Perma-Pipe International Holdings, Inc. (NASDAQ:PPIH), a $106 million market cap industrial company with $157.7 million in annual revenue, announced on Thursday that its previously issued financial statements for the six months ended July 31, 2024, should no longer be relied upon.
The company’s Audit Committee, in consultation with management and independent auditors, identified errors that require a restatement of these financials. According to InvestingPro data, the company maintains a perfect Piotroski Score of 9, indicating strong financial health despite these developments.
The discrepancies, discovered during a review of a Middle Eastern subsidiary’s records, included a duplicated invoice leading to an overstatement of property, plant, and equipment (PP&E) by $1.4 million. This mistake also affected the trade accounts payable, and consequently, the net cash provided by operating activities and net cash used in investing activities were misstated in the unaudited consolidated statement of cash flows.
Additionally, intercompany transactions related to asset transfers were not correctly eliminated, resulting in an overstatement of trade accounts receivable by $0.4 million and an understatement of PP&E. This error also led to incorrect reporting in the consolidated statement of cash flows, with a $0.4 million understatement of net cash provided by operating activities and a $0.5 million overstatement of net cash used in investing activities.
The company acknowledged existing material weaknesses in internal control over financial reporting and plans to address and enhance the related disclosures in the amended Quarterly Report on Form 10-Q/A, which will be filed as promptly as possible.
Perma-Pipe’s statement also included a caution regarding forward-looking statements, reminding investors that such statements are subject to risks and uncertainties and should not be relied upon as predictions of future events.
This news is based on a press release statement and the company has committed to updating its financial statements to correct the identified errors. The stock currently trades at an attractive P/E ratio of 6.91, with a current ratio of 1.78 indicating solid liquidity. InvestingPro analysis suggests the stock is trading near its Fair Value, with additional insights and metrics available to subscribers.
In other recent news, Perma-Pipe International Holdings, Inc. has made significant headway in securing new projects. The company has been awarded contracts totaling $15 million across the MENA region and the Americas, bolstering its project backlog to over $100 million. The awards include $6 million for district energy infrastructure projects in the MENA region and $9 million for projects in the Americas. These developments underscore Perma-Pipe’s market leadership, as noted by company executives.
In addition to these awards, Perma-Pipe has also secured contracts exceeding $4 million for projects in the Americas. These projects include anticorrosion coating services for the oil and gas sector in Western Canada and pre-insulated piping solutions for a pharmaceutical plant expansion in the Northeastern U.S. Furthermore, the company has won contracts for two major projects in the Middle East and North Africa region, valued at over $46 million.
The company’s Annual Meeting of Stockholders resulted in the approval of the executive compensation package and the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending January 31, 2025. The company’s 2024 Omnibus Stock Incentive Plan received over 95% approval votes, aligning the interests of key employees with those of shareholders.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.