Newpark Resources(NR) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights NPK reported record Q2 2025 rental revenues, revenue growth, stable EPS, increased Adjusted EBITDA, and raised full-year guidance Second Quarter 2025 Financial Highlights 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][6] - As of June 30, 2025, total cash was $26.0 million and total debt was $9.3 million[6] - The company repurchased $6 million of common equity, representing 1% of outstanding shares[6] - A new $150 million revolving credit facility was established[6] - NPK's Global Industry Classification Standard (GICS) code changed to 20107010 (Industrials/Capital Goods/Trading Companies & Distributors)[6] Management Commentary 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] - Long-term growth strategy focuses on growing rental fleet scale, expanding geographic footprint, and providing industry-leading products and services[7] - Full-year revenue and EBITDA expectations for fiscal 2025 were raised due to strong first-half performance and continued momentum[7] - Capital allocation included a 5% expansion of the rental fleet and repurchase of another 1% of outstanding shares[7] - 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] Business Update 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 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] - 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] - Revenues from product sales were $22 million for Q2 2025, reflecting continued strength in demand from utility companies and critical infrastructure end-markets[8] - 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] - During Q2 2025, the company repurchased 0.8 million (1%) of outstanding shares for $6 million under its return of capital program[8] Financial Performance 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 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 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] 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] - Capital investments used $10.2 million (net), primarily for mat rental fleet expansion[12] - $8.5 million was used to fund the purchase of treasury shares[12] Financial Guidance 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 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 This section overviews NPK International Inc.'s temporary worksite access solutions business and outlines risks of its forward-looking statements About NPK International 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] - The company manufactures, sells, and rents recyclable composite matting products, along with services including planning, logistics, and site restoration[17] - Serves critical infrastructure markets, including electrical transmission and distribution, oil and gas exploration, pipeline, renewable energy, petrochemical, and construction[17] Forward-Looking Statements 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] - Statements are not guarantees and involve risks, uncertainties, and assumptions, which could cause actual plans or results to differ materially[18] - 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] - NPK assumes no obligation to update any forward-looking statements, except as required by securities laws[18] Financial Statements (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 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 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 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 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 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 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 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 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") 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% |