Note 15 - Noncontrolling Interest |
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Apr. 30, 2026 | ||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||
| Noncontrolling Interest Disclosure [Text Block] |
Note 15 - Noncontrolling interest
On June 1, 2023, the Company closed on its formation of a joint venture (the "JV", and the agreement governing the JV, the "JV Agreement") with Gulf Insulation Group ("GIG"), a leading provider of pre-insulated piping systems and pipe fabrication, in which the Company acquired a 60% controlling financial interest and contributed assets consisting of a building and equipment. The JV is a limited liability company named Perma-Pipe Gulf Arabia Industry LLC and is a closed joint stock company established under the laws of the Kingdom of Saudi Arabia. The JV's capital is comprised of ordinary shares with 60% owned by the Company and the remaining 40% owned by GIG. This collaborative business arrangement results in expanding the Company's market presence in Saudi Arabia, Kuwait, and Bahrain. The primary business activities of the JV include the manufacture and sale of pre-insulated piping systems and pipe coating services.
The balance sheets and operating activities of this investment are included in the Company's Condensed Consolidated Financial Statements. As of April 30, 2026, the carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $42.3 million and $10.3 million, respectively, and $44.2 million and $18.6 million, respectively, as of January 31, 2026.
The Company adjusts net income in the Condensed Consolidated Statements of Operations to exclude the proportionate share of results that is attributable to the non-controlling interest. Additionally, the Company presents the proportionate share that is attributable to the non-controlling interest as temporary equity within the Condensed Consolidated Balance Sheets. This temporary equity presentation is the result of the non-controlling interest being subject to certain redemption rights that are not entirely within the Company's control. Due to these redemption rights, at each balance sheet date, the Company is required to adjust the carrying value attributable to the non-controlling interest to fair value, which is limited to its original carrying value at the formation of the business arrangement. Adjustments made to reflect the change in the value of the redeemable non-controlling interest are offset against permanent equity within the Company's Condensed Consolidated Balance Sheets.
Net income attributable to GIG was $0.8 million and $0.9 million for the three months ended April 30, 2026 and 2025, respectively. The proportionate share of net income was accounted for as a reduction in deriving net income attributable to common stock in the Company's Condensed Consolidated Statements of Operations.
The following table summarizes 2026 activity for the redeemable non-controlling interest:
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