Perma-Pipe International Holdings, Inc.
For the period ended Jul 31, 2026. Filed Sep 9, 2026.
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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.
Jul 31, 2026 · Filed Sep 9, 2026
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 2026-04-30; filed 2026-06-09.
0001437749-26-019930
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-09-09.
0001437749-26-029988
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 63 previous paragraphs and 83 current paragraphs.
31 unchanged; 23 reworded; 26 added; 9 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 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 (26)
Current report
(In thousands unless otherwise specified)
Current report
Net sales were $ 59.6 million and $ 47.9 million in the three months ended July 31, 2026 and 2025, respectively. The increase of $ 11.7 million was driven by higher sales volumes in both North America and the Middle East and North Africa ("MENA") region.
Current report
Gross profit was $17.4 million, or 29% of net sales and $14.4 million, or 30% of net sales, in thethree months ended July 31, 2026 and 2025, respectively. Theincrease of $3.0 millionwas driven by higher sales volumes and consistent gross margins globally.
Current report
General and administrative expenses were $11.9 million and $10.0 million in thethree months ended July 31, 2026 and 2025, respectively. Theincrease of $1.9 million was primarily due to a $3.9 million write-off of a customer receivable during the second quarter of 2026, partially offset by a $2.0 million non-recurring acceleration of certain executive compensation expense recorded during the second quarter of fiscal 2025 in connection with an executive departure.
Current report
Six months ended July 31, 2026 vs. Six months ended July 31, 2025
Current report
Net sales:
Current report
Gross profit:
Current report
General and administrative expenses:
Current report
General and administrative expenses were $20.7 million and $17.8 million in thesix months ended July 31, 2026 and 2025, respectively. Theincrease of $2.9 million was primarily due toa $3.9 million write-off of a customer receivable during the second quarter of fiscal 2026, partially offset by a non-recurring acceleration of certain executive compensation expenses recorded in the second quarter of fiscal 2025 in connection with an executive departure. This decrease was partially offset by higher IT and office-related costs in the current year.
Current report
Selling expenses:
Current report
Selling expenses remained consistent and were $ 2.4 million and $ 2.3 million in the six months ended July 31, 2026 and 2025, respectively.
Current report
Interest expense:
Current report
Net interest expense was $1.1 million and $0.8 million in thesix months ended July 31, 2026 and 2025, respectively. Theincrease of $0.3 million was due to an increase in debt.
Current report
Income tax expense:
Current report
The Company's ETR was 25% and 30% in thesix months ended July 31, 2026 and 2025, respectively.
Current report
Public Float
Current report
The Company qualifies as both an accelerated filer and a Smaller Reporting Company ("SRC"), as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. Based on the Company's public float as of July 31, 2026, the Company will continue to qualify as both an accelerated filer and an SRC, consistent with its filer status for the fiscal year ended January 31, 2026. Accordingly, the Company remains subject to the filing deadlines applicable to accelerated filers while continuing to be eligible for the scaled disclosure accommodations available to SRCs.
Current report
Accounts Receivable Write-Off
Current report
During the quarter, the Company directly wrote off a $3.9 million customer receivable after determining that the receivable was uncollectible. This determination was based on the updated information received during the quarter regarding the customer’s ability and intent to pay.
Current report
Any future recoveries will be recognized if realized. The $3.9 million write-off is included as a component of bad debt expense for the period and is presented within general and administrative expenses in the condensed consolidated statements of operations for the three and six months ended July 31, 2026.
Current report
Cash and cash equivalents as of July 31, 2026, were $31.8 million, compared to $18.7 million as of January 31, 2026. As of July 31, 2026, $1.7 million of this total was held in the United States, and $30.1 million was held by the Company's foreign subsidiaries. The Company's working capital increased$16.5 million to $83.4 million at July 31, 2026, from $66.9 million at January 31, 2026. The increase primarily reflected a$13.8 million decrease in short-term borrowings and current maturities of long-term debt, a$13.1 million increase in cash and cash equivalents, a $9.1 million increase in unbilled accounts receivable, and decreases of$3.7 million in customers' deposits and $1.5 million in billings in excess of costs and estimated earnings on uncompleted contracts. These favorable movements, together with other current asset and liability movements that increased working capital by $3.7 million, net, were partially offset by a $17.2 million decrease in trade accounts receivable and an $11.1 million increase in trade accounts payable. Overall, current assets increased $6.8 million and current liabilities decreased $9.7 million.
Current report
Subsequent Event - 2026 Credit Agreement
Current report
On August 25, 2026, the Company, as borrower, certain subsidiaries of the Company party thereto as loan parties, the lenders party thereto and JPMorgan as administrative agent, entered into a Credit Agreement (the “2026 Credit Agreement”). The 2026 Credit Agreement replaces the Company’s existing Credit Agreement dated April 8, 2026 with JPMorgan, as lender (the “Existing Credit Agreement”), which was terminated concurrently with the closing of the 2026 Credit Agreement. In connection with the closing, all outstanding borrowings under the Existing Credit Agreement were repaid in full. The 2026 Credit Agreement provides for a secured credit facility consisting of a $75.0 million revolving credit facility, which includes availability for letters of credit up to $30.0 million and swingline loans up to $5.0 million, and a $14.0 million term loan facility. Subject to the terms and conditions set forth in the 2026 Credit Agreement, the Company may also request increases in the revolving commitments or incremental term loans in an aggregate amount not to exceed $50.0 million. On the closing date, the Company borrowed $14.0 million under the term loan facility, and the proceeds thereof, together with other available cash, were used to repay outstanding borrowings under the Existing Credit Agreement. As of the closing date, $23.0 million was outstanding under the revolving credit facility. The Company intends to use borrowings under the 2026 Credit Agreement for working capital and general corporate purposes, which may include, from time to time, permitted acquisitions and other investments.
Current report
The revolving loans may be borrowed, repaid and reborrowed from time to time prior to the revolving credit maturity date, and the term loans are scheduled to amortize in quarterly installments beginning September 30, 2026, with the remaining unpaid principal due on the term loan maturity date. The revolving credit facility and term loan facility mature on August 25, 2031, unless earlier terminated or accelerated in accordance with the terms of the 2026 Credit Agreement.
Current report
Borrowings under the 2026 Credit Agreement bear interest, at the Company’s option and subject to the terms of the 2026 Credit Agreement, at rates based on the Alternate Base Rate or applicable term benchmark rates, including Adjusted Term SOFR, Adjusted EURIBOR or Adjusted Term CORRA, plus an applicable margin (each as defined in the 2026 Credit Agreement). The applicable margin is determined by reference to the Company’s leverage ratio and ranges from 1.50% to 2.00% for Alternate Base Rate loans and from 2.50% to 3.00% for term benchmark and RFR loans (each as defined in the 2026 Credit Agreement). The Company is also required to pay a commitment fee on the unused portion of the revolving commitments at a rate ranging from 0.20% to 0.30%, based on the Company’s leverage ratio, as well as customary fees with respect to letters of credit and administrative agent fees.
Current report
The obligations under the 2026 Credit Agreement are guaranteed by certain subsidiaries of the Company and are secured by liens on collateral granted by the loan parties. The 2026 Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The covenants include, among others, restrictions on indebtedness, liens, investments, dispositions, restricted payments and certain other transactions, as well as financial covenants requiring compliance with a leverage ratio and a fixed charge coverage ratio. The 2026 Credit Agreement requires the Company to maintain a consolidated leverage ratio of not more than 3.00 to 1.00 and a fixed charge coverage ratio of not less than 1.25 to 1.00, subject to the terms and exceptions thereof. As the 2026 Credit Agreement was executed after the balance sheet date, no amounts were outstanding under this facility as of July 31, 2026.
Removed paragraphs (9)
Previous report
(In thousands, except per share data, or unless otherwise specified)
Previous report
General and administrative expenses were $8.8 million and $7.7 million in thethree months ended April 30, 2026 and 2025, respectively. Theincrease of $1.1 million was mainly due to higher payroll expenses and professional fees relating to Sarbanes-Oxley 404 compliance in connection with our transition from a non-accelerated filer to an accelerated filer.
Previous report
Cash and cash equivalents as of April 30, 2026, were $28.3 million, compared to $18.7 million as of January 31, 2026. As of April 30, 2026, $0.6 million of this total was held in the United States, and $27.7 million was held by the Company's foreign subsidiaries. The Company's working capital increased to $83.0 million as of April 30, 2026, from $66.9 million on January 31, 2026. This $16.1 million increase in working capital was primarily driven by a $16.4 million decrease in current liabilities, largely attributable to the reclassification of $11.1 million from current to long-term liabilities in connection with the new J.P. Morgan Chase Credit Agreement (as further described below). This increase was partially offset by a $14.8 million decrease in accounts receivable; however, the decrease in accounts receivable reflected improved collection activity during the quarter, driving the $9.6 million increase in cash and cash equivalents. Remaining changes in working capital components resulted from smaller, customary quarterly fluctuations.
Previous report
Revolving lines - North America**.**
Previous 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 one year from the date 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 we will be able to successfully obtain financing.
Previous 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 under existing financing agreements are sufficient to meet future business requirements for the twelve months following the issuance of these Condensed Consolidated Financial Statements.
Previous report
Accounts receivable:
Previous report
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 April 30, 2026, 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 Condensed Consolidated Balance Sheets.
Previous report
The Company continues to engage with the customer to collect the remaining balance. No payments were received during the three months ended April 30, 2026. However, the Company previously received partial payments to settle $0.6 million and $0.4 million of the customer's outstanding balances during 2025 and 2024, respectively. Additionally, the Company has been engaged by the customer to perform additional work in 2026 under customary trade terms; remaining payments are expected to be received upon completion of this new scope and fulfillment of related terms and conditions, supporting 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 April 30, 2026. 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.
Reworded paragraphs (23)
Previous wording
Selling expenses remained consistent and were $ 1.2 million and $ 1.1 million in the three months ended April 30, 2026 and 2025, respectively.
Current wording
Selling expenses remained consistent and were $ 1.3 million and $ 1.2 million in the three months ended July 31, 2026 and 2025, respectively.
Previous wording
Net interest expense was $0.6 million and $0.4 million in thethree months ended April 30, 2026 and 2025, respectively. The increase of $0.2 was due to an increase in debt.
Current wording
Net interest expense was $0.5 million and $0.4 million in thethree months ended July 31, 2026 and 2025, respectively. The increase of $0.1 was due to an increase in debt.
Previous wording
The Company's ETR was 34% and 21% in thethree months ended April 30, 2026 and 2025, respectively. The higher ETR for the three months ended April 30, 2026 is due to the mix of income and loss in various jurisdictions.
Current wording
The Company's ETR was 16% and 54% in thethree months ended July 31, 2026 and 2025, respectively. The lower ETR for the three months ended July 31, 2026 is due to the mix of income and loss in various jurisdictions.
Previous wording
Net income attributable to common stock was$1.8 million and$5.0 million in thethree months ended April 30, 2026 and 2025, respectively. Thedecrease of$3.2 millionwas the result of the changes discussed above, net of amounts attributable to non-controlling interest.
Current wording
Net income attributable to common stock was$2.5 million and$0.9 million in thethree months ended July 31, 2026 and 2025, respectively. Theincrease of$1.6 million was the result of the changes discussed above, net of amounts attributable to non-controlling interest.
Previous wording
Net sales were $ 50.3 million and $ 46.7 million in the three months ended April 30, 2026 and 2025, respectively. The increase of $ 3.6 million was driven by higher sales volumes in both North America and the MENA region.
Current wording
Net sales were $ 109.8 million and $ 94.6 million in the six months ended July 31, 2026 and 2025, respectively. The increase of $ 15.2 million was driven by higher sales volumes in both North America and the MENA region.
Previous wording
Gross profit was $14.6 million and $16.7 million in thethree months ended April 30, 2026 and 2025, respectively. Thedecrease of $2.1 million was primarily attributable toproduct mix across various jurisdictions, particularly in Canada due to seasonal factors, together with start-up and ramp-up costs associated with the Company's new Ohio manufacturing facility as well as ongoing project ramp-up costs in Qatar.
Current wording
Gross profit was $32.0 million, or 29% of net sales and $31.1 million, or 33% of net sales, in thesix months ended July 31, 2026 and 2025, respectively. Theincrease of $0.9 million was primarily driven by higher sales volumes, and is partially offset with the product mix across various jurisdictions in the first quarter, particularly in Canada due to seasonal factors, together with start-up and ramp-up costs associated with the Company's new Ohio manufacturing facility as well as ongoing project ramp-up costs in Qatar.
Previous wording
Net cash provided by operating activities was $6.1 million and $0.7 million in thethree months ended April 30, 2026 and 2025, respectively. Theincrease of $5.4 million was primarily attributable to favorable changes in operating assets and liabilities, partially offset by lower net income.
Current wording
Net cash provided by (used in) operating activities was $13.3 million and $(1.3) million in thesix months ended July 31, 2026 and 2025, respectively. Theincrease of $14.6 million was primarily attributable to favorable changes in operating assets and liabilities, most notably through accounts receivable and accounts payable.
Previous wording
Net cash used in investing activities in thethree months ended April 30, 2026 and 2025 was $1.3 million and $0.9 million, respectively. Theincrease of $0.4 million was primarily due to increases in the amount of capital expenditures during the year.
Current wording
Net cash used in investing activities in thesix months ended July 31, 2026 and 2025 was $3.2 million and $3.5 million, respectively. The change of $0.3 million was primarily due to decreases in the amount of capital expenditures during the current year.
Previous wording
Net cash provided by financing activities in thethree months ended April 30, 2026 and 2025 was $4.8 million and $3.2 million, respectively. Debt totaled $38.0 million and $32.5 million as of April 30, 2026 and January 31, 2026, respectively. See Note 10 - Debt, in the Notes to Condensed Consolidated Financial Statements for further discussion relating to this topic.
Current wording
Net cash provided by financing activities in thesix months ended July 31, 2026 and 2025 was $2.5 million and $6.3 million, respectively. Debt totaled $36.1 million and $32.5 million as of July 31, 2026 and January 31, 2026, respectively. See Note 10 - Debt, in the Notes to Condensed Consolidated Financial Statements for further discussion relating to this topic.
Previous wording
Restricted cash was $3.5 million as of April 30, 2026 and $3.6 million January 31, 2026. This balance primarily relates to fixed deposits utilized as security deposits and financial guarantees.
Current wording
Restricted cash was $3.0 million as of July 31, 2026 and $3.6 million as of January 31, 2026. This balance primarily relates to fixed deposits utilized as security deposits and financial guarantees.
Previous wording
On April 8, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as borrower, the other loan parties thereto, and JPMorgan Chase Bank, N.A., as lender (the “Lender”). The Credit Agreement effectively replaced the Company’s previous credit facility (the "PNC Credit Facility") with PNC Bank, National Association ("PNC"). On April 9, 2026, the Company drew $15.3 million under the Credit Agreement to pay off the remaining $15.2 million outstanding balance under the PNC Credit Facility and to fund $0.1 million of cash collateral required for cash management and purchasing card solutions. As of January 31, 2026, the Company had borrowed an aggregate of $10.7 million at a rate of 7.8% and had $2.7 million available under the PNC Credit Facility.
Current wording
Revolving lines - North America**.** On April 8, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as borrower, the other loan parties thereto, and JPMorgan Chase Bank, N.A., as lender (“JPMorgan”). The Credit Agreement effectively replaced the Company’s previous credit facility (the "PNC Credit Facility") with PNC Bank, National Association. On April 9, 2026, the Company drew $15.3 million under the Credit Agreement to pay off the remaining $15.2 million outstanding balance under the PNC Credit Facility and to fund $0.1 million of cash collateral required for cash management and purchasing card solutions. As of January 31, 2026, the Company had borrowed an aggregate of $10.7 million at a rate of 7.8% and had $2.7 million available under the PNC Credit Facility.
Previous wording
As of April 30, 2026, the outstanding balance under the Credit Agreement was $15.3 million with a weighted-average interest rate of 8.8% and there were no outstanding letters of credit under the sublimit. Borrowings under the Credit Agreement are limited to the lesser of the revolving commitment and a borrowing base calculated as (i) 80% of eligible North American accounts receivable, plus (ii) 25% of eligible North American inventory (valued at the lower of cost or market), in each case subject to customary eligibility criteria and reserves established by the Lender. As of April 30, 2026, the borrowing base calculation limited the maximum availability under the facility to an amount below the aggregate revolving commitment. As a result, $0.7 million has been classified as current debt as of April 30, 2026.
Current wording
As of July 31, 2026, the outstanding balance under the Credit Agreement was $17.3 million with a weighted-average interest rate of 6.9% and there were no outstanding letters of credit under the sublimit. Borrowings under the Credit Agreement are limited to the lesser of the revolving commitment and a borrowing base calculated as (i) 80% of eligible North American accounts receivable, plus (ii) 25% of eligible North American inventory (valued at the lower of cost or market), in each case subject to customary eligibility criteria and reserves established by JPMorgan.
Previous wording
The Credit Agreement contains customary affirmative and negative covenants, including, among other things, limitations on additional indebtedness, liens, investments, acquisitions, asset sales, restricted payments, and transactions with affiliates. The Credit Agreement also includes financial maintenance covenants requiring the Company to maintain both (1) a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) and (2) a maximum Leverage Ratio, which are tested upon the occurrence of certain availability thresholds.
Current wording
The Credit Agreement contains customary affirmative and negative covenants, including, among other things, limitations on additional indebtedness, liens, investments, acquisitions, asset sales, restricted payments, and transactions with affiliates. The Credit Agreement also includes financial maintenance covenants requiring the Company to maintain both a minimum Fixed Charge Coverage Ratio and a maximum Leverage Ratio (each as defined in the Credit Agreement), which are tested upon the occurrence of certain availability thresholds.
Previous wording
The Company maintains a credit facility with a financial institution in the U.A.E. totaling 65.2 million U.A.E. Dirhams (“AED”) (approximately $17.7 million at April 30, 2026). Borrowings under the facility bear interest at the Emirates Inter Bank Offered Rate (“EIBOR”) plus 3.5% per annum, subject to minimum interest rates ranging from 4.5% to 8.0% per annum, depending on the type of financing utilized. The facility is stratified by instrument type and expires at various dates through October 2026. As of April 30, 2026, the Company was in compliance with all covenants under this facility. As of April 30, 2026 and January 31, 2026, the Company had outstanding borrowingsof 12.2 million AED (approximately $3.3 million) and 9.4 million AED (approximately $2.6 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. Additionally, as of April 30, 2026 and January 31, 2026, the Company had issued guarantees totaling 31.9 million AED (approximately $8.7 million) and 30.9 million AED (approximately $8.4 million). After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $5.7 million and $6.8 million under the credit facility as of April 30, 2026 and January 31, 2026, respectively.
Current wording
The Company maintains a credit facility with a financial institution in the U.A.E. totaling 65.2 million U.A.E. Dirhams (“AED”) (approximately $17.7 million at July 31, 2026). Borrowings under the facility bear interest at the Emirates Inter Bank Offered Rate (“EIBOR”) plus 3.5% per annum, subject to minimum interest rates ranging from 4.5% to 8.0% per annum, depending on the type of financing utilized. The facility is stratified by instrument type and expires at various dates through October 2026. While certain portions of the credit arrangement have expired, the subsidiary continues to access the facility under the same terms while formal documentation of a renewal is being finalized with the lender. As of July 31, 2026, the Company was in compliance with all financial covenants under the Facility, including a maximum Adjusted Leverage Ratio and a minimum Adjusted Tangible Net Worth requirement. As of July 31, 2026 and January 31, 2026, the Company had outstanding borrowings of 5.5 million AED (approximately $1.5 million) and 9.4 million AED (approximately $2.6 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. Additionally, as of July 31, 2026 and January 31, 2026, the Company had issued guarantees totaling 28.0 million AED (approximately $7.6 million) and 30.9 million AED (approximately $8.4 million). After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $8.6 million and $6.8 million under the credit facility as of July 31, 2026 and January 31, 2026, respectively.
Previous wording
The Company maintains a letter of credit facility with a financial institution in the U.A.E. totaling 100.0 million AED (approximately $27.2 million at April 30, 2026), portions of which expire in July 2026, and a portion of which expired in April 2026. The portion that expired in April 2026 remains in effect under the same terms. 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 facility is non-interest bearing; however, the Company incurs a commission ranging from 0.8% to 1.0% per annum on the face value of issued instruments and is required to maintain cash collateral (margins) ranging from 10% to 15% depending on the type of instrument utilized. As of April 30, 2026, the Company had outstanding guarantees under this facility of 39.3 million AED (approximately $10.7 million). The remaining available balance under the facility was approximately $16.5 million as of April 30, 2026.
Current wording
The Company maintains a letter of credit facility with a financial institution in the U.A.E. totaling 100.0 million AED (approximately $27.2 million at July 31, 2026). While the credit arrangement had a scheduled expiration date in July 2026, the subsidiary continues to access the facility under the same terms while formal documentation of a renewal is being finalized with the lender. T he facility is non-interest bearing; however, the Company incurs a commission ranging from 0.8% to 1.0% per annum on the face value of issued instruments and is required to maintain cash collateral (margins) ranging from 10% to 15% depending on the type of instrument utilized. As of July 31, 2026, the Company had outstanding guarantees under this facility of 39.3 million AED (approximately $10.7 million). The remaining available balance under the facility was approximately $16.5 million as of July 31, 2026.
Previous wording
As of April 30, 2026, borrowings under the Company’s credit facility in Egypt bore interest at rates ranging from 15.0% to 20.8%. The 15.0% rate relates to specific government-sponsored initiatives, while the 20.8% rate applies to our general facility limits. The Company had $0.2 million outstanding under this arrangement as of both April 30, 2026 and January 31, 2026. These amounts are included in "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets. As of both April 30, 2026 and January 31, 2026, the Company had unused availability of approximately $2.2 million.
Current wording
As of July 31, 2026, borrowings under the Company’s credit facility in Egypt bore interest at rates ranging from 15.0% to 20.8%. The 15.0% rate relates to specific government-sponsored initiatives, while the 20.8% rate applies to our general facility limits. The Company had no amount outstanding and $0.2 million outstanding under this arrangement as of July 31, 2026 and January 31, 2026, respectively. These amounts are included in "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets. As of July 31, 2026 and January 31, 2026, the Company had unused availability of approximately $2.4 million and $2.2 million, respectively.
Previous wording
As of April 30, 2026, the facility bore interest at a rate of approximately 8.5%. As of April 30, 2026 and January 31, 2026, the Company had outstanding borrowingsof 8.3 million SAR (approximately $2.2 million) and 10.9 million SAR (approximately $2.9 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. Additionally, as of April 30, 2026 and January 31, 2026, the Company had issued guarantees totaling 0.4 million SAR (approximately $0.1 million) and 6.3 million SAR (approximately $1.7 million), respectively. After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $7.6 million and $5.3 million under the credit facility as of April 30, 2026 and January 31, 2026, respectively.
Current wording
As of July 31, 2026, the facility bore interest at a rate of approximately 8.5%. As of July 31, 2026 and January 31, 2026, the Company had outstanding borrowings of 3.0 million SAR (approximately $0.8 million) and 10.9 million SAR (approximately $2.9 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. Additionally, as of July 31, 2026 and January 31, 2026, the Company had issued guarantees totaling 5.0 million SAR (approximately $1.3 million) and 6.3 million SAR (approximately $1.7 million), respectively. After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $7.8 million and $5.3 million under the credit facility as of July 31, 2026 and January 31, 2026, 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 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 April 30, 2026 and January 31, 2026, the amount of foreign subsidiary debt guaranteed by the Company was approximately $8.5 million and $8.4 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 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, 2026 and January 31, 2026, the amount of foreign subsidiary debt guaranteed by the Company was approximately $5.0 million and $8.4 million, respectively.
Previous wording
The Company was in compliance with respect to the covenants under the foreign credit arrangements as of April 30, 2026. Certain of these arrangements are subject to periodic renewal; while such renewals are being processed, the Company remains in regular communication with the lenders, and the arrangements have historically continued without interruption or penalty. On April 30, 2026, interest rates were based on (i) the EIBOR plus 3.5% per annum for the U.A.E. credit arrangements, which have minimum interest rates ranging from 4.5% to 8.0% per annum; (ii) interest rates ranging from 15.0% to 20.8% for the Egypt credit arrangements; and (iii) an interest rate of 8.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of April 30, 2026, the Company's interest rates ranged from 7.3% to 20.8%, with a weighted average rate of 7.9%, and the Company had facility limits totaling $57.2 million under these credit arrangements. As of April 30, 2026, $19.5 million of the facility limits were utilized to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of April 30, 2026, the Company had borrowed $5.7 million and had an additional $32.0 million of borrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets as of April 30, 2026 and January 31, 2026.
Current wording
The Company was in compliance with respect to the financial covenants under the foreign credit arrangements as of July 31, 2026. Certain of these arrangements are subject to periodic renewal; while such renewals are being processed, the Company remains in regular communication with the lenders, and the arrangements have historically continued without interruption or penalty. On July 31, 2026, interest rates were based on (i) the EIBOR plus 3.5% per annum for the U.A.E. credit arrangements, which have minimum interest rates ranging from 4.5% to 8.0% per annum; (ii) interest rates ranging from 15.0% to 20.8% for the Egypt credit arrangements; and (iii) an interest rate of 8.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of July 31, 2026, the Company's interest rates ranged from 7.4% to 20.8%, with a weighted average rate of 8.0%, and the Company had facility limits totaling $57.2 million under these credit arrangements. As of July 31, 2026, $19.6 million of the facility limits were utilized to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of July 31, 2026, the Company had borrowed $2.3 million and had an additional $35.3 million of borrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets as of July 31, 2026 and January 31, 2026.
Previous wording
Finance obli gation - buildings and land. On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement") to sell its land and building in Lebanon, Tennessee (the "Property"). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale of the Property, the Company paid off the approximately $0.9 million remaining on the mortgage note on the Property to its lender. The Company used the remaining proceeds to repay its borrowings under the PNC Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into a fifteen-year lease agreement (the “Lease Agreement”), whereby the Company is leasing back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option. As of April 30, 2026 and January 31, 2026, the Company had a net book value relating to this asset of $1.6 million and $1.7 million, respectively.
Current wording
Finance obligation - buildings and land. On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement") to sell its land and building in Lebanon, Tennessee (the "Property"). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale of the Property, the Company paid off the approximately $0.9 million remaining on the mortgage note on the Property to its lender. The Company used the remaining proceeds to repay its borrowings under the PNC Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into a fifteen-year lease agreement (the “Lease Agreement”), whereby the Company is leasing back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option. As of July 31, 2026 and January 31, 2026, the Company had a net book value relating to this asset of $1.6 million and $1.7 million, respectively.
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 the fair value of the underlying asset. 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 "Short-term borrowings and current maturities of long-term debt" and the long-term portion of $8.5 million is recognized in "Long-term finance obligation" on the Condensed Consolidated Balance Sheets as of April 30, 2026. 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 the fair value of the underlying asset. 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 "Short-term borrowings and current maturities of long-term debt" and the long-term portion of $8.4 million is recognized in "Long-term debt, less current maturities" on the Condensed Consolidated Balance Sheets as of July 31, 2026. The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.
Previous wording
Mortgage Note. 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 April 30, 2026, the remaining balance on the mortgage in Canada is approximately 5.3 million Canadian Dollars ("CAD") (approximately $3.9 million). The interest rate is variable, and was 6.3% at April 30, 2026. The principal balance is included as a component of "Short-term borrowings and current maturities of long-term debt" and "Long-term debt, less current maturities" on the Condensed Consolidated Balance Sheets and is presented net of issuance costs of $0.1 million as of April 30, 2026 and January 31, 2026.
Current wording
Mortgage Note. 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, 2026, the remaining balance on the mortgage in Canada is approximately 5.3 million Canadian Dollars ("CAD") (approximately $3.7 million). The interest rate is variable, and was 6.3% at July 31, 2026. The principal balance is included as a component of "Short-term borrowings and current maturities of long-term debt" and "Long-term debt, less current maturities" on the Condensed Consolidated Balance Sheets and is presented net of issuance costs of $0.1 million as of July 31, 2026 and January 31, 2026. Subsequent to July 31, 2026, the mortgage note was repaid in full on August 28, 2026, using proceeds from the 2026 Credit Agreement.
Previous wording
***Loan Payable to GIG.***In June 2023, in connection with the formation of a joint venture with Gulf Insulation Group (“GIG”), the Company assumed a promissory note with an aggregate principal amount of approximately $2.8 million, which matured on April 9, 2026. The note that expired in April 2026 remains in effect under the same terms as of April 30, 2026. Through the date of this filing, the Company and GIG are engaged in constructive discussions to reach an agreement on renewal or settlement of the promissory note. Because a definitive agreement has not been executed as of the balance sheet date, the Company did not possess a contractual, unconditional right to defer settlement of the obligation for at least twelve months following April 30, 2026. Accordingly, the full obligation is classified within “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets as of April 30, 2026.
Current wording
Loan Payable to GIG. In June 2023, in connection with the formation of a joint venture with Gulf Insulation Group (“GIG”), the Company assumed a promissory note with an aggregate principal amount of approximately $2.8 million, which matured on April 9, 2026. Through the date of this filing, the Company and GIG are engaged in constructive discussions to reach an agreement on renewal or settlement of the promissory note. Because a definitive agreement has not been executed as of the balance sheet date, the Company did not possess a contractual, unconditional right to defer settlement of the obligation for at least twelve months following July 31, 2026. Accordingly, the full obligation is classified within “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets as of July 31, 2026.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
For further information, see Note 6 - Income taxes, in the Notes to Condensed Consolidated Financial Statements.
Current report — wording carried from elsewhere
Net income attributable to common stock:
Current report — wording carried from elsewhere
Net income attributable to common stock was $4.3 million and $5.8 million in thesix months ended July 31, 2026 and 2025, respectively. Thedecrease of $1.5 million was the result of the changes discussed above, net of amounts attributable to non-controlling interest.