Perma-Pipe Posts 24% Sales Growth Amidst $3.9M Receivable Charge

Perma-Pipe International Holdings reported second-quarter fiscal 2026 net sales of $59.6 million, a 24% increase year over year. Net income attributable to common stockholders rose to $2.5 million, or $0.31 per diluted share, compared with $0.9 million, or $0.10 per share, in the prior-year period. The company attributed the volume growth to increased activity in its Middle East and North Africa and North American operations.

The quarter included a $3.9 million charge for an uncollectible accounts receivable balance with a specific customer. CFO Matt Lewicki stated that the company conducted an extensive review of the customer’s financial position and ability to pay before determining the full write-off was appropriate. This charge was partially offset by an approximately $1.6 million tax benefit. Management noted that they are not currently pursuing recovery of the amount but will recognize any future collections as subsequent recoveries in the income statement.

Backlog Expansion Drives Pipeline

Perma-Pipe ended the quarter with a backlog of $142.3 million, up from $121.6 million at the end of fiscal 2025. The company secured $67.8 million in new orders during the period. Management projected that approximately 40% to 50% of the current backlog will convert into revenue during the third quarter. Substantially all remaining backlog is expected to be completed within the next 12 months.

Production capacity is expanding through new facilities in Ohio and Qatar, which are currently ramping up. The leak-detection business has also secured about 80% of its full-year bookings target. For the first six months of fiscal 2026, net sales totaled $109.8 million, a 16% increase from the comparable prior-year period. Gross profit for the half was $32 million, representing about 29% of sales, down from a 33% margin in the year-earlier period due to product mix and startup costs at the new Ohio facility.

Financing Supports Growth Initiatives

The company has secured greater financial flexibility to support larger projects and a pipeline exceeding $900 million. A new facility with JPMorgan provides approximately $90 million in initial commitments. This includes up to $50 million in additional capacity and $30 million in letter-of-credit availability. Management stated that this financing structure will support expansion opportunities in the water, energy, and infrastructure sectors.

Income from operations rose to $4.3 million in the second quarter from $3.2 million a year earlier. However, operating income for the first half declined to $8.9 million from $11.1 million in the prior-year period. This half-year decline reflects lower gross profit and higher operating expenses associated with the expansion activities and the receivable charge. The data provided by GN markets/earnings (en-US) highlights a period of significant volume growth balanced by specific financial adjustments.