☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-02960 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q NPK International Inc. (Exact name of registrant as specified in its charter) Delaware 72-1123385 (State o ...

THIRD QUARTER 2025 RESULTS (all comparisons versus the prior year period unless otherwise noted) Exhibit 99.1 NPK REPORTS THIRD QUARTER 2025 RESULTS Revenues increased 56% year-over-year; Company raises full-year revenue guidance to $268-$272 million; full-year Adjusted EBITDA updated to $71-$74 million THE WOODLANDS, TEXAS – October 30, 2025 – NPK International Inc. (NYSE: NPKI) ("NPK" or the "Company") today announced results for the three and nine months ended September 30, 2025. | | | | Third Quarter | ...

Market Overview - The Singapore Oilfield Services Market was valued at USD 1.55 Billion in 2024 and is projected to reach USD 2.52 Billion by 2032, with a CAGR of 6.2% from 2025 to 2032 [1][21]. Technological Advancements - Artificial intelligence is enhancing operational efficiency, safety standards, and resource utilization in the oilfield services industry, enabling predictive maintenance and advanced seismic interpretation [2][4]. - The integration of smart sensors and robotics is improving well integrity management and production optimization, leading to safer operations and reduced environmental impact [3][4]. Market Dynamics - The market is influenced by a global push towards sustainability and technological advancement, with new regulations emphasizing environmental performance and digital transformation [6][10]. - Singapore's strategic positioning as a regional energy hub, along with its robust regulatory environment, supports the growth of high-value services and technological innovation [7][8]. Key Players - Major companies in the oilfield services market include Schlumberger Limited, Halliburton Company, and Baker Hughes Company, focusing on sustainable and low-carbon solutions [11][16]. Growth Segments - The fastest-growing segments are expected to be analytical services and subsea services, driven by the need for data-driven insights and complex deepwater developments [24][28]. Future Outlook - The market outlook remains positive, with sustained energy demand and ongoing technological advancements expected to drive growth, particularly in specialized services related to digital transformation and decarbonization efforts [21][29].

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents NPK International Inc.'s financial information, including statements, notes, and management's discussion and analysis [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents NPK International Inc.'s unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive income, equity, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details NPK's financial position, presenting assets, liabilities, and stockholders' equity at June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (In thousands) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $26,012 | $17,756 | | Total current assets | $102,365 | $112,984 | | Total assets | $393,682 | $393,682 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $43,832 | $44,659 | | Total liabilities | $64,847 | $67,187 | | Total stockholders' equity | $328,835 | $326,495 | | Total liabilities and stockholders' equity | $393,682 | $393,682 | - Total assets remained constant at **$393.682 million** from December 31, 2024, to June 30, 2025[14](index=14&type=chunk) - Cash and cash equivalents increased by **$8.256 million**, while total current assets decreased by **$10.619 million**[14](index=14&type=chunk) - Total liabilities decreased by **$2.34 million**, and total stockholders' equity increased by **$2.34 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents NPK's revenues, operating income, and net income for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (In thousands, except per share data) | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $68,233 | $66,791 | $133,010 | $115,758 | | Operating income from continuing operations | $11,629 | $12,507 | $25,157 | $19,473 | | Net income | $8,678 | $8,040 | $18,681 | $15,333 | | Net income per common share - basic | $0.10 | $0.09 | $0.22 | $0.18 | | Net income per common share - diluted | $0.10 | $0.09 | $0.22 | $0.18 | - For the three months ended June 30, 2025, revenues increased by **2.16% YoY**, and net income increased by **7.94% YoY**[15](index=15&type=chunk) - For the six months ended June 30, 2025, revenues increased by **14.90% YoY**, and net income increased by **21.84% YoY**[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section details NPK's comprehensive income (loss), including net income and foreign currency adjustments, for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Comprehensive Income (Loss) (In thousands) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $8,678 | $8,040 | $18,681 | $15,333 | | Foreign currency translation adjustments | $210 | $(710) | $369 | $(3,245) | | Comprehensive income | $8,888 | $7,330 | $19,050 | $12,088 | - Comprehensive income for the three months ended June 30, 2025, increased by **21.26% YoY**, primarily due to positive foreign currency translation adjustments compared to a loss in the prior year[16](index=16&type=chunk) - For the six months ended June 30, 2025, comprehensive income increased by **57.59% YoY**, also driven by improved foreign currency translation[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in NPK's stockholders' equity, including common stock, paid-in capital, retained earnings, and treasury stock, for the periods presented Condensed Consolidated Statements of Stockholders' Equity (In thousands) | (In thousands) | Balance at March 31, 2025 | Balance at June 30, 2025 | Balance at December 31, 2024 | | :--- | :--- | :--- | :--- | | Common Stock | $1,117 | $1,117 | $1,117 | | Paid-In Capital | $634,424 | $629,952 | $633,239 | | Accumulated Other Comprehensive Loss | $(2,712) | $(2,502) | $(2,871) | | Retained Earnings (Deficit) | $(129,463) | $(120,785) | $(139,466) | | Treasury Stock | $(176,480) | $(178,947) | $(165,524) | | Total Stockholders' Equity | $326,886 | $328,835 | $326,495 | - Total stockholders' equity increased from **$326.495 million** at December 31, 2024, to **$328.835 million** at June 30, 2025, primarily driven by net income of **$18.681 million**, partially offset by treasury shares purchased at cost of **$17.212 million**[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents NPK's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (In thousands) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,268 | $39,531 | | Net cash provided by (used in) investing activities | $(811) | $(17,041) | | Net cash used in financing activities | $(21,792) | $(24,988) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $7,775 | $(3,459) | | Cash, cash equivalents, and restricted cash at end of period | $26,012 | $35,442 | - Net cash provided by operating activities decreased by **$9.263 million YoY** for the first half of 2025[18](index=18&type=chunk) - Net cash used in investing activities significantly decreased from **$17.041 million** in 2024 to **$0.811 million** in 2025, largely due to proceeds from divestitures[18](index=18&type=chunk) - Net cash used in financing activities decreased by **$3.196 million YoY**[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [Note 1 – Basis of Presentation and Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note describes NPK's business, the basis of financial statement presentation, and significant accounting policies, including recent accounting guidance - NPK International Inc. is a temporary worksite access solutions company, manufacturing, selling, and renting recyclable composite matting products and offering related services[20](index=20&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The company exited its Fluids Systems business in September 2024, with results reported as discontinued operations[20](index=20&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - New accounting guidance on income tax disclosures is effective for the year ending December 31, 2025, and disaggregation of income statement expenses will be effective for years beginning after December 15, 2026[26](index=26&type=chunk)[27](index=27&type=chunk) [Note 2 – Discontinued Operations](index=10&type=section&id=Note%202%20%E2%80%93%20Discontinued%20Operations) This note details the financial impact and status of NPK's divested Fluids Systems business, reported as discontinued operations - The sale of the Fluids Systems business was completed on September 13, 2024[28](index=28&type=chunk) - Net assets due from the Purchaser decreased from **$18.040 million** at December 31, 2024, to **$3.596 million** at June 30, 2025, primarily due to the receipt of **$15.6 million** in receivables[28](index=28&type=chunk) Income (Loss) from Discontinued Operations (In thousands) | (In thousands) | Second Quarter 2025 | Second Quarter 2024 | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $0 | $112,218 | $0 | $232,358 | | Operating income (loss) from discontinued operations | $(53) | $792 | $(448) | $5,685 | | Income (loss) from discontinued operations | $(106) | $(588) | $(478) | $2,651 | - The former Fluids Systems segment reported a net loss from discontinued operations of **$0.106 million** for Q2 2025 and **$0.478 million** for H1 2025, compared to a loss of **$0.588 million** and income of **$2.651 million** for the respective periods in 2024, reflecting the cessation of operations post-sale[33](index=33&type=chunk) [Note 3 – Earnings Per Share](index=12&type=section&id=Note%203%20%E2%80%93%20Earnings%20Per%20Share) This note provides calculations for basic and diluted earnings per common share for the periods presented Earnings Per Share (In thousands, except per share data) | (In thousands, except per share data) | Second Quarter 2025 | Second Quarter 2024 | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income per common share - basic | $0.10 | $0.09 | $0.22 | $0.18 | | Net income per common share - diluted | $0.10 | $0.09 | $0.22 | $0.18 | | Weighted average common shares outstanding - basic | 84,480 | 85,473 | 85,264 | 85,237 | | Weighted average common shares outstanding - diluted | 85,423 | 87,626 | 86,205 | 87,435 | - Basic and diluted net income per common share increased to **$0.10** for Q2 2025 (from $0.09 in Q2 2024) and to **$0.22** for H1 2025 (from $0.18 in H1 2024)[34](index=34&type=chunk) - The company excluded **732 thousand** and **518 thousand** weighted-average potential shares from diluted EPS calculations for Q2 and H1 2025, respectively, as their inclusion would have been anti-dilutive[34](index=34&type=chunk) [Note 4 – Repurchase Program](index=12&type=section&id=Note%204%20%E2%80%93%20Repurchase%20Program) This note outlines NPK's share repurchase program, including authorization, activity, and remaining capacity - The Board of Directors increased the remaining authorization under the share repurchase program to **$100.0 million** on April 30, 2025[35](index=35&type=chunk) - During the first half of 2025, the company repurchased **2.6 million shares** for **$17.0 million**[37](index=37&type=chunk) - As of June 30, 2025, **$95.0 million** remained under the program[38](index=38&type=chunk) [Note 5 – Stock-Based and Other Long-Term Incentive Compensation](index=12&type=section&id=Note%205%20%E2%80%93%20Stock-Based%20and%20Other%20Long-Term%20Incentive%20Compensation) This note describes NPK's stock-based and other long-term incentive compensation plans, including restricted stock units and awards - In Q2 2025, the Compensation Committee approved **0.6 million** restricted stock units for executive officers and key employees (vesting over three years) and **0.1 million** restricted stock awards for non-employee directors (vesting in one year)[39](index=39&type=chunk)[40](index=40&type=chunk) - Additionally, **0.4 million** performance-based restricted stock units were issued to executive officers, with payout based on relative TSR (70%) and consolidated RONCE (30%) over a three-year period[41](index=41&type=chunk) [Note 6 – Receivables](index=13&type=section&id=Note%206%20%E2%80%93%20Receivables) This note provides a breakdown of NPK's trade and other receivables, along with changes in the allowance for credit losses Receivables (In thousands) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross trade receivables | $53,722 | $46,819 | | Allowance for credit losses | $(655) | $(948) | | Net trade receivables | $53,067 | $45,871 | | Other receivables | $6,342 | $26,921 | | Total receivables, net | $60,975 | $74,841 | - Total receivables, net, decreased by **$13.866 million** from December 31, 2024, to June 30, 2025, primarily due to a **$16.879 million** decrease in other receivables, largely from amounts due from the Purchaser related to the Fluids Systems sale[43](index=43&type=chunk) Changes in Allowance for Credit Losses (In thousands) | (In thousands) | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | | Balance at beginning of period | $948 | $1,223 | | Credit loss expense | $19 | $14 | | Write-offs, net of recoveries | $(312) | $(37) | | Balance at end of period | $655 | $1,200 | [Note 7 – Inventories](index=13&type=section&id=Note%207%20%E2%80%93%20Inventories) This note details NPK's inventory composition, including raw materials and finished goods, at the reporting dates Inventories (In thousands) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $4,825 | $5,721 | | Finished goods | $6,259 | $8,938 | | Total inventories | $11,084 | $14,659 | - Total inventories decreased by **$3.575 million** from December 31, 2024, to June 30, 2025, with both raw materials and finished goods experiencing declines[45](index=45&type=chunk) [Note 8 – Financing Arrangements and Fair Value of Financial Instruments](index=14&type=section&id=Note%208%20%E2%80%93%20Financing%20Arrangements%20and%20Fair%20Value%20of%20Financial%20Instruments) This note describes NPK's debt, credit facilities, and fair value measurements of financial instruments - On June 20, 2025, NPK entered into a new U.S. senior secured revolving Credit Facility of up to **$150 million** (expandable to **$250 million**), replacing the Amended ABL Facility[47](index=47&type=chunk)[48](index=48&type=chunk)[54](index=54&type=chunk) - As of June 30, 2025, there were no outstanding borrowings and **$148.0 million** of remaining availability[47](index=47&type=chunk)[48](index=48&type=chunk)[54](index=54&type=chunk) - The Credit Facility matures on June 20, 2030, and features variable interest rates (Term SOFR or alternate base rate plus applicable margin) and a commitment fee on the unused portion[47](index=47&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) - The company was in compliance with all required ratios as of June 30, 2025[47](index=47&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) Total Debt (In thousands) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finance leases | $9,317 | $7,622 | | Other debt | $19 | $105 | | Total debt | $9,336 | $7,727 | | Less: current portion | $(3,429) | $(2,900) | | Long-term debt | $5,907 | $4,827 | [Note 9 – Income Taxes](index=15&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) This note provides information on NPK's income tax provision, effective tax rate, and the impact of recent tax legislation - The provision for income taxes from continuing operations was **$7.0 million** for the first half of 2025, with an effective tax rate of **27%**, up from **$4.4 million** and **26%** in the first half of 2024[58](index=58&type=chunk) - The recently signed One Big Beautiful Bill Act (OBBB Act) is not expected to materially impact the effective tax rate but is anticipated to provide cash flow timing benefits through accelerated tax deductions[59](index=59&type=chunk) [Note 10 – Commitments and Contingencies](index=15&type=section&id=Note%2010%20%E2%80%93%20Commitments%20and%20Contingencies) This note discloses NPK's various commitments and contingencies, including litigation and indemnifications - NPK is involved in various litigation and claims in the ordinary course of business, including indemnifications related to the Fluids Systems business sale[60](index=60&type=chunk) - Management does not expect any resulting loss, beyond accrued or insured amounts, to materially impact consolidated financial statements[60](index=60&type=chunk) [Note 11 – Supplemental Disclosures to the Statements of Cash Flows](index=16&type=section&id=Note%2011%20%E2%80%93%20Supplemental%20Disclosures%20to%20the%20Statements%20of%20Cash%20Flows) This note provides additional details on cash paid for income taxes and interest, and a reconciliation of cash, cash equivalents, and restricted cash Supplemental Cash Flow Disclosures (In thousands) | (In thousands) | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | | Cash paid for income taxes (net of refunds) | $70 | $6,945 | | Cash paid (received) for interest | $(265) | $3,307 | - Cash paid for income taxes significantly decreased from **$6.945 million** in H1 2024 to **$0.070 million** in H1 2025, with a substantial majority of 2024 payments related to the former Fluids Systems segment's international operations[62](index=62&type=chunk) - Cash received for interest in H1 2025 contrasts with cash paid for interest in H1 2024[62](index=62&type=chunk) Cash, Cash Equivalents, and Restricted Cash (In thousands) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $26,012 | $17,756 | | Restricted cash | $0 | $481 | | Total cash, cash equivalents, and restricted cash | $26,012 | $18,237 | [Note 12 – Segment Data](index=17&type=section&id=Note%2012%20%E2%80%93%20Segment%20Data) This note details NPK's reportable segments and disaggregated revenues by type and geography following the Fluids Systems sale - Following the sale of the Fluids Systems segment in September 2024, NPK now operates as a **single reportable segment**[64](index=64&type=chunk) - The Chief Executive Officer assesses performance on a consolidated basis using income from continuing operations[64](index=64&type=chunk) Disaggregated Revenues by Type (In thousands) | (In thousands) | Second Quarter 2025 | Second Quarter 2024 | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | :--- | | Rental revenues | $31,654 | $23,682 | $59,764 | $44,914 | | Service revenues | $14,658 | $12,714 | $29,941 | $26,663 | | Product sales revenues | $21,921 | $30,395 | $43,305 | $44,181 | | Total revenues | $68,233 | $66,791 | $133,010 | $115,758 | Disaggregated Revenues by Geography (In thousands) | (In thousands) | Second Quarter 2025 | Second Quarter 2024 | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | :--- | | United States | $63,320 | $63,104 | $123,995 | $108,445 | | United Kingdom | $4,913 | $3,687 | $9,015 | $7,313 | | Total revenues | $68,233 | $66,791 | $133,010 | $115,758 | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on NPK's financial condition, results of operations, liquidity, and capital resources for the second quarter and first half of 2025 [Overview](index=18&type=section&id=Overview) This section provides an overview of NPK's business, focusing on temporary worksite access solutions and the impact of the Fluids Systems divestiture - NPK International Inc. specializes in temporary worksite access solutions, including manufacturing, selling, and renting recyclable composite matting products and offering related services[67](index=67&type=chunk) - For the first half of 2025, **67%** of revenues came from rental and services, and **33%** from product sales, primarily to the power transmission sector[67](index=67&type=chunk) - The Fluids Systems business, previously a separate operating segment, was sold on September 13, 2024, and its results are now reported as discontinued operations[68](index=68&type=chunk) [2025 Priorities](index=18&type=section&id=2025%20Priorities) This section outlines NPK's strategic priorities for 2025, including organic growth, operational efficiency, and capital allocation - NPK's long-term strategy focuses on accelerating organic growth through rental business expansion (geographic, market share, adjacent offerings), pursuing strategically-aligned inorganic growth, driving operational efficiency to reduce SG&A as a percentage of revenue to mid-teens by early 2026, and enhancing return on capital through organic investment and share repurchases[69](index=69&type=chunk) - In the first half of 2025, NPK invested **$16 million** in its rental fleet, expanding it by approximately **8%**, leading to a **25% year-over-year increase** in rental and service revenues[69](index=69&type=chunk) - SG&A as a percentage of revenues improved to **19.1%** for H1 2025 from **21.0%** for H1 2024[69](index=69&type=chunk) - The company repurchased **2.6 million shares** for **$17.0 million** in H1 2025, following an increase in the repurchase program authorization to **$100.0 million** in April 2025[69](index=69&type=chunk) [Second Quarter of 2025 Compared to Second Quarter of 2024](index=19&type=section&id=Second%20Quarter%20of%202025%20Compared%20to%20Second%20Quarter%20of%202024) This section analyzes NPK's consolidated financial performance for the second quarter of 2025 compared to the same period in 2024 Consolidated Results of Operations (Second Quarter, In thousands) | (In thousands) | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $68,233 | $66,791 | $1,442 | 2 % | | Cost of revenues | $43,052 | $41,966 | $1,086 | 3 % | | Selling, general and administrative expenses | $13,657 | $12,750 | $907 | 7 % | | Operating income from continuing operations | $11,629 | $12,507 | $(878) | (7)% | | Net income | $8,678 | $8,040 | $638 | NM | - Revenues increased **2%** to **$68.2 million**, driven by a **27% increase** in rental and service revenues, partially offset by a **28% decrease** in product sales[71](index=71&type=chunk)[72](index=72&type=chunk) - Operating income from continuing operations decreased by **7%** due to higher SG&A expenses and elevated cross-rent costs[74](index=74&type=chunk) - Gross profit margin slightly declined to **36.9%** from **37.2%** due to elevated cross-rent costs, despite an improved revenue mix with a higher proportion of rental revenues[72](index=72&type=chunk)[73](index=73&type=chunk) - Interest expense decreased significantly due to interest income and lower average debt outstanding[77](index=77&type=chunk) [First Half of 2025 Compared to First Half of 2024](index=21&type=section&id=First%20Half%20of%202025%20Compared%20to%20First%20Half%20of%202024) This section analyzes NPK's consolidated financial performance for the first half of 2025 compared to the same period in 2024 Consolidated Results of Operations (First Half, In thousands) | (In thousands) | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $133,010 | $115,758 | $17,252 | 15 % | | Cost of revenues | $82,579 | $73,291 | $9,288 | 13 % | | Selling, general and administrative expenses | $25,403 | $24,330 | $1,073 | 4 % | | Operating income from continuing operations | $25,157 | $19,473 | $5,684 | 29 % | | Net income | $18,681 | $15,333 | $3,348 | NM | - Revenues increased **15%** to **$133.0 million**, driven by a **25% increase** in rental and service revenues, partially offset by a **2% decrease** in product sales[80](index=80&type=chunk)[81](index=81&type=chunk) - Operating income from continuing operations surged by **29%** to **$25.2 million**[80](index=80&type=chunk) - Gross profit margin improved to **37.9%** from **36.7%**, primarily due to an improved revenue mix with a higher proportion of rental revenues[82](index=82&type=chunk)[83](index=83&type=chunk) - SG&A as a percentage of revenues decreased to **19.1%** from **21.0%**[84](index=84&type=chunk) - Interest income, net, was minimal for H1 2025 compared to **$1.7 million** of interest expense, net, for H1 2024, reflecting interest income earned and a decrease in average debt outstanding[87](index=87&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses NPK's cash flows, capital expenditures, and overall liquidity and capital structure Cash Flow Summary (First Half, In thousands) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,268 | $39,531 | | Net cash used in investing activities | $(811) | $(17,041) | | Net cash used in financing activities | $(21,792) | $(24,988) | - Net cash provided by operating activities decreased by **$9.263 million YoY** for the first half of 2025[91](index=91&type=chunk) - Net cash used in investing activities significantly decreased due to **$14.5 million** in proceeds from the Fluids Systems business sale[92](index=92&type=chunk) - Capital expenditures for H1 2025 were **$21.7 million**, primarily for expanding the mat rental fleet[92](index=92&type=chunk) - The company expects 2025 capital expenditures to be **$35 million to $40 million**, focused on rental fleet expansion[95](index=95&type=chunk) - Liquidity will be managed through cash on hand and the new **$150 million** Credit Facility, which had **$148.0 million** available as of June 30, 2025[96](index=96&type=chunk)[97](index=97&type=chunk) Capitalization (In thousands) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $9,336 | $7,727 | | Stockholders' equity | $328,835 | $326,495 | | Total capitalization | $338,171 | $334,222 | | Total debt to capitalization | 2.8 % | 2.3 % | [Critical Accounting Estimates and Policies](index=24&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section highlights NPK's key accounting estimates and policies that require significant management judgment - Key accounting estimates include cash flows and fair values for long-lived asset impairments (goodwill and other intangibles) and valuation allowances for deferred tax assets[105](index=105&type=chunk)[106](index=106&type=chunk) - These estimates have not materially changed since December 31, 2024[105](index=105&type=chunk)[106](index=106&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines NPK's exposure to market risks, specifically interest rate risk and foreign currency risk, and how these risks are managed [Interest Rate Risk](index=25&type=section&id=Interest%20Rate%20Risk) This section discusses NPK's exposure to interest rate fluctuations, primarily from its variable-rate credit facility - NPK's primary interest rate risk exposure stems from its Credit Facility, which is subject to variable interest rates[109](index=109&type=chunk) - As of June 30, 2025, the company had no borrowings under this facility[109](index=109&type=chunk) [Foreign Currency Risk](index=25&type=section&id=Foreign%20Currency%20Risk) This section addresses NPK's exposure to foreign currency exchange risks, mainly from its U.K. operations - Following the Fluids Systems sale, NPK's principal foreign operations are in the U.K., contributing approximately **7%** of consolidated revenues for the first half of 2025[110](index=110&type=chunk) - The company is exposed to foreign currency exchange risks, primarily with British pounds, and historically has not used off-balance sheet hedging instruments[110](index=110&type=chunk) [ITEM 4. Controls and Procedures](index=25&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section details the evaluation of NPK's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=25&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's conclusion regarding the effectiveness of NPK's disclosure controls and procedures - Management, including the CEO and CFO, concluded that NPK's disclosure controls and procedures were **effective** as of June 30, 2025[111](index=111&type=chunk) [Changes in Internal Control Over Financial Reporting](index=25&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes in NPK's internal control over financial reporting during the quarter - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[112](index=112&type=chunk) [PART II OTHER INFORMATION](index=26&type=section&id=PART%20II%20OTHER%20INFORMATION) This section includes additional information such as legal proceedings, risk factors, equity sales, and exhibits [ITEM 1. Legal Proceedings](index=26&type=section&id=ITEM%201.%20Legal%20Proceedings) This section provides information on legal actions and claims involving NPK International Inc - NPK is involved in various litigation and claims in the ordinary course of business[114](index=114&type=chunk) - Management does not expect any loss from these proceedings, beyond accrued or insured amounts, to have a material adverse impact on consolidated financial statements[114](index=114&type=chunk) [ITEM 1A. Risk Factors](index=26&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers to the company's risk factors as previously disclosed in its annual report - There have been no material changes to NPK's risk factors during the period ended June 30, 2025, as discussed in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2024[115](index=115&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details NPK's share repurchase activities and the use of proceeds from equity securities Share Repurchase Program Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs ($ in Millions) | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 212,210 | $5.78 | 212,210 | $100.0 | | May 2025 | 290,876 | $7.89 | 290,876 | $97.7 | | June 2025 | 597,188 | $8.28 | 314,520 | $95.0 | | Total | 1,100,274 | | 817,606 | | - During the three months ended June 30, 2025, NPK repurchased **817,606 shares** under its repurchase program[116](index=116&type=chunk) - As of June 30, 2025, **$95.0 million** remained authorized under the program[116](index=116&type=chunk)[118](index=118&type=chunk) - An additional **282,668 shares** were purchased for tax settlement upon vesting of restricted shares, not under the repurchase program[119](index=119&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=27&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section reports on any defaults concerning senior securities - There were no defaults upon senior securities during the reporting period[120](index=120&type=chunk) [ITEM 4. Mine Safety Disclosures](index=27&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section addresses disclosures related to mine safety - Mine safety disclosures are not applicable to NPK International Inc[121](index=121&type=chunk) [ITEM 5. Other Information](index=27&type=section&id=ITEM%205.%20Other%20Information) This section includes other material information not covered elsewhere, such as insider trading arrangements - On May 23, 2025, CEO Matthew Lanigan adopted a Rule 10b5-1 trading plan to sell up to **69,896 shares** from options, effective from August 22, 2025, until May 19, 2026[122](index=122&type=chunk) - No other directors or officers adopted or terminated such plans during the quarter[122](index=122&type=chunk) [ITEM 6. Exhibits](index=28&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q - The report includes various exhibits, such as the Credit Agreement dated June 20, 2025, amended and restated restricted stock plans, forms of restricted stock unit and performance share unit agreements, and certifications under the Sarbanes-Oxley Act[125](index=125&type=chunk) [Signatures](index=29&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q - The report was signed on August 6, 2025, by Matthew S. Lanigan (President and CEO), Gregg S. Piontek (Senior Vice President and CFO), and Douglas L. White (Vice President, Chief Accounting Officer and Treasurer)[130](index=130&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) NPK reported record Q2 2025 rental revenues, revenue growth, stable EPS, increased Adjusted EBITDA, and raised full-year guidance [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) NPK International Inc. reported record rental revenues in Q2 2025, with overall revenues increasing by 2% to $68.2 million, stable diluted EPS at $0.10, and Adjusted EBITDA growth to $18.8 million, alongside share repurchases and a new credit facility **Second Quarter 2025 Key Financials (YoY Comparison):** | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :---------------------------------- | :-------------- | :-------------- | :---------------- | | Revenues | $68.2 | $66.8 | $1.4 | | Operating income from continuing operations | $11.6 | $12.5 | $(0.9) | | Income from continuing operations per common share - Diluted | $0.10 | $0.10 | — | | Adjusted EBITDA from continuing operations | $18.8 | $17.9 | $0.9 | | Net cash provided by operating activities | $21.4 | $27.6 | $(6.2) | | Free Cash Flow | $11.2 | $21.9 | $(10.7) | **Second Quarter 2025 Key Financial Ratios (YoY Comparison):** | Metric | 2025 | 2024 | Change | | :---------------------------------- | :----- | :----- | :----- | | Operating margin from continuing operations (%) | 17.0% | 18.7% | -170 bps | | Adjusted EBITDA margin from continuing operations (%) | 27.5% | 26.8% | 70 bps | - Rental revenues increased by **34%** to **$31.7 million**, marking **another single quarter record**[5](index=5&type=chunk)[6](index=6&type=chunk) - As of **June 30, 2025**, total cash was **$26.0 million** and total debt was **$9.3 million**[6](index=6&type=chunk) - The company repurchased **$6 million** of common equity, representing **1%** of outstanding shares[6](index=6&type=chunk) - A new **$150 million** revolving credit facility was established[6](index=6&type=chunk) - NPK's Global Industry Classification Standard (GICS) code changed to **20107010** (Industrials/Capital Goods/Trading Companies & Distributors)[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Matthew Lanigan highlighted strong organic growth, particularly in rental revenue (34% increase), driven by demand in utility and critical infrastructure markets, with raised full-year guidance and strategic capital allocation - **Strong organic growth** in **Q2**, highlighted by **34%** rental revenue growth, driven by core utility and critical infrastructure markets and large-scale utility projects[5](index=5&type=chunk) - **Long-term growth strategy** focuses on growing rental fleet scale, expanding geographic footprint, and providing industry-leading products and services[7](index=7&type=chunk) - **Full-year revenue and EBITDA expectations** for **fiscal 2025** were raised due to strong first-half performance and continued momentum[7](index=7&type=chunk) - **Capital allocation included** a **5%** expansion of the rental fleet and repurchase of another **1%** of outstanding shares[7](index=7&type=chunk) - As of **June 30, 2025**, the company had approximately **$175 million** of cash and available liquidity, providing **significant flexibility for strategic growth and capital allocation**[7](index=7&type=chunk) [Business Update](index=2&type=section&id=Business%20Update) NPK's business plan focuses on organic growth, asset optimization, and efficient capital allocation, with strong Q2 2025 rental demand and SG&A efficiency progress [Strategic Priorities & Q2 Highlights](index=2&type=section&id=Strategic%20Priorities%20%26%20Q2%20Highlights) NPK's business plan aims for organic commercial growth in high-margin product and rental markets, improved asset optimization, organizational efficiency, and a capital allocation strategy prioritizing high-return investments and programmatic capital return - **Business plan designed to drive organic commercial growth** in targeted, higher-margin product and rental markets, improve asset optimization and organizational efficiency, and pursue a capital allocation strategy prioritizing investments with superior return profiles and programmatic **return of capital program**[8](index=8&type=chunk) - Revenues from specialty rental and related services increased to **$46 million** in **Q2 2025**, with record rental revenues driven by strong demand in power transmission projects[8](index=8&type=chunk) - Revenues from product sales were **$22 million** for **Q2 2025**, reflecting continued strength in demand from utility companies and critical infrastructure end-markets[8](index=8&type=chunk) - **Focused on efficiency improvements and operating cost optimization**, **targeting SG&A as a percentage of revenue in the mid-teens by early 2026**. **Q2 2025** SG&A was **20%** of revenue, including **$2 million** in elevated costs for performance-based incentives and severance[8](index=8&type=chunk) - During **Q2 2025**, the company repurchased **0.8 million (1%)** of outstanding shares for **$6 million** under its **return of capital program**[8](index=8&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) NPK reported increased Q2 2025 revenue and Adjusted EBITDA, stable diluted EPS, a net cash positive balance sheet, and strong liquidity [Q2 2025 Financial Results](index=3&type=section&id=Q2%202025%20Financial%20Results) In Q2 2025, NPK generated $8.8 million in income from continuing operations ($0.10 per diluted share) on $68.2 million total revenue, with a slight gross margin decrease and increased Adjusted EBITDA to $18.8 million **Q2 2025 vs. Q2 2024 Financial Results (in millions, except per share):** | Metric | Q2 2025 | Q2 2024 | | :---------------------------------- | :------ | :------ | | Total Revenue | $68.2 | $66.8 | | Income from continuing operations | $8.8 | $8.6 | | Diluted EPS from continuing operations | $0.10 | $0.10 | | Gross margin | 36.9% | 37.2% | | Adjusted EBITDA from Continuing Operations | $18.8 | $17.9 | | Adjusted EBITDA margin | 27.5% | 26.8% | | Selling, general and administrative expenses | $13.7 (20.0% of revenues) | $12.8 (19.1% of revenues) | [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, NPK maintained a net cash positive position with $26.0 million in total cash and $9.3 million in total debt, supported by $148 million in available liquidity and $21.4 million in operating cash flow - As of **June 30, 2025**, NPK was in a **net cash positive position**[11](index=11&type=chunk) **Balance Sheet and Liquidity as of June 30, 2025 (in millions):** | Metric | Amount | | :---------------------------------- | :----- | | Total cash | $26.0 | | Total debt | $9.3 | | Available liquidity (revolving credit facility) | $148 | - Operating cash flow was **$21.4 million** in **Q2 2025**[12](index=12&type=chunk) - Capital investments used **$10.2 million (net)**, primarily for mat rental fleet expansion[12](index=12&type=chunk) - **$8.5 million** was used to fund the purchase of treasury shares[12](index=12&type=chunk) [Financial Guidance](index=3&type=section&id=Financial%20Guidance) NPK updated its full-year 2025 guidance, projecting revenues of $250-260 million, Adjusted EBITDA of $68-74 million, and capital expenditures of $35-40 million [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) NPK updated its full-year 2025 financial guidance, anticipating revenues between $250 million and $260 million, Adjusted EBITDA in the range of $68 million to $74 million, and capital expenditures between $35 million and $40 million **Full Year 2025 Financial Guidance:** | Metric | Range | | :------------------- | :------------------- | | Revenues | $250 million to $260 million | | Adjusted EBITDA | $68 million to $74 million | | Capital expenditures | $35 million to $40 million | [Company Information](index=4&type=section&id=Company%20Information) This section overviews NPK International Inc.'s temporary worksite access solutions business and outlines risks of its forward-looking statements [About NPK International](index=4&type=section&id=About%20NPK%20International) NPK International Inc. is a temporary worksite access solutions company that manufactures, sells, and rents recyclable composite matting products, providing services to critical infrastructure markets - **NPK International Inc. is a temporary worksite access solutions company**[17](index=17&type=chunk) - The company **manufactures, sells, and rents recyclable composite matting products**, along with services including planning, logistics, and site restoration[17](index=17&type=chunk) - **Serves critical infrastructure markets**, including electrical transmission and distribution, oil and gas exploration, pipeline, renewable energy, petrochemical, and construction[17](index=17&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to risks, uncertainties, and assumptions, as defined by the Private Securities Litigation Reform Act of 1995, with NPK disclaiming any obligation to update them - The news release contains **"forward-looking statements"** as defined by the Private Securities Litigation Reform Act of **1995**[18](index=18&type=chunk) - **Statements are not guarantees and involve risks, uncertainties, and assumptions**, which could cause actual plans or results to differ materially[18](index=18&type=chunk) - **Risk factors include** economic and market conditions, fleet management, international operations, operating hazards, contract termination, market competition, raw material prices, inflation, capital investments, cybersecurity, and more[18](index=18&type=chunk) - NPK **assumes no obligation to update** any forward-looking statements, except as required by securities laws[18](index=18&type=chunk) [Financial Statements (GAAP)](index=5&type=section&id=Financial%20Statements%20(GAAP)) This section presents NPK's unaudited condensed consolidated GAAP financial statements, including operations, segment results, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, detailing revenues, operating income, net income, and earnings per common share **Condensed Consolidated Statements of Operations (in thousands, except per share data):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $68,233 | $66,791 | $133,010 | $115,758 | | Operating income from continuing operations | $11,629 | $12,507 | $25,157 | $19,473 | | Income from continuing operations | $8,784 | $8,628 | $19,159 | $12,682 | | Net income | $8,678 | $8,040 | $18,681 | $15,333 | | Income from continuing operations per common share - Diluted | $0.10 | $0.10 | $0.22 | $0.15 | | Net income per common share - Diluted | $0.10 | $0.09 | $0.22 | $0.18 | [Operating Segment Results](index=6&type=section&id=Operating%20Segment%20Results) This section provides unaudited operating segment results, breaking down revenues by rental, service, and product sales for the three and six months ended June 30, 2025, including operating income and margin **Operating Segment Revenues (in thousands):** | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental revenues | $31,654 | $23,682 | $59,764 | $44,914 | | Service revenues | $14,658 | $12,714 | $29,941 | $26,663 | | Product sales revenues | $21,921 | $30,395 | $43,305 | $44,181 | | Total revenues | $68,233 | $66,791 | $133,010 | $115,758 | | Operating income from continuing operations | $11,629 | $12,507 | $25,157 | $19,473 | | Operating margin from continuing operations | 17.0% | 18.7% | 18.9% | 16.8% | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity, with key changes highlighted **Condensed Consolidated Balance Sheets (in thousands):** | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $26,012 | $17,756 | | Receivables, net | $60,975 | $74,841 | | Inventories | $11,084 | $14,659 | | Total current assets | $102,365 | $112,984 | | Property, plant and equipment, net | $202,243 | $187,483 | | Total assets | $393,682 | $393,682 | | Total current liabilities | $43,832 | $44,659 | | Total liabilities | $64,847 | $67,187 | | Total stockholders' equity | $328,835 | $326,495 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section provides the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, outlining cash flows from operating, investing, and financing activities **Condensed Consolidated Statements of Cash Flows (in thousands):** | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $30,268 | $39,531 | | Net cash provided by (used in) investing activities | $(811) | $(17,041) | | Net cash used in financing activities | $(21,792) | $(24,988) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $7,775 | $(3,459) | | Cash, cash equivalents, and restricted cash at end of period | $26,012 | $35,442 | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) This section reconciles key non-GAAP financial measures like Adjusted Income, Adjusted EBITDA, and Free Cash Flow to GAAP equivalents for performance and liquidity [Adjusted Income from Continuing Operations](index=9&type=section&id=Adjusted%20Income%20from%20Continuing%20Operations) This sub-section reconciles GAAP income from continuing operations to Adjusted Income from Continuing Operations and Adjusted Income from Continuing Operations Per Common Share, adjusting for items like severance costs **Adjusted Income from Continuing Operations (in thousands):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income from continuing operations (GAAP) | $8,784 | $8,628 | $19,159 | $12,682 | | Severance costs | $359 | $175 | $386 | $808 | | Adjusted Income from Continuing Operations (non-GAAP) | $9,068 | $8,766 | $19,464 | $12,833 | | Adjusted Income from Continuing Operations Per Common Share - Diluted (non-GAAP) | $0.11 | $0.10 | $0.23 | $0.15 | [EBITDA and Adjusted EBITDA from Continuing Operations](index=10&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20from%20Continuing%20Operations) This sub-section reconciles GAAP income from continuing operations to EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA Margin from Continuing Operations, by adding back interest, taxes, depreciation, amortization, and adjusting for specific items like severance costs **EBITDA and Adjusted EBITDA from Continuing Operations (in thousands):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income from continuing operations (GAAP) | $8,784 | $8,628 | $19,159 | $12,682 | | EBITDA from Continuing Operations (non-GAAP) | $18,427 | $17,694 | $38,071 | $30,081 | | Severance costs | $359 | $175 | $386 | $808 | | Adjusted EBITDA from Continuing Operations (non-GAAP) | $18,786 | $17,869 | $38,457 | $30,272 | | Adjusted EBITDA Margin from Continuing Operations (non-GAAP) | 27.5% | 26.8% | 28.9% | 26.2% | [Free Cash Flow](index=10&type=section&id=Free%20Cash%20Flow) This sub-section reconciles GAAP net cash provided by operating activities to Free Cash Flow by deducting capital expenditures and adding back proceeds from the sale of property, plant, and equipment **Free Cash Flow Reconciliation (in thousands):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities (GAAP) | $21,440 | $27,581 | $30,268 | $39,531 | | Capital expenditures | $(11,694) | $(6,586) | $(21,705) | $(20,468) | | Proceeds from sale of property, plant and equipment | $1,502 | $899 | $3,320 | $2,042 | | Free Cash Flow (non-GAAP) | $11,248 | $21,894 | $11,883 | $21,105 | [Trailing Twelve Months ("TTM")](index=11&type=section&id=Trailing%20Twelve%20Months%20(%22TTM%22)) This sub-section provides selected financial metrics on a trailing twelve months (TTM) basis ending June 30, 2025, including revenues, operating income, income from continuing operations, EBITDA, and Adjusted EBITDA, along with their respective margins **Trailing Twelve Months Ended June 30, 2025 (in thousands):** | Metric | Amount | | :-------------------------------------------------- | :------- | | Revenues | $234,741 | | Operating income from continuing operations (GAAP) | $38,035 | | Income from continuing operations (GAAP) | $42,076 | | EBITDA from Continuing Operations (non-GAAP) | $62,128 | | Adjusted EBITDA from Continuing Operations (non-GAAP) | $63,043 | | Operating Margin from Continuing Operations (GAAP) | 16.2% | | Adjusted EBITDA Margin from Continuing Operations (non-GAAP) | 26.9% |

Part I [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents NPK International Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2025, reflecting the company's financial position after the Fluids Systems business divestiture [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows a slight decrease in total assets to $390.0 million from $393.7 million at year-end 2024, driven by decreases in receivables and inventories, partially offset by an increase in property, plant, and equipment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $20,832 | $17,756 | | Total current assets | $105,088 | $112,984 | | Property, plant and equipment, net | $194,092 | $187,483 | | **Total assets** | **$390,010** | **$393,682** | | Total current liabilities | $40,354 | $44,659 | | **Total liabilities** | **$63,124** | **$67,187** | | **Total stockholders' equity** | **$326,886** | **$326,495** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, the company reported a significant increase in performance compared to the same period in 2024, with revenues growing 32% to $64.8 million and operating income from continuing operations nearly doubling to $13.5 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $64,777 | $48,967 | | Operating income from continuing operations | $13,528 | $6,966 | | Income from continuing operations | $10,375 | $4,054 | | Net income | $10,003 | $7,293 | | Diluted EPS from continuing operations | $0.12 | $0.05 | | Diluted Net EPS | $0.11 | $0.08 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities was $8.8 million, a decrease from Q1 2024, while investing activities provided $5.4 million, primarily from divestiture proceeds, and financing activities used $11.7 million Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,828 | $11,950 | | Net cash provided by (used in) investing activities | $5,418 | $(12,739) | | Net cash provided by (used in) financing activities | $(11,675) | $589 | | **Net increase (decrease) in cash** | **$2,597** | **$(961)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the financial statements, including the basis of presentation following the Fluids Systems business sale, share repurchase program details, and segment data reflecting a single reportable segment - The company's core business is providing **temporary worksite access solutions**, including manufacturing, selling, and renting **recyclable composite matting products**[20](index=20&type=chunk)[24](index=24&type=chunk) - The Fluids Systems business was sold on **September 13, 2024**, and its results are now reported in **discontinued operations**, with all presented financial information pertaining to **continuing operations** unless specified otherwise[25](index=25&type=chunk) - Following the sale of the Fluids Systems segment, the company operates as a **single reportable segment**, with the Chief Executive Officer assessing financial performance on a consolidated basis[62](index=62&type=chunk) Disaggregated Revenues by Type (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Rental revenues | $28,110 | $21,232 | | Service revenues | $15,283 | $13,949 | | Product sales revenues | $21,384 | $13,786 | | **Total revenues** | **$64,777** | **$48,967** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 2025 performance, highlighting a 32% revenue increase and 94% operating income surge, alongside outlining four key strategic priorities for 2025 and maintaining a strong liquidity position [2025 Priorities](index=19&type=section&id=2025%20Priorities) The company's 2025 strategy centers on four key pillars: accelerating organic growth, pursuing strategic inorganic growth, driving operational efficiency, and enhancing capital returns via share repurchases - Accelerate Organic Growth: Focus on expanding the rental business through geographic and market share expansion, with **$8 million** invested in rental fleet expansion in Q1 2025[69](index=69&type=chunk) - Drive Operational Efficiency: Aim to streamline the organization and reduce SG&A as a percentage of revenue to a **mid-teens range by early 2026**, with this metric improving from **23.6% in Q1 2024 to 18.1% in Q1 2025**[69](index=69&type=chunk) - Enhance Return on Capital: Prioritize organic investment while returning excess cash to shareholders, repurchasing **1.8 million shares** for **$11 million** in Q1 2025 and subsequently increasing the repurchase authorization to **$100 million**[69](index=69&type=chunk)[39](index=39&type=chunk) [First Quarter of 2025 Compared to First Quarter of 2024](index=20&type=section&id=First%20Quarter%20of%202025%20Compared%20to%20First%20Quarter%20of%202024) Q1 2025 results showed significant year-over-year improvement, with revenues increasing 32% to $64.8 million, gross profit margin expanding by 300 basis points to 39.0%, and operating income growing 94% to $13.5 million Q1 2025 vs Q1 2024 Performance Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $64,777 | $48,967 | 32% | | - Rental and service revenues | $43,393 | $35,181 | 23% | | - Product sales revenues | $21,384 | $13,786 | 55% | | Operating income from continuing operations | $13,528 | $6,966 | 94% | | Total gross profit margin | 39.0% | 36.0% | +300 bps | - The increase in revenues was driven by **higher rental volume** and **strong customer adoption** of manufactured composite matting products, primarily in the power transmission sector[71](index=71&type=chunk) - SG&A expenses remained flat at **~$11.7 million**, but as a percentage of revenue, they decreased significantly from **23.6% in Q1 2024 to 18.1% in Q1 2025**, demonstrating **improved operating leverage**[74](index=74&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $20.8 million in cash and $66.1 million available under its ABL Facility as of March 31, 2025, with management expecting sufficient funds for the next 12 months Liquidity Position as of March 31, 2025 (in thousands) | Item | Amount | | :--- | :--- | | Cash on hand | $20,834 | | Amended ABL Facility availability | $68,100 | | Outstanding letters of credit | $2,000 | | **Remaining availability** | **$66,100** | - Capital expenditures for 2025 are projected to be between **$35 million and $40 million**, mainly focused on expanding the mat rental fleet to support the utilities market[85](index=85&type=chunk) - Net cash used in financing activities was **$11.7 million**, primarily reflecting **$10.8 million** in share repurchases[84](index=84&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate risk, currently minimal due to no outstanding ABL facility borrowings, and foreign currency risk from U.K. operations, which accounted for approximately 6% of Q1 2025 consolidated revenues - Interest rate risk exposure is primarily from the Amended ABL Facility, and as of March 31, 2025, there were **no borrowings** under this facility, mitigating this risk[101](index=101&type=chunk) - Foreign currency risk is associated with U.K. operations conducted in British pounds, which contributed about **6% of consolidated revenues** for Q1 2025[102](index=102&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective**[103](index=103&type=chunk) - **No changes** occurred in the company's internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[104](index=104&type=chunk) Part II [Item 1. Legal Proceedings](index=26&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in routine litigation and claims in the ordinary course of business, with management not anticipating a material adverse impact on consolidated financial statements - The company is involved in litigation in the ordinary course of business and has **indemnified the purchaser** of its former Fluids Systems business for certain pre-closing contingencies[106](index=106&type=chunk) - Management does **not expect any resulting loss** from litigation, beyond amounts accrued or covered by insurance, to have a **material adverse impact** on its financial statements[106](index=106&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - **No material changes** to the 'Risk Factors' discussed in the Annual Report on Form 10-K for the year ended December 31, 2024, occurred during the period ended March 31, 2025[107](index=107&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased 1,819,600 shares for $10.8 million, with $39.2 million remaining available as of March 31, 2025, and the Board subsequently increasing authorization to $100.0 million Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | January 2025 | — | $ — | | February 2025 | — | $ — | | March 2025 | 1,819,600 | $5.92 | | **Total** | **1,819,600** | **N/A** | - As of March 31, 2025, the company had **$39.2 million** of authorization remaining under its share repurchase program[111](index=111&type=chunk) - On **April 30, 2025**, the Board of Directors increased the remaining authorization under the repurchase program to **$100.0 million**[112](index=112&type=chunk) [Item 5. Other Information](index=28&type=section&id=ITEM%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1 trading plans by board member Michael Lewis and EVP Lori Briggs on March 7, 2025, for future sales of company common stock - On **March 7, 2025**, board member Michael Lewis adopted a Rule 10b5-1 trading plan for the sale of up to **16,108 shares**, commencing **June 16, 2025**[116](index=116&type=chunk) - On **March 7, 2025**, EVP Lori Briggs adopted a Rule 10b5-1 trading plan for the sale of up to **35,822 shares**, commencing **June 6, 2025**[117](index=117&type=chunk) [Item 6. Exhibits](index=29&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The exhibits filed with this report include **Sarbanes-Oxley Act certifications** from the CEO (Matthew S. Lanigan) and CFO (Gregg S. Piontek)[119](index=119&type=chunk) - The filing also includes **XBRL Instance Documents** and other related **Inline XBRL files** as required[119](index=119&type=chunk)

First Quarter 2025 Results Overview NPK International reported robust Q1 2025 results, showing significant revenue and Adjusted EBITDA growth, and strategic commentary on market and capital allocation [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) NPK International reported strong Q1 2025 results with revenues of $64.8 million (+32% YoY) and Adjusted EBITDA of $19.7 million (+59% YoY), with diluted EPS from continuing operations at $0.12, resuming share repurchases and increasing authorization | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (Millions) | Change (%) | | :------------------------------------ | :----------------- | :----------------- | :---------------- | :--------- | | Revenues | $64.8 | $49.0 | $15.8 | 32% | | Operating income from continuing operations | $13.5 | $7.0 | $6.5 | 92.8% | | Income from continuing operations per common share - Diluted | $0.12 | $0.05 | $0.07 | 140% | | Adjusted EBITDA from continuing operations | $19.7 | $12.4 | $7.3 | 59% | | Operating margin from continuing operations (%) | 20.9% | 14.2% | 670 bps | | | Adjusted EBITDA margin from continuing operations (%) | 30.4% | 25.3% | 510 bps | | | Net cash provided by operating activities | $8.8 | $12.0 | $(3.2) | -26.7% | | Free Cash Flow | $0.6 | $(0.8) | $1.4 | 175% | - Total cash of **$20.8 million** and total debt of **$8.1 million** as of March 31, 2025[7](index=7&type=chunk) - Repurchased **$11 million** of common equity, representing **2%** of outstanding shares[7](index=7&type=chunk) - Announced an increase in remaining share repurchase authorization to **$100 million**[7](index=7&type=chunk) - Raised full-year 2025 financial guidance[7](index=7&type=chunk) [Management's Strategic Commentary](index=1&type=section&id=MANAGEMENT%20COMMENTARY) CEO highlighted strong Q1 performance from rental and product sales, driven by infrastructure demand, committing to rental expansion and balanced capital allocation - Q1 2025 results showed strong revenue and adjusted EBITDA growth of **32%** and **59%** respectively, driven by meaningful growth in both rental and product sales[6](index=6&type=chunk) - Rental revenue increased **32%** from last year to a single-quarter record, reflecting momentum in core utilities transmission and critical infrastructure end markets[6](index=6&type=chunk) - The company is committed to a long-term growth strategy emphasizing expansion of its high-return rental business and increasing customer market share[6](index=6&type=chunk) - Disciplined capital allocation strategy includes investments in organic growth of the rental fleet, evaluation of inorganic opportunities, and return of capital to shareholders[8](index=8&type=chunk) - The Board of Directors increased the remaining share repurchase authorization to **$100 million** as of April 30, 2025[8](index=8&type=chunk) - Secular megatrends underpinning critical infrastructure investment remain robust, and the company's **100%** US-based manufacturing and raw material sourcing insulates it from tariff impacts[8](index=8&type=chunk) Business Update and Operational Performance This section details NPK's commercial growth, operational efficiency, and strategic capital allocation, including share repurchases [Commercial Growth and Market Demand](index=2&type=section&id=Commercial%20Growth%20and%20Market%20Demand) Strong customer demand led to a record $43 million in specialty rental and related services revenue in Q1 2025, with product sales also growing to $21 million, driven by the wood-to-composite mat conversion trend and project timing - Revenues from specialty rental and related services increased to **$43 million** in Q1 2025, a record, driven by strong demand from key customer accounts in power transmission projects[9](index=9&type=chunk) - Revenues from product sales increased to **$21 million** for Q1 2025, reflecting continued wood-to-composite mat conversion by fleet owners and timing of customer projects[9](index=9&type=chunk) [Operating Efficiency Improvements](index=2&type=section&id=Operating%20Efficiency%20Improvements) NPK continues to focus on efficiency improvements and cost optimization, targeting SG&A as a percentage of revenue in the mid-teens by early 2026, with Q1 2025 seeing a 550 basis point decline to 18.1% - NPK is focused on efficiency improvements and operating cost optimization, aiming to streamline the organization and cost structure[9](index=9&type=chunk) - Targeting SG&A as a percentage of revenue in the **mid-teens percentage range** by early 2026[9](index=9&type=chunk) - In Q1 2025, SG&A as a percentage of revenue was **18.1%**, a decline of **550 bps** versus the prior year period[9](index=9&type=chunk) [Capital Allocation and Share Repurchase Program](index=2&type=section&id=Capital%20Allocation%20and%20Share%20Repurchase%20Program) The company resumed its share repurchase program in Q1 2025, utilizing $11 million to repurchase 1.8 million shares (2% of outstanding shares), following an increased authorization to $100 million in April 2025 - In Q1 2025, the Company used **$11 million** of cash to repurchase **1.8 million (2%)** of outstanding shares under the repurchase program[9](index=9&type=chunk) - The Board of Directors increased the authorization for common stock repurchases to **$50.0 million** in February 2024, and further increased the remaining authorization to **$100 million** as of April 30, 2025[8](index=8&type=chunk)[9](index=9&type=chunk) Detailed Financial Performance This section provides a detailed analysis of NPK's income statement, balance sheet, and cash flow performance for the quarter [Income Statement Analysis](index=3&type=section&id=Income%20Statement%20Analysis) For Q1 2025, NPK reported income from continuing operations of $10.4 million ($0.12 per diluted share) on $64.8 million revenue, up from $4.1 million ($0.05 per diluted share) on $49.0 million revenue in Q1 2024, with gross margin improving to 39.0% and Adjusted EBITDA rising to $19.7 million (30.4% of revenue) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (Millions) | | :------------------------------------ | :----------------- | :----------------- | :---------------- | | Income from continuing operations | $10.4M | $4.1M | +$6.3M | | Diluted EPS from continuing operations | $0.12 | $0.05 | +$0.07 | | Total Revenue | $64.8M | $49.0M | +$15.8M | | Gross Margin | 39.0% | 36.0% | +300 bps | | Adjusted EBITDA from Continuing Operations | $19.7M | $12.4M | +$7.3M | | Adjusted EBITDA Margin | 30.4% | 25.3% | +510 bps | | SG&A Expenses | $11.7M | $11.6M | +$0.1M | | SG&A as % of Revenues | 18.1% | 23.6% | -550 bps | [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) As of March 31, 2025, NPK had $20.8 million in cash, $8.1 million in total debt, and $66 million in available liquidity under its U.S. ABL credit facility, also holding $7 million in receivables and net deferred consideration from the Fluids Systems sale - Total cash: **$20.8 million** as of March 31, 2025[12](index=12&type=chunk) - Total debt: **$8.1 million** as of March 31, 2025[12](index=12&type=chunk) - Available liquidity under U.S. ABL credit facility: **$66 million**[12](index=12&type=chunk) - Receivables and net deferred consideration from Fluids Systems sale: **$7 million**[12](index=12&type=chunk) [Cash Flow Analysis](index=3&type=section&id=Cash%20Flow%20Analysis) Operating cash flow for Q1 2025 was $9 million, including a $10 million usage in net working capital due to strong business activity, with capital investments primarily for expanding the mat rental fleet using $8 million net, maintaining a net cash positive position - Operating cash flow: **$9 million** in Q1 2025, including **$10 million** usage in net working capital[13](index=13&type=chunk) - Capital investments: **$8 million** net, primarily for expanding the mat rental fleet[13](index=13&type=chunk) - Company remained in a **net cash positive position** as of March 31, 2025[13](index=13&type=chunk) Financial Outlook NPK provides its updated full-year 2025 financial guidance, including projections for revenues, Adjusted EBITDA, and capital expenditures [Full-Year 2025 Guidance](index=3&type=section&id=Full-Year%202025%20Guidance) NPK raised its full-year 2025 financial guidance, anticipating revenues between $240 million and $252 million, Adjusted EBITDA between $64 million and $72 million, and capital expenditures between $35 million and $40 million - Revenues: **$240 million to $252 million**[14](index=14&type=chunk) - Adjusted EBITDA: **$64 million to $72 million**[14](index=14&type=chunk) - Capital expenditures: **$35 million to $40 million**[14](index=14&type=chunk) Company Information and Disclosures This section provides Q1 2025 conference call details, an NPK overview, forward-looking statements, and investor relations contact [Conference Call Details](index=4&type=section&id=FIRST%20QUARTER%202025%20RESULTS%20CONFERENCE%20CALL) NPK will host a conference call on Friday, May 2, 2025, at 9:30 a.m. ET to discuss Q1 2025 results, with details for webcast and teleconference participation, including replay options, provided | Type | Domestic Live | International Live | Conference ID | | :--- | :------------ | :----------------- | :------------ | | Live Teleconference | 800-715-9871 | 646-307-1963 | 8869084 | | Replay Teleconference (available through May 9, 2025) | 800-770-2030 | 609-800-9909 | | [About NPK International](index=4&type=section&id=ABOUT%20NPK%20INTERNATIONAL) NPK International Inc. is a temporary worksite access solutions company that manufactures, sells, and rents recyclable composite matting products and offers related services, serving critical infrastructure markets globally - NPK International Inc. is a temporary worksite access solutions company[17](index=17&type=chunk) - Manufactures, sells, and rents recyclable composite matting products, along with services like planning, logistics, and site restoration[17](index=17&type=chunk) - Serves critical infrastructure markets including electrical transmission and distribution, oil and gas, pipeline, renewable energy, petrochemical, and construction[17](index=17&type=chunk) [Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains a disclaimer regarding forward-looking statements, noting that actual results may differ materially due to various risks and uncertainties, with the company assuming no obligation to update these statements - News release contains "forward-looking statements" subject to risks, uncertainties, and assumptions[18](index=18&type=chunk) - Factors causing actual results to differ include economic and market conditions, fleet management, international operations, operating hazards, contract termination risks, raw material prices, inflation, capital investments, market competition, and cybersecurity incidents[18](index=18&type=chunk)[19](index=19&type=chunk) - The company assumes no obligation to update forward-looking statements, except as required by securities laws[19](index=19&type=chunk) [Investor Relations Contact](index=5&type=section&id=INVESTOR%20RELATIONS%20CONTACT) Contact information for investor relations inquiries is provided, including names and email address | Name | Email | | :--- | :---------- | | Noel Ryan | Investors@npki.com | | Paul Bartolai | Investors@npki.com | Condensed Consolidated Financial Statements This section presents NPK's condensed consolidated statements of operations, operating results, balance sheets, and cash flows for the reported periods [Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations show NPK's revenues, costs, operating income, and net income for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, along with per share data | (In thousands, except per share data) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------------ | :------------- | :---------------- | :------------- | | Revenues | $64,777 | $57,524 | $48,967 | | Cost of revenues | $39,527 | $35,001 | $31,325 | | Selling, general and administrative expenses | $11,746 | $10,713 | $11,580 | | Operating income from continuing operations | $13,528 | $11,644 | $6,966 | | Income from continuing operations | $10,375 | $8,048 | $4,054 | | Net income | $10,003 | $8,703 | $7,293 | | Income from continuing operations per common share - diluted | $0.12 | $0.09 | $0.05 | [Operating Results by Revenue Type](index=7&type=section&id=Operating%20Results) This table breaks down NPK's total revenues into rental and service revenues and product sales revenues for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, also showing operating income and margin from continuing operations | (In thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :---------------------- | :------------- | :---------------- | :------------- | | Rental and service revenues | $43,393 | $41,800 | $35,181 | | Product sales revenues | $21,384 | $15,724 | $13,786 | | Total revenues | $64,777 | $57,524 | $48,967 | | Operating income from continuing operations | $13,528 | $11,644 | $6,966 | | Operating margin from continuing operations | 20.9% | 20.2% | 14.2% | [Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets provide a snapshot of NPK's assets, liabilities, and stockholders' equity as of March 31, 2025, and December 31, 2024 | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Cash and cash equivalents | $20,832 | $17,756 | | Total current assets | $105,088 | $112,984 | | Property, plant and equipment, net | $194,092 | $187,483 | | Total assets | $390,010 | $393,682 | | Total current liabilities | $40,354 | $44,659 | | Total liabilities | $63,124 | $67,187 | | Total stockholders' equity | $326,886 | $326,495 | [Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The condensed consolidated statements of cash flows detail NPK's cash flows from operating, investing, and financing activities for the three months ended March 31, 2025, and March 31, 2024 | (In thousands) | March 31, 2025 | March 31, 2024 | | :------------------------------------ | :------------- | :------------- | | Net cash provided by operating activities | $8,828 | $11,950 | | Net cash provided by (used in) investing activities | $5,418 | $(12,739) | | Net cash provided by (used in) financing activities | $(11,675) | $589 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $2,597 | $(961) | | Cash, cash equivalents, and restricted cash at end of period | $20,834 | $37,940 | Non-GAAP Financial Measures Reconciliation This section provides reconciliations of GAAP to non-GAAP financial measures, including adjusted income, EBITDA, free cash flow, and trailing twelve-month metrics [Adjusted Income from Continuing Operations](index=10&type=section&id=Adjusted%20Income%20(Loss)%20from%20Continuing%20Operations) This reconciliation table adjusts GAAP income from continuing operations to derive Adjusted Income from Continuing Operations and Adjusted Income from Continuing Operations Per Common Share (Diluted) for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, by accounting for specific non-recurring items | (In thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :---------------------------------------------------- | :------------- | :---------------- | :------------- | | Income from continuing operations (GAAP) | $10,375 | $8,048 | $4,054 | | Severance costs | $27 | $416 | $633 | | Unusual tax items | — | $(1,280) | — | | Adjusted Income from Continuing Operations (non-GAAP) | $10,396 | $7,097 | $4,067 | | Adjusted Income from Continuing Operations Per Common Share - Diluted (non-GAAP) | $0.12 | $0.08 | $0.05 | [EBITDA and Adjusted EBITDA from Continuing Operations](index=11&type=section&id=EBITDA%20from%20Continuing%20Operations%2C%20Adjusted%20EBITDA%20from%20Continuing%20Operations%2C%20and%20Adjusted%20EBITDA%20Margin%20from%20Continuing%20Operations) This table reconciles GAAP operating income from continuing operations to EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA Margin from Continuing Operations for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024 | (In thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :---------------------------------------------------- | :------------- | :---------------- | :------------- | | Operating income from continuing operations (GAAP) | $13,528 | $11,644 | $6,966 | | Depreciation and amortization | $5,802 | $5,724 | $5,666 | | EBITDA from Continuing Operations (non-GAAP) | $19,644 | $16,669 | $12,387 | | Severance costs | $27 | $416 | $633 | | Adjusted EBITDA from Continuing Operations (non-GAAP) | $19,671 | $17,085 | $12,403 | | Adjusted EBITDA Margin from Continuing Operations (non-GAAP) | 30.4% | 29.7% | 25.3% | [Free Cash Flow](index=11&type=section&id=Free%20Cash%20Flow) This table reconciles net cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, by adjusting for capital expenditures and proceeds from asset sales | (In thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------------ | :------------- | :---------------- | :------------- | | Net cash provided by operating activities (GAAP) | $8,828 | $(4,127) | $11,950 | | Capital expenditures | $(10,011) | $(13,591) | $(13,882) | | Proceeds from sale of property, plant and equipment | $1,818 | $1,809 | $1,143 | | Free Cash Flow (non-GAAP) | $635 | $(15,909) | $(789) | [Trailing Twelve Months (TTM) Non-GAAP Measures](index=12&type=section&id=Trailing%20Twelve%20Months%20(%22TTM%22)) This table provides a reconciliation of key financial metrics, including revenues, operating income, income from continuing operations, EBITDA, and Adjusted EBITDA, on a trailing twelve-month basis ending March 31, 2025, by aggregating quarterly data | (In thousands) | TTM March 31, 2025 | | :---------------------------------------------------- | :----------------- | | Revenues | $233,299 | | Operating income from continuing operations (GAAP) | $38,913 | | Income from continuing operations (GAAP) | $41,920 | | EBITDA from Continuing Operations (non-GAAP) | $61,395 | | Adjusted EBITDA from Continuing Operations (non-GAAP) | $62,126 | | Operating Margin from Continuing Operations (GAAP) | 16.7% | | Adjusted EBITDA Margin from Continuing Operations (non-GAAP) | 26.6% |

Revenue Sources - In 2024, 67% of NPK International Inc.'s revenues were generated from the rental of recyclable composite matting systems, while 33% came from the sale of manufactured mats[25]. - Approximately 55% of rental and service revenues in 2024 were derived from the power transmission sector, with expectations for growth driven by increasing energy demand and investments in grid reliability[29]. - The company's largest customer accounted for 19% of total revenues in 2024, with 67% of revenues coming from the 20 largest customers[30]. - Revenues increased by 5% to $217.5 million in 2024, driven by a 24% increase in product sales revenues, while rental and service revenues declined by 3%[135]. - Total revenues for 2024 were $217.5 million, a 4.0% increase from $207.6 million in 2023[203]. - The company generated 67% of its 2024 revenues from the rental of recyclable composite matting systems, with the remaining 33% from sales of manufactured mats[212]. Business Operations and Strategy - NPK International Inc. completed the sale of its Fluids Systems segment on September 13, 2024, which had generated approximately 68% of total combined company revenue prior to the sale[44][46]. - The company aims to accelerate organic growth through geographic expansion and increasing market share, while also pursuing strategically-aligned inorganic growth opportunities[31]. - The company seeks to expand its product and service offerings and enter new markets, which involves inherent uncertainties and capital investment risks[61]. - The company is focused on operational efficiency and cost optimization to improve profitability while maintaining a strong balance sheet[31]. - The company plans to drive SG&A as a percentage of revenue to a mid-teens range by early 2026 through ongoing efficiency improvements[21]. Financial Performance - Operating income from continuing operations rose by 41% to $32.4 million in 2024, compared to $22.9 million in 2023[134]. - The gross profit margin improved to 35.5% in 2024 from 34.9% in 2023, attributed to a favorable revenue mix[136]. - The company reported a net loss of $150.3 million in 2024, primarily due to a loss from discontinued operations related to the Fluids Systems segment[134]. - Interest expense decreased by 36% to $2.6 million in 2024, reflecting a reduction in average debt outstanding[140]. - The company ended 2024 with total cash of $17.8 million and total debt of $7.7 million, providing a strong balance sheet to support growth strategies[21]. - The company's comprehensive loss for 2024 was $90,294 thousand, while in 2023, it recorded a comprehensive income of $18,863 thousand[205]. Capital Expenditures and Investments - Capital expenditures in 2024 amounted to $43,531 thousand, an increase from $29,232 thousand in 2023[210]. - Capital expenditures are expected to be between $35 million and $40 million in 2025, focusing on expanding the mat rental fleet[161]. - The company anticipates capital investments will focus on end-markets benefiting from increasing demand for electricity, such as power transmission and renewable energy[89]. Risks and Challenges - The company faces significant health, safety, and environmental risks, particularly in the electrical utility and oil and natural gas industries, which could lead to substantial liability claims[58]. - The company is highly dependent on the availability of HDPE, the primary raw material for its recyclable composite mats, which could impact profitability if costs increase[67]. - The company anticipates that inflation could adversely affect its results of operations and financial position by increasing overall costs, particularly if it cannot raise prices correspondingly[68]. - The company may experience labor shortages, which have increased labor costs and negatively impacted profitability[64]. - The company is subject to risks related to severe weather and natural disasters, which could disrupt operations and increase repair costs[79]. - The company faces risks related to public health crises that may significantly reduce demand for its products and services, impacting operating and financial results[81]. Cybersecurity and Compliance - The company has implemented a cybersecurity program to manage risks from cybersecurity threats[107]. - The company maintains appropriate levels of cybersecurity insurance covering various risks, including network security failures and privacy breaches[114]. - The company has a comprehensive incident response plan for cybersecurity threats, ensuring a coordinated approach to mitigate incidents[113]. - The company is subject to complex legal and regulatory requirements across multiple jurisdictions, which could result in significant compliance costs and potential fines[91]. Market Competition - The competitive landscape includes major players like Yak Mat (United Rentals) and a few competitors in composite mat sales, with NPK's proprietary technology providing a competitive edge[34]. - The company faces intense competition in its markets, with competitors increasingly marketing composite products that could impact its market share[71]. Shareholder and Stock Information - The board of directors authorized a securities repurchase program for up to $50.0 million, but no shares were repurchased in 2024 due to restrictions[125][127]. - The company has not paid any dividends during the last three fiscal years and does not intend to pay cash dividends in the foreseeable future[122]. - The company's common stock began trading on the NYSE under the ticker symbol "NPKI" on December 19, 2024[121]. - The company rebranded as NPK and commenced trading on the NYSE under the ticker symbol "NPKI" starting December 19, 2024[21]. Employee and Talent Management - NPK employed approximately 460 personnel as of December 31, 2024, with a focus on attracting and retaining talent to support long-term success[38].

Financial Performance - Revenues for Q4 2024 were $57.5 million, representing a 24% increase compared to Q4 2023[3] - Adjusted EBITDA for Q4 2024 was $17.1 million, up 35% year-over-year, with an Adjusted EBITDA margin of 29.7%[3][7] - Full-year 2024 revenues totaled $217.5 million, a 5% increase from $207.6 million in 2023[3][4] - Income from continuing operations for Q4 2024 was $8.0 million, or $0.09 per diluted share, compared to $5.2 million, or $0.06 per diluted share, in Q4 2023[7] - Operating income from continuing operations for the twelve months ended December 31, 2024, rose to $32,351 thousand, compared to $22,940 thousand for the same period in 2023, reflecting a 41% increase[19] - Net income for the twelve months ended December 31, 2024, was a loss of $150,262 thousand, significantly down from a net income of $14,516 thousand in 2023[21] - Adjusted Income from Continuing Operations for the three months ended December 31, 2024, was $7,097,000, compared to $341,000 for the previous quarter[24] - EBITDA from Continuing Operations for the twelve months ended December 31, 2024, was $54,138,000, compared to $47,425,000 for the previous year, reflecting a year-over-year increase of 14.4%[25] Revenue Growth - The company expects 2025 revenue growth of 10% and Adjusted EBITDA growth of 18% compared to 2024[5][6] - Specialty rental revenues reached a record $42 million in Q4 2024, driven by strong customer demand[10] - Revenues for the three months ended December 31, 2024, increased to $57,524 thousand, up 30% from $44,207 thousand in the previous quarter[18] - Rental and service revenues for the three months ended December 31, 2024, were $41,800 thousand, an increase from $32,408 thousand in the previous quarter[19] - Revenues for the three months ended December 31, 2024, increased to $57,524,000, up from $44,207,000 in the previous quarter, representing a growth of 29.5%[25] Expenses and Cash Flow - Selling, general and administrative expenses were $10.7 million in Q4 2024, down from $10.2 million in Q4 2023, representing 18.6% of revenues[8] - Free Cash Flow for the three months ended December 31, 2024, was $(15,909,000), compared to $(5,561,000) in the previous quarter, indicating a decline in cash flow[26] - The company reported a net cash used in operating activities of $(4,127,000) for the three months ended December 31, 2024[26] - The company incurred severance costs of $416,000 for the three months ended December 31, 2024[24] Assets and Liabilities - Total cash as of December 31, 2024, was $18 million, with total debt of $8 million[9] - Cash and cash equivalents increased to $17,756 thousand as of December 31, 2024, compared to $789 thousand at the end of 2023[20] - Total current assets decreased to $112,984 thousand as of December 31, 2024, down from $357,224 thousand in 2023, primarily due to the sale of the Fluids Systems business[20] - The company had total liabilities of $67,187 thousand as of December 31, 2024, down from $226,972 thousand in 2023[20] Capital Expenditures and Future Plans - Capital expenditures for 2025 are expected to be between $35 million and $40 million, with 80% allocated to expanding the rental fleet[6] - The company launched a new brand identity, changing its name to NPK International, and began trading under the ticker symbol 'NPKI' on December 19, 2024[10] Share Information - The weighted average shares outstanding for diluted earnings per share were 87,222 thousand for the three months ended December 31, 2024[18] - The weighted average common shares outstanding for diluted calculations was 87,222,000 for the three months ended December 31, 2024[24]

Financial Performance - Revenues decreased 23% to $44.2 million for Q3 2024, compared to $57.3 million for Q3 2023[59] - Rental and service revenues decreased by $5.7 million (15%) in Q3 2024, while product sales revenues decreased by $7.4 million (39%)[61] - Operating income from continuing operations was $1.2 million in Q3 2024, down from $6.3 million in Q3 2023, reflecting an 80% decline[59] - The company reported a net loss of $174.3 million in Q3 2024, compared to a net income of $7.7 million in Q3 2023[59] - Revenues decreased 1% to $159.965 million for the first nine months of 2024, compared to $161.193 million for the same period in 2023[74] - Rental and service revenues decreased by $10.389 million (9%) for the first nine months of 2024, while product sales revenues increased by $9.161 million (20%)[75] - Operating income from continuing operations increased by 23% to $20.707 million for the first nine months of 2024, compared to $16.863 million for the same period in 2023[74] Expenses and Cost Management - Selling, general and administrative expenses decreased by $2.9 million to $11.0 million in Q3 2024, with SG&A as a percentage of revenues at 24.9%[64] - Selling, general and administrative expenses decreased by $5.5 million (13%) to $35.335 million for the first nine months of 2024[79] - Interest expense decreased by 17% to $2.612 million for the first nine months of 2024, compared to $3.154 million for the same period in 2023[82] Cash Flow and Debt Management - The company ended Q3 2024 with $43 million in cash and $14 million in total debt[67] - Net cash provided by operating activities was $42.3 million for the first nine months of 2024, down from $63.8 million for the same period in 2023[87] - Total debt decreased to $13.963 million as of September 30, 2024, from $62.029 million at the end of 2023[89] - Total debt to capitalization ratio improved to 4.2% as of September 30, 2024, compared to 13.0% at the end of 2023[89] Tax and Financial Benefits - A $14.0 million tax benefit was recorded in Q3 2024, primarily due to the release of valuation allowances on U.S. net operating losses[68] - The benefit for income taxes from continuing operations was $9.626 million for the first nine months of 2024, compared to a provision of $4.9 million for the same period in 2023[83] Future Outlook - The company expects revenues to improve in Q4 2024 due to higher customer rental project activity and product sales[62] - The company aims to reduce SG&A as a percentage of revenue to the mid-teens range by early 2026 following the sale of the Fluids Systems business[54] Financing and Credit Facilities - As of September 30, 2024, the applicable margin for borrowings under the Amended ABL Facility was 1.50% for BSBY borrowings and 0.50% for base rate borrowings[91] - The aggregate commitments under the Credit Agreement were reduced from $175 million to $100 million following the September 2024 amendment[91] - The U.K. subsidiary entered a £7.0 million term loan and a £2.0 million revolving credit facility, with an interest rate of 8.2% as of September 30, 2024[91] - Total principal amounts outstanding under financing arrangements were $14.0 million as of September 30, 2024, with $5.5 million borrowed under the U.K. term loan and credit facility[97] - The Amended ABL Facility requires a minimum fixed charge coverage ratio of 1.00 to 1.00 for the most recently completed four fiscal quarters[91] - The financial covenant requiring the Consolidated Leverage Ratio to be less than or equal to 4.00 to 1.00 will be tested for each fiscal quarter starting from June 30, 2024[91] Asset Management - Capital expenditures for the first nine months of 2024 totaled $29.9 million, primarily directed towards expanding the mat rental fleet[88] - The Fluids Systems business was sold in September 2024, with deferred consideration and estimated liabilities due from the purchaser expected to be finalized in the fourth quarter of 2024[94] Risk Management - The company has not used off-balance sheet financial hedging instruments to manage foreign currency risks associated with operations in the U.K.[98] - The company entered $3.5 million of new finance lease liabilities during the first nine months of 2024[91] - The interest rate for the U.K. facilities was based on the Sterling Overnight Index Average plus a margin of 3.25% per year[91]