x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
36-3922969
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
7720 N. Lehigh Avenue, Niles, Illinois
|
60714
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, $.01 per share
|
The NASDAQ Stock Market LLC
|
Item
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Page
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1.
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1
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2
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Filtration Products
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4
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4
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|
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4
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|
|
5
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1A.
|
5
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1B.
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8
|
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2.
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9
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3.
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9
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4.
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9
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|
|
|
|
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5.
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10
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6.
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11
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7.
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11
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7A.
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18
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8.
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18
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9.
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18
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9A.
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18
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9B.
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20
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10.
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Directors, Executive Officers and Corporate Governance
|
20
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11.
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Executive Compensation
|
20
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12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
20
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13.
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Certain Relationships and Related Transactions, and Director Independence
|
20
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14.
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Principal Accounting Fees and Services
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20
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|
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|
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15.
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20
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|
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|
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21
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||
54
|
•
|
On January 29, 2016, sold certain assets and liabilities of its TDC Filter business based in Bolingbrook, Illinois for approximately $11 million, subject to certain post-closing adjustments, to the Industrial Air division of CLARCOR, a NYSE-listed company based in Franklin, Tennessee. CLARCOR is a leading diversified marketer and manufacturer of mobile, industrial and environmental filtration products. As a part of this program, MFRI plans to sell the 100,000 square foot TDC manufacturing and office facility in Bolingbrook, Illinois.
|
•
|
On January 29, 2016, sold its Nordic Air Filtration, Denmark and Nordic Air Filtration, Middle East businesses, for approximately $11 million, on a debt/cash free basis, subject to certain post-closing adjustments, to Hengst Holding GmbH. Hengst is a leading specialist in filtration and filtration management and an international development partner and OEM supplier for all major automobile manufacturers.
|
•
|
Is reorganizing the Company’s corporate staff and reducing expenses to reflect its new strategic focus and structure. The restructuring is expected to yield annualized savings of approximately $1.2 million.
|
Perma-Pipe, Inc.
|
|
Niles, IL
|
|
New Iberia, LA
|
|
Lebanon, TN
|
|
Perma-Pipe Middle East FZC
|
|
Fujarah, United Arab Emirates
|
|
Perma-Pipe Saudi Arabia, LLC
|
|
Dammam, Kingdom of Saudi Arabia
|
|
Bayou Perma-Pipe Canada, Ltd.
|
|
Camrose, Alberta, Canada
|
|
Perma-Pipe India Pvt. Ltd
|
|
Gandidham, India
|
|
Name
|
Offices and positions, if any, held with the Company; age
|
Executive officer of the Company or its predecessor since
|
Bradley E. Mautner
|
Director, President and Chief Executive Officer; Age 60
|
1994
|
|
|
|
Karl J. Schmidt
|
Vice President and Chief Financial Officer; Age 62
|
2013
|
|
|
|
Wayne Bosch
|
Vice President, Chief Human Resources Officer; Age 59
|
2013
|
|
|
|
Fati A. Elgendy
|
President and Chief Operating Officer, Perma-Pipe; Age 67
|
1990
|
·
|
incurring additional debt;
|
·
|
entering into transactions with affiliates;
|
·
|
making investments or other restricted payments;
|
·
|
paying dividends or making other distributions; and
|
·
|
creating liens.
|
•
|
strain on working capital;
|
•
|
diversion of management from other activities, which could impair the operation of existing businesses;
|
•
|
failure to successfully integrate the acquired businesses or facilities into existing operations;
|
•
|
inability to maintain key pre-acquisition business relationships;
|
•
|
loss of key personnel of the acquired business or facility;
|
•
|
exposure to unanticipated liabilities; and
|
•
|
failure to realize efficiencies, synergies and cost savings.
|
Illinois
|
Owned production facilities and office space
|
16,800 square feet
|
Louisiana
|
Owned production facilities and leased land
|
30,000 square feet on approximately 6 acres
|
Tennessee
|
Owned production facilities and office space
|
131,800 square feet on approximately 23.5 acres
|
Canada
|
Joint venture owned production facilities and office space
|
87,160 square feet on approximately 128 acres
|
India
|
Leased production facilities, office space and land
|
33,700 square feet on approximately 1.2 acres
|
Kingdom of Saudi Arabia
|
Owned production facilities on leased land
|
91,000 square feet on approximately 11 acres
|
United Arab Emirates
|
Leased office space and production facilities on leased land
|
108,300 square feet on approximately 23 acres
|
Illinois
|
Bolingbrook - owned production facilities and office space, currently idle
|
101,500 square feet on 5.5 acres
|
|
Cicero - owned production facilities and office space, currently idle
|
130,700 square feet on 2.8 acres
|
Virginia
|
Owned production facilities
|
97,500 square feet on 5.0 acres
|
|
Leased office space
|
6,000 square feet
|
•
|
Nine acres of land in the Kingdom of Saudi Arabia is leased through 2030.
|
•
|
Land for production facilities in the United Arab Emirates, ("U.A.E.") of approximately 80,200 square feet is leased until June 30, 2030. Office space and land for production facilities of approximately 21,500 square feet in the U.A.E. is leased until July 2032.
|
Item 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
High
|
|
Low
|
|
Fiscal 2015
|
|
|
||
Fourth Quarter
|
$6.88
|
$5.17
|
||
Third Quarter
|
5.68
|
|
4.52
|
|
Second Quarter
|
6.40
|
|
5.56
|
|
First Quarter
|
6.83
|
|
5.60
|
|
Fiscal 2014
|
|
|
||
Fourth Quarter
|
9.03
|
|
5.46
|
|
Third Quarter
|
13.40
|
|
8.62
|
|
Second Quarter
|
12.57
|
|
9.62
|
|
First Quarter
|
16.80
|
|
9.19
|
|
Period
|
Total number of shares purchased
|
Average price paid per share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
|
||||
February
|
28,066
|
|
6.64
|
|
28,066
|
|
1,813,632
|
|
March
|
16,500
|
|
6.27
|
|
16,500
|
|
1,710,342
|
|
April - December
|
—
|
|
—
|
|
—
|
|
—
|
|
Total
|
44,566
|
|
6.50
|
|
44,566
|
|
|
|
Number of shares to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a))
|
Plan Category
|
(a)(1)
|
(b)(1)
|
(c)
|
Equity compensation plans approved by stockholders
|
719,650
|
$11.38
|
205,576
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
January 31,
|
|
($ in thousands
)
|
2016
|
2015
|
Backlog
|
$47,937
|
$30,715
|
($ in thousands)
|
2015
|
|
2014
|
|
% Increase (Decrease)
|
|
Net sales
|
$122,696
|
$126,923
|
(3.3
|
)%
|
||
|
|
|
|
|||
Gross profit
|
26,741
|
30,774
|
(13.1
|
)%
|
||
Percentage of net sales
|
22
|
%
|
24
|
%
|
|
|
|
|
|
|
|||
General and administrative expenses
|
11,211
|
|
12,309
|
|
(8.9
|
)%
|
Percentage of net sales
|
9.1
|
%
|
9.7
|
%
|
|
|
|
|
|
|
|||
Selling expense
|
4,994
|
|
5,725
|
|
(12.8
|
)%
|
Percentage of net sales
|
4.1
|
%
|
4.5
|
%
|
|
|
|
|
|
|
|||
Income from operations
|
10,537
|
12,740
|
(17.3
|
)%
|
||
Percentage of net sales
|
8.6
|
%
|
10.0
|
%
|
|
|
|
|
|
|
|||
Income from joint venture
|
602
|
|
1,960
|
|
(69.3
|
)%
|
|
2015
|
|
2014
|
|
Statutory tax rate
|
34.0
|
%
|
34.0
|
%
|
Repatriation
|
30.2
|
%
|
21.2
|
%
|
Valuation allowance for domestic deferred tax assets
|
29.6
|
%
|
—
|
%
|
Permanent difference management fee allocation
|
22.8
|
%
|
27.0
|
%
|
Permanent differences other
|
7.9
|
%
|
(7.5
|
)%
|
Foreign tax credit
|
(28.0
|
)%
|
(11.0
|
)%
|
Differences in foreign tax rate
|
(29.9
|
)%
|
(4.1
|
)%
|
Domestic deferred tax true ups
|
(12.7
|
)%
|
—
|
%
|
Nontaxable income from the Canadian joint venture
|
(7.5
|
)%
|
(9.2
|
)%
|
Research tax credit
|
(2.0
|
)%
|
(0.4
|
)%
|
Valuation allowance for state NOLs
|
3.2
|
%
|
(4.4
|
)%
|
Valuation allowance for foreign NOLs
|
1.2
|
%
|
0.5
|
%
|
State taxes, net of federal benefit
|
(2.1
|
)%
|
(1.8
|
)%
|
All other, net expense
|
(1.0
|
)%
|
(2.4
|
)%
|
Effective income tax rate
|
45.7
|
%
|
41.9
|
%
|
($ in thousands)
|
|
Year Ending January 31,
|
|
|||||||||||||||||
Contractual obligations
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
||||||
Revolving line domestic (1)
|
$5,237
|
|
$5,237
|
|
|
$—
|
|
|
$—
|
|
|
$—
|
|
|
$—
|
|
|
$—
|
|
|
Mortgages (2)
|
1,822
|
|
162
|
|
162
|
|
162
|
|
162
|
|
162
|
|
1,012
|
|
||||||
Revolving line foreign (3)
|
8,348
|
|
8,348
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Term loans (2)
|
261
|
|
175
|
|
86
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Subtotal
|
15,668
|
|
13,922
|
|
248
|
|
162
|
|
162
|
|
162
|
|
1,012
|
|
||||||
Capitalized lease obligations
|
1,453
|
|
1,386
|
|
67
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Operating lease obligations (4)
|
17,666
|
|
1,944
|
|
1,640
|
|
1,378
|
|
1,311
|
|
1,327
|
|
10,066
|
|
||||||
Projected pension contributions (5)
|
3,590
|
|
326
|
|
349
|
|
348
|
|
363
|
|
363
|
|
1,841
|
|
||||||
Deferred compensation (6)
|
6,167
|
|
6,167
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Employment agreements (7)
|
101
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
101
|
|
||||||
Contractual obligations of discontinued operations (8)
|
3,439
|
|
3,439
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Uncertain tax position obligations (9)
|
140
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
140
|
|
||||||
Total
|
$48,224
|
$27,184
|
$2,304
|
$1,888
|
$1,836
|
$1,852
|
$13,160
|
(1)
|
Interest obligations exclude floating rate interest on debt payable under the domestic revolving line of credit. Based on the amount of such debt at
January 31, 2016
, and the weighted average interest rate of
4.19%
on that debt, such interest was being incurred at an annual rate of approximately
$0.1 million
.
|
(2)
|
Scheduled maturities, including interest.
|
(3)
|
Scheduled maturities of foreign revolver line, including interest.
|
(4)
|
Minimum contractual amounts, assuming no changes in variable expenses.
|
(5)
|
Includes estimated future benefit payments.
|
(6)
|
Non-qualified deferred compensation plan - The Company had a Supplemental Retirement and Deferred Compensation Plan ("Supplemental Plan"), under which key employees deferred compensation. The Supplemental Plan was terminated on April 10, 2014. Refer to Note 9 - Retirement plans,
in the Notes to Consolidated Financial Statements
.
|
(7)
|
Refer to the proxy statement for a description of compensation plans for Named Executive Officers.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK -
Not applicable.
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE -
None.
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(1)
|
Financial Statements - Consolidated Financial Statements of the Company
|
(2)
|
Financial Statement Schedules
|
b.
|
Exhibits: The exhibits, as listed in the Exhibit Index included herein, are submitted as a separate section of this report.
|
|
Twelve months ended January 31,
|
|||
(In thousands, except per share data)
|
2016
|
|
2015
|
|
|
|
|
||
Net sales
|
$122,696
|
$126,923
|
||
Cost of sales
|
95,955
|
|
96,149
|
|
Gross profit
|
26,741
|
|
30,774
|
|
|
|
|
||
Operating expenses:
|
|
|
||
General and administrative expense
|
18,869
|
|
19,202
|
|
Selling expense
|
4,994
|
|
5,725
|
|
Total operating expenses
|
23,863
|
|
24,927
|
|
|
|
|
||
Income from operations
|
2,878
|
|
5,847
|
|
|
|
|
||
Income from joint venture
|
602
|
|
1,960
|
|
|
|
|
||
Interest expense, net
|
470
|
|
519
|
|
Income from continuing operations before income taxes
|
3,010
|
|
7,288
|
|
|
|
|
||
Income tax expense
|
1,375
|
|
3,051
|
|
|
|
|
||
Income from continuing operations
|
1,635
|
|
4,237
|
|
|
|
|
||
Loss from discontinued operations, net of tax
|
(6,044
|
)
|
(4,418
|
)
|
|
|
|
||
Net loss
|
($4,409)
|
($181)
|
||
|
|
|
||
Weighted average common shares outstanding
|
|
|
||
Basic
|
7,280
|
|
7,251
|
|
Diluted
|
7,371
|
|
7,324
|
|
|
|
|
||
Earnings per share from continuing operations
|
|
|
||
Basic and diluted
|
$0.22
|
$0.58
|
||
Loss per share from discontinued operations
|
|
|
||
Basic and diluted
|
($0.83)
|
($0.61)
|
||
Loss per share
|
|
|
||
Basic and diluted
|
($0.61)
|
($0.02)
|
|
Twelve months ended January 31,
|
|||
|
2016
|
|
2015
|
|
|
|
|
||
Net loss
|
($4,409)
|
($181)
|
||
|
|
|
||
Other comprehensive income (loss)
|
|
|
||
Currency translation adjustments, net of tax
|
(481
|
)
|
(1,718
|
)
|
Minimum pension liability adjustment, net of tax
|
822
|
|
(1,612
|
)
|
Unrealized gain on marketable security, net of tax
|
118
|
|
—
|
|
Interest rate swap, net of tax
|
91
|
|
(40
|
)
|
Other comprehensive income (loss)
|
550
|
|
(3,370
|
)
|
|
|
|
||
Comprehensive loss
|
($3,859)
|
($3,551)
|
|
January 31,
|
|||
(In thousands, except per share data)
|
2016
|
2015
|
||
ASSETS
|
|
|
||
Current assets
|
|
|
||
Cash and cash equivalents
|
$16,631
|
$9,900
|
||
Restricted cash
|
2,324
|
|
428
|
|
Trade accounts receivable, less allowance for doubtful accounts of $33 at January 31, 2016 and $31 at January 31, 2015
|
36,090
|
|
34,332
|
|
Inventories, net
|
15,625
|
|
13,685
|
|
Assets of discontinued operations
|
15,733
|
|
41,476
|
|
Assets held for sale
|
3,062
|
|
3,378
|
|
Cash surrender value on life insurance policies
|
3,049
|
|
3,255
|
|
Prepaid expenses and other current assets
|
1,744
|
|
2,550
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
2,463
|
|
700
|
|
Income tax receivable
|
327
|
|
—
|
|
Total current assets
|
97,048
|
|
109,704
|
|
Property, plant and equipment, net of accumulated depreciation
|
25,400
|
|
24,165
|
|
Other assets
|
|
|
||
Note receivable from joint venture
|
1,905
|
|
3,931
|
|
Investment in joint venture
|
9,112
|
|
8,514
|
|
Other assets
|
4,658
|
|
1,760
|
|
Total other assets
|
15,675
|
|
14,205
|
|
Total assets
|
$138,123
|
$148,074
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
||
Current liabilities
|
|
|
||
Trade accounts payable
|
$11,026
|
$6,933
|
||
Commissions and management incentives payable
|
4,169
|
|
5,628
|
|
Deferred compensation liability
|
6,167
|
|
213
|
|
Accrued compensation and payroll taxes
|
4,274
|
|
4,021
|
|
Revolving line domestic
|
5,237
|
|
11,353
|
|
Current maturities of long-term debt
|
8,769
|
|
4,817
|
|
Customers' deposits
|
3,690
|
|
4,271
|
|
Liabilities of discontinued operations
|
15,465
|
|
21,379
|
|
Liabilities held for sale
|
3,439
|
|
3,342
|
|
Other accrued liabilities
|
965
|
|
1,100
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
1,176
|
|
681
|
|
Income tax payable
|
2,339
|
|
1,688
|
|
Total current liabilities
|
66,716
|
|
65,426
|
|
Long-term liabilities
|
|
|
||
Long-term debt, less current maturities
|
1,493
|
|
2,355
|
|
Deferred compensation liabilities
|
495
|
|
6,560
|
|
Deferred tax liabilities - long-term
|
160
|
|
734
|
|
Other long-term liabilities
|
231
|
|
199
|
|
Total long-term liabilities
|
2,379
|
|
9,848
|
|
Stockholders' equity
|
|
|
||
Common stock, $.01 par value, authorized 50,000 shares; 7,306 issued and outstanding January 31, 2016 and 7,291 issued and outstanding January 31, 2015
|
74
|
|
73
|
|
Additional paid-in capital
|
53,031
|
|
52,655
|
|
Treasury Stock 45 shares at January 31, 2016 and none at January 31, 2015
|
(290
|
)
|
—
|
|
Retained earnings
|
20,193
|
|
24,602
|
|
Accumulated other comprehensive loss
|
(3,980
|
)
|
(4,530
|
)
|
Total stockholders' equity
|
69,028
|
|
72,800
|
|
Total liabilities and stockholders' equity
|
$138,123
|
$148,074
|
($ in thousands, except share data)
|
|
Additional Paid-in Capital
|
Retained Earnings
|
Treasury Stock
|
Accumulated Other Comprehensive Income (Loss)
|
Total Stockholders' Equity
|
||||||
Common Stock
|
||||||||||||
Total stockholders' equity at January 31, 2014
|
$72
|
$52,144
|
$24,783
|
$0
|
($1,160)
|
$75,839
|
||||||
|
|
|
|
|
|
|
||||||
Net loss
|
|
|
(181
|
)
|
|
|
(181
|
)
|
||||
Stock options exercised
|
—
|
|
330
|
|
|
|
|
330
|
|
|||
Stock-based compensation expense
|
|
124
|
|
|
|
|
124
|
|
||||
Deferred shares converted to common stock
|
1
|
|
57
|
|
|
|
|
58
|
|
|||
Interest rate swap
|
|
|
|
|
(51
|
)
|
(51
|
)
|
||||
Pension liability adjustment
|
|
|
|
|
(1,611
|
)
|
(1,611
|
)
|
||||
Foreign currency translation adjustment
|
|
|
|
|
(1,632
|
)
|
(1,632
|
)
|
||||
Tax expense on above items
|
|
|
|
|
(76
|
)
|
(76
|
)
|
||||
Total stockholders' equity at January 31, 2015
|
$73
|
$52,655
|
$24,602
|
$0
|
($4,530)
|
$72,800
|
||||||
|
|
|
|
|
|
|
||||||
Net loss
|
|
|
(4,409
|
)
|
|
|
(4,409
|
)
|
||||
Stock options exercised
|
1
|
|
116
|
|
|
|
|
117
|
|
|||
Repurchase of common stock
|
|
|
|
(290
|
)
|
|
(290
|
)
|
||||
Stock-based compensation expense
|
|
278
|
|
|
|
|
278
|
|
||||
Shares issued less shares used for payroll taxes
|
|
(18
|
)
|
|
|
|
(18
|
)
|
||||
Interest rate swap
|
|
|
|
|
119
|
|
119
|
|
||||
Pension liability adjustment
|
|
|
|
|
821
|
|
821
|
|
||||
Marketable security
|
|
|
|
|
118
|
|
118
|
|
||||
Foreign currency translation adjustment
|
|
|
|
|
(486
|
)
|
(486
|
)
|
||||
Tax expense on above items
|
|
|
|
|
(22)
|
(22)
|
||||||
Total stockholders' equity at January 31, 2016
|
$74
|
$53,031
|
$20,193
|
($290)
|
($3,980)
|
$69,028
|
|
Twelve months ended January 31,
|
|||||
($ in thousands)
|
2016
|
2015
|
||||
Operating activities
|
|
|
||||
Net loss
|
($4,409)
|
($181)
|
||||
Adjustments to reconcile net loss to net cash flows (used in) provided by operating activities
|
|
|
||||
Depreciation and amortization
|
5,929
|
|
5,897
|
|
||
Gain on disposal of discontinued operations
|
(8,099
|
)
|
(188
|
)
|
||
Impairment expense on discontinued operation
|
6,480
|
|
—
|
|
||
Deferred tax (benefit) expense
|
(249
|
)
|
1,231
|
|
||
Income from joint venture
|
(602
|
)
|
(1,960
|
)
|
||
Stock-based compensation expense
|
278
|
|
124
|
|
||
Cash surrender value on life insurance policies
|
206
|
|
(145
|
)
|
||
Provision on uncollectible accounts
|
(59
|
)
|
(80
|
)
|
||
Loss (gain) on disposal of fixed assets
|
101
|
|
(17
|
)
|
||
Changes in operating assets and liabilities
|
|
|
||||
Accounts payable
|
5,819
|
|
(4,612
|
)
|
||
Accrued compensation and payroll taxes
|
299
|
|
(3,055
|
)
|
||
Inventories
|
4,027
|
|
3,250
|
|
||
Customers' deposits
|
(2,400
|
)
|
(28
|
)
|
||
Income taxes receivable and payable
|
620
|
|
(687
|
)
|
||
Prepaid expenses and other current assets
|
1,914
|
|
1,000
|
|
||
Accounts receivable
|
(2,809
|
)
|
3,314
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
(1,268
|
)
|
(765
|
)
|
||
Notes receivable
|
273
|
|
849
|
|
||
Other assets and liabilities
|
(8,948
|
)
|
(449
|
)
|
||
Net cash (used in) provided by operating activities
|
(2,897
|
)
|
3,498
|
|
||
Investing activities
|
|
|
||||
Net proceeds from sale of discontinued operations
|
16,373
|
|
109
|
|
||
Capital expenditures
|
(6,457
|
)
|
(5,878
|
)
|
||
Payments on loan from joint venture
|
1,890
|
|
—
|
|
||
Proceeds from sales of property and equipment
|
2,059
|
|
24
|
|
||
Net cash provided by (used in) investing activities
|
13,865
|
|
(5,745
|
)
|
||
Financing activities
|
|
|
||||
Proceeds from revolving lines
|
105,636
|
|
85,270
|
|
||
Proceeds from debt
|
918
|
|
661
|
|
||
Proceeds from borrowing against life insurance policies
|
1,916
|
|
—
|
|
||
Payments of debt on revolving lines
|
(105,378
|
)
|
(83,150
|
)
|
||
Payments of other debt
|
(2,544
|
)
|
(3,641
|
)
|
||
Payments of borrowing against life insurance policies
|
(1,916
|
)
|
—
|
|
||
(Decrease) increase in drafts payable
|
(467
|
)
|
629
|
|
||
Payments on capitalized lease obligations
|
(998
|
)
|
(704
|
)
|
||
Repurchase of common stock
|
(290
|
)
|
—
|
|
||
Stock options exercised and restricted shares issued
|
98
|
|
389
|
|
||
Net cash used in financing activities
|
(3,025
|
)
|
(546
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(1,212
|
)
|
(702
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
6,731
|
|
(3,495
|
)
|
||
Cash and cash equivalents - beginning of period
|
9,900
|
|
13,395
|
|
||
Cash and cash equivalents - end of period
|
|
$16,631
|
|
|
$9,900
|
|
Supplemental cash flow information
|
|
|
||||
Interest paid
|
$749
|
$1,288
|
||||
Income taxes paid
|
970
|
|
2,988
|
|
||
Fixed assets acquired under capital leases
|
—
|
|
680
|
|
||
Funds held in escrow related to the sale of Filtration assets
|
1,905
|
|
—
|
|
|
2015
|
2014
|
Net sales
|
|
|
Piping Systems
|
$122,696
|
$126,923
|
Gross profit
|
|
|
Piping Systems
|
$26,741
|
$30,774
|
Income (loss) from operations
|
|
|
Piping Systems
|
$10,537
|
$12,740
|
Corporate
|
(7,659)
|
(6,893)
|
Total income from operations
|
$2,878
|
$5,847
|
|
|
|
Segment assets
|
|
|
Piping Systems
|
$112,161
|
$99,065
|
Corporate
|
10,229
|
7,533
|
Total segment assets
|
$122,390
|
$106,598
|
Capital expenditures
|
|
|
Piping Systems
|
$4,762
|
$3,953
|
Corporate
|
289
|
485
|
Total capital expenditures
|
$5,051
|
$4,438
|
Depreciation and amortization
|
|
|
Piping Systems
|
$3,735
|
$3,635
|
Corporate
|
469
|
552
|
Total depreciation and amortization
|
$4,204
|
$4,187
|
|
2015
|
2014
|
Net sales
|
|
|
United States
|
$58,707
|
$64,063
|
Middle East
|
60,749
|
50,430
|
Europe
|
73
|
372
|
Canada
|
2,581
|
3,248
|
India
|
372
|
5,099
|
Other Americas
|
72
|
3,657
|
Other
|
142
|
54
|
Total net sales
|
$122,696
|
$126,923
|
|
|
|
Property, plant and equipment, net of accumulated depreciation
|
|
|
United States
|
$13,822
|
$12,166
|
Middle East
|
11,211
|
11,608
|
India
|
367
|
391
|
Total
|
$25,400
|
$24,165
|
|
2015
|
|
2014
|
|
||
Equity adjustment foreign currency
|
|
($2,208
|
)
|
|
($1,722
|
)
|
Minimum pension liability, gross
|
(2,303)
|
(3,124)
|
||||
Marketable security, gross
|
118
|
0
|
||||
Interest rate swap, gross
|
0
|
(119)
|
||||
Subtotal excluding tax effect
|
(4,393)
|
(4,965)
|
||||
Tax effect of foreign exchange
|
(69)
|
(74)
|
||||
Tax effect of minimum pension liability
|
482
|
481
|
||||
Tax effect of interest rate swap
|
0
|
28
|
||||
Total other comprehensive loss
|
($3,980)
|
($4,530)
|
|
2015
|
2014
|
Land, buildings and improvements
|
$14,758
|
$13,704
|
Machinery and equipment
|
41,534
|
38,509
|
Furniture, office equipment and computer systems
|
5,632
|
5,945
|
Transportation equipment
|
40
|
43
|
Subtotal
|
61,964
|
58,201
|
Less accumulated depreciation and amortization
|
36,564
|
34,036
|
Property, plant and equipment, net
|
$25,400
|
$24,165
|
|
2015
|
2014
|
Share of income from joint venture
|
$602
|
$1,960
|
|
2015
|
2014
|
Current assets
|
$8,274
|
$13,820
|
Noncurrent assets
|
12,284
|
14,023
|
Current liabilities
|
2,438
|
4,499
|
Noncurrent liabilities
|
3,908
|
9,013
|
Equity
|
14,212
|
14,331
|
Revenue
|
22,228
|
40,397
|
Gross profit
|
3,465
|
8,451
|
Income from continuing operations
|
1,938
|
6,397
|
Net income
|
1,228
|
4,000
|
Basic weighted average number of common shares outstanding
|
2015
|
|
2014
|
|
Basic weighted average number of common shares outstanding
|
7,280
|
|
7,251
|
|
Dilutive effect of stock options, deferred stock and restricted stock units
|
91
|
|
73
|
|
Weighted average number of common shares outstanding assuming full dilution
|
7,371
|
|
7,324
|
|
|
|
|
||
Weighted average number of stock options not included in the computation of diluted EPS of common stock because the option exercise prices exceeded the average market prices
|
710
|
|
261
|
|
Canceled options during the year
|
(77
|
)
|
(64
|
)
|
Stock options with an exercise price below the average stock price
|
10
|
|
503
|
|
|
As Reported
|
Adjustment
|
As Adjusted
|
|||
Inventories, net
|
$14,613
|
($928)
|
$13,685
|
|||
Prepaid expenses and other current assets
|
2,345
|
|
205
|
|
2,550
|
|
Total current assets
|
110,427
|
|
(723
|
)
|
109,704
|
|
Total assets
|
148,797
|
|
(723
|
)
|
148,074
|
|
Retained earnings
|
25,325
|
|
(723
|
)
|
24,602
|
|
Total stockholders' equity
|
73,523
|
|
(723
|
)
|
72,800
|
|
Total liabilities and stockholders' equity
|
148,797
|
|
(723
|
)
|
148,074
|
|
|
As Reported
|
Adjustment
|
As Adjusted
|
|||
Cost of sales
|
$96,247
|
($98)
|
$96,149
|
|||
Gross profit
|
30,676
|
|
98
|
|
30,774
|
|
General and administrative expense
|
19,179
|
|
23
|
|
19,202
|
|
Total operating expenses
|
24,904
|
|
23
|
|
24,927
|
|
Income from operations
|
5,772
|
|
75
|
|
5,847
|
|
Income from continuing operations before income taxes
|
7,213
|
|
75
|
|
7,288
|
|
Income from continuing operations
|
4,162
|
|
75
|
|
4,237
|
|
Net loss
|
(256
|
)
|
75
|
|
(181
|
)
|
|
As Reported
|
Adjustment
|
As Adjusted
|
|||
Net loss
|
($256)
|
$75
|
($181)
|
|||
Inventories, net
|
3,348
|
|
(98
|
)
|
3,250
|
|
Prepaid expenses and other current assets
|
977
|
|
23
|
|
1,000
|
|
|
As Reported
|
Adjustment
|
As Adjusted
|
|||
Net loss
|
($256)
|
$75
|
($181)
|
|||
Retained earnings
|
25,325
|
|
(723
|
)
|
24,602
|
|
Total comprehensive loss
|
(3,626
|
)
|
75
|
|
(3,551
|
)
|
|
As Reported
|
Adjustment
|
As Adjusted
|
|||
Retained earnings
|
$25,580
|
($797)
|
$24,783
|
|||
Stockholders' Equity
|
76,636
|
|
(797
|
)
|
75,839
|
|
|
2015
|
|
2014
|
|
||
Net sales
|
|
$64,975
|
|
|
$68,110
|
|
|
|
|
||||
Gain on disposal of discontinued operations
|
|
$8,099
|
|
|
$188
|
|
Impairment expense from discontinued operations
|
(6,480
|
)
|
—
|
|
||
Loss from discontinued operations
|
(7,569
|
)
|
(4,282
|
)
|
||
Loss from discontinued operations before income taxes
|
(5,950
|
)
|
(4,094
|
)
|
||
Income tax expense
|
94
|
|
324
|
|
||
Loss from discontinued operations, net of tax
|
|
($6,044
|
)
|
|
($4,418
|
)
|
|
|
|
|
January 31,
|
|||||
|
2016
|
2015
|
||||
Current assets
|
|
|
||||
Cash and cash equivalents
|
|
$5
|
|
|
$608
|
|
Trade accounts receivable, net
|
5,720
|
|
7,516
|
|
||
Inventories, net
|
2,000
|
|
15,157
|
|
||
Other assets
|
349
|
|
2,003
|
|
||
Property, plant and equipment, net of accumulated depreciation
|
6,456
|
|
14,477
|
|
||
Non-current assets
|
1,203
|
|
1,715
|
|
||
Total assets from discontinued operations
|
|
$15,733
|
|
|
$41,476
|
|
|
|
|
||||
Current liabilities
|
|
|
||||
Trade accounts payable, accrued expenses and other
|
|
$7,514
|
|
|
$10,016
|
|
Current maturities of long-term debt
|
5,322
|
|
806
|
|
||
Long-term liabilities
|
2,629
|
|
10,557
|
|
||
Total liabilities from discontinued operations
|
15,465
|
|
21,379
|
|
|
January 31,
|
|||||
|
2016
|
2015
|
||||
Net cash used in discontinued operating activities
|
|
($7,113
|
)
|
|
($2,629
|
)
|
Net cash provided by (used in) discontinued investing activities
|
17,026
|
|
(1,425
|
)
|
||
Net cash (used in) provided by discontinued financing activities
|
(3,025
|
)
|
4,219
|
|
|
2015
|
2014
|
Costs incurred on uncompleted contracts
|
$78,843
|
$66,547
|
Estimated earnings
|
46,359
|
31,082
|
Earned revenue
|
125,202
|
97,629
|
Less billings to date
|
123,915
|
97,610
|
Costs in excess of billings, net
|
$1,287
|
$19
|
Balance sheet classification
|
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$2,463
|
$700
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(1,176)
|
(681)
|
Costs in excess of billings, net
|
$1,287
|
$19
|
|
2015
|
|
2014
|
|
Revolving line domestic
|
$5,237
|
$11,353
|
||
Mortgage notes
|
1,443
|
|
1,530
|
|
Revolving lines foreign
|
8,131
|
|
2,774
|
|
Term loans
|
246
|
|
1,808
|
|
Capitalized lease obligations
|
442
|
|
1,060
|
|
Total debt
|
15,499
|
|
18,525
|
|
Less current maturities
|
14,006
|
|
16,170
|
|
Total long-term debt
|
$1,493
|
$2,355
|
|
Total
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
||||||
Revolving line domestic
|
$5,237
|
|
$5,237
|
|
|
$—
|
|
|
$—
|
|
|
$—
|
|
|
$—
|
|
|
$—
|
|
Mortgages
|
1,443
|
97
|
102
|
107
|
112
|
117
|
908
|
||||||||||||
Revolving line foreign
|
8,131
|
8,131
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Term loans
|
246
|
165
|
81
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Capitalized lease obligations
|
442
|
376
|
66
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total
|
$15,499
|
$14,006
|
$249
|
$107
|
$112
|
$117
|
$908
|
Property under capitalized leases
|
2.015
|
|
2.014
|
|
Machinery and equipment
|
$1,747
|
$1,803
|
||
Transportation equipment
|
22
|
|
24
|
|
Computer equipment
|
—
|
|
92
|
|
Subtotal
|
1,769
|
|
1,919
|
|
Less accumulated amortization
|
726
|
|
691
|
|
Total
|
$1,043
|
$1,228
|
•
|
Nine acres of land in the Kingdom of Saudi Arabia is leased through 2030.
|
•
|
Land for production facilities in the U.A.E. of approximately 80,200 square feet is leased until June 30, 2030. Office space and land for production facilities of approximately 21,500 square feet in the U.A.E. is leased until July 2032.
|
|
Operating Leases
|
Capital Leases
|
||
2016
|
$1,944
|
$1,386
|
||
2017
|
1,640
|
|
67
|
|
2018
|
1,378
|
|
—
|
|
2019
|
1,311
|
|
—
|
|
2020
|
1,327
|
|
—
|
|
Thereafter
|
10,066
|
|
—
|
|
Subtotal
|
17,666
|
|
1,453
|
|
Less Amount representing interest
|
|
22
|
|
|
Future minimum lease payments
|
$17,666
|
$1,431
|
Income (loss) from continuing operations
|
2015
|
|
2014
|
|
Domestic
|
($2,066)
|
$1,968
|
||
Foreign
|
5,076
|
|
5,320
|
|
Total
|
$3,010
|
$7,288
|
Components of income tax expense (benefit)
|
2015
|
|
2014
|
|
Current
|
|
|
||
Federal
|
$12
|
$49
|
||
Foreign
|
1,541
|
|
1,851
|
|
State and other
|
71
|
|
(80
|
)
|
Subtotal
|
1,624
|
|
1,820
|
|
Deferred
|
|
|
||
Federal
|
—
|
|
—
|
|
Foreign
|
(249
|
)
|
1,231
|
|
State and other
|
—
|
|
—
|
|
Subtotal
|
(249
|
)
|
1,231
|
|
Total
|
$1,375
|
$3,051
|
|
2015
|
|
2014
|
|
||
Tax benefit at federal statutory rate
|
$1,023
|
$2,478
|
||||
Permanent differences management fee allocation
|
619
|
|
1,946
|
|
||
Domestic valuation allowance
|
804
|
|
—
|
|
||
Permanent differences other
|
214
|
|
(540
|
)
|
||
Valuation allowance for state NOLs
|
88
|
|
(318
|
)
|
||
Differences in foreign tax rate
|
(780
|
)
|
(291
|
)
|
||
Foreign tax credit
|
(761
|
)
|
(793
|
)
|
||
Domestic deferred tax true ups
|
(346
|
)
|
—
|
|
||
Research tax credit
|
(54
|
)
|
(29
|
)
|
||
Repatriation
|
821
|
|
1,530
|
|
||
Valuation allowance for foreign NOLs
|
32
|
|
35
|
|
||
Nontaxable income from the Canadian joint venture
|
(205
|
)
|
(666
|
)
|
||
State taxes, net of federal benefit
|
(58
|
)
|
(131
|
)
|
||
All other, net expense
|
(22
|
)
|
(170
|
)
|
||
Total
|
|
$1,375
|
|
|
$3,051
|
|
Components of deferred income tax assets
|
2015
|
|
2014
|
|
U.S. Federal NOL carryforward
|
$3,044
|
$3,156
|
||
Non-qualified deferred compensation
|
2,382
|
|
2,363
|
|
Research tax credit
|
2,057
|
|
2,032
|
|
Foreign NOL carryforward
|
231
|
|
483
|
|
Foreign tax credit
|
2,861
|
|
2,088
|
|
Stock compensation
|
1,061
|
|
1,033
|
|
Other accruals not yet deducted
|
438
|
|
901
|
|
State NOL carryforward
|
1,419
|
|
1,291
|
|
Accrued commissions and incentives
|
723
|
|
584
|
|
Accrued pension
|
—
|
|
735
|
|
Inventory valuation allowance
|
73
|
|
430
|
|
Other
|
106
|
|
561
|
|
Inventory uniform capitalization
|
10
|
|
94
|
|
Deferred tax assets, gross
|
14,405
|
|
15,751
|
|
Valuation allowance
|
(13,333
|
)
|
(14,201
|
)
|
Total deferred tax assets, net of valuation allowances
|
$1,072
|
$1,550
|
||
|
|
|
||
Components of the deferred income tax liability
|
|
|
||
Depreciation
|
$633
|
$851
|
||
Foreign subsidiaries unremitted earnings
|
412
|
|
863
|
|
Prepaid
|
88
|
|
310
|
|
Total deferred tax liabilities
|
$1,133
|
$2,024
|
||
|
|
|
||
Deferred tax liability, net
|
$(61)
|
$(474)
|
||
|
|
|
||
Balance sheet classification
|
|
|
||
Long-term assets
|
$99
|
$260
|
||
Long-term liability
|
160
|
|
734
|
|
Total deferred tax liabilities, net of valuation allowances
|
$(61)
|
$(474)
|
|
2.015
|
|
2.014
|
|
Balance at beginning of the year
|
$1,288
|
$1,358
|
||
Increases in positions taken in a prior period
|
11
|
|
17
|
|
Increases in positions taken in a current period
|
14
|
|
—
|
|
Decreases due to lapse of statute of limitations
|
—
|
|
(42
|
)
|
Decreases due to settlements
|
—
|
|
(45
|
)
|
Balance at end of the year
|
$1,313
|
$1,288
|
Level 1 market value of plan assets
|
2015
|
|
2014
|
Equity securities
|
$3,062
|
$3,795
|
|
U.S. bond market
|
2,168
|
2,033
|
|
Subtotal
|
5,230
|
5,828
|
|
Level 2 significant other observable inputs
|
|
|
|
Money market fund
|
$351
|
$340
|
|
Equity securities
|
302
|
0
|
|
Subtotal
|
653
|
340
|
|
Total
|
5,883
|
|
6,168
|
|
|
|
|
||||
Reconciliation of benefit obligations, plan assets and funded status of plan
|
2015
|
|
2014
|
|
Accumulated benefit obligations
|
|
|
||
Vested benefits
|
$6,587
|
$7,626
|
||
Accumulated benefits
|
$7,020
|
$8,129
|
||
|
|
|
||
Change in benefit obligation
|
|
|
||
Benefit obligation - beginning of year
|
$8,129
|
$6,827
|
||
Service cost
|
—
|
|
—
|
|
Interest cost
|
266
|
|
299
|
|
Actuarial (gain) loss
|
(1,115
|
)
|
1,249
|
|
Benefits paid
|
(260
|
)
|
(246
|
)
|
Benefit obligation - end of year
|
$7,020
|
$8,129
|
||
|
|
|
||
Change in plan assets
|
|
|
||
Fair value of plan assets - beginning of year
|
$6,168
|
$6,351
|
||
Actual (gain) loss on plan assets
|
(25
|
)
|
63
|
|
Benefits paid
|
(260
|
)
|
(246
|
)
|
Fair value of plan assets - end of year
|
$5,883
|
$6,168
|
||
|
|
|
||
Unfunded status
|
$(1,137)
|
$(1,961)
|
||
|
|
|
||
Balance sheet classification
|
|
|
||
Current assets
|
$326
|
$352
|
||
Other assets
|
1,166
|
|
1,163
|
|
Other long-term liabilities
|
(2,629
|
)
|
(3,476
|
)
|
Net amount recognized
|
$(1,137)
|
$(1,961)
|
||
|
|
|
||
Amounts recognized in accumulated other comprehensive loss
|
|
|
||
Unrecognized actuarial loss
|
$2,303
|
$3,124
|
||
Net amount recognized
|
$2,303
|
$3,124
|
Weighted-average assumptions used to determine net cost and benefit obligations
|
2015
|
|
2014
|
|
End of year benefit obligation
|
4.05
|
%
|
3.35
|
%
|
Service cost discount rate
|
4.50
|
%
|
4.50
|
%
|
Expected return on plan assets
|
8.00
|
%
|
8.00
|
%
|
Rate of compensation increase
|
N/A
|
|
N/A
|
|
Components of net periodic benefit cost
|
2015
|
2014
|
Service cost
|
$0
|
$0
|
Interest cost
|
266
|
299
|
Expected return on plan assets
|
(479)
|
(494)
|
Recognized actuarial loss
|
210
|
69
|
Net periodic benefit (income) cost
|
($3)
|
($126)
|
Amounts recognized in other comprehensive income
|
|
|
||
Actuarial gain (loss) on obligation
|
$1,115
|
$(1,249)
|
||
Actual (loss) gain on plan assets
|
(294
|
)
|
(362
|
)
|
Total in other comprehensive income (loss)
|
$821
|
$(1,611)
|
||
Other comprehensive income is also affected by the tax effect of the valuation allowance recorded on the domestic deferred tax assets.
|
|
|
Deferred compensation liability
|
2015
|
|
2014
|
|
Current
|
$6,167
|
$213
|
||
Long-term
|
495
|
|
6,560
|
|
Total
|
$6,662
|
$6,773
|
||
|
|
|
||
Deferred compensation expense
|
$36
|
$270
|
•
|
Assets contributed to the multi-employer plans by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers.
|
•
|
If the Company chooses to stop participating in the multi-employer plan, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
|
2015
|
|
2014
|
|
||
Stock-based compensation expense (benefit)
|
|
$116
|
|
|
($114
|
)
|
Restricted stock based compensation expense
|
|
$470
|
|
|
$82
|
|
1.
|
risk-free interest rate - an estimate based on the "Market yield on U.S. Treasury securities at the rate for the period described in assumption 3 below, quoted on investment basis" for the end of week closest to the stock option grant date, from the Federal Reserve website;
|
2.
|
expected volatility - an estimate based on the historical volatility of MFRI common stock's weekly closing stock price for the expected life ; and
|
3.
|
expected life of the option - an estimate based on historical experience including the effect of employee terminations.
|
|
|
2.015
|
|
2.014
|
|
1.
|
Risk-free interest rate
|
.74%-1.77%
|
|
.74%-1.77%
|
|
2.
|
Expected volatility
|
40.88%-57.02%
|
|
40.88%-59.39%
|
|
3.
|
Expected life in years
|
5.0 to 5.1
|
|
4.9 to 5.1
|
|
4.
|
Dividend yield
|
—
|
|
—
|
|
|
Options
|
|
Weighted average exercise price
|
|
Weighted average remaining contractual term
|
Aggregate intrinsic value
|
|
Outstanding at January 31, 2014
|
776
|
|
$11.69
|
6.1
|
$3,859
|
||
|
|
|
|
|
|||
Granted
|
97
|
|
12.41
|
|
|
|
|
Exercised
|
(45
|
)
|
7.27
|
|
|
194
|
|
Expired or forfeited
|
(64
|
)
|
18.92
|
|
|
|
|
Outstanding at January 31, 2015
|
764
|
|
11.45
|
|
5.7
|
—
|
|
|
|
|
|
|
|||
Options exercisable at January 31, 2015
|
532
|
|
$12.04
|
4.5
|
—
|
|
|
|
|
|
|
|
|||
Granted
|
51
|
|
6.38
|
|
|
|
|
Exercised
|
(18
|
)
|
6.48
|
|
|
3
|
|
Expired or forfeited
|
(77
|
)
|
9.93
|
|
|
|
|
Outstanding at January 31, 2016
|
720
|
|
11.38
|
|
5.1
|
34
|
|
|
|
|
|
|
|||
Options exercisable at January 31, 2016
|
554
|
|
$11.94
|
4.2
|
$30
|
Unvested options outstanding
|
Options
|
|
Weighted-average grant date fair value
|
|
Aggregate intrinsic value
|
Outstanding at January 31, 2015
|
232
|
|
$10.11
|
$0
|
|
Granted
|
51
|
|
6.38
|
|
|
Vested
|
(92
|
)
|
|
|
|
Expired or forfeited
|
(25
|
)
|
9.65
|
|
|
Outstanding at January 31, 2016
|
166
|
|
$9.51
|
$3
|
|
Restricted shares
|
|
Weighted average grant price
|
|
Aggregate intrinsic value
|
|
||
Outstanding at January 31, 2014
|
50
|
|
|
$14.52
|
|
|
$719
|
|
Granted
|
54
|
|
12.41
|
|
|
|||
Issued
|
(15
|
)
|
|
|
||||
Forfeited
|
(3
|
)
|
11.25
|
|
|
|||
Outstanding at January 31, 2015
|
86
|
|
|
$14.52
|
|
|
$1,242
|
|
|
|
|
|
|||||
Granted
|
108
|
|
6.38
|
|
|
|||
Issued
|
(26
|
)
|
|
|
||||
Forfeited
|
(5
|
)
|
6.38
|
|
|
|||
Outstanding at January 31, 2016
|
163
|
|
|
$6.40
|
|
|
$1,040
|
|
Period
|
Total number of shares purchased (in thousands)
|
Average price paid per share
|
February
|
28
|
$6.64
|
March
|
17
|
6.27
|
April to December
|
—
|
—
|
|
2015
|
|
2.014
|
|
Interest expense
|
$950
|
$1,045
|
||
Interest income
|
(480
|
)
|
(526
|
)
|
Interest expense, net
|
$470
|
$519
|
|
Balance at beginning of period
|
Charged to costs and expenses
|
Deductions from reserves (1)
|
Charged to other accounts (2)
|
Balance at end of period
|
|
|
|
|
|
|
Year Ended January 31, 2016
|
|
|
|
|
|
Allowance for possible losses in collection of trade receivables
|
$31
|
$6
|
$4
|
$0
|
$33
|
|
|
|
|
|
|
Year Ended January 31, 2015
|
|
|
|
|
|
Allowance for possible losses in collection of trade receivables
|
$26
|
$10
|
$5
|
$0
|
$31
|
|
|
|
|
|
|
Date:
|
April 28, 2016
|
/s/ Bradley E. Mautner
|
|
|
Bradley E. Mautner
|
|
|
Director, President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
BRADLEY E. MAUTNER*
|
Director, President and Chief Executive Officer (Principal Executive Officer)
|
))
|
|
|
|
|
)
|
|
|
KARL J. SCHMIDT*
|
Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
)
)
|
April 28, 2016
|
|
|
|
)
|
|
|
DAVID UNGER*
|
Director
|
)
|
|
|
|
|
)
|
|
|
DAVID S. BARRIE*
|
Director and Chairman of the Board of Directors
|
|
|
|
|
|
|
|
|
DENNIS KESSLER*
|
Director
|
)
|
|
|
|
|
)
|
|
|
MICHAEL J. GADE*
|
Director
|
)
|
|
|
|
|
)
|
|
|
MARK A. ZORKO*
|
Director
|
)
|
|
|
|
|
)
|
|
|
DAVID B. BROWN*
|
Director
|
)
|
|
|
|
|
)
|
|
|
JEROME T. WALKER*
|
Director
|
)
|
|
|
|
|
|
|
|
*By:
|
/s/ Bradley E. Mautner
|
Individually and as Attorney in Fact
|
|
|
|
Bradley E. Mautner
|
|
|
|
|
|
EXHIBIT INDEX
|
|
23
|
|
|
Consent of Independent Registered Public Accounting Firm - Grant Thornton LLP
|
24
|
|
|
Power of Attorney executed by directors and officers of the Company
|
31
|
|
|
Rule 13a - 14(a)/15d - 14(a) Certifications
(1) Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(2) Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32
|
|
|
Section 1350 Certifications
(1) Chief Executive Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(2) Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
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
|
1.
|
Definitions
. All capitalized terms used herein without definition shall have the meanings contained in the Credit Agreement.
|
2.
|
Amendments to Credit Agreement.
|
6.
|
Confirmation of Obligations; Release
.
|
BORROWERS:
|
|
|
MFRI, INC., MIDWESCO FILTER RESOURCES, INC., PERMA-PIPE, INC., TC NILES CORPORATION
,
TDC FILTER MANUFACTURING, INC., MM NILES CORPORATION
and
PERMA-PIPE CANADA, INC.
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By:
/s/ Karl J. Schmidt
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Name:
Karl J. Schmidt
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Title:
Vice President and Chief Financial Officer
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LENDER:
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BMO HARRIS BANK, N.A.
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By:
/s/ Terrence McKenna, Jr.
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Name:
Terrence McKenna, Jr.
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Title:
Vice President
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MFRI, Inc.,
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as Borrower Agent
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By:
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Name:
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Title:
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I.
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Section 8.12(a) – Consolidated Fixed Charge Coverage Ratio.
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1. Consolidated Net Income for Subject Period:
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$
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2. Consolidated Interest Charges for Subject Period (net of interest income for such period of the Company and its Domestic Subsidiaries):
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$
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3. Federal, state, local and foreign income taxes for Subject Period (net of income tax credits):
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$
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4. Depreciation expenses for Subject Period:
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$
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5. Amortization expenses for Subject Period:
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$
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6. Non-cash expenses or losses and other non-cash charges incurred and LIFO reserves established during such period (excluding any non-cash charges representing an accrual of, or reserve for cash charges to be paid within the next twelve months):
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$
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7. Expenses of up to $[____________] incurred in connection with the Transaction.
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$
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8. Non-cash income, gains or profits or LIFO reserves terminated during such period
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$
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9. Consolidated EBITDA (Lines A.1. + A.2. + A.3. + A.4. + A.5. + A.6. + A.7. – A.8.):
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$
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1. All expenditures (whether paid in cash or accrued as liabilities) by the Company or any Domestic Subsidiary for items that would be classified as "property, plant or equipment" or comparable items, including without limitation all transactional costs incurred in connection with such expenditures provided the same have been capitalized:
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$
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2. Capital expenditures (i) financed with Indebtedness permitted under the Agreement other than Loans, or (ii) made with Net Cash Proceeds from any Disposition described in clauses (b), (d) and (h) of Section 8.05 of the Agreement:
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$
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3. Consolidated Capital Expenditures: (Lines B.1.–B.2.)
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$
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1. Consolidated Interest Charges paid or required to be paid in cash
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$
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2. All principal repayments made or required to be paid of Indebtedness, but excluding any such payments to the extent constituting a refinancing of such Indebtedness through the incurrence of additional Indebtedness otherwise expressly permitted under Section 8.02 of the Agreement and repayments of the Revolving Loans:
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$
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3. Restricted Payments made in cash:
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$
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4. Aggregate Federal, state, local and foreign income taxes paid in cash:
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$
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5. Cash contributions made to any Pension Plan (to the extent not deducted in the calculation of the Consolidated Net Income), other than contributions of up to $500,000 made within 180 days following the Closing Date in connection with the Company’s proposed pension plan conversion:
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$
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6. Consolidated Fixed Charges (Lines C.1. + C.2. + C.3. + C.4. +C.5):
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$
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II.
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Section 8.12(b) – Minimum Availability.
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/s/ Bradley E. Mautner
Bradley E. Mautner
, Director, President and Chief Executive Officer (Principal Executive Officer)
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/s/ David S. Barrie
David S. Barrie
, Director, Chairman of the Board of Directors
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/s/ Karl J. Schmidt
Karl J. Schmidt
, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
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/s/ Michael J. Gade
Michael J. Gade
, Director
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/s/ David Unger
David Unger
, Director
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/s/ Mark A. Zorko
Mark A. Zorko
, Director
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/s/ Dennis Kessler
Dennis Kessler
, Director
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/s/ Jerome T. Walker
Jerome T. Walker
, Director
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/s/ David Brown
David Brown
, Director
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1.
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I have reviewed this annual report on Form 10-K of MFRI, Inc.
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2.
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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 respect to the period covered by this report;
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3.
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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;
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4.
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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:
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(a)
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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;
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(c)
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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
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(d)
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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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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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):
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(a)
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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
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(b)
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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.
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/s/ Bradley E. Mautner
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1.
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I have reviewed this annual report on Form 10-K of MFRI, Inc.
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2.
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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 respect to the period covered by this report;
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3.
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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;
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4.
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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:
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(a)
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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;
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(c)
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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
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(d)
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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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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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):
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(a)
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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
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(b)
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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.
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/s/ Karl J. Schmidt
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(1)
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The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
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/s/ Bradley E. Mautner
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/s/ Karl J. Schmidt
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