Perma-Pipe International Holdings, Inc.
For the period ended Oct 31, 2025. Filed Dec 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 31, 2025 · Filed Dec 12, 2025
PPIH$28.42+4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-31; filed 2025-09-15.
0001437749-25-029017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-12.
0001437749-25-037631
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 70 previous paragraphs and 71 current paragraphs.
33 unchanged; 32 reworded; 6 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Net income attributable to common stock was $6.3 million and $2.5 million in thethree months ended October 31, 2025 and 2024, respectively. The increaseof $3.8 million was mainly due to increased sales activity in the quarter, and better project execution.
Current report
Nine months ended October 31, 2025****vs. Nine months ended October 31, 2024
Current report
Debt
Current report
Debt consisted of the following:
Current report
We assess going concern uncertainty on a quarterly basis to determine if we have sufficient cash and cash equivalents on hand, working capital and access to capital through financing agreements to operate for a period of at least a year from the date of our consolidated financial statements are issued (the look-forward period). Our ability to continue as a going concern is dependent on many factors, including, among other things, our ability to comply with the covenants in our debt agreements, our ability to cure any defaults that may occur under our debt agreements, or forbearances with respect to any such defaults, and our ability to pay, retire, amend, replace or refinance our indebtedness as principal payments come due. We can offer no assurances that we will be able to successfully obtain financing.
Current report
A summary of our liquidity and relevant cash flows is presented above. We believe that our unrestricted cash, cash flows from operating activities and availability and commitments under existing financing agreements are sufficient to meet future business requirements for the look-forward period.
Removed paragraphs (5)
Previous report
Net income attributable to common stock was $0.9 million and $3.3 million in thethree months ended July 31, 2025 and 2024, respectively. The decreaseof $2.4 million, was mainly due to higher payroll expenses in connection with a one-time charge of $2.1 million related to an acceleration of certain executive compensation as a result of a departure from the organization.
Previous report
Public Float:
Previous report
The Company performed its public float calculation pursuant to the SEC's Public Float Test as of the last business day of its second fiscal quarter ended July 31, 2025. Based on this calculation, the Company concluded that its public float exceeded the threshold of $75 million to retain its filer status as a Smaller Reporting Company ("SRC"). As a result, the Company's filer status has changed and henceforth will be classified as an accelerated filer. Accordingly, the Company will be subject to the requirements within this classification, including an accelerated timeline to file certain periodic reports and will no longer be eligible for the scaled-down financial disclosure requirements provided to entities that meet the definition of an SRC. This change in filer status goes into effect for fiscal year ended January 31, 2026, which is the first annual report filed for the fiscal year in which the Company loses its SRC status.
Previous report
Six months ended July 31, 2025****vs. Six months ended July 31, 2024
Previous report
In December 2021, the Company entered into a credit arrangement for project financing with a bank in Egypt for 28.2 million Egyptian Pounds. As this project has progressed and the Company has received collections, the facility has decreased to a current amount of 2.1 million Egyptian Pounds (approximately $0.1 million at July 31, 2025). This credit arrangement is in the form of project financing at rates competitive in Egypt. The line is secured by the contract for a project being financed by the Company's Egyptian subsidiary. The facility has an interest rate of approximately 15.0% and, as of November 2022, is no longer available for borrowings by the Company. The facility will expire in connection with final customer balance collections and the completion of the project. The Company had no outstanding balance as of July 31, 2025 and January 31, 2025.
Reworded paragraphs (32)
Previous wording
Net sales were $ 47.9 million and $ 37.5 million in the three months ended July 31, 2025 and 2024, respectively. The increase of $10.4 million was a result of increased sales volumes in the Middle East and in North America.
Current wording
Net sales were $ 61.1 million and $ 41.6 million in the three months ended October 31, 2025 and 2024, respectively. The increase of $19.5 million was a result of increased sales volumes in the Middle East and in North America.
Previous wording
Gross profit was $14.4 million and $13.5 million in the three months ended July 31, 2025 and 2024, respectively. The increase of $0.9 million, was driven primarily by increased volume of activity in the quarter.
Current wording
Gross profit was $21.0 million and $14.1 million in the three months ended October 31, 2025 and 2024, respectively. The increase of $6.9 million was driven primarily by increased volume of activity in the quarter.
Previous wording
General and administrative expenses were $10.0 million and $6.0 million in the three months ended July 31, 2025 and 2024, respectively. The increase of $4.0 million, was mainly due to higher payroll expenses and professional fees in the quarter. This includes a one-time charge due to an acceleration of certain executive compensation expense in the quarter as a result of a departure from the organization.
Current wording
General and administrative expenses were $8.3 million and $7.3 million in the three months ended October 31, 2025 and 2024, respectively. The increase of $1.0 million was mainly due to higher payroll expenses and, to a lesser extent, professional fees in the quarter.
Previous wording
Selling expenses were $ 1.2 million and $ 1.4 million in the three months ended July 31, 2025 and 2024, respectively. The decrease of $ 0.2 million, was due to lower payroll expense in the quarter.
Current wording
Selling expenses were $ 1.3 million and $ 1.2 million in the three months ended October 31, 2025 and 2024, respectively. The increase of $ 0.1 million was due to higher payroll expense in the quarter.
Previous wording
Net interest expense remained consistent and was $0.4 million and $0.5 million in the three months ended July 31, 2025 and 2024, respectively.
Current wording
Net interest expense remained consistent and was $0.5 million in the three months ended October 31, 2025 and 2024, respectively.
Previous wording
The Company's ETR was 30% and 25% in the six months ended July 31, 2025 and 2024, respectively. The change in the ETR is due to the mix of income and loss in various jurisdictions, primarily an increase in income in UAE, and a tax deduction limitation that was attributable to an acceleration of certain executive compensation.
Current wording
The Company's ETR was 27% and 32% in the three months ended October 31, 2025 and 2024, respectively. The lower ETR for the three months ended October 31, 2025 is due to the mix of income and loss in various jurisdictions.
Previous wording
Net sales were $94.6 million and $71.8 million in the six months ended July 31, 2025 and 2024, respectively. The increase of $22.8 millionwas a result of increased sales volumes in the Middle East and in North America.
Current wording
Net sales were $155.8 million and $113.4 million in the nine months ended October 31, 2025 and 2024, respectively. The increase of $42.4 millionwas a result of increased sales volumes in the Middle East and in North America.
Previous wording
Gross profit was $31.1 million and $24.0 million in the six months ended July 31, 2025 and 2024, respectively. The increase of $7.1 million, was driven primarily by increased volume of activity and better margins due to product mix.
Current wording
Gross profit was $52.2 million and $38.1 million in the nine months ended October 31, 2025 and 2024, respectively. The increase of $14.1 million was driven primarily by increased volume of activity.
Previous wording
General and administrative expenses were $17.8 million and $12.1 million in the six months ended July 31, 2025 and 2024, respectively. The increase of $5.7 million, was due to higher payroll expenses and professional fees. This includes a one-time charge due to an acceleration of certain executive compensation expense as a result of a departure from the organization.
Current wording
General and administrative expenses were $26.1 million and $19.5 million in the nine months ended October 31, 2025 and 2024, respectively. The increase of $6.6 million was due to higher payroll expenses and professional fees. This includes a one-time charge of approximately $2.0 million due to an acceleration of certain executive compensation expense as a result of a departure from the organization.
Previous wording
Selling expenses remained consistent and were $2.3 million and $2.6 million in the six months ended July 31, 2025 and 2024, respectively. The decrease of $0.3 million was primarily attributable to lower payroll expenses.
Current wording
Selling expenses remained consistent and were $3.5 million and $3.8 million in the nine months ended October 31, 2025 and 2024, respectively. The decrease of $0.3 million was primarily attributable to lower payroll expenses.
Previous wording
Net interest expense was $0.8 million and $1.0 million in the six months ended July 31, 2025 and 2024, respectively. The decrease of $0.2 million was the result of an overall reduction in interest rates during the current year.
Current wording
Net interest expense was $1.3 million and $1.5 million in the nine months ended October 31, 2025 and 2024, respectively. The decrease of $0.2 million was the result of an overall reduction in interest rates during the current year.
Previous wording
The Company's ETR was 54% and 23% in the three months ended July 31, 2025 and 2024, respectively. The change in the ETR is due to the mix of income and loss in various jurisdictions, primarily an increase in income in UAE, and a tax deduction limitation that was attributable to an acceleration of certain executive compensation.
Current wording
The Company's ETR was 29% and 28% in the nine months ended October 31, 2025 and 2024, respectively. The change in the ETR is due to the mix of income and loss in various jurisdictions.
Previous wording
Net income attributable to common stock was $5.8 million and $4.7 million in thesix months ended July 31, 2025 and 2024, respectively. The increase of $1.1 million, was mainly due to increased sales volumes and better project execution during the current year, offset by higher payroll expenses in connection with a one-time charge due to an acceleration of certain executive compensation expense as a result of the recent departure of the former chief executive officer.
Current wording
Net income attributable to common stock was $12.1 million and $7.2 million in thenine months ended October 31, 2025 and 2024, respectively. The increase of $4.9 million was mainly due to increased sales volumes and better project execution during the current year.
Previous wording
Cash and cash equivalents as of July 31, 2025 were $17.3 million compared to $15.7 million on January 31, 2025. On July 31, 2025, $0.2 million was held in the United States, and $17.1 million was held at the Company's foreign subsidiaries. The Company's working capital was $58.5 million on July 31, 2025 compared to $54.7 million on January 31, 2025. Of the working capital components, accounts receivable increased by $4.1 million and cash and cash equivalents increased by $1.6 million as the result of the movements discussed below. As of July 31, 2025, the Company had $3.0 million of borrowing capacity under the Renewed Senior Credit Facility in North America and $14.9 million of borrowing capacity under its foreign revolving credit agreements. The Company had $9.7 million borrowed under the Renewed Senior Credit Facility and $5.8 million borrowed under its foreign revolving credit agreements at July 31, 2025.
Current wording
Cash and cash equivalents as of October 31, 2025 were $27.2 million compared to $15.7 million on January 31, 2025. On October 31, 2025, $0.3 million was held in the United States, and $26.9 million was held at the Company's foreign subsidiaries. The Company's working capital was $65.3 million on October 31, 2025 compared to $54.7 million on January 31, 2025. Of the working capital components, accounts receivable increased by $13.5 million and cash and cash equivalents increased by $11.5 million as the result of the movements discussed below. As of October 31, 2025, the Company had $3.3 million of borrowing capacity under the Renewed Senior Credit Facility in North America and $28.5 million of borrowing capacity under its foreign revolving credit agreements. The Company had $10.3 million borrowed under the Renewed Senior Credit Facility and $3.4 million borrowed under its foreign revolving credit agreements at October 31, 2025.
Previous wording
Net cash (used in) provided by operating activities was $(1.3) million and $2.7 million in the six months ended July 31, 2025 and 2024, respectively. The decrease of $4.0 million was primarily attributable to changes in accounts receivable and unbilled accounts receivable, partially offset by increases related to inventories, customer deposits, accounts payable, prepaid expenses and other current assets, and net income.
Current wording
Net cash provided by operating activities was $16.0 million and $7.9 million in the nine months ended October 31, 2025 and 2024, respectively. The increase of $8.1 million was primarily attributable to net income, customer deposits, and changes in accounts payable and other assets and liabilities, partially offset by increases in accounts receivable, unbilled receivables, inventories, prepaid expenses and other current assets, and inventories.
Previous wording
Net cash used in investing activities in thesix months ended July 31, 2025 and 2024 was $3.5 million and $1.2 million, respectively. Theincrease of $2.3 million was primarily due to increases in the amount of capital expenditures during the year.
Current wording
Net cash used in investing activities in thenine months ended October 31, 2025 and 2024 was $8.4 million and $1.6 million, respectively. Theincrease of $6.8 million was primarily due to increases in the amount of capital expenditures during the year.
Previous wording
Net cash provided by financing activities in thesix months ended July 31, 2025 and 2024 was $6.3 million and $2.2 million, respectively. Debt totaled $31.3 million and $24.5 million as of July 31, 2025 and January 31, 2025, respectively. See Note 10 - Debt, in the Notes to Consolidated Financial Statements for further discussion relating to this topic.
Current wording
Net cash provided by financing activities in thenine months ended October 31, 2025 and 2024 was $4.1 million and $1.3 million, respectively. Debt totaled $29.9 million and $24.5 million as of October 31, 2025 and January 31, 2025, respectively. See Note 10 - Debt, in the Notes to Consolidated Financial Statements for further discussion relating to this topic.
Previous wording
As of July 31, 2025, Perma-Pipe had $17.3 million of cash and cash equivalents on hand and committed debt facility agreements with commercial banks aggregating $63.0 million, for which $17.9 million was available. The Company believes these amounts are sufficient to meet future business requirements for at least the next 12 months and beyond.
Current wording
As of October 31, 2025, Perma-Pipe had $27.2 million of cash and cash equivalents on hand and committed debt facility agreements with commercial banks aggregating $74.9 million, for which $31.8 million was available. The Company believes these amounts are sufficient to meet future business requirements for at least the next 12 months and beyond.
Previous wording
As of July 31, 2025, the Company had borrowed an aggregate of$9.7 million at a rate of 9.0% and had $3.0 million available under the Renewed Senior Credit Facility. As of January 31, 2025, the Company had borrowed an aggregate of $6.8 million and had $3.7 million available under the Renewed Senior Credit Facility.
Current wording
As of October 31, 2025, the Company had borrowed an aggregate of$10.3 million at a rate of 8.5% and had $3.3 million available under the Renewed Senior Credit Facility. As of January 31, 2025, the Company had borrowed an aggregate of $6.8 million and had $3.7 million available under the Renewed Senior Credit Facility.
Previous wording
In accordance with ASC 842,Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially all of the fair value of the underlying assets. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.2 million is recognized in current maturities of long-term debt and the long-term portion of $8.7 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of July 31, 2025 . The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.
Current wording
In accordance with ASC 842,Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially all of the fair value of the underlying assets. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.3 million is recognized in current maturities of long-term debt and the long-term portion of $8.6 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of October 31, 2025 . The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.
Previous wording
The Company has a revolving line for 8.0 million U.A.E. Dirhams (approximately $ 2.2 million at July 31, 2025) from a bank in the U.A.E. As of July 31, 2025, the facility has an interest rate of approximately 7.6% and expires in November 2025, of which, the Company has started the process to renew and extend this credit arrangement. The Company had no borrowings outstanding under the credit facility as of July 31, 2025, and $0.4 million as of January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. As of July 31, 2025 and January 31, 2025, the Company had unused borrowing availability of approximately $2.2 million and $1.6 million, respectively.
Current wording
The Company has a revolving line for 8.0 million U.A.E. Dirhams (approximately $2.2 million at October 31, 2025) from a bank in the U.A.E. As of October 31, 2025, the facility has an interest rate of approximately 7.6% and expired in November 2025, of which, the Company does not intend to renew and extend this credit arrangement. The Company had no borrowings outstanding under this credit facility as of October 31, 2025, and $0.4 million as of January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. As of October 31, 2025, this revolving line has been cancelled and there is no further borrowing availability under this credit facility, and approximately $1.6 million of unused borrowing availability at January 31, 2025.
Previous wording
The Company has a revolving line for 17.5 million U.A.E. Dirhams (approximately $4.8 million at July 31, 2025) from a bank in the U.A.E. As of July 31, 2025, the facility has an interest rate of approximately 7.6% and expires in November 2025, of which, the Company has started the process to renew and extend this credit arrangement. The Company had borrowed an aggregate of $2.4 million as of July 31, 2025 and $0.1 million as of January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. The Company had unused borrowing availability of approximately $0.3 million and $2.5 million as of July 31, 2025 and January 31, 2025, respectively.
Current wording
The Company has a revolving line for 17.5 million U.A.E. Dirhams (approximately $4.8 million at October 31, 2025) from a bank in the U.A.E. As of October 31, 2025, the facility has an interest rate of approximately 7.6% and expired in November 2025, of which, the Company is in the process of renewing this credit arrangement with substantially the same terms and conditions and is in regular communication with the bank throughout this process ensuring the facility continues without interruption or penalty. The Company had borrowed an aggregate of $1.1 million as of October 31, 2025 and $0.1 million as of January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. As of October 31, 2025, approximately $1.9 million has been utilized in the form of a bank guarantee. The Company had unused borrowing availability of approximately $1.8 million and $2.5 million as of October 31, 2025 and January 31, 2025, respectively.
Previous wording
The Company has a revolving line for 47.7 million U.A.E. Dirhams (approximately $13.0 million at July 31, 2025) from a bank in the U.A.E. As of July 31, 2025, the facility has a minimum 8% interest rate and expires in December 2025. The Company had unused borrowing availability $5.3 million and $6.5 million as of July 31, 2025 and January 31, 2025, respectively.
Current wording
The Company has a revolving line for 47.7 million U.A.E. Dirhams (approximately $13.0 million at October 31, 2025) from a bank in the U.A.E. As of October 31, 2025, the facility has a minimum 8.0% interest rate and expiresin December 2025, for which the Company intends to renew and extend this revolving credit facility. As of October 31, 2025 and January 31, 2025, the Company had no borrowings outstanding with respect to this credit facility. As of October 31, 2025 approximately $6.8 million has been utilized in the form of a bank guarantee. The Companyhad unused borrowing availability of $6.2 million and $6.5 million as of October 31, 2025 and January 31, 2025, respectively.
Previous wording
The Company has a guarantee for 48.6 million U.A.E. Dirhams (approximately $13.2 million at July 31, 2025) from a bank in the U.A.E. There is no interest rate on this facility, however, it earns a 1% commission. As of July 31, 2025, approximately $11.0 million has been utilized in the form of a bank guarantee, with $2.2 million of availability remaining. Additionally, in August 2025, a line of credit was added to the agreement for 51.4 million U.A.E Dirhams (approximately $14.0 million at July 31, 2025) which will incur an additional .8% commission.
Current wording
The Company has a guarantee for 48.6 million U.A.E. Dirhams (approximately $13.2 million at October 31, 2025) from a bank in the U.A.E. There is no interest rate on this facility, however, it earns a 1% commission. As of October 31, 2025, approximately $11.0 million has been utilized in the form of a bank guarantee, with $2.2 million of availability remaining. Additionally, in August 2025, a line of credit was added to the agreement for 51.4 million U.A.E Dirhams (approximately $14.0 million at October 31, 2025) which will incur an additional 0.8% commission. As of October 31, 2025, there were no borrowings outstanding with respect to this additional line of credit, and approximately $14.0 million of unused availability.
Previous wording
In June 2021, and as renewed or amended subsequently thereafter, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $ 2.0 million at July 31, 2025). This credit arrangement is in the form of project financing, for which the line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable and restricted the Company's Egyptian subsidiary's ability to undertake any additional debt. As of July 31, 2025, the facility has an interest rate of approximately 20.8% and expires in November 2025. As of July 31, 2025 and January 31, 2025, the Company had an immaterial amount outstanding, which is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. Further, as of July 31, 2025 and January 31, 2025, the Company had approximately $2.0 million of unused borrowing capacity with respect to this credit arrangement.
Current wording
In June 2021, and as renewed or amended subsequently thereafter, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $2.0 million at October 31, 2025). This credit arrangement is in the form of project financing, for which the line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable and restricted the Company's Egyptian subsidiary's ability to undertake any additional debt. As of October 31, 2025, the facility has an interest rate of approximately 8.0% and expired in November 2025, of which, the Company is in the process of renewing this credit arrangement with substantially the same terms and conditions and is in regular communication with the bank throughout this process ensuring the facility continues without interruption or penalty. As of October 31, 2025 and January 31, 2025, the Company had an immaterial amount outstanding with respect to this credit arrangement, which is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. Further, as of October 31, 2025 and January 31, 2025, the Company had unused borrowing capacity of approximately $1.8 million and $2.0 million, respectively.
Previous wording
In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of 37.0 million Saudi Riyals (approximately $ 9.9 million at July 31, 2025). This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia. The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary, and expires in April 2026. As of July 31, 2025, the facility has an interest rate of approximately 9.0%. The Company had borrowed an aggregate of $3.3 million and $1.5 million as of July 31, 2025 and January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. The unused borrowing availability attributable to this credit arrangement at July 31, 2025 and January 31, 2025, was $2.9 million and $3.0 million, respectively.
Current wording
In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of 37.0 million Saudi Riyals (approximately $9.9 million at October 31, 2025). This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia. The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary, and expires in April 2026. As of October 31, 2025, the facility has an interest rate of approximately 9.0%. The Company had borrowed an aggregate of $2.0 million and $1.5 million as of October 31, 2025 and January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. The unused borrowing availability attributable to this credit arrangement at October 31, 2025 and January 31, 2025, was $2.5 million and $3.0 million, respectively.
Previous wording
These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and in some cases, a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of July 31, 2025 and January 31, 2025, the amount of foreign subsidiary debt guaranteed by the Company was approxim ately $8.6 million and $4.8 million, respectively.
Current wording
These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and in some cases, a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of October 31, 2025 and January 31, 2025, the amount of foreign subsidiary debt guaranteed by the Company was approxim ately $6.2 million and $4.8 million, respectively.
Previous wording
The Company was in compliance with respect to the covenants under the credit arrangements in the U.A.E., Egypt, and Saudi Arabia as of July 31, 2025. Although certain arrangements are set to expire and the borrowings could be required to be repaid immediately by the bank, the Company is in regular communication with the bank throughout the renewal process and the arrangements have continued without interruption or penalty. On July 31, 2025, interest rates were based on (i) the Emirates Inter Bank Offered Rate plus 3.0% to 3.5% per annum for the U.A.E. credit arrangements, two of which have a minimum interest rate of 4.5% per annum; (ii) either the Central Bank of Egypt corporate loan rate plus 1.5% to 3.5% per annum or the stated interest rate in the agreements for the Egypt credit arrangements; and (iii) the Saudi Inter-Bank Offered Rate plus 3.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of July 31, 2025, the Company's interest rates ranged from 7.6% to 20.8%, with a weighted average rate of 8.4%, and the Company had facility limits totaling$45.0 million under these credit arrangements. As of July 31, 2025, $24.4 million o f availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of July 31, 2025, the Company had borrow ed $5.8 million and had an additional$14.9 million ofborrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of current maturities of long-term debt in the Company's consolidated balance sheets as of July 31, 2025 and January 31, 2025.
Current wording
The Company was in compliance with respect to the covenants under the credit arrangements in the U.A.E., Egypt, and Saudi Arabia as of October 31, 2025. Although certain arrangements have expired or are set to expire and the borrowings could be required to be repaid immediately by the bank, the Company is in regular communication with the bank throughout the renewal process and the arrangements have continued without interruption or penalty. On October 31, 2025, interest rates were based on (i) the Emirates Inter Bank Offered Rate plus 3.0% to 3.5% per annum for the U.A.E. credit arrangements, two of which have a minimum interest rate of 4.5% per annum; (ii) either the Central Bank of Egypt corporate loan rate plus 1.5% to 3.5% per annum or the stated interest rate in the agreements for the Egypt credit arrangements; and (iii) the Saudi Inter-Bank Offered Rate plus 3.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of October 31, 2025, the Company's interest rates ranged from 7.6% to 20.8%, with a weighted average rate of 8.0%, and the Company had facility limits totaling$56.9 million under these credit arrangements. As of October 31, 2025, $25.0 million o f availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of October 31, 2025, the Company had borrow ed $6.2 million and had an additional$28.5 million ofborrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of current maturities of long-term debt in the Company's consolidated balance sheets as of October 31, 2025 and January 31, 2025.
Previous wording
In June 2023, the Company assumed a promissory note of approximately $2.8 million in connection with the formation of the joint venture with Gulf Insulation Group (see Note 15). In accordance with the promissory note, all principal is due and payable on the maturity date of April 9, 2026, with the option to prepay, in whole or in part, at any time prior to the maturity date, without premium or penalty. This amount is presented as a component of current liabilities in the Company's consolidated balance sheets.
Current wording
In June 2023, the Company assumed a promissory note of approximately $2.8 million in connection with the formation of the joint venture with Gulf Insulation Group (see Note 15). In accordance with the promissory note, all principal is due and payable on the maturity date of April 9, 2026, with the option to prepay, in whole or in part, at any time prior to the maturity date, without premium or penalty. This amount is presented on the Company's consolidated balance sheets as a component of current maturities of long-term debt at October 31, 2025, and as a component of long-term debt, net of current maturities at January 31, 2025.
Previous wording
***Mortgages.***On July 28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December 23, 2042. As of July 31, 2025, the remaining balance on the mortgage in Canada is approximately CAD 5.6 million (approximately $ 4 million at July 31, 2025). The interest rate is variable, and was 6.8% at July 31, 2025. The principal balance is included as a component of long-term debt, less current maturities in the Company's consolidated balance sheets and is presented net of issuance costs of $0.1 million as of July 31, 2025 and January 31, 2025.
Current wording
***Mortgages.***On July 28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December 23, 2042. As of October 31, 2025, the remaining balance on the mortgage in Canada is approximately CAD 5.5 million (approximately $ 3.9 million at October 31, 2025). The interest rate is variable, and was 6.6% at October 31, 2025. The principal balance is included as a component of long-term debt, less current maturities in the Company's consolidated balance sheets and is presented net of issuance costs of $0.1 million as of October 31, 2025 and January 31, 2025.
Previous wording
In 2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately $41.9 million. The system has not yet been commissioned by the customer. Nevertheless, the Company has received approximately $ 40.7 million as of July 31, 2025, with a remaining balance due in the amount of $ 1.2 million, all of which pertains to retention clauses within the agreements with the Company's customer, and which become payable by the customer when this project is fully tested and commissioned. Of this amount, $ 1.2 million is classified in other long-term assets on the Company's consolidated balance sheets.
Current wording
In 2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately $41.9 million. The system has not yet been commissioned by the customer. Nevertheless, the Company has received approximately $ 40.7 million as of October 31, 2025, with a remaining balance due in the amount of $ 1.2 million, all of which pertains to retention clauses within the agreements with the Company's customer, and which become payable by the customer when this project is fully tested and commissioned. Of this amount, $ 1.2 million is classified in other current long-term assets on the Company's consolidated balance sheets.
Previous wording
The Company has been actively involved in ongoing efforts to collect this outstanding balance. The Company continues to engage with the customer to ensure full payment of the open balances, and during the six months ended July 31, 2025, and at various times throughout 2024, the Company received partial payments to settle $ 0.6 million and $ 0.3 million, respectively, of the customer's outstanding balances. Further, the Company has been engaged by the customer to perform additional work in 2024 under customary trade terms that support the continued cooperation between the Company and the customer. As a result, the Company did not reserve any allowance against the remaining outstanding balances as of July 31, 2025. However, if the Company's efforts to collect on this account are not successful, the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts.
Current wording
The Company has been actively involved in ongoing efforts to collect this outstanding balance. The Company continues to engage with the customer to ensure full payment of the open balances, and during the nine months ended October 31, 2025, and at various times throughout 2024, the Company received partial payments to settle $ 0.6 million and $ 0.3 million, respectively, of the customer's outstanding balances. Further, the Company has been engaged by the customer to perform additional work in 2024 under customary trade terms that support the continued cooperation between the Company and the customer. As a result, the Company did not reserve any allowance against the remaining outstanding balances as of October 31, 2025. However, if the Company's efforts to collect on this account are not successful, the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts.