Perma-Pipe International Holdings, Inc. Announces Fourth Quarter and Full Year Financial Results.

• Net sales of $27.4 million for the quarter and $105.2 million
  for the year
• Operating results from continuing operations before income taxes
  improved to a loss of $1.5 million for the quarter and $10.2 million
  for the year
• Backlog at $46.7 million

NILES, Ill.–(BUSINESS WIRE)–Perma-Pipe International Holdings, Inc. (NASDAQ: PPIH) announced today
financial results for the fourth quarter and fiscal year ended
January 31, 2018.

President and CEO David Mansfield commented, “While revenues for the
quarter were similar to those achieved in the prior year period, pre-tax
losses were reduced by $2.3 million after an improvement in margins and
reductions in SG&A costs. This was achieved despite the adverse impact
of project schedules slipping into the first quarter of next year and
the cancellation of orders destined for Qatar, which were rebid due to
the GCC embargo that prevented the supply from our facilities in the
GCC. While activities in North America were lower than we had
anticipated, our plants in the Middle East were very busy executing the
significant backlog that we had accumulated there."

"We are very pleased to report that we ended the year with a 6.5%
increase to revenues and an improvement to pre-tax earnings of $3.6
million. While the highly competitive market conditions that persisted
throughout the year have put significant pressure on our margins, we
have succeeded in absorbing the impact of these through our initiatives
to reduce costs and improve efficiencies, as well as our focus on
overhead costs", continued Mr. Mansfield.

"During the year we have achieved some important positive steps in
realigning and rebuilding our organization. Notably with the
appointments of John Carusiello to Senior Vice President – Americas, and
Grant Dewbre to the positions of Senior Vice President – MENA. We have
also better defined our strategic plans, which include a specific focus
on growth and margin improvements", reported Mr. Mansfield.

"Furthermore, we do anticipate an upturn in the levels of activity in
our markets during the forthcoming year, and we enter the new financial
year with a backlog of $46.7 million, up slightly from our position at
the preceding year-end date. In addition, we continue to pursue the East
Africa Project, which although experiencing some minor delays from the
originally anticipated schedule, is still expected to move forward
during the coming months." concluded Mr. Mansfield.

Fourth Quarter 2017 Results

Net sales decreased to $27.4 million in the fourth quarter of 2017,
compared to $27.6 million during the same period in 2016.

Gross profit increased to $3.6 million in the fourth quarter of 2017,
compared to $3.0 million during the same period in 2016. This 17.5%
improvement in margin is due primarily to higher utilization and
improved profitability in the Middle East.

Selling expenses decreased to $1.1 million in the fourth quarter of
2017, compared to $1.5 million during the same period in 2016. General
and Administrative expenses reduced to $3.8 million in the fourth
quarter of 2017, compared to $5.2 million during the same period in
2016. This overall reduction in expenses of $1.8 million is due to
changes in the senior management, both domestic and international,
relocation of U.S. headquarters and realignment of administrative
functions.

Interest expense was $0.2 million in the fourth quarter of 2017,
compared to $0.1 million in the same period during 2016. This increase
is due to higher borrowings and increased interest rates, both domestic
and foreign.

Operating results from continuing operations before income taxes
improved to a loss of $1.5 million in the fourth quarter of 2017,
compared to a loss of $3.8 million in 2016. The positive contributing
factors were increased margins and reduced selling, general and
administrative expenses.

Full Year 2017 Results

Net sales increased 6.5% to $105.2 million in 2017, from $98.8 million
in 2016. Higher revenues resulted primarily from increased sales to
distributors in Canada.

Gross profit remained unchanged at $11.7 million in 2017 and 2016. Gross
margin decreased to 11% from 12% of net sales in the prior year due to
changes in the North American product mix and continued competitive
pricing pressures in the United States and Middle East.

Selling expenses decreased to $5.0 million from $5.7 million, an
improvement of 11.9%. As a percentage of net sales, selling expenses
decreased to 4.8% in 2017 from 5.8% in the prior year. This improvement
is due to management changes in the Middle East and realignment of the
North American sales organization.

General and administrative expenses were $16.2 million in 2017 compared
to $17.6 million 2016, an improvement of 7.8%. Included in the 2017
expenses is a one-time, third-party cost of $1.2 million to conduct a
complete review of policies and procedures in the Middle East region.
The 2016 expenses included one-time legal settlement expenses of
$0.8 million, and hiring and separation costs of $0.7 million related to
changes in the senior executive positions of the Company.

On a comparative basis, not including these one-time charges, general
and administrative expenses were $15.0 million and $16.1 million, in
2017 and 2016, respectively. This decrease of $1.1 million was primarily
due to the relocation of the U.S. headquarters and realignment of
administrative functions, all of which contributed to the overall
improvement year over year.

Interest expense increased to $0.8 million in 2017 from $0.7 million in
2016 due to higher borrowings and increased interest rates, both
domestic and foreign.

Operating results from continuing operations before income taxes
reflects a loss of $10.2 million in 2017, compared to a loss of
$13.8 million in 2016. The primary positive contributing factors were
increased coating volumes from distributors in Canada, and reduced
selling, general and administrative expenses.

Cash used in operations was $1.8 million in 2017, an improvement of $3.7
million as compared to $5.5 million in 2016, due to the increased
revenues of $6.4 million, along with reduced selling, general and
administrative expenses.

Perma-Pipe International Holdings, Inc.

PPIH is a global leader in pre-insulated piping and leak detection
systems for oil and gas gathering, district heating and cooling, and
other applications. It uses its extensive engineering and fabrication
expertise to develop piping solutions that solve complex challenges
regarding the safe and efficient transportation of many types of
liquids. In total, PPIH has operations at seven locations in five
countries.

Forward-Looking Statements

Certain statements and other information contained in this press release
that can be identified by the use of forward-looking terminology
constitute “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), and are
subject to the safe harbors created thereby, including, without
limitation, statements regarding the expected future performance and
operations of the Company. These statements should be considered as
subject to the many risks and uncertainties that exist in the Company's
operations and business environment. Such risks and uncertainties
include, but are not limited to, the following: (i) the Company’s
ability to effectively execute its strategic plan and achieve
profitability and positive cash flows; (ii) the impacts of global
economic weakness and volatility; (iii) fluctuations in steel prices and
the Company’s ability to offset increases in steel prices through price
increases in its products; (iv) the timing of orders for the Company’s
products; (v) decreases in United States government spending on projects
using the Company’s products, and challenges to the Company’s
non-government customers’ liquidity and access to capital funds;
(vi) the Company’s ability to successfully negotiate progress-billing
arrangements for its large contracts; (vii) fluctuations in crude oil
and natural gas prices risks and uncertainties related to the Company’s
international business operations; (viii) the Company’s ability to repay
its debt, refinance its current expiring United States credit agreement,
and renew expiring international credit facilities; (ix) aggressive
pricing by existing competitors and the entrance of new competitors in
the markets in which the Company operates; (x) the Company’s ability to
purchase raw materials at favorable prices and to maintain beneficial
relationships with its suppliers; (xi) the Company’s ability to
manufacture products free of latent defects and to recover from
suppliers who may provide defective materials to the Company;
(xii) reductions or cancellations of orders included in the Company’s
backlog; (xiii) the Company’s ability to attract and retain senior
management and key personnel; (xiv) the Company’s ability to achieve the
expected benefits of its growth initiatives; (xv) reversals of
previously recorded revenue and profits resulting from inaccurate
estimates made in connection with the Company’s percentage-of-completion
revenue recognition; (xvi) the Company’s failure to establish and
maintain effective internal control over financial reporting; and
(xvii) the impact of cybersecurity threats on the Company’s information
technology systems. Shareholders, potential investors and other readers
are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue reliance
on such forward-looking statements. The forward-looking statements made
herein are made only as of the date of this press release and we
undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise. More detailed information about factors that may affect our
performance may be found in our filings with the Securities and Exchange
Commission, which are available at https://www.sec.gov
and under the Investor Center section of our website (http://investors.permapipe.com.)

Perma-Pipe International Holdings, Inc.’s Form 10-K for
the period ended January 31, 2018 will be accessible at www.sec.gov
and www.permapipe.com.
For more information, visit the Company's website.

Contacts

Perma-Pipe International Holdings, Inc.
David Mansfield, President
and CEO
(847) 966-1000
or
Perma-Pipe Investor Relations
(847)
929-1200
[email protected]