Perma-Pipe Q1 sales rise 7.5% but EPS misses estimates
Perma-Pipe International Holdings reported a 7.5% increase in Q1 sales to $50.265 million, though this missed analyst estimates. Net income fell to $1.8 million, with EPS dropping 64% to $0.22, also missing consensus. The decline was attributed to geopolitical delays and compliance costs, while the backlog grew 12% to $136.5 million.
*this image is generated using AI for illustrative purposes only.
Perma-Pipe International Holdings, Inc. reported net sales of $50.265 million for the first quarter ended April 30, 2026, an increase of 7.53% compared to $46.747 million in the prior-year quarter. Despite the sales growth, the company missed the analyst consensus estimate of $54.000 million by 6.92%. Earnings per share (EPS) stood at $0.22, missing the analyst consensus estimate of $0.48 by 54.17% and decreasing 63.93% from $0.61 in the same period last year. The financial performance was impacted by geopolitical project delays in the Middle East and increased compliance costs.
President and Chief Executive Officer Saleh Sagr stated that geopolitical developments in the Middle East caused delays in project execution, affecting revenue recognition and profitability in the MENA region. He emphasized that no projects were cancelled and customer demand remains strong. Sagr added that the company anticipates both revenue growth and net income growth for fiscal 2026 compared to fiscal 2025.
Net income attributable to common stock decreased to $1.801 million from $4.952 million in the same period of fiscal 2025. Gross profit for the quarter was $14.636 million, down from $16.724 million in the prior-year quarter. The decline reflects project and product mix across jurisdictions, seasonal factors in Canada, and start-up costs for new manufacturing facilities in Ohio and Qatar. Selling, general and administrative expenses increased to $9.999 million from $8.835 million, driven by professional fees related to the company's transition to accelerated filer status and Sarbanes-Oxley compliance initiatives.
Earnings before income taxes were $3.9 million, compared to $7.4 million in the prior-year quarter. The effective tax rate rose to 34% from 21%, reflecting the impact of earnings mix across tax jurisdictions. Net interest expense increased to $0.6 million from $0.4 million, primarily due to incremental borrowings.
The company's backlog stood at $136.5 million at April 30, 2026, an increase of approximately 12% from $121.6 million at January 31, 2026. Sagr noted that the backlog includes contributions from recently awarded AI-driven data center projects in North America. The company also reported robust bidding activity across infrastructure, energy, industrial, water-related, and data center projects.
Financial Results
| Metric | Three Months Ended April 30, 2026 | Three Months Ended April 30, 2025 |
|---|---|---|
| Net sales | $50,265 | $46,747 |
| Gross profit | $14,636 | $16,724 |
| Total operating expenses | $9,999 | $8,835 |
| Income from operations | $4,637 | $7,889 |
| Net income attributable to common stock | $1,801 | $4,952 |
Balance Sheet Highlights
| Category | April 30, 2026 | January 31, 2026 |
|---|---|---|
| Total assets | $221,603 | $217,486 |
| Current liabilities | $63,372 | $79,789 |
| Long-term liabilities | $49,496 | $31,396 |
| Stockholders' equity | $92,241 | $90,638 |
Perma-Pipe International Holdings, Inc. expects to initiate quarterly earnings conference calls beginning with the second quarter of fiscal 2026 to enhance transparency and engagement with the investment community.
What is the expected timeline for resolving the geopolitical delays in the MENA region to normalize revenue recognition?
How will the ramp-up of the new manufacturing facilities in Ohio and Qatar impact gross margins in the coming quarters?
What portion of the $136.5 million backlog is expected to convert into revenue during the fiscal second quarter?
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