Perma-Pipe International Holdings, Inc. (Form: 10-Q, Received: 09/19/2017 16:09:04)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



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

For the quarterly period ended July 31, 2017

Commission File No. 0-18370

Perma-Pipe International Holdings, Inc.

(Exact name of registrant as specified in its charter)



Delaware	36-3922969
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6410 W. Howard Street, Niles, Illinois	60714
(Address of principal executive offices)	(Zip Code)

(847) 966-1000

(Registrant's telephone number, including area code)

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

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x Emerging growth company o

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

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

On September 7, 2017 , there were 7,713,407 shares of the registrant's common stock outstanding.

Perma-Pipe International Holdings, Inc.

FORM 10-Q

For the fiscal quarter ended July 31, 2017

TABLE OF CONTENTS



Item		Page

Part I	Financial Information

1.	Financial Statements
	Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended July 31, 2017 and 2016	1
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Six Months Ended July 31, 2017 and 2016	2
	Consolidated Balance Sheets as of July 31, 2017 (Unaudited) and January 31, 2017	3
	Consolidated Statements of Stockholders' Equity as of July 31, 2017 (Unaudited) and January 31, 2017	4
	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended July 31, 2017 and 2016	5
	Notes to Consolidated Financial Statements (Unaudited)	6

2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15

4.	Controls and Procedures	19

Part II	Other Information
6.	Exhibits	20

Signatures		21

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)



	Three Months Ended July 31,						Six Months Ended July 31,
	2017			2016			2017			2016
Net sales		$26,852			$22,859			$50,353			$45,928
Cost of sales	23,794			19,879			45,510			40,956
Gross profit	3,058			2,980			4,843			4,972

Operating expenses
General and administrative expenses	3,856			3,720			8,142			8,908
Selling expenses	1,307			1,450			2,623			2,854
Total operating expenses	5,163			5,170			10,765			11,762

Loss from operations	(2,105		)	(2,190		)	(5,922		)	(6,790		)

Loss on consolidation of joint venture	—			—			—			(1,620		)

Interest expense, net	157			97			314			323
Loss from continuing operations before income taxes	(2,262		)	(2,287		)	(6,236		)	(8,733		)

Income tax benefit	(564		)	(1,077		)	(1,049		)	(1,334		)

Loss from continuing operations	(1,698		)	(1,210		)	(5,187		)	(7,399		)

Income from discontinued operations, net of tax	—			1,309			—			1,109

Net (loss) income		($1,698	)		$99			($5,187	)	($6,290)

Weighted average common shares outstanding
Basic	7,679			7,481			7,645			7,416
Diluted	7,679			7,603			7,645			7,416

Loss per share from continuing operations
Basic and diluted		($0.22	)		($0.16	)	($0.68)			($1.00)
Earnings per share from discontinued operations
Basic and diluted		$—			$0.17			$—			$0.15
(Loss) earnings per share
Basic and diluted	($0.22)				$0.01		($0.68)				($0.85	)

See accompanying notes to consolidated financial statements.

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

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In thousands)



	Three Months Ended July 31,						Six Months Ended July 31,
	2017			2016			2017			2016
Net (loss) income		($1,698	)		$99			($5,187	)		($6,290	)

Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax	940			(888		)	1,072			1,034
Unrealized loss on marketable security, net of tax	(87		)	(5		)	(92		)	(4		)
Other comprehensive income (loss)	853			(893		)	980			1,030

Comprehensive loss		($845	)		($794	)		($4,207	)		($5,260	)

See accompanying notes to consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



(In thousands except per share data)	July 31, 2017			January 31, 2017
ASSETS	Unaudited
Current assets
Cash and cash equivalents		$8,546			$7,603
Restricted cash	893			1,098
Trade accounts receivable, less allowance for doubtful accounts of $155 at July 31, 2017 and $305 at January 31, 2017	26,583			31,271
Inventories, net	16,031			13,565
Assets of discontinued operations	—			25
Prepaid expenses and other current assets	3,434			2,171
Costs and estimated earnings in excess of billings on uncompleted contracts	2,687			2,091
Total current assets	58,174			57,824
Property, plant and equipment, net of accumulated depreciation	35,995			36,275
Other assets
Goodwill	2,388			2,279
Other assets	5,282			5,233
Total other assets	7,670			7,512
Total assets		$101,839			$101,611
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade accounts payable		$10,695			$10,901
Accrued compensation and payroll taxes	4,248			4,236
Commissions and management incentives payable	876			1,845
Revolving line North America	7,930			3,813
Current maturities of long-term debt	585			658
Customers' deposits	3,129			2,640
Outside commissions payable	2,380			1,612
Liabilities of discontinued operations	156			199
Billings in excess of costs and estimated earnings on uncompleted contracts	631			1,100
Other accrued liabilities	2,446			2,360
Income taxes payable	330			684
Total current liabilities	33,406			30,048
Long-term liabilities
Long-term debt, less current maturities	7,792			7,258
Deferred compensation liabilities	2,540			2,523
Deferred tax liabilities - long-term	1,893			1,829
Other long-term liabilities	567			540
Total long-term liabilities	12,792			12,150
Stockholders' equity
Common stock, $.01 par value, authorized 50,000 shares; 7,710 issued and outstanding at July 31, 2017 and 7,595 issued and outstanding at January 31, 2017	77			76
Additional paid-in capital	55,622			55,358
Treasury Stock, 27 shares at January 31, 2017	—			(170		)
Retained earnings	1,686			6,873
Accumulated other comprehensive loss	(1,744		)	(2,724		)
Total stockholders' equity	55,641			59,413
Total liabilities and stockholders' equity		$101,839			$101,611

See accompanying notes to consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited)



($ in thousands, except share data)		Additional Paid-in Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Common Stock
Total stockholders' equity at January 31, 2017	$76	$55,358			($170	)	$6,873			($2,724)		$59,413

Net loss								($5,187	)			(5,187	)
Common stock issued under stock plans, net of shares used for tax withholding	1	(257	)	170								(86	)
Stock-based compensation expense		521										521
Marketable security										(142	)	(142	)
Foreign currency translation adjustment										1,159		1,159
Tax benefit/expense on above items										(37	)	(37	)
Total stockholders' equity at July 31 , 2017	$77	$55,622			$—		$1,686			($1,744)		$55,641



Shares	2017	2016
Balances at beginning of year	7,595,509	7,305,925
Treasury stock released	26,753	17,813
Shares issued	87,545	271,771
Balances at period end	7,709,807	7,595,509

See accompanying notes to consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



(In thousands)	Six Months Ended July 31,
	2017			2016
Operating activities
Net loss		($5,187	)		($6,290	)
Adjustments to reconcile net loss to net cash flows used in operating activities
Depreciation and amortization	2,509			2,830
Gain on disposal of subsidiaries	—			(867		)
Deferred tax benefit	(260		)	(277		)
Stock-based compensation expense	521			582
Loss on consolidation of joint venture	—			1,620
Cash surrender value on life insurance policies	—			(132		)
Loss (gain) on disposal of fixed assets	2			(2,364		)
Provision on uncollectible accounts	(298		)	400
Gain from sale of marketable securities	(142		)	—
Changes in operating assets and liabilities
Accounts receivable	5,355			16,277
Inventories	(2,317		)	5,004
Costs and estimated earnings in excess of billings on uncompleted contracts	(1,065		)	(296		)
Accounts payable	(713		)	(4,889		)
Accrued compensation and payroll taxes	(1,019		)	(5,884		)
Customers' deposits	489			(1,824		)
Income taxes receivable and payable	(1,442		)	(1,418		)
Prepaid expenses and other current assets	(513		)	(1,233		)
Other assets and liabilities	1,252			(2,140		)
Net cash used in operating activities	(2,828		)	(901		)
Investing activities
Acquisition of interest in subsidiary, net of cash acquired	—			(4,672		)
Capital expenditures	(1,526		)	(994		)
Proceeds from surrender of corporate-owned life insurance policies	—			1,894
Proceeds from sales of marketable securities	142			—
Proceeds from sales of property and equipment	1			11,930
Net cash (used in) provided by investing activities	(1,383		)	8,158
Financing activities
Proceeds from revolving lines	16,936			21,113
Proceeds from debt	—			6,147
Payments of debt on revolving lines of credit	(13,237		)	(29,835		)
Payments of other debt	(120		)	(10,044		)
Increase (decrease) in drafts payable	285			(248		)
Borrowings (payments) on capitalized lease obligations	567			(1,204		)
Release of treasury stock	170			—
Stock options exercised and restricted shares issued	(256		)	309
Net cash provided by (used in) financing activities	4,345			(13,762		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	604			104
Net increase (decrease) in cash, cash equivalents and restricted cash	738			(6,401		)
Cash, cash equivalents and restricted cash - beginning of period	8,701			18,955
Cash, cash equivalents and restricted cash - end of period		$9,439			$12,554
Supplemental cash flow information
Interest paid		$362			$457
Income taxes paid	524			1,142
Fixed assets acquired under capital leases	697			—
Funds held in escrow related to the sale of Filtration assets	250			502

See accompanying notes to consolidated financial statements.

PERMA-PIPE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2017

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

Basis of presentation. The interim consolidated financial statements of Perma-Pipe International Holdings, Inc. and subsidiaries ("PPIH," "Company," or "Registrant") are unaudited, but include all adjustments that the Company's management considers necessary to present fairly the financial position and results of operations for the periods presented. These adjustments consist of normal recurring adjustments. Information and footnote disclosures have been omitted pursuant to Securities and Exchange Commission ("SEC") rules and regulations. The consolidated balance sheet as of January 31, 2017 is derived from the audited consolidated balance sheet as of that date. The results of operations for any interim period are not necessarily indicative of future or annual results. Interim financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. The Company's fiscal year ends on January 31. Years and balances described as 2017 and 2016 are for the six months ended July 31, 2017 and 2016 , respectively.

In February 2017, the Company announced that the board of directors had authorized Company management to move forward with the re-naming and re-branding of MFRI, Inc. under the Perma-Pipe name now that the Company operates in a single business segment under the Perma-Pipe brand, and the Company believes this decision will better serve its strategy, position it well in the industry and global market, and better reflect the Company’s mission and strategy, and positions it to leverage the strong reputation Perma-Pipe has established since beginning operations. The name change to Perma-Pipe International Holdings, Inc. was effective March 20, 2017. The Company's common stock has been and will continue to be reported under its new ticker symbol “PPIH” since March 21, 2017.

Business segment reporting. As of January 31, 2016, PPIH is engaged in the manufacture and sale of products in one segment: Piping Systems. As described below, prior to January 29, 2016, the Company was also engaged in the manufacture and sale of products in the Filtration Products segment. Piping Systems engineers, designs, manufactures and sells specialty piping, leak detection and location systems . This segment's specialty piping systems include (i) industrial and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products, (ii) insulated and jacketed district heating and cooling piping systems for efficient energy distribution to multiple locations from central energy plants, and (iii) oil and gas gathering flow and long lines for oil and mineral transportation. Piping Systems' leak detection and location systems are sold with many of its piping systems and on a stand-alone basis, to monitor areas where fluid intrusion may contaminate the environment, endanger personal safety, cause a fire hazard, impair essential services or damage equipment or property.

Prior to January 29, 2016, the Company had a Filtration Products segment. This business is reported as discontinued operations in the consolidated financial statements. For further information, see "Notes to Consolidated Financial Statements, Note 4 Discontinued operations".

For the three months ended July 31, 2017 and 2016, no individual customer accounted for 10% or more of the Company's consolidated net sales. For the six months ended July 31, 2017 , no individual customer accounted for 10% or more of the Company's consolidated net sales, and for the six months ended July 31, 2016 , one customer accounted for 11% of the Company's consolidated net sales.

At July 31, 2017 , one customer accounted for 20% of accounts receivable. Two customers accounted for 33% of accounts receivable at January 31, 2017 .



	Three Months Ended July 31,						Six Months Ended July 31,
	2017			2016			2017			2016
Net sales
Piping Systems		$26,852			$22,859			$50,353			$45,928
Gross profit
Piping Systems		$3,058			$2,980			$4,843			$4,972
Loss from operations
Piping Systems		$62			($714	)		($1,397	)		($2,415	)
Corporate		($2,167	)		($1,476	)	(4,525		)	(4,375		)
Total loss from operations		($2,105	)		($2,190	)		($5,922	)		($6,790	)

Correction of immaterial errors. An error was identified during the preparation and review of the current quarter financial statements, as stock-based compensation cost and additional paid in capital had been reversed for vested equity awards that expired, terminated or were unexercised . The cumulative adjustment for the stock-based compensation cost covering the period from May 1, 2015 to January 31, 2016 was approximately $846 thousand . The adjustments applicable to the fiscal year ending January 31, 2017 were approximately $95 thousand for the three months ending April 30, 2016, $350 thousand for the three months ending July 31, 2016, $138 thousand for the three months ending October 31, 2016, and $213 thousand for the three months ending January 31, 2017.

Pursuant to the guidance of Staff Accounting Bulletin ("SAB") No. 99, Materiality, the Company concluded that the errors were not material to any of its prior period financial statements. The prior period financial statements were revised, in accordance with SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements .

A reconciliation of the effects of the adjustments to the previously reported balance sheet and stockholders' equity at January 31, 2017 follows:



	As Reported	Adjustment		Revised
Additional paid in capital	$53,716	$1,642		$55,358
Retained earnings	8,515	(1,642	)	6,873

A reconciliation of the effects of the adjustments to the previously reported statement of operations for the three months ending July 31, 2016 follows:



	As Reported		Adjustment		Revised
General and administrative expense	$3,370		$350		$3,720
Total operating expenses	4,820		350		5,170
Loss from operations	(1,840	)	(350	)	(2,190	)
Loss from continuing operations before income taxes	(1,937	)	(350	)	(2,287	)
Loss from continuing operations	(860	)	(350	)	(1,210	)
Net income	449		(350	)	99
Loss per share from continuing operations	(0.11	)	(0.05	)	(0.16	)
Earnings per share	0.06		(0.05	)	0.01

A reconciliation of the effects of the adjustments to the previously reported statement of operations for the six months ending July 31, 2016 follows:



	As Reported		Adjustment		Revised
General and administrative expense	$8,463		$445		$8,908
Total operating expenses	11,317		445		11,762
Loss from operations	(6,345	)	(445	)	(6,790	)
Loss from continuing operations before income taxes	(8,288	)	(445	)	(8,733	)
Loss from continuing operations	(6,954	)	(445	)	(7,399	)
Net loss	(5,845	)	(445	)	(6,290	)
Loss per share from continuing operations	(0.94	)	(0.06	)	(1.00	)
Loss per share	(0.79	)	(0.06	)	(0.85	)

A reconciliation of the effects of the adjustments to the previously reported statement of cash flows for the six months ending July 31, 2016 follows:



	As Reported	Adjustment	Revised
Net loss	($5,845)	($445)	($6,290)
Stock-based compensation expense	137	445	582

Discontinued operations. The domestic fabric filter business, which was included in discontinued operations, sold product until operations ceased in the second quarter of 2016. The Filtration business segment is reported as discontinued operations in the consolidated financial statements, and the notes to consolidated financial statements have been revised to conform to the current year reporting. There was $719 thousand of tax benefit for the three months ended July 31, 2016 and $703 thousand of tax benefit for the six months ended July 31, 2016 . Income (loss) from discontinued operations net of tax for the three and six months ended July 31, 2016 and 2017 was as follows:



	Three Months Ended July 31,				Six Months Ended July 31,
	2017		2016		2017		2016
Net sales from discontinued operations		$—		$3,276		$—		$10,467

Gain on disposal of discontinued operations	—		1,605		—		2,472
Income (loss) from discontinued operations	—		423		—		(660		)
Income from discontinued operations before income taxes	—		2,028		—		1,812
Income tax expense	—		719		—		703
Income from discontinued operations, net of tax		$—		$1,309		$—		$1,109

Components of assets and liabilities from discontinued operations consist of the following:



	July 31, 2017		January 31, 2017
Current assets
Trade accounts receivable, net		$—		$25
Total assets from discontinued operations		$—		$25
Current liabilities
Trade accounts payable, accrued expenses and other		$156		$199
Total liabilities from discontinued operations		$156		$199

Cash flows from discontinued operations:



	Six Months Ended July 31,
	2017			2016
Net cash used in discontinued operating activities		($18	)		($208	)
Net cash provided by discontinued investing activities	—			7,574
Net cash used in discontinued financing activities	—			(7,365		)

Income taxes. The determination of the consolidated provision for income taxes, deferred tax assets and liabilities and related valuation allowances requires management to make judgments and estimates. As a company with subsidiaries in foreign jurisdictions, the process of calculating income taxes involves estimating current tax obligations and exposures in each jurisdiction as well as making judgments regarding the future recoverability of deferred tax assets. Income earned in the United Arab Emirates ("U.A.E.") is not subject to local country income tax. Additionally, the relative proportion of taxable income earned domestically versus internationally can fluctuate significantly from period to period. Changes in the estimated level of annual pre-tax income, tax laws and the results of tax audits can affect the overall effective income tax rate, which impacts the level of income tax expense and net income. Judgments and estimates related to the Company's projections and assumptions are inherently uncertain; therefore, actual results could differ materially from projections.

The Company's effective tax rate ("ETR") from continuing operations for the second quarter and year-to-date was 24.9% and 16.8% , respectively, compared to 47.1% and 15.3% during the respective prior-year periods. The change in the ETR from the prior year-to-date to the current year-to-date was mainly due to changes in the foreign income and loss activities.

The amount of unrecognized tax benefits, including interest and penalties, at July 31, 2017 , recorded in other long-term liabilities was $0.2 million , all of which would impact the Company’s ETR if recognized. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with $1,200 included in expense for the current quarter. The amount of accrued interest and penalties at July 31, 2017 associated with unrecognized tax benefits was $47,900 .

The Company files income tax returns in U.S. federal and state jurisdictions. The Internal Revenue Service ("IRS") began an audit of the fiscal year ended January 31, 2015 in August 2016. In August 2017, the Company received a notice from the IRS that it had concluded the tax audit for the year ended January 31, 2015. No changes were made to the reported tax.

Impairment of long-lived assets. The Company evaluates long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. A factor considered important that could trigger an impairment review includes a year-to-date loss from operations. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate. Piping Systems has a year-to-date loss, but based on the Company's review, there was no impairment of long-lived assets as of July 31, 2017 or January 31, 2017 .

Goodwill. The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill . All identifiable goodwill as of July 31, 2017 and January 31, 2017 is attributable to the purchase of Perma-Pipe Canada, Ltd. ("PPC")



	January 31, 2017		Foreign exchange change effect		July 31, 2017
Goodwill		$2,279		$109		$2,388

In January 2017, the Financial Accounting Standards Board ("FASB") issued authoritative guidance that simplifies the assessment of goodwill for impairment when the estimated fair value of a reporting unit is less than its carrying

value by eliminating the requirement to determine the fair value of goodwill. Under the new guidance, the amount of goodwill impairment will be determined by the amount the carrying value of the reporting unit exceeds its fair value. The new guidance is effective for the Company beginning January 1, 2020, with early adoption permitted. The Company adopted this new guidance in the fourth quarter of 2016.

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

Other intangible assets with definite lives. The Company owns several patents, including those covering features of its piping and electronic leak detection systems. Patents are capitalized and amortized on a straight-line basis over a period not to exceed the legal lives of the patents. The Company expenses costs incurred to renew or extend the term of intangible assets . Gross patents were $2.63 million as of July 31, 2017 and January 31, 2017 . Accumulated amortization was approximately $2.40 million and $2.38 million as of July 31, 2017 and January 31, 2017 , respectively. Full year amortizations for the next five years ending January 31 will be $44,700 in 2018 , $36,600 in 2019 , $33,700 in 2020 , $27,100 in 2021 , and $17,500 in 2022 , with the residual balance of $93,900 to be amortized in future periods thereafter. Patents are included in other assets in the consolidated balance sheets.



	Three Months Ended July 31,				Six Months Ended July 31,
	2017		2016		2017		2016
Patent amortization expense		$11		$11		$22		$22


8.	Stock-based compensation. The Company has stock-based compensation awards that can be granted to eligible employees, officers or directors.



	Three Months Ended July 31,				Six Months Ended July 31,
	2017		2016		2017		2016
Stock-based compensation expense		$65		$68		$59		$161
Restricted stock-based compensation expense		$452		$390		$647		$668

The decrease in the six months restricted stock-based compensation expense relates to grants that vested in January 2017, and the increase in the three months comparison is due to new grants that were made in June 2017.

Stock Options. The fair value of the outstanding option awards was estimated on the grant dates using the Black-Scholes option pricing model.



	Six Months Ended July 31,
Fair value assumptions	2017	2016
Expected volatility	43.2%	43.2%
Risk free interest rate	1.2%	1.2%
Dividend yield	0	0
Expected life	5.0	5.0



Option activity	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 31, 2017	524			$11.55	4.5		$534
Exercised	(24	)	6.74			29
Expired or forfeited	(82	)	23.49
Outstanding end of period	418		9.49		4.5	274

Exercisable end of period	383			$9.59	4.2		$249



Unvested option activity	Options		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at January 31, 2017	74			$9.31		$69
Vested	(32	)
Expired or forfeited	(7	)	11.97
Outstanding end of period	35			$8.42		$25

As of July 31, 2017 , there was $0.1 million of total unrecognized compensation expense related to unvested stock options. The expense is expected to be recognized over a period of 2.0 years.

Restricted stock. The following table summarizes restricted stock activity for the year:



Restricted stock activity	Restricted Shares		Weighted Average Grant Price Per Share		Aggregate Intrinsic Value
Outstanding at January 31, 2017	290			$8.75		$2,540
Granted	175		8.02
Issued	(55	)
Forfeited	(38	)	7.85
Outstanding end of period	372			$7.93		$2,988

As of July 31, 2017 , there was $1.9 million of unrecognized compensation expense related to unvested restricted stock granted under the plans. The cost is expected to be recognized over the weighted-average period of 2.4 years .


9.	Earnings per share.



	Three Months Ended July 31,		Six Months Ended July 31,
	2017	2016	2017	2016
Basic weighted average common shares outstanding	7,679	7,481	7,645	7,416
Dilutive effect of equity compensation plans	—	122	—	—
Weighted average common shares outstanding assuming full dilution	7,679	7,603	7,645	7,416

Stock options not included in the computation of diluted earnings per share of common stock because the option exercise prices exceeded the average market prices of the common shares	163	356	163	378

Stock options with an exercise price below the average market price	255	248	255	226


10.	Interest expense, net.



	Three Months Ended July 31,						Six Months Ended July 31,
	2017			2016			2017			2016
Interest expense		$193			$139			$358			$392
Interest income	(36		)	(42		)	(44		)	(69		)
Interest expense, net		$157			$97			$314			$323

11. Debt. Debt totaled $16.3 million at July 31, 2017 , a net increase of $4.6 million since January 31, 2017 .

Revolving lines North America . On September 24, 2014, the Company entered into the Credit and Security Agreement with a financial institution (as amended, "Credit Agreement"). Under the terms of the Credit Agreement, which matures on September 24, 2018 , the Company can borrow up to a combined $15.0 million in the U.S. and Canada, subject to borrowing base availability from secured domestic and certain Canadian assets, such as accounts receivable and inventory, and other requirements, under a revolving line of credit. The Credit Agreement covenants restrict debt, liens, share repurchases and investments, and require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met . On July 31, 2017 , the Company was in compliance with all covenants under the Credit Agreement. The North American revolving line balances as of July 31, 2017 and January 31, 2017 were included as current liabilities in the consolidated balance sheets, because the Credit Agreement has a subjective acceleration clause.

Interest rates vary based on the average availability in the preceding fiscal quarter and are: (a) a margin in effect plus a base rate, if below certain availability limits; or (b) a margin in effect plus the Eurodollar rate for the corresponding interest period. On July 31, 2017 , the Company had borrowed $7.9 million at 5.5% and 4.2% and had $4.8 million available to it under the revolving line of credit. In addition, $0.2 million of availability was used under the Credit Agreement primarily to support letters of credit to guarantee amounts committed for inventory purchases. Cash required for operations, as needed, is provided by draw downs on the line of credit.

July 31, 2017 , $7.5 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. As there were no borrowings under these credit arrangements, an additional $15.5 million remained unused. The foreign revolving lines balances as of January 31, 2017 were included as current maturities of long-term debt in the consolidated balance sheets.

On May 5, 2017 , Piping Systems obtained two capital leases for a total of 0.94 million CAD (approximately $0.7 million USD at the prevailing exchange rate on the transaction date) to finance vehicle equipment. The interest rate for these capital leases is 7.8% per annum with monthly principal and interest payments of $9 thousand , and these leases mature on April 30, 2021 .


12.	Restricted cash. Restricted cash held by foreign subsidiaries was $0.9 million as of July 31, 2017 and January 31, 2017 . Restricted cash held by foreign subsidiaries related to an escrow account from the sale of Nordic Air Filtration and fixed deposits that also serve as security deposits and guarantees.



	Six Months Ended July 31,
	2017		2016
Cash and cash equivalents		$8,546		$11,612
Restricted cash	893		942
Cash, cash equivalents and restricted cash shown in the statement of cashflows		$9,439		$12,554


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

14.

Acquisition. On February 4, 2016 , PPIH acquired the remaining 51% ownership of PPC , a coating and insulation company in Camrose, Alberta that serves the oil and gas industry in Western Canada . The purchase price was $13.1 million CAD ( $9.6 million USD) in cash and debt at closing. This transaction was accounted for under the acquisition method of accounting. The following table represents the allocation of the total consideration in the acquisition of PPC:



Total purchase consideration:
Cash		$7,587
Loan payable	2,000
Purchase consideration to third party	9,587

Fair value of 49% previously held equity interest	7,492
Total purchase consideration		$17,079

Fair value of net assets acquired:
Cash and cash equivalents		$2,915
Property and equipment	13,124
Goodwill	2,279
Net working capital	406
Other assets (liabilities) net	(1,645		)
Net assets acquired		$17,079

The acquisition resulted in $2.3 million of goodwill. Goodwill is not deductible for income tax purposes. The Company incurred legal, professional and other costs related to this acquisition. These one-time costs of $0.2 million were recognized as general and administrative expenses.

In the first quarter of 2016, the Company recognized a non-cash loss of $1.6 million , which represents the difference between the pre-existing book value interest in PPC immediately prior to the acquisition remeasured to its fair value upon the acquisition date.

15.

Recent accounting pronouncements . In October 2016, the FASB issued authoritative guidance requiring the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than when transferred to a third party as required under the current guidance. The new guidance is effective for the Company beginning February 1, 2018, with early adoption permitted. The Company is currently assessing the potential impact the guidance will have upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires entities to recognize assets and liabilities for most leases on their balance sheets. It also requires additional qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on the consolidated financial statements and related disclosures.

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers ("Topic 606")", with several clarifying updates issued during 2016. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The mandatory adoption will require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. This guidance is effective for the Company beginning February 1, 2018, with early adoption permitted. The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company has not yet selected the transition method. The Company currently expects to adopt the new revenue standards in the first quarter of 2018.

The Company is currently evaluating the impact of adopting the standard on the Company’s financial position, results of operations, cash flows and related disclosures and has not determined its adoption methodology. The Company has completed staff education and is currently in discovery and analysis phases of reviewing contracts and identifying potential differences that would result from applying the new standard to current contracts. This step is expected to be complete in October 2017. Then the Company will begin to identify and implement changes to the Company’s business processes, systems and controls to support adoption of the new standard in 2018. Although it is early in the evaluation process, the Company does not expect Topic 606 to have a material impact on the financial statements, though internal processes, record keeping and disclosures may be significantly impacted. The sales are not believed to be material, because Topic 606 generally supports the recognition of revenue over time under the cost-to-cost method for the majority of the contracts, which is consistent with the current percentage of completion revenue recognition model.

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

16. Reclassifications. Reclassifications were made to the prior-year consolidated statement of cash flows to conform to the current-year presentations and were not material to the financial statements.

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

The statements contained under the caption MD&A and other information contained elsewhere in this quarterly report, which can be identified by the use of forward-looking terminology such as "may," "will," "expect," "continue," "remains," "intend," "aim," "should," "prospects," "could," "future," "potential," "believes," "plans," "likely" and "probable" or the negative thereof or other variations thereon or comparable terminology, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected as a result of many factors, including, but not limited to, those under the heading Item 1A. Risk Factors included in the Company's latest Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Consolidated

Perma-Pipe International Holdings, Inc. is engaged in the manufacture and sale of products in one reportable segment: Piping Systems. The Company's website is www.permapipe.com . Since the Piping Systems segment includes large discrete projects, operating results could be negatively impacted in the future as a result of large variations in the level of market demand in reporting periods.

This discussion should be read in conjunction with the consolidated financial statements, including the notes thereto, contained elsewhere in this report.

Piping Systems



	Three Months Ended July 31,									Six Months Ended July 31,
($ in thousands)	2017	%		2016		%		% Increase (decrease)		2017		%		2016		%		% Increase (decrease)
Net sales	$26,852			$22,859				17	%	$50,353				$45,928				10	%
Gross profit	3,058	11	%	2,980		13	%	3	%	4,843		10	%	4,972		11	%	(3	)%
General and administrative expenses	1,689	6	%	2,244		10	%	(25	)%	3,617		7	%	4,533		10	%	(20	)%
Selling expenses	1,307	5	%	1,450		6	%	(10	)%	2,623		5	%	2,854		6	%	(8	)%
Gain (loss) from operations	62	—	%	(714	)	(3	)%	(109	)%	(1,397	)	(3	)%	(2,415	)	(5	)%	(42	)%
Loss on consolidation of JV	—			—				—	%	—				(1,620	)			100	%

Three months ended July 31, 2017 ( " current quarter " ) vs. Three months ended July 31, 2016 ( " prior-year quarter " )

Net sales increased 17% to $26.9 million in the current quarter from $22.9 million in the prior-year quarter. Higher revenues resulted from increased business with distributors of coated pipe in Canada and from a pick-up in general project activities in the Middle East.

Gross margin decreased to 11% of net sales in the current quarter from 13% of net sales in the prior-year quarter due to changes in the product mix.

Selling and general and administrative expenses combined decreased by $0.7 million in the current quarter from the prior-year quarter. The prior-year quarter included one-time legal settlement expenses of $0.8 million partially offset by $0.4 million in foreign currency exchange gains.

Six months ended July 31, 2017 ( "year-to-date" ) vs. Six months ended July 31, 2016 ( " prior-year year-to-date " )

Net sales increased 10% to $50.4 million in the current year-to-date from $45.9 million in the prior-year year-to-date. Higher volumes resulted from increased project demand in the U.S. and from higher coating volumes for distributors in Canada.

Gross margin decreased to 10% of net sales in the current year-to-date from 11% of net sales in the prior-year year-to-date due to changes in the product mix.

Selling and general and administrative expenses combined decreased by $1.2 million to $6.2 million in the current year-to-date from $7.4 million in the prior-year year-to-date. The prior-year year-to-date expenses included one-time legal settlement expenses of $0.8 million and the current year expenses include $0.4 million in exchange rate losses realized on intercompany loans extended to a foreign subsidiary, recorded in general and administrative expenses during the first quarter of 2017. Realigning support and governance activities between Corporate and the Piping Systems resulted in a benefit of $0.4 million in Piping Systems in comparison to prior-year year-to-date, with the offsetting effect in Corporate general and administrative expenses.

Corporate

Current quarter vs. prior-year quarter

Corporate operating expenses include general and administrative expenses that are not allocated to the segment. General and administrative expenses increased to $2.2 million in the current quarter from $1.5 million in the prior-year quarter. This increase was related to $0.4 million of additional professional service expenses related to Middle East executive management transition and operations in addition to $0.2 million of additional expenses reported in Corporate after realigning support and governance activities between Corporate and the Piping Systems. The prior-year quarter was affected by a gain of $ 0.4 million on the sale of its former corporate headquarters.

Net interest expense increased to $157 thousand in the current quarter from $97 thousand in the prior-year quarter due to higher borrowings, both domestic and foreign.

Year-to-date vs. prior-year year-to-date

General and administrative expenses increased to $4.5 million in the current year-to-date from $4.4 million in the prior-year year-to-date. This increase was related to $0.4 million of additional professional service expenses related to Middle East executive management transition and operations in addition to $0.4 million of additional expenses reported in Corporate after realigning support and governance activities between Corporate and the Piping Systems. In the prior-year year-to-date, the Company reported a net gain of $0.3 million on the sale of its former corporate headquarters and $0.2 million of executive incentive reductions.

Net interest expense decreased to $314 thousand in the current year-to-date from $323 thousand in the prior-year year-to-date due to lower borrowings, both domestic and foreign, in the first quarter of 2017.

Consolidated results

Current quarter vs. prior-year quarter

The pretax loss from continuing operations for the current quarter remained level at $2.3 million due to:


•	increased volume from distributors in Canada;


•	increased sales in the Middle East;


•	the prior-year quarter included a one-time $0.8 million lawsuit settlement; and


•	increased professional services fees.

Year-to-date vs. prior-year year-to-date

The pretax loss from continuing operations was $6.2 million year-to-date versus $8.7 million in the prior-year year-to-date. The contributing factors were:


•	increased volume from distributors in Canada;


•	the prior-year year-to-date included a non-cash loss of $1.6 million from the consolidation of the joint venture;


•	the prior-year year-to-date included a one-time $0.8 million lawsuit settlement; and


•	increased professional services fees.

Income taxes

The Company's ETR from continuing operations for the current quarter and year-to-date was 24.9% and 16.8% , respectively, compared to 47.1% and 15.3% during the respective prior-year periods. The change in the ETR from the prior year to the current year was mainly due to the change in foreign income and loss activities. The Company remains in a domestic net operating loss carryforward position. For additional information, see "Notes to Consolidated Financial Statements, Note 5 Income taxes".

Other

At July 31, 2017 , one customer accounted for 20% of accounts receivable. Two customers accounted for 33% of accounts receivable at January 31, 2017 .

Liquidity and capital resources

Cash, cash equivalents and restricted cash as of July 31, 2017 were $9.4 million compared to $8.7 million on January 31, 2017 . On July 31, 2017 , $0.2 million was held in the U.S., and $9.2 million was held at the foreign subsidiaries. The Company's working capital was $24.8 million on July 31, 2017 compared to $27.8 million on January 31, 2017 . Of the working capital components, accounts receivable decreased $4.7 million as a result of collections from higher sales in previous quarters, and inventory increased $2.5 million in preparation for fulfilling an increased backlog of orders. Net cash used in operating activities during the first six months of 2017 was $2.8 million compared to $0.9 million during the first six months of 2016 .

Foreign earnings in the Middle East are considered to be indefinitely reinvested outside the U.S. The Company has not provided U.S. Federal tax on unremitted earnings of its Middle East subsidiaries. The Company does not believe that it will be necessary to repatriate investments from these subsidiaries. The $9.3 million cash held at the foreign subsidiaries are designated for working capital expansion and other operational investments outside the U.S. Also, some foreign credit arrangement covenants require a minimum tangible net worth to be maintained overseas, including intercompany subordinated debt.

Net cash used in investing activities for the six months ended July 31, 2017 was $1.4 million .

Debt totaled $16.3 million on July 31, 2017 , a net increase of $4.6 million compared to the beginning of the current fiscal year. For additional information, see "Notes to Consolidated Financial Statements, Note 11 Debt". Net cash provided by financing activities was $4.3 million for the six months ended July 31, 2017 .

On September 24, 2014, the Company entered into the Credit Agreement. Under the terms of the Credit Agreement, which matures on September 24, 2018 , the Company can borrow up to a combined $15.0 million in the

U.S. and Canada, subject to borrowing base availability from secured domestic and certain Canadian assets, such as accounts receivable and inventory, and other requirements, under a revolving line of credit. The Credit Agreement covenants restrict debt, liens, share repurchases and investments, and require achieving a minimum fixed charge coverage ratio with respective performance metrics as defined by the Credit Agreement if a minimum availability is not met . On July 31, 2017 , the Company was in compliance with all covenants under the Credit Agreement. The North American revolving line balances as of July 31, 2017 and January 31, 2017 were included as current liabilities in the consolidated balance sheets, because the Credit Agreement has a subjective acceleration clause.

Revolving lines foreign . The Company also had credit arrangements used by its Middle Eastern subsidiaries. These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends. On July 31, 2017 , the Company was in compliance with the covenants under the credit arrangements. On July 31, 2017 , interest rates were based on the Emirates Inter Bank Offered Rate (EIBOR) plus 3.5% per annum, with a minimum interest rate of 4.5% per annum. On July 31, 2017, the Company's interest rates ranged from 5.0% to 6.5%, and the Company could borrow $23.0 million under these credit arrangements. On July 31, 2017 , $7.5 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. As there were no borrowings under these credit arrangements, an additional $15.5 million remained unused. The foreign revolving lines balances as of January 31, 2017 were included as current maturities of long-term debt in the consolidated balance sheets.

On May 5, 2017, Piping Systems obtained two capital leases for a total of 0.94 million CAD (approximately $0.7 million USD at the prevailing exchange rate on the transaction date) to finance vehicle equipment. The interest rate for these capital leases is 7.8% per annum with monthly principal and interest payments of $9 thousand, and these leases mature on April 30, 2021.

The Company believes its current cash and cash flow from operations, together with borrowing capacity under the revolving credit facilities, will be sufficient to fund anticipated operations, working capital and capital spending needs for at least the next 12 months.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies are described in Item 7. MD&A and in the Notes to the Consolidated Financial Statements for the year ended January 31, 2017 contained in the Company's most recent Annual Report on Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of critical accounting policies may require management to make assumptions, judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

Item 4. Controls and Procedures

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of July 31, 2017 . Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of July 31, 2017 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. This determination was based on the matters discussed below under Changes in Internal Control over Financial Reporting.

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

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

An error was identified during the preparation and review of the current quarter financial statements related to stock-based compensation cost. The material weakness in internal control over financial reporting resulted from the lack of technical accounting knowledge. Specifically, we did not have adequate controls in place to properly account for stock-based compensation cost, because the stock-based compensation had been reversed for vested equity awards that expired, terminated or were cancelled unexercised. The error was corrected, and the financial statements presented properly reflect these adjustments as an entry to additional paid in capital.

This material weakness did not result in any material adjustments to the Registrant's financial statements, notes thereto, or other disclosures in this Quarterly Report on Form 10-Q.

Other than the material weakness noted above, there was no change in internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

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


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


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


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

•

Starting with the third quarter of 2017, implement a catalog of key accounting rules that have been applied during the quarter. In the reviews of any major journal entries for non-standard operational accounting matters, this catalog will be used as a checklist to validate that the required accounting treatment is applied and disclosures are made accordingly. Management will evaluate whether the accounting treatment follows the current rules in the catalog and will decide whether outside firm expertise is warranted in such a review; and


•	Management will validate and update the catalog quarterly for any changes resulting from changed or newly pronounced accounting rules.

Management will monitor the remediation progress of this material weakness against the revised procedures that have been implemented.

We anticipate the actions described above and resulting improvements in controls will strengthen the Company's processes, procedures and controls related to recording stock-based compensation cost and will address the related material weakness that was identified as of July 31, 2017 . However, the material weakness cannot be remediated fully until the remediation processes have been in operation for a period of time and successfully tested.

PART II OTHER INFORMATION

Item 6. Exhibits



10.1	2017 Omnibus Stock Incentive Plan as Amended June 13, 2017
31.1	Rule 13a - 14(a)/15d - 14(a) Certifications (1) Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Rule 13a - 14(a)/15d - 14(a) Certifications (2) Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Section 1350 Certifications (Chief Executive Officer and Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
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

SIGNATURES

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

Perma-Pipe International Holdings, Inc.



Date:	September 19, 2017	/s/ David J. Mansfield
		David J. Mansfield
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	September 19, 2017	/s/ Karl J. Schmidt
		Karl J. Schmidt
		Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 10.1

Perma-Pipe International Holdings, Inc.

2017 OMNIBUS STOCK INCENTIVE PLAN

AS AMENDED JUNE 13, 2017


1.	Establishment, Purpose and Types of Awards

Perma-Pipe International Holdings, Inc., a Delaware corporation (the " Company" ), hereby establishes the 2017 OMNIBUS STOCK INCENTIVE PLAN (the " Plan" ). The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing key people with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain and reward the best-available personnel.

The Plan permits the granting of stock options (including incentive stock options qualifying under Code section 422 and nonstatutory stock options), stock appreciation rights, restricted or unrestricted stock awards, restricted stock units, performance awards, deferred stock awards, other stock-based awards, or any combination of the foregoing.


2.	Definitions

Under this Plan, except where the context otherwise indicates, the following definitions apply:

(a) " Administrator" means the Board and/or the committee(s) or officer(s) appointed by the Board that have authority to administer the Plan as provided in Section 3 hereof.

(b) " Affiliate" means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, " control" shall mean ownership of 25% or more of the total combined voting power or value of all classes of stock or interests of the entity, or the power to direct the management and policies of the entity, by contract or otherwise.

(c) " Award" means any stock option, stock appreciation right, stock award, restricted stock unit award, performance award, or other stock-based award.

(d) " Board" means the Board of Directors of the Company.

(e) " Change in Control" means: a (i) Change in Ownership of the Company, (ii) Change in Effective Control of the Company, or (iii) Change in the Ownership of Assets of the Company, as described herein and construed in accordance with Code section 409A.

i. A Change in Ownership of the Company shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire, ownership of the capital stock of the Company that, together with the stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the capital stock of the Company. An increase in the percentage of capital stock owned by any one Person, or Persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock.

ii. A Change in Effective Control of the Company shall occur on the date either (A) a majority of members of the Company's Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company's Board before the date of the appointment or election, or (B) any one Person, or Persons Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company.

Exhibit 10.1

i. A Change in the Ownership of Assets of the Company shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during the 12- month period ending on the date of the most recent acquisition by such Person or Persons), assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

The following rules of construction apply in interpreting the definition of Change in Control:

(A) A Person means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by the Company and by entities controlled by the Company or an underwriter of the capital stock of the Company in a registered public offering.

(B) Persons will be considered to be Persons Acting as a Group (or Group) if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a Person owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such stockholder is considered to be acting as a Group with other stockholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time or purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

(D) A Change in Control shall not include a transfer to a related person as described in Code section 409A or a public offering of capital stock of the Company.

(E) For purposes of this Section 2(e), Code section 318(a) applies to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §1.83-3(b) and (j)), the stock underlying the option is not treated as owned by the individual who holds the option.

(f) " Code" means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.


(g)	" Common Stock" means shares of common stock of the Company, par value of ($0.01) per share

(h)

" Dividend Equivalents" means, with respect to Shares subject to an Award, a right to be paid an amount equal to the dividends declared and paid on an equal number of outstanding Shares. Any dividend equivalents shall be distributed in Cash to the Participant only if, when and to the extent such Award vests . The value of dividends and other distributions payable with respect to Awards that do not vest shall be forfeited .

(i)

" Fair Market Value" means the fair market value per share of the common stock of this Corporation shall mean, with respect to a share of the Corporation's common stock for any purpose on a particular date, the value determined by the Board of Directors of the Corporation in good faith. However, if the Corporation's common stock is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and listed for trading on a national exchange or market, "fair market value" shall mean, as applicable on the relevant date, (i) either the closing price, the average of the high and low sale price, the last sale, or the average of the high bid and

Exhibit 10.1

low asked prices on the relevant date quoted on or by the New York Stock Exchange, the NASDAQ Stock Market, the OTC Markets Group, Inc. or a comparable service as determined in the discretion of the Corporation's Board of Directors; or (ii) if the common stock is not quoted by any of the above, the average of the closing bid and asked prices on the relevant date furnished by a professional market maker for the common stock, or by such other source, selected by the Board of Directors of the Corporation. If no public trading of the common stock occurs on the relevant date, then fair market value shall be determined as of the next preceding date on which trading of the common stock occurred. For all purposes under this Plan, the term "relevant date" as used in this paragraph shall mean either the date as of which fair market value is to be determined or the next preceding date on which public trading of the common stock occurs, as determined in the discretion of the Corporation's Board of Directors; or (iii) if the Common Stock is neither listed or admitted to trading on a national securities exchange or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator in good faith by the reasonable application of a reasonable valuation method.


(j)	" Grant Agreement " means a written document, including an electronic writing acceptable to the Administrator, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.

(k)

" Performance Measures" mean criteria established by the Administrator which may include any of the following, as it may apply to an individual, one or more business units, divisions or subsidiaries, or on a Company-wide basis, and in either absolute terms or relative to the performance of one or more comparable companies or an index covering multiple companies: revenue; earnings before interest, taxes, depreciation and amortization (EBITDA); operating income; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings per share; price-to-earnings ratio; return on equity; return on invested capital; return on assets; growth in assets; share price performance; economic value added; total stockholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; relative performance to a group of companies comparable to the Company, and strategic business criteria consisting of one or more objectives based on the Company's meeting specified goals relating to revenue, market penetration, business expansion, costs or acquisitions or divestitures.


3.	Administration

(a) Administration of the Plan. The Plan shall be administered by the Board. The Board may also appoint a committee or committees of the Board to administer the Plan from time to time. To the extent allowed by applicable state law, the Board by resolution may authorize an officer or officers to grant Awards to other officers and employees of the Company and its Affiliates.

(b) Powers of the Administrator . The Administrator shall have all the powers vested in it by the terms of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards.

The Administrator shall have full power and authority to take all other actions necessary or desirable to carry out the purpose and intent of the Plan, including, but not limited to, the authority to: (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii) determine the number of shares to be covered by or used for reference purposes for each Award; (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Administrator shall deem appropriate; (v) modify, amend, extend or renew outstanding Awards, provided however, that, except as provided in Section 6 or 7(d) of the Plan, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the holder; (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, including, but not limited to, any restriction or condition with respect to the vesting or exercisability of an Award following termination of any

Exhibit 10.1

grantee's employment or other relationship with the Company; provided, however, that no such waiver or acceleration of lapse restrictions shall be made with respect to a performance-based stock award granted to an executive officer of the Company if such waiver or acceleration is inconsistent with Code section 162(m); (vii) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid with respect to a performance period; and (viii) for any purpose, including but not limited to, qualifying for preferred tax treatment under foreign tax laws or otherwise complying with the regulatory requirements of local or foreign jurisdictions, to establish, amend, modify, administer or terminate and prescribe, amend and rescind rules and regulations relating to such sub-plans.

The Administrator shall have full power and authority to administer, construe and interpret the Plan, Grant Agreements and all other documents relevant to the Plan and Awards issued thereunder, to establish, amend, rescind and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable, and to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Administrator shall deem it desirable to carry it into effect.

(c) Non-Uniform Determinations . The Administrator's determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards, and the Grant Agreements evidencing such Awards, and the ramifications of a Change in Control upon outstanding Awards) need not be uniform and may be made by the Administrator selectively among Awards or persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

(d) Limited Liability. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder.

(e) Indemnification . To the maximum extent permitted by law and by the Company's charter and by-laws, the members of the Administrator shall be indemnified by the Company in respect of all their activities under the Plan.

(f) Effect of Administrator's Decision . All actions taken and decisions and determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator's sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any participants in the Plan and any other employee, consultant, or director of the Company, and their respective successors in interest.

(g) Repricing . Except in connection with a corporate transaction involving the company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding awards may not be amended to reduce the exercise price of outstanding Options or SARs or cancel outstanding Options or SARS in exchange for cash, other awards or Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs without stockholder approval.


4.	Shares Available for the Plan; Maximum Awards

Subject to adjustments as provided in Section 7(d) of the Plan, the shares of Common Stock that may be issued with respect to Awards granted under the Plan shall not exceed an aggregate of 600,000 shares of Common Stock. In no event shall more than 100,000 shares be issued pursuant to incentive stock options intended to qualify under Code section 422. The Company shall reserve such number of shares for Awards under the Plan, subject to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable, is settled in cash without delivery of shares of Common Stock, or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or if any shares of Common Stock are repurchased by or surrendered to the Company in connection with any Award (whether or not such surrendered shares were acquired pursuant to any Award), or if any shares are withheld by the Company,

Exhibit 10.1

the shares subject to such Award and the repurchased, surrendered and withheld shares shall thereafter be available for further Awards under the Plan; provided, however, that any such shares that are surrendered to or repurchased or withheld by the Company in connection with any Award or that are otherwise forfeited after issuance shall not be available for purchase pursuant to incentive stock options intended to qualify under Code section 422.

Subject to adjustments as provided in Section 7(d) of the Plan: (a) the maximum number of shares of Common Stock subject to stock option grants that may be granted during any one fiscal year of the Company to any one individual under this Plan shall be limited to 50,000 shares and (b) the maximum number of shares of Common Stock subject to other Awards that may be granted during any one fiscal year to any one individual under the 2017 Plan shall be limited to 100,000 shares. Such per-individual limit shall not be adjusted to effect a restoration of shares of Common Stock with respect to which the related Award is terminated, surrendered or canceled. The aggregate grant date fair value of shares of Common Stock that may be granted during any fiscal year of the Company to any non-employee director shall not exceed $250,000 .


5.	Participation

Participation in the Plan shall be open to all employees, officers, and directors of, and other individuals providing bona fide services to or for, the Company, or of any Affiliate of the Company, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to individuals in connection with hiring, recruiting or otherwise, prior to the date the individual first performs services for the Company or an Affiliate, provided that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.


6.	Awards

The Administrator, in its sole discretion, establishes the terms of all Awards granted under the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to outstanding Awards. All Awards are subject to the terms and conditions provided in the Grant Agreement.

(a) Stock Options . The Administrator may from time to time grant to eligible participants Awards of incentive stock options as that term is defined in Code section 422 or nonstatutory stock options; provided, however, that Awards of incentive stock options shall be limited to employees of the Company or of any current or hereafter existing " parent corporation" or " subsidiary corporation ," as defined in Code sections 424(e) and (f), respectively, of the Company and any other individuals who are eligible to receive incentive stock options under the provisions of Code section 422. Options must have an exercise price at least equal to Fair Market Value as of the date of grant and may not have a term in excess of ten years' duration. No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option.

(b) Stock Appreciation Rights. The Administrator may from time to time grant to eligible participants Awards of Stock Appreciation Rights (" SAR" ). An SAR entitles the grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. The base price per share specified in the Grant Agreement shall not be less than the lower of the Fair Market Value on the grant date or the exercise price of any tandem stock option Award to which the SAR is related. No SAR shall have a term longer than ten years' duration. Payment by the Company of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator

Exhibit 10.1

shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.


(c)	Stock Awards.

(i) The Administrator may from time to time grant Awards to eligible participants in such amounts, on such terms and conditions including restricted stock and deferred stock awards, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. An Award may be denominated in Common Stock or other securities, stock- equivalent units or restricted stock units, securities or debentures convertible into Common Stock, or any combination of the foregoing and may be paid in Common Stock or other securities, in cash, or in a combination of Common Stock or other securities and cash, all as determined in the sole discretion of the Administrator.

(ii) The Administrator may grant Awards in a manner constituting "qualified performance-based compensation" within the meaning of Code section 162(m). The grant of, or lapse of restrictions with respect to, such performance-based Awards shall be based upon one or more Performance Measures and objective performance targets to be attained relative to those Performance Measures, all as determined by the Administrator. Performance targets may include minimum, maximum, intermediate and target levels of performance, with the size of the performance-based stock award or the lapse of restrictions with respect thereto based on the level attained. A performance target may be stated as an absolute value or as a value determined relative to prior performance, one or more indices, budget, one or more peer group companies, any other standard selected by the Administrator, or any combination thereof. The Administrator shall be authorized to make adjustments in the method of calculating attainment of Performance Measures and performance targets in recognition of: (A) extraordinary or non-recurring items; (B) changes in tax laws; (C) changes in generally accepted accounting principles or changes in accounting policies; (D) charges related to restructured or discontinued operations; (E) restatement of prior period financial results; and (F) any other unusual, non-recurring gain or loss that is separately identified and quantified in the Company's financial statements; provided that the Administrator's decision as to whether such adjustments will be made with respect to any Covered Employee, within the meaning of Code section 162(m), is determined when the performance targets are established for the applicable performance period. Notwithstanding the foregoing, the Administrator may, at its sole discretion, modify the performance results upon which Awards are based under the Plan to offset any unintended results arising from events not anticipated when the Performance Measures and performance targets were established; provided, that such modifications may be made with respect to an Award granted to any Covered Employee, within the meaning of Code section 162(m), only to the extent permitted by Code section 162(m) if the Award was intended to constitute "qualified performance-based compensation" within the meaning of Code section 162(m). Notwithstanding anything in the Plan to the contrary, the Administrator is not authorized to waive or accelerate the lapse of restrictions on a performance-based stock award granted to any Covered Employee, within the meaning of Code section 162(m) except upon death, disability or a change of ownership or control of the Company. In the event that a Change in Control occurs after a performance-based stock award has been granted but before completion of the applicable performance period, a pro rata portion of such Award shall become payable (or a pro rata portion of the lapse restrictions shall lapse, as applicable) as of the date of the Change in Control to the extent otherwise earned on the basis of achievement of the pro rata portion of the Performance Measures and performance targets relating to the portion of the performance period completed as of the date of the Change in Control.


7.	Limitation on Dividends and Dividend Equivalents

Notwithstanding anything in this Plan to the contrary, no dividends or dividend equivalents shall be paid with respect to unvested Awards, and any such dividends or dividend equivalents, if applicable shall be accumulated or reinvested and shall be paid only at such time as the Award's applicable vesting conditions are met.

Exhibit 10.1


8.	Miscellaneous

(a) Withholding of Taxes . Grantees and holders of Awards shall pay to the Company or its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company or its Affiliate may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the grantee or holder of an Award. In the event that payment to the Company or its Affiliate of such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair Market Value on the applicable date for such purposes and shall not exceed in amount the minimum statutory tax withholding obligation.

(b) Loans . To the extent otherwise permitted by law, the Company or its Affiliate may make or guarantee loans to grantees to assist grantees in exercising Awards and satisfying any withholding tax obligations.

(c) Transferability . Except as otherwise determined by the Administrator, and in any event in the case of an incentive stock option or a stock appreciation right granted with respect to an incentive stock option, no Award granted under the Plan shall be transferable by a grantee otherwise than by will or the laws of descent and distribution. Unless otherwise determined by the Administrator in accord with the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime of the grantee, only by the grantee or, during the period the grantee is under a legal disability, by the grantee's guardian or legal representative.

(d) Adjustments for Corporate Transactions and Other Events .

(i) Stock Dividend, Stock Split and Reverse Stock Split. In the event of a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, (A) the maximum number of shares of such Common Stock as to which Awards may be granted under this Plan and the maximum number of shares with respect to which Awards may be granted during any one fiscal year of the Company to any individual as provided in Section 4 of the Plan, and (B) the number of shares covered by and the exercise price and other terms of outstanding Awards, shall, without further action of the Board, be adjusted to reflect such event. The Administrator may make adjustments, in its discretion, to address the treatment of fractional shares and fractional cents that arise with respect to outstanding Awards as a result of the stock dividend, stock split or reverse stock split.

(ii) Non-Change in Control Transactions. Except with respect to the transactions set forth in Section 7(d)(i), in the event of any change affecting the Common Stock, the Company or its capitalization, by reason of a spin-off, split-up, dividend, recapitalization, merger, consolidation or share exchange, other than any such change that is part of a transaction resulting in a Change in Control of the Company, the Administrator, in its sole and absolute discretion and without the consent of the holders of the Awards, may make (A) appropriate adjustments to the maximum number and kind of shares reserved for issuance or with respect to which Awards may be granted under the Plan, in the aggregate and with respect to any individual during any one fiscal year of the Company as provided in Section 4 of the Plan; and (B) any adjustments in outstanding Awards, including but not limited to modifying the number, kind and price of securities subject to Awards, as the Administrator determines to be appropriate and equitable.

(iii) Change in Control Transactions. In the event of any transaction resulting in a Change in Control of the Company, outstanding stock options and other Awards that are payable in or convertible into Common Stock under this Plan will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the substitution of equivalent awards, as determined in the sole and absolute discretion of the Administrator, of, the surviving or successor entity or a parent thereof. In the event of any termination pursuant to this Section 7(d)(iii), (A) the outstanding stock options and other Awards that will terminate upon the effective time of the Change in Control shall become fully vested and exercisable immediately before the effective time of the Change in Control, and (B) the holders of stock options and other Awards under the

Exhibit 10.1

Plan will be permitted, immediately before the Change in Control, to exercise or convert all portions of such stock options or other Awards under the Plan that are then exercisable or convertible or which become exercisable or convertible upon or prior to the effective time of the Change in Control.

(iv) Unusual or Nonrecurring Events. The Administrator is authorized to make, in its discretion and without the consent of holders of Awards, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan; provided that no such adjustment shall be made in contravention of Code section 409A with respect to any Award that constitutes a deferred compensation arrangement within the meaning of Code section 409A.

(e) Substitution of Awards in Mergers and Acquisitions. Awards may be granted under the Plan from time to time in substitution for awards held by employees, officers, consultants or directors of entities who become or are about to become employees, officers, consultants or directors of the Company or an Affiliate as the result of a merger or consolidation of the employing entity with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets or stock of the employing entity. The terms and conditions of any substitute Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the substitute Awards to the provisions of the awards for which they are substituted.

(f) Termination, Amendment and Modification of the Plan. Subject to any approval of the stockholders of the Company which may be required by applicable law or regulation, the Board may terminate, amend or modify the Plan or any portion thereof at any time. Except as otherwise determined by the Board, termination of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

(g) Non-Guarantee of Employment or Service . Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Company or shall interfere in any way with the right of the Company to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual's interests under the Plan.

(h) Compliance with Securities Laws; Listing and Registration . If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or foreign securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Common Stock under the Plan would or may violate the rules of the national exchange on which the shares are then listed for trade, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery would not violate such rules. The Company shall have no obligation to effect any registration or qualification of the Common Stock under Federal, state or foreign laws.

The Company may require that a grantee, as a condition to exercise of an Award, and as a condition to the delivery of any share certificate, make such written representations (including representations to the effect that such person will not dispose of the Common Stock so acquired in violation of Federal, state or foreign securities laws) and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable Federal, state or foreign securities laws. The stock certificates for any shares of Common Stock issued pursuant to this Plan may bear a legend restricting transferability of the shares of Common Stock unless such shares are registered or an

Exhibit 10.1

exemption from registration is available under the Securities Act of 1933, as amended, and applicable state or foreign securities laws.

(i) No Trust or Fund Created . Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

(j) Governing Law . The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles.

(k) 409A Savings Clause . The Plan and all Awards granted hereunder are intended to comply with, or otherwise be exempt from, Code section 409A. The Plan and all Awards granted under the Plan shall be administered, interpreted, and construed in a manner consistent with Code section 409A to the extent necessary to avoid the imposition of additional taxes under Code section 409A(a)(1)(B). Should any provision of the Plan, any Award Agreement, or any other agreement or arrangement contemplated by the Plan be found not to comply with, or otherwise be exempt from, the provisions of Code section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Administrator, and without the consent of the holder of the Award, in such manner as the Administrator determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code section 409A. Notwithstanding anything in the Plan to the contrary, in no event shall the Administrator exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4) or any successor provision. With respect to any Award that is subject to the requirements of Code section 409A: (1) no payment shall be made in connection with a Change in Control unless such event also meets the requirements of Treasury Regulation §1.409A-3(i)(5); and (2) no payment shall be made in connection with a termination of employment or service until such event also constitutes a separation from service pursuant to Treasury Regulation §1.409A-1(h) and, to the extent applicable with respect to a specified employee, the six month delay requirement of Treasury Regulation §1.409A-3(i)(2) has been met. To the extent not otherwise specified in an Award, if payment of an Award is subject to the execution of a Release, the Participant shall have a period of no more than 45 days following the payment event to execute, without revocation, any release and to the extent such 45 day period would cross- over into a later tax year, the amount will be paid in such later tax year.

(l) Effective Date; Termination Date . The Plan is effective as of the date on which the Plan is adopted by the Board, subject to approval of the stockholders within twelve months after such date. No Award shall be granted under the Plan after the close of business on the day immediately preceding the third anniversary of the effective date of the Plan, or if earlier, the third anniversary of the date this Plan is approved by the stockholders. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards.

PLAN APPROVAL

Date Approved by the Board: June 13, 2017

Date Approved by the Stockholders: June 22,2017

Exhibit 31.1

I, David J. Mansfield, certify that:


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


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


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


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


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


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


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


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


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


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


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


Date:	September 19, 2017

/ s/ David J. Mansfield

David J. Mansfield

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

I, Karl J. Schmidt, certify that:


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


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


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


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


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


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


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


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


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


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


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


Date:	September 19, 2017

/ s/ Karl J. Schmidt

Karl J. Schmidt

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

Exhibit 32

Certification of Principal Executive Officers

Pursuant to 18 U.S.C. 1350

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

The undersigned in their capacities as Chief Executive Officer and Chief Financial Officer of Perma-Pipe International Holdings, Inc.. (the “Registrant’), certify that, to the best of their knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended July 31, 2017 of the Registrant, (the “Report”):

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

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

/ s/ David J. Mansfield

David J. Mansfield

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Karl J. Schmidt

Karl J. Schmidt

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

September 19, 2017

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