Min Cho

Min Cho inquired about the building segment's organic growth in the quarter, asking for details on the opportunities and developing trends. She also asked about the gross margin trends by vertical over the past few years and expectations for 2026, and sought more detail on the strong organic growth and demand drivers in the natural resources segment.

Answer

Bruce Labovitz, CFO, expressed optimism about a developing trend in the building segment, driven by a focus on affordable housing, loosened permitting, and stimulus for homebuilding/multifamily, noting its geographical nature. He stated that gross margins by vertical were consistent with Q3, with transportation being cost-plus and other markets having favorable margins, potentially improving with process automation. For natural resources, he described it as a broad category including environmental, mining, water resources, agricultural imaging, and land services, with exciting projects developing in water resources and high-altitude aerial imaging.

Min Cho inquired about the organic growth observed in the building segment during the quarter, asking for more details on the opportunities and developing trends. She also asked about the gross margin trends by vertical over the past few years and expectations for 2026, and sought more detail on the demand drivers for the strong organic growth in the natural resources segment.

Answer

CFO Bruce Labovitz expressed optimism about a developing trend in the building segment, driven by a focus on affordable housing, loosened permitting, and stimulus, noting geographical variations. Regarding gross margins, he stated consistency with Q3, with transportation being cost-plus but offering stability, and favorable margins expected in other markets. For natural resources, he described it as a 'catch-all' including environmental, mining, water resources, agricultural imaging, and land services, highlighting exciting projects in water resources and high-altitude aerial imaging.

Min Cho inquired whether NPK International's 2026 guidance incorporates price increases, or if the anticipated growth is solely driven by increased fleet size and utilization.

Answer

President and CEO Matthew Lanigan indicated early stages of pricing improvement are being observed, which is expected given the need for capacity expansion. Senior Vice President and CFO Gregg Piontek clarified that pricing is a relatively minor contributor to 2026 expectations, with volume growth being the primary driver.

Min Cho inquired whether NPK International's 2026 guidance incorporates any price increases, or if the projected growth is solely from increased fleet and utilization. She also asked for insights into the anticipated seasonality and quarterly phasing of revenue and EBITDA for 2026, considering utility project timing and the Grassform integration.

Answer

President and CEO Matthew Lanigan noted early stages of pricing improvement in the market, but CFO Gregg Piontek emphasized that volume growth is the primary driver for 2026 expectations, with pricing being a relatively minor contributor. Mr. Lanigan stated that Q3 and summer activities are still expected to be the major seasonal impact, with some dampening from UK activities, but largely following historical trends. Mr. Piontek added that calling quarterly project timings remains challenging.