NPK International Inc. Q2 FY2025 earnings call

• Strong first half execution validating long-term growth strategy. - Second quarter rental revenues at $32 million, a 34% YOY increase; product sales at $22 million. - Invested $8 million in rental fleet expansion in Q2, used $6 million to repurchase shares. - Second quarter gross margin 36.9%, SG&A expenses $13.7 million. - Cash from operating activities in Q2 was $21 million. - Raised full year 2025 revenue expectations to $250M-$260M and adjusted EBITDA to $68M-$74M.

Total second quarter revenues were $68 million, with a 5% sequential increase. Rental revenues were $32 million in the second quarter, a 34% year-over-year increase and reaching a single quarter record. Rental and service revenues for the first half of 2025 increased 25% year-over-year. Product sales in the second quarter were $22 million, down from the record $30 million in the second quarter of the previous year. For the first half of 2025, product sales were relatively in line with prior year.

• Full year 2025 revenue expected to be $250 million to $260 million, adjusted EBITDA $68 million to $74 million. - Total rental and service revenues expected to grow in the high teen to low 20s percentage range over 2024. - Product sales expected to grow 10% to 15% over 2024 levels. - Q3 rental activity expected to pull back from Q2 levels due to seasonality, but Q3 rental and service revenues expected to show similar year-over-year growth as first half of 2025.

• Forward-looking statements subject to risks from periodic reports filed with the SEC. - Currency fluctuations (FX gains/losses) can impact results. - Seasonality in the utility sector can affect Q3 rental activity.

Q: Pipeline activity strength vs industry slowdown.

A: Pipeline activity renaissance with new administration, presence in laydown areas and maintenance, seeing healthy rebound though smaller part of portfolio.

Q: Large-scale conversions from wood to composites.

A: Traditional timber fleet operators converting to composite, utilities recognizing longer-term economic benefits of composite assets.