Perma-Pipe Restates Financials Amidst Review

TL;DR

Perma-Pipe is ditching old financials due to accounting issues - expect a restatement.

AI Summary

Perma-Pipe International Holdings, Inc. announced on December 19, 2024, that it will not rely on previously issued financial statements for the fiscal year ended January 31, 2024, and interim periods thereafter, due to an ongoing internal review. The company is investigating potential accounting errors related to revenue recognition and inventory valuation.

Why It Matters

Investors should be aware that previously reported financial results may be inaccurate, potentially impacting the company's valuation and future performance.

Risk Assessment

Risk Level: high — The non-reliance on previously issued financial statements indicates significant accounting irregularities that could lead to substantial restatements and impact investor confidence.

Key Players & Entities

• Perma-Pipe International Holdings, Inc. (company) — Registrant
• January 31, 2024 (date) — Fiscal year end affected
• December 19, 2024 (date) — Date of report

FAQ

Key Financial Figures

• $1.4 million — t of PP&E and trade accounts payable of $1.4 million on the unaudited consolidated balance s
• $0.4 million — atement of trade accounts receivable of $0.4 million and a corresponding understatement of P
• $0.5 million — et cash used in investing activities of $0.5 million and corresponding overstatement in effe

Filing Documents

• ppih20241216_8k.htm (8-K) — 32KB
• 0001437749-24-038156.txt ( ) — 162KB
• ppih-20241211.xsd (EX-101.SCH) — 3KB
• ppih-20241211_def.xml (EX-101.DEF) — 11KB
• ppih-20241211_lab.xml (EX-101.LAB) — 15KB
• ppih-20241211_pre.xml (EX-101.PRE) — 11KB
• ppih20241216_8k_htm.xml (XML) — 3KB

02

Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. On December 19, 2024, the Audit Committee of the Board of Directors of Perma-Pipe International Holdings, Inc. (the "Company"), in consultation with members of the Company's management and the Company's independent registered public accounting firm, concluded that the Company's unaudited consolidated financial statements in its Quarterly Report on Form 10-Q for the six m onths ended July 31, 2024, should no longer be relied upon due to the aggregate impact of certain errors as described below and should be restated. As a result, the Company will correct these errors by filing an amended Quarterly Report on Form 10-Q (the "Form 10-Q/A"), as soon as practicable. The errors resulted from a subsidiary in the Middle East incorrectly recording a duplicate invoice during the three months ended April 30, 2024. This duplication related to the purchase of property, plant, and equipment ("PP&E"), resulting in an overstatement of PP&E and trade accounts payable of $1.4 million on the unaudited consolidated balance sheet and a corresponding overstatement of net cash provided by operating activities and net cash used in investing activities in the unaudited consolidated statement of cash flows. The Company also identified certain intercompany transactions related to asset transfers in the Middle East that were not appropriately eliminated in the Company's unaudited consolidated financial statements for the three months ended July 31, 2024. The failure to appropriately eliminate these intercompany transactions resulted in the following errors in the Company's unaudited consolidated financial statements: An overstatement of trade accounts receivable of $0.4 million and a corresponding understatement of PP&E on the consolidated balance sheet. An understatement of net cash provided by operating activities of $0.4 million and a corresponding overstatement in

Forward-Looking Statements

Forward-Looking Statements This Form 8-K contains certain "forward-looking statements" relating to, among other things, the Company, the Quarterly Report, and the Company's business, plans, results and operations. All statements, other than statements of historical fact included herein, are "forward-looking statements." Forward-looking statements are often identified by the use of forward-looking terminology, such as "expects," "anticipates," "estimates," "projects," "intends," "plans," "believes," "predicts," "should," "will", "could", "would", "may", "forecast" or similar expressions, and involve known and unknown risks and uncertainties that could cause the Company's actual results to differ materially from any future results expressed or implied by the forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks, and uncertainties, and these expectations may prove to be incorrect. Such risks and uncertainties include, but are not limited to, other events that may require the attention of the Company's management, the timing of the process of finalizing the Quarterly Report and undertaking various reviews, analyses, and assessments in connection with the Quarterly Report, and other events, factors and risks previously and from time to time disclosed in the Company's filings with the Securities and Exchange Commission. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this filing. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by applicable securities laws. The information contained in this filing is made as of the date hereof, even if subsequently made available by the Company on its website or otherwise.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PERMA-PIPE INTERNATIONAL HOLDINGS, INC. Date: December 20, 2024 By: /s/ Matthew E. Lewicki Matthew E. Lewicki Vice President and Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR