PPIH 10-K & 10-Q changes, risk factors and insider trading

The Company may be unable to purchase raw materials at favorable prices, or maintain beneficial relationships with its suppliers, which could result in a shortage of supply, or increased pricing . There can be no assurance regarding the availability of supply for key components of the Company's products. The lack of supply of these components could result in an adverse effect on the financial condition of the Company. The steel industry in particular is highly cyclical in nature, and at times, pricing can be highly volatile due to a number of factors beyond the Company's control. The Company utilizes escalation clauses and bid expiration dates to mitigate the impact of this volatility on its earnings. This volatility may negatively impact market conditions thus reducing project activity and the Company's results of operations. If the United States or other countries in which the Company operates impose tariffs on imports of raw materials, including steel, used in the Company's operations, this could have an adverse impact on the Company's business.

Due to thevolatile currenteconomic inflationary environment, raw materialconditions, supply shortageschain disruptions, tariff uncertainties, and transportation delays, the Company couldhas experienceexperienced, and may in the future experience, delays and increased prices for raw materials used in its production processes. To mitigate these impacts, the Company has implemented several strategies, including purchasing larger volumes from existing suppliers to reduce near- and medium-term supply risk, actively seeking alternative supplierssuppliers, and planning for material purchases fartherfurther in advance to ensure the Company has materialsavailability when needed. The Company also adjusts its pricing to customers to offset the impacts of the raw material price increases. The Company is unable to predict the duration of the current inflationary environment, raw material supply shortages and transportation delays, and the resulting future disruptions to the Company’s operations are uncertain.

The Company may be unable to maintain compliance with existing debt covenants, repay its debt or renew its expiring international credit facilities. There is a risk that the Company may not be able to remain in compliance with covenants in connection with its credit agreement covenants.agreements. If there were an event of default under the Company's current revolving credit facilities, the lenders could cause all amounts outstanding with respect to that debt to be due and payable immediately. The Company cannot assure that its cash flow will be sufficient to fully repay amounts due under any of the financing arrangements, if accelerated upon an event of default, or, that the Company would be able to repay, refinance or restructure the payments under any such arrangements. Complying with the covenants under the Company's domestic and/or foreign revolving credit facilities may limit management's discretion by restricting options such as:

The Company has approximately $5.5 million of borrowings under foreign revolving lines of credit that are scheduled to mature in the year ending January 31, 2027. Credit arrangements used by the Company’s Middle Eastern subsidiaries are typically renewed on an annual basis. In addition, the Company has obtained project-specific financing in the Middle East, with $0.2 million of borrowings under such arrangements becoming due in the year ending January 31, 2027. While the Company expects to renew its Middle Eastern credit arrangements and maintain access to project financing, there can be no assurance that such arrangements will be renewed on similar terms or amounts, or that project-specific financing will be available for future projects. For additional information regarding the Company’s foreign debt, refer to Note 5 – Debt Any replacement credit arrangements outside of the United States may further limit the Company’s ability to repatriate funds from abroad. Repatriation of funds from certain countries may become limited based upon regulatory restrictions or unfeasible economically because of the taxation of funds when moved to another subsidiary or to the parent company. In addition, any refinancing, replacement or additional financing the Company may obtain could contain similar or more restrictive covenants than those currently applicable to the Company. The Company’s ability to comply with any covenants may be adversely affected by general economic conditions, political decisions, industry conditions and other events beyond management’s control.

The Company extended credit to a customer for a project in the Middle East in 2013 and, if the Company is unable to collect this accountoutstanding receivable,balance, its future profitability could be adversely impacted. One of the Company’s accounts receivablereceivable, intotaling the total amount of $1.8$1.2 million and $2.2$1.8 million as of January 31, 20252026 and 2024,2025, respectively, has been outstanding for several years. As of January 31, 2025,2026, the entire balance represents a retention asset that is payable upon the commissioning of the system. Due to the long-term nature of the receivable, $1.2 million and $1.4 million werewas included in other long-term assets as of both January 31, 20252026 and 2024, respectively.2025. The Company completed all of its deliverables in 2015 under the related contract,contract butin 2015; however, the system has not yet been commissioned by the customercustomer, as additional activities must be completed prior to the overall system completion and commissioning. Nevertheless, theThe Company continues to actively engage in ongoing collection efforts with the customer to ensure full payment of openthe balances,outstanding andbalance. atAt various times throughout 2024 and 2023,2025, the Company received a partial paymentpayments to settleof $0.4 million and $0.6 millionmillion, of the customer's outstanding balances, respectively, including an additional $0.5 million that was received subsequent to the end of the year.respectively. Additionally, the Company has been engaged by the customer to perform additional work in 20252026 under customary trade credit termsterms, that supportsupporting the continued cooperation between the Company and the customer. As a result, the Company did not reserverecord anyan allowance againstfor this outstanding receivable as of January 31, 2025.2026. However, if the Company’scollection efforts to collect on this account are not successful,unsuccessful, the Company may recognize an allowance for all, or substantially all, of any suchthe uncollected amounts.amount.

The Company’s ability to use its net operating loss carryforwards and certain other tax attributes may be limited. The Company’s net operating loss carryforwards (“NOLsNOL”) carryforwards in the U.S. could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax law. As of January 31, 2025,2026, the Company had $23.8$16.6 million of gross federal NOLs and $21.9$22.2 million of gross state NOLs available to offset the Company’s future taxable income. Of the gross federal NOL amount, $16.4$9.3 million will begin to expire between tax years 2036 and 2037 and the remainder has an indefinite carryforward. The stateState NOLs expire at various dates from 20252026 to 2044.2045. In addition, the Company'sCompany’s ability to use its NOLs may be limited in the event of future changes in its stock ownership. As a result, if the Company earns net taxable income, the Company’s ability to use its pre-change NOLs to offset U.S. federal taxable income may be subject to limitations, which could potentially result in a future tax liability of the Company. In addition, at the state level, there may be periods in the future during which the use of NOLs is suspended or otherwise limited, which could result in a state tax liability which would otherwise not arise.

Delays in the timing of order receipt, execution, delivery and acceptance forof the Company’s products generally negatively impact the Company’s operating results. The Company's operating results in any reporting period could be negatively impacted as a result of delays in the timing of project execution.

The Company may not be able to successfully negotiate progress-billing arrangements foron its largelarge-scale contracts, which could adversely impact the Company’s working capital needs, cash flows and credit risk. The Company sells systems and products under contracts that allow the Company to either bill upon the completion of certain agreed upon milestones, or upon actual shipment of the system or product. The Company attempts to negotiate progress-billing milestones on large contracts to help manage its working capital and cash flows, and to reduce the credit risk associated with these large contracts. Consequently, changes in accepted billing terms of contracts could impact the Company's requirements for working capital and cash flows.

The Company may be subject to claims for damages forfrom defective products. The Company warrants its products to be free of certain defects. The Company has, from time to time, had claims alleging defects in its products. The Company may experience material product liability claims in the future and it could incur significant costs to defend such claims. While the Company currently has product liability insurance that it believes to be sufficient, the Company cannot be certain that its product liability insurance coverage will be adequate for liabilities that may be incurred in the future or that such coverage will continue to be available to the Company on commercially reasonable terms. Any claimsclaim relating to defective products that result in liabilities exceeding the Company's insurance coverage could have a material adverse effect on the Company's business, results of operations, financial position and cash flows.

Due to the international scope of the Company’s operations, it is subject to a complex system of commercial and trade regulations around the world. The Company’s foreign subsidiaries are governed by laws, rules and business practices that differ from those of the United States. If the activities of these entities do not comply with U.S. laws or business practices or the Company’s Code of Business Conduct, then violations of these laws or practices may result in severe criminal or civil sanctions, which could disrupt the Company’s business, and result in an adverse effect on the Company’s reputation, business and results of operations or financial condition. The Company cannot predict the nature, scope, or effect of future regulatory requirements to which its operations might be subject or the manner in which existing laws might be administered or interpreted.

Net sales were $158.4$210.9 million and $150.7$158.4 million in the years ended January 31, 20252026 and 2024,2025, respectively. The increase of $7.7$52.5 million was primarily athe result of higher sales volumes in the Middle EastEast, Canada, and Canada.the United States.

Gross profit was $53.2$69.5 million, or 34%33% of net sales and $41.5$53.2 million, or 28%34% of net sales, in the years ended January 31, 20252026 and 2024,2025, respectively. The increase of $11.7$16.3 million was driven by higher sales volumes and improvedconsistent gross margins in the Middle East and Canada.globally.

General and administrative expenses were $28.0$35.3 million and $22.6$28.0 million in the years ended January 31, 20252026 and 2024,2025, respectively. The increase of $5.4$7.3 million was primarily related to higher compensation costs and professional fees.fees, including approximately $1.0 million relating to Sarbanes-Oxley 404 compliance in connection with our transition from a non-accelerated filer to an accelerated filer. This also includes a one-time compensation charge of approximately $2.0 million related to the departure of the previous CEO.

Selling expenses were $4.9$4.7 million and $5.5$4.9 million in the years ended January 31, 20252026 and 2024,2025, respectively. The decrease of $0.6$0.2 million was primarily driven by lower payroll expenses during the year.

Interest expense was $1.9$1.8 million and $2.3$1.9 million in the years ended January 31, 20252026 and 2024,2025, respectively. The decrease of $0.4$0.1 million was relatedthe toresult decreasedof borrowingsan and,overall toreduction a lesser extent, lowerin interest rates.rates during the current year

The Company's worldwide effective tax rates ("ETR") were 29.1%24.9% and (33.6%)29.1% in the years ended January 31, 20252026 and 2024,2025, respectively. The change in the ETR was largely due to changes in the mix of income and loss in various tax jurisdictions and the release of the partial domestic valuationGlobal allowanceIntangible inLow-Taxed theIncome prior("GILTI") year.inclusion. For further information, see Note 7 - Income taxes, in the Notes to Consolidated Financial Statements.

Net income attributable to common stock was $9.0$17.0 million and $10.5$9.0 million in the years ended January 31, 20252026 and 2024,2025, respectively. The decreaseincrease in net income was a result of the changes discussed above, less amounts attributable to non-controlling interest.

Cash and cash equivalents were $15.7$18.7 million and $5.8$15.7 million as of January 31, 20252026 and January 31, 2024,2025, respectively. On January 31, 2025,2026, approximately $0.3$0.2 million was held in the United States, and $15.4$18.5 million was held by the Company's foreign subsidiaries. The Company's working capital was $66.9 million on January 31, 2026 compared to $54.7 million on January 31, 2025 compared to $41.1 million on January 31, 2024.2025. As of January 31, 2025,2026, the Company had $3.7$2.7 million of borrowing capacity under the Renewed Senior Credit Facility (as defined below) in North America and $15.6$29.9 million of borrowing capacity under its foreign revolving credit agreements. The Company had $6.8$10.7 million borrowed under the Renewed Senior Credit Facility and $4.8$8.4 million borrowed under its foreign revolving credit agreements at January 31, 2025.2026.

Net cash provided by operating activities in the years ended January 31, 20252026 and 20242025 was $13.9$9.2 million and $14.7$13.9 million, respectively. The current year decrease of $0.8$4.7 million was due primarily todriven aby decreasean increase in accounts payable and customer deposits,receivable, partially offset by aan reductionincrease in receivables,net prepaid expensesincome and othercustomer current assets, asdeposits compared to the prior year.

Net cash used in investing activities in the years ended January 31, 20252026 and 20242025 was $2.8$10.4 million and $11.1$2.8 million, respectively. The decreaseincrease of $8.3$7.6 million was dueprimarily todriven lessby investment activity inhigher capital assetsexpenditures during the year,period, mainlyrelated into the UnitedMiddle States and Canada.East.

There was no restricted cash held in the United States on January 31, 20252026 or January 31, 2024.2025. Restricted cash held by foreign subsidiaries was $3.6 million and $1.4 million as of January 31, 20252026 and 2024,2025, respectively. Restricted cash held by foreign subsidiaries related to fixed deposits that also serve as security deposits and guarantees.

Revolving lines - North America. On September 20, 2018, the Company and certain of its U.S. and Canadian subsidiaries (collectively, together with the Company, the “North American Loan Parties”) entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association ("PNC"), as administrative agent and lender, providing for a three-yearthree-year, $18 million Senior Secured Revolving Credit Facility, subject to a borrowing base including various reserves (the “Senior Credit Facility”).

On September 17, 2021, the North American Loan Parties executed an extension of the Credit Agreement with PNC, providing for a new five-yearfive-year, $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Renewed Senior Credit Facility”). The Company's obligations under the Renewed Senior Credit Facility are currently guaranteed by Perma-Pipe Canada, Inc. Each of the North American Loan Parties other than Perma-Pipe Canada, Inc. is a borrower under the Renewed Senior Credit Facility (collectively, the “Borrowers”). The Renewed Senior Credit Facility matures on September 20, 2026.

Subject to certain exceptions, borrowings under the Renewed Senior Credit Facility are secured by substantially all of the North American Loan Parties’ assets. The Renewed Senior Credit Facility matures on September 20, 2026. Subject to certain qualifications and exceptions, the Renewed Senior Credit Facility contains covenants that, among other things, restrict the North American Loan Parties’ ability to create liens, merge or consolidate, consummate acquisitions, make investments, dispose of assets, incur debt, and pay dividends and other distributions. In addition, the North American Loan Parties may not make capital expenditures in excess of $5.0 million annually, plus a limited carryover of unused amounts. Further, the North American Loan Parties may not make repurchases of the Company's common stock in excess of $3.0 million.

The Renewed Senior Credit Facility also contains financial covenants requiring the North American Loan Parties to achieve a ratio of its EBITDA (as defined in the Renewed Senior Credit Facility) to the sum of scheduled cash principal payments on indebtedness for borrowed money and interest payments on the advances under the Renewed Senior Credit Facility to be not less than 1.10 to 1.00 for any five consecutive days in which the undrawn availability is less than $3.0 million or any day in which the undrawn availability is less than $2.0 million.m illion. As of January 31, 2025,2026 , the calculated ratio was greater than 1.10 to 1.00. In order to cure any future breach of these covenants by the North American Loan Parties, the Company may repatriate cash from any of its foreign subsidiaries that are otherwise not a party to the Renewed Senior Credit Facility in an amount which, when added to the amount of the Company’s Consolidated EBITDA, would result in compliance on a pro forma basis. The Company was in compliance with respect to these covenants as of and for the year ended January 31, 2025.2026 .

As of January 31, 2026 , the Company had borrowed an aggregate of $ 10.7 million at a rate of 7.8% and had $ 2.7 million available under the Renewed Senior Credit Facility. As of January 31, 2025, the Company had borrowed an aggregate of $ 6.8 million at a rate of 9.0% and had $ 3.7 million available under the Renewed Senior Credit Facility. As of January 31, 2024, the Company had borrowed an aggregate of $ 5.5 million and had $ 4.0 million available under the Renewed Senior Credit Facility.

RevolvingCredit linesfacilities - foreign . foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt, and Saudi Arabia as further described below:

In March 2022, the Company'sCompany’s Saudi Arabian subsidiary entered into a credit arrangement with a bankfinancial institution in Saudi Arabia for a revolving line of totaling 37.0 million Saudi RiyalRiyals (“SAR”) (approximately $ 9.9 $9.9 million at January 31, 2025 2026). ThisThe credit arrangement isprovides in the form of projectproject-based financing at interest rates competitive in Saudi Arabia. The lineArabia, is secured by certain assets (such as accounts receivable) of the Company'ssubsidiary Saudiincluding Arabianaccounts subsidiary. The facility was renewed in May 2024 with substantially the same terms and conditionsreceivable, and expires inon MayApril 2025.27, 2026. As of January 31, 2025 ,2026, the facility has anbore interest at a rate of approximately 9.0% . 8.5%. As of January 31, 2026, the Company was in compliance with all covenants under this arrangement. The Company had borrowedoutstanding an aggregateborrowings of $1.5$2.9 million and $3.2$1.5 million as of January 31, 20252026 and January 31, 2024,2025, respectively, which are included in “Short-term borrowings and is presented as a component of current maturities of long-term debt” inon the Company'sConsolidated consolidatedBalance balanceSheets. sheets. The unused borrowingUnused availability attributable tounder this credit arrangement at Januarywas 31,$5.3 2025million and January 31, 2024, was $3.0 million as of January 31, 2026 and $6.12025, million,respectively, respectively.which are net of both outstanding borrowings and issued letters of guarantee.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (In thousands, except per share data, orthousands unless otherwise specified)

Three months ended AprilJuly 30,31, 2026 vs. Three months ended AprilJuly 30,31, 2025

Net sales were $ 50.359.6 million and $ 46.747.9 million in the three months ended AprilJuly 30,31, 2026 and 2025 , respectively. The increase of $ 3.611.7 million was driven by higher sales volumes in both North America and the Middle East and North Africa ("MENA") region.

General and administrative expenses were $8.8$11.9 million and $7.7$10.0 million in the three months ended AprilJuly 30,31, 2026 and 2025, respectively. The increase of $1.1$1.9 million was mainlyprimarily due to highera payroll$3.9 expensesmillion andwrite-off professionalof feesa relatingcustomer toreceivable Sarbanes-Oxleyduring 404the compliancesecond quarter of 2026, partially offset by a $2.0 million non-recurring acceleration of certain executive compensation expense recorded during the second quarter of fiscal 2025 in connection with our transition from a non-accelerated filer to an acceleratedexecutive filer.departure.

Selling expenses remained consistent and were $ 1.21.3 million and $ 1.11.2 million in the three months ended AprilJuly 30,31, 2026 and 2025 , respectively.

Net interest expense was $0.6$0.5 million and $0.4 million in the three months ended AprilJuly 30,31, 2026 and 2025, respectively. The increase of $0.2$0.1 was due to an increase in debt.

The Company's ETR was 34%16% and 21%54% in the three months ended AprilJuly 30,31, 2026 and 2025, respectively. The higherlower ETR for the three months ended AprilJuly 30,31, 2026 is due to the mix of income and loss in various jurisdictions.

Net income attributable to common stock was $1.8$2.5 million and $5.0$0.9 million in the three months ended AprilJuly 30,31, 2026 and 2025, respectively. The decreaseincrease of $3.2$1.6 million was the result of the changes discussed above, net of amounts attributable to non-controlling interest.

Net cash provided by (used in) operating activities was $6.1$13.3 million and $0.7$(1.3) million in the threesix months ended AprilJuly 30,31, 2026 and 2025, respectively. The increase of $5.4$14.6 million was primarily attributable to favorable changes in operating assets and liabilities, partiallymost offsetnotably bythrough loweraccounts netreceivable income.and accounts payable.

Net cash used in investing activities in the threesix months ended AprilJuly 30,31, 2026 and 2025 was $1.3$3.2 million and $0.9$3.5 million, respectively. The increasechange of $0.4$0.3 million was primarily due to increasesdecreases in the amount of capital expenditures during the current year.

Net cash provided by financing activities in the threesix months ended AprilJuly 30,31, 2026 and 2025 was $4.8$2.5 million and $3.2$6.3 million, respectively. Debt totaled $38.0$36.1 million and $32.5 million as of AprilJuly 30,31, 2026 and January 31, 2026, respectively. See Note 10 - Debt, in the Notes to Condensed Consolidated Financial Statements for further discussion relating to this topic.

Restricted cash was $3.5$3.0 million as of AprilJuly 30,31, 2026 and $3.6 million as of January 31, 2026. This balance primarily relates to fixed deposits utilized as security deposits and financial guarantees.

Revolving lines - North America. On April 8, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as borrower, the other loan parties thereto, and JPMorgan Chase Bank, N.A., as lender (the “LenderJPMorgan”). The Credit Agreement effectively replaced the Company’s previous credit facility (the "PNC Credit Facility") with PNC Bank, National Association ("PNC").Association. On April 9, 2026, the Company drew $15.3 million under the Credit Agreement to pay off the remaining $15.2 million outstanding balance under the PNC Credit Facility and to fund $0.1 million of cash collateral required for cash management and purchasing card solutions. As of January 31, 2026, the Company had borrowed an aggregate of $10.7 million at a rate of 7.8% and had $2.7 million available under the PNC Credit Facility.

As of April 30,July 31, 2026, the outstanding balance under the Credit Agreement was $15.3$17.3 million with a weighted-average interest rate of 8.8% 6.9% and there were no outstanding letters of credit under the sublimit. Borrowings under the Credit Agreement are limited to the lesser of the revolving commitment and a borrowing base calculated as (i) 80% of eligible North American accounts receivable, plus (ii) 25% of eligible North American inventory (valued at the lower of cost or market), in each case subject to customary eligibility criteria and reserves established by the Lender. As of April 30, 2026, the borrowing base calculation limited the maximum availability under the facility to an amount below the aggregate revolving commitment. As a result, $0.7 million has been classified as current debt as of April 30, 2026.JPMorgan.

The obligations under the Credit Agreement are secured by substantially all North American assets of the Company and the guarantor subsidiaries, subject to customary exclusions, and are guaranteed on a joint and several basis by certain existing and future subsidiaries of the Company, subject to customary exceptions The Credit Agreement contains customary affirmative and negative covenants, including, among other things, limitations on additional indebtedness, liens, investments, acquisitions, asset sales, restricted payments, and transactions with affiliates. The Credit Agreement also includes financial maintenance covenants requiring the Company to maintain both (1) a minimum Fixed Charge Coverage Ratio and a maximum Leverage Ratio (each as defined in the Credit Agreement) and (2) a maximum Leverage Ratio,, which are tested upon the occurrence of certain availability thresholds.

As of April 30,July 2026 ,31, 2026, the Company was in compliance with all covenants under the Credit Agreement.

The Company maintains a credit facility with a financial institution in the U.A.E. totaling 65.2 million U.A.E. Dirhams (“AED”) (approximately $17.7 million at AprilJuly 30,31, 2026 ). Borrowings under the facility bear interest at the Emirates Inter Bank Offered Rate (“EIBOR”) plus 3.5% per annum, subject to minimum interest rates ranging from 4.5% to 8.0% per annum, depending on the type of financing utilized. The facility is stratified by instrument type and expires at various dates through October 2026. While certain portions of the credit arrangement have expired, the subsidiary continues to access the facility under the same terms while formal documentation of a renewal is being finalized with the lender. As of AprilJuly 30,31, 2026 , the Company was in compliance with all financial covenants under thisthe facility.Facility, including a maximum Adjusted Leverage Ratio and a minimum Adjusted Tangible Net Worth requirement. As of AprilJuly 30,31, 2026 and January 31, 2026,2026 , the Company had outstanding borrowings of 12.25.5 million AED (approximately $3.3$1.5 million) and 9.4 million AED (approximately $2.6 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. Additionally, as of AprilJuly 30,31, 2026 and January 31, 2026 , the Company had issued guarantees totaling 31.928.0 million AED (approximately $8.7$7.6 million) and 30.9 million AED (approximately $8.4 million). After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $5.7$8.6 million and $6.8 million under the credit facility as of AprilJuly 30,31, 2026 and January 31, 2026 , respectively.

The Company maintains a letter of credit facility with a financial institution in the U.A.E. totaling 100.0 million AED (approximately $27.2 million at April July 30,31, 2026 ),. portionsWhile ofthe whichcredit expirearrangement had a scheduled expiration date in July 2026, andthe asubsidiary portioncontinues ofto whichaccess expiredthe in April 2026. The portion that expired in April 2026 remains in effectfacility under the same terms.terms Thewhile Companyformal documentation of a renewal is inbeing the process of renewing this credit arrangement with substantially the same terms and conditions and is in regular communicationfinalized with the banklender. throughout this process ensuring the facility continues without interruption or penalty. TheT he facility is non-interest bearing; however, the Company incurs a commission ranging from 0.8% to 1.0% per annum on the face value of issued instruments and is required to maintain cash collateral (margins) ranging from 10% to 15% depending on the type of instrument utilized. As of AprilJuly 30,31, 2026,2026 , the Company had outstanding guarantees under this facility of 39.3 million AED (approximately $10.7 million). The remaining available balance under the facility was approximately $16.5 million as of AprilJuly 30,31, 2026.2026 .

In June 2021, the Company's Egyptian subsidiary entered into a credit facility with a financial institution in Egypt, which has been subsequently amended. The facility provides project-based financing and expires in December 2026. The facility has a maximum borrowing capacity of 120.0 million Egyptian Pounds (approximately $2.4 million at AprilJuly 30,31, 2026 ). The line is secured by certain assets of the subsidiary, including accounts receivable, and contains various covenants, including a maximum leverage ratio and restrictions on incurring additional indebtedness. Covenants under this facility are measured annually at year-end, and the Company was in compliance with all such covenants at its most recent measurement date.

As of AprilJuly 30,31, 2026 , borrowings under the Company’s credit facility in Egypt bore interest at rates ranging from 15.0% to 20.8%. The 15.0% rate relates to specific government-sponsored initiatives, while the 20.8% rate applies to our general facility limits. The Company had no amount outstanding and $0.2 million outstanding under this arrangement as of July both April 30,31, 2026 and January 31, 2026 ., respectively. These amounts are included in "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets. As of July both April 30,31, 2026 and January 31, 2026 , the Company had unused availability of approximately $2.4 million and $2.2 million.million, respectively.

In March 2022, the Company’s Saudi Arabian subsidiary entered into a credit arrangement with a financial institution in Saudi Arabia for a revolving line totaling 37.0 million Saudi Riyals (“SAR”) (approximately $9.9 million at AprilJuly 30,31, 2026 ). The credit arrangement provides project-based financing at interest rates competitive in Saudi Arabia and is secured by certain assets of the subsidiary including accounts receivable. While the credit arrangement had a scheduled expiration date of April 27, 2026, the subsidiary continues to access the facility under the same terms while formal documentation of a renewal is being finalized with the lender.

As of AprilJuly 30,31, 2026 , the facility bore interest at a rate of approximately 8.5%. As of AprilJuly 30,31, 2026 and January 31, 2026,2026 , the Company had outstanding borrowings of 8.33.0 million SAR (approximately $2.2$0.8 million) and 10.9 million SAR (approximately $2.9 million), respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. Additionally, as of AprilJuly 30,31, 2026 and January 31, 2026 , the Company had issued guarantees totaling 0.45.0 million SAR (approximately $0.1$1.3 million) and 6.3 million SAR (approximately $1.7 million), respectively. After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $7.6$7.8 million and $5.3 million under the credit facility as of AprilJuly 30,31, 2026 and January 31, 2026 , respectively.

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 or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of AprilJuly 30,31, 2026 and January 31, 2026 , the amount of foreign subsidiary debt guaranteed by the Company was approximately $8.5$5.0 million and $8.4 million, respectively.

The Company was in compliance with respect to the financial covenants under the foreign credit arrangements as of AprilJuly 30,31, 2026 . Certain of these arrangements are subject to periodic renewal; while such renewals are being processed, the Company remains in regular communication with the lenders, and the arrangements have historically continued without interruption or penalty. On AprilJuly 30,31, 2026 , interest rates were based on (i) the EIBOR plus 3.5% per annum for the U.A.E. credit arrangements, which have minimum interest rates ranging from 4.5% to 8.0% per annum; (ii) interest rates ranging from 15.0% to 20.8% for the Egypt credit arrangements; and (iii) an interest rate of 8.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of AprilJuly 30,31, 2026 , the Company's interest rates ranged from 7.3%7.4% to 20.8%, with a weighted average rate of 7.9%,8.0%, and the Company had facility limits totaling $57.2 million under these credit arrangements. As of AprilJuly 30,31, 2026 , $19.5$19.6 million of the facility limits were utilized to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of April July 30,31, 2026 , the Company had borrowed $5.7$2.3 million and had an additional $32.0$35.3 million of borrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of "Short-term borrowings and current maturities of long-term debt" on the Condensed Consolidated Balance Sheets as of AprilJuly 30,31, 2026 and January 31, 2026 .

Finance obligation - buildings and land. On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement") to sell its land and building in Lebanon, Tennessee (the "Property"). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale of the Property, the Company paid off the approximately $0.9 million remaining on the mortgage note on the Property to its lender. The Company used the remaining proceeds to repay its borrowings under the PNC Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into a fifteen-year lease agreement (the “Lease Agreement”), whereby the Company is leasing back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option. As of AprilJuly 30,31, 2026 and January 31, 2026 , the Company had a net book value relating to this asset of $1.6 million and $1.7 million, respectively.

In accordance with ASC 842, Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially the fair value of the underlying asset. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.3 million is recognized in "Short-term borrowings and current maturities of long-term debt" and the long-term portion of $8.5$8.4 million is recognized in "Long-term financedebt, obligationless current maturities " on the Condensed Consolidated Balance Sheets as of AprilJuly 30,31, 2026 . The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.

Mortgage Note. On July 28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December 23, 2042. As of July 31, 2026 April 30, 2026,, the remaining balance on the mortgage in Canada is approximately 5.3 million Canadian Dollars ("CAD") (approximately $3.9$3.7 million). The interest rate is variable, and was 6.3% at July 31, 2026 April 30, 2026.. The principal balance is included as a component of "Short-term borrowings and current maturities of long-term debt" and "Long-term debt, less current maturities" on the Condensed Consolidated Balance Sheets and is presented net of issuance costs of $0.1 million as of April July 30,31, 2026 and January 31, 2026.2026 . Subsequent to July 31, 2026, the mortgage note was repaid in full on August 28, 2026, using proceeds from the 2026 Credit Agreement.

Loan Payable to GIG. In June 2023, in connection with the formation of a joint venture with Gulf Insulation Group (“GIG”), the Company assumed a promissory note with an aggregate principal amount of approximately $2.8 million, which matured on April 9, 2026. The note that expired in April 2026 remains in effect under the same terms as of April 30, 2026. Through the date of this filing, the Company and GIG are engaged in constructive discussions to reach an agreement on renewal or settlement of the promissory note. Because a definitive agreement has not been executed as of the balance sheet date, the Company did not possess a contractual, unconditional right to defer settlement of the obligation for at least twelve months following AprilJuly 30,31, 2026.2026 . Accordingly, the full obligation is classified within “Short-term borrowings and current maturities of long-term debt” on the Condensed Consolidated Balance Sheets as of July 31, 2026 April 30, 2026..