NPK cuts 2026 revenue outlook to $300–305 million after Texas drought
Key Facts
NPK International cut its fiscal 2026 revenue forecast to a range of $300 million to $305 million, and its adjusted EBITDA forecast to $90–93 million, according to its third-quarter results statement published on October 29. The revenue revision follows the company’s second-quarter forecast of annual revenue between $335 million and $350 million. The CEO said, "Exceptional dry weather in Texas negatively affected demand for mats during the third quarter and the start of the fourth quarter." The company said several large scheduled infrastructure projects began without using mats amid the state’s dry weather pattern. Management thus linked the cut to weaker demand and the timing of equipment use on specific projects, while saying revenue from other expansion regions offset part of the regional decline.
The annual cut came despite third-quarter revenue rising to $76.3 million, up 11% from $68.8 million in the same period of 2025. Rental and services revenue rose 12% to $49.6 million, while product sales increased 9% to $26.7 million. In the second quarter, the company reported revenue of $81.6 million, up 20% year over year, and adjusted EBITDA of about $25.7 million, a margin of 31.5%. In July, management said it had raised its annual earnings outlook, citing strength in power transmission markets and product demand, and expected that strength to continue in the second half of 2026. In explaining the new range, the company said the midpoint of its revenue forecast reflects modest organic growth in rentals and a contribution from the Grassform acquisition, with product sales relatively in line with the prior year.
Management said weaker demand in Texas did not amount to a broad halt in rental activity, and that rental project activity improved sharply during October. It added that rental and services trends are expected to remain strong through year-end, and that its 2027 growth outlook was unchanged. The company also said quoting activity remained strong, with growth of about 20% year over year throughout the year, and that a significant share of business volume came from expansion regions. These indicators provide mixed context for the cut: the impact of the Texas drought weighed on current-year expectations, while the company pointed to improving project activity and unchanged growth estimates for the following year. The company did not give a specific timeline for the weather impact to ease in these remarks, but described improving activity in October and kept its 2027 outlook unchanged.
NPK plans capital expenditures of $70–75 million in 2026, including $40–45 million to expand its rental fleet and about $20 million for manufacturing expansion. In the third quarter, operating cash flow was $7.1 million, while net capital investments used $11.4 million. The company spent $13.4 million to repurchase 1 million shares during the quarter, with $76 million remaining under its buyback authorization on September 30. On the same date, cash was $4.2 million and total debt was $26.3 million, with $132.2 million of liquidity available under its revolving credit facility. The spending plans run alongside these figures, with a large portion directed toward rental and manufacturing capacity that the company said it is expanding.
In manufacturing, the company aims to increase capacity at its Carencro, Louisiana plant by about 50% from current levels, with additional production expected to begin by mid-2027. It frames the move as preparation for the growth it expects in 2027, while saying its growth estimates for that year are unchanged. In the nearer term, the company expects rental and services trends to remain strong through the end of 2026, following improved project activity during October. NPK International shares, listed under the ticker NPKI, closed at $11.20 on October 29.