Perma-Pipe International Holdings, Inc.

Perma-Pipe reported second-quarter net sales of $59.6 million, up 24% from $47.9 million a year ago. Gross profit was $17.4 million, or approximately 29% of sales, compared with $14.4 million, or approximately 30% last year. Income from operations was $4.3 million versus $3.2 million last year, and net income attributable to common stock was $2.5 million, or $0.31 per diluted share, versus $0.9 million, or $0.10 per diluted share. For the first six months, net sales were $109.8 million, gross profit was $32 million, and net income attributable to common stock was $4.3 million, or $0.53 per diluted share. Cash and cash equivalents were $31.8 million at July 31, 2026, total debt was $36.1 million, and net debt was approximately $4.3 million. Backlog was $142.3 million at quarter end, and management said 40%-50% of backlog should convert to revenue in the third quarter. No formal revenue or EPS guidance was given, but management said it expects a strong second half of fiscal 2026 barring a material worsening of market and geopolitical conditions.

Saleh Sagr framed the quarter as evidence that Perma-Pipe is broadening from a product company into a technology-enabled infrastructure platform, with growing exposure to data centers, water security, oil and gas, and district energy/cooling. He emphasized strategic progress from the Ohio and Qatar ramps, the Russell index inclusion, and the Jordan and Middle East initiatives as steps toward a larger long-term opportunity set. His tone was upbeat and expansionary, but he repeatedly anchored the outlook to disciplined execution and the need to manage geopolitical and logistics risk.

Matt Lewicki said Q2 sales growth was driven by higher volumes in MENA and North America, while gross margins held roughly in line year over year at about 29% despite product mix, startup costs, and the Ohio ramp. He highlighted a $3.9 million charge tied to an uncollectible receivable, operating expenses of $13.2 million in the quarter, and net income of $2.5 million, or $0.31 per share. On the balance sheet, he pointed to cash of $31.8 million, total debt of $36.1 million, and net debt of about $4.3 million, then noted the new JPMorgan facility provides a $75 million revolver, a $14 million term loan, and up to an additional $50 million of incremental capacity. He also said operating cash flow was $13.3 million for the first six months and capex was $3.2 million.

Analysts focused on tariffs, the Ohio facility ramp, the Welspun/Jordan opportunity, the bad debt charge, margin trajectory, and whether the new credit facility changes the size of projects Perma-Pipe can pursue. Management said tariffs can affect operations and input costs, but the company tries to mitigate through local sourcing and expects the impact to subside over time. On Ohio, management said the facility is primarily aimed at data centers and DHC, is still in ramp-up, and is expected to reach full production by early 2027. On the $3.9 million receivable write-off, Matt Lewicki said the company made a conservative decision not to pursue recovery at this time, though any future collection would flow back through the income statement.