Hello everyone, thank you so much for waiting and welcome to NPK International First Quarter 2025 Earnings Conference Call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Gregg Piontek. Please go ahead. Thank you, Operator. I'd like to welcome everyone to the NPK International First Quarter 2025 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 statement 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 at npki.com. Please note that the information disclosed on today's call is current as of May 2nd, 2025. At the conclusion of our prepared remarks, we will open the line for questions. 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. We are very pleased with our execution in the first quarter, which continued to validate our long-term growth strategy and the strength of our unique value proposition. We believe our commitment to scale, geographic expansion, and unique product and service quality is being increasingly recognized by our customers, and our investments in our commercial capabilities and rental fleet expansion continue to provide tangible benefits as demonstrated by our strong first quarter results. Entering 2025, the positive momentum from the fourth quarter carried over to the new year, and as the quarter progressed, we saw demand on both rentals and product sales accelerate, leading to a very strong finish to the first quarter. Total first quarter revenue increased 32% year -over -year to $65 million, supported by meaningful growth in both rental and product sales. Rental revenue also increased by 32% year -over -year, reaching yet another single quarter record, supported by a growing demand across our core utilities, transmission, and critical infrastructure customers. Product sales increased 55% year-over-year, reflecting both continued wood-to-composite mat conversion by fleet operators supporting utilities and critical infrastructure and markets and timing of customer projects. Gross margin increased by 300 basis points to 39%, while adjusted EBITDA improved to $19.7 million in the first quarter, an increase of 59% versus the prior year. These improvements were driven by a combination of higher revenue, a stronger sales mix, and improved operating leverage. Given the continued positive demand across our served markets, we maintained our commitment to invest in the expansion of our rental fleet, investing a net $8 million in the first quarter, strengthening our scale, customer responsiveness, and ability to serve the needs of the largest critical infrastructure projects. Also consistent with our plans discussed in February's call, we resumed our return of capital program using $11 million of cash in the first quarter to purchase 2% of our outstanding shares, with an additional $1 million of purchases in April. In support of our program, our board of directors has increased the remaining share repurchase authorization to $100 million as of April 30th. As we enter 2025, we noted that the secular megatrend's underpinning investment in critical infrastructure remained robust despite uncertainties being created by the realignment of federal government priorities, including the imposition of tariffs and reassessment of the IIJA and IRA programs. While the industry continues to wait for clarity on government actions, we are encouraged by feedback from our customers and broader market participants during the quarter that their 2025 priorities remain relatively unchanged, indicating a continued robust growth in their CapEx plans. Given that feedback, in combination with our strong performance in Q1 and the continued strength we see early in Q2, we have raised our full-year revenue and EBITDA expectations for 2025. With that, I'll turn the call to Gregg for his prepared remarks. Thanks, Matthew. I'll begin with a more detailed discussion of our first quarter results, then provide an update on our outlook for 2025 and capital allocation priorities. As Matthew touched on, first quarter revenues benefited from continued robust rental demand along with elevated product sales. Total rental and service revenues improved 4% sequentially and 23% year-over-year to $43 million in the first quarter. Revenues from product sales also improved 36% sequentially and 55% year-over-year, coming in at $21 million for the first quarter. By industry, our year-over-year growth in rental and service revenues was primarily driven by the power transmission sector and increased pipeline activity, somewhat offset by a lower contribution from the oil and gas sector, while product sales continue to be heavily directed to power transmission. Reflecting on the trailing 12-month period through Q1, our trailing 12-month revenue improved to $233 million, reflecting 16% year-over-year growth over the previous 12-month period. This improvement includes a 53% increase in product sales and a 15% increase in rental revenues, somewhat offset by lower service revenues. Now turning to gross profit, the first quarter improved $3 million sequentially and $8 million year-over-year, largely reflecting the impact of higher revenues along with the benefits of the associated operating leverage and stronger sales mix. With the continued strength in sales mix, we delivered a 39% gross margin in the first quarter, a 300 basis point improvement from the first quarter of 2024. SG&A expenses increased by $1 million from the fourth quarter to $11.7 million, which was slightly higher than the first quarter of 2024 and in line with our expectations as we absorbed certain fixed overhead costs that were historically carried by fluids. As a percentage of revenues, the first quarter SG&A was 18.1% of revenues, reflecting a 50 basis point improvement from the prior quarter and a 550 basis point improvement from Q1 of last year. FX gains provided a modest tailwind to the first quarter, driven by U.S. dollar to British pound currency fluctuations. Income tax expense was $3.5 million in the first quarter, reflecting an effective tax rate of 25%. Adjusted EPS from continuing operations was $0.12 per diluted share in the first quarter, compared to $0.08 in the fourth quarter and $0.05 in the first quarter of last year. Turning to cash flows, operating cash flow generated $9 million in the first quarter, including $19 million from net income adjusted for non-cash expenses, partially offset by $10 million of net cash used to fund growth in working capital. Total investing activities provided $5 million of cash, which includes $11 million of additional proceeds from last year's divestiture, offset by $8 million of net CapEx, substantially all of which was invested into fleet expansion, growing our composite mat rental fleet by approximately 2% from the end of 2024. Additionally, as Matthew touched on, we resumed share repurchases under our return of capital program, using $11 million to purchase 1.8 million shares, reflecting an average purchase price of $5.94 per share. We ended the quarter with total cash of $21 million and total debt of $8 million for a net cash position of $13 million. Additionally, we have $66 million of availability under our U.S. ABL facility, which currently has no outstanding borrowings. At the end of the quarter, we have roughly $7 million of net assets related to the fluid sale, with substantially all of the receivables bearing interest at 12.5% per annum. Also, as we discussed last quarter, we have significant U.S. federal net operating loss and other tax credit carryforwards that we expect will limit our cash tax obligations over the next few years. Now turning to our business outlook, despite some uncertainty that Matthew touched on, our customers continue to remain highly constructive on the near-term and longer-term outlook, particularly for utility spending. As disclosed in yesterday's press release, in light of the strong start to the year, we have increased our full-year 2025 expectations, with total anticipated revenues now in the $240-$252 million range and adjusted EBITDA of $64-$72 million. The midpoint of our 2025 range reflects 13% revenue growth and 24% adjusted EBITDA growth over 2024. Breaking our full-year revenue expectation down further, we expect total rental and service revenues will grow roughly 15%-20% over 2024, while product sales, which are more difficult to predict, are expected to remain somewhat in line with 2024 levels. Our net CapEx expectation remains unchanged at $35-$40 million, which includes roughly $8-$10 million of maintenance capital. As for the near-term outlook, we expect to see Q2 rental volume to run at a similar level to Q1, with the quarter starting out above Q1 average monthly run rates and expected to taper off as we head into the seasonally slower summer months. On the product sales side, we expect Q2 volumes will pull back into the mid-teens range following the strong Q1 results. In terms of SG&A, as discussed last quarter, we expect Q1 will reflect the high point of our quarterly spending. At this point, the majority of our post-sale administrative support obligations to the fluids business have been completed, and we are actively working to streamline our overhead structure for the simplified business, though the meaningful improvements are expected to be realized late in the year. In terms of capital allocation strategy, our priorities remain unchanged. We continue to prioritize investment in the organic growth of our rental fleet and also expect to continue returning a portion of free cash flow generation to shareholders through our programmatic share repurchase program. We are also currently in the process of evaluating alternative revolving credit facilities that can provide us with greater liquidity to support our strategic growth plans. I would like to turn the call back over to Matthew for his concluding remarks. Thanks, Gregg. We are very pleased with our strong performance over the past few quarters, which we believe continues to validate our unique value proposition and growth outlook. As discussed last quarter, our strategy for 2025 remains focused on three foundational elements to drive long-term shareholder value creation through scale enhancement, operating efficiency, and return of capital optimization. Our primary focus remains the acceleration of revenue growth through the expansion of our high-return rental business, which includes a combination of geographic expansion within the U.S. while also expanding our customer market share within our currently served markets. Following our efforts in 2023 and 2024 to expand our sales team and enhance our sales force effectiveness capabilities, we are very pleased with the results being delivered. Consistent with prior quarters, our quoted volume continues to grow meaningfully year-over-year, while our award rate remains in line with historical levels. As a result, in the first quarter, we delivered 32% year-over-year growth in rental revenues, which follows a 28% year-over-year increase in the fourth quarter of 2024. As Gregg framed up, we expect to once again achieve double-digit year-over-year rental growth in the second quarter and the full year. To support this growth, we expanded our composite mat rental fleet by approximately 13% in 2024 and an additional 2% in the first quarter of 2025 as we continue to build on our leading position within the composite rental market. As the largest U.S.-based manufacturer and rental fleet operator of composite matting, we are insulated from any currently known tariff impacts as 100% of our raw materials are sourced within the U.S. This allows us to maintain a competitive offering and meet industry growth expectations moving forward, which is good for both our customers and our shareholders. Our second focus area is on driving further organizational efficiencies across every aspect of our business, with SG&A improving to 18.1% of revenues in the first quarter of 2025. We continue to evaluate and execute actions intended to streamline the organization and our cost structure and remain focused on our target of SG&A as a percentage of revenue in the mid-teens range by early 2026, as outlined in previous earnings calls. Our final priority is the allocation of capital beyond our organic requirements to optimize return of capital for shareholders. With a strong balance sheet and a disciplined approach, we will thoughtfully evaluate strategic inorganic opportunities that increase our value and relevance to customers in key critical infrastructure markets while enhancing return on capital deployed. We also look to balance these inorganic opportunities against our return of capital program and remain committed to continuing our share repurchases, building upon the 2 million shares purchased through April. In closing, I want to thank our shareholders for their ongoing support, our employees for their dedication to the business, including their commitment to safety and compliance, and our customers for their ongoing partnership. With that, we will open the call for questions. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star, followed by one on your telephone keypad. That's star, followed by one on your telephone keypad. Our first question comes from Aaron Spychalla of Craig-Hallum. Your line is now open. Yeah, good morning, Matthew and Gregg. Thanks for taking the questions. Hey, Aaron. Hello. First, for me, you talked a little bit on the sales additions and kind of quotes and order rates and positive trends there. Can you just maybe give a little more detail on just how that the pipeline growth looks kind of year-over-year and just how you're thinking about growth? It sounds like you're talking about continued double-digit growth, but just wanted to unpack that a little bit more. Yeah, absolutely. Thanks, Aaron. Yeah, I think it's fair to say when you look at the growth rate in our rental over the last couple of quarters, our pipeline growth is keeping pace with that, which is obviously the fuel for that. We are pretty happy that we are getting productivity out of the new reps and that it continues to build in that sort of magnitude. Given that, when you look at the various timings of the projects and when they will fall and so on and so forth, that is why we are kind of calling Q2 the way we called it in full year at double digits. Yeah, I think the other thing to add there is with something we've talked about in the past is that we are seeing a greater proportion of our wins coming from those larger scale, longer-term projects, which also helps with not only the volume, but that consistency. Got it. Thanks for that. Maybe second, you talked about the continued shift in the market from wood to composites. Can you just give a little more detail on where that's at today, how you think that can trend in the coming years, and just what that could mean for your business and just kind of the value proposition behind that shift? Yeah, I think as we both touched on in the call, the preponderance of the sales in Q1 was to people who had operated timber fleets in the past. We are encouraged by the fact that we're seeing an adoption of historical timber fleet operators to composites. That trend continues from previous quarters, which is encouraging. Obviously, for us, that bodes well. We're the largest composite fleet operator in the country and also have the manufacturing capacity to keep pace with those demands. All encouraging in terms of our focus. All right. Maybe one last one. Can you give an update on just M&A and how you're kind of currently thinking about this geographic expansion and kind of focus on wallet share expansion? What's the pipeline look like there? Yeah, how are you thinking about kind of make versus buy as you look to expand the business? Yeah, thanks, Aaron. I'm obviously not going to get into specifics other than to say it's an active workstream on our behalf, but I think you touched on the relevant point there. As we look at these things, it's always referenced against a make versus buy decision. We know the economics of what we do, and we've got to make sure that we evaluate those on a return basis. Keeping shareholder return front and center in those decisions. All right. That sounds good. Thanks for taking the questions. Appreciate it. You bet. Thanks, Aaron. Your next question comes from the line of Amit Dayal of H.C. Wainwright. Your line is now open. Thank you. Good morning, everyone. Hey, Amit. First of all, congratulations on a really strong quarter and a very timely execution on the share repurchases. Really good to see that. Question around the rental business. It looks like that is mainly the driver for the near term. Are you potentially fully utilized? It looks like you are. How should we think about growth in 2026 from the rental side? It looks like maybe the majority of the CapEx is going towards the rental business. Are there any other drivers that can support that trend, I guess, where you're seeing a lot of demand on the rental side? Yeah, look, I think if you look at industry CapEx spend, particularly around the utilities transmission spend, we look at that. The forward forecasts are all positive in terms of their growth through their forecast period, which includes 2026, which you touched on. We feel good that the demand from the industry is there. The work needs to be done. Obviously, we have the capacity with our manufacturing footprint to flex our fleet to meet those demands. I think it's really as simple as the utilities continue to spend more money on their transmission network and require more square footage of matting that we're there to provide it for them, which will drive the growth in the period you mentioned. Yeah, and in terms of the CapEx, I think it's really we are committed to continuing to invest in the fleet as warranted to support the revenue growth that we're seeing and the demand growth that we're seeing in the market. Understood. Adjacent to that, I mean, it doesn't look like we are close to peaking, right, in terms of the investments and expansion going on with respect to just getting the power infrastructure in place. Any color on sort of where we are in that cycle in terms of all of these investments and projects being deployed at this point? Yeah, I mean, depending on how you talk to it, I think we're pretty early in on a revised kind of outlook for the industry. If you look at the industry over its more recent history, the growth rates on demand have been kind of low single digits, and now we're calling with whether it's onshoring, whether it's AI, whether whatever the demand driver is, a meaningful uptick in demand, which obviously drives the need to have robust, reliable infrastructure to deliver that. I think as long as those drivers remain, the uptick in activity will also remain. I also call out the fact that the industry has grown its CapEx at a meaningful rate despite its historical growth rate. Even independent of this surge in demand, it remains a very, very fruitful market for us. Understood. You mentioned you may have some further cost savings from sort of the post-divestiture expenses being removed. How big would that amount be on an annual basis going forward? Yeah, that goes back to our previous commentary in terms of the SG&A reductions. It's really in the SG&A side that we see that. We're running on an annualized basis in the mid-40s, and we talked about getting that down closer to the 40 level by early 2026. There are a few big pieces in that, one of which is really our IT systems and moving to a more fit-for-purpose system, which is obviously a project that takes several quarters. That is why the timings of where we see some of these improvements is really later in the year and into early 2026. Okay. Understood. That's all I have, guys. Thank you so much. Thanks, Amit. Your next question comes from the line of Gerry Sweeney of Roth Capital. Your line is now open. Good morning, Matthew and Gregg. Thanks for taking my call. You bet, Gerry. A lot of questions have been asked. I only have one or two sort of additional questions, maybe to dig a little deeper, but it's more on sort of sales, investment, and opportunities around investment for growth. How much more of an opportunity is there? You obviously said in prepared remarks that investing from sales were happy with the productivity coming out of some of the new reps, etc. What should we be thinking about from sales investment on a go-forward basis? Is there still a pretty good opportunity out there to expand organically? Yeah, I mean, if you look at our footprint from a sales perspective, Gerry, we think that we've got some more to go there. Again, I think we're probably looking at a few heads here and there around the country, so nothing that I would describe as very significant investments. That really comes down to productivity and seeing how much we get out of each of our sales territories and whether or not we need to enhance our coverage a little bit there, which we're constantly looking at as we look at the productivity and the activity levels in those markets. I think there's more to come, particularly as our sales team gets more comfortable and gets more tenured with us and understands our value prop deeper. I think from that side, there's more to come from that, if I've answered your question correctly. Yeah, I'm just curious. Also, any low-hanging fruit, maybe some of your larger customers pushing you into regions that you're not necessarily in quite yet, or are we sort of a little bit further into the ballgame for, say, maybe a little bit later innings? Yeah, I do not know that I would call it low-hanging fruit, Gerry, but when we look at our share of wallet with our more established areas that we have been in, we still have ground to make up with the customers that we have more recently penetrated based on our sales expansion. I do not want to diminish the work of the sales team and the operations team to win the trust of the customers to get a bigger share of wallet, but that is going to be a real focus area, which I kind of previously described as sales productivity. Not low-hanging, but definitely opportunity. Got it. Okay. That is it for me. Great quarter, and congratulations. Your next question comes from the line of Laura Maher of B. Riley Securities. Your line is now open. Hi, Matthew and Gregg. Thanks for taking the question. Yeah, you bet. My question is, what would influence growth more? Would it be share gain growth against timber or geographic expansion? And how would that tie into your investment in fleet growth? Yeah, great question, actually. I think, look, ultimately, we still see timber as the predominant technology in the market. I'd have to say share growth against that would be more meaningful when you look at the market coverage timber has traditionally enjoyed versus sort of calling out any specific region. I would think what we're seeing in the continued conversion of timber to composite is a more meaningful driver. Yeah, in terms of those investments, again, it goes back to with having the vertical integration here in the manufacturing side, we are feeding the fleet as needed to support our growth. As Matthew touched on, expanded the fleet 13% last year and another 2% here in Q1. Obviously, the returns on those investments we've established is a very high ROI, so we will continue to do that. Okay. Thank you. I'll pass it on. Thanks, Laura. Your final question comes from the line of Bill Dezellem of Tieton Capital. Thank you. I have actually a group of questions, so if I go too long, just cut me off and we can take it offline. Let me follow up on the last question, please. Clearly, the providers of wood matting are working to save their business. Are you seeing any opportunity or any interest from some of the wood competitors to buy mats from you so that they can then supply what has traditionally been their customer base where their salespeople have relationships? Yeah, Bill, I'd say that's absolutely what's happening. Please, we've developed a bit of an echo here, but yeah, that's absolutely what's happening. When you look at our sales, the preponderance of those sales have been to customers who would traditionally have rented timber products whose end customer is asking them to provide composites. That's exactly what's happening, Bill. It comes back to that issue of the longer-term economics. Obviously, the wood mat is a lower-cost product with a short life, but when you look at it over the term of our life, we have the cost advantage as well. The economics of that is advantage as well. That's helpful. Actually, I'll use that as a segue to just this week. I was driving by a site and saw matting that was in place, and it was, I could say, beat-up or really well used, one of the two. Would you walk through what the replacement cycle is? I don't think I had really thought about the sales that you are making that eventually those ultimately will be repurchased or purchased again to replace those that wear out or are broken, etc. What's your history, and what are you anticipating the life cycle of the mats to be? Yeah, look, we have mats in our fleet that are 20 years old. If you look at what the average is, we kind of think of those things as a 15-year asset, 12- 15 year asset when it's well looked after. From that perspective, that's the life cycle that we operate under. What I can say is, like anything in the world, if you do not look after it, you can break it. There are operators out there who may be a little harder on the mat and break it earlier than that, but you're definitely right. There is a return life cycle on these products. What we've called out in the past is that our manufacturing process and the core components of our mat are fully recyclable. We can take that mat, we can run it back through our process, and produce it at the end of our plant as a brand new mat once it gets to end of life, which is really where the economics start to add up here on the recyclability of these products. We do offer that to our customers who operate fleets of composite as well. I think looking at it, if you look after your mats, it is probably a 12-15 year cycle on that. Following up on that, how often are the mats looked after versus how often are they maybe treated like dirt, if you will? Yeah, look, I can't speak for everybody in the market, Bill. I can only speak for us. What I'd say is we're very motivated to look after them, which is why you see the economic value that we're able to extract from them. All right. Thank you. Let me switch to the new administration. Has Trump or anybody within the administration said or put any initiatives in place that are reducing the incentives that utilities had or reducing dollars that were provided to the industry for expansion? Yeah, I think I'd describe that as evolving. I think obviously offshore wind has taken a bit of a pause there. Where that ends up, we'll find out. The question is how many of these things are going to stick in the long-term bill versus be kind of just highlighted in the immediate term. What I can say is if you look at industry participants, the utilities, our customers who have just all reported that they're fairly advanced in their supply chain initiatives to offset any tariff impacts. We're seeing the tariff impacts flow through at very low single-digit expectations from them. That would not have a meaningful impact on their CapEx. As we see it now, that's really why it's sort of underpinned our confidence for the full year. There's a lot of moving parts, but net-net the industry still feels very robust, and that's why we're encouraged by that. Great. Thank you. Two additional questions, please. First of all, you had referenced in your opening remarks that rentals and sales both accelerated at the end of the quarter and therefore starting strong here early in the second quarter. Would you walk through the dynamics that are taking place there, or is that simply normal seasonality? I mean, I was sensing that you were highlighting something more than that. Yeah, look, I'll break it apart because I think they're different. Sales is always going to be project-timing dependent on our customers and when they want to make that investment. As we've said on a number of calls, when people purchase mats, they don't want to move them to a holding pattern and then put them on a job. They want to move them directly to a job to minimize their transportation expense. So we have a lot of dependency on project timing when it comes to the actual timing of those sales. When you look at rental, we are seeing, as I think we touched on in the call, Bill, just a sustained demand for that product right now, which is underpinning our confidence in obviously tipping up our full-year guide, but also calling what we said around the Q2 results, or expectation, I should say. I would say the industry took a pause in the second half. We saw that in the second half of 2024. It was pretty pronounced in Q3 for us, and they are now organized and ready to go. Yeah, and in terms of that monthly stream there, March was the strongest rental activity month for us, as we said. That continued into early April. Again, it is important to note that as you head into those summer months, you do expect things to slow down as you go through the summer heat, as we usually see. All right. Thank you. Would you please correct me if this is wrong, but I think of the fourth quarter as the seasonally strong quarter when it comes to purchases, and yet the first quarter here was very strong on the purchase front. First of all, is my memory correct that Q4 is seasonally the strongest? If that's the case, then how is it that we're seeing such strength here in Q1 that's exceeding Q4? Yeah, I'll have a go at it, Bill, because I think traditionally the strong Q4 seasonality was direct from utilities. What we're seeing now is a broader population of participants on the purchase side that do not necessarily have that end-of-year use-it-or-lose-it CapEx kind of crunch. I think what we're seeing now is a spread, which is more related to project activity early in the year. We also do expect that if utilities come to the table, or when utilities come to the table, Q4 would traditionally be their bigger quarter. You are correct, but I think there's a different dynamic in our sales pipeline than perhaps historically. Matthew, does that mean that it was an industry or industries other than utilities that led to the strength in the fourth? Excuse me. No, Bill, it was utility participants, but it was not directly utilities themselves, so. Great. Thank you both, and congratulations on a really excellent quarter. Thank you. Appreciate it. I'd now like to hand the call back to Gregg for final remarks. All right. That concludes our call today. Should you have any questions or requests, please reach out to us using our email at investors@npki.com, and we look forward to hosting you again next quarter. Have a good day. Thank you for attending today's call. You may now disconnect. Good.