Perma-Pipe reports strong revenue growth and a record backlog, but faces margin pressure from regional conflict costs and a significant customer write-off.
Perma-Pipe reported strong revenue growth and backlog increase, but margin pressure and a customer write-off temper the outlook.
Perma-Pipe International Holdings reported a 24.4% revenue increase to $59.6 million, bolstered by a record $142.3 million backlog. Despite this growth, the company faced margin compression due to rising logistics costs and a $3.9 million write-off from a single customer, leading to a mixed outlook for investors.
The company is pivoting from traditional pipe sales to infrastructure platforms, supported by new facilities in Ohio and Qatar, and a planned joint venture in Jordan to enter pipe manufacturing.
Margins were pressured by higher logistics and material costs, startup expenses for the Ohio facility, and a $3.9 million write-off related to a customer's financial distress.