NPK International (NPKI) Q3 2026 Earnings Call Transcript

As projects ramp up through the fourth quarter, we expect to end the year with robust fleet utilization. Providing a strong jumping off point for 2027. For the quarter, we generated revenue of $76 million, an increase of 11% from the prior year. Which included a 12% increase in rental and service revenues, and a 9% increase in product sales. Rental and related services contributed $50 million of revenues to the third quarter. Notably, the third quarter revenue declined $4 million sequentially and fell short of our expectations due to the weather related impact in Texas I just mentioned, which contributed to a nearly $6 million sequential decline in the R&S revenues within this region.

Other regions were more resilient through the typical seasonal slow period growing $2 million sequentially. Product sales activity remained robust, contributing $27 million of third quarter revenues, driven again by strong demand from the utility sector. Adjusted EBITDA was $20 million, reflecting an adjusted EBITDA margin of 26.2% a year over year improvement of nearly 400 basis points. But a sequential decline of 35 basis points. The sequential decline following the record Q2 EBITDA margin reflects the lower rental revenues, which I just covered, and a less favorable mix. As rental revenues accounted for the entire sequential revenue decline. Our optimistic view of the longer term growth outlook for our business remains unchanged.

And we continue to advance our Louisiana manufacturing expansion. Investing approximately $6 million during the quarter. The project remains on track for completion in mid 27 and as a reminder, it is expected to increase production capacity by approximately 50% to support our long term growth and improve margins over time through operating leverage and reduced reliance on CrossRent mats.

Our balance sheet continues to provide flexibility to execute our strategic priorities, During the quarter, we invested $13 million to purchase 1 million shares outstanding, ending the quarter with net debt of approximately $22 million While the unfavorable weather pattern provided a meaningful headwind to our Q3 and early Q4 RNS performance, as I reflect on our results through the first 3 quarters of 26, the benefit of stronger product sales activity helped offset the shorter term headwind to rental activity. Keeping our consolidated results relatively in line with our organic growth expectations. On a year to date basis, revenue has increased 15% year over year. With approximately half of the growth generated organically and half through acquisition.

Adjusted EBITDA increased 27%, expanding our adjusted EBITDA margin by 260 basis points. While after tax return on invested capital remained stable at 11%. We also invested approximately $46 million in capital through the first 9 months. Expanding our rental fleet by 10% and advancing our manufacturing expansion initiative. Positioning the business to support future growth and further margin expansion. With that, I will turn the call over to Gregg for his prepared remarks.

Gregg S. Piontek:Thanks, Matthew. I will begin with a more detailed discussion of our third quarter results and year to date performance before providing an update on our near term outlook. Third quarter revenue was $76 million, an increase of 11% year over year. rental project activity strengthened $50 million, up 12% year over year. Including an 8% increase in rental revenue, and a 21% increase in associated service revenue. The $5 million year over year increase in rental and service revenue primarily attributable to The UK acquisition, while The U.S. R&S revenues remain flat year over year. Impacted by the exceptionally dry weather conditions that Matthew discussed. Product sales remained elevated at 27 million up 9% from the prior year.

Driven by strength in utility sector demand. Gross profit was $24 million, a gross margin of 31.3%. Compared with 31.9% in the prior third quarter. Third quarter SG&A expenses totaled $14.7 million, an increase of $1.5 million from the prior third quarter. As highlighted in yesterday's release, third quarter SG&A includes $1.2 million of severance and related costs along with $700 thousand of costs associated with strategic planning and diligence activities, as we continue to explore opportunities to drive our growth strategy. After consideration of these items, the remaining SG&A was $12.8 million for the third quarter, relatively in line with our recent quarterly run rate and expectations.

Income tax expense was $2.3 million in the third quarter, reflecting an effective tax rate of 26%. Adjusted EBITDA was $20 million, increasing 30% year over year, and adjusted EBITDA margin was 26.2%. Adjusted EPS from continuing operations was $0.09 per diluted share compared with $0.07 in the prior third quarter. For the first 9 months of 2026, total revenue was $233 million, an increase of 15% year over year. Adjusted EBITDA was $68 million up 27% and adjusted EPS increased 22%. Roughly 2 thirds of our 2026 revenue is derived from the utility sector, relatively in line with prior year mix, as we have seen fairly balanced growth across industries.

In terms of our geographic expansion efforts, in addition to our previously discussed expansion within Texas, we are also seeing solid progress with targeted customers in the Midwest and the Northeast. Turning to cash flows, operating activities generated $7 million of cash in the third quarter including $18 million of net income adjusted for non cash expenses, somewhat offset by $11 million of cash used by a net increase in working capital. Including receivables and inventory. Net CapEx used $11 million which includes $3 million of net investment into fleet expansion and $6 million to fund the manufacturing expansion. We also used $13 million to fund share repurchases in the third quarter.

Purchasing 1 million shares at an average price of $13.37 per share. We ended the quarter with total debt of $26 million and totaled cash of $4 million for a net debt position of $22 million Additionally, we have $132 million of availability under our bank facility, providing us with ample financial flexibility to continue executing on our strategic growth initiatives including our manufacturing expansion as well as the support of our capital return objectives. Now turning to our business outlook. Overall, there has been no meaningful change in the market as our customers remain highly constructive on the outlook for utilities, critical infrastructure spending which we see within our robust quoting activity.

As for the near term outlook, following the seasonal low period, which was amplified this year by the exceptionally dry weather in the South, we have seen our rental fleet utilization steadily improve through October, with fleet utilization exiting October in the mid seventies. With the October improvements and scheduled projects, we expect Q4 rental and services to reflect a mid teens year over year growth versus last Q4. Reflecting a fairly balanced combination of organic growth and the acquisition impact, In closing out 2026, with another quarterly rental and service record. On the product sales side, our visibility to Q4 remains subject to final customer decisions as they evaluate prioritization of matting versus longer lead item purchases.

Based on our current view, we are planning on Q4 to settle in the mid teens which will bring full year product sales in line with prior year levels. This sales level provides us flexibility to move additional mats into the fleet in Q4 in support of our rental diversification efforts prior to our new manufacturing facility coming online. With the forecasted rebound in rental revenues, we expect a solid improvement in profitability with both gross margin and adjusted EBITDA margin returning to the levels achieved in the first half of the year.

In light of the unfavorable seasonal impact on rental revenues EBITDA margins for both Q3 and early Q4, and the current line of sight to utility customer Q4 purchasing priorities we have revised our full year 2026 outlook. Adjusting the total revenues range to $300 million to $305 million and adjusted EBITDA to a range of $90 million to $93 million. The midpoint of our range reflects 9% revenue growth and 21% adjusted EBITDA growth over 25. The midpoint of our revenue guidance reflects modest organic growth in rentals, along with the contribution from the Grassform acquisition while product sales are expected to be relatively in line with prior year.

Our total net CapEx expectation was also revised to $70 million to $75 million for the year, including approximately $20 million of current year spending for the manufacturing expansion project along with $40 million to $45 million targeted for rental fleet expansion. This level of investment is expected to grow our DURA-BASE rental fleet by a mid teens percentage for the year, supporting our organic growth and geographic expansion efforts while also displacing a portion of CrossRent assets. Our SG&A expectation remains unchanged at roughly a $13 million quarterly level in the near term, while tax rate is expected to remain relatively in line with the year to date rate.

As highlighted previously, we entered 2026 with roughly $40 million of NOLs and other tax credit carryforwards, which when combined with the accelerated deductions for capital investments, are expected to significantly limit our cash tax obligations for the next several years. As it relates to our capital allocation strategy, we continue to prioritize investments in the growth of our rental fleet and our manufacturing capacity expansion as well as strategic acquisitions. While also remaining committed to returning a portion of free cash flow generation to shareholders through our disciplined share repurchase program. And with that, I would like to turn the call back over to Matthew for his concluding remarks.

Matthew S. Lanigan:Thanks, Gregg. With the end of the year in sight, we remain confident in our long double digit growth outlook and committed to the execution of our strategic priorities. 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. Supporting our key customers' needs and remaining flexible to their changing schedules is key to supporting our long term relationships. And our continued focus on fleet scale and geographic diversity will provide a buffer to specific weather related impacts like we saw in Texas in Q3 moving forward. Quoting activity remains aligned with our confidence in our served markets.

And remains above a 20% year over year increase in quoted volumes at stable win rates. Pleasingly, most of that volume is coming from our expansion geographies. As we sit here today, our fleet utilization has returned to the mid seventies. As we return to a more typical organic R&S growth expectation. Our primary focus remains on the geographic expansion and scale of our rental platform. Which generates the highest long term returns for our business. As we look forward, we continue to see a robust long term investment cycle in our core markets.

Grid load growth is expected to remain elevated driven by growing demand from data centers, the reshoring of US manufacturing and the broad electrification of our economy. Additionally, critical investments are needed to expand, modernize, and harden the nation's aging transmission infrastructure. Which is necessary to maintain a secure, healthy, and growing economy. Collectively, this combination of drivers reinforces our confidence that our investments in scale are well timed, and vital to position us to capitalize on these opportunities and drive profitable growth for our company. To support that growth, our commitment to making the necessary investments is unchanged with the growth of our DURA-BASE composite mat rental fleet remaining our top priority.

Necessitating the expansion of our current manufacturing capacity. Which we have addressed in prior quarters. Our second focus area remains on driving organizational efficiencies across the business. We continue to see this play out in both gross margins and SG&A as a percent of revenues as we remain on track to achieve a 30% EBITDA margin in 2026, delivering a meaningful margin expansion over prior year. As we continue to grow, we see opportunity to further expand our EBITDA margins and returns on invested capital through operating leverage, while also making targeted investments to drive sustainable long term revenue growth for the company. And our final priority is the allocation of capital beyond our organic requirements.

With a strong balance sheet and a disciplined approach, we remain active in the evaluation of core strategic inorganic opportunities that increase our market coverage, value and relevance to customers in key critical infrastructure markets. As well as the continuation of our share repurchase program. As mentioned, during the quarter, we purchased 1 million shares which leaves us with $76 million remaining on our authorization, and we will continue to utilize this capacity to opportunistically manage our program. With supportive long term market outlooks in our served geographies, a clear strategic focus and a robust balance sheet, we remain on pace to deliver another year of profitable growth in 2026 and beyond.

In closing, I want to thank our shareholders for their ongoing support, and our employees for their dedication to the business, including their commitment to safety and compliance. And our customers for their ongoing partnership. And with that, we will open the call for questions.

Operator:We will now begin the Q&A session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Aaron Spychalla with Craig-Hallum. Your line is open, Aaron. Please go ahead.

Aaron Spychalla:Yeah. Good morning, Matthew and Gregg. Thanks for taking the questions. First for us, can you just give a little bit more details on some of the rental dynamics How big were the projects? It sounds like most of them have started up. And, it seems to be more kind of customer weather specific, not really a change in overall kinda market demand. And if you could just speak to the potential growth you see, you know, kinda customer wise or region wise as well. down in Texas, that would be great.

Matthew S. Lanigan:Yeah. Thanks, Aaron. I will jump on that 1. Yeah. Look. I think I think it covered it pretty well. I think where we left you guys on our Q2 call and our Q3 expectations was we were taking care of the demobilization of a number of large projects and putting them to work in that Texas region in Q3. I guess post that call, the Texas challenge was if you look at the rain gauges around the DFW area, I think we had our second lowest rainfall in a decade, which really allowed you know, 1 of our key customers there to make the decision to proceed.

On some of these projects without the deployment of mats, and it was not until we saw some meaningful rain in the forecast in October that we started to deploy. So very much a localized Texas issue that kind of caught us with the lack of rain there through the back end of the third quarter and into early fourth quarter there. Moving forward, you know, the vast majority of those mats are deployed, I think, in the next week So the remainder of those will be on the ground and earning, which is reflected in our confidence coming into Q4 that we are returning to a normal level.

You know, the encouraging thing was, and we touched on it in our prepared remarks, you know, the rest of the country performed pretty well, you know, outside of Texas, our other regions were up. Think our diverse efforts were paying dividends there. You know, if you add back the Texas delays, I think we were right on or would have been slightly ahead of guide. So that is a little frustrating for us, but we obviously cannot control the weather. And we will support our customers, you know, however they however they need us to support them.

You know, the other thing I would add, I think this really plays into why our expansion strategy and the expansion of the manufacturing capacity is important to us, you know, as we are able to get fleet deployed into more markets, we are going to have a buffer for regionalized or localized effects like we saw here in the quarter going forward. So you know, disappointing in terms of the impact it had in the region, but you know, I just want to kinda leave you with the overarching trends the rest of the regional activity levels really reflect our confidence here going forward in the growth of the business.

Aaron Spychalla:Got it. Thanks for the color there. And then maybe second, you know, on the guidance, it implies, you know, kind of low 30s, around 33% EBITDA margin in the fourth quarter. Can you just talk to confidence and kind of drivers behind that? It sounds like you are not seeing a notable impact on the commodity side with resin prices?

Gregg S. Piontek:Yeah. I guess, first of all, in terms of that bounce back in Q4, the overall EBITDA margin, Q2 was quite solid as well. The big mover from Q2 to Q3 was the rental. Revenue. I mean, was. So you had a much softer mix and that rental is what has the highest contribution, you know, flow through. And so with that recovery, that is where the bulk of that rebound is coming from. In terms of the resin prices, no, not much of an impact. You know, we did see earlier in this year the price increases you know, following the conflict with Iran that really started to flow through here in the second quarter.

But, you know, we were able to really help neutralize that as we become a more scaled player diversifying our supply base, etcetera. So we are to offset a fair amount. And the other thing is as we continue to grow and expand, you know, we are getting operating leverage that is helping to offset that. The impact to the resin.

Aaron Spychalla:Got it. Thanks for taking the questions. I will turn it over.

Matthew S. Lanigan:Thanks, Aaron.

Operator:Your next question comes from the line of Laura Maher with B. Riley. Your line is open, Laura. Please go ahead.

Laura Maher:Hi. Good morning, Matthew and Gregg.

Matthew S. Lanigan:Hey, Laura.

Laura Maher:So you said Yeah. It was low sixties is where we started significantly through October. Is that catch up on delayed deployments or new activity? And what does the deployed fleet look like Today versus the start of Q3?

Matthew S. Lanigan:Yeah. I mean, it is really a catch up I think all we lost was days rather than projects, Laura, when if I can put it into that context in terms of the deployment. So it is really just now catching up on the duration of those with I guess, less days in the scope. You know, we touched on mid seventies, I think, as the fleet, you know, that is recovering from a sort of 60s mark. Think that is where we referenced it. Coming out of Q2, and so I think they are your bookends.

Gregg S. Piontek:Yeah. It was. I would say low sixties is where we started Q3. Or Q4 rather. And. Yeah. So that is pretty meaningful improvement as we progress through October. And as Matthew mentioned, additional projects here queued up.

Laura Maher:Thanks.

Matthew S. Lanigan:And then for my second question, you reiterated unchanged 2027 growth expectation. Can you frame that in terms of rental revenue growth and the margin profile? And then what has to go right on the deployment side for that to hold?

Gregg S. Piontek:Yeah. I guess as we look at 2027, the way I would I would frame it is obviously, we have been very consistent in the double digit expectation. Here in 2026, we have not hit the mark that we have targeted for ourselves in terms of the R&S growth, and that is a function of these large project inefficiencies and weather. So, obviously, you layer that on top and you are starting with that double digit, it means you know, if you just factor in the 2026 element of it, that kind of points you to more of a mid teen sort of growth expectations is what we would have for the RNS side.

I think the greater variable that you have and this is always the case, within the revenue, Outlook is the product sales side, which has so many dependencies on capital cycles, etcetera. Again, as we have planned, you know, as we came into 2026, we had an expectation of flattish. Things started out stronger, and then we kind of we have now come back to that flattish. And so that is kind of how I think about our expectations for 2027 as well. In terms of the EBITDA profile on that you know, it just goes back to what we have delivered here you know, over the past few years.

And you have seen the operating leverage that we are getting as we are as we are growing. We are able to continue to build and expand our EBITDA margin and that is what I would expect to see at a similar level.

Laura Maher:Thanks. I will pass it on.

Matthew S. Lanigan:Thanks, Sarah.

Operator:Your next question comes from the line of Min Cho with Texas Capital Bank. Your line is open, Min. Please go ahead.

Min Cho:Gregg. Thank you. Good morning, Matthew and Gregg. Just a couple of questions here.

Matthew S. Lanigan:Hey.

Min Cho:Can you talk a little bit about just how we should think about quoting activity being up 20% and expectations for revenue growth. What is the typical lag between quoting and delivery? Or is that just kind of a constant rolling effect?

Matthew S. Lanigan:Yeah. No. I think it is it is it is been extending, Min. I think as activity levels across you know, the infrastructure is increasing. We are getting, you know, more inquiries early utilities as they are starting to see that parts of supply chain may be becoming stretched. So we are we are getting a longer look I would say. So as you think about the. that math we are we are looking later into 2027 Some of it is 2028, particularly on the 765 side as people are starting to look at when that is likely to start to begin construction.

So I think that is the way we look at it, and that is the way you should reflect it in any kind of models you have got, Min.

Min Cho:Okay. that is fair. And then you definitely mentioned that you are seeing you are seeing strength outside of the Texas market. Mhmm. Can you just talk about where like, what geographies you are seeing the most demand from?

Matthew S. Lanigan:Yeah. I think pleasingly, you know, we have been talking, if you go back on our calls now for a while, about getting more traction in the Midwest, Min, and I think we are seeing that happen. I think 2026 has been stronger for us in the Midwest. And I think we will continue with that. I think we are getting a nice level of activity up the Eastern Seaboard as well. In the Northeast. We have always been a player in the Northeast. Particularly on our oil and gas side, but we are seeing increasing traction on the T and D side there too.

So I think they are kind of the main regions that I would call out Excellent.

Min Cho:And then can you talk a little. Obviously, you know, there is transportation involved here to get the mats to where you need them. Yeah. Can you talk a little bit about diesel impact and how you are looking to offset that or how you have to offset that?

Matthew S. Lanigan:Yeah. I think Q3 is a great example of that. I mean, when you look at Texas, when the customer's saying, hey. We are not gonna need these when we thought they did. Our standard operating playbook at that point would be to put them on trucks and move them to projects where we could get some utilization for them with diesel prices where it is right now, that economics was very challenged for us. So, we elected not to do it. So, I think it is playing out. It played out as part of the story there in Texas that you know, the elevated prices, we just chose not to do that. The economics would have been upside down.

I think, you know, the key kind of buffer for us moving forward is having more fleet dispersion throughout the market. So you are doing less longer haul routes with your fleet. And again, that just comes back to our priority to expand fleet, to expand manufacturing capacity, to be have inventory in the markets where we see the growth moving in the future and minimize the amount of kind of intermodal transport runs that we have to do. Excellent. Gregg. Thank you.

Operator:Your next question comes from the line of Gerard Sweeney with ROTH Capital Partners. Your line is. Jerry, please go ahead.

Gerard Sweeney:Good morning, guys. You kind of hit upon 1 of my main questions. Just now, and that was, you know, sort of the strategy and ability to ready the mats. So it sounds like longer term, the mats for rentals will be more regionally based and can redeploy them within those regions and then with more. If you have more capacity, more. A larger fleet, you can keep mats in a region and have less moving around, and is that, generally speaking, what you are discussing on that front?

Matthew S. Lanigan:Yeah. 100%, Jerry. I think when you look at the sweet spot, you know, anything much over 3 hours of transport starts to starts to become a little more challenging, and that is obviously pressured with diesel where it is right now. So if you can get your front end working well, identifying where the projects are and having inventory, you know, prepositioned in those spots. It. it is helpful when it comes to kind of offsetting that transportation inefficiency, if you will.

Gerard Sweeney:Got it. And, you know, weather is weather. Right? Obviously. But know, certain areas of the country tend to have longer periods of maybe dryness, etcetera. But, I mean, is Texas or the South Southwest more susceptible to some of these issues as opposed to some of the other areas? And I guess the deeper question is, you know, how much dryness does a region need to have for people to or clients to start pulling back on some of those rent Yeah.

Matthew S. Lanigan:Great question. I mean, I have been in this business now for 10 years, Jerry, and this is the first time we have seen this. I think I quoted a number out of, you know, we pulled some rain gauge data out of DFW. This was the second driest third quarter in the last decade. So Yeah. I think that kind of goes to some indication of frequency. You know, I will say I am certainly no meteorologist, but, you know, looking ahead, I think the forecast for this part of the world in 2027 is wetter, which is Super.

Gerard Sweeney:That was my next point. Yes. Super.

Matthew S. Lanigan:Texas is supposed to be wetter. Yeah. So, I mean, again, you know, we want. We wanna make sure that the projects we are on are as efficient as possible. So we wanna work with our customers to make sure they get to where they need to be and out of there again as efficient as possible. So but everything does point towards a, you know, a wetter south of the country next year. Which have not you know, so far in 10 years has been the only spot that said we do not need mats for a project. Gotcha.

Gerard Sweeney:So this was a unique a unique year, and I am a believer in regression to the mean, so next year will be good. All right, guys. Thank you.

Operator:Your next question comes from the line of William Dezellem with Tieton Capital Management. Line is open, Bill. Please go ahead.

William Dezellem:Thank you. First of all, would you please repeat the fleet growth that you are anticipating this year? And then how does that compare with the fleet growth that you were targeting over the next few years?

Gregg S. Piontek:So, yeah, with. So far, year to date, we have grown our fleet by about 10%. With the higher level of additions expected here in Q4, we are expecting to be kind of mid teens growth year over year. So that is been you know, that. that is consistent with the growth that we had last year. You know, 1 of the dependencies that we had here coming into this year and why we had a broad range on the capital requirement there was you are also satisfying the sales demand.

And so as Matthew touched on to the extent that it is a little bit softer there, We are able to put more into the fleet, displace some of the CrossRents, and also position ourselves to help to drive the diversification and growth in 2027. And then, Gregg, as you look out over whether it be 3 years or 5 years, what rate of growth are you are you targeting for fleet growth again? Well, I think your fleet growth over the longer term taking, you know, ebbs and flows out of things, your fleet growth is going to go--it is going to correlate to your revenue growth. You get 10% rental revenue growth.

You can assume that means 10% growth in the fleet. And that is really what is gonna drive it is the overall demand and how, you know, how strong we are able to lean into this and grow it.

William Dezellem:Yeah. And then at the margin, how much of those CrossRents we deploy. displace, and when might be 1 of those swings.

Gregg S. Piontek:Yeah. We took out about a third of our CrossRents here. In the third quarter. Gregg.

William Dezellem:Thank you. And then let's circle back if we could to the comment that you all made in the press release and your opening remarks regarding strategic planning and the diligence cost. Walk us through kind of what you all are doing, and maybe bigger picture, what you are trying to accomplish not just holistically, but maybe as much detail as you can provide will really be helpful.

Matthew S. Lanigan:Yeah, Bill. I think you know, we have been pretty transparent in terms of our you know, the trade offs that we have between organic entry into markets where we do not have enough presence, and we see that the work is there to support a larger operation than we have and then the inorganic evaluation of targets within that space that would accelerate our entry and, obviously, be accretive to the business. So that is ongoing. We did not do grass form and stop. We have been continuing to look for opportunities there that pencil out.

I will say they have to obviously pencil out. there is there is a lot of variation in people's expectation of value for some of these businesses, and we are very disciplined in the way we evaluate things. So that is really what is continuing and it has a large focus on geographic expansion of our footprint and, obviously, the long term displacement of the traditional access products, primarily timber to composite, which will also support the share shift of the market to a longer term higher share of composites.

William Dezellem:And the strategic planning what are what are you all trying to what is the riddle that you are trying to solve with your strategic planning?

Matthew S. Lanigan:Yeah. Look. I mean, primarily, Bill, it is just continuing to get updated relevant information around what the market drivers are in these geographies that I just you know, pointed out we are evaluating. So, really, that is just involving, you know, third parties and people who study this very closely. As a profession to really understand what that longer term dynamic is so that when we when we evaluate regions, we are doing it with a long term return. In mind. And that is that is primarily where that expense was incurred. Yeah.

Gregg S. Piontek:I think. I mean, when you look at the market, you see pretty dramatic changes, pretty dramatic increases in the spend. A lot of movement over the past few years in terms of that longer term outlook, and you are just trying to stay current with the views as that shifts to make sure that you are being thoughtful about the longer term expectations of the business and how you invest your capital.

William Dezellem:And then lastly, are you finding new industries outside of utilities that you think could be could be a meaningful growth opportunity as you work through this strategic planning thought process?

Matthew S. Lanigan:Yeah. I mean, I think, Bill, right now, it is, you know, priority 1 is get the distribution in what we do. Obviously, if there is an ancillary or adjacent services that we can provide the same customers, that is that is a much better proposition in terms of gaining traction for that if those services then avail themselves to markets outside of T&D. that is going to be something that we are focused on, but at this point, I would not say that is anything that I would wanna highlight as a meaningful near term kind of pivot for the business. Yeah.

Gregg S. Piontek:I think I think it is important to highlight the. As we noted in the comments, we are seeing growth this year across industries. You know, the utility proportion that is coming from the utilities has been holding consistent with last year because we are seeing growth in other markets. As well.

William Dezellem:Gregg. Thank you both.

Operator:This concludes the Q&A session. I will now turn the call back to Gregg for closing remarks.

Gregg S. Piontek:Thanks again for joining us on the call today. And should you have any questions or requests please reach out by email at investors@npki.com. We look forward to hosting you again on next quarter's call.

Operator:This concludes today's call. Thank you for attending. You may now disconnect.

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NPK International (NPKI) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool