Financial Analysis

"Note 5 - Debt During the current year, the Company disaggregated its Revolving lines - foreign' into Revolving credit agreement United Arab Emirates,' Revolving credit agreement Egypt, and Revolving credit agreement Saudi Arabia. Further, Short-term debt and Long-term debt were stratified by underlying instrument for presentation purposes. This refined presentation provides more detailed information regarding the Companys capital structure. Prior period amounts have also been disaggregated to conform to the current year presentation. This update in presentation had no impact on total liabilities, net income, or cash flows. 2025 2024 Short-term debt Revolving credit agreement - North America $ 10,749 $ 6,765 Revolving credit agreement - United Arab Emirates 2,573 465 Revolving credit agreement - Egypt 190 - Revolving credit agreement - Saudi Arabia 2,909 1,545 Finance obligation - buildings and land 267 225 Mortgage note 228 221 Finance lease obligation 174 32 Loan payable to GIG 2,753 - Total short-term debt $ 19,843 $ 9,253 Long-term debt Finance obligation - buildings and land $ 8,527 $ 8,798 Mortgage note 3,737 3,735 Loan payable to GIG - 2,753 Finance lease obligation 541 43 Unamortized debt issuance costs (109 ) (116 ) Total long-term debt $ 12,696 $ 15,213 The following table summarizes the Company's scheduled maturities in each of the next five fiscal years: Total 2026 2027 2028 2029 2030 Thereafter Revolving line - North America $ 10,749 $ 10,749 $ - $ - $ - $ - - Mo …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

2025 2024 Sales % to Total Sales % to Total Products $ 15,777 7 % $ 14,112 9 % Specialty Piping Systems and Coating Revenue recognized under input method 52,210 25 % 45,606 29 % Revenue recognized under output method 142,938 68 % 98,666 62 % Total $ 210,925 100 % $ 158,384 100 %

DisaggregationOfRevenueTableTextBlock

"Note 9 - Stock-based compensation The Company has prior incentive plans under which previously granted awards remain outstanding, but under which no new awards may be granted, including the Company's 2021 Omnibus Stock Incentive Plan, which expired in May 2024. At January 31, 2026 , the Company had reserved a total of 20,465 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards. The Company's 2024 Omnibus Stock Incentive Plan dated May 28, 2024 was approved by the Company's stockholders in July 2024 ( ""2024 Plan""). The 2024 Plan will expire in July 2027. The 2024 Plan authorizes awards to officers, employees, consultants and independent directors. The 2024 Plan provides for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section 422 of the Internal Revenue Code. Grants were made in connection with the 2024 Plan and the prior incentive plans to employees, officers, and independent directors, as further described below: Stock compensation expense The Company has granted stock-based compensation awards to eligible employees, officers or independent directors. The Company recognized the following stock-based compensation expense for the periods presented: 2025 2024 Restricted stock-based compensation expense $ 2,537 $ 860 Total stock-based compensation ex …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"Note 7 - Income taxes Income from continuing operations before income taxes 2025 2024 Domestic (1) $ (7,429 ) $ (4,682 ) Foreign 34,922 23,150 Total $ 27,493 $ 18,468 ( 1 ) The domestic loss from continuing operations before income taxes includes corporate overhead costs. Components of income tax expense (benefit) 2025 2024 Current Federal $ (4 ) $ (4 ) Foreign 5,615 3,614 State and other 111 150 Total current income tax expense 5,722 3,760 Deferred Federal 1,210 1,048 Foreign (88 ) 569 Total deferred income tax expense 1,122 1,617 Total income tax expense $ 6,844 $ 5,377 Repatriation of foreign earnings As a result of the one -time transition tax from the U.S. Tax Cuts and Jobs Act of 2017 (Tax Act), the Company estimates that distributions from foreign subsidiaries will no longer be subject to incremental U.S. federal income tax as they will either be remittances of previously taxed earnings and profits or eligible for a full dividends received deduction to offset any U.S. federal income tax liability on the undistributed earnings. However, upon repatriation, various state taxes and foreign withholding taxes may be levied on such amounts. Current and future earnings in the Company's subsidiaries in Canada and Egypt are not permanently reinvested. Earnings from these subsidiaries are subject to tax in their local jurisdiction, and withholding taxes in these jurisdictions are considered. The Company's liability was $1.3 million and $0.8 million as of January 31, 2026 and 202 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Accounting Pronouncements Recently Adopted . In December 2023, the FASB issued ASU No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures . Pursuant to this standard update, companies are required to provide additional information, which is primarily attributable to the rate reconciliation and income taxes paid. The Company adopted the standard effective for the year ended January 31, 2026. The prospective adoption of this standard update expanded the Company's disclosures related to income taxes, but did not impact its consolidated financial statements. Accounting Pronouncements Not Yet Adopted. In November 2024, the FASB issued ASU No. 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ) : Disaggregation of Income Statement Expenses. In accordance with this standard update, companies are required to disclose specified information about certain costs and expenses in the notes to the financial statements at each interim and annual reporting period. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard update on its consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU No. 2025 - 06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Note 8 - Retirement plans 401 (k) plan The domestic employees of the Company participate in the PPIH 401 (k) Employee Savings Plan, which is applicable to all employees except employees covered by collective bargaining agreement benefits. The Company matches 100% of each participant's payroll deferral contributions up to 1% of their compensation, plus 50% of each participant's payroll deferral contributions on the next 5% of compensation. Company contributions to the 401 (k) plan were $ 0.4 million f or each of the years ended January 31, 2026 and 2025 . Multi-employer plans The Company contributes to a multi-employer plan for certain collective bargaining U.S. employees. The risks of participating in this multi-employer plan are different from a single employer plan in the following aspects: Assets contributed to the multi-employer plans by one employer may be used to provide benefits to employees of other participating employers. If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers. If the Company chooses to stop participating in the multi-employer plan, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company has assessed and determined that the multi-employer plans to which it contributes are not significant to the Company's consolidated financial statements. The Company does …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Note 4 - Revenue recognition The Company accounts for its revenues under ASC 606, Revenue from Contracts with Customers . Revenue from contracts with customers The Company defines a contract as an agreement that has approval and commitment from both parties, defined rights and identifiable payment terms, which ensures the contract has commercial substance and that collectability is reasonably assured. The Companys standard revenue transactions are classified into two main categories: 1 ) Specialty Piping Systems and Coating - which include all bundled products in which Perma-Pipe engineers, and manufactures pre-insulated specialty piping systems mainly relating to the district heating and cooling and energy & industrial markets. 2 ) Products - which include cables, leak detection products, heat trace products, material/goods not bundled with piping or flowline systems, and field services not bundled into a project contract. In accordance with ASC 606 - 10 - 25 - 27 through 29, the Company recognizes specialty piping and coating systems revenue over time as the manufacturing process progresses because one of the following conditions exist: 1 ) The customer owns the material that is being insulated or coated, so the customer controls the asset and thus the work-in-process; or 2 ) The customer controls the work-in-process due to the custom nature of the pre-insulated, fabricated system being manufactured, which has no alternative future use, and there is a right to payment f …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Note 12 - Segment reporting The Company operates under one segment: Piping Systems. The results are presented on a consolidated basis to the Chief Executive Officer who serves as the chief operating decision maker (""CODM""). The accounting policies of the Company's segment are the same as those described in the summary of significant accounting policies. For further information, see Note 2 - Significant accounting policies, in the Notes to Consolidated Financial Statements. The CODM regularly reviews consolidated revenues, significant expenses, and consolidated net income attributable to common stock to make operating decisions and assess performance. The CODM uses this information in making company-wide decisions when determining how to allocate resources. Significant expenses represent amounts that are regularly provided to the CODM and included in consolidated net income attributable to common stock. Additionally, the CODM regularly reviews asset information by our reporting segment in a manner that is consistent with the presentation on the Company's accompanying Consolidated Balance Sheets. The following table summarizes the Company's revenues, net income attributable to common stock, and significant expenses: Year ended January 31, 2026 2025 Net sales $ 210,925 $ 158,384 Cost of sales Labor 28,980 23,109 Materials 83,987 59,036 Depreciation and amortization 2,814 3,104 Other costs of sales 25,656 19,887 Total Cost of sales 141,437 105,136 Operating expenses Salaries a …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"Note 2 - Significant accounting policies Principles of Consolidation and Basis of Presentation. The consolidated financial statements include the accounts of the Company and its subsidiaries. This includes all wholly owned subsidiaries as well as certain joint ventures in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated. Certain amounts in prior periods have been reclassified to conform to the current year presentation. Use of estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition. In accordance with Accounting Standards Codification (""ASC"") 606, R evenue from Contracts with Customers , the Company recognizes revenue for certain contracts when a customer obtains control of promised goods or services. Other contracts recognize revenues usingperiodic recognition of income. For these contracts, the Company uses the ""over time"" accounting method. Under the input approach, income is recognized in each reporting period based on the status of the uncompleted contracts and the current estimates of co …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 13 - Subsequent events Credit Agreement Subsequent to January 31, 2026 and prior to the issuance of these financial statements, the Company entered into a credit agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A. (JPMorgan). The Credit Agreement provides for a revolving credit facility that is expected to be used to refinance and replace the Companys existing credit facility with PNC Bank, National Association. The Credit Agreement is intended to serve as a temporary bridge financing arrangement. The Company expects that, in the coming months, it will enter into a new global credit facility with a syndicate of lenders, with JPMorgan acting as administrative agent and lead arranger. Upon execution of the global credit facility, any outstanding borrowings under the Credit Agreement are expected to be rolled into the global credit facility, and the Credit Agreement will be terminated; however, there can be no assurance as to the timing or terms of such transaction. The Credit Agreement provides for a revolving credit commitment of up to $18.0 million, subject to customary borrowing base limitations, and matures in October 2027. Borrowings bear interest at variable rates based on SOFR or an alternate base rate, plus an applicable margin. The Company is also required to pay a commitment fee on the unused portion of the facility. The credit facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The ob …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

"Note 10 - Debt Debt consisted of the following: April 30, 2026 January 31, 2026 Short-term debt Revolving credit agreement - North America $ 666 $ 10,749 Revolving credit agreement - United Arab Emirates 3,319 2,573 Revolving credit agreement - Egypt 190 190 Revolving credit agreement - Saudi Arabia 2,221 2,909 Current maturities of long-term debt 1,245 669 Loan payable to GIG 2,753 2,753 Total short-term debt $ 10,394 $ 19,843 Long-term debt Revolving credit agreement - North America $ 14,666 $ - Finance obligation - buildings and land 8,452 8,527 Mortgage note 3,674 3,737 Finance lease obligation 945 541 Unamortized debt issuance costs (108 ) (109 ) Total long-term debt $ 27,629 $ 12,696 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 (the Lender). The Credit Agreement effectively replaced the Companys 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 u …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Three Months Ended April 30, 2026 2025 Sales % of Total Sales % of Total Products $ 3,082 6 % $ 3,640 8 % Specialty Piping Systems and Coating Revenue recognized under input method 14,382 29 % 12,060 26 % Revenue recognized under output method 32,801 65 % 31,047 66 % Total $ 50,265 100 % $ 46,747 100 %

DisaggregationOfRevenueTableTextBlock

"Note 8 - Stock-based compensation The Company has prior incentive plans under which previously granted awards remain outstanding, but under which no new awards may be granted, including the Company's 2021 Omnibus Stock Incentive Plan, which expired in May 2024. At April 30, 2026 , the Company had reserved a total of 20,465 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards. The Company's 2024 Omnibus Stock Incentive Plan, dated May 28, 2024, was approved by the Company's stockholders in July 2024 ( ""2024 Plan""). The 2024 Plan will expire in July 2027. The 2024 Plan authorizes awards to officers, employees, consultants, and independent directors. The 2024 Plan provides for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section 422 of the Internal Revenue Code. Grants were made in connection with the 2024 Plan and the prior incentive plans to employees, officers, and independent directors, as further described below. Stock-based compensation expense The Company has granted stock-based compensation awards to eligible employees, officers and independent directors. The Company recognized the following stock-based compensation expense for the periods presented: Three Months Ended April 30, 2026 2025 Restricted stock-based compensation expense $ 180 $ 22 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 13 - Fair value The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered reasonable estimates of fair value due to their short-term nature. The carrying amount of the Company's short-term debt, revolving lines of credit and long-term debt approximate fair value because the majority of the amounts outstanding accrue interest at variable market rates.

FairValueDisclosuresTextBlock

"Note 6 - Income taxes The determination of the consolidated provision for income taxes, deferred tax assets and liabilities and related valuation allowances requires management to make judgments and estimates. As a company with subsidiaries in foreign jurisdictions, the process of calculating income taxes involves estimating current tax obligations and exposures in each jurisdiction as well as making judgments regarding the future recoverability of deferred tax assets. The relative proportion of taxable income earned domestically versus internationally can fluctuate significantly from period to period. Changes in the estimated level of annual pre-tax income, tax laws and the results of tax audits can affect the overall effective income tax rate, which impacts the level of income tax expense and net income. Judgments and estimates related to the Company's projections and assumptions are inherently uncertain; therefore, actual results could differ materially from projections. The Company's effective tax rates (""ETR"") for the three months ended April 30, 2026 and 2025 were 34% and 21%, respectively. The change in the ETR is due to changes in the mix of income and loss in various jurisdictions. The Company expects that future distributions from foreign subsidiaries will not be subject to incremental U.S. federal tax as they will be excludible from U.S. taxable income either as remittances of previously taxed earnings and profits or eligible for a full dividends received deduct …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Note 4 - Revenue recognition The Company accounts for its revenues under Accounting Standards Codification (""ASC"") 606, Revenue from Contracts with Customers . Revenue from contracts with customers The Company defines a contract as an agreement that has approval and commitment from both parties, defined rights and identifiable payment terms, which ensures the contract has commercial substance and that collectability is reasonably assured. The Companys standard revenue transactions are classified into two main categories: 1 ) Specialty Piping Systems and Coating - which include all bundled products in which Perma-Pipe engineers, and manufactures pre-insulated specialty piping systems mainly relating to the district heating and cooling and energy & industrial markets. 2 ) Products - which include cables, leak detection products, heat trace products, materials/goods not bundled with piping or flowline systems, and field services not bundled into a project contract. In accordance with ASC 606 - 10 - 25 - 27 through 29, the Company recognizes specialty piping systems and coating revenue over time as the manufacturing process progresses if one of the following conditions exists: 1 ) the customer owns the material that is being coated, so the customer controls the asset and thus the work-in-process; or 2 ) the customer controls the work-in-process due to the custom nature of the pre-insulated, fabricated system being manufactured, which has no alternative future use, and ther …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Note 2 - Business segment reporting The Company operates under one segment: Piping Systems. The results are presented on a consolidated basis to the Chief Executive Officer who serves as the chief operating decision maker (""CODM""). The CODM regularly reviews consolidated revenues, significant expenses, and consolidated net income attributable to common stock to make operating decisions and assess performance. The CODM uses this information in making company-wide decisions when determining how to allocate resources. Significant expenses represent amounts that are regularly provided to the CODM and included in consolidated net income attributable to common stock. Additionally, the CODM regularly reviews asset information by our reporting segment in a manner that is consistent with the presentation on the Company's accompanying Condensed Consolidated Balance Sheets. The following table summarizes the Company's revenues, net income attributable to common stock, and significant expenses: Three Months Ended April 30, 2026 2025 Net sales $ 50,265 $ 46,747 Cost of sales Labor 8,269 6,289 Materials 19,503 17,416 Depreciation and amortization 924 849 Other costs of sales 6,933 5,469 Total cost of sales 35,629 30,023 Operating expenses Salaries and wages 4,666 4,217 Depreciation and amortization 118 87 Other general and administrative expense 4,051 3,445 General and administrative expenses 8,835 7,749 Selling expense 1,164 1,086 Total operating expenses 9,999 8,835 Income from operat …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing