NPK Cuts 2026 Outlook to $300–305 Million Despite 11% Quarterly Revenue Growth
Key Facts
NPK International reported third-quarter results on October 29, with revenue of $76.3 million, up 11% from $68.8 million a year earlier. Income from continuing operations was $6.3 million, or $0.07 per diluted share, compared with $6.1 million and $0.07 per share in the third quarter of 2025. The company, meanwhile, cut its 2026 revenue outlook to a range of $300–305 million and its adjusted EBITDA outlook to $90–93 million. July guidance had put revenue at $313–323 million and adjusted EBITDA at $97–103 million. Management said exceptional drought in Texas weakened demand for mats in the third quarter and early fourth quarter, despite higher revenue and an improved adjusted EBITDA margin.
Adjusted EBITDA from continuing operations rose 30% to $20.0 million, compared with $15.4 million in the year-earlier period. Its margin increased to 26.2% from 22.3% a year earlier. Operating income from continuing operations was $9.2 million, with an operating margin of 12.0%. On a quarterly basis, revenue was below the second quarter of 2026, when it was $81.6 million, up 20% year over year. The second quarter also saw adjusted EBITDA of $25.7 million, up 37% year over year, according to management's comments.
Revenue growth came from rental and services activity and product sales: rental and services revenue rose 12% to $49.6 million, while product sales increased 9% to $26.7 million. The company said rental demand was affected by exceptionally dry weather in Texas. Large utility projects there began work without using mats, according to the earnings release. Chief Executive Matthew Lanigan said the adverse weather impact extended into the beginning of the fourth quarter and contributed to the lower full-year outlook. He noted, however, that rental project activity strengthened during October and that the 2027 growth outlook remained unchanged.
The weakness also affected cash flow during the quarter, with operating cash flow of $7.1 million, compared with $24.7 million a year earlier. Free cash flow showed a deficit of $4.4 million, after reaching $12.5 million in the year-earlier period. As of September 30, the company had $4.2 million in cash and $26.3 million in debt. Available liquidity under its revolving credit facility was $132.2 million on that date. These figures provide a picture of available liquidity alongside the lower outlook and continued spending on expansion and share repurchases.
The company plans to invest $40–45 million to expand manufacturing capacity in Carencro, Louisiana, by about 50%, with additional production expected to begin by mid-2027. It had spent $10.5 million on the project through September 30, 2026. In the third quarter, it used $13.4 million to repurchase 1 million shares, with $76 million remaining under its repurchase authorization. The company manufactures, sells and rents recyclable composite mats and worksite access solutions. The sectors it serves include electric power transmission and distribution, oil and gas, pipelines and renewable energy.
The company had previously increased its capital expenditure plan by $10 million to meet expected demand growth in 2026, according to management's comments in an earlier release. Management then pointed to momentum in power transmission markets, while current expansion plans remain focused on increasing manufacturing capacity. The 2026 outlook cut follows the higher July guidance, with management keeping its 2027 growth outlook unchanged despite the weather's impact on near-term demand. NPKI shares closed at $11.20 on October 29. The earnings conference call was scheduled for October 30, 2026, at 9:30 a.m. Eastern Time.