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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Perma Pipe International Holdings Inc | NASDAQ:PPIH | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.01 | 0.12% | 8.31 | 6.52 | 10.11 | 8.34 | 8.10 | 8.34 | 8,563 | 21:30:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Delaware
|
36-3922969
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
6410 W. Howard Street, Niles, Illinois
|
60714
|
(Address of principal executive offices)
|
(Zip Code)
|
Item
|
|
Page
|
|
|
|
Part I
|
|
|
|
|
|
1.
|
|
|
|
Consolidated Statements of Operations for the Three Months Ended April 30, 2016 and 2015
|
|
|
Consolidated Statements of Comprehensive Loss for the Three Months Ended April 30, 2016 and 2015
|
2
|
|
Consolidated Balance Sheets as of
April 30, 2016 and January 31, 2016
|
|
|
Consolidated Statements of Stockholders' Equity as of April 30, 2016 and January 31, 2016
|
|
|
Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2016 and 2015
|
|
|
||
|
|
|
2.
|
||
|
|
|
4.
|
||
|
|
|
Part II
|
|
|
6.
|
18
|
|
|
|
|
|
Three Months Ended April 30,
|
|
|||||
|
2016
|
|
2015
|
|
|
||
Net sales
|
|
$23,069
|
|
|
$20,277
|
|
|
Cost of sales
|
21,077
|
|
17,922
|
|
|
||
Gross profit
|
1,992
|
|
2,355
|
|
|
||
|
|
|
|
||||
Operating expenses
|
|
|
|
||||
General and administrative expenses
|
5,093
|
|
4,706
|
|
|
||
Selling expenses
|
1,404
|
|
1,219
|
|
|
||
Total operating expenses
|
6,497
|
|
5,925
|
|
|
||
|
|
|
|
||||
Loss from operations
|
(4,505
|
)
|
(3,570
|
)
|
|
||
|
|
|
|
||||
Income from joint venture
|
—
|
|
165
|
|
|
||
Loss on consolidation of joint venture
|
(1,620
|
)
|
—
|
|
|
||
|
|
|
|
||||
Interest expense (income), net
|
226
|
|
(79
|
)
|
|
||
Loss from continuing operations before income taxes
|
(6,351
|
)
|
(3,326
|
)
|
|
||
|
|
|
|
||||
Income tax (benefit) expense
|
(257
|
)
|
26
|
|
|
||
|
|
|
|
||||
Loss from continuing operations
|
(6,094
|
)
|
(3,352
|
)
|
|
||
|
|
|
|
||||
Loss from discontinued operations, net of tax
|
(200
|
)
|
(1,303
|
)
|
|
||
|
|
|
|
||||
Net loss
|
|
($6,294
|
)
|
|
($4,655
|
)
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
|
|
|
||||
Basic and diluted
|
7,351
|
|
7,252
|
|
|
||
|
|
|
|
||||
Loss per share from continuing operations
|
|
|
|
||||
Basic and diluted
|
|
($0.83
|
)
|
|
($0.46
|
)
|
|
Loss per share from discontinued operations
|
|
|
|
||||
Basic and diluted
|
|
($0.03
|
)
|
|
($0.18
|
)
|
|
Loss per share
|
|
|
|
||||
Basic and diluted
|
($0.86)
|
|
($0.64
|
)
|
|
|
Three Months Ended April 30,
|
|
|||||
|
2016
|
|
2015
|
|
|
||
Net loss
|
|
($6,294
|
)
|
|
($4,655
|
)
|
|
|
|
|
|
||||
Other comprehensive income
|
|
|
|
||||
Foreign currency translation adjustments, net of tax
|
1,922
|
|
342
|
|
|
||
Interest rate swap, net of tax
|
—
|
|
5
|
|
|
||
Unrealized gain on marketable security, net of tax
|
1
|
|
—
|
|
|
||
Other comprehensive income
|
1,923
|
|
347
|
|
|
||
|
|
|
|
||||
Comprehensive loss
|
|
($4,371
|
)
|
|
($4,308
|
)
|
|
(In thousands except per share data)
|
April 30, 2016
|
|
January 31, 2016
|
|
||
ASSETS
|
Unaudited
|
|
|
|||
Current assets
|
|
|
||||
Cash and cash equivalents
|
|
$12,858
|
|
|
$16,631
|
|
Restricted cash
|
944
|
|
2,324
|
|
||
Trade accounts receivable, less allowance for doubtful accounts of $66 at April 30, 2016 and $33 at January 31, 2016
|
28,297
|
|
36,090
|
|
||
Inventories, net
|
13,839
|
|
15,625
|
|
||
Assets of discontinued operations
|
14,871
|
|
15,733
|
|
||
Assets held for sale
|
2,992
|
|
3,062
|
|
||
Cash surrender value on life insurance policies, net
|
1,284
|
|
3,049
|
|
||
Prepaid expenses and other current assets
|
2,190
|
|
1,744
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
1,956
|
|
2,463
|
|
||
Income tax receivable
|
206
|
|
327
|
|
||
Total current assets
|
79,437
|
|
97,048
|
|
||
Property, plant and equipment, net of accumulated depreciation
|
39,417
|
|
25,400
|
|
||
Other assets
|
|
|
||||
Goodwill
|
2,693
|
|
—
|
|
||
Note receivable from joint venture
|
—
|
|
1,905
|
|
||
Investment in joint venture
|
—
|
|
9,112
|
|
||
Other assets
|
3,911
|
|
4,658
|
|
||
Total other assets
|
6,604
|
|
15,675
|
|
||
Total assets
|
|
$125,458
|
|
|
$138,123
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
||||
Current liabilities
|
|
|
||||
Trade accounts payable
|
|
$6,943
|
|
|
$11,026
|
|
Accrued compensation and payroll taxes
|
4,278
|
|
4,274
|
|
||
Deferred compensation liability
|
3,943
|
|
6,167
|
|
||
Commissions and management incentives payable
|
3,988
|
|
4,169
|
|
||
Revolving line domestic
|
7,167
|
|
5,237
|
|
||
Current maturities of long-term debt
|
6,884
|
|
8,769
|
|
||
Customers' deposits
|
2,812
|
|
3,690
|
|
||
Liabilities of discontinued operations
|
12,432
|
|
15,465
|
|
||
Liabilities held for sale
|
3,475
|
|
3,439
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
1,253
|
|
1,176
|
|
||
Other accrued liabilities
|
1,802
|
|
965
|
|
||
Income taxes payable
|
1,813
|
|
2,339
|
|
||
Total current liabilities
|
56,790
|
|
66,716
|
|
||
Long-term liabilities
|
|
|
||||
Long-term debt, less current maturities
|
1,234
|
|
1,493
|
|
||
Other long-term liabilities
|
2,380
|
|
886
|
|
||
Total long-term liabilities
|
3,614
|
|
2,379
|
|
||
Stockholders' equity
|
|
|
||||
Common stock, $.01 par value, authorized 50,000 shares; 7,378 issued and outstanding at April 30, 2016 and 7,306 issued and outstanding at January 31, 2016
|
74
|
|
74
|
|
||
Additional paid-in capital
|
53,428
|
|
53,031
|
|
||
Treasury Stock 45 shares at April 30, 2016 and at January 31, 2016
|
(290
|
)
|
(290
|
)
|
||
Retained earnings
|
13,899
|
|
20,193
|
|
||
Accumulated other comprehensive loss
|
(2,057
|
)
|
(3,980
|
)
|
||
Total stockholders' equity
|
65,054
|
|
69,028
|
|
||
Total liabilities and stockholders' equity
|
|
$125,458
|
|
|
$138,123
|
|
($ in thousands, except share data)
|
|
Additional Paid-in Capital
|
Retained Earnings
|
Treasury Stock
|
Accumulated Other Comprehensive Income (Loss)
|
Total Stockholders' Equity
|
||||||||
Common Stock
|
||||||||||||||
Total stockholders' equity at January 31, 2016
|
$74
|
$53,031
|
$20,193
|
|
($290
|
)
|
($3,980)
|
$69,028
|
||||||
|
|
|
|
|
|
|
||||||||
Net loss
|
|
|
|
($6,294
|
)
|
|
|
(6,294
|
)
|
|||||
Stock options exercised
|
—
|
|
1
|
|
|
|
|
1
|
|
|||||
Restricted shares vested, deferred shares converted and payroll taxes paid with shares
|
—
|
|
54
|
|
|
|
|
54
|
|
|||||
Stock-based compensation expense
|
|
342
|
|
|
|
|
342
|
|
||||||
Marketable security
|
|
|
|
|
1
|
|
1
|
|
||||||
Foreign currency translation adjustments
|
|
|
|
|
1,926
|
|
1,926
|
|
||||||
Tax benefit/expense on above items
|
|
|
|
|
(4
|
)
|
(4
|
)
|
||||||
Total stockholders' equity at April 30, 2016
|
$74
|
$53,428
|
$13,899
|
($290)
|
($2,057)
|
$65,054
|
(In thousands)
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Operating activities
|
|
|
||||
Net loss
|
|
($6,294
|
)
|
|
($4,655
|
)
|
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities
|
|
|
||||
Depreciation and amortization
|
1,448
|
|
1,423
|
|
||
Loss on consolidation of joint venture
|
1,620
|
|
—
|
|
||
Gains on disposal of subsidiaries
|
(867
|
)
|
—
|
|
||
Deferred tax (benefit) expense
|
(376
|
)
|
1
|
|
||
Stock-based compensation expense
|
342
|
|
137
|
|
||
Income from joint venture
|
—
|
|
(165
|
)
|
||
Cash surrender value on life insurance policies
|
1,765
|
|
(66
|
)
|
||
Provision on uncollectible accounts
|
196
|
|
115
|
|
||
Changes in operating assets and liabilities
|
|
|
||||
Accounts receivable
|
12,228
|
|
3,500
|
|
||
Inventories
|
3,342
|
|
(34
|
)
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
584
|
|
(1,681
|
)
|
||
Accounts payable
|
(4,247
|
)
|
3,081
|
|
||
Accrued compensation and payroll taxes
|
(2,536
|
)
|
5,782
|
|
||
Customers' deposits
|
(2,057
|
)
|
(1,280
|
)
|
||
Income taxes receivable and payable
|
(81
|
)
|
(699
|
)
|
||
Prepaid expenses and other current assets
|
(581
|
)
|
268
|
|
||
Other assets and liabilities
|
2,566
|
|
(6,569
|
)
|
||
Net cash provided by (used in) operating activities
|
7,052
|
|
(842
|
)
|
||
Investing activities
|
|
|
||||
Acquisition of interest in subsidiary, net of cash acquired
|
(4,672
|
)
|
—
|
|
||
Capital expenditures
|
(796
|
)
|
(2,034
|
)
|
||
Receipts on loan from joint venture
|
—
|
|
331
|
|
||
Net cash used in investing activities
|
(5,468
|
)
|
(1,703
|
)
|
||
Financing activities
|
|
|
||||
Proceeds from revolving lines
|
14,786
|
|
22,394
|
|
||
Proceeds from debt
|
—
|
|
597
|
|
||
Proceeds from borrowing against life insurance policies
|
—
|
|
1,916
|
|
||
Payments of debt on revolving lines of credit
|
(19,267
|
)
|
(22,482
|
)
|
||
Payments of other debt
|
(81
|
)
|
(539
|
)
|
||
(Decrease) increase in drafts payable
|
(217
|
)
|
933
|
|
||
Payments on capitalized lease obligations
|
(1,069
|
)
|
(170
|
)
|
||
Payments for repurchase of common stock
|
—
|
|
(290
|
)
|
||
Stock options exercised and restricted shares issued
|
56
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(5,792
|
)
|
2,359
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
435
|
|
396
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(3,773
|
)
|
210
|
|
||
Cash and cash equivalents - beginning of period
|
16,631
|
|
10,508
|
|
||
Cash and cash equivalents - end of period
|
|
$12,858
|
|
|
$10,718
|
|
Supplemental cash flow information
|
|
|
||||
Interest paid
|
|
$289
|
|
|
$272
|
|
Income taxes paid
|
197
|
|
715
|
|
||
Fixed assets acquired under capital leases
|
—
|
|
732
|
|
||
Funds held in escrow related to the sale of Filtration assets
|
502
|
|
—
|
|
1.
|
Basis of presentation.
The interim consolidated financial statements of MFRI, Inc. and subsidiaries ("MFRI," "Company," or "Registrant") are unaudited, but include all adjustments which the Company's management considers necessary to present fairly the financial position and results of operations for the periods presented. These adjustments consist of normal recurring adjustments. Information and footnote disclosures have been omitted pursuant to Securities and Exchange Commission ("SEC") rules and regulations. The consolidated balance sheet as of
January 31, 2016
is derived from the audited consolidated balance sheet as of that date. The results of operations for any interim period are not necessarily indicative of future or annual results. Interim financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. The Company's fiscal year ends on January 31. Years and balances described as
2016
and
2015
are for the
three months ended April 30,
2016
and
2015
, respectively.
|
2.
|
Business segment reporting.
As of January 31, 2016, MFRI is engaged in the manufacture and sale of products in
one
segment: Piping Systems. As described below, prior to January 29, 2016, the Company was also engaged in the manufacture and sale of products in the Filtration Products segment.
Piping Systems engineers, designs, manufactures and sells specialty piping, leak detection and location systems
. This segment's specialty piping systems include (i) industrial and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products, (ii) insulated and jacketed district heating and cooling piping systems for efficient energy distribution to multiple locations from central energy plants, and (iii) oil and gas gathering flow and long lines for oil and mineral transportation. Piping Systems' leak detection and location systems are sold with many of its piping systems and on a stand-alone basis, to monitor areas where fluid intrusion may contaminate the environment, endanger personal safety, cause a fire hazard, impair essential services or damage equipment or property.
|
|
Three Months Ended April 30,
|
|
|||||
|
2016
|
|
2015
|
|
|
||
Net sales
|
|
|
|
||||
Piping Systems
|
|
$23,069
|
|
|
$20,277
|
|
|
Gross profit
|
|
|
|
||||
Piping Systems
|
|
$1,992
|
|
|
$2,355
|
|
|
Loss from operations
|
|
|
|
||||
Piping Systems
|
|
($1,701
|
)
|
|
($1,426
|
)
|
|
Corporate
|
|
($2,804
|
)
|
|
($2,144
|
)
|
|
Total loss from operations
|
|
($4,505
|
)
|
|
($3,570
|
)
|
|
3.
|
Acquisition.
MFRI entered into a purchase agreement with its joint venture partner Aegion Corporation to acquire the remaining 51% ownership of
Bayou Perma-Pipe Canada, Ltd
. ("BPPC"),
a coating and insulation company in Camrose, Alberta
, which acquisition closed on
February 4, 2016
. MFRI had owned a
49%
interest in BPPC since 2009, when the joint venture was formed with Aegion to serve the oil and gas industry in Western Canada.
|
Total purchase consideration:
|
|
|
||
Cash
|
|
|
$7,587
|
|
Loan payable
|
|
2,000
|
|
|
Purchase consideration to third party
|
|
9,587
|
|
|
|
|
|
||
Fair Value of 49% Previously Held Equity Interest
|
|
7,492
|
|
|
Total purchase consideration
|
|
|
$17,079
|
|
|
|
|
||
Fair value of net assets acquired:
|
|
|
||
Cash and cash equivalents
|
|
|
$2,915
|
|
Property and equipment
|
|
12,670
|
|
|
Goodwill
|
|
2,693
|
|
|
Net working capital
|
|
406
|
|
|
Other assets (liabilities) net
|
|
(1,605
|
)
|
|
Net assets acquired
|
|
|
$17,079
|
|
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Revenue
|
|
$23,069
|
|
|
$26,544
|
|
Net loss
|
(6,294
|
)
|
(3,923
|
)
|
||
Loss per share basic and diluted
|
|
($0.86
|
)
|
|
($0.54
|
)
|
4.
|
Discontinued operations.
On
January 29, 2016
, the Company sold certain assets and liabilities of its TDC Filter business based in Bolingbrook, Illinois to the Industrial Air division of CLARCOR. On January 29, 2016, the Company also sold its Nordic Air Filtration, Denmark and Nordic Air Filtration, Middle East businesses to Hengst Holding GmbH. The purchase price of these Illinois and international filtration businesses was
$22.0 million
, including cash proceeds of
$18.4 million
, of which
$0.5 million
is held in escrow until July 2017. The remaining domestic fabric filter business, which is included in discontinued operations, is operational and selling product as of April 30, 2016. The Company is currently engaged in liquidating the assets of this business. The Filtration business segment is reported as discontinued operations in the consolidated financial statements and the notes to consolidated financial statements have been revised to conform to the current year reporting. There was
$16 thousand
of tax benefit for the
three
months ended
April 30, 2016
. Loss from discontinued operations net of tax for the
three months ended April 30,
2016 and 2015
were as follows:
|
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Net sales
|
|
$7,191
|
|
|
$17,397
|
|
|
|
|
||||
Gain on disposal of discontinued operations
|
|
$867
|
|
|
$—
|
|
Loss from discontinued operations
|
|
($1,083
|
)
|
|
($1,303
|
)
|
Loss from discontinued operations before income taxes
|
(216
|
)
|
(1,303
|
)
|
||
Income tax benefit
|
(16
|
)
|
—
|
|
||
Loss from discontinued operations, net of tax
|
|
($200
|
)
|
|
($1,303
|
)
|
|
April 30, 2016
|
|
January 31, 2016
|
|
||
Current assets
|
|
|
||||
Cash and cash equivalents
|
|
$—
|
|
|
$5
|
|
Trade accounts receivable, net
|
4,998
|
|
5,720
|
|
||
Inventories, net
|
1,939
|
|
2,000
|
|
||
Other assets
|
1,565
|
|
1,552
|
|
||
Property, plant and equipment, net of accumulated depreciation
|
6,369
|
|
6,456
|
|
||
Total assets from discontinued operations
|
|
$14,871
|
|
|
$15,733
|
|
Current liabilities
|
|
|
||||
Trade accounts payable, accrued expenses and other
|
|
$5,356
|
|
|
$7,514
|
|
Current maturities of long-term debt
|
4,447
|
|
5,322
|
|
||
Other liabilities
|
2,629
|
|
2,629
|
|
||
Total liabilities from discontinued operations
|
|
$12,432
|
|
|
$15,465
|
|
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Net cash used in discontinued operating activities
|
|
($1,408
|
)
|
|
($1,568
|
)
|
Net cash used in discontinued investing activities
|
(1
|
)
|
(383
|
)
|
||
Net cash provided by discontinued financing activities
|
858
|
|
1,666
|
|
5.
|
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. Income earned in the United Arab Emirates ("U.A.E.") is not subject to local country income tax. Additionally, 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.
|
6.
|
Impairment of long-lived assets and assets held for sale.
The Company evaluates long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate.
There was no impairment of long-lived assets as of April 30, 2016 and January 31, 2016
.
|
7.
|
Other intangible assets with definite lives.
The Company owns several patents, including those covering features of its piping and electronic leak detection systems.
Patents are capitalized and amortized on a straight-line basis over a period not to exceed the legal lives of the patents.
The Company expenses costs incurred to renew or extend the term of intangible assets
. Gross patents were
$2.60 million
and
$2.59 million
as of
April 30, 2016
and
January 31, 2016
, respectively. Accumulated amortization was approximately
$2.35 million
and
$2.33 million
as of
April 30, 2016
and
January 31, 2016
, respectively. Future amortizations over the next five years ending January 31 will be
$34,929
in
2017
,
$41,100
in
2018
,
$32,100
in
2019
,
$29,100
in
2020
,
$22,850
in
2021
, and
$92,850
thereafter. Patents are included in other assets in the balance sheet.
|
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Patent amortization expense
|
|
$11
|
|
|
$13
|
|
8.
|
Stock-based
compensation.
The Company has stock-based compensation awards that can be granted to eligible employees, officers or directors.
|
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Stock-based compensation (benefit) expense
|
|
($2
|
)
|
|
$59
|
|
Restricted stock based compensation expense
|
|
$390
|
|
|
$89
|
|
|
Three Months Ended April 30,
|
|
Fair value assumptions
|
2016
|
2015
|
Expected volatility
|
40.88% - 57.02%
|
40.88% - 59.39%
|
Risk free interest rate
|
.74% - 1.77%
|
.74% - 1.77%
|
Dividend yield
|
none
|
none
|
Expected life
|
5.0 - 5.1 years
|
4.9 - 5.1 years
|
Option activity
|
Options
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 31, 2016
|
720
|
|
|
$11.38
|
|
5.1
|
|
$34
|
|
Expired or forfeited
|
(42
|
)
|
9.63
|
|
|
|
|||
Outstanding end of period
|
678
|
|
11.49
|
|
4.7
|
118
|
|
||
|
|
|
|
|
|||||
Exercisable end of period
|
535
|
|
|
$12.00
|
|
3.9
|
|
$92
|
|
Unvested option activity
|
Options
|
Weighted Average Grant Date Fair Value
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 31, 2016
|
166
|
|
|
$9.51
|
|
|
$—
|
|
Vested
|
(2
|
)
|
|
|
||||
Expired or forfeited
|
(21
|
)
|
9.07
|
|
|
|||
Outstanding end of period
|
143
|
|
|
$9.57
|
|
|
$—
|
|
Restricted stock activity
|
Restricted Shares
|
Weighted Average Grant Price Per Share
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 31, 2016
|
163
|
|
|
$8.60
|
|
|
$1,040
|
|
Granted
|
90
|
|
7.25
|
|
|
|||
Issued
|
(10
|
)
|
|
|
||||
Forfeited
|
(1
|
)
|
6.38
|
|
|
|||
Outstanding end of period
|
242
|
|
|
$8.17
|
|
|
$1,686
|
|
9.
|
Earnings per share.
|
|
Three Months Ended April 30,
|
|||
|
2016
|
|
2015
|
|
Basic weighted average common shares outstanding
|
7,351
|
|
7,252
|
|
Dilutive effect of equity compensation plans
|
—
|
|
—
|
|
Weighted average common shares outstanding assuming full dilution
|
7,351
|
|
7,252
|
|
|
|
|
||
Stock options not included in the computation of diluted earnings per share of common stock because the option exercise prices exceeded the average market prices of the common shares
|
415
|
|
643
|
|
|
|
|
||
Stock options with an exercise price below the average market price
|
263
|
|
106
|
|
10.
|
Interest expense, net.
|
|
Three Months Ended April 30,
|
|||||
|
2016
|
|
2015
|
|
||
Interest expense
|
|
$253
|
|
|
$196
|
|
Interest income
|
(27
|
)
|
(275
|
)
|
||
Interest expense (income), net
|
|
$226
|
|
|
($79
|
)
|
11.
|
Debt.
Debt totaled
$15.3 million
at
April 30, 2016
, a net
decrease
of
$0.2 million
since
January 31, 2016
.
|
12.
|
Fair Value.
In relation to the acquisition of BPPC, the Company estimated the fair value of the assets acquired and liabilities assumed at acquisition date. See "Notes to Consolidated Financial Statements Note 3 Acquisition", for a further discussion of this purchase. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair value due to their short-term nature. The carrying amount of the Company's short-term debt, revolving line of credit and long-term debt approximate fair value because the majority of the amounts outstanding accrue interest at variable rates.
|
13.
|
Recent accounting pronouncements
.
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires entities to recognize assets and liabilities for most leases on their balance sheets. It also requires additional qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on the consolidated financial statements and related disclosures.
|
14.
|
Reclassifications.
Reclassifications were made to the prior-year statement of cashflow to conform to the current-year presentations.
|
15.
|
Subsequent events
.
In May, 2016, the Company completed the sale of its former corporate headquarters, land and building, to a third party at a purchase price of
$4.4 million
. The sale generated approximately
$0.4 million
in net cash after expenses and mortgage payoffs.
|
|
Three Months Ended April 30,
|
|
|||||||||
($ in thousands)
|
2016
|
|
%
|
2015
|
|
%
|
% Increase (decrease)
|
|
|||
Net sales
|
$23,069
|
|
$20,277
|
|
14
|
%
|
|
||||
Gross profit
|
1,992
|
|
9
|
%
|
2,355
|
|
12
|
%
|
(15
|
)%
|
|
General and administrative expenses
|
2,289
|
|
10
|
%
|
2,562
|
|
13
|
%
|
53
|
%
|
|
Selling expenses
|
1,404
|
|
6
|
%
|
1,219
|
|
6
|
%
|
15
|
%
|
|
Loss from operations
|
(1,701
|
)
|
(7
|
)%
|
(1,426
|
)
|
(7
|
)%
|
19
|
%
|
|
Loss on consolidation of joint venture
|
(1,620
|
)
|
|
—
|
|
|
(100
|
)%
|
|
•
|
reduced volume in North American oil and gas operations driven by oil prices
|
•
|
pricing pressure
|
•
|
uncertain market conditions in the Middle East
|
•
|
a non-cash loss of $1.6 million from the consolidation of the joint venture
|
•
|
expenses related to the Canadian facility
|
•
|
severance costs
|
•
|
increased stock compensation expense and
|
•
|
increased professional services.
|
31
|
|
Rule 13a - 14(a)/15d - 14(a) Certifications
(1) Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(2) Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32
|
|
Section 1350 Certifications (Chief Executive Officer and Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
|
101.INS
|
|
XBRL Instance
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation
|
101.DEF
|
|
XBRL Taxonomy Extension Definition
|
101.LAB
|
|
XBRL Taxonomy Extension Labels
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation
|
Date:
|
June 10, 2016
|
/s/ Bradley E. Mautner
|
|
|
Bradley E. Mautner
|
|
|
Director, President and
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Date:
|
June 10, 2016
|
/s/ Karl J. Schmidt
|
|
|
Karl J. Schmidt
|
|
|
Vice President and Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
1 Year Perma Pipe Chart |
1 Month Perma Pipe Chart |
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