Perma-Pipe International Holdings, Inc. (Nasdaq: PPIH) (“Perma-Pipe” or the “Company”), a global leader in engineered pipe services specializing in anti-corrosion coatings, insulation solutions, containment systems, custom fabrication and leak detection, today announced financial results for the second quarter of fiscal 2026 ended July 31, 2026.
“Our second quarter results reflect continued commercial momentum and the fundamental strength of our end markets,” stated President and Chief Executive Officer Saleh Sagr. “We grew net sales year-over-year, added over $67 million in new orders to backlog, and continued to expand Perma-Pipe’s footprint in strategic markets to capture strong secular demand, particularly for localized infrastructure solutions. Importantly, we delivered year-over-year growth in net income attributable to common stockholders, which underscores the earnings power of the platform we are building.”
“Operationally, we continued to build a strong foundation for sustainable, long-term growth,” continued Mr. Sagr. “We commenced operations and have ramped production at our new Ohio facility, in part to support higher demand in the U.S. market. In MENA, we are expanding our Qatar facility to meet local demand and, subsequent to quarter-end, entered into a memorandum of understanding to form a joint venture in Jordan. Initially, we will serve a key role in the supply chain for a large-scale, water-security, government-supported infrastructure program through the joint venture; longer term, we will support cross-border water, oil and gas, energy, and infrastructure projects.”
Concluded Mr. Sagr, “We enter the second half of the year with momentum, supported by our strong backlog, a growing pipeline of RFP and quoting activity, and a new global credit facility that together set the stage for Perma-Pipe’s next stage of growth. With disciplined execution and a product portfolio aligned with our customers’ infrastructure priorities, we are confident in our ability to convert the opportunities before us into sustainable, long-term value for our shareholders.”
Second Quarter Fiscal 2026 Results
Net sales were $59.6 million for the three months ended July 31, 2026, an increase of $11.7 million, or 24.4%, compared to $47.9 million in the same quarter of the prior year. The increase was driven by higher sales volumes in both North America and the MENA region.
Gross profit was $17.4 million, an increase of $3.0 million, or 20.7%, compared to $14.4 million in the prior-year quarter, reflecting increased activity levels. Gross margin was 29.2%, compared to 30.1% in the prior-year quarter, reflecting increased materials and logistics costs that are having impact on global operations, as well as ramp-up costs associated with the Company’s new Ohio manufacturing facility.
General and administrative expenses were $11.9 million, compared to $10.0 million in the prior-year quarter. The current quarter included a $3.9 million charge related to an uncollectible account receivable from a specific customer and approximately $0.5 million of start-up costs at the Company’s new Ohio manufacturing facility, partially offset by lower personnel costs, as the prior-year quarter included a $2.0 million non-recurring charge for the acceleration of certain executive compensation expenses in connection with an executive departure.
Selling expenses were $1.3 million, compared to $1.2 million in the prior-year quarter.
Income from operations was $4.3 million, compared to $3.2 million in the prior-year quarter.
Net interest expense was $0.5 million, compared to $0.4 million in the prior-year quarter. The increase was primarily driven by incremental borrowings.
Income before income taxes was $3.9 million, compared to $2.8 million in the same quarter of the prior year. Adjusted income before taxes was $8.3 million, compared with $4.9 million last year. For the six-month period, Adjusted income before taxes was $12.5 million, compared with $12.3 million in the same period last year (non-GAAP)1.
Income tax expense was $0.6 million, compared to $1.5 million in the prior-year quarter. The Company’s effective tax rate was approximately 16%, compared to 54% in the prior-year quarter. The lower rate in the current quarter primarily reflects a discrete tax benefit of approximately $1.6 million related to the uncollectible account receivable recognized during the quarter. The prior-year rate reflected changes in the mix of income and loss across the jurisdictions in which the Company operates, which can cause the effective rate to vary meaningfully from period to period.
Net income attributable to common stock was $2.5 million, or $0.31 per diluted share, compared to $0.9 million, or $0.10 per diluted share, in the prior-year quarter.
Cash and cash equivalents at the end of the second quarter of fiscal 2026 totaled $31.8 million, up $3.5 million from $28.3 million at the end of the first quarter. During the second quarter, operating activities provided approximately $8.1 million of cash, driven by net income and favorable changes in working capital, principally the collection of accounts receivable and higher accounts payable. Capital expenditures were approximately $2.0 million in the second quarter of fiscal 2026.
During the first six months of fiscal 2026, operating activities provided $13.3 million of cash, compared to $1.3 million used in the prior-year period, driven by favorable changes in working capital, most notably accounts receivable and accounts payable. Capital expenditures were $3.2 million for the first six months of fiscal 2026.
Total debt was $36.1 million at July 31, 2026, compared with $32.5 million at January 31, 2026.
At July 31, 2026, the Company had $17.3 million outstanding under its $18.0 million senior secured asset-based revolving credit facility with JPMorgan Chase Bank, N.A. Subsequent to quarter-end, on August 25, 2026, the Company entered into a new global credit agreement with JPMorgan that replaced this facility. The new facility consists of a $75.0 million revolving credit facility, which includes availability for letters of credit of up to $30.0 million, and a $14.0 million term loan facility, representing approximately $90 million of commitments at closing, together with access to up to an additional $50.0 million of incremental capacity. At closing, the Company borrowed $14.0 million under the term loan facility and, together with available cash, repaid the outstanding balance under its prior JPMorgan credit agreement; $23.0 million was outstanding under the new revolving credit facility at closing. Subsequent to quarter-end, the Company also repaid in full the mortgage note on its Alberta, Canada manufacturing plant using proceeds from the new facility.
Backlog and New Awards
Backlog was $142.3 million at July 31, 2026, compared to $136.5 million at April 30, 2026, and $121.6 million at January 31, 2026, and remains well diversified across geographies, customers, and end-markets. As previously announced on August 13, 2026, the Company secured more than $67 million in new orders during the second quarter, including significant oil and gas awards in MENA and Canada, the Company’s first critical-cooling infrastructure award in the MENA region, and continued backlog growth at its new Ohio manufacturing facility.
Conference Call and Webcast
The Company will host a conference call and webcast today at 7:30 a.m. CT/8:30 a.m. ET. During the conference call, management will review the financial and operating results and discuss Perma-Pipe’s corporate strategy. A question-and-answer session will follow. To listen to the live call, dial (877) 317-6789 or (412) 317-6789. In addition, the webcast and slide presentation may be found at link.
A telephonic replay will be available from 12:30 p.m. ET on the day of the call through Wednesday, September 16, 2026. To listen to the archived call, dial (855) 669-9658 or (412) 317-0088 and enter replay access code 2085365. The webcast replay can be accessed through link.
About Perma-Pipe International Holdings, Inc.
Perma-Pipe International Holdings, Inc. (Nasdaq: PPIH) is a global leader in engineered piping and corrosion protection solutions. The Company provides pre-insulated piping systems, leak detection systems, anti-corrosion coatings and related engineered products and services to customers across the energy, district energy, infrastructure, industrial, Oil & Gas, water transmission, and other critical infrastructure markets.
Perma-Pipe operates manufacturing and service facilities across North America, Middle East, North Africa, India and other strategic markets, enabling the Company to serve customers globally while providing local manufacturing and engineering capabilities.
For more information, visit www.permapipe.com.
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