NPK International (NYSE:NPKI) reported third-quarter revenue growth and higher adjusted EBITDA, though exceptionally dry weather in Texas delayed rental-mat deployments and prompted the company to lower its full-year outlook.
Revenue for the third quarter totaled $76 million, up 11% from a year earlier. Adjusted EBITDA increased 30% to $20 million, while adjusted EBITDA margin expanded nearly 400 basis points year over year to 26.2%. Adjusted earnings per share from continuing operations were $0.09, compared with $0.07 in the prior-year quarter.
President and Chief Executive Officer Matthew Lanigan said the quarter was affected by unusually dry conditions in Texas, where certain utility customers proceeded with projects without initially deploying planned matting. The weather-related effect delayed a return to more typical fleet utilization levels until the fourth quarter.
Texas Weather Weighed on Rental Activity
Rental and related service revenue was $50 million, an increase of 12% year over year. However, the category declined $4 million sequentially, including a nearly $6 million decline in Texas. Other regions grew by $2 million sequentially during what management described as the normal seasonal slowdown.
Lanigan said most of the delayed Texas deployments had begun by late October, with the remaining mats expected to be deployed shortly thereafter. Fleet utilization exited October in the mid-70% range, recovering from the low-60% range at the beginning of the fourth quarter.
“All we lost was days rather than projects,” Lanigan said in response to an analyst question, characterizing the recovery as a catch-up in deployment timing rather than a loss of underlying demand.
The company said the dry conditions were localized rather than indicative of broader weakness. NPK reported stronger activity in the Midwest and Northeast, where it has been seeking to expand its customer base and utility transmission-and-distribution presence.
Chief Financial Officer Gregg Piontek said transportation economics also influenced the company’s decision not to redeploy certain Texas mats to distant markets. Elevated diesel prices made some long-distance moves uneconomic, he said, reinforcing the company’s strategy of expanding and positioning fleet inventory closer to expected projects.
Product Sales Remain Elevated
Product sales totaled $27 million during the quarter, up 9% from a year earlier, supported by utility-sector demand. About two-thirds of NPK’s 2026 revenue has come from the utility sector, a mix that Piontek said was broadly consistent with the prior year as the company also experienced growth in other markets.
Third-quarter gross profit was $24 million, producing a gross margin of 31.3%, compared with 31.9% a year earlier. SG&A expenses rose $1.5 million to $14.7 million, including $1.2 million of severance and related costs and $700,000 tied to strategic planning and diligence activities. Excluding those items, SG&A was $12.8 million, which Piontek said was generally in line with the company’s recent quarterly run rate.
NPK said the sequential decline in profitability reflected lower rental revenue and a less favorable revenue mix, as rental revenue accounted for the full sequential decline in sales. Management expects gross margin and adjusted EBITDA margin to recover in the fourth quarter as rental activity improves.
Outlook Reduced for 2026
The company revised its full-year outlook to account for the weather-related rental disruption and uncertainty around fourth-quarter customer purchasing decisions for product sales.
- Full-year revenue is now expected to be between $300 million and $305 million.
- Adjusted EBITDA is forecast at $90 million to $93 million.
- Net capital expenditures are expected to total $70 million to $75 million.
- The company expects to invest approximately $20 million this year in its Louisiana manufacturing expansion and $40 million to $45 million in rental-fleet expansion.
At the midpoint, the revised revenue forecast represents 9% growth from 2025, while adjusted EBITDA would increase 21%. The outlook assumes modest organic rental growth, a contribution from the Grassform acquisition and product sales roughly in line with the prior year.
For the fourth quarter, NPK expects rental and services revenue to grow in the mid-teens year over year and establish another quarterly record for that business. The company expects product sales to settle in the mid-teens for the quarter, which would bring full-year product sales approximately in line with 2025.
Management said quoting volumes remain more than 20% above the prior-year level, with stable win rates and much of the increased activity coming from expansion geographies. However, Piontek said the timing between quotations and project delivery has lengthened as utilities seek earlier visibility into supply availability, with some opportunities extending into 2027 and 2028.
Manufacturing Expansion and Capital Allocation
NPK continued work on its Louisiana manufacturing expansion, investing about $6 million in the third quarter. The project remains scheduled for completion in mid-2027 and is expected to increase production capacity by about 50%. Management said the added capacity should support growth, reduce reliance on cross-rented mats and improve margins through operating leverage.
The company invested approximately $46 million in capital expenditures through the first nine months of 2026, expanding its rental fleet by 10%. It expects fleet growth to reach the mid-teens percentage range for the full year, consistent with the prior year.
NPK also repurchased 1 million shares for $13 million during the quarter, at an average price of $13.37 per share. The company ended the period with $26 million in total debt, $4 million in cash and net debt of approximately $22 million. It had $132 million available under its bank facility and $76 million remaining under its share-repurchase authorization.
Lanigan said the company remains focused on expanding the DURA-BASE composite mat rental fleet, improving organizational efficiency and evaluating disciplined acquisition opportunities that could broaden geographic coverage and deepen its relevance in critical-infrastructure markets.
“While weather impacts on project timings and key utility customers’ capital allocation to non-matting purchases have reduced our 2026 expectations, our long-term outlook remains unchanged,” Lanigan said.
About NPK International (NYSE:NPKI)
NPK International is an industrial equipment company focused on attachments and related systems used with excavators and other heavy construction machinery. Through its operating businesses, the company designs, manufactures and distributes equipment for construction, demolition, recycling, mining, utility and material-handling applications.
Its product portfolio includes hydraulic breakers and hammers, concrete crushers and pulverizers, demolition shears, grapples, compactors, augers and other specialized attachments.
