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Significant Accounting Policies (Policies)

12 Months Ended

Jan. 31, 2021

Use of Estimates, Policy [Policy Text Block]

Use of estimates.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue from Contract with Customer [Policy Text Block]

Revenue recognition.

During

2020

and

2019

and in accordance with Accounting Standards Update

No.

2014

19,

“Revenue from Contracts with Customers” (“ASC

606”

), the Company recognizes revenue when a customer obtains control of promised goods or services. See Note

- Revenue Recognition for more detail.

•

Percentage of completion revenue recognition.

Certain domestic divisions have contracts that recognize revenues using periodic recognition of income. For these contracts, the Company uses the "percentage of completion" accounting method. Under this approach, income is recognized in each reporting period based on the status of the uncompleted contracts and the current estimates of costs to complete. The choice of accounting method is made at the time the contract is received based on the expected length and complexity of the project. The percentage of completion is determined by the relationship of costs incurred to the total estimated costs of the contract. Provisions are made for estimated losses on uncompleted contracts in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements,

may

result in revisions to costs and income. Such revisions are recognized in the period in which they are determined. Claims for additional compensation due to the Company are recognized in contract revenues when realization is probable and the amount can be reliably estimated.

Shipping and handling.

Shipping and handling costs are included in cost of sales, and the amounts invoiced to customers relating to shipping and handling are included in net sales.

Sales tax.

Sales tax is reported on a net basis in the consolidated financial statements.

Operating cycle.

The length of contracts vary, but are typically less than

one

year. The Company includes in current assets and liabilities amounts realizable and payable in the normal course of contract completion unless completion of such contracts extends significantly beyond

one

year.

Consolidation, Policy [Policy Text Block]

Consolidation.

The consolidated financial statements include the accounts of the Company and its domestic and foreign subsidiaries, all of which are wholly owned. All intercompany balances and transactions have been eliminated.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Translation of foreign currency.

Assets and liabilities of consolidated foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at year-end. Revenues and expenses are translated at average weighted exchange rates prevailing during the year. The resulting translation adjustments are included in stockholders' equity as part of accumulated other comprehensive income (loss). Gains or losses on foreign currency transactions and the related tax effects are reflected in net income. The aggregated foreign exchange transaction gain recognized in the income statement was less than

$0.1

million in

2020

as compared to a gain of

$0.4

million recognized in

2019

Commitments and Contingencies, Policy [Policy Text Block]

Contingencies.

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, including those involving environmental, tax, product liability and general liability claims. The Company accrues for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, the Company's estimates of the outcomes of these matters, and its experience in contesting, litigating and settling other similar matters. The Company does

not

currently anticipate the amount of any ultimate liability with respect to these matters will materially affect the Company's financial position, liquidity or future operations.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents.

All highly liquid investments with a maturity of

three

months or less when purchased are considered to be cash equivalents. Cash and cash equivalents were

$7.2

million and

$13.4

million as of

January 31, 2021

and

2020

, respectively. On

January 31, 2021

$0.1

million was held in the United States and

$7.1

million was held by foreign subsidiaries. On

January 31, 2020

$0.3

million was held in the United States and

$13.1

million was held by foreign subsidiaries.

Accounts payable included drafts payable of

$0.1

million on both

January 31, 2021

and

2020

Restricted cash.

There was

restricted cash held in the United States on

January 31, 2021

January 31, 2020

. Restricted cash held by foreign subsidiaries was

$1.2

million and

$1.3

million as of

January 31, 2021

and

2020

, respectively. Restricted cash held by foreign subsidiaries related to fixed deposits that also serve as security deposits and guarantees.

(In thousands)	2020		2019
Cash and cash equivalents	$	7,174	$	13,371
Restricted cash		1,201		1,287
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	8,375	$	14,658

Receivable [Policy Text Block]

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. In the United States, collateral is

not

generally required. In the U.A.E., Saudi Arabia, Egypt and India 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. Standard payment terms are net

days. 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

$3.8

million and

$4.1

million as of

January 31, 2021

and

January 31, 2020

, respectively, has been outstanding for several years. Included in this balance is a retention receivable that is payable upon commissioning of the system in the amount of

$3.4

million, of which, due to the long-term nature of the receivable,

$2.4

million and

$2.1

million were included in the balance of other long-term assets in our consolidated balance sheets as of

January 31, 2021

and

January 31, 2020

, respectively. The Company completed all of its deliverables in

2015

under the related contract, but the system has

not

yet been commissioned by the customer. Nevertheless, the Company has been engaged in ongoing active efforts to collect this outstanding amount. During

2020

, the Company received payments of approximately $

0.2

million. The Company continues to engage with the customer to ensure full payment of open balances, and during fiscal

2021

received an updated acknowledgment of the outstanding balances and assurances of payment from the customer. As a result, the Company did

not

reserve any allowance against this receivable as of

January 31, 2021

. However, if the Company's efforts to collect on this account are

not

successful, the Company

may

recognize an allowance for all, or substantially all, of any such then uncollected amounts.

For the year ended

January 31, 2021

one

customer accounted for greater than

10%

of the Company's consolidated net sales and for the year ended

January 31, 2020

one

customer accounted for

11.5%

of the Company's consolidated net sales.

As of

January 31, 2021

and

2020,

one

customer accounted for greater than

10%

and

one

customer accounted for

13.3%

of accounts receivable, respectively.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of credit risk.

The Company maintains its U.S. cash in bank deposit accounts at financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC"). Cash balances are below FDIC limits. The Company has

not

experienced any losses in such accounts.

The Company has a broad customer base doing business in all regions of the United States as well as other areas in the world.

Comprehensive Income, Policy [Policy Text Block]

Accumulated other comprehensive loss.

Accumulated other comprehensive loss represents the change in equity from non-owner transactions and consisted of foreign currency translation, minimum pension liability and marketable securities.

(In thousands)	2020			2019
Equity adjustment foreign currency, gross	$	(1,590	)	$	(1,879	)
Minimum pension liability, gross		(1,902	)		(2,087	)
Subtotal excluding tax effect		(3,492	)		(3,966	)
Tax effect of equity adjustment foreign currency		91			91
Tax effect of minimum pension liability		114			115
Total accumulated other comprehensive loss	$	(3,287	)	$	(3,760	)

Inventory, Policy [Policy Text Block]

Inventories.

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the

first

-in,

first

-out method for all inventories.

(In thousands)	2020		2019
Raw materials	$	12,499	$	13,859
Work in process		211		592
Finished goods		375		798
Subtotal		13,085		15,249
Less allowance		928		751
Inventories, net	$	12,157	$	14,498

Property, Plant and Equipment, Policy [Policy Text Block]

Long-lived assets.

Property, plant and equipment are stated at cost. Interest is capitalized in connection with the construction of facilities and amortized over the asset's estimated useful life. Long-lived assets are reviewed for possible impairment whenever events indicate that the carrying amount of such assets

may

not

be recoverable. If such a review indicates impairment, the carrying amount of such assets is reduced to an estimated fair value.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from

three

years. Leasehold improvements are depreciated over the remaining life of the lease or its useful life, whichever is shorter. Amortization of assets under capital leases is included in depreciation. Depreciation expense was approximately

$4.7

million in

2020

and

$4.4

million in

2019

(In thousands)	2020		2019
Land, buildings and improvements	$	22,713	$	22,328
Machinery and equipment		49,406		47,409
Furniture, office equipment and computer systems		3,830		4,317
Transportation equipment		2,725		3,762
Subtotal		78,674		77,816
Less accumulated depreciation		51,777		49,187
Property, plant and equipment, net of accumulated depreciation	$	26,897	$	28,629

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. At

January 31, 2021,

the Company performed a qualitative analysis assessment to determine if it was more likely than

not

that the fair values of the Company's long-lived assets exceeded their carrying values. The Company assessed

three

asset groups as part of this analysis: United States, Canada and Middle East. The qualitative assessment indicated that it was more likely than

not

that the fair values of the Company's long-lived assets exceeded their carrying values for the United States and Middle East asset groups. However, triggering events were identified related to the Company's Canada asset group, indicating that further analysis was required in order to determine if it was more likely than

not

that the fair value of the asset group's long-lived assets exceeded their carrying values. Therefore, the Company performed a quantitative assessment to determine any potential impairment. After completion of this additional assessment, it was determined that there was

impairment of the Company's long-lived assets as of

January 31, 2021

and

2020.

The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

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

January 31, 2021

and

2020

, is attributable to the purchase of Perma-Pipe Canada, Ltd. ("PPC").

			Foreign exchange
(In thousands)	January 31, 2020		change effect		January 31, 2021
Goodwill	$	2,254	$	78	$	2,332

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. At

January 31, 2021,

the Company elected to perform a Step

qualitative analysis assessment to determine if it was more likely than

not

that the fair value of the Company's Canadian reporting unit was less than its carrying amount, including goodwill. The qualitative assessment identified triggering events that indicated that further analysis was required in order to determine if it was more likely than

not

that the fair value of the Company's Canadian reporting unit exceeded its carrying value. Therefore, the Company proceeded to complete the Step

analysis to determine any potential impairment. The Step

analysis involved a quantitative fair valuation of the Company's Canadian reporting unit, including a market approach and discounted cash flow analysis. After completion of the Step

analysis, it was determined that the fair value of the reporting unit exceeded its carrying value, resulting in

impairment for the years ended

January 31, 2021

and

2020;

however, if the reporting unit is unable to achieve its forecasted results, there can be

assurance that a future impairment charge will

not

be required.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Other intangible assets with definite lives.

The Company owns several patents including those covering features of its piping and electronic leak detection systems. Patents are capitalized and amortized on a straight-line basis over a period

not

to exceed the legal lives of the patents. The Company expenses costs incurred to renew or extend the term of intangible assets. Gross patents were

$2.6

million and

$2.7

million as of

January 31, 2021

and

2020

, respectively. Accumulated amortization was approximately

$2.5

million as of

January 31, 2021

and

2020

. The Company expensed less than

$0.1

million during the year ended

January 31, 2021

for patents that were considered impaired as they are

longer expected to provide future benefits for the Company. Future amortization over the next

five

years ending

January 31

will be less than

$0.1

million in the years

2021

2025

and less than

$0.1

million thereafter. Amortization expense is expected to be recognized over the weighted-average period of

2.8

years.

Research and Development Expense, Policy [Policy Text Block]

Research and development

Research and development expenses consist of materials, salaries and related expenses of engineering personnel and outside services for product development projects. Research and development costs are expensed as incurred. Research and development expense was approximately

$0.3

million in both

2020

and

2019

Income Tax, Policy [Policy Text Block]

Income taxes.

Deferred income taxes have been provided for temporary differences arising from differences in the basis of assets and liabilities for tax and financial reporting purposes. Deferred income taxes on temporary differences have been recorded at the current tax rate. The Company assesses its deferred tax assets and liabilities for realizability at each reporting period.

The Company recognizes a tax position in its consolidated financial statements only after determining that the relevant tax authority would more likely than

not

sustain the position following an audit. For tax positions meeting the more likely than

not

threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50%

likelihood of being realized upon ultimate settlement with the relevant tax authority. For further information, see Note

- Income taxes, in the Notes to Consolidated Financial Statements.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair value of financial instruments

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

Reclassification, Comparability Adjustment [Policy Text Block]

Reclassifications.

Certain reclassifications have been made to prior period financial statements to conform to current period presentation. These reclassifications have

effect on net income. Other income, net was reclassified from general and administrative expense on the consolidated statements of operations. Composition of deferred tax assets and liabilities were broken out to conform to current period presentation.

Earnings Per Share, Policy [Policy Text Block]

Net income/(loss) per common share.

Earnings per share ("EPS") is computed by dividing net income/(loss) by the weighted average number of common shares outstanding (basic). The Company reported a net loss in

2020

and net income in

2019.

Therefore, the Company adjusted for dilutive shares in

2019,

while in

2020

the diluted loss per share was identical to the basic loss per share rather than assuming conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on earnings per share. The dilutive shares are in the following table:

Basic weighted average number of common shares outstanding (in thousands)	2020			2019
Basic weighted average number of common shares outstanding		8,126			7,989
Dilutive effect of stock options and restricted stock units		-			431
Weighted average number of common shares outstanding assuming full dilution		8,126			8,420

Restricted Stock and Stock options not included in the computation of diluted EPS of common stock because the option exercise prices exceeded the average market prices		214			143
Canceled options during the year		(25	)		(33	)
Restricted Stock and Stock options with an exercise price below the average stock price		168			431

Share-based Payment Arrangement [Policy Text Block]

Equity-based compensation.

The Company issues various types of stock-based awards to employees and directors: restricted stock, deferred stock and stock options. Non-cash compensation expense associated with restricted stock is based on the fair value of the common stock at the date of grant, and amortized using the straight line method over the vesting period. Compensation expense associated with deferred stock which is awarded to the Board of Directors (non-employee) is based upon the fair value of the common stock at the date of grant, and since the grant vests immediately it is expensed on the date of the grant. Stock

compensation expense for stock options is recognized ratably over the requisite service period of the award. The Black-Scholes option-pricing model is utilized to estimate the fair value of option awards.

Segment Reporting, Policy [Policy Text Block]

Segments.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker ("CODM") in making decisions regarding resource allocation and assessing performance The Company's Chief Executive Officer is the CODM, and he uses a combination of several management reports, including the Company's financial information in determining how to allocate resources and assess performance. The Company has determined that it operates in

one

segment.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

. In

March 2020,

the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")

2020

04,

Reference Rate Reform

(Topic

848

), which provides guidance designed to provide relief from the accounting analysis and impacts that

may

otherwise be required for modifications to agreements necessitated by the scheduled discontinuation of LIBOR on

December 31, 2021.

It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. The ASU provides the option to account for and present a modification that meets the scope of the standard as an event that does

not

require contract remeasurement at the modification date or reassessment of a previous accounting determination required under the relevant topic or subtopic. This ASU is effective for all entities; however, application of the guidance is optional, is only available in certain situations and is only available for companies to apply from

March 12, 2020

until

December 31, 2022.

The Company's Senior Credit Facility which matures on

September 20, 2021

bears interest using an alternate base rate or LIBOR plus an applicable margin. Based on the maturity of the Senior Credit Facility prior to the discontinuation of LIBOR, the Company does

not

expect a material impact from the adoption of this standard on the financial statements of the Company.

August 2018,

the FASB issued ASU

2018

14,

Compensation - Retirement Benefits -

Defined Benefit Plans - General

(Subtopic

715

), which removes disclosures that are

longer considered cost beneficial, clarifies specific requirements of existing disclosures and adds disclosure requirements identified as relevant. This ASU is effective for fiscal years ending after

December 15, 2020,

with early adoption permitted. The Company has adopted this standard during the year ended

January 31, 2021

and noted that there was

material impact on the financial statements of the Company.

June 2016,

the FASB issued ASU

No.

2016

13,

Financial Instruments-Credit Losses

(Topic

326

): Measurement of Credit Losses on Financial Instruments. The new guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets

not

excluded from the scope that have the contractual right to receive cash. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019,

with early adoption permitted. A recently adopted amendment has delayed the effective date until fiscal years beginning after

December 15, 2022.

The Company is currently evaluating this standard and the impact to the financial statements of the Company.

December 2019,

the FASB issued ASU

2019

12,

Simplifying the Accounting for Income Taxes

(Topic

740

), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes, enacts changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2020,

with early adoption permitted. The Company has early adopted ASU

2019

2020,

using a prospective application approach, and there was

material impact on the financial statements of the Company.

The Company evaluated other recent accounting pronouncements and does

not

expect them to have a material impact on its consolidated financial statements.