10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2018

Commission File No. 0-18370

Perma-Pipe International Holdings, Inc.

(Exact name of registrant as specified in its charter)

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)

(847) 966-1000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes xNo o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xNo o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

On September 7, 2018, there were 7,876,237 shares of the registrant's common stock outstanding.

Perma-Pipe International Holdings, Inc.

FORM 10-Q

For the fiscal quarter ended July 31, 2018

TABLE OF CONTENTS

Item		Page
Part I	Financial Information
1.	Financial Statements
	Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended July 31, 2018 and 2017	2
	Consolidated Statements of Comprehensive Loss (Unaudited) for the Three and Six Months Ended July 31, 2018 and 2017	3
	Consolidated Balance Sheets as of July 31, 2018 (Unaudited) and January 31, 2018	4
	Consolidated Statements of Stockholders' Equity as of July 31, 2018 (Unaudited) and January 31, 2018	5
	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended July 31, 2018 and 2017	6
	Notes to Consolidated Financial Statements (Unaudited)	8
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
4.	Controls and Procedures	23
Part II	Other Information
6.	Exhibits	24
Signatures		25

PART I FINANCIAL INFORMATION

Item 1.    Financial Statements

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

	Three Months Ended July 31,						Six Months Ended July 31,
	2018			2017			2018			2017
Net sales		$32,325			$26,852			$61,214			$50,353
Cost of sales	26,432			23,794			51,096			45,510
Gross profit	5,893			3,058			10,118			4,843
Operating expenses
General and administrative expenses	3,924			3,856			7,906			8,142
Selling expenses	1,321			1,307			2,463			2,623
Total operating expenses	5,245			5,163			10,369			10,765
Income/(loss) from operations	648			(2,105		)	(251		)	(5,922		)
Interest expense, net	284			157			550			314
Income/(loss) from operations before income taxes	364			(2,262		)	(801		)	(6,236		)
Income tax expense/(benefit)	639			(564		)	591			(1,049		)
Net loss		($275	)		($1,698	)		($1,392	)	($5,187)
Weighted average common shares outstanding
Basic and diluted	7,820			7,679			7,769			7,645
Loss per share
Basic and diluted	($0.04)				($0.22	)	($0.18)				($0.68	)

See accompanying notes to consolidated financial statements.

Note: Earnings per share calculations could be impacted by rounding.

2

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(In thousands)

	Three Months Ended July 31,						Six Months Ended July 31,
	2018			2017			2018			2017
Net loss		($275	)		($1,698	)		($1,392	)		($5,187	)
Other comprehensive (loss) income
Foreign currency translation adjustments, net of tax	(324		)	940			(987		)	1,072
Unrealized gain on marketable security, net of tax	—			(87		)	—			(92		)
Other comprehensive (loss) income	(324		)	853			(987		)	980
Comprehensive loss		($599	)		($845	)		($2,379	)		($4,207	)

See accompanying notes to consolidated financial statements.

3

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands except per share data)	July 31, 2018			January 31, 2018
ASSETS	Unaudited
Current assets
Cash and cash equivalents		$5,247			$7,084
Restricted cash	1,108			1,237
Trade accounts receivable, less allowance for doubtful accounts of $435 at July 31, 2018 and $469 at January 31, 2018	29,703			32,936
Inventories, net	14,707			16,856
Prepaid expenses and other current assets	3,761			2,703
Contract assets	2,014			1,502
Total current assets	56,540			62,318
Property, plant and equipment, net of accumulated depreciation	31,967			34,509
Other assets
Deferred tax assets - long-term	189			391
Goodwill	2,287			2,423
Other assets	5,025			4,943
Total other assets	7,501			7,757
Total assets		$96,008			$104,584
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade accounts payable		$10,806			$14,186
Accrued compensation and payroll taxes	1,338			1,580
Commissions and management incentives payable	1,202			787
Revolving line North America	8,385			7,273
Current maturities of long-term debt	1,720			753
Customers' deposits	2,859			5,236
Outside commissions payable	1,713			1,800
Contract liability	546			1,967
Other accrued liabilities	3,101			4,259
Income taxes payable	879			1,339
Total current liabilities	32,549			39,180
Long-term liabilities
Long-term debt, less current maturities	7,079			7,728
Deferred compensation liabilities	3,460			4,098
Deferred tax liabilities - long-term	1,167			1,242
Other long-term liabilities	542			524
Total long-term liabilities	12,248			13,592
Stockholders' equity
Common stock, $.01 par value, authorized 50,000 shares; 7,876 issued and outstanding at July 31, 2018 and 7,717 issued and outstanding at January 31, 2018	79			77
Additional paid-in capital	58,080			56,304
Accumulated deficit	(4,495		)	(3,103		)
Accumulated other comprehensive loss	(2,453		)	(1,466		)
Total stockholders' equity	51,211			51,812
Total liabilities and stockholders' equity		$96,008			$104,584

See accompanying notes to consolidated financial statements.

4

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(In thousands, except share data)

	Common Stock	Additional Paid-in Capital	Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Total stockholders' equity at January 31, 2018	$77	$56,304	($3,103)		($1,466)		$51,812
Net loss			(1,392	)			(1,392	)
Common stock issued under stock plans, net of shares used for tax withholding	2	1,065					1,067
Stock-based compensation expense		711					711
Foreign currency translation adjustment					(987	)	(987	)
Total stockholders' equity at July 31, 2018	$79	$58,080	($4,495)		($2,453)		$51,211

Shares	2018	2017
Balances at beginning of year	7,716,542	7,595,509
Treasury stock released	—	26,753
Shares issued	159,477	94,280
Balances at period end	7,876,019	7,716,542

See accompanying notes to consolidated financial statements.

5

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)	Six Months Ended July 31,
	2018			2017
Operating activities
Net loss		($1,392	)		($5,187	)
Adjustments to reconcile net loss to net cash flows used in operating activities
Depreciation and amortization	2,344			2,509
Deferred tax expense (benefit)	202			(260		)
Equity-based compensation expense	711			521
Loss on disposal of fixed assets	14			2
Provision on uncollectible accounts	(31		)	(298		)
Gain from sale of marketable securities	—			(142		)
Changes in operating assets and liabilities
Accounts receivable	2,622			5,355
Inventories	1,985			(2,317		)
Change in contract assets and contract liabilities	(1,932		)	(1,065		)
Accounts payable	(4,071		)	(713		)
Accrued compensation and payroll taxes	257			(1,019		)
Customers' deposits	(2,370		)	489
Income taxes receivable and payable	(405		)	(1,442		)
Prepaid expenses and other current assets	(1,127		)	(513		)
Other assets and liabilities	(263		)	1,252
Net cash used in operating activities	(3,456		)	(2,828		)
Investing activities
Capital expenditures	(571		)	(1,526		)
Proceeds from sales of marketable securities	—			142
Proceeds from sales of property and equipment	—			1
Net cash used in investing activities	(571		)	(1,383		)
Financing activities
Proceeds from revolving lines	20,082			16,936
Payments of debt on revolving lines of credit	(17,618		)	(13,237		)
Payments of other debt	(176		)	(120		)
(Decrease) increase in drafts payable	(27		)	285
Payments (borrowings) on capitalized lease obligations	(154		)	567
Release of treasury stock	—			170
Stock options exercised and taxes related to restricted shares vested	252			(256		)
Net cash provided by financing activities	2,359			4,345
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(298		)	604
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,966		)	738
Cash, cash equivalents and restricted cash - beginning of period	8,321			8,701
Cash, cash equivalents and restricted cash - end of period		$6,355			$9,439
Supplemental cash flow information
Interest paid		$588			$362
Income taxes paid	797			524
Fixed assets acquired under capital leases	—			697
Funds held in escrow related to the sale of Filtration assets	—			250

6

See accompanying notes to consolidated financial statements.

7

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2018

(Tabular amounts presented in thousands, except per share amounts)

Note 1 - Basis of presentation

The interim consolidated financial statements of Perma-Pipe International Holdings, Inc., and subsidiaries ("PPIH", "Company", or "Registrant", "we", or "us") are unaudited, but include all adjustments that 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, 2018 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 2018 and 2017 are for the three and six months ended July 31,2018 and 2017, respectively.

Note 2 - Business segment reporting

PPIH is engaged in the manufacture and sale of products in one segment: Piping Systems. Piping Systems engineers, designs, manufactures and sells specialty piping, leak detection and location systems. Specialty piping systems include (i) industrial and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products, (ii) insulated and jacketed piping systems for district heating and cooling, municipal freeze protection, oil & gas, mining and industrial applications, and (iii) the coating and/or insulation of oil and gas gathering flow and long lines for oil and mineral transportation. The Company's leak detection and location systems are sold with 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.

Note 3 - Accounts receivable

The majority of the Company's accounts receivable are due from geographically dispersed contractors and manufacturing companies. Credit is extended based on an evaluation of a customer's financial condition, including the availability of credit insurance. In the U.S., collateral is not generally required. In the U.A.E. and Saudi Arabia, letters of credit are usually obtained for significant orders. Accounts receivable are due within various time periods specified in the terms applicable to the specific customer and are stated at amounts due from customers net of an allowance for claims and doubtful accounts. The allowance for doubtful accounts is based on specifically identified amounts in customers' accounts, where future collectability is deemed uncertain. Management may exercise its judgment in adjusting the provision as a consequence of known items, such as current economic factors and credit trends. Past due trade accounts receivable balances are written off when the Company's collection efforts have been unsuccessful in collecting the amount due and the amount is deemed uncollectible. The write-off is recorded against the allowance for doubtful accounts.

One of the Company’s accounts receivable in the total amount of $5.4 million as of January 31, 2018 (inclusive of a retention receivable amount of $3.7 million, of which $3.2 million was included in the balance of other long-term assets as of July 31, 2018 and January 31, 2018, due to the long-term nature of the receivables) has been outstanding for several years as of July 31, 2018. The Company completed all of its deliverables in 2015, and has been engaged in ongoing active efforts to collect this amount. In the second quarter of 2018, the Company received a payment of approximately $0.5 million, which reduced the balance of this receivable. As a result, the Company did not reserve any allowance against this receivable as of July 31, 2018. The Company continues to engage with the customer to ensure full payment of open balances. However, if the Company’s efforts to collect on this account are not successful in fiscal 2018, then the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts. As of July 31, 2018, this receivable balance, inclusive of a retention receivable amount, was $4.9 million.

8

For the three months ended July 31, 2018 and 2017, one customer accounted for 13%, and no individual customer accounted for more than 10% of the Company's consolidated net sales. For the six months ended July 31, 2018 and 2017, two customers accounted for 23%, and no individual customer accounted for more than 10% of the Company's consolidated net sales.

At July 31, 2018, one customer accounted for 15% of all accounts receivable. Three customers accounted for 35% of all accounts receivable at January 31, 2018.

Note 4 - Revenue recognition

On February 1, 2018, the Company adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," ("Topic 606") using the modified retrospective method applied to contracts that were not completed as of that date. Under this methodology the effect, if any, of initially applying the new revenue standard is recorded as an adjustment to the opening balance of retained earnings while periods prior to the adoption date are not adjusted and continue to be reported in accordance with the accounting policies in effect for those periods.

The Company conducted a complete and thorough analysis of each single element of the five-step model of Topic 606 and concluded that there is no material impact to the Company upon the adoption of the new standard. As a result, there was no cumulative adjustment required to the opening balances of retained earnings, contract assets, or contract liabilities as of February 1, 2018.

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 Company’s standard revenue transactions are classified in to two main categories:

1) Systems - which include all bundled products in which Perma-Pipe designs, engineers, and manufactures pre-insulated piping systems, insulates subsea flowline pipe or subsea oil production equipment. Additionally, this systems classification also includes coating applied to pipes and structures which are provided by the customer.

2) Products - which include cables, leak detection products, heat trace products sold under the PermAlert brand name, material/goods not bundled with piping or flowline systems, and field services not bundled into a project contract.

The Systems revenue class has generally accounted for more than 90% of the Company’s total revenue and is recognized over time. The remaining revenue (Product class) is recognized when goods are shipped or services are performed. A breakdown of the Company's revenues by revenue class for the three and six months ended 2018 and 2017 are as follows:

9

	Three Months Ended July 31,						Six Months Ended July 31,
	2018			2017			2018			2017
	Sales	% to Total		Sales	% to Total		Sales	% to Total		Sales	% to Total
Products	2,578	8	%	1,995	7	%	5,007	8	%	3,326	7	%
Specialty Piping Systems and Coating
Revenue recognized under input method	9,807	30	%	14,138	53	%	20,909	34	%	23,254	46	%
Revenue recognized under output method	19,940	62	%	10,719	40	%	35,298	58	%	23,773	47	%
Total	32,325	100	%	26,852	100	%	61,214	100	%	50,353	100	%

Most of the Company’s revenue is recognized 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 as evidenced by the Company’s right to payment for work performed to date plus seller’s profit margin for products that have no alternative use for the Company.

The U.S. operating entities measure revenue by the costs incurred to date relative to the estimated costs to satisfy the contract using the percentage-of-completion method (an input method). Generally, these contracts are considered a single performance obligation satisfied over time and due to the custom nature of the goods and services, the percentage-of-completion method is the most faithful depiction of the Company’s performance as it measures the value of the goods and services transferred to the customer. Costs include all material, labor, and direct costs incurred to satisfy the performance obligations of the contract. Revenue recognition begins when projects costs are incurred.

All other operating entities measure revenue by the direct measurement of the outputs produced relative to the remaining goods promised under the contract (output method). Due to the types of end customers, generally these contracts require formal inspection protocols or specific export documentation for units produced or produced and shipped, therefore, the output method is the most faithful depiction of the Company’s performance. Depending on the conditions of the contract, revenue may be recognized based on units produced, inspected and held by the Company prior to shipment or on units produced, inspected and shipped.

Contract modifications that occur prior to the start of the manufacturing process will supersede the original contract and revenue is recognized using the modified contract value. Contract modifications that occur during the manufacturing process (changes in scope of work, job performance, material costs, and/or final contract settlements) are recognized in the period in which the revisions are known. Provisions for losses on uncompleted contracts are made in contract liabilities account in the period such losses are identified.

Contract assets and liabilities:

Contract assets represent revenue recognized in excess of amounts billed (unbilled receivables) for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Contract liabilities represent billings in excess of costs (unearned revenue) for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Both customer billings and the satisfaction (or partial satisfaction) of the performance obligation(s) occur throughout the manufacturing process and impacts the period end balances in these accounts.

10

The Company anticipates that substantially all costs incurred for uncompleted contracts as of July 31, 2018 will be billed and collected within one year.

The following tables set forth the activity in contract assets and liabilities. The Company expects to recognize the remaining balance within one year.

	Contract Assets
Balance January 31, 2018		$1,502
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,085		)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,417
Closing Balance at April 30, 2018	1,834
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,395		)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,575
Closing Balance at July 31, 2018		$2,014

	Contract Liabilities
Balance January 31, 2018		$1,967
Revenue recognized during the period for uncompleted contracts from the prior period	(1,810		)
New contracts entered into that are uncompleted at the end of the current period	413
Closing Balance at April 30, 2018	570
Revenue recognized during the period for uncompleted contracts from the prior period	(422		)
New contracts entered into that are uncompleted at the end of the current period	398
Closing Balance at July 31, 2018		$546

Practical expedients:

Costs to obtain a contract are not considered project costs as they are not usually incremental, nor does job duration span more than one year. The Company applies practical expedient for these types of costs and as such expensed in the period incurred.

As the Company's contracts are less than one year, the Company has applied the practical expedient regarding disclosure of the aggregate amount and future timing of performance obligations that are unsatisfied or partially satisfied as of the end of the reporting period.

Note 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.

11

The Company's effective tax rate ("ETR") from operations for the second quarter and year-to-date was 176% and (74)%, compared to 25% and 17% during the respective prior year periods. The change in the ETR from the prior year-to-date to the current year-to-date was in large part due to the changes in net income by jurisdiction. Additional factors include the tax impact of Canadian business combination which occurred in the prior year, and the prior year inclusion of the U.A.E., India, and Saudi Arabia in the annual effective tax rate (“AETR”).

The amount of unrecognized tax benefits, including interest and penalties, at July 31, 2018, recorded in other long-term liabilities was $0.1 million, all of which would impact the Company’s ETR if recognized.

The U.S. Tax Cuts and Jobs Act ("Tax Act") was enacted on December 22, 2017 and introduced significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21%, effective January 1, 2018 and created new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion anti-abuse tax, respectively. In addition, in 2017 the Company was subject to the one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax.

Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has made reasonable estimates of the effects and recorded provisional amounts in its financial statements as of January 31, 2018 and July 31, 2018. As the Company collects and prepares necessary data, and interprets the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, the Company may make future adjustments to its provisional amounts. Furthermore, the Company has considered the impact of the global intangible low-taxed income (GILTI) provision during the quarter and has determined that there was an inclusion of $0.4 million based on year-to-date figures. The Company has elected to account for the impact of GILTI as a current period expense when incurred, however due to the net operating losses ("NOLs") available, along with the valuation allowance in the U.S. this had no impact to the current quarter tax expense, and no additional expense was recorded for this. The accounting for the tax effects of the Tax Act will be completed in 2018.

Provisional amounts for the foregoing income tax effects of the Tax Act have been recorded as of July 31, 2018 and are subject to change during 2018.

Note 6 - Impairment of long-lived assets

The Company's assessment of long-lived assets, and other identifiable intangibles is based upon factors that market participants would use in accordance with the accounting guidance for the fair value measurement of assets. The company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards. There was no impairment of long-lived assets for the three and six months ended July 31, 2018 and 2017.

Goodwill. The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. All identifiable goodwill as of July 31, 2018 and January 31, 2018 was attributable to the purchase of Perma-Pipe Canada, Ltd.

	January 31, 2018		Foreign exchange change effect			July 31, 2018
Goodwill		$2,423		($136	)		$2,287

The Company performs an impairment assessment of goodwill annually as of January 31, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. There was no impairment of goodwill for the three and six months ended July 31, 2018 and 2017.

12

Note 7 - Stock-based compensation

At July 31, 2018, the Company had one incentive stock plan under which new equity incentive awards may be granted:

• 2017 Omnibus Stock Incentive Plan dated June 13, 2017, as amended, which stockholders approved in June 2017.

The Company has prior incentive plans under which previously granted awards remain outstanding, but under which no new awards may be granted. At July 31, 2018, the Company had reserved a total of 938,565 shares for grants and issuances under these incentive stock plans, which includes a reserve for issuance pursuant to unvested or unexercised prior awards, and shares for new grants or issuance pursuant to the 2017 Plan.

While the 2017 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, to date the Company has issued only restricted shares and restricted stock units under the 2017 Plan and currently intends to continue this practice. The 2017 Plan authorizes awards to officers, employees, consultants, and directors.

The Company has equity-based compensation awards that can be granted to eligible employees, officers or directors. The following is the equity-based compensation expense:

	Three Months Ended July 31,				Six Months Ended July 31,
	2018		2017		2018		2017
Stock-based compensation expense		$9		$65		$23		$59
Restricted stock-based compensation expense		$432		$452		$688		$647

Stock Options

The following tables summarize the Company's stock option activity:

Option activity	No. of Shares UnderlyingOptions		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 31, 2018	358			$9.44	4.0		$482
Exercised	(37	)	6.88			37
Expired or forfeited	(53	)	17.14
Outstanding end of period	268		8.42		4.1	392
Exercisable end of period	257			$8.48	3.9		$370

Unvested option activity	No. of Shares UnderlyingOptions		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at January 31, 2018	31			$8.24		$50
Vested	(14	)
Expired or forfeited	(6	)
Outstanding end of period	11			$7.00		$23

13

As of July 31, 2018, there was less than $0.1 million of total unrecognized compensation expense related to unvested stock options. The expense is expected to be recognized over a weighted average period of 1.6 years.

Restricted stock

The following table summarizes the Company's restricted stock activity for the year:

Restricted stock activity	Restricted Shares		Weighted Average Grant Price Per Share		Aggregate Intrinsic Value
Outstanding (unvested) at January 31, 2018	360			$9.05		$3,254
Granted	124		9.75
Vested and issued	(88	)
Forfeited	(63	)	7.19
Outstanding (unvested) end of period	333			$9.05		$3,022

As of July 31, 2018, there was $1.9 million of unrecognized compensation expense related to unvested restricted stock granted under the plans. The expense is expected to be recognized over a period of 4.0 years.

Based upon certain second quarter 2018 matters, including the share settlement to a retiring board director, the Company changed the accounting for the deferred stock compensation arrangements granted to directors from liability accounting treatment to equity accounting treatment and, as such, classified $0.7 million from a liability to additional paid in capital.

Note 8 - Earnings per share

	Three Months Ended July 31,		Six Months Ended July 31,
	2018	2017	2018	2017
Basic weighted average common shares outstanding	7,820	7,679	7,769	7,645
Dilutive effect of equity compensation plans	—	—	—	—
Weighted average common shares outstanding assuming full dilution	7,820	7,679	7,769	7,645
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	178	163	178	163
Stock options with an exercise price below the average market price	90	255	90	255

Note 9 - Debt

Debt totaled $17.2 million at July 31, 2018, a net increase of $1.4 million since January 31, 2018.

Revolving lines North America. On September 24, 2014, the Company entered into a Credit and Security Agreement with a financial institution (as amended, "Credit Agreement"). Under the terms of the Credit Agreement, which matures on September 25, 2018, the Company can borrow up to a combined $15.0 million in the U.S. and Canada, subject to borrowing base availability from secured domestic and certain Canadian assets, such as accounts receivable and inventory, and other requirements, under a revolving line of credit. The Credit Agreement covenants restrict debt, liens, share repurchases and investments, and require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met. In a seventh amendment

14

to the Credit Agreement executed on December 14, 2017, the lenders increased the borrowing limit for the Company’s Canadian subsidiary and adjusted minimum availability requirements for borrowers in the U.S. and Canada with a limited waiver of related covenant non-compliance retroactive to October 31, 2017.

On June 5, 2018, the Company completed an eighth amendment to the Credit Agreement. The lenders extended the minimum availability requirements for the Company’s Canadian subsidiary through August 1, 2018. Furthermore, the lenders waived the technical reporting event of default which resulted from the Company applying a non-conforming method in calculating the Canadian availability as of April 30, 2018. Based on the waiver received on June 5, 2018, the Company was in compliance with all covenants under the Credit Agreement as of April 30, 2018, and the lenders extended the minimum availability requirements for the Company’s Canadian subsidiary, through August 1, 2018. On August 1, 2018 the Company received a ninth amendment to the Credit Agreement, in which the lenders adjusted the minimum availability requirements for borrowers in the U.S. and Canada through September 15, 2018. As of July 31, 2018, the Company was in compliance with all covenants under the Credit Agreement. The Credit Agreement balances as of July 31, 2018 and January 31, 2018 were included as current liabilities in the Company's consolidated balance sheets, because the Credit Agreement has a subjective acceleration clause, and expires in less than 12 months.

The Credit Agreement will expire on September 25, 2018. See “Note 13 – Subsequent events” for information on the

Company’s potential new replacement credit facility.

Interest rates vary based on the average availability in the preceding fiscal quarter and are: (a) a margin in effect plus a base rate, if below certain availability limits; or (b) a margin in effect plus the Eurodollar rate for the corresponding interest period. On July 31, 2018, the Company had borrowed $8.4 million at 10.0% and 8.7% and had $0.9 million available to it under the revolving line of credit. In addition, $0.2 million of availability was used under the Credit Agreement primarily to support letters of credit to guarantee amounts committed for inventory purchases. Cash required for operations, as needed, is provided by draw downs on the line of credit.

Revolving lines foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries. These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends. On July 31, 2018, the Company was in compliance with the covenants under the credit arrangements. On July 31, 2018, interest rates were based on the Emirates Inter Bank Offered Rate (EIBOR) plus 3.5% per annum, with a minimum interest rate of 4.5% per annum. On July 31, 2018, the Company's interest rates ranged from 5.0% to 6.5%, and the Company could borrow $10.4 million under these credit arrangements. On July 31, 2018, $4.9 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. On July 31, 2018, the Company had borrowed $1.2 million, and had an additional $4.3 million available. The foreign revolving lines balances as of July 31, and January 31, 2018, were included as current maturities of long-term debt in the Company's consolidated balance sheets.

Mortgages. On July 28, 2016, the Company borrowed 8.0 million CAD (approximately $6.1 million at the prevailing exchange rate on the transaction date) from a bank in Canada under a mortgage note secured by the Company's manufacturing facility located in Alberta, Canada, that matures on December 23, 2042. The interest rate is variable, currently at 5.8%, with monthly payments of 36 thousand CAD (approximately $28 thousand) for interest; and monthly payments of 27 thousand CAD (approximately $20 thousand) for principal. Principal payments began January 2018.

On June 19, 2012, the Company borrowed $1.8 million under a mortgage note secured by its manufacturing facility in Lebanon, Tennessee. The proceeds were used for payment of amounts borrowed. The loan bears interest at 4.5% with monthly payments of $13 thousand for both principal and interest and matures July 1, 2027. On June 19, 2022, and on the same day of each year thereafter, the interest rate shall adjust to the prime rate, provided that the applicable interest rate shall not adjust more than 2.0% per annum and shall be subject to a ceiling of 18.0% and a floor of 4.5%.

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Capital Leases. In 2017, the Company obtained three capital leases for 1.1 million CAD (approximately $0.8 million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these capital leases were from 4.0% to 7.8% per annum with monthly principal and interest payments of less than $0.1 million. These leases mature from April 30, 2021 to September 29, 2022.

In 2014, the Company obtained two capital leases for 0.9 million CAD (approximately $0.9 million at the prevailing exchange rate on the transaction date) to finance vehicle equipment. The interest rate for these capital leases is 3.25% per annum with monthly principal and interest payments of 14 thousand CAD. These leases matured on June 25, 2018

Note 10 - Restricted cash

Restricted cash held by foreign subsidiaries was $1.1 million as of July 31, 2018 and $1.2 million as of January 31, 2018. Restricted cash held by foreign subsidiaries related to fixed deposits that also serve as security deposits and guarantees.

	Six Months Ended July 31,
	2018		2017
Cash and cash equivalents		$5,247		$8,546
Restricted cash	1,108		893
Cash, cash equivalents and restricted cash shown in the statement of cashflows		$6,355		$9,439

Note 11 - Fair value

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 market rates.

Note 12 - Recent accounting pronouncements

In June 2018, the FASB issued an update to Topic 718, which is intended to reduce costs and complexity, and improve financial reporting for share-based payments issued to non-employees. ASU No. 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.  The Company has evaluated the effect that this standard will have on its consolidated financial statements and related disclosures, and has determined that this guidance does not have any impact on its results of operations or financial position.

In March 2017, the FASB issued authoritative guidance which changes the income statement presentation of the components of net periodic benefit cost related to defined benefit pension and other postretirement plans. The primary change under the new guidance is that only the service cost component of net periodic benefit cost should be included in operating income and is eligible for capitalization as an asset. The other components of net periodic benefit cost, such as interest cost, the expected return on assets, and amortization of actuarial gains and losses and prior service cost, should be presented below operating income. The guidance was effective for the Company starting February 1, 2018 and has been applied retrospectively to the presentation of net periodic benefit cost and prospectively to the capitalization of service cost. The adoption of this guidance did not have a material impact on the Company's results of operations or financial position.

In October 2016, the FASB issued authoritative guidance requiring the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than when transferred to a third party as required under the current guidance. The new guidance was effective for the Company beginning February

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1, 2018. The adoption of this guidance did not have a material impact on the Company's results of operations or financial position.

In February 2016, the FASB issued 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 its consolidated financial statements and related disclosures.

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers ("Topic 606")", with several clarifying updates issued during 2016. This guidance was effective for the Company beginning February 1, 2018. The adoption of this guidance did not have a material impact on the Company's results of operations or financial position.

Refer to Note 4 - Revenue recognition for more detail.

The Company evaluated other recent accounting pronouncements and does not expect them to have a material impact on its consolidated financial statements and related disclosures.

Note 13 - Subsequent event

On August 31, 2018, the Company entered into a commitment letter with PNC Bank for a new $18 million senior secured replacement credit facility. The Company is actively working to finalize the related credit agreement prior to the expiration of the existing Credit Agreement.

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

The statements contained under the caption MD&A and other information contained elsewhere in this quarterly report, which can be identified by the use of forward-looking terminology such as "may," "will," "expect," "continue," "remains," "intend," "aim," "should," "prospects," "could," "future," "potential," "believes," "plans," "likely" and "probable" or the negative thereof or other variations thereon or comparable 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, and are subject to the safe harbors created thereby. 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 could cause actual results to differ materially from those projected as a result of many factors, including, but not limited to, those under the heading Item 1A. Risk Factors included in the Company's latest Annual Report on Form 10-K.

RESULTS OF OPERATIONS

The Company is engaged in the manufacture and sale of products in one reportable segment. Since the Company focuses on large discrete projects, operating results could be negatively impacted in the future as a result of large variations in the level of project activity in reporting periods.

This discussion should be read in conjunction with the Company's consolidated financial statements, including the notes thereto, contained elsewhere in this report. Percentages set forth below in the MD&A have been rounded to the nearest percentage point, and may not exactly correspond to the comparative data presented.

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	Three Months Ended July 31,								Six Months Ended July 31,
($ in thousands)	2018			2017			% Favorable (Unfavorable)		2018		2017		% Favorable (Unfavorable)
Net sales	$32,325			$26,852			20	%	$61,214		$50,353		22	%
Gross profit	5,893			3,058			93	%	10,118		4,843		109	%
Percentage of net sales	18		%	11		%			17	%	10	%
General and administrative expenses	3,924			3,856			(2	)%	7,906		8,142		3	%
Percentage of net sales	12		%	14		%			13	%	16	%
Selling expense	1,321			1,307			(1	)%	2,463		2,623		6	%
Percentage of net sales	4		%	5		%			4	%	5	%
Interest expense, net	284			157			(81	)%	550		314		(75	)%
Income/(Loss) from operations before income taxes		$364			($2,262	)	116	%	(801)		(6,236)		87	%

Three months endedJuly 31, 2018 ("current quarter") vs. Three months endedJuly 31, 2017 ("prior year quarter")

Net sales:

Net sales increased 20% to $32.3 million in the current quarter, from $26.9 million in the prior year quarter. Higher revenues resulted from increased sales in Canada, the Middle East and India.

Cost of sales and gross profit:

Gross margin increased to 18%, or $5.9 million of net sales, in the current quarter from 11%, or $3.1 million of net sales, in the prior year quarter. This 93% improvement was due to increased volumes, and improved margins.

General and administrative expenses:

General and administrative expenses remained flat at $3.9 million in the current quarter, and the prior year quarter. Higher payroll and accrued incentive expenses were offset by lower professional fees.

Selling expenses:

Selling expenses of $1.3 million in the current quarter, remained unchanged from the prior year quarter.

Interest expense:

Net interest expense increased to $0.3 million in the current quarter from $0.2 million in the prior-year quarter due to higher borrowings, and higher effective interest rates, both domestic and foreign.

Income from operations before income taxes:

Income from operations before income taxes improved by 116%, or $2.7 million, to pre-tax income of $0.4 million in the current quarter, from a pre-tax loss of $2.3 million in the prior year quarter. The positive contributing factors were:

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• Increased sales of $5.5 million;

• Improved gross profit of $2.8 million; and

• Selling, general and administration expenses remaining flat, an improvement as a percentage of sales.

Six months ended July 31, 2018 ("year-to-date") vs. Six months ended July 31, 2017 ("prior year year-to-date")

Net sales:

Net sales increased 22% to $61.2 million in the current year-to-date, from $50.4 million in the prior year year-to-date. Higher revenues resulted from increased sales in the Middle East and India.

Cost of sales and gross profit:

Gross margin increased to 17%, or $10.1 million of sales, in the current year-to-date from 10%, or $4.8 million of sales, in the prior year year-to-date. This improvement, which more than doubled the gross margin, was due to increased volumes in the Middle East and India.

General and administrative expenses:

General and administrative expenses decreased by 3% to $7.9 million in the current year-to-date, from $8.1 million in the prior year year-to-date.

In the prior year-to-date, the Company recognized foreign exchange losses on the payback of an intercompany loan extended to a foreign subsidiary. This was partially offset by higher payroll and accrued incentive expenses in the current year.

Selling expenses:

Selling expenses decreased by 6% to $2.5 million in the current year-to-date from $2.6 million the prior year year-to-date, and an improvement of 1% as a percentage to net sales. This decrease is due to the expiration of a lease in 2017 for a sales office.

Interest expense:

Net interest expense increased to $0.6 million in the current year-to-date from $0.3 million in the prior year year-to-date due to higher borrowings, and higher effective interest rates, both domestic and foreign.

Income from operations before income taxes:

Income from operations before income taxes improved by 87%, or $5.4 million, to a pre-tax loss of $0.8 million in the current year-to-date, from a pre-tax loss of $6.2 million in the prior year year-to-date. The positive contributing factors were:

• Increased sales of $10.8 million;

• Improved gross profit of $5.3 million; and

• Selling, general and administration expenses remaining flat, and an improvement as a percentage of sales.

Accounts receivable:

In 2013, the Company started a project in the Middle East as a sub-contractor, with billings in the aggregate amount of approximately $41.9 million. The Company completed all of its deliverables in 2015, and has collected approximately $37.0 million, as of July 31, 2018. The remaining balance due as of July 31, 2018 was $4.9 million. Included in this balance is an amount of $3.7 million, which pertains to retention clauses within the agreements of our customer

19

(contractor), and which become payable by the customer when this project is fully tested and commissioned. In the absence of a firm date for the final commissioning of the project, and due to the long-term nature of this receivable, $3.2 million of this retention amount is carried in a long-term receivable account.

The Company has been engaged in ongoing active efforts to collect this outstanding amount, and has received updated acknowledgment of the outstanding balances and assurances of payment from the customer. During the second quarter of 2018, the Company received a payment of approximately $0.5 million. As a result, the Company did not reserve any allowance against this amount, however, if the Company’s efforts to collect on the remaining balance on this account are not successful in fiscal 2018, then the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts.

Income taxes:

The Company's effective tax rate ("ETR") from operations for the current quarter and current year-to-date was 176% and (74)%, compared to 25% and 17% during the respective prior year periods. The change in the ETR from the prior year-to-date to the current year-to-date was in large part due to the changes in net income by jurisdiction. Additional factors include the tax impact of Canadian business combination which occurred in the prior year and the prior year inclusion of the U.A.E., India, and Saudi Arabia in the annual effective tax rate. The Company remains in a domestic net operating loss carryforward position. For additional information, see "Notes to Consolidated Financial Statements, Note 5 Income taxes".

Other

The Company has made a bid to provide insulation of pipes to the East Africa Crude Oil Pipeline ("EACOP") project. The EACOP project is a 1450 Km (900 mile) long heavy crude oil pipeline from the Lake Albert Basin in Uganda to the Tanga port in Tanzania being developed by French oil company Total E&P, China National Offshore Oil Corporation (CNOOC) and London-based Tullow Oil. The pipeline is 24 inches in diameter, and is electrically heat traced. Once completed, it will be the longest insulated and heat traced pipeline in the world. There can be no assurance that the Company will be successful in its bid for this project, or what the final terms of any such potential engagement will be until the bid is awarded; the timing of which is uncertain.

Liquidity and capital resources

Cash, cash equivalents and restricted cash as of July 31, 2018 were $6.4 million compared to $8.3 million on January 31, 2018. On July 31, 2018, $0.4 million was held in the U.S., and $6.0 million was held at the Company's foreign subsidiaries. From time to time, the Company repatriates cash held at certain of its foreign subsidiaries as needed to help fund the Company's working capital needs. The Company's working capital was $24.0 million on July 31, 2018 compared to $23.1 million on January 31, 2018.

Cash used in operating activities during the first six months of 2018 was $3.5 million, compared to $2.8 million during the same period in 2017. Net cash used in investing activities during the first six months of 2018 amounted to $0.6 million, compared to $1.4 million during the same period in 2017.

Debt totaled $17.2 million on July 31, 2018, a net increase of $1.4 million compared to the beginning of the current fiscal year. For additional information, see "Notes to Consolidated Financial Statements, Note 9 Debt". Net cash provided by financing activities during the first six months of 2018 was $2.4 million compared to $4.3 million for the same period in 2017.

On September 24, 2014, the Company entered into its Credit Agreement. Under the terms of the Credit Agreement, which matures on September 25, 2018, the Company can borrow up to a combined $15.0 million in the U.S. and Canada, subject to borrowing base availability from secured domestic and certain Canadian assets, such as accounts receivable and inventory, and other requirements, under a revolving line of credit. The Credit Agreement covenants restrict debt, liens, share repurchases and investments, and require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met. In a seventh amendment to the Credit Agreement executed on December 14, 2017, the lenders increased the borrowing

20

limit for the Company’s Canadian subsidiary and adjusted minimum availability requirements for borrowers in the U.S. and Canada with a limited waiver of related covenant non-compliance retroactive to October 31, 2017. On June 5, 2018, the Company completed an eighth amendment to the Credit Agreement. The lenders extended the minimum availability requirements for the Company’s Canadian subsidiary, through August 1, 2018. Furthermore, the lenders waived the technical reporting event of default which resulted from the Company applying a non-conforming method in calculating the Canadian availability as of April 30, 2018. On August 1, 2018 the Company received a ninth amendment to the Credit Agreement, in which the lenders adjusted the minimum availability requirements for borrowers in the U.S. and Canada through September 15, 2018. The Credit Agreement balances as of July 31, 2018 and January 31, 2018 were included as current liabilities in the Company's consolidated balance sheets because the Credit Agreement has a subjective acceleration clause, and expires in less than 12 months.

Interest rates vary based on the average availability in the preceding fiscal quarter and are: (a) a margin in effect plus a base rate, if below certain availability limits; or (b) a margin in effect plus the Eurodollar rate for the corresponding interest period. On July 31, 2018, the Company had borrowed $8.4 million at 10% and 8.7% and had $0.9 million available to it under the Credit Agreement. In addition, $0.2 million of availability was used under the Credit Agreement primarily to support letters of credit to guarantee amounts committed for inventory purchases. Cash required for operations, as needed, is provided by draw downs on the line of credit.

The Credit Agreement will expire on September 25, 2018. On August 31, 2018, the Company entered into a commitment letter with a national bank for a new $18 million senior secured replacement credit facility. The Company is actively working to finalize the related credit agreement prior to the expiration of the Credit Agreement.

Revolving lines foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries. These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. These lines are secured by certain equipment, certain assets, such as accounts receivable and inventory, and a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends. On July 31, 2018, the Company was in compliance with the covenants under the credit arrangements. On July 31, 2018, interest rates were based on the Emirates Inter Bank Offered Rate (EIBOR) plus 3.5% per annum, with a minimum interest rate of 4.5% per annum. On July 31, 2018, the Company's interest rates ranged from 5.0% to 6.5%, and the Company can borrow $10.4 million under these credit arrangements. On July 31, 2018, $4.9 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. As of July 31, 2018, the Company had borrowed $1.2 million, and had an additional $4.3 million remaining unused. The foreign revolving lines balances as of July 31, and January 31, 2018 were included as current maturities of long-term debt in the Company's consolidated balance sheets.

The Company’s credit arrangements used by its Middle Eastern subsidiaries renew on an annual basis. Subsequent to January 31, 2018, the Company's foreign credit lines were renewed with a reduction in facility size of $3.2 million, thus reducing the amount available to borrow by the same amount.

Mortgages. On July 28, 2016, the Company borrowed 8.0 million CAD (approximately $6.1 million at the prevailing exchange rate on the transaction date) from a bank in Canada under a mortgage note secured by the manufacturing facility located in Alberta, Canada that matures on December 23, 2042. The interest rate is variable, currently at 4.7%, with monthly payments of 31 thousand CAD (approximately $24 thousand) for interest; and monthly payments of 27 thousand CAD (approximately $20 thousand) for principal. Principal payments began January 2018.

On June 19, 2012, the Company borrowed $1.8 million under a mortgage note secured by its manufacturing facility in Lebanon, Tennessee. The proceeds were used for payment of amounts borrowed. The loan bears interest at 4.5% with monthly payments of $13 thousand for both principal and interest and matures July 1, 2027. On June 19, 2022, and on the same day of each year thereafter, the interest rate shall adjust to the prime rate, provided that the applicable interest rate shall not adjust more than 2.0% per annum and shall be subject to a ceiling of 18.0% and a floor of 4.5%.

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Capital Leases. In 2017, the Company obtained three capital leases for 1.1 million CAD (approximately $0.8 million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these capital leases were from 4.0% to 7.8% per annum with monthly principal and interest payments of less than $0.1 million. These leases mature from April 30, 2021 to September 29, 2022.

In 2014, the Company obtained two capital leases for 0.9 million CAD (approximately $0.9 million at the prevailing exchange rate on the transaction date) to finance vehicle equipment. The interest rate for these capital leases is 3.25% per annum with monthly principal and interest payments of $14 thousand. These leases matured on June 25, 2018.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies are described in Item 7. MD&A and in the Notes to the Consolidated Financial Statements for the year ended January 31, 2018 contained in the Company's most recent Annual Report on Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of critical accounting policies may require management to make assumptions, judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

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Item 4.Controls and Procedures

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of July 31, 2018. This evaluation included consideration of the controls, processes, and procedures that are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management has previously reported on a material weakness in the Company's internal control over financial reporting that resulted from an accounting error identified by the Company during its preparation and review of the Company's financial statements for the fiscal quarter ended July 31, 2017 related to the Company's accounting for stock-based compensation cost. Specifically, the Company had improperly reversed stock-based compensation costs for vested equity awards that expired, terminated or were cancelled unexercised. This accounting error was attributable to the Company’s lack of technical accounting knowledge and led management to conclude that a material weakness existed with respect to the Company’s internal control over financial reporting.

As described below, the Company has adopted and implemented policies and procedures to ensure that its staff has the necessary technical accounting knowledge.

Notwithstanding the material weakness described above, the Company's management, including it's Chief Executive Officer and Chief Financial Officer, have concluded that the financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

Changes in Internal Control Over Financial Reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Remediation Plan for the Material Weakness in Internal Control over Financial Reporting: To address the material weakness regarding the adjustment for awards that expired unexercised, the Company has completed the following:

• Expanded the training of employees in financial technical accounting, reporting and disclosure-related positions;

• Reinforced the importance of a strong control environment, to emphasize the technical requirements for controls that are designed, implemented and operating effectively and to set the appropriate expectations on internal controls through establishing the related policies and procedures;

• Implemented a catalog of key accounting rules that have been applied during the quarter. In the reviews of any major journal entries for non-standard operational accounting matters, this catalog will be used as a checklist to validate that the required accounting treatment is applied and disclosures are made accordingly. Management will evaluate whether the accounting treatment follows the current rules in the catalog and will decide whether outside firm expertise is warranted in such a review;

• Validated and updated the catalog quarterly for any changes resulting from changed or newly pronounced accounting rules;

• Reviewed the categories that are underlying the calculations related to stock-based compensation, and revise procedures for the calculation and review of effects from vested, forfeited and expired options; and

• Implemented Certent, a comprehensive equity compensation management and reporting solution provider, in the second quarter of 2018.

The Company anticipates the actions described above and resulting improvements in controls will strengthen the Company's processes, procedures and controls related to recording equity-based compensation costs and will address the related material weakness described above. However, the material weakness cannot be considered fully remediated

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until the remediation processes have been in operation for a period of time and successfully tested. Testing in this area is continuing and the Company believes that this material weakness with be fully remediated by fiscal year end.

PART II OTHER INFORMATION

Item 6. Exhibits

31.1	Rule 13a - 14(a)/15d - 14(a) Certifications (1) Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Rule 13a - 14(a)/15d - 14(a) Certifications (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)
10 (a)	Limited Waiver and Ninth Amendment to Credit and Security Agreement
10 (b)	Restricted stock option agreement
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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Perma-Pipe International Holdings, Inc.

Date:	September 11, 2018	/s/ David J. Mansfield
		David J. Mansfield
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	September 11, 2018	/s/ Karl J. Schmidt
		Karl J. Schmidt
		Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-10.A

EX-10.B

2018 PPIH EMPLOYEE RESTRICTED STOCK UNIT GRANT RESTRICTED STOCK UNIT AGREEMENT UNDER THE 2017 OMNIBUS STOCK INCENTIVE PLAN, AS AMENDED JUNE 13, 2017 GRANTEE: __________ NO. OF AWARD UNITS: ____________ This Agreement (the “Agreement”) evidences the award of ___________ restricted stock units (each, a “Award Unit,” and collectively, the “Award Units”), entitling the grantee to receive one share of Common Stock (a “Share”) on a future date, that Perma-Pipe International Holdings, Inc., a Delaware corporation (the “Company”), has granted to you, ________________, effective as of ____________ (the “Grant Date”), pursuant to the 2017 Omnibus Stock Incentive Plan, as Amended June 13, 2017 (the “Plan”) and conditioned upon your agreement to the terms described below. All of the provisions of the Plan are expressly incorporated into this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows: 1. Terminology. Unless otherwise provided in this Agreement, capitalized words used herein are defined in the Glossary at the end of this Agreement, or, if no definition is provided in this Agreement or the Glossary, such capitalized words shall have the same definitions as in the Plan. 2. Vesting. (a) All of the Award Units are nonvested and forfeitable as of the Grant Date. (b) So long as your Service is continuous from the Grant Date through the applicable date upon which vesting is scheduled to occur, . _____ of the Award Units will vest and become nonforfeitable on _____, 2019, . _____ of the Award Units will vest and become nonforfeitable on _____, 2020, . _____ of the Award Units will vest and become nonforfeitable on _____, 2021, . _____ of the Award Units will vest and become nonforfeitable on _____, 2022. (c) Notwithstanding Section 2(b), one hundred percent of the Award Units will become vested and nonforfeitable as of immediately before and contingent upon the occurrence of a Change in Control, so long as your Service is continuous from the Grant Date, through the date of the Change in Control. (d) If your Service ceases by reason of your permanent disability (as defined in Section 22(e)(3) of the Code) or death, then for one year after the date you become permanently disabled or your death, the Award Units will continue to vest and become nonforfeitable as set forth in Section 2(b) as though your Service was continuous through the one year anniversary of your date of disability or death, as applicable, and any Units that do not vest in accordance with this subsection shall be forfeited; provided, however, if the Company (or an Affiliate) reasonably determines following your termination due to death or disability that you could have been terminated for Cause had all the facts been known to the Company (or an Affiliate) at the time of your death or disability, as applicable, then you shall forfeit all rights with respect to any unvested Award Units. Employee Restricted Stock Unit Grant - US 4836-6702-6798.6

(e) Except as otherwise specified in this Section 2, unless otherwise determined by the Administrator in its sole discretion, none of the Award Units will become vested and nonforfeitable after your Service ceases. 3. Settlement of Units. The Company shall deliver to you (or a designated broker) a whole number of Shares equal to the number of Units (if any) that vest pursuant to this Agreement, subject to withholding of any taxes (as provided in Section 7 below). Such delivery shall take place as soon as administratively practicable following the vesting date, but in no event more than 30 days after the applicable vesting date. 4. Effect of Termination of Employment or Service. If your Service ceases for any reason except as otherwise specified in Section 2, all Award Units that are not then vested and nonforfeitable will be immediately forfeited by you. 5. Restrictions on Transfer. (a) Your Award Units may not be sold, assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise), except by will or the laws of descent and distribution, and shall not be subject to execution, attachment or similar process. (b) You hereby represent and warrant to the Company as follows: (i) You will hold any Shares transferred to you upon the vesting of the Award Units for your own account for investment only and not with a view to, or for resale in connection with, any “distribution” of the Shares within the meaning of the Securities Act. (ii) You understand that the Company may, in its discretion, impose restrictions on the sale, pledge or other transfer of the Shares transferred to you upon the vesting of the Award Units (including the placement of appropriate legends on stock certificates and the issue of stop transfer instructions to the Company’s Transfer Agents) if, in the judgment of the Company, such restrictions are necessary or desirable to comply with the Securities Act, the securities laws of any State or any other law. (iii) You are aware that your investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. (c) Any attempt to dispose of the Award Units or Shares received upon settlement of the Award Units in contravention of the restrictions set forth in this Section 5 shall be null and void and without effect. The Company shall not be required to (i) transfer on its books any Shares that have been sold or transferred in contravention of this Agreement or (ii) treat as the owner of the Shares, or otherwise accord voting, dividend, or liquidation rights to any transferee to whom the Shares have been transferred in contravention of this Agreement. 6. Stockholder Rights and Dividend Equivalents. You shall not have any rights of a stockholder with respect to the Shares underlying the Award Units (including, without limitation, any voting rights or any right to dividends), until the Shares have been issued hereunder. If, however, a cash dividend record date occurs after the Grant Date and prior to the settlement date, then on the date that such dividend is paid to Company stockholders, you shall be credited with “dividend equivalents” in an amount equal to the dividends that would have been paid to you if you had owned a number of Shares equal to the number of Award Units that are outstanding hereunder as of such record date. Such dividend equivalents will accrue and be paid to you in cash at the same time and to the same extent that the related Award Units vest. If you forfeit any Award Units, then you will also forfeit any related accrued dividend equivalents. Employee Restricted Stock Unit Grant - US

7. Tax Withholding. (a) You hereby agree to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the grant, vesting, or settlement, of the Award Units. If you wish to satisfy your tax withholding obligations by delivering proceeds from the sale of Shares that are issued under this Agreement on the market, then you should execute Exhibit A to this Agreement and return it to the Company by the deadline set forth therein. If you have not timely executed Exhibit A to this Agreement, then you shall, immediately upon notification of the amount of withholding taxes due, if any, pay to the Company in cash or by check the amount necessary to satisfy any withholding obligations. The Company (and its Affiliates) shall also have the right to deduct from any compensation or any other payment of any kind due you (including withholding the issuance or delivery of Shares hereunder) the amount of any federal, state, local or foreign taxes required by law to be withheld as a result of the grant, vesting or settlement of the Award Units in whole or in part; provided, however, that the value of the Shares withheld or redeemed may not exceed the maximum statutory rate associated with the transaction to the extent necessary for the Company to avoid an accounting charge. If you do not pay the amount necessary to satisfy any withholding obligations when requested, the Company may refuse to issue any Shares under this Agreement. (b) You hereby acknowledge that you have been advised by the Company to seek independent tax advice from your own advisors regarding the tax consequences of this Award. You may not rely on the Company, its Affiliates, or any of their officers, directors or employees for tax or legal advice regarding this Award. You acknowledge that you have sought tax and legal advice from your own advisors regarding this Award or have voluntarily and knowingly foregone such consultation. 8. Adjustments for Corporate Transactions and Other Events. (a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, the number of outstanding Award Units shall, without further action of the Administrator, be adjusted to reflect such event. The Administrator shall make adjustments, in its discretion, to address the treatment of fractional Shares with respect to the Award Units as a result of the stock dividend, stock split or reverse stock split; provided that such adjustments do not result in the issuance of fractional Shares. Adjustments under this Section 8 will be made by the Administrator, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. (b) Non-Change in Control Transactions. Upon any change affecting the Common Stock, the Company or its capitalization, by reason of a spin-off, split-up, dividend, recapitalization, merger, consolidation or share exchange, other than any such change that is part of a transaction resulting in a Change in Control, the Administrator shall make any adjustments with respect to the Award Units as the Administrator determines to be appropriate and equitable. The Administrator’s determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. (c) Unusual or Nonrecurring Events. The Administrator shall make, in its discretion, adjustments in the terms and conditions of, and the criteria included in, Award Units in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan; provided that no such adjustment shall be made in contravention of Section 409A of the Code (“Code Section 409A”) with respect to any Award that constitutes a deferred compensation arrangement within the meaning of Code Section 409A. (d) Binding Nature of Agreement. The terms and conditions of this Agreement shall apply with equal force to any additional and/or substitute securities received by you in exchange for, or by virtue of your ownership of, the Award Units, to the same extent as the Award Units with respect to which such additional and/or substitute securities are distributed, whether as a result of any spin-off, stock split-up, Employee Restricted Stock Unit Grant - US

stock dividend, stock distribution, other reclassification of the Common Stock of the Company, or similar event, except as otherwise determined by the Administrator. If the Award Units are converted into or exchanged for, or stockholders of the Company receive by reason of any distribution in total or partial liquidation or pursuant to any merger of the Company or acquisition of its assets, securities of another entity, or other property (including cash), then the rights of the Company under this Agreement shall inure to the benefit of the Company’s successor, and this Agreement shall apply to the securities or other property (including cash) received upon such conversion, exchange or distribution in the same manner and to the same extent as the Award Units. 9. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this Agreement shall alter your at-will or other employment status or other service relationship with the Company (or an Affiliate), nor be construed as a contract of employment or service relationship between the Company (or an Affiliate) and you, or as a contractual right of you to continue in the employ of, or in a service relationship with, the Company (or an Affiliate) for any period of time, or as a limitation of the right of the Company (or an Affiliate) to discharge you at any time with or without cause or notice and whether or not such discharge results in the forfeiture of any Award Units or any other adverse effect on your interests under the Plan. 10. The Company’s Rights. The existence of the Award Units shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 11. Notices. All notices and other communications made or given pursuant to this Agreement shall be in writing and shall be sufficiently made or given if hand delivered or mailed by certified mail, addressed to you at the address contained in the records of the Company, or addressed to the Administrator, care of the Company for the attention of its Corporate Secretary at its principal executive office or, if the receiving party consents in advance, transmitted and received via telecopy or via such other electronic transmission mechanism as may be available to the parties. 12. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the Award Units granted hereunder. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Award Units granted hereunder shall be void and ineffective for all purposes. In the event a court of competent jurisdiction deems any provision hereof to be unreasonable, void, or unenforceable, such provision(s) shall be deemed severed from the remainder of the Agreement, which shall continue in all other respects to be valid and enforceable. It is the intent of the parties that any such provision(s) of this Agreement declared void, unreasonable, or unenforceable shall be deemed by a court of competent jurisdiction revised to the minimum amount necessary in order to be valid and enforceable. 13. Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a material adverse effect on your rights with respect to the Award Units as determined in the discretion of the Administrator, except as otherwise provided in (a) Section 8 of this Agreement, (b) the Plan or (c) a written document signed by each of the parties hereto. 14. Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is provided to you with this Agreement. Employee Restricted Stock Unit Grant - US

15. Governing Law. The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Administrator relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Delaware, without regard to its provisions concerning the applicability of laws of other jurisdictions. As a condition of this Agreement, you agree that you will not bring any action arising under, as a result of, pursuant to or relating to, this Agreement in any court other than a federal or state court in the districts which include Niles, Illinois, and you hereby agree and submit to the personal jurisdiction of any federal court located in the district which includes Niles, Illinois or any state court in the district which includes Niles, Illinois. You further agree that you will not deny or attempt to defeat such personal jurisdiction or object to venue by motion or other request for leave from any such court. 16. Resolution of Disputes. Any dispute or disagreement which shall arise under, or as a result of, or pursuant to or relating to, this Agreement shall be determined by the Administrator in good faith in its absolute and uncontrolled discretion, and any such determination or any other determination by the Administrator under or pursuant to this Agreement and any interpretation by the Administrator of the terms of this Agreement, will be final, binding and conclusive on all persons affected thereby. You agree that before you may bring any legal action arising under, as a result of, pursuant to or relating to, this Agreement you will first exhaust your administrative remedies before the Administrator. You further agree that in the event that the Administrator does not resolve any dispute or disagreement arising under, as a result of, pursuant to or relating to, this Agreement to your satisfaction, no legal action may be commenced or maintained relating to this Agreement more than twenty-four (24) months after the Administrator’s decision. 17. Headings. The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 18. Counterparts. This Agreement may be executed in multiple counterparts, each of which is deemed to be an original, but all of which taken together constitute one and the same Agreement and shall become effective when all counterparts have been executed by each of the parties hereto and delivered to the other. Facsimile and other electronic transmissions (including in portable document format) of any originally executed document (including this Agreement) shall be deemed to be the same as a delivered, executed original. 19. Electronic Delivery of Documents. By your signing this Agreement, you (i) consent to the electronic delivery of this Agreement, all information with respect to the Plan and the Award Units and any reports of the Company provided generally to the Company’s stockholders; (ii) acknowledge that you may receive from the Company a paper copy of any documents delivered electronically at no cost to you by contacting the Company by telephone or in writing; (iii) further acknowledge that you may revoke your consent to the electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledge that you understand that you are not required to consent to electronic delivery of documents. 20. No Future Entitlement. By your signing this Agreement, you acknowledge and agree that: (i) the grant of these Award Units is a one-time benefit which does not create any contractual or other right to receive future grants of stock, or compensation in lieu of stock grants, even if stock grants have been granted repeatedly in the past; (ii) all determinations with respect to any such future grants, including, but not limited to, the times when stock grants shall be granted, the maximum number of Shares subject to each stock grant, and the times or conditions under which restrictions on such stock grants shall lapse, will be at the sole discretion of the Administrator; (iii) the value of this stock grant is an extraordinary item of compensation which is outside the scope of your employment contract, if any; (iv) the value of this stock grant is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service payments or similar payments, or bonuses, long-service awards, pension or retirement benefits; (v) the vesting of these Award Units ceases upon termination of employment with the Company or transfer of employment from the Company, or other cessation of eligibility for any reason, except as may otherwise be explicitly provided in this Agreement; (vi) the Company does not guarantee any future value of these Award Units; and (vii) no claim or entitlement to Employee Restricted Stock Unit Grant - US

compensation or damages arises if these Award Units do not increase in value and you irrevocably release the Company from any such claim that does arise. 21. Personal Data. For purposes of the implementation, administration and management of this Award or the effectuation of any acquisition, equity or debt financing, joint venture, merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of stock, sale of material assets or other similar corporate transaction involving the Company (a “Corporate Transaction”), you consent, by execution of this Agreement, to the collection, receipt, use, retention and transfer, in electronic or other form, of your personal data by and among the Company and its third party vendors or any potential party to a potential Corporate Transaction. You understand that personal data (including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, date of birth, nationality, job and payroll location, data for tax withholding purposes and Shares awarded, cancelled, vested and unvested) may be transferred to third parties assisting in the implementation, administration and management of the stock grant or the effectuation of a Corporate Transaction and you expressly authorize such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). You understand that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that data will be held only as long as is necessary to implement, administer and manage the stock grant or effect a Corporate Transaction. You understand that you may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Secretary. You understand, however, that refusing or withdrawing your consent may affect your ability to accept a stock grant. 22. Consideration for Shares. To ensure compliance with applicable state corporate law, the Company may require you to furnish consideration in the form of cash or cash equivalents equal to the par value of the Shares issued to you upon settlement of the Award Units, and you hereby authorize the Company to withhold such amount from remuneration otherwise due you from the Company. 23. Recoupment. The Award Units (and any compensation paid or Shares issued upon settlement of the Award Units) are subject to recoupment in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy or practice otherwise required by applicable law. Employee Restricted Stock Unit Grant - US

GLOSSARY (a) “Administrator” means the Board of Directors of Perma-Pipe International Holdings, Inc. and/or the committee(s) or officer(s) appointed by the Board that have authority to administer the Plan. (b) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with the Company (including but not limited to joint ventures, limited liability companies and partnerships). For this purpose, “control” shall mean ownership of 25% or more of the total combined voting power or value of all classes of stock or interests of the entity, or the power to direct the management and policies of the entity, by contract or otherwise. (c) “Cause” means termination in whole or substantial part, for gross negligence or willful misconduct in the execution of your duties, for conviction of, or entry of a plea of guilty or nolo contendere to, any felony or any act of fraud, embezzlement, misappropriation, or a crime involving moral turpitude, or for commission of any act which causes or may reasonably be expected to cause substantial damage to the Company (d) “Company” means Perma-Pipe International Holdings, Inc. (e) “Securities Act” means the Securities Act of 1933, as amended. (f) “Service” means your employment or other service relationship with the Company and its Affiliates. Your Service will be considered to have ceased with the Company and its Affiliates if, immediately after a sale, merger or other corporate transaction, the trade, business or entity with which you are employed or otherwise have a service relationship is not Perma-Pipe International Holdings, Inc. or its successor, or an Affiliate of Perma-Pipe International Holdings, Inc. or its successor. (g) “You”; “Your”; “Employee”, means the recipient of the Award Units as reflected in the first paragraph of this Agreement. Whenever the word “Employee”, “you” or “your” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to the estate, personal representative, or beneficiary to whom the Award Units may be transferred by will or by the laws of descent and distribution, the words “Employee”, “you” and “your” shall be deemed to include such person. Employee Restricted Stock Unit Grant - US

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer. Perma-Pipe International Holdings, Inc. By: Date: The undersigned hereby acknowledges that he/she has carefully read this Agreement and agrees to be bound by all of the provisions set forth herein. The undersigned also consents to electronic delivery of all notices or other information with respect to the Award Units or the Company. WITNESS: GRANTEE Date: Employee Restricted Stock Unit Grant - US

Exhibit A Standing Order Election By executing this Irrevocable Standing Order Election (this “Standing Order”), I wish to notify the Company of my election to satisfy any withholding taxes due in connection with each and every vesting date for the Award Units by applying proceeds from a market sale of Company securities issuable as a result of such vesting date. I understand that if I do not execute this Standing Order, then the Company will require that I pay my withholding obligations by cash or check, or the Company will deduct the amount of any withholding obligations from other payments due to me. IMPORTANT NOTES:  You may not enter into this Standing Order if you are in possession of material non-public information. If you are in possession of material non-public information, then you must wait to complete this Standing Order until such time as you no longer possess material non-public information.  No sales may be made pursuant to this Standing Order for 30 calendar days following its execution. To ensure that you can satisfy your withholding obligations by selling Shares in the market, you should return this form to the Company as soon as possible, but in no event later than 30 days before the first vesting date of your Award Units listed in the Agreement. By signing below, I understand that I am agreeing to the following provisions: 1. I am executing this Standing Order to authorize the Company and any broker the Company designates (the “Broker”) to take the actions described in this Paragraph 1. I authorize the Company to transfer the Shares issued to me upon settlement of the Award Units to the Broker to be held in an account for my benefit (the “Brokerage Account”), and I irrevocably authorize the Broker to sell, at the market price and on the date the Shares are issued by the Company (or, if all or a portion of the sale cannot be completed on such date because of insufficient demand or a market disruption, then on the next following business day on which the sale can be made) the number of Shares necessary to obtain proceeds sufficient to satisfy the amount of any withholding obligations associated with my Award Units indicated by the Company to the Broker. I understand and agree that the number of Shares that the Broker will sell will be based on the Company’s estimate (or Broker’s estimate if it provides such service) of the Shares required to satisfy the withholding obligations, using the closing price of a Share of the Company’s common stock on the trading day immediately prior to vesting date (or such other date as any withholding obligations become due). I agree to execute and deliver such documents, instruments and certificates as may reasonably be required in connection with the sale of the Shares pursuant to this Standing Order. 2. I agree that the proceeds received from the sale of Shares pursuant to Paragraph 1 will be used to satisfy any withholding obligations associated with my Award Units and, accordingly, I hereby authorize the Broker to pay such proceeds to the Company for such purpose. I understand that, to the extent that the proceeds obtained by such sale exceed the amount necessary to satisfy the withholding obligations, such excess proceeds shall be deposited into the Brokerage Account and, if a shortfall occurs, the Broker may sell additional Shares held in my Brokerage Account, the Company may deduct any remaining withholding obligations from any compensation or other payment of any kind due to me, or the Company may require that I pay any remaining withholding obligations to by cash or check. I further understand that any Shares that are issuable to me as a result of the vesting of my Award Units that are not sold to satisfy withholding obligations will be deposited into the Brokerage Account. Employee Restricted Stock Unit Grant - US

3. I have reviewed with my own tax advisors the federal, state, local and foreign tax consequences of this grant and the actions contemplated by the Agreement and this Standing Order. I am relying solely on such advisors and not on any statements or representations of the Company or any of its agents. I understand that I (and not the Company) will be responsible for my own tax liability that may arise as a result of this Standing Order. 4. I represent to the Company that, as of the date hereof, (i) I am not aware of any material nonpublic information about the Company or its Common Stock, (ii) the Company is not in a black out period (as defined in the Company’s Insider Trading Policy), (iii) sales will not be commenced within 30 calendar days of adoption of this Standing Order, (iv) I am not subject to any legal, regulatory or contractual restriction or undertaking that would prevent the sales of Shares contemplated by this Standing Order, and (v) I am entering into this Standing Order in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1. The Company and I have structured this Agreement to comply with the affirmative defense to liability under Section 10(b) of the Securities Exchange Act of 1934, as amended, under Rule 10b5-1(c)(1) issued under such Act, and this Standing Order shall be interpreted to comply with such requirements. IN WITNESS WHEREOF, the parties hereto have executed this Standing Order as of the last date indicated below. Perma-Pipe International Holdings, Inc. Date: By: GRANTEE Date: Employee Restricted Stock Unit Grant - US

EX-31.1

Exhibit 31.1

I, David J. Mansfield, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Perma-Pipe International Holdings, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with the respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 11, 2018

/s/ David J. Mansfield

David J. Mansfield

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Karl J. Schmidt, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Perma-Pipe International Holdings, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with the respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 11, 2018

/s/ Karl J. Schmidt

Karl J. Schmidt

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32

Exhibit 32

Certification of Principal Executive Officers

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

The undersigned in their capacities as Chief Executive Officer and Chief Financial Officer of Perma-Pipe International Holdings, Inc.. (the “Registrant’), certify that, to the best of their knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended July 31, 2018 of the Registrant, (the “Report”):

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ David J. Mansfield

David J. Mansfield

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Karl J. Schmidt

Karl J. Schmidt

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

September 11, 2018

A signed original of     this written statement required by Section 906 has been provided by Perma-Pipe International Holdings, Inc. and will be retained by Perma-Pipe International Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Entity information Document - USD ($)	6 Months Ended
	Jul. 31, 2018	Sep. 07, 2018	Jul. 31, 2017
Document Information
Entity Registrant Name	Perma-Pipe International Holdings, Inc.
Trading Symbol	PPIH
Entity Central Index Key	0000914122
Current Fiscal Year End Date	--01-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Jul. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		7,876,237
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 55,628,183

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Income Statement [Abstract]
Net sales	$ 32,325	$ 26,852	$ 61,214	$ 50,353
Cost of sales	26,432	23,794	51,096	45,510
Gross profit	5,893	3,058	10,118	4,843
Operating expenses
General and administrative expenses	3,924	3,856	7,906	8,142
Selling expenses	1,321	1,307	2,463	2,623
Total operating expenses	5,245	5,163	10,369	10,765
Income/(loss) from operations	648	(2,105)	(251)	(5,922)
Interest expense, net	284	157	550	314
Income/(loss) from continuing operations before income taxes	364	(2,262)	(801)	(6,236)
Income tax expense/(benefit)	639	(564)	591	(1,049)
Net loss	$ (275)	$ (1,698)	$ (1,392)	$ (5,187)
Weighted average common shares outstanding
Basic and diluted	7,820	7,679	7,769	7,645
Loss per share
Basic and diluted	$ (0.04)	$ (0.22)	$ (0.18)	$ (0.68)

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (275)	$ (1,698)	$ (1,392)	$ (5,187)
Other comprehensive (loss) income
Foreign currency translation adjustments, net of tax	(324)	940	(987)	1,072
Unrealized loss on marketable security, net of tax	0	(87)	0	(92)
Other comprehensive (loss) income	(324)	853	(987)	980
Comprehensive loss	$ (599)	$ (845)	$ (2,379)	$ (4,207)

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CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jul. 31, 2018	Jan. 31, 2018
Current assets
Cash and cash equivalents	$ 5,247	$ 7,084
Restricted cash	1,108	1,237
Trade accounts receivable, less allowance for doubtful accounts of $435 at July 31, 2018 and $469 at January 31, 2018	29,703	32,936
Inventories, net	14,707	16,856
Prepaid expenses and other current assets	3,761	2,703
Contract Assets	2,014	1,502
Total current assets	56,540	62,318
Property, plant and equipment, net of accumulated depreciation	31,967	34,509
Other assets
Deferred tax assets - long-term	189	391
Goodwill	2,287	2,423
Other assets	5,025	4,943
Total other assets	7,501	7,757
Total assets	96,008	104,584
Current liabilities
Trade accounts payable	10,806	14,186
Accrued compensation and payroll taxes	1,338	1,580
Commissions and management incentives payable	1,202	787
Revolving line North America	8,385	7,273
Current maturities of long-term debt	1,720	753
Customers' deposits	2,859	5,236
Outside commissions payable	1,713	1,800
Contract Liability	546	1,967
Other accrued liabilities	3,101	4,259
Income taxes payable	879	1,339
Total current liabilities	32,549	39,180
Long-term liabilities
Long-term debt, less current maturities	7,079	7,728
Deferred compensation liabilities	3,460	4,098
Deferred tax liabilities - long-term	1,167	1,242
Other long-term liabilities	542	524
Total long-term liabilities	12,248	13,592
Stockholders' equity
Common stock, $.01 par value, authorized 50,000 shares; 7,876 issued and outstanding at July 31, 2018 and 7,717 issued and outstanding at January 31, 2018	79	77
Additional paid-in capital	58,080	56,304
(Accumulated deficit) retained earnings	(4,495)	(3,103)
Accumulated other comprehensive loss	(2,453)	(1,466)
Total stockholders' equity	51,211	51,812
Total liabilities and stockholders' equity	$ 96,008	$ 104,584

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jul. 31, 2018	Jan. 31, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 435	$ 469
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	50,000	50,000
Common stock, shares issued	7,876	7,717
Common stock, shares outstanding	7,876	7,717

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Shares, Outstanding at Jan. 31, 2017		7,595,509
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock released		26,753
Shares issued		94,280
Stockholders' equity at Jan. 31, 2018	$ 51,812	$ 77	$ 56,304	$ (3,103)	$ (1,466)
Shares, Outstanding at Jan. 31, 2018		7,716,542
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(1,392)			(1,392)
Common stock issued under stock plans, net of shares used for tax withholding	1,067	$ 2	1,065
Stock-based compensation expense	711		711
Foreign currency translation adjustment	$ (987)				(987)
Treasury stock released	0
Shares issued		159,477
Stockholders' equity at Jul. 31, 2018	$ 51,211	$ 79	$ 58,080	$ (4,495)	$ (2,453)
Shares, Outstanding at Jul. 31, 2018		7,876,019

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Operating activities
Net loss	$ (1,392)	$ (5,187)
Adjustments to reconcile net loss to net cash flows used in operating activities
Depreciation and amortization	2,344	2,509
Deferred tax expense (benefit)	202	(260)
Equity-based compensation expense	711	521
Loss on disposal of fixed assets	14	2
Provision on uncollectible accounts	(31)	(298)
Gain from sale of marketable securities	0	(142)
Changes in operating assets and liabilities
Accounts receivable	2,622	5,355
Inventories	1,985	(2,317)
Change in contract assets and contract liabilities	(1,932)	(1,065)
Accounts payable	(4,071)	(713)
Accrued compensation and payroll taxes	257	(1,019)
Customers' deposits	(2,370)	489
Income taxes receivable and payable	(405)	(1,442)
Prepaid expenses and other current assets	(1,127)	(513)
Other assets and liabilities	(263)	1,252
Net cash used in operating activities	(3,456)	(2,828)
Net Cash Provided by (Used in) Investing Activities [Abstract]
Capital expenditures	(571)	(1,526)
Proceeds from Sale and Maturity of Marketable Securities	0	142
Proceeds from sales of property and equipment	0	1
Net cash used in investing activities	(571)	(1,383)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from revolving lines	20,082	16,936
Payments of debt on revolving lines of credit	(17,618)	(13,237)
Payments of other debt	(176)	(120)
(Decrease) increase in drafts payable	(27)	285
Payments (borrowings) on capitalized lease obligations	(154)	567
Release of treasury stock	0	170
Stock options exercised and taxes related to restricted shares vested	252	(256)
Net cash provided by financing activities	2,359	4,345
Effect of Exchange Rate on Cash and Cash Equivalents	(298)	604
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,966)	738
Cash, cash equivalents and restricted cash - beginning of period	8,321	8,701
Cash, cash equivalents and restricted cash - end of period	6,355	9,439
Supplemental cash flow information
Interest paid	588	362
Income taxes paid	797	524
Fixed assets acquired under capital leases	0	697
Funds held in escrow related to the sale of Filtration assets	$ 0	$ 250

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Basis of presentation

6 Months Ended

Jul. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation [Text Block]

Basis of presentation

The interim consolidated financial statements of Perma-Pipe International Holdings, Inc., and subsidiaries ("PPIH", "Company", or "Registrant", "we", or "us") are unaudited, but include all adjustments that 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, 2018 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 2018 and 2017 are for the three and six months ended July 31,2018 and 2017, respectively.

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Business segment reporting

6 Months Ended

Jul. 31, 2018

Segment Reporting [Abstract]

Business segment reporting

Business segment reporting

PPIH is engaged in the manufacture and sale of products in one segment: Piping Systems. Piping Systems engineers, designs, manufactures and sells specialty piping, leak detection and location systems. Specialty piping systems include (i) industrial and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products, (ii) insulated and jacketed piping systems for district heating and cooling, municipal freeze protection, oil & gas, mining and industrial applications, and (iii) the coating and/or insulation of oil and gas gathering flow and long lines for oil and mineral transportation. The Company's leak detection and location systems are sold with 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.

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Accounts Receivable

6 Months Ended

Jul. 31, 2018

Receivables [Abstract]

Accounts Receivable

Accounts receivable

The majority of the Company's accounts receivable are due from geographically dispersed contractors and manufacturing companies. Credit is extended based on an evaluation of a customer's financial condition, including the availability of credit insurance. In the U.S., collateral is not generally required. In the U.A.E. and Saudi Arabia, letters of credit are usually obtained for significant orders. Accounts receivable are due within various time periods specified in the terms applicable to the specific customer and are stated at amounts due from customers net of an allowance for claims and doubtful accounts. The allowance for doubtful accounts is based on specifically identified amounts in customers' accounts, where future collectability is deemed uncertain. Management may exercise its judgment in adjusting the provision as a consequence of known items, such as current economic factors and credit trends. Past due trade accounts receivable balances are written off when the Company's collection efforts have been unsuccessful in collecting the amount due and the amount is deemed uncollectible. The write-off is recorded against the allowance for doubtful accounts.

One of the Company’s accounts receivable in the total amount of $5.4 million as of January 31, 2018 (inclusive of a retention receivable amount of $3.7 million, of which $3.2 million was included in the balance of other long-term assets as of July 31, 2018 and January 31, 2018, due to the long-term nature of the receivables) has been outstanding for several years as of July 31, 2018. The Company completed all of its deliverables in 2015, and has been engaged in ongoing active efforts to collect this amount. In the second quarter of 2018, the Company received a payment of approximately $0.5 million, which reduced the balance of this receivable. As a result, the Company did not reserve any allowance against this receivable as of July 31, 2018. The Company continues to engage with the customer to ensure full payment of open balances. However, if the Company’s efforts to collect on this account are not successful in fiscal 2018, then the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts. As of July 31, 2018, this receivable balance, inclusive of a retention receivable amount, was $4.9 million.

For the three months ended July 31, 2018 and 2017, one customer accounted for 13%, and no individual customer accounted for more than 10% of the Company's consolidated net sales. For the six months ended July 31, 2018 and 2017, two customers accounted for 23%, and no individual customer accounted for more than 10% of the Company's consolidated net sales.

At July 31, 2018, one customer accounted for 15% of all accounts receivable. Three customers accounted for 35% of all accounts receivable at January 31, 2018.

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Revenue recognition

6 Months Ended

Jul. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenue recognition

Revenue recognition

On February 1, 2018, the Company adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," ("Topic 606") using the modified retrospective method applied to contracts that were not completed as of that date. Under this methodology the effect, if any, of initially applying the new revenue standard is recorded as an adjustment to the opening balance of retained earnings while periods prior to the adoption date are not adjusted and continue to be reported in accordance with the accounting policies in effect for those periods.

The Company conducted a complete and thorough analysis of each single element of the five-step model of Topic 606 and concluded that there is no material impact to the Company upon the adoption of the new standard. As a result, there was no cumulative adjustment required to the opening balances of retained earnings, contract assets, or contract liabilities as of February 1, 2018.

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 Company’s standard revenue transactions are classified in to two main categories:

1) Systems - which include all bundled products in which Perma-Pipe designs, engineers, and manufactures pre-insulated piping systems, insulates subsea flowline pipe or subsea oil production equipment. Additionally, this systems classification also includes coating applied to pipes and structures which are provided by the customer.

2) Products - which include cables, leak detection products, heat trace products sold under the PermAlert brand name, material/goods not bundled with piping or flowline systems, and field services not bundled into a project contract.

The Systems revenue class has generally accounted for more than 90% of the Company’s total revenue and is recognized over time. The remaining revenue (Product class) is recognized when goods are shipped or services are performed. A breakdown of the Company's revenues by revenue class for the three and six months ended 2018 and 2017 are as follows:

	Three Months Ended July 31,						Six Months Ended July 31,
	2018			2017			2018			2017
	Sales	% to Total		Sales	% to Total		Sales	% to Total		Sales	% to Total
Products	2,578	8	%	1,995	7	%	5,007	8	%	3,326	7	%
Specialty Piping Systems and Coating
Revenue recognized under input method	9,807	30	%	14,138	53	%	20,909	34	%	23,254	46	%
Revenue recognized under output method	19,940	62	%	10,719	40	%	35,298	58	%	23,773	47	%
Total	32,325	100	%	26,852	100	%	61,214	100	%	50,353	100	%

Most of the Company’s revenue is recognized 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 as evidenced by the Company’s right to payment for work performed to date plus seller’s profit margin for products that have no alternative use for the Company.

The U.S. operating entities measure revenue by the costs incurred to date relative to the estimated costs to satisfy the contract using the percentage-of-completion method (an input method). Generally, these contracts are considered a single performance obligation satisfied over time and due to the custom nature of the goods and services, the percentage-of-completion method is the most faithful depiction of the Company’s performance as it measures the value of the goods and services transferred to the customer. Costs include all material, labor, and direct costs incurred to satisfy the performance obligations of the contract. Revenue recognition begins when projects costs are incurred.

All other operating entities measure revenue by the direct measurement of the outputs produced relative to the remaining goods promised under the contract (output method). Due to the types of end customers, generally these contracts require formal inspection protocols or specific export documentation for units produced or produced and shipped, therefore, the output method is the most faithful depiction of the Company’s performance. Depending on the conditions of the contract, revenue may be recognized based on units produced, inspected and held by the Company prior to shipment or on units produced, inspected and shipped.

Contract modifications that occur prior to the start of the manufacturing process will supersede the original contract and revenue is recognized using the modified contract value. Contract modifications that occur during the manufacturing process (changes in scope of work, job performance, material costs, and/or final contract settlements) are recognized in the period in which the revisions are known. Provisions for losses on uncompleted contracts are made in contract liabilities account in the period such losses are identified.

Contract assets and liabilities:

Contract assets represent revenue recognized in excess of amounts billed (unbilled receivables) for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Contract liabilities represent billings in excess of costs (unearned revenue) for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Both customer billings and the satisfaction (or partial satisfaction) of the performance obligation(s) occur throughout the manufacturing process and impacts the period end balances in these accounts.

The Company anticipates that substantially all costs incurred for uncompleted contracts as of July 31, 2018 will be billed and collected within one year.

The following tables set forth the activity in contract assets and liabilities. The Company expects to recognize the remaining balance within one year.

	Contract Assets
Balance January 31, 2018		$1,502
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,085		)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,417
Closing Balance at April 30, 2018	1,834
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,395		)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,575
Closing Balance at July 31, 2018		$2,014

	Contract Liabilities
Balance January 31, 2018		$1,967
Revenue recognized during the period for uncompleted contracts from the prior period	(1,810		)
New contracts entered into that are uncompleted at the end of the current period	413
Closing Balance at April 30, 2018	570
Revenue recognized during the period for uncompleted contracts from the prior period	(422		)
New contracts entered into that are uncompleted at the end of the current period	398
Closing Balance at July 31, 2018		$546

Practical expedients:

Costs to obtain a contract are not considered project costs as they are not usually incremental, nor does job duration span more than one year. The Company applies practical expedient for these types of costs and as such expensed in the period incurred.

As the Company's contracts are less than one year, the Company has applied the practical expedient regarding disclosure of the aggregate amount and future timing of performance obligations that are unsatisfied or partially satisfied as of the end of the reporting period.

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Income taxes

6 Months Ended

Jul. 31, 2018

Income Tax Disclosure [Abstract]

Income taxes

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.

The Company's effective tax rate ("ETR") from operations for the second quarter and year-to-date was 176% and (74)%, compared to 25% and 17% during the respective prior year periods. The change in the ETR from the prior year-to-date to the current year-to-date was in large part due to the changes in net income by jurisdiction. Additional factors include the tax impact of Canadian business combination which occurred in the prior year, and the prior year inclusion of the U.A.E., India, and Saudi Arabia in the annual effective tax rate (“AETR”).

The amount of unrecognized tax benefits, including interest and penalties, at July 31, 2018, recorded in other long-term liabilities was $0.1 million, all of which would impact the Company’s ETR if recognized.

The U.S. Tax Cuts and Jobs Act ("Tax Act") was enacted on December 22, 2017 and introduced significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21%, effective January 1, 2018 and created new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion anti-abuse tax, respectively. In addition, in 2017 the Company was subject to the one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax.

Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has made reasonable estimates of the effects and recorded provisional amounts in its financial statements as of January 31, 2018 and July 31, 2018. As the Company collects and prepares necessary data, and interprets the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, the Company may make future adjustments to its provisional amounts. Furthermore, the Company has considered the impact of the global intangible low-taxed income (GILTI) provision during the quarter and has determined that there was an inclusion of $0.4 million based on year-to-date figures. The Company has elected to account for the impact of GILTI as a current period expense when incurred, however due to the net operating losses ("NOLs") available, along with the valuation allowance in the U.S. this had no impact to the current quarter tax expense, and no additional expense was recorded for this. The accounting for the tax effects of the Tax Act will be completed in 2018.

Provisional amounts for the foregoing income tax effects of the Tax Act have been recorded as of July 31, 2018 and are subject to change during 2018.

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Impairment of long-lived assets (Notes)

6 Months Ended

Jul. 31, 2018

Tangible Asset Impairment Charges [Abstract]

Impairment of long-lived assets

Impairment of long-lived assets

The Company's assessment of long-lived assets, and other identifiable intangibles is based upon factors that market participants would use in accordance with the accounting guidance for the fair value measurement of assets. The company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards. There was no impairment of long-lived assets for the three and six months ended July 31, 2018 and 2017.

Goodwill. The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. All identifiable goodwill as of July 31, 2018 and January 31, 2018 was attributable to the purchase of Perma-Pipe Canada, Ltd.

	January 31, 2018		Foreign exchange change effect			July 31, 2018
Goodwill		$2,423		($136	)		$2,287

The Company performs an impairment assessment of goodwill annually as of January 31, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. There was no impairment of goodwill for the three and six months ended July 31, 2018 and 2017.

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Stock-based compensation

6 Months Ended

Jul. 31, 2018

Stock-based compensation [Abstract]

Stock-based compensation [Text Block]

Stock-based compensation

At July 31, 2018, the Company had one incentive stock plan under which new equity incentive awards may be granted:

• 2017 Omnibus Stock Incentive Plan dated June 13, 2017, as amended, which stockholders approved in June 2017.

The Company has prior incentive plans under which previously granted awards remain outstanding, but under which no new awards may be granted. At July 31, 2018, the Company had reserved a total of 938,565 shares for grants and issuances under these incentive stock plans, which includes a reserve for issuance pursuant to unvested or unexercised prior awards, and shares for new grants or issuance pursuant to the 2017 Plan.

While the 2017 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, to date the Company has issued only restricted shares and restricted stock units under the 2017 Plan and currently intends to continue this practice. The 2017 Plan authorizes awards to officers, employees, consultants, and directors.

The Company has equity-based compensation awards that can be granted to eligible employees, officers or directors. The following is the equity-based compensation expense:

	Three Months Ended July 31,				Six Months Ended July 31,
	2018		2017		2018		2017
Stock-based compensation expense		$9		$65		$23		$59
Restricted stock-based compensation expense		$432		$452		$688		$647

Stock Options

The following tables summarize the Company's stock option activity:

Option activity	No. of Shares UnderlyingOptions		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 31, 2018	358			$9.44	4.0		$482
Exercised	(37	)	6.88			37
Expired or forfeited	(53	)	17.14
Outstanding end of period	268		8.42		4.1	392
Exercisable end of period	257			$8.48	3.9		$370

Unvested option activity	No. of Shares UnderlyingOptions		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at January 31, 2018	31			$8.24		$50
Vested	(14	)
Expired or forfeited	(6	)
Outstanding end of period	11			$7.00		$23

As of July 31, 2018, there was less than $0.1 million of total unrecognized compensation expense related to unvested stock options. The expense is expected to be recognized over a weighted average period of 1.6 years.

Restricted stock

The following table summarizes the Company's restricted stock activity for the year:

Restricted stock activity	Restricted Shares		Weighted Average Grant Price Per Share		Aggregate Intrinsic Value
Outstanding (unvested) at January 31, 2018	360			$9.05		$3,254
Granted	124		9.75
Vested and issued	(88	)
Forfeited	(63	)	7.19
Outstanding (unvested) end of period	333			$9.05		$3,022

As of July 31, 2018, there was $1.9 million of unrecognized compensation expense related to unvested restricted stock granted under the plans. The expense is expected to be recognized over a period of 4.0 years.

Based upon certain second quarter 2018 matters, including the share settlement to a retiring board director, the Company changed the accounting for the deferred stock compensation arrangements granted to directors from liability accounting treatment to equity accounting treatment and, as such, classified $0.7 million from a liability to additional paid in capital.

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Earnings per share

6 Months Ended

Jul. 31, 2018

Earnings Per Share [Abstract]

Earnings per share [Text Block]

Earnings per share

	Three Months Ended July 31,		Six Months Ended July 31,
	2018	2017	2018	2017
Basic weighted average common shares outstanding	7,820	7,679	7,769	7,645
Dilutive effect of equity compensation plans	—	—	—	—
Weighted average common shares outstanding assuming full dilution	7,820	7,679	7,769	7,645
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	178	163	178	163
Stock options with an exercise price below the average market price	90	255	90	255

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Debt

6 Months Ended

Jul. 31, 2018

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Debt

Debt totaled $17.2 million at July 31, 2018, a net increase of $1.4 million since January 31, 2018.

Revolving lines North America. On September 24, 2014, the Company entered into a Credit and Security Agreement with a financial institution (as amended, "Credit Agreement"). Under the terms of the Credit Agreement, which matures on September 25, 2018, the Company can borrow up to a combined $15.0 million in the U.S. and Canada, subject to borrowing base availability from secured domestic and certain Canadian assets, such as accounts receivable and inventory, and other requirements, under a revolving line of credit. The Credit Agreement covenants restrict debt, liens, share repurchases and investments, and require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met. In a seventh amendment to the Credit Agreement executed on December 14, 2017, the lenders increased the borrowing limit for the Company’s Canadian subsidiary and adjusted minimum availability requirements for borrowers in the U.S. and Canada with a limited waiver of related covenant non-compliance retroactive to October 31, 2017.

On June 5, 2018, the Company completed an eighth amendment to the Credit Agreement. The lenders extended the minimum availability requirements for the Company’s Canadian subsidiary through August 1, 2018. Furthermore, the lenders waived the technical reporting event of default which resulted from the Company applying a non-conforming method in calculating the Canadian availability as of April 30, 2018. Based on the waiver received on June 5, 2018, the Company was in compliance with all covenants under the Credit Agreement as of April 30, 2018, and the lenders extended the minimum availability requirements for the Company’s Canadian subsidiary, through August 1, 2018. On August 1, 2018 the Company received a ninth amendment to the Credit Agreement, in which the lenders adjusted the minimum availability requirements for borrowers in the U.S. and Canada through September 15, 2018. As of July 31, 2018, the Company was in compliance with all covenants under the Credit Agreement. The Credit Agreement balances as of July 31, 2018 and January 31, 2018 were included as current liabilities in the Company's consolidated balance sheets, because the Credit Agreement has a subjective acceleration clause, and expires in less than 12 months.

The Credit Agreement will expire on September 25, 2018. See “Note 13 – Subsequent events” for information on the

Company’s potential new replacement credit facility.

Interest rates vary based on the average availability in the preceding fiscal quarter and are: (a) a margin in effect plus a base rate, if below certain availability limits; or (b) a margin in effect plus the Eurodollar rate for the corresponding interest period. On July 31, 2018, the Company had borrowed $8.4 million at 10.0% and 8.7% and had $0.9 million available to it under the revolving line of credit. In addition, $0.2 million of availability was used under the Credit Agreement primarily to support letters of credit to guarantee amounts committed for inventory purchases. Cash required for operations, as needed, is provided by draw downs on the line of credit.

Revolving lines foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries. These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends. On July 31, 2018, the Company was in compliance with the covenants under the credit arrangements. On July 31, 2018, interest rates were based on the Emirates Inter Bank Offered Rate (EIBOR) plus 3.5% per annum, with a minimum interest rate of 4.5% per annum. On July 31, 2018, the Company's interest rates ranged from 5.0% to 6.5%, and the Company could borrow $10.4 million under these credit arrangements. On July 31, 2018, $4.9 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. On July 31, 2018, the Company had borrowed $1.2 million, and had an additional $4.3 million available. The foreign revolving lines balances as of July 31, and January 31, 2018, were included as current maturities of long-term debt in the Company's consolidated balance sheets.

Mortgages. On July 28, 2016, the Company borrowed 8.0 million CAD (approximately $6.1 million at the prevailing exchange rate on the transaction date) from a bank in Canada under a mortgage note secured by the Company's manufacturing facility located in Alberta, Canada, that matures on December 23, 2042. The interest rate is variable, currently at 5.8%, with monthly payments of 36 thousand CAD (approximately $28 thousand) for interest; and monthly payments of 27 thousand CAD (approximately $20 thousand) for principal. Principal payments began January 2018.

On June 19, 2012, the Company borrowed $1.8 million under a mortgage note secured by its manufacturing facility in Lebanon, Tennessee. The proceeds were used for payment of amounts borrowed. The loan bears interest at 4.5% with monthly payments of $13 thousand for both principal and interest and matures July 1, 2027. On June 19, 2022, and on the same day of each year thereafter, the interest rate shall adjust to the prime rate, provided that the applicable interest rate shall not adjust more than 2.0% per annum and shall be subject to a ceiling of 18.0% and a floor of 4.5%.

Capital Leases. In 2017, the Company obtained three capital leases for 1.1 million CAD (approximately $0.8 million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these capital leases were from 4.0% to 7.8% per annum with monthly principal and interest payments of less than $0.1 million. These leases mature from April 30, 2021 to September 29, 2022.

In 2014, the Company obtained two capital leases for 0.9 million CAD (approximately $0.9 million at the prevailing exchange rate on the transaction date) to finance vehicle equipment. The interest rate for these capital leases is 3.25% per annum with monthly principal and interest payments of 14 thousand CAD. These leases matured on June 25, 2018

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Restricted cash (Notes)

6 Months Ended

Jul. 31, 2018

Restricted Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted cash

Restricted cash held by foreign subsidiaries was $1.1 million as of July 31, 2018 and $1.2 million as of January 31, 2018. Restricted cash held by foreign subsidiaries related to fixed deposits that also serve as security deposits and guarantees.

	Six Months Ended July 31,
	2018		2017
Cash and cash equivalents		$5,247		$8,546
Restricted cash	1,108		893
Cash, cash equivalents and restricted cash shown in the statement of cashflows		$6,355		$9,439

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Fair value of financial instruments

6 Months Ended

Jul. 31, 2018

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Disclosures [Text Block]

Fair value

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 market rates.

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Recent accounting pronouncements

6 Months Ended

Jul. 31, 2018

Accounting Policies [Abstract]

Recent accounting pronouncements [Text Block]

Recent accounting pronouncements

In June 2018, the FASB issued an update to Topic 718, which is intended to reduce costs and complexity, and improve financial reporting for share-based payments issued to non-employees. ASU No. 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.  The Company has evaluated the effect that this standard will have on its consolidated financial statements and related disclosures, and has determined that this guidance does not have any impact on its results of operations or financial position.

In March 2017, the FASB issued authoritative guidance which changes the income statement presentation of the components of net periodic benefit cost related to defined benefit pension and other postretirement plans. The primary change under the new guidance is that only the service cost component of net periodic benefit cost should be included in operating income and is eligible for capitalization as an asset. The other components of net periodic benefit cost, such as interest cost, the expected return on assets, and amortization of actuarial gains and losses and prior service cost, should be presented below operating income. The guidance was effective for the Company starting February 1, 2018 and has been applied retrospectively to the presentation of net periodic benefit cost and prospectively to the capitalization of service cost. The adoption of this guidance did not have a material impact on the Company's results of operations or financial position.

In October 2016, the FASB issued authoritative guidance requiring the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than when transferred to a third party as required under the current guidance. The new guidance was effective for the Company beginning February 1, 2018. The adoption of this guidance did not have a material impact on the Company's results of operations or financial position.

In February 2016, the FASB issued 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 its consolidated financial statements and related disclosures.

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers ("Topic 606")", with several clarifying updates issued during 2016. This guidance was effective for the Company beginning February 1, 2018. The adoption of this guidance did not have a material impact on the Company's results of operations or financial position.

Refer to Note 4 - Revenue recognition for more detail.

The Company evaluated other recent accounting pronouncements and does not expect them to have a material impact on its consolidated financial statements and related disclosures.

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Subsequent event

6 Months Ended

Jul. 31, 2018

Subsequent Events [Abstract]

Subsequent event

Subsequent event

On August 31, 2018, the Company entered into a commitment letter with PNC Bank for a new $18 million senior secured replacement credit facility. The Company is actively working to finalize the related credit agreement prior to the expiration of the existing Credit Agreement.

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Revenue recognition (Tables)

6 Months Ended

Jul. 31, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

	Three Months Ended July 31,						Six Months Ended July 31,
	2018			2017			2018			2017
	Sales	% to Total		Sales	% to Total		Sales	% to Total		Sales	% to Total
Products	2,578	8	%	1,995	7	%	5,007	8	%	3,326	7	%
Specialty Piping Systems and Coating
Revenue recognized under input method	9,807	30	%	14,138	53	%	20,909	34	%	23,254	46	%
Revenue recognized under output method	19,940	62	%	10,719	40	%	35,298	58	%	23,773	47	%
Total	32,325	100	%	26,852	100	%	61,214	100	%	50,353	100	%

Contract with Customer, Asset and Liability

The following tables set forth the activity in contract assets and liabilities. The Company expects to recognize the remaining balance within one year.

	Contract Assets
Balance January 31, 2018		$1,502
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,085		)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,417
Closing Balance at April 30, 2018	1,834
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,395		)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,575
Closing Balance at July 31, 2018		$2,014

	Contract Liabilities
Balance January 31, 2018		$1,967
Revenue recognized during the period for uncompleted contracts from the prior period	(1,810		)
New contracts entered into that are uncompleted at the end of the current period	413
Closing Balance at April 30, 2018	570
Revenue recognized during the period for uncompleted contracts from the prior period	(422		)
New contracts entered into that are uncompleted at the end of the current period	398
Closing Balance at July 31, 2018		$546

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Impairment of long-lived assets (Tables)

6 Months Ended

Jul. 31, 2018

Tangible Asset Impairment Charges [Abstract]

Schedule of Goodwill

	January 31, 2018		Foreign exchange change effect			July 31, 2018
Goodwill		$2,423		($136	)		$2,287

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Stock-based compensation Stock Compensation (Tables)

6 Months Ended

Jul. 31, 2018

Stock-based compensation [Abstract]

Stock-based compensation expense [Table Text Block]

	Three Months Ended July 31,				Six Months Ended July 31,
	2018		2017		2018		2017
Stock-based compensation expense		$9		$65		$23		$59
Restricted stock-based compensation expense		$432		$452		$688		$647

Option activity [Table Text Block]

Option activity	No. of Shares UnderlyingOptions		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 31, 2018	358			$9.44	4.0		$482
Exercised	(37	)	6.88			37
Expired or forfeited	(53	)	17.14
Outstanding end of period	268		8.42		4.1	392
Exercisable end of period	257			$8.48	3.9		$370

Unvested option activity [Table Text Block]

Unvested option activity	No. of Shares UnderlyingOptions		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at January 31, 2018	31			$8.24		$50
Vested	(14	)
Expired or forfeited	(6	)
Outstanding end of period	11			$7.00		$23

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

Restricted stock activity	Restricted Shares		Weighted Average Grant Price Per Share		Aggregate Intrinsic Value
Outstanding (unvested) at January 31, 2018	360			$9.05		$3,254
Granted	124		9.75
Vested and issued	(88	)
Forfeited	(63	)	7.19
Outstanding (unvested) end of period	333			$9.05		$3,022

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Earnings per share (Tables)

6 Months Ended

Jul. 31, 2018

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended July 31,		Six Months Ended July 31,
	2018	2017	2018	2017
Basic weighted average common shares outstanding	7,820	7,679	7,769	7,645
Dilutive effect of equity compensation plans	—	—	—	—
Weighted average common shares outstanding assuming full dilution	7,820	7,679	7,769	7,645
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	178	163	178	163
Stock options with an exercise price below the average market price	90	255	90	255

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Restricted cash Restricted cash (Tables)

6 Months Ended

Jul. 31, 2018

Restricted Cash and Cash Equivalents Items [Line Items]

Restrictions on Cash and Cash Equivalents [Table Text Block]

	Six Months Ended July 31,
	2018		2017
Cash and cash equivalents		$5,247		$8,546
Restricted cash	1,108		893
Cash, cash equivalents and restricted cash shown in the statement of cashflows		$6,355		$9,439

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Business segment reporting (Details) - Segments	3 Months Ended	6 Months Ended
	Jul. 31, 2018	Jul. 31, 2018
Segment reporting
Number of reportable segments	1
Piping Systems [Member]
Segment reporting
Segment reporting information, description of Products and Services		Piping Systems engineers, designs, manufactures and sells specialty piping, leak detection and location systems

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Accounts Receivable (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended	12 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jan. 31, 2018
Concentration Risk [Line Items]
Receivables, Long-term Contracts or Programs				$ 3.2
Accounts Receivable, Additional Narrative Disclosure	outstanding for several years as of July 31, 2018. The Company completed all of its deliverables in 2015, and has been engaged in ongoing active efforts to collect this amount. In the second quarter of 2018, the Company received a payment of approximately $0.5 million, which reduced the balance of this receivable. As a result, the Company did not reserve any allowance against this receivable as of July 31, 2018. The Company continues to engage with the customer to ensure full payment of open balances. However, if the Company’s efforts to collect on this account are not successful in fiscal 2018, then the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts.
Accounts Receivable [Member]
Concentration Risk [Line Items]
Accounts Receivable, Gross	$ 4.9		$ 4.9	5.4
Receivables, Long-term Contracts or Programs				$ 3.7
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			14.80%	34.90%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	12.90%	10.00%	23.40%

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Revenue recognition (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jul. 31, 2018	Apr. 30, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Disaggregation of Revenue [Line Items]
Sales by product	$ 32,325		$ 26,852	$ 61,214	$ 50,353
Sales by product (percent of total)	100.00%		100.00%	100.00%	100.00%
Revenue recognized that was included in contract liabilities	$ 422	$ 1,810
Products [Member]
Disaggregation of Revenue [Line Items]
Sales by product	$ 2,578		$ 1,995	$ 5,007	$ 3,326
Sales by product (percent of total)	8.00%		7.00%	8.00%	7.00%
Specialty Piping Systems And Coating [Member]
Disaggregation of Revenue [Line Items]
Sales by product (percent of total)	90.00%
Specialty Piping Systems And Coating [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Sales by product	$ 9,807		$ 14,138	$ 20,909	$ 23,254
Sales by product (percent of total)	30.00%		53.00%	34.00%	46.00%
Specialty Piping Systems And Coating [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Sales by product	$ 19,940		$ 10,719	$ 35,298	$ 23,773
Sales by product (percent of total)	62.00%		40.00%	58.00%	47.00%

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Revenue recognition - Contract Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Apr. 30, 2018
Change in Contract with Customer, Asset [Roll Forward]
Beginning balance	$ 1,834	$ 1,502
Costs and gross profit recognized during the period for uncompleted contracts from the prior period	(1,395)	(1,085)
Costs and deferred gross profit incurred on uncompleted contracts not billed at the end of the current period	1,575	1,417
Ending balance	$ 2,014	$ 1,834

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Revenue recognition - Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Apr. 30, 2018
Change in Contract with Customer, Liability [Roll Forward]
Beginning balance	$ 570	$ 1,967
Revenue recognized during the period for uncompleted contracts from the prior period	(422)	(1,810)
New contracts entered into that are uncompleted at the end of the current period	398	413
Ending balance	$ 546	$ 570

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Income taxes Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Income Tax Disclosure [Abstract]
Global intangible low taxed income			$ 0.4
effective income tax rate from continuing operations	175.90%	24.90%	(73.70%)	16.80%
Unrecognized tax benefits	$ 0.1		$ 0.1

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Impairment of long-lived assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2018	Jan. 31, 2018
Tangible Asset Impairment Charges [Abstract]
New Date of Annual Goodwill Impairment Test	impairment assessment of goodwill annually as of January 31
Impairment of long-lived assets	There was no impairment of long-lived assets for the three and six months ended July 31, 2018 and 2017
Goodwill recognized, description	allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill
Goodwill	$ 2,287	$ 2,423
Goodwill, Period Increase (Decrease)	$ (136)
Goodwill no impairment	There was no impairment of goodwill for the three and six months ended July 31, 2018 and 2017.

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Stock-based compensation Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Capital shares reserved for future issuance	938,565		938,565
Stock-based compensation expense	$ 9	$ 65	$ 23	$ 59
Restricted stock based compensation expense	$ 432	$ 452	$ 688	$ 647

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Stock-based compensation Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 31, 2018	Jan. 31, 2018
Option activity [Line Items]
Unrecognized compensation expense	$ 100
Unrecognized compensation expense recognized period	1 year 6 months 25 days
Restricted Stock [Member]
Option activity [Line Items]
Unrecognized compensation expense	$ 1,900
Unrecognized compensation expense recognized period	4 years
Stock Option [Member]
Option activity [Line Items]
Outstanding at beginning of year		358
Weighted Average Exercise Price Per Share		$ 9.44
Weighted Average Remaining Contractual Term		4 years
Options Outstanding Aggregate Intrinsic Value	$ 392	$ 482
Options, exercises in period	(37)
Options, exercises in period, weighted average exercise price	$ 6.88
Options, exercises in period, intrinsic value	$ 37
Expired or forfeited	(53)
Expired or Forfeited Weighted Average Exercise Price Per Share	$ 17.14
Outstanding end of period	268
Outstanding Weighted Average Exercise Price Per Share	$ 8.42
Outstanding Weighted Average Remaining Contractual Term	4 years 1 month 6 days
Exercisable end of period	257
Exercisable Weighted Average Exercise Price Per Share	$ 8.48
Exercisable Weighted Average Remaining Contractual Term	3 years 10 months 31 days
Exercisable Aggregate Intrinsic Value	$ 370
unvested option [Member]
Option activity [Line Items]
Outstanding at beginning of year	11	31
Options, vested, number of shares	(14)
Weighted Average Exercise Price Per Share	$ 7.00	$ 8.24
Options Outstanding Aggregate Intrinsic Value	$ 23	$ 50
Expired or forfeited	(6)
Expired or Forfeited Weighted Average Exercise Price Per Share

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Stock-based compensation Restricted stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jul. 31, 2018	Jan. 31, 2018
Disclosure of compensation, restricted shares [Abstract]
Outstanding	333	360
Share-based compensation nonvested weighted average grant date fair value	$ 9.05	$ 9.05
Aggregate Intrinsic Value, Outstanding	$ 3,022	$ 3,254
Granted	124
Weighted Average Grant Date Fair Value	$ 9.75
Issued	(88)
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited	(63)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 7.19
Deferred compensation liabilities	$ 3,460	4,098
Stockholders' equity	51,211	51,812
Restatement Adjustment [Member]
Deferred compensation liabilities	(723)
Additional Paid-in Capital [Member]
Stockholders' equity	58,080	$ 56,304
Additional Paid-in Capital [Member] | Restatement Adjustment [Member]
Stockholders' equity	$ 700

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Earnings per share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Earnings per share [Line Items]
Basic weighted average common shares outstanding	7,820	7,679	7,769	7,645
Dilutive effect of equity compensation plans	0	0	0	0
Weighted average common shares outstanding assuming full dilution	7,820	7,679	7,769	7,645
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	178	163	178	163
Stock options with an exercise price below the average market price	90	255	90	255

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Debt (Details) $ in Thousands, $ in Thousands									3 Months Ended			6 Months Ended		12 Months Ended
	Dec. 23, 2042	Jul. 01, 2027	Sep. 29, 2022	Jun. 19, 2022	Apr. 30, 2021	Sep. 25, 2018	Jul. 28, 2016 CAD ($)	Sep. 24, 2014	Jul. 31, 2018 USD ($) Rate	Apr. 30, 2018	Jul. 31, 2012	Jul. 31, 2018 USD ($) Rate	Jul. 31, 2018 CAD ($)	Jan. 31, 2018 USD ($) Rate	Jan. 31, 2018 CAD ($) Rate	Jul. 28, 2016 USD ($)	Jan. 31, 2015 USD ($)	Jan. 31, 2015 CAD ($)	Jun. 19, 2012 USD ($)
Debt [Line Items]
Debt									$ 17,200			$ 17,200
Debt, net change												$ 1,400
Description of violation and waiver received												lenders increased the borrowing limit for the Company’s Canadian subsidiary and adjusted minimum availability requirements for borrowers in the U.S. and Canada with a limited waiver of related covenant non-compliance retroactive to October 31, 2017	lenders increased the borrowing limit for the Company’s Canadian subsidiary and adjusted minimum availability requirements for borrowers in the U.S. and Canada with a limited waiver of related covenant non-compliance retroactive to October 31, 2017
Revolving line North America									$ 8,385			$ 8,385		$ 7,273
UNITED STATES
Debt [Line Items]
Line of Credit Facility, Initiation Date								Sep. 24, 2014
Maturity date						Sep. 25, 2018
Line of Credit Facility, Covenant Terms												require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met	require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met
Line of Credit Facility, Covenant Compliance										in compliance
Line of Credit Facility, Interest Rate Description												(a) a margin in effect plus a base rate, if below certain availability limits; or (b) a margin in effect plus the Eurodollar rate for the corresponding interest period.	(a) a margin in effect plus a base rate, if below certain availability limits; or (b) a margin in effect plus the Eurodollar rate for the corresponding interest period.
Prime interest rate | Rate									10.00%			10.00%
Letters of Credit Outstanding, Amount									$ 200			$ 200
North America [Member]
Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity									15,000			15,000
Revolving line, amount outstanding									8,400			8,400
Revolving line, remaining borrowing capacity									$ 900			$ 900
CANADA
Debt [Line Items]
Eurodollar interest rate | Rate									8.70%			8.70%
Foreign Line of Credit [Member]
Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity									$ 10,400			$ 10,400
Line of Credit Facility, Covenant Compliance												in compliance with the covenants under the credit arrangements.	in compliance with the covenants under the credit arrangements.
Line of Credit Facility, Interest Rate Description												interest rates were based on the Emirates Inter Bank Offered Rate (EIBOR) plus 3.5% per annum, with a minimum interest rate of 4.5% per annum. On July 31, 2018, the Company's interest rates ranged from 5.0% to 6.5%	interest rates were based on the Emirates Inter Bank Offered Rate (EIBOR) plus 3.5% per annum, with a minimum interest rate of 4.5% per annum. On July 31, 2018, the Company's interest rates ranged from 5.0% to 6.5%
Revolving line, remaining borrowing capacity									4,300			$ 4,300
Letters of Credit Outstanding, Amount									4,900			4,900
Revolving line North America									$ 1,168			1,168
North America [Member]
Debt [Line Items]
Maturity date						Sep. 25, 2018
Leases, Acquired-in-Place [Member]
Debt [Line Items]
Capital Lease Obligations														$ 800	$ 1,100
Debt Instrument, Interest Rate, Effective Percentage | Rate														4.00%	4.00%
Debt Instrument, Maturity Date			Sep. 29, 2022
Debt Instrument, Periodic Payment														$ 100
Capital Lease Obligations [Member]
Debt [Line Items]
Debt Instrument, Interest Rate, Effective Percentage | Rate														8.00%	8.00%
Debt Instrument, Maturity Date					Apr. 30, 2021
Vehicles [Member]
Debt [Line Items]
Capital Lease Obligations																	$ 900	$ 900
Debt Instrument, Interest Rate, Effective Percentage														3.30%	3.30%
Debt Instrument, Periodic Payment												14
Secured Debt [Member]
Debt [Line Items]
Debt Instrument, Issuance Date											Jun. 19, 2012
Debt Instrument, Interest Rate, Effective Percentage														4.50%	4.50%
Mortgage Loans on Real Estate, Final Maturity Date		Jul. 01, 2027
mortgage loans on real estate date interest rate changes				Jun. 19, 2022
Mortgage Loans on Real Estate, Face Amount of Mortgages																			$ 1,800
Debt Instrument, Periodic Payment												$ 13
Debt Instrument, Basis Spread on Variable Rate												2.00%	2.00%
Mortgages [Member]
Debt [Line Items]
Debt Instrument, Issuance Date							Jul. 28, 2016
Debt Instrument, Maturity Date, Description	December 23, 2042
Debt Instrument, Interest Rate, Effective Percentage														5.80%	5.80%
Proceeds from Issuance of Debt							$ 8,000
Mortgage Loans on Real Estate, Face Amount of Mortgages																$ 6,100
Debt Instrument, Periodic Payment, Interest												$ 28	$ 36
Debt Instrument, Periodic Payment												$ 20	$ 27
Maximum [Member] | Secured Debt [Member]
Debt [Line Items]
Mortgage Loans on Real Estate, Interest Rate												18.00%	18.00%
Minimum [Member] | Secured Debt [Member]
Debt [Line Items]
Mortgage Loans on Real Estate, Interest Rate												4.50%	4.50%
Lease Agreements [Member]
Debt [Line Items]
Debt Instrument, Maturity Date									Jun. 25, 2018

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Restricted cash (Details) - USD ($) $ in Thousands	Jul. 31, 2018	Jan. 31, 2018	Jul. 31, 2017	Jan. 31, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 5,247	$ 7,084	$ 8,546
Restricted cash	1,108	1,237	893
Cash, cash equivalents and restricted cash shown in the statement of cashflows	$ 6,355	$ 8,321	$ 9,439	$ 8,701

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Subsequent event (Details) $ in Millions	Aug. 31, 2018 USD ($)
Subsequent Event [Member]
Subsequent Event [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 18.0