NPK International Inc.

Please stand by. We're about to begin. Good morning, everyone. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to the New Park Resources fourth quarter and full year 2024 results conference call. Today's call is being recorded and will be available for replay beginning at 1230 p.m. Eastern Standard Time. The recording can be accessed by dialing 800-839-5629 for domestic or 402-220-2556 for international. All lines are currently muted and after the prepared remarks, there will be a live question and answer session. If you would like to ask a question during the Q&A segment, please press star 1 on your phone. If your question has been answered, you may remove yourself from the queue at any time by pressing star 2. We do ask that you please pick up your handset for optimal sound quality. It is now my pleasure to turn the floor over to Greg Piontek, Chief Financial Officer of New Park Resources. Please go ahead.

Thank you, Operator. I'd like to welcome everyone to the NPK International Year-end 2024 Conference Call. Joining me today is Matthew Lanigan, our President and Chief Executive Officer. Before handing over to Matthew, I'd like to highlight that today's discussion contains forward-looking statements regarding future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. Our comments on today's call may also include certain non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our quarterly earnings release, which can be found on our corporate website. There will be a replay of today's call, and it will be available by webcast within the investor relations section of our website, mpki.com. Please note that the information disclosed on today's call is current as of February 27, 2025. At the conclusion of our prepared remarks, we will open the line for questions. And with that, I'd like to turn the call over to our President and CEO, Matthew Lennigan.

Matthew Lennigan Thanks, Greg, and welcome to everyone joining us on today's call. I'll begin with commentary for our fourth quarter and full year 2024 performance, followed by our outlook and strategic priorities for 2025. Following the third quarter, transitory pause in our key customer projects, rental activity accelerated meaningfully entering the fourth quarter, consistent with our expectations, resulting in a strong finish to the year for our business. Fourth quarter revenue increased 24% year-over-year to $58 million, supported by broad-based growth across all our revenue streams. Rental revenues increased by 28% year-over-year, reaching a new single quarter record, supported by a growing demand across our core utilities, transmission and critical infrastructure customers. Gross margin increased by nearly 500 basis points to 39.2%, the strongest level in two years, while adjusted EBITDA improved to $17.1 million in the fourth quarter, an increase of 35% versus the prior year and doubling sequentially. These improvements were driven by a combination of higher revenue, a stronger sales mix and improved operating leverage. For the full year, total revenue increased by 5% year-over-year, which included a 7% increase in rental revenue and a 24% increase in product sales, somewhat offset by a 15% decline in service revenues. Breaking our full year revenue details down further, our commercial priorities in 2024 focused on targeting the highest value rental and service opportunities to drive long-term profitable growth and on driving broader market adoption of our Jira-based composite matting solution. Our focus on returns resulted in us moving away from a number of service intensive projects that failed to meet our required return thresholds, impacting our 2024 service revenues by more than $10 million. Importantly, this enabled our team to concentrate their efforts on high impact relationships and projects that value our unique integrated solutions model that should deliver ongoing benefits in 2025 and beyond. We are also encouraged that our record level of product sales illustrates the success of our strategy to displace traditional timber matting as customers increasingly recognize the superior quality and economic value of the JuraBase composite matting system. With our focus on these priorities and resultant improved sales mix, we delivered a 12% adjusted EBITDA growth for the year, 160 basis points of adjusted EBITDA margin expansion, and a 35% improvement in our adjusted diluted earnings per share. Given continued positive demand across our served markets, we maintained our commitment to invest in the expansion of our rental fleet, investing a net $33 million in 2024, including $10 million in the fourth quarter, strengthening our customer responsiveness and ability to serve the needs of the largest critical infrastructure projects. We also feel that recent actions taken by the federal government as the new administration implements its realigned strategic priorities will have a muted impact on our business as the secular megatrends underpinning investment in critical infrastructure remain robust. Therefore, we expect that our continued focus and discipline will deliver meaningful growth and expansion of our return on invested capital in the years to come. And with that, I'll turn the call over to Greg for his prepared remarks.