Newpark Resources(NR) - 2025 Q1 - Quarterly Results

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 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] - Repurchased $11 million of common equity, representing 2% of outstanding shares[7] - Announced an increase in remaining share repurchase authorization to $100 million[7] - Raised full-year 2025 financial guidance[7] Management's Strategic Commentary 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] - Rental revenue increased 32% from last year to a single-quarter record, reflecting momentum in core utilities transmission and critical infrastructure end markets[6] - The company is committed to a long-term growth strategy emphasizing expansion of its high-return rental business and increasing customer market share[6] - Disciplined capital allocation strategy includes investments in organic growth of the rental fleet, evaluation of inorganic opportunities, and return of capital to shareholders[8] - The Board of Directors increased the remaining share repurchase authorization to $100 million as of April 30, 2025[8] - 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] 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 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] - 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] Operating Efficiency Improvements 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] - Targeting SG&A as a percentage of revenue in the mid-teens percentage range by early 2026[9] - In Q1 2025, SG&A as a percentage of revenue was 18.1%, a decline of 550 bps versus the prior year period[9] Capital Allocation and Share Repurchase Program 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] - 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][9] 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 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 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] - Total debt: $8.1 million as of March 31, 2025[12] - Available liquidity under U.S. ABL credit facility: $66 million[12] - Receivables and net deferred consideration from Fluids Systems sale: $7 million[12] Cash Flow Analysis 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] - Capital investments: $8 million net, primarily for expanding the mat rental fleet[13] - Company remained in a net cash positive position as of March 31, 2025[13] Financial Outlook NPK provides its updated full-year 2025 financial guidance, including projections for revenues, Adjusted EBITDA, and capital expenditures Full-Year 2025 Guidance 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] - Adjusted EBITDA: $64 million to $72 million[14] - Capital expenditures: $35 million to $40 million[14] 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 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 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] - Manufactures, sells, and rents recyclable composite matting products, along with services like planning, logistics, and site restoration[17] - Serves critical infrastructure markets including electrical transmission and distribution, oil and gas, pipeline, renewable energy, petrochemical, and construction[17] Forward-Looking Statements 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] - 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][19] - The company assumes no obligation to update forward-looking statements, except as required by securities laws[19] Investor Relations Contact 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 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 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 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 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 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 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 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 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% |