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 30, 2026. At the conclusion of our prepared remarks, we will open the line for questions. 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 remain 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 mats. 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-date basis, revenue has increased 15% year over year, with approximately half of the growth generated organically and half through acquisition. Adjusted EBITDA increased 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.
Thanks, Matthew. I'll begin with a more detailed discussion of our third quarter results and year-to-date performance before providing an update on our near-term outlook. Third quarter revenue was $76 million, an increase of 11% year-over-year. Rental and service revenues totaled $50 million, up 12% year-over-year, including an 8% increase in rental revenue and a 21% increase in associated service revenue. The $5 million year-over-year increase in rental and service revenue is primarily attributable to the U.K. acquisition, while the U.S. R&S revenues remained flat year-over-year, impacted by the exceptionally dry weather conditions that Matthew discussed. Product sales remained elevated at $27 million, up 9% from the prior year, driven by strength in utility sector demand. Gross profit was $24 million, a gross margin of 31.3%, compared with 31.9% in the prior third quarter.
Third quarter SG&A expenses totaled $14.7 million, an increase of $1.5 million from the prior third quarter. As highlighted in yesterday's release, third quarter SG&A includes $1.2 million of severance and related costs, along with $700,000 of costs associated with strategic planning and diligence activities as we continue to explore opportunities to drive our growth strategy. After consideration of these items, the remaining SG&A was $12.8 million for the third quarter, relatively in line with our recent quarterly run rate and expectations. Income tax expense was $2.3 million in the third quarter, reflecting an effective tax rate of 26%. Adjusted EBITDA was $20 million, increasing 30% year-over-year, and adjusted EBITDA margin was 26.2%. Adjusted EPS from continuing operations was $0.09 per diluted share, compared with $0.07 in the prior third quarter.
For the first nine months of 2026, total revenue was $233 million, an increase of 15% year-over-year. Adjusted EBITDA was $68 million, up 27%, and adjusted EPS increased 22%. Roughly 2/3s of our 2026 revenue is derived from the utility sector, relatively in line with prior year mix, as we've seen fairly balanced growth across industries. In terms of our geographic expansion efforts, in addition to our previously discussed expansion within Texas, we're also seeing solid progress with targeted customers in the Midwest and the Northeast. Turning to cash flows, operating activities generated $7 million of cash in the third quarter, including $18 million of net income adjusted for non-cash expenses, somewhat offset by $11 million of cash used by a net increase in working capital, including receivables and inventory.
Net CapEx used $11 million, which includes $3 million of net investment into fleet expansion and $6 million to fund the manufacturing expansion. We also used $13 million to fund share repurchases in the third quarter, purchasing 1 million shares at an average price of $13.37 per share. We ended the quarter with total debt of $26 million and total cash of $4 million for a net debt position of $22 million. Additionally, we have $132 million of availability under our bank facility, providing us with ample financial flexibility to continue executing on our strategic growth initiatives, including our manufacturing expansion, as well as the support of our capital return objectives. Now turning to our business outlook.
Overall, there has been no meaningful change in the market as our customers remain highly constructive on the outlook for utilities and critical infrastructure spending, which we see within our robust quoting activity. As for the near-term outlook, following the seasonal low period, which was amplified this year by the exceptionally dry weather in the South, we have seen our rental fleet utilization steadily improve through October, with fleet utilization exiting October in the mid-70s. With the October improvements and scheduled projects, we expect Q4 rental and services to reflect a mid-teens year-over-year growth versus last Q4, reflecting a fairly balanced combination of organic growth and the acquisition impact, and closing out 2026 with another quarterly rental and service record. On the product sales side, our visibility to Q4 remains subject to final customer decisions as they evaluate prioritization of matting versus longer lead item purchases.
Based on our current view, we are planning on Q4 to settle in the mid-teens, which will bring full-year product sales in line with prior year levels. This sales level provides us flexibility to move additional mats into the fleet in Q4 in support of our rental diversification efforts prior to our new manufacturing facility coming online. With the forecasted rebound in rental revenues, we expect a solid improvement in profitability, with both gross margin and adjusted EBITDA margin returning to the levels achieved in the first half of the year.
In light of the unfavorable seasonal impact on rental revenues and EBITDA margins for both Q3 and early Q4, and the current line of sight to utility customer Q4 purchasing priorities, we have revised our full-year 2026 outlook, adjusting the total revenues range to $300 million-$305 million and adjusted EBITDA to a range of $90 million-$93 million. The midpoint of our range reflects 9% revenue growth and 21% adjusted EBITDA growth over 2025. The midpoint of our revenue guidance reflects modest organic growth in rentals, along with the contribution from the Grassform acquisition, while product sales are expected to be relatively in line with prior year.
Our total net CapEx expectation was also revised to $70 million-$75 million for the year, including approximately $20 million of current year spending for the manufacturing expansion project, along with $40 million-$45 million targeted for rental fleet expansion. This level of investment is expected to grow our DURA-BASE rental fleet by a mid-teens percentage for the year, supporting our organic growth and geographic expansion efforts while also displacing a portion of cross-rental mats. Our SG&A expectation remains unchanged at roughly a $13 million quarterly level in the near term, while tax rate is expected to remain relatively in line with the year-to-date rate.
As highlighted previously, we entered 2026 with roughly $40 million of NOLs and other tax credit carryforwards, which, when combined with the accelerated deductions for capital investments, are expected to significantly limit our cash tax obligations for the next several years. As it relates to our capital allocation strategy, we continue to prioritize investments in the growth of our rental fleet and our manufacturing capacity expansion, as well as strategic acquisitions, while also remaining committed to returning a portion of free cash flow generation to shareholders through our disciplined share repurchase program. With that, I'd like to turn the call back over to Matthew for his concluding remarks.
Yeah, thanks, Gregg. With the end of the year in sight, we remain confident in our long-term double-digit growth outlook and committed to the execution of our strategic priorities. While weather impacts on project timings and key utility customers' capital allocation to non-matting purchases have reduced our 2026 expectations, our long-term outlook remains unchanged. Supporting our key customers' needs and remaining flexible to their changing schedules is key to supporting our long-term relationships, and our continued focus on fleet scale and geographic diversification will provide a buffer to specific weather-related impacts like we saw in Texas in Q3 moving forward. Quoting activity remains aligned with our confidence in our served markets and remains above a 20% year-over-year increase in quoted volumes at stable win rates. Pleasingly, most of that volume is coming from our expansion geographies.
As we sit here today, our fleet utilization has returned to the mid-70s as we return to a more typical organic R&S growth expectation. Our primary focus remains on the geographic expansion and scale-up of our rental platform, which generates the highest long-term returns for our business. As we look forward, we continue to see a robust long-term investment cycle in our core markets. Grid load growth is expected to remain elevated, driven by growing demand from data centers, the reshoring of U.S. manufacturing, and the broad electrification of our economy. Additionally, critical investments are needed to expand, modernize, and harden the nation's aging transmission infrastructure, which is necessary to maintain a secure, healthy, and growing economy. Collectively, this combination of drivers reinforces our confidence that our investments in scale are well-timed and vital to position us to capitalize on these opportunities and drive profitable growth for our company.
To support that growth, our commitment to making the necessary investments is unchanged, with the growth of our DURA-BASE composite mat rental fleet remaining a top priority, necessitating the expansion of our current manufacturing capacity, which we have addressed in prior quarters. Our second focus area remains on driving organizational efficiencies across the business. We continue to see this play out in both gross margins and SG&A as a percent of revenues, as we remain on track to achieve a 30% EBITDA margin in 2026, delivering a meaningful margin expansion over prior year. As we continue to grow, we see opportunity to further expand our EBITDA margins and returns on invested capital through operating leverage, while also making targeted investments to drive sustainable long-term revenue growth for the company. Our final priority is the allocation of capital beyond our organic requirements.
With a strong balance sheet and a disciplined approach, we remain active in the evaluation of core strategic inorganic opportunities that increase our market coverage, value, and relevance to customers in key critical infrastructure markets, as well as the continuation of our share repurchase program. As mentioned, during the quarter, we purchased 1 million shares, which leaves us with $76 million remaining on our authorization, and we will continue to utilize this capacity to opportunistically manage our program. With supportive long-term market outlooks in our served geographies, a clear strategic focus, and a robust balance sheet, we remain on pace to deliver another year of profitable growth for 2026 and beyond. 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 will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Aaron Spychalla with Craig-Hallum. Your line is open, Aaron. Please go ahead.
Yeah. Good morning, Matthew and Gregg. Thanks for taking the questions. First for us, can you just give a little bit more details on some of the rental dynamics? How big were the projects? It sounds like most of them have started up and seem to be more kind of customer weather-specific, not really a change in overall kind of market demand. If you could just speak to the potential growth you see, kind of customer-wise or region-wise as well, down in Texas, that would be great.
Yeah. Thanks, Aaron. I will jump on that one. Yeah, look, I think you covered it pretty well. I think where we left you guys on our Q2 call and our Q3 expectations was we were taking care of the demobilization of a number of large projects and putting them to work in that Texas region in Q3. Post that call, really, the Texas challenge was, if you look at the rain gauges around the DFW area, I think we had our second-lowest rainfall in a decade, which really allowed one of our key customers there to make the decision to proceed on some of these projects without the deployment of mats. It was not until we saw some meaningful rain in the forecast in October that we started to deploy.
Very much a localized Texas issue that kind of caught us with the lack of rain there through the back end of the third quarter and into early fourth quarter there. Moving forward, the vast majority of those mats are deployed. I think in the next week, the remainder of those will be on the ground and earning, which is reflected in our confidence coming into Q4 that we are returning to a normal level. The encouraging thing was, and we touched on it in our prepared remarks, the rest of the country performed pretty well. Outside of Texas, our other regions were up. I think our diversification efforts were paying dividends there.
If you add back the Texas delays, I think we were right on or would have been slightly ahead of guide, so that is a little frustrating for us, but we obviously cannot control the weather, and we will support our customers however they need us to support them. The other thing I would add, I think this really plays into why our expansion strategy and the expansion of the manufacturing capacity is important to us. As we are able to get fleet deployed into more markets, we are going to have a buffer for regionalized or localized effects like we saw here in the quarter going forward. Just disappointing in terms of the impact it had in the region, but I just want to kind of leave you with the overarching trends.
The rest of the regional activity levels really reflect our confidence here going forward in the growth of the business.
Got it. Thanks for the color there. Second, on the guidance, it implies kind of low 30s, around 33% EBITDA margin in the fourth quarter. Can you just talk to confidence and kind of drivers behind that? It sounds like you are not seeing notable impact on the commodity side with resin prices.
Yeah. I guess first of all, in terms of that bounce back in Q4, the overall EBITDA margin, Q2 was quite solid as well. The big mover from Q2 to Q3 was the rental revenue. So, you had a much softer mix, and that rental is what has the highest contribution flow-through. With that recovery, that is where the bulk of that rebound is coming from. In terms of the resin prices, no, not much of an impact. We did see earlier in this year the price increases following the conflict with Iran that really started to flow through here in the second quarter, but we were able to really help neutralize that as we become a more scaled player, diversifying our supply base, et cetera, so we were able to offset a fair amount.
The other thing is, as we continue to grow and expand, we are getting operating leverage, and that is helping to offset the impact of the resin.
Got it. Thanks for taking the questions. I will turn it over.
Thanks, Aaron.
Your next question comes from the line of Laura Maher with B. Riley. Your line is open, Laura. Please go ahead.
Hi. Good morning, Matthew and Gregg.
Hey, Laura.
You said rental project activity strengthened significantly through October. Is that catch-up on delayed deployments or new activity, and what does the deployed fleet look like today versus the start of 3Q?
Yeah. It is really a catch-up. I think all we lost was days rather than projects, Laura, if I can put it into that context in terms of the deployment. So, it is really just now catching up on the duration of those with, I guess, less days in the scope. We touched on mid-70s, I think, is the fleet that is recovering from a sort of 60s mark. I think that is where we referenced it coming out of Q2, and so, I think they are your bookends.
Yeah. I would say low 60s is where we started Q3, or Q4, rather. And yeah, so that is pretty meaningful improvement as we progressed through October. As Matthew mentioned, additional projects here queued up.
Thanks. For my second question, you reiterated unchanged 2027 growth expectation. Can you frame that in terms of rental revenue growth and the margin profile, and what has to go right on the deployment side for that to hold?
Yeah. I guess as we look at 2027, the way I would frame it is, obviously, we've been very consistent in the double-digit expectation. Here in 2026, we have not hit the mark that we have targeted for ourselves in terms of the R&S growth, and that's a function of these large project inefficiencies and weather. Obviously, you layer that on top, and you're starting with that double digit. It means, if you just factor in the 2026 element of it, that kind of points you to more of a mid-teen sort of growth expectations is what we would have for the R&S side. I think the greater variable that you have, and this is always the case within the revenue outlook, is the product sales side, which has so many dependencies on capital cycles, et cetera.
Again, as we've planned, as we came into 2026, we had an expectation of flattish. Things started out stronger, and then we've now come back to that flattish. That's kind of how I think about our expectations for 2027 as well. In terms of the EBITDA profile on that, it just goes back to what we have delivered here over the past few years. You've seen the operating leverage that we're getting as we're growing. We're able to continue to build and expand our EBITDA margin, and that's what I would expect to see at a similar level.
Thanks. I'll pass it on.
Thank you.
Your next question comes from the line of Min Cho with Texas Capital Bank. Your line is open, Min. Please go ahead.
Great. Thank you. Good morning, Matthew and Gregg.
Hey.
Just a couple of questions here. Hey. Can you talk a little bit about just how we should think about the quoting activity being up 20% and expectations for revenue growth? What is the typical lag between quoting and delivery, or is that just kind of a constant rolling effect?
Yeah. No, I think it's been extending, Min. I think as activity levels across the infrastructure is increasing, we're getting more inquiries early from utilities as they're starting to see that parts of supply chain may be becoming stretched. So, we're getting a longer look, I would say. So, as you think about that math, we're looking later into 2027 on some of it. Some of it is 2028, particularly on the 765 side, as people are starting to look at when that is likely to start to begin construction. So, I think that's the way we look at it, and that's the way you should reflect it in any kind of models you've got there, Min.
Okay. That is fair. Then you definitely mentioned that you are seeing strength outside of the Texas market.
Can you just talk about where, what geographies you are seeing the most demand from?
Yeah. I think pleasingly, we have been talking, if you go back on our calls now for a while, about getting more traction in the Midwest, Min, and I think we are seeing that happen. I think 2026 has been stronger for us in the Midwest, and I think we will continue with that. I think we are getting a nice level of activity up the Eastern Seaboard as well, in the Northeast. We have always been a player in the Northeast, particularly on our oil and gas side, but we are seeing increasing traction on the T&D side there too. I think they are kind of the main regions that I would call out.
Excellent. Then can you talk a little. Obviously, there is transportation involved here to get the mats to where you need them.
Yeah.
Can you talk a little bit about diesel impact and how you're looking to offset that, or how you have been offsetting it?
Yeah. I think Q3 is a great example of that, Min. When you look at Texas, when the customer's saying, "Hey, we're not going to need these mats when we thought they did," our standard operating playbook at that point would be to put them on trucks and move them to projects where we could get some utilization for them. With diesel prices where it is right now, that economics was very challenged for us, so we elected not to do it. I think it played out as part of the story there in Texas that the elevated prices, we just chose not to do that. The economics would have been upside down. I think the key kind of buffer for us moving forward is having more fleet dispersion throughout the market, so you're doing less longer haul routes with your fleet.
Again, that just comes back to our priority to expand fleet, to expand manufacturing capacity, to have inventory in the markets where we see the growth moving in the future and minimize the amount of kind of intermodal transport runs that we have to do.
Excellent. Great. Thank you.
Your next question comes from the line of Gerry Sweeney with Roth Capital Partners. Your line is open, Gerry. Please go ahead.
Good morning, guys. You kind of hit upon one of my main questions just now, and that was sort of the strategy and ability to redeploy the mats. So, it sounds like longer term, the mats for rentals will be more regionally based. You can redeploy them within those regions. Then, if you have more capacity, a larger fleet, you can keep mats in a region and have less moving around. Is that, generally speaking, what you're discussing on that front?
Yeah, 100%, Gerry. I think when you look at the sweet spot, anything much over three hours of transport starts to become a little more challenging, and that's obviously pressured with diesel where it is right now. So, if you can get your front end working well, identifying where the projects are and have inventory pre-positioned in those spots, it's helpful when it comes to kind of offsetting that transportation inefficiency, if you will.
Got it. Weather is weather, right, obviously, but certain areas of the country tend to have longer periods of maybe dryness, et cetera. I mean, is Texas or the South, Southwest more susceptible to some of these issues as opposed to some of the other areas? I guess the deeper question is, how much dryness does a region need to have for people or clients to start pulling back on some of those rentals?
Yeah. Great question. I mean, I have been in this business now for 10 years, Gerry, and this is the first time we have seen this. I think I quoted a number out of We pulled some rain gauge data out of DFW. This was the second driest third quarter in the last decade.
Yeah
I think that kind of goes to some indication of frequency. I will say, I am certainly no meteorologist, but looking ahead, I think the forecast for this part of the world in 2027 is wetter.
Yeah, super. That was my next point. Yeah, super. And Texas is supposed to be wetter.
Yeah. Again, we want to make sure that the projects we are on are as efficient as possible, so we want to work with our customers to make sure they get to where they need to be and out of there again as efficient as possible. But everything does point towards a wetter south of the country next year, which so far, in 10 years, has been the only spot that said, "We don't need mats for a project.
Got you. This was a unique year, and I'm a believer in regression to the mean, so next year will be good. All right, guys. Thank you.
Your next question comes from the line of Bill Dezellem with Tieton Capital Management. Your line is open, Bill. Please go ahead.
Thank you. First of all, would you please repeat the fleet growth that you're anticipating this year, and then how does that compare with the fleet growth that you are targeting over the next few years?
So, year-to-date, we've grown our fleet by about 10%. With the higher level of additions expected here in Q4, we're expecting to be kind of mid-teens growth year-over-year. That's consistent with the growth that we had last year. One of the dependencies that we had here coming into this year and why we had a broad range on the capital requirement there was, you're also satisfying the sales demand. As Matthew touched on, to the extent that it's a little bit softer there, we're able to put more into the fleet, displace some of the cross-rental mats, and also position ourselves to help to drive the diversification and growth in 2027.
Gregg, as you look out over, whether it be three years or five years, what rate of growth are you targeting for fleet growth again?
Well, I think your fleet growth over the longer term, taking ebbs and flows out of things, your fleet growth is going to correlate to your revenue growth. You get 10% rental revenue growth, you can assume that that means 10% growth in the fleet. That is really what is going to drive it, is the overall demand and how strong we are able to lean into this and grow it.
Yeah, and then at the margin, how much of those cross-rental mats we displace.
Yeah
When might be one of those swings we are talking about, Gregg.
Yeah, we took out about 1/3 of our cross-rental mats here in the third quarter.
Great. Thank you. Then let's circle back, if we could, to the comment that you all made in the press release and your opening remarks regarding the strategic planning and the diligence costs. Walk us through what you all are doing and maybe bigger picture, what you are trying to accomplish, not just holistically, but maybe as much detail as you can provide will really be helpful.
Yeah, Bill, I think we have been pretty transparent in terms of the trade-offs that we have between organic entry into markets where we do not have enough presence, and we see that the work is there to support a larger operation than we have, and then the inorganic evaluation of targets within that space that would accelerate our entry and obviously be accretive to the business. That is ongoing. We did not do Grassform and stop. We have been continuing to look for opportunities there that pencil out. I will say, they have to obviously pencil out. There is a lot of variation in people's expectation of value for some of these businesses, and we are very disciplined in the way we evaluate things.
That is really what is continuing, and it has a large focus on geographic expansion of our footprint, and obviously, the long-term displacement of the traditional access products, primarily timber to composite, which will also support the share shift of the market to a longer term higher share of composites.
And the strategic planning, what's the riddle that you're trying to solve with your strategic planning?
Yeah, look, I think primarily, Bill, it's just continuing to get updated relevant information around what the market drivers are in these geographies that I just pointed out we're evaluating. So really, that's just involving third parties and people who study this very closely as a profession to really understand what that longer term dynamic is, so that when we evaluate regions, we're doing it with a long-term return in mind. And that's primarily where that expense was incurred.
Yeah, I think, when you look at the market, you're seeing pretty dramatic changes, pretty dramatic increases in the spend, a lot of movement over the past few years in terms of that longer term outlook, and you're just trying to stay current with the views as that shifts to make sure that you're being thoughtful about the longer term expectations of the business and how you invest your capital.
And then lastly, are you finding new industries outside of utilities that you think could be a meaningful growth opportunity as you work through the strategic planning thought process?
Yeah, I think, Bill, right now, priority one is get the distribution in what we do. Obviously, if there's ancillary or adjacent services that we can provide the same customers, that's a much better proposition in terms of gaining traction for that. If those services then avail themselves to markets outside of T&D, that's going to be something that we're focused on. But at this point, I wouldn't say that's anything that I would want to highlight as a meaningful near-term kind of pivot for the business.
Yeah, I think it's important to highlight, as we noted in the comments, we're seeing growth this year across industries. The utility proportion that's coming from the utilities has been holding consistent with last year because we are seeing growth in other markets as well.
Great. Thank you both.
Thanks.
This concludes the Q&A session. I will now turn the call back to Gregg Piontek for closing remarks.
Thanks again for joining us on the call today. Should you have any questions or requests, please reach out by email at investors@npki.com, and we look forward to hosting you again on next quarter's call.
This concludes today's call. Thank you for attending. You may now disconnect.