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Note 10 - Debt
 9 Months Ended
Oct. 31, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 10 - Debt

 

Debt consisted of the following:

 

  

October 31, 2025

  

January 31, 2025

 

Revolving credit agreement - North America, due September 2026

 $10,289  $6,765 

Revolving credit agreements - United Arab Emirates, due November 2025

  1,112   465 

Revolving credit agreement - Saudi Arabia, due April 2026

  2,042   1,545 

Revolving credit agreement - Egypt, due November 2025

  258   - 

Finance obligation - buildings and land, due April 2036

  8,853   9,023 

Mortgage payable, due December 2042

  3,921   3,956 

Loan payable to GIG

  2,753   2,753 

Finance leases

  631   75 

Less: debt issuance costs

  (115)  (116)

Total debt

  29,744   24,466 

Less: current maturities of long-term debt

  17,083   9,246 

Long-term debt, net of current maturities

 $12,661  $15,220 

 

Revolving lines - North America. On September 20, 2018, and as amended, extended, or renewed subsequently thereafter, the Company and certain of its U.S. and Canadian subsidiaries (collectively the “North American Loan Parties”) entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association ("PNC"), as administrative agent and lender, providing for a three-year $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Senior Credit Facility”). The Credit Agreement with PNC was subsequently extended on September 17, 2021, providing for a new five-year $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the "Renewed Senior Credit Facility"). The Renewed Senior Credit Facility matures on September 20, 2026. 

 

As of October 31, 2025, the Company had borrowed an aggregate of $10.3 million at a rate of 8.5% and had $3.3 million available under the Renewed Senior Credit Facility. As of January 31, 2025, the Company had borrowed an aggregate of $6.8 million and had $3.7 million available under the Renewed Senior Credit Facility.  

 

The Company was in compliance with respect to the covenants under the Credit Agreement as of  October 31, 2025.

 

Finance obligation - buildings and land. On April 14, 2021, the Company entered into a purchase and sale agreement, pursuant to which the Company sold its land and buildings in Lebanon, Tennessee (the "Property") for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale, the Company paid off the approximately $0.9 million mortgage note on the Property to its lender.  The Company used the remaining proceeds to repay its borrowings under the Senior Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into a fifteen-year lease agreement (the “Lease Agreement”), whereby the Company leases back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option.  
 
In accordance with ASC 842, Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially all of the fair value of the underlying assets. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.3 million is recognized in current maturities of long-term debt and the long-term portion of $8.6 million is recognized in long-term finance obligation on the Company's consolidated balance sheets as of October 31, 2025 . The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.
 

 

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

 

United Arab Emirates
 
The Company has a revolving line for 8.0 million U.A.E. Dirhams (approximately $2.2 million at October 31, 2025) from a bank in the U.A.E. As of October 31, 2025, the facility has an interest rate of approximately  7.6% and expired in November 2025, of which, the Company does not intend to renew and extend this credit arrangement. The Company had no borrowings outstanding under this credit facility as of October 31, 2025, and $0.4 million as of January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. As of  October 31, 2025, this revolving line has been cancelled and there is  no further borrowing availability under this credit facility, and approximately $1.6 million of unused borrowing availability at January 31, 2025. 
 
The Company has a revolving line for 17.5  million U.A.E. Dirhams (approximately $ 4.8  million at October 31, 2025 ) from a bank in the U.A.E. As of October 31, 2025 , the facility has an interest rate of approximately  7.6%  and expired in November 2025, of which, the Company is in the process of renewing this credit arrangement with substantially the same terms and conditions and is in regular communication with the bank throughout this process ensuring the facility continues without interruption or penalty. The  Company had borrowed an aggregate of $1.1 million  as of October 31, 2025 and $0.1 million  as of January 31, 2025 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. As of  October 31, 2025 , approximately $1.9 million has been utilized in the form of a bank guarantee. The Company had unused borrowing availability of approximately $1.8 million and $2.5 million as of  October 31, 2025 and January 31, 2025 , respectively.
 
The Company has a revolving line for 47.7 million U.A.E. Dirhams (approximately $13.0 million at October 31, 2025) from a bank in the U.A.E. As of October 31, 2025, the facility has a minimum 8.0% interest rate and expires in December 2025, for which the Company intends to renew and extend this revolving credit facility. As of  October 31, 2025 and January 31, 2025 , the Company had no borrowings outstanding with respect to this credit facility. As of  October 31, 2025 approximately $6.8 million has been utilized in the form of a bank guarantee. The Company had unused borrowing availability of $6.2 million and $6.5 million as of  October 31, 2025 and January 31, 2025, respectively.

 

The Company has a guarantee for  48.6 million U.A.E. Dirhams (approximately $13.2 million at October 31, 2025) from a bank in the U.A.E. There is no interest rate on this facility, however, it earns a 1% commission. As of October 31, 2025, approximately $11.0 million has been utilized in the form of a bank guarantee, with  $2.2 million of availability remaining. Additionally, in August 2025, a line of credit was added to the agreement for 51.4 million U.A.E Dirhams (approximately $14.0 million at  October 31, 2025) which will incur an additional 0.8% commission. As of  October 31, 2025, there were no borrowings outstanding with respect to this additional line of credit, and approximately $14.0 million of unused availability. 
 

Egypt

 

In June 2021, and as renewed or amended subsequently thereafter, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $2.0  million at October 31, 2025 ). This credit arrangement is in the form of project financing, for which the line is secured by certain assets (such as accounts receivable) of the Company's Egyptian subsidiary. Among other covenants, the credit arrangement established a maximum leverage ratio allowable and restricted the Company's Egyptian subsidiary's ability to undertake any additional debt. As of October 31, 2025 , the facility has an interest rate of approximately  8.0%  and expired in November 2025, of which, the Company is in the process of renewing this credit arrangement with substantially the same terms and conditions and is in regular communication with the bank throughout this process ensuring the facility continues without interruption or penalty. As of  October 31, 2025 and  January 31, 2025, the Company had an immaterial amount outstanding with respect to this credit arrangement, which is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. Further, as of  October 31, 2025  and  January 31, 2025 , the Company had unused borrowing capacity of approximately $1.8 million and $2.0 million, respectively. 

 

Saudi Arabia

 

In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of 37.0 million Saudi Riyals (approximately $9.9 million at  October 31, 2025). This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia. The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary, and expires in April 2026. As of October 31, 2025, the facility has an interest rate of approximately 9.0%. The Company had borrowed an aggregate of $2.0 million and $1.5 million as of October 31, 2025 and January 31, 2025, respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets. The unused borrowing availability attributable to this credit arrangement at  October 31, 2025 and  January 31, 2025, was $2.5 million and $3.0 million, respectively. 

 

These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and in some cases, a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of  October 31, 2025 and  January 31, 2025, the amount of foreign subsidiary debt guaranteed by the Company was approximately $6.2 million and $4.8 million, respectively. 

 

The Company was in compliance with respect to the covenants under the credit arrangements in the U.A.E., Egypt, and Saudi Arabia as of October 31, 2025. Although certain arrangements have expired or are set to expire and the borrowings could be required to be repaid immediately by the bank, the Company is in regular communication with the bank throughout the renewal process and the arrangements have continued without interruption or penalty. On October 31, 2025, interest rates were based on (i) the Emirates Inter Bank Offered Rate plus 3.0% to 3.5% per annum for the U.A.E. credit arrangements, two of which have a minimum interest rate of 4.5% per annum; (ii) either the Central Bank of Egypt corporate loan rate plus 1.5% to 3.5% per annum or the stated interest rate in the agreements for the Egypt credit arrangements; and (iii) the Saudi Inter-Bank Offered Rate plus 3.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of October 31, 2025, the Company's interest rates ranged from 7.6% to 20.8%, with a weighted average rate of 8.0%, and the Company had facility limits totaling $56.9 million  under these credit arrangements. As of October 31, 2025, $25.0 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of October 31, 2025, the Company had borrowed $6.2 million and had an additional $28.5 million of borrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of current maturities of long-term debt in the Company's consolidated balance sheets as of October 31, 2025 and January 31, 2025.

 

In June 2023, the Company assumed a promissory note of approximately $2.8 million in connection with the formation of the joint venture with Gulf Insulation Group (see Note 15). In accordance with the promissory note, all principal is due and payable on the maturity date of April 9, 2026, with the option to prepay, in whole or in part, at any time prior to the maturity date, without premium or penalty. This amount is presented on the Company's consolidated balance sheets as a component of current maturities of long-term debt at  October 31, 2025, and as a component of long-term debt, net of current maturities at  January 31, 2025. 

 

Mortgages. On July 28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December 23, 2042. As of October 31, 2025, the remaining balance on the mortgage in Canada is approximately CAD 5.5 million (approximately $3.9 million at October 31, 2025). The interest rate is variable, and was 6.6% at October 31, 2025. The principal balance is included as a component of long-term debt, less current maturities in the Company's consolidated balance sheets and is presented net of issuance costs of $0.1 million as of October 31, 2025 and January 31, 2025.