | | |
1,580
| |
|
Commissions and management incentives payable
| | |
1,789
| | | |
787
| |
|
Revolving line of credit
| | |
13,662
| | | |
7,273
| |
|
Current maturities of long-term debt
| | |
1,046
| | | |
753
| |
|
Customers' deposits
| | |
4,028
| | | |
5,236
| |
|
Outside commissions payable
| | |
2,194
| | | |
1,800
| |
|
Contract liability
| | |
1,599
| | | |
1,967
| |
|
Other accrued liabilities
| | |
3,491
| | | |
4,259
| |
|
Income taxes payable
| |
|
1,348
|
|
|
|
1,339
|
|
| Total current liabilities | | |
40,838
| | | |
39,180
| |
| Long-term liabilities | | | | | | | | |
|
Long-term debt, less current maturities
| | |
6,892
| | | |
7,728
| |
|
Deferred compensation liabilities
| | |
3,504
| | | |
4,098
| |
|
Deferred tax liabilities - long-term
| | |
1,149
| | | |
1,242
| |
|
Other long-term liabilities
| |
|
534
|
|
|
|
524
|
|
| Total long-term liabilities | |
|
12,079
|
|
|
|
13,592
|
|
| Stockholders' equity | | | | | | | | |
|
Common stock, $.01 par value, authorized 50,000 shares; 7,877 issued
and outstanding at October 31, 2018 and 7,717 issued and outstanding
at January 31, 2018 | | |
79
| | | |
77
| |
|
Additional paid-in capital
| | |
58,365
| | | |
56,304
| |
|
Accumulated deficit
| | |
(4,627
|
)
| | |
(3,103
|
)
|
|
Accumulated other comprehensive loss
| |
|
(3,004
|
)
|
|
|
(1,466
|
)
|
| Total stockholders' equity | |
|
50,813
|
|
|
|
51,812
|
|
| Total liabilities and stockholders' equity | |
$
|
103,730
|
|
|
$
|
104,584
|
|
| | | | | | | |
|
See accompanying notes to consolidated financial statements.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181211005170/en/
Perma-Pipe International Holdings, Inc.
David Mansfield,
President and CEO
Perma-Pipe Investor Relations
(847) 929-1200
investor@permapipe.com
Source: Perma-Pipe International Holdings, Inc.