NPK International Inc.

Hello, everyone. Thank you for joining us and welcome to NPK International's third quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Gregg Piontek, Senior Vice President and Chief Financial Officer. Please go ahead.

Thank you, operator. I'd like to welcome everyone to the NPK International third quarter 2026 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 reconciliation 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 at NPKI.com. Please note that the information disclosed on today's call is current as of October 30th, 2026. At the conclusion of our prepared remarks, we will open the line for questions. And with that, I would like to turn the call over to our president and CEO, Matthew Lanigan.

Thanks, Gregg, and welcome to everyone joining us on today's call. Our third quarter results demonstrated continued year-over-year growth in revenue and adjusted EBITDA and the expansion of EBITDA margin. We achieved this result despite the exceptionally dry weather pattern in Texas that resulted in slower than normal quarterly activity, as well as several scheduled utility projects commencing during the quarter without the use of planned matting, delaying the return of fleet utilization to more typical levels into the fourth quarter. Elsewhere in the country, business trends remained favorable and our performance was in line with expectations coming into the quarter. While project timing can impact results in the short term, the long-term business momentum remains strong. 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 530 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-2027, 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 cross-rental maps. 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 R&S performance, as I reflect on our results through the first three quarters of 2026, 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-day basis, revenue has increased 15% year-over-year, with approximately half of the growth generated organically and half through acquisition. Adjusted EBITDA increased to 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 nine 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'll turn the call over to Gregg for his prepared remarks.