NATIONAL PRESTO INDUSTRIES INC (NPK) Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 net sales were $120.45M, up 41.6% year over year, while net earnings were $5.15M and EPS $0.72; defense shipments drove growth but profitability compressed versus Q1 due to Housewares losses and tariff impacts .
• Defense segment sales rose $33.7M (+50.9% YoY) and operating earnings increased $5.5M (+61.0%), reflecting higher backlog shipments; Housewares posted a sizable operating loss due to 145% tariffs and a supplier bankruptcy deposit loss; Safety remained loss-making as anticipated .
• Portfolio earnings were “nominal” given inventory investments to support augmented defense awards, a dynamic continuing from Q1; the backlog exceeded $1B as of the annual release, constraining extra dividend capacity .
• No earnings call transcript or Street consensus estimates were available; results should prompt focus on defense ramp sustainability vs. tariff headwinds in Housewares and the ongoing Safety loss profile .

What Went Well and What Went Wrong

What Went Well

• Defense execution: “Defense segment sales for the quarter were up $33.7 million or 50.9%... increased shipments from backlog,” with operating earnings up $5.5M (+61.0%) .
• Broader top-line growth: Housewares/Small Appliances sales increased $1.7M (+9%) YoY despite headwinds, indicating distribution and retail environment resilience .
• Backlog and certification milestones: Management highlighted a backlog exceeding $1B (annual release) and noted smoke detector certification obtained in January 2025, underpinning future capacity and Safety progress .

What Went Wrong

• Housewares profitability: “Sizable operating loss” driven by 145% Trump tariffs treated as period costs under LIFO; additionally hit by “bankruptcy of a supplier and the resulting loss of a deposit” .
• Margin compression: Net income margin fell vs. Q1 and prior-year Q2 despite strong revenue growth, as tariff burden and segment losses weighed on consolidated profitability .
• Safety losses persisted: Safety “reported a loss as anticipated,” continuing the drag until commercialization catches up post-certification .

Financial Results

Consolidated Results vs prior year and prior quarter

Trend Analysis (actuals from S&P Global)

*Values retrieved from S&P Global.

Segment Highlights (Q2 2025 YoY changes and commentary)

KPIs

Guidance Changes

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was located; themes synthesized from company press releases.

Management Commentary

• “Defense segment sales for the quarter were up $33.7 million or 50.9%... The Defense segment’s operating earnings increased $5.5 million or 61.0%... largely due to the additional volume referenced above.” — Maryjo Cohen, President .
• “The Housewares/Small Appliance segment reported a sizable operating loss. The Trump tariffs had a significant effect… treated as period costs… reflecting the segment’s LIFO inventory cost valuation method… earnings were impacted by the bankruptcy of a supplier and the resulting loss of a deposit.” — Maryjo Cohen .
• “Due to the sizable investment in inventory required to support augmented Defense segment awards, the quarter’s portfolio earnings were nominal.” — Maryjo Cohen .
• “With the President’s so-called ‘Liberation Day’ proclamation, the Trump tariffs are now at 145%... announcement of new products and their purchase have been placed on hold.” — Maryjo Cohen (Q1 2025 release) .
• “Given the size of the Defense segment’s backlog that now exceeds one-billion dollars… there will be no extra dividend paid in 2025.” — Maryjo Cohen (annual release) .

Q&A Highlights

• No public Q2 2025 earnings call transcript was available; therefore, no Q&A highlights or clarifications could be extracted from a call .

Estimates Context

• S&P Global consensus estimates were unavailable for NPK for Q2 2025 (Revenue Consensus Mean, Primary EPS Consensus Mean, # of Estimates did not populate); we present actuals only. Values retrieved from S&P Global.

*Values retrieved from S&P Global.

Key Takeaways for Investors

• Defense ramp continues to be the core driver, with YoY step-ups in both sales (+50.9%) and operating earnings (+61.0%) signaling backlog conversion and operating leverage .
• Housewares profitability is the key swing factor; 145% tariffs expensed under LIFO and a supplier bankruptcy deposit loss drove a sizable operating loss despite 9% sales growth .
• Consolidated margins compressed vs. Q1 and prior-year Q2 due to segment mix and tariff burdens; focus should be on cost mitigation and pricing strategies in Housewares .
• Portfolio earnings remain constrained by working capital needs for Defense awards; dividend policy reflects cash prioritization (regular $1.00, no extra dividend) .
• Near-term trading: positive bias tied to defense shipment momentum; monitor headlines on tariff policy, Housewares margin remediation, and Safety commercialization progress .
• Medium-term thesis: backlog depth and certification milestones are constructive, but sustained profitability hinges on reducing tariff drag and stabilizing Safety losses .
• Data-gap risk: absent Street consensus and call transcript limits visibility; investors should watch subsequent filings for margin disclosure, segment P&L detail, and operational updates .