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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition, results of operations, liquidity, and capital resources should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 “Financial Statements and Supplementary Data.”

Overview

NPK International Inc. is a temporary worksite access solutions company that manufactures, sells, and rents recyclable composite matting products, along with a full suite of services, including planning, logistics, and site restoration. In 2025, 66% of our revenues were generated from the rental of our recyclable composite matting systems, along with related site construction and services to customers in various markets including power transmission, oil and natural gas exploration and production, pipeline, renewable energy, petrochemical, construction and other industries within the United States and United Kingdom. The remaining 34% of our 2025 revenues were generated from the sale of our manufactured recyclable composite mats to customers around the world, with power transmission being the primary end market.

We previously operated a Fluids Systems business, which was historically reported as a separate operating segment. In September 2024, we completed the sale of substantially all of the Company’s Fluids Systems segment (the “Sale Transaction”) to SCF Partners, a leading private equity firm serving the global energy industry (the “Purchaser”). The results of operations of Fluids Systems are reported in discontinued operations in the consolidated statements of operations. All results and information in the consolidated financial statements and related notes are presented for our continuing operations and exclude Fluids Systems unless otherwise noted specifically as discontinued operations. See Note 2 for additional information.

2025 Strategic Actions

As aligned with our Strategy described in Part I. Item I. Business, the following reflect our strategic priorities intended to enhance long-term shareholder value as well as our actions and achievements in 2025.

•Accelerated Organic Growth – We seek to accelerate revenue growth through the expansion of our rental business, which includes a combination of geographic expansion to new growth territories, primarily within the U.S., while also expanding customer market share within currently-served markets. As part of this effort, we have placed a particular emphasis on penetrating larger-scale, longer-term (six months or longer) projects, which we believe will help drive improvements in revenue stability and operational efficiency. Due in part to the success of our efforts, rental and service revenues increased $38 million, or 26%, year-over-year for 2025, including a 39% increase in rental revenues. The elevated growth in rental revenues has been primarily attributable to our success on larger-scale, longer-term projects with a key utilities customer, and consequently, the revenue contribution from this customer grew substantially to 19% of our total revenues in 2025. We prioritize investment capital to support our organic growth objective, where over the past several years, we have seen the strong market adoption of our specialty rental products and differentiated service offering. During 2025, we made net investments of $37 million in the expansion of our composite rental fleet, expanding the fleet by approximately 16% (excludes Grassform, as discussed below). Further, with our revenue growth and the favorable macro-environment, we have also accelerated our manufacturing capacity expansion planning efforts. As a result, 2025 cost of revenues includes $0.9 million of expense associated with these efforts. In 2026, we intend to make investments to expand our composite mat production capacity, with additional capacity expected to come online in the first half of 2027.

•Pursued Inorganic Growth – We seek to accelerate our growth and enhance shareholder value through strategically-aligned inorganic actions, leveraging our scale to increase our value and relevance to customers. We continually evaluated inorganic opportunities that align with our objectives throughout 2025, and our 2025 selling, general and administrative expenses expense (“SG&A”) includes $1.1 million of costs in support of this effort. In November 2025, we completed the acquisition of Grassform Plant Hire Limited (“Grassform”), a U.K. market leader in ground protection and temporary roadway solutions and services with a fleet of over 20,000 composite mats. We anticipate that the acquisition will meaningfully increase the scale and capabilities of our U.K. operations.

•Drove Operational Efficiency – We are focused on efficiency improvements and operating cost optimization across every aspect of our business. Throughout 2025, we continued to evaluate and execute actions intended to streamline the organization and our cost structure, driving improvements in profitability, with the goal of driving SG&A as a percentage of revenue to a mid-teens range by early 2026. During 2025, we incurred $1.2 million of severance expense associated with our streamlining efforts. Additionally, during the second half of 2025, we began the rollout of our new cloud-based enterprise resource planning (“ERP”) system, which is expected to be substantially completed in the first quarter of 2026. SG&A includes $0.5 million of expenses associated with the ERP rollout in 2025. In addition, we have capitalized $5.1 million of implementation costs for our cloud-based ERP system during 2025 that are included in prepaid expenses and other current assets, as well as other assets, on the balance sheet. We also

incurred $1.1 million in acquisition-related transaction costs primarily attributable to the Grassform acquisition. SG&A as a percentage of revenues was 19.5% for 2025 compared to 21.2% for 2024.

•Enhanced Return on Invested Capital – We are committed to maintaining a strong balance sheet, prioritizing organic investment to expand our rental business while evaluating accretive inorganic growth opportunities to accelerate growth and returning excess cash generation via programmatic share repurchases. During 2025, we utilized $20.4 million to repurchase 3.0 million shares (4% of our outstanding shares) under our share repurchase program.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Consolidated Results of Operations

Summarized results of operations for 2025 compared to 2024 are as follows:

Other operating (income) loss, net (53) (1,269) 1,216 NM

Foreign currency exchange (gain) loss (884) 869 (1,753) NM

The following table presents further disaggregated revenues by type:

Revenues

The following table presents gross profit margins by type:

Year Ended December 31, Change

Gross profit margin

Rental and service - Gross profit margin 36.7 % 35.3 % 140 bps

Product sales - Gross profit margin 35.7 % 35.8 % (10) bps

Total gross profit margin 36.4 % 35.5 % 90 bps

Revenues

Revenues increased 27% to $277.0 million for 2025, compared to $217.5 million for 2024, including a 26% increase in rental and service revenues and a 30% increase in product sales revenues. Rental revenues increased $34.7 million (39%), primarily due to higher rental volume driven by our organic growth efforts, partially offset by lower pricing resulting primarily from a higher mix of larger-scale, longer-term rental projects. Service revenues increased $3.3 million (6%), primarily attributable to the increased level of customer rental projects, though at a lower rate than rental revenues, due to the lower relative service requirements on the higher mix of larger-scale, longer-term rental projects. Product sales revenues increased $21.6 million (30%), reflecting continued strength in customer adoption of manufactured composite matting products relative to timber-based products that continue to be the primary solution used for temporary worksite access in the market. More than 80% of the 2025 product sales revenues were derived from utility companies.

Cost of revenues

Cost of revenues increased 26% to $176.3 million for 2025 (36.4% gross profit margin), compared to $140.4 million for 2024 (35.5% gross profit margin), primarily driven by the 27% increase in revenues described above. The 140 basis point improvement in rental and service gross profit margin is also attributable to the effects of an improved revenue mix, including a higher proportion of rental revenues and a lower proportion of service revenues. Cost of revenues in 2025 includes approximately $11 million of cross-rental costs required to meet customer demand, and was negatively impacted by approximately $1.6 million of elevated transportation costs required to meet customer project timelines, as well as $0.9 million of costs incurred with our manufacturing capacity planning efforts as described above. Product sales gross profit margin declined 10 basis points, primarily reflecting lower pricing on large volume sales to utility customers, partially offset by improved manufacturing cost leverage, as 2024 included an approximately $1 million impact of an unscheduled downtime event on one of the production lines at our manufacturing facility.

Selling, general and administrative expenses

Selling, general and administrative expenses increased to $54.0 million for 2025, compared to $46.0 million for 2024. Selling, general and administrative expenses as a percentage of revenues was 19.5% for 2025 compared to 21.2% for 2024. The increase in expense was primarily driven by higher performance-based incentives, including $1.5 million in elevated charges related to performance-based awards measured on the Company’s TSR as compared to the TSR of a designated peer group, while 2024 included a $0.8 million charge, as well as $1.1 million in acquisition-related transaction costs primarily attributable to the Grassform acquisition, and $0.5 million of ERP implementation costs as described above. In addition, selling, general and administrative expenses included $1.2 million of severance costs in 2025 compared to $0.7 million in 2024.

Other operating (income) loss, net

Other operating (income) loss, net primarily includes gains and losses on sales of non-rental assets. In addition, 2024 included a $0.6 million gain related to a legal settlement.

Foreign currency exchange

Foreign currency exchange for 2025 and 2024 reflects the impact of currency translation on assets and liabilities (including intercompany balances) that are denominated in currencies other than functional currencies, principally related to our U.K. operations.

Interest expense, net

Interest expense, net was minimal for 2025 compared to $2.6 million for 2024. The decrease in interest expense is primarily due to interest income of $1.8 million earned in 2025 as well as a decrease in average debt outstanding. The 2024 expense included a $0.5 million non-cash write off of debt issuance costs associated with the amendment of our Amended ABL Facility. Discontinued operations in 2024 also included an allocation of interest expense of $1.4 million on corporate debt.

Provision (benefit) for income taxes from continuing operations

The provision for income taxes from continuing operations was $11.7 million for 2025 compared to a benefit for income taxes of $6.7 million for 2024. The 2025 and 2024 results include income tax benefits of $1.5 million and $15.9 million, respectively, primarily reflecting the release of valuation allowances on U.S. net operating losses and other tax credit carryforwards following the sale of the Fluids Systems business. Excluding this valuation allowance benefit, the effective tax rate was 27.7% for 2025 and 31.7% for 2024, primarily attributable to the increase in U.S. earnings.

Income (loss) from discontinued operations

Income (loss) from discontinued operations, net of tax reflects the former Fluids Systems segment, which was sold in the third quarter of 2024. In the fourth quarter of 2025, we recognized a $2.2 million pre-tax gain on sale related to revised estimates for certain estimated deferred consideration and liabilities related to the Sale Transaction upon their resolution. The loss from discontinued operations for 2024 included the loss on sale of the segment of $195.7 million, as well as $8.9 million in charges related to the Sale Transaction, impairments, and other items. See Note 2 for additional information.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Consolidated Results of Operations

Summarized results of operations for 2024 compared to 2023 are as follows:

Other operating (income) loss, net (1,269) (1,469) 200 NM

Foreign currency exchange (gain) loss 869 (889) 1,758 NM

The following table presents further disaggregated revenues by type:

Revenues

The following table presents gross profit margins by type:

Year Ended December 31, Change

Gross profit margin

Rental and service - Gross profit margin 35.3 % 34.3 % 100 bps

Product sales - Gross profit margin 35.8 % 36.7 % (90) bps

Total gross profit margin 35.5 % 34.9 % 60 bps

Revenues

Revenues increased 5% to $217.5 million for 2024, compared to $207.6 million for 2023, including a 24% increase in product sales revenues, partially offset by a 3% decline in rental and service revenues. Rental revenues increased $6.1 million (7%) primarily due to higher rental volume driven by our organic growth efforts, partially offset by lower pricing. Service revenues decreased $10.3 million (15%), primarily attributable to a reduced level of services required within customer rental projects. Product sales revenues increased $14.0 million (24%) for 2024, primarily reflecting an increasing customer adoption of manufactured composite matting products relative to timber-based products that continue to be the primary solution used for temporary worksite access. The majority of the 2024 and 2023 revenues were derived from customers in the power transmission sector.

Cost of revenues

Cost of revenues increased 4% to $140.4 million for 2024 (35.5% gross profit margin), compared to $135.1 million for 2023 (34.9% gross profit margin), primarily driven by the 5% increase in revenues described above. The improvement in gross profit margin is primarily attributable to the effects of an improved revenue mix. Rental and service gross profit margin increased 100 basis points primarily due to a higher proportion of rental revenues and a lower proportion of service revenues. Product sales gross profit margin decreased partially due to an approximately $1 million impact of an unscheduled downtime event on one of the production lines at our manufacturing facility in the third quarter 2024.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased $5.0 million to $46.0 million for 2024, compared to $51.1 million for 2023. The decrease was primarily driven by lower performance-based incentives and other personnel expense resulting from efforts to streamline the overhead structure, lower severance costs, as well as increased lease and sublease income associated with our administrative offices. In addition, 2023 included $1.4 million of costs related to strategic planning projects. Selling, general and administrative expenses as a percentage of revenues was 21.2% for 2024 compared to 24.6% for 2023.

Other operating (income) loss, net

Other operating (income) loss, net primarily includes gains and losses on sales of non-rental assets. In addition, 2024 included a $0.6 million gain related to a legal settlement.

Foreign currency exchange

Foreign currency exchange for 2024 and 2023 reflects the impact of currency translation for assets and liabilities (including intercompany balances) that are denominated in currencies other than functional currencies, principally related to our U.K. operations.

Interest expense, net

Interest expense, net was $2.6 million for 2024 compared to $4.1 million for 2023. The decrease was primarily due to a decrease in average debt outstanding. The 2024 expense included a $0.5 million non-cash write off of debt issuance costs associated with the amendment of our Amended ABL Facility. Discontinued operations also included an allocation of interest expense on corporate debt. Such interest expense totaled $1.4 million and $2.4 million for 2024 and 2023, respectively.

Provision (benefit) for income taxes from continuing operations

The benefit for income taxes from continuing operations was $6.7 million for 2024 compared to a provision for income taxes of $5.6 million for 2023. The 2024 benefit included a $15.9 million benefit primarily related to the release of valuation allowances on U.S. federal and state net operating losses and tax credit carryforwards expected to be realized following the sale of the Fluids Systems business. Excluding this valuation allowance benefit, the effective tax rate increased to 31.7% for 2024 compared to 28.3% for 2023, primarily attributable to higher state income taxes and the effect of unbenefited losses in the U.K.

Income (loss) from discontinued operations

Income (loss) from discontinued operations reflects the former Fluids Systems segment, which was sold in the third quarter of 2024. The loss from discontinued operations for 2024 included the loss on sale of the segment of $195.7 million. Discontinued operations also included $8.9 million and $12.7 million in charges for 2024 and 2023, respectively, primarily related to the Sale Transaction, impairments, and other items. See Note 2 for additional information.

Liquidity and Capital Resources

We elected not to adjust the consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 to separately present cash flows attributable to discontinued operations. As a result, the below descriptions of net cash provided by or used in operating, investing, and financing activities represents the consolidated cash flows for such activities. See Note 2 for depreciation, capital expenditures and significant operating and investing non-cash items related to discontinued operations.

Net cash provided by operating activities was $73.0 million for 2025 compared to $38.2 million for 2024. Net income adjusted for non-cash items provided cash of $75.4 million in 2025, compared to $54.5 million in 2024. Changes in working capital used cash of $2.4 million in 2025, compared to $16.3 million in 2024.

Net cash used in investing activities was $65.3 million for 2025, which includes $46.7 million in capital expenditures and $42.4 million associated with the Grassform acquisition (see Note 2 for additional information), partially offset by $16.6 million in additional proceeds from the sale of the Fluids Systems business. Net cash provided by investing activities was $8.3 million for 2024, which includes $48.5 million in initial net proceeds from the sale of the Fluids Systems business, partially offset by capital expenditures of $43.5 million. The substantial majority of our capital expenditures for 2025 and 2024 were directed to expanding our mat rental fleet. In addition, we received $4.0 million and $5.0 million in proceeds from the sale of assets in 2025 and 2024, respectively, primarily reflecting the sale of used mats from our mat rental fleet.

Net cash used in financing activities was $20.9 million for 2025, primarily reflecting $22.7 million in purchases of treasury stock, including purchases under our repurchase program and shares withheld upon vesting of employee equity awards for the settlement of tax obligations. Net cash used in financing activities was $66.9 million for 2024, primarily reflecting net repayments on our Amended ABL Facility and other existing financing arrangements.

Substantially all the $5.1 million of cash on hand at December 31, 2025 resides in the U.K., primarily related to the November 2025 Grassform acquisition. We primarily manage our liquidity utilizing cash on hand and availability under our Credit Facility and other existing financing arrangements.

We expect future working capital requirements for our operations will generally fluctuate directionally with revenues, and we expect capital expenditures in 2026 to be $45 million to $55 million, exclusive of any manufacturing expansion or acquisition, with spending primarily focused on the expansion of our mat rental fleet to further support our market penetration efforts. We also intend to make investments to expand our composite mat production capacity and expect to use a portion of our existing liquidity to return value to our shareholders and pursue our long-term strategic initiatives. We expect cash on hand and cash generated by operations, as well as the projected availability under our Credit Facility and other existing financing arrangements, to be adequate to fund our current operations during the next 12 months.

Our capitalization is as follows:

Credit Facility $ 5,300 $ —

Unamortized discount and debt issuance costs — (1)

Total debt to capitalization 4.6 % 2.3 %

Credit Facility. In June 2025, we entered into a U.S. senior secured revolving credit agreement (the “Credit Facility”) with a group of lenders that provides financing of up to $150 million available for borrowings (inclusive of letters of credit), which can be increased up to $250 million, subject to certain conditions. The Credit Facility and the loans made under the Credit Facility are secured by a first priority lien on substantially all of the personal property of the Company and its significant U.S. subsidiaries as guarantors (subject to customary exceptions and exclusions). The Credit Facility will mature in June 2030. In connection with establishing the Credit Facility, we terminated our U.S. asset-based revolving credit agreement.

As of December 31, 2025, we had $5.3 million in outstanding borrowings and $5.5 million in outstanding letters of credit, resulting in $139.2 million of remaining availability under the Credit Facility.

Under the terms of the Credit Facility, we may elect to borrow at a variable interest rate based on either the Term SOFR rate or an alternate base rate plus, in each case, a per annum applicable margin. The applicable margin will range from 1.75% to 2.25% for Term SOFR loans and 0.75% to 1.25% for alternate base rate loans, based on the consolidated leverage ratio (as defined in the Credit Facility) as of the last day of the most recent fiscal quarter. We are also required to pay a commitment fee on the unused portion of the Credit Facility ranging from 0.25% to 0.35% per annum based on the consolidated leverage ratio.

As of December 31, 2025, the applicable margin for loans under the Credit Facility was 1.75% for Term SOFR loans and 0.75% for alternate base rate loans, and the applicable commitment fee was 0.25% per annum. As of December 31, 2025, the weighted average interest rate for the Credit Facility was 7.5%.

The Credit Facility requires compliance with a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio, each as defined in the Credit Facility. In addition, at our option, we may choose to increase the maximum consolidated leverage ratio for a certain period following a significant acquisition, subject to certain limitations, as defined in the Credit Facility. As of December 31, 2025, we were in compliance with required ratios.

The Credit Facility contains various customary representations, warranties and covenants that, among other things and subject to certain specified circumstances and exceptions, restrict or limit the ability of the Company and its subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with respect to capital stock or make other restricted payments, make prepayments on other indebtedness, engage in mergers or other fundamental changes, dispose of property, or change the nature of their business.

The Credit Facility includes various events of default (subject to certain materiality thresholds and/or grace periods), including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross-default to other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests or invalidity of loan documents, certain ERISA events, unsatisfied or unstayed judgments and change of control.

Other Financing Arrangements. We maintain finance leases primarily related to transportation equipment. During 2025, we entered into $4.7 million of new finance lease liabilities in exchange for leased assets.

Off-Balance Sheet Arrangements

We do not have any special purpose entities. At December 31, 2025, we had $10.3 million in outstanding letters of credit (inclusive of the amount outstanding under the Credit Facility as described above), performance bonds, and other guarantees. We also enter into normal short-term operating leases for office and warehouse space, as well as certain operating equipment. None of these off-balance sheet arrangements either has, or is expected to have, a material effect on our financial statements.

Contractual Obligations

A summary of our outstanding contractual and other obligations and commitments at December 31, 2025 is as follows:

Credit Facility $ — $ — $ — $ — $ 5,300 $ — $ 5,300

Trade accounts payable and accrued liabilities (2) 49,532 — — — — — 49,532

Letter of credit commitments 5,540 — — — — — 5,540

(1)Financing obligations, finance lease liabilities, and operating lease liabilities represent the undiscounted future payments.

(2)Excludes the current portion of operating lease liabilities.

(3)Table does not allocate by year expected tax payments and uncertain tax positions due to the inability to make reasonably reliable estimates of the timing of future cash settlements.

We anticipate that the obligations and commitments listed above that are due in less than one year will be paid from available cash on-hand, cash generated by operations, and the projected availability under our Credit Facility, subject to covenant compliance and certain restrictions as further discussed above. The specific timing of settlement for certain long-term obligations cannot be reasonably estimated.

Critical Accounting Policies

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts and disclosures. Significant estimates used in preparing our consolidated financial statements include the fair values of assets acquired and liabilities assumed at the dates of acquisition for business combinations, estimated cash flows and fair values used for impairments of long-lived assets, including goodwill and other intangibles, and valuation allowances for deferred tax assets. See Note 1 in Item 8. “Financial Statements and Supplementary Data” for a discussion of the accounting policies for each of these matters. Our estimates are based on historical experience and on our future expectations that we believe to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our current estimates, and those differences may be material.

We believe the critical accounting policies described below affect our more significant judgments and estimates used in preparing the consolidated financial statements.

Business Combinations

We use the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed are recognized as goodwill. The valuations of the acquired assets and liabilities will impact the determination of future operating results. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, revenue growth rates, discount rates, customer attrition rates, royalty rates, and asset lives, among other items.

Goodwill

Goodwill is tested for impairment annually as of November 1, or more frequently, if indicators of impairment exist. As part of our annual goodwill review, we first perform a qualitative assessment based on company performance and future business outlook to determine if indicators of impairment exist. When there are qualitative indicators of impairment, we use an impairment test which includes a comparison of the carrying value of net assets of our reporting unit, including goodwill, with its estimated fair values, which we estimate using a combination of a market multiple and discounted cash flow approach (classified within Level 3 of the fair value hierarchy). In completing the annual evaluation during the fourth quarter of 2025, we determined that the fair value was significantly more than the net carrying value, and therefore, no impairment was required. As of December 31, 2025, our consolidated balance sheet includes $76.3 million of goodwill, including $28.2 million from the November 2025 Grassform acquisition.

Income Taxes

We had total deferred tax assets of $72.9 million and $78.6 million at December 31, 2025 and 2024, respectively. A valuation allowance must be established to offset a deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized. We have considered future taxable income and tax planning strategies in assessing the need for our valuation allowance. The years ended 2025 and 2024 include income tax benefits of $1.5 million and $15.9 million, respectively, primarily reflecting the release of valuation allowances on U.S. federal and state net operating losses and other tax credit carryforwards following the sale of the Fluids Systems business. At December 31, 2025, we had a total valuation allowance of $25.8 million, which includes valuation allowances of $17.2 million for U.S. capital loss carryforwards, $3.8 million for certain U.S. state and foreign net operating loss carryforwards as well as $4.8 million for foreign tax credits. Changes in the expected future generation of qualifying taxable income within these jurisdictions or in the realizability of other tax assets may result in an adjustment to the valuation allowance, which would be charged or credited to income in the period this determination was made.

We file income tax returns in the U.S. and certain non-U.S. jurisdictions and are subject to examination in the various jurisdictions in which we file. We are no longer subject to income tax examinations for U.S. federal and substantially all state jurisdictions for years prior to 2021 and for substantially all foreign jurisdictions for years prior to 2019.

From time to time, we are examined by various tax authorities in countries where we operate. We fully cooperate with all audits but defend existing positions vigorously. We evaluate the potential exposure associated with various filing positions and record a reduction to the related net operating loss or a liability for uncertain tax positions, as circumstances warrant. Although we believe all tax positions are reasonable and properly reported in accordance with applicable tax laws and regulations in effect during the periods involved, the final determination of these matters could be materially different than that which is reflected in historical income tax provisions and accruals.

Sale of Fluids Systems Business

In September 2024, we completed the sale of the Fluids Systems business. In connection with recognizing the loss on the Sale Transaction included in discontinued operations, we made certain estimates in determining the amounts of deferred consideration due from the Purchaser and estimated liabilities due to the Purchaser. Our estimates for the fair value of deferred consideration due from the Purchaser and liabilities due to the Purchaser required us to make judgments regarding the likelihood of possible outcomes and cash flows and the ultimate resolution of such matters. These judgments are uncertain in that they require assumptions about the potential outcomes and may change. Depending on the actual outcomes of such matters, or changes in these assumptions, the estimated amounts recognized for deferred consideration due from the Purchaser and estimated liabilities due to the Purchaser may change and any income or expense associated with such changes will be presented in discontinued operations. In the fourth quarter of 2025, we recognized a $2.2 million pre-tax gain on sale related to the resolution of certain estimated deferred consideration and liabilities for the Sale Transaction. See Note 2 for additional information.

New Accounting Pronouncements

See Note 1 in Item 8. “Financial Statements and Supplementary Data” for a discussion of new accounting pronouncements.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in interest rates and changes in foreign currency exchange rates. A discussion of our primary market risk exposure in financial instruments is presented below.

Interest Rate Risk

We are primarily exposed to interest rate risk through our Credit Facility, which is subject to variable interest rates as determined by the debt agreement. At December 31, 2025, we had $5.3 million of borrowings under our Credit Facility. The weighted average interest rate at December 31, 2025 for the Credit Facility was 7.5%. Based on the balance of variable rate debt at December 31, 2025, a 100 basis-point increase in short-term interest rates would have increased annual pre-tax interest expense by $0.1 million.

Foreign Currency Risk

Following the Fluids Systems sale in September 2024, our principal foreign operations are currently conducted in the U.K., which contributed approximately 7% of our 2025 consolidated revenues. Following the November 2025 Grassform acquisition, our U.K. operations represented 21% of our total assets at December 31, 2025. We have foreign currency exchange risks associated with these operations, which are conducted principally in British pounds. Historically, we have not used off-balance sheet financial hedging instruments to manage foreign currency risks when we enter into a transaction denominated in a currency other than our local currencies.

ITEM 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of NPK International Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of NPK International Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Business Combination - Grassform - Refer to Note 2 of the financial statements.

Critical Audit Matter Description

The Company completed the acquisition of Grassform Plant Hire Limited on November 24, 2025 (the “Grassform Acquisition”). The Grassform Acquisition has been recorded using the acquisition method of accounting and accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The fair values of the identifiable assets acquired and liabilities assumed were based on management’s estimates and assumptions using various market, income, and cost valuation approaches. The largest asset classes acquired included property, plant and equipment (“PP&E”); and customer relationships and tradename (“Intangible Assets”).

We identified the valuation of PP&E and Intangible Assets arising out of the Grassform Acquisition as a critical audit matter because of the estimates made by management to determine the fair value of these assets. This required a high degree of auditor judgement and an increased extent of effort, including the need to involve our valuation specialists when performing audit procedures to determine the fair value of the acquired assets.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the fair value of the PP&E and Intangible Assets acquired as part of the Grassform Acquisition included the following, among others:

•We tested the effectiveness of controls over the purchase price allocation, including management’s controls over the assumptions used in the market, income and cost valuation approaches for PP&E and Intangible Assets. In addition, we evaluated the work of management’s third-party specialists.

•With the assistance of our valuation specialists, and in respect to the PP&E acquired, we developed a range of independent estimates and compared to those used by management.

•With the assistance of our valuation specialists, and in respect to the Intangible Assets acquired, we evaluated the estimates used in the determining the value of the Intangible Assets acquired and developed a range of independent estimates and compared those to those selected by management.

•We evaluated whether the financial statement disclosures were consistent with the terms of the acquisition.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

February 27, 2026

We have served as the Company’s auditor since 2008.

NPK International Inc.

Consolidated Balance Sheets

December 31,

(In thousands, except share data) 2025 2024

ASSETS

Prepaid expenses and other current assets 5,046 5,728

LIABILITIES AND STOCKHOLDERS’ EQUITY

Long-term debt, less current portion 11,692 4,827

Noncurrent operating lease liabilities 9,877 10,896

Commitments and contingencies (Note 15)

Accumulated other comprehensive loss (1,610) (2,871)

Total liabilities and stockholders’ equity $ 441,758 $ 393,682

See Accompanying Notes to Consolidated Financial Statements

NPK International Inc.

Consolidated Statements of Operations

Years Ended December 31,

Revenues

Cost of revenues

Other operating (income) loss, net (53) (1,269) (1,469)

Foreign currency exchange (gain) loss (884) 869 (889)

Discontinued operations:

Income (loss) per common share - basic

Income from continuing operations $ 0.42 $ 0.41 $ 0.16

Income (loss) from discontinued operations 0.04 (2.17) —

Income (loss) per common share - diluted

Income from continuing operations $ 0.42 $ 0.41 $ 0.16

Income (loss) from discontinued operations 0.03 (2.13) —

See Accompanying Notes to Consolidated Financial Statements

NPK International Inc.

Consolidated Statements of Comprehensive Income (Loss)

Years Ended December 31,

Recognition of cumulative foreign currency translation losses — 59,469 798

See Accompanying Notes to Consolidated Financial Statements

NPK International Inc.

Consolidated Statements of Stockholders’ Equity

Stock-based compensation expense — 6,638 — — — 6,638

Treasury shares purchased at cost — — — — (32,185) (32,185)

Foreign currency translation, net of tax — — 3,549 — — 3,549

Recognition of cumulative foreign currency translation losses — — 798 — — 798

Stock-based compensation expense — 5,247 — — — 5,247

Treasury shares purchased at cost — — — (45) (45)

Foreign currency translation, net of tax — — 499 — — 499

Stock-based compensation expense — 5,527 — — — 5,527

Treasury shares purchased at cost — — — — (20,650) (20,650)

Foreign currency translation, net of tax — — 1,261 — — 1,261

See Accompanying Notes to Consolidated Financial Statements

NPK International Inc.

Consolidated Statements of Cash Flows

Years Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operations:

Impairments and other non-cash charges — — 6,356

Gain on insurance recovery — (874) —

Amortization of original issue discount and debt issuance costs 472 983 541

Change in assets and liabilities:

Increase (decrease) in accrued liabilities and other 4,236 (6,590) 445

Cash flows from investing activities:

Business acquisitions, net of cash acquired (42,352) — —

Proceeds from sale of property, plant and equipment 4,014 4,997 3,709

Proceeds from insurance property claim — 1,385 —

Other investing activities 3,089 (3,089) —

Net cash provided by (used in) investing activities (65,317) 8,261 (5,690)

Cash flows from financing activities:

Debt issuance costs (1,241) (50) —

Effect of exchange rate changes on cash 177 (212) 576

See Accompanying Notes to Consolidated Financial Statements

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Summary of Significant Accounting Policies

Organization and Principles of Consolidation. NPK International Inc. is a temporary worksite access solutions company that manufactures, sells, and rents recyclable composite matting products, along with a full suite of services, including planning, logistics, and site restoration. In 2025, 66% of our revenues were generated from the rental of our recyclable composite matting systems, along with related site construction and services to customers in various markets including power transmission, oil and natural gas exploration and production, pipeline, renewable energy, petrochemical, construction and other industries within the United States and United Kingdom. The remaining 34% of our 2025 revenues were generated from the sale of our manufactured recyclable composite mats, with power transmission being the primary end market.

We previously operated a Fluids Systems business, which was historically reported as a separate operating segment. On September 13, 2024, we completed the sale of substantially all of the Company’s Fluids Systems segment (the “Sale Transaction”) to SCF Partners, a leading private equity firm serving the global energy industry (the “Purchaser”). The results of operations of Fluids Systems are reported in discontinued operations in the consolidated statements of operations. All results and information in the consolidated financial statements and related notes are presented for our continuing operations and exclude Fluids Systems unless otherwise noted specifically as discontinued operations. See Note 2 for additional information.

When referring to NPK International Inc. (“NPK,” the “Company,” “we,” “our,” or “us”), the intent is to refer to NPK International Inc. and its subsidiaries as a whole. NPK International Inc., formerly known as Newpark Resources, Inc., was organized in 1932 as a Nevada corporation. In 1991, we changed our state of incorporation to Delaware. On December 9, 2024, we changed our name to NPK International Inc. The consolidated financial statements include our company and our wholly owned subsidiaries. All intercompany transactions are eliminated in consolidation.

Use of Estimates and Market Risks. The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates used in preparing our consolidated financial statements include, but are not limited to, the following: the fair values of assets acquired and liabilities assumed at the dates of acquisition for business combinations, estimated cash flows and fair values used for impairments of long-lived assets, including goodwill and other intangibles, and valuation allowances for deferred tax assets.

Cash Equivalents. All highly liquid investments with a remaining maturity of three months or less at the date of acquisition are classified as cash equivalents.

RestrictedCash. Cash that is restricted as to withdrawal or usage is recognized as restricted cash and is included in other current assets in the consolidated balance sheets.

Allowance for Credit Losses. Trade receivables are presented at the net amount expected to be collected. We estimate the lifetime “expected credit loss” for such assets at inception, which generally results in the earlier recognition of allowances for losses. Our allowance for credit losses reflects losses that are expected over the contractual life of the asset, and takes into account historical loss experience, current and future economic conditions, and reasonable and supportable forecasts.

Inventories. Inventories are stated at the lower of average cost or net realizable value. Certain conversion costs associated with our manufacturing operations are capitalized as a component of the carrying value of the inventory and expensed as a component of cost of revenues as the products are sold.

Property, Plant and Equipment. Property, plant and equipment are recorded at cost. Additions and improvements that extend the useful life of an asset are capitalized. We capitalize interest costs on significant capital projects. Maintenance and repairs are expensed as incurred. Sales and disposals of property, plant and equipment are removed at carrying cost less accumulated depreciation with any resulting gain or loss reflected in earnings.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Depreciation is provided on property, plant and equipment, including finance lease assets, primarily utilizing the straight-line method over the following estimated useful service lives or lease term:

Computer software, hardware, and office equipment 3-5 years

Autos and light trucks 5-7 years

Furniture, fixtures, and trailers 7-10 years

Rental assets 2-12 years

Machinery and heavy equipment 5-15 years

Owned buildings 20-39 years

Leasehold improvements Lease term, including reasonably assured renewal periods

Cloud Computing Arrangements. Cloud computing arrangements that do not include a software license are accounted for as a service contract. For such cloud computing arrangements, we capitalize certain implementation costs in prepaid expenses and other current assets and other noncurrent assets in the consolidated balance sheets, and amortize these capitalized costs to selling, general and administrative expenses using the straight-line method over the fixed, non-cancellable term of the associated hosting arrangement, plus any reasonably certain renewal periods. Implementation costs for cloud computing arrangements are included in operating activities in the consolidated statements of cash flows.

Leases. Leases are classified as either finance or operating at inception of the lease, with classification affecting the expense recognition in the income statement. Our leases have remaining terms ranging from 1 to 6 years with various extension and termination options. We consider these options in determining the lease term used to establish our operating lease assets and liabilities. Lease agreements with lease and non-lease components are accounted for as a single lease component. Leases with an initial term of 12 months or less are not recorded in the balance sheet and we recognize lease expense for these leases on a straight-line basis over the lease term. Certain leases require additional payments based on reimbursement for real estate taxes, common area maintenance, or various other variable lease payments. These variable lease payments are generally excluded from operating lease assets and lease liabilities and are recognized in rent expense as incurred. Sublease income is recognized on a straight-line basis over the expected lease term.

For information regarding revenues from the rental of our matting systems, see Revenue Recognition below.

Goodwill and Other Intangible Assets. Goodwill represents the excess of the purchase price of acquisitions over the fair value of the net identifiable assets acquired in business combinations. Goodwill is not amortized. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the asset are realized. Any period costs of maintaining intangible assets are expensed as incurred.

Impairment of Long-Lived Assets. Goodwill is tested for impairment annually as of November 1, or more frequently, if indicators of impairment exist. As part of our annual goodwill review, we first perform a qualitative assessment based on company performance and future business outlook to determine if indicators of impairment exist. When there are qualitative indicators of impairment, we use an impairment test which includes a comparison of the carrying value of net assets of our reporting unit, including goodwill, with its estimated fair value, which we estimate using a combination of a market multiple and discounted cash flow approach (classified within level 3 of the fair value hierarchy). If the carrying value exceeds the estimated fair value, an impairment charge is recorded in the period in which such review is performed.

We review property, plant and equipment, finite-lived intangible assets and certain other assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We assess recoverability based on the undiscounted future net cash flows expected from the use and eventual disposition of such asset. Should the review indicate that the carrying value is not fully recoverable, the amount of impairment loss is determined by comparing the carrying value to the estimated fair value.

Insurance. We maintain reserves for estimated future payments associated with our self-insured employee healthcare programs, as well as the self-insured retention exposures under our general liability, auto liability, and workers compensation insurance policies. Our reserves are determined based on historical experience under these programs, including estimated development of known claims and estimated incurred-but-not-reported claims.

Treasury Stock. Treasury stock is carried at cost, which includes the entire cost of the acquired stock.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Revenue Recognition. We recognize revenues in accordance with two different accounting standards, leases and revenues from contracts with customers.

Leases

Owned equipment rentals are accounted for as operating leases with rental revenues recognized over the rental term. Revenues from any subsequent extensions to the rental agreements are recognized over the extension period. Rental revenues also include cross-rentals, in which we rent matting systems from vendors and then re-rent them to our customers, which are accounted for as subleases.

Revenues from Contracts with Customers

Service revenues are recognized when the specified services are performed. Services revenues include certain services performed that are directly related to mat rental operations. Such services include mat installation and removal, freight (hauling of mats), and direct labor related to such activities. Revenues from the direct sale of products are recognized when control passes to the customer, which is upon shipment or delivery, depending on the terms of the underlying sales contract.

Revenues for rentals and services are generated from both fixed-price and unit-priced contracts, which are generally short term in duration. The activities under these contracts include the installation and rental of matting systems for a period of time and services such as access road construction, site planning and preparation, environmental protection, erosion control, and site restoration services.

The amount of revenue we recognize for services performed and products sold reflects the consideration to which we expect to be entitled in exchange for such services or goods, which generally reflects the amount we have the right to invoice. While billing requirements vary, many of our customer contracts require that billings occur periodically or at the completion of specified activities, even though our performance and right to consideration occurs throughout the contract. As such, we recognize revenue as performance is completed in the amount to which we have the right to invoice. We do not disclose the value of our unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue for the amount to which we have the right to invoice for services performed and products sold.

Shipping and handling costs are reflected in cost of revenues, and all reimbursements by customers of shipping and handling costs are included in revenues.

Income Taxes. We provide for deferred taxes using an asset and liability approach by measuring deferred tax assets and liabilities due to temporary differences existing at year end using currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. We reduce deferred tax assets by a valuation allowance when, based on our estimates, it is more likely than not that a portion of those assets will not be realized in a future period. The estimates utilized in recognition of deferred tax assets are subject to revision, either up or down, in future periods based on new facts or circumstances. We present deferred tax assets and liabilities as noncurrent in the balance sheet based on an analysis of each taxpaying component within a jurisdiction. We evaluate uncertain tax positions and record a reduction to the related net operating loss or a liability, as circumstances warrant.

Share-Based Compensation. Share-based compensation cost is measured at the grant date based on the fair value of the award, net of an estimated forfeiture rate. We recognize these costs in the statement of operations using the straight-line method over the vesting term.

Foreign CurrencyTranslation. The functional currency for all international subsidiaries is their respective local currency. Financial statements for these international subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the average exchange rates in effect during the respective period for revenues and expenses. Exchange rate adjustments resulting from translation of foreign currency financial statements of our international subsidiaries are reflected in accumulated other comprehensive loss in stockholders’ equity until such time that the international subsidiary is sold or liquidation is substantially complete, at which time the related accumulated adjustments would be reclassified into income. Exchange rate adjustments resulting from foreign currency denominated transactions are recorded in income. Following the Sale Transaction, our U.K. operations represent our primary foreign currency exposure, with British pounds serving as the functional currency for our U.K. subsidiaries. At December 31, 2025 and 2024, accumulated other comprehensive loss related to foreign subsidiaries reflected in stockholders’ equity was $1.6 million and $2.9 million, respectively.

Fair Value Measurement. Fair value is measured as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date. We apply the following fair

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

•Level 1: The use of quoted prices in active markets for identical financial instruments.

•Level 2: The use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or other inputs that are observable in the market or can be corroborated by observable market data.

•Level 3: The use of significantly unobservable inputs that typically require the use of management’s estimates of assumptions that market participants would use in pricing.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

New Accounting Pronouncements

Standards Adopted in 2025

Income Taxes: Improvements to Income Tax Disclosures. In December 2023, the FASB issued new guidance intended to enhance the transparency and decision usefulness of income tax disclosures. We adopted this guidance on a prospective basis in this Annual Report on Form 10-K. The new guidance had no impact on our consolidated financial position, results of operations, or cash flows, but did result in expanded income tax disclosures. See Note 9 for additional information.

Standards Not Yet Adopted

Disaggregation of Income Statement Expenses. In November 2024, the FASB issued new guidance which requires entities to disclose additional information about specific expense categories, such as employee compensation and depreciation. This guidance will be effective for us for years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted on either a prospective or retrospective basis. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 2 — Business Combinations and Discontinued Operations

Acquisition of Grassform Plant Hire Limited

On November 24, 2025, we completed the acquisition of Grassform Plant Hire Limited (“Grassform”), a U.K. market leader in ground protection and temporary roadway solutions and services.

The estimated purchase price for this acquisition was $50.2 million, or $46.0 million net of cash acquired, with $42.4 million funded at closing with cash on hand and borrowings under the Credit Facility. The acquisition is subject to customary post-closing adjustments pursuant to completion accounts and certain other adjustment mechanisms. Additional potential consideration may also be payable based upon improvements in Grassform’s trailing twelve-month performance through its current financial year-end, February 28, 2026.

The Grassform acquisition has been recorded using the acquisition method of accounting and accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The acquisition resulted in the recognition of $12.8 million in other intangible assets, consisting of customer relationships and tradename. The customer relationships and tradename are finite-lived intangible assets that are expected to be amortized over periods of 15 years and 10 years, respectively. The excess of the total consideration was recorded as goodwill, which is not deductible for U.S. tax purposes. The fair values of the identifiable assets acquired and liabilities assumed were based on our estimates and assumptions using various market, income, and cost valuation approaches, which are classified within level 3 of the fair value hierarchy.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes the preliminary amounts recognized for the assets acquired and liabilities assumed as of the November 24, 2025 acquisition date.

(In thousands)

Property, plant and equipment 15,409

Total assets acquired 33,549

Other current liabilities 4,669

Long-term debt, less current portion 1,309

Deferred tax liabilities 7,200

Other noncurrent liabilities 968

Total liabilities assumed 15,737

Net assets purchased 17,812

Total purchase consideration 45,991

Net cash conveyed at closing 42,352

Estimated due to seller 3,639

Total estimated purchase consideration $ 45,991

Results of operations and pro-forma combined results of operations for the acquired business have not been presented as the effect of this acquisition is not material to our consolidated financial statements. Selling, general and administrative expenses includes $1.0 million in acquisition-related transaction costs attributable to the Grassform acquisition.

Sale of Fluids Systems Business

As discussed above in Note 1, in September 2024, we completed the Sale Transaction. In connection with the Sale Transaction in the third quarter of 2024, we received $48.5 million in cash proceeds, net of cash disposed, and recognized a pre-tax loss on sale of $195.7 million, which includes a $59.5 million non-cash charge for the reclassification of cumulative foreign currency translation losses related to the Fluids Systems business. In 2025, we received additional net proceeds of $16.6 million related to the Sale Transaction as discussed further below. In the fourth quarter of 2025, we recognized a $2.2 million pre-tax gain on sale related to the resolution of certain estimated deferred consideration and liabilities for the Sale Transaction.

As of December 31, 2025 and December 31, 2024, approximately $3.7 million and $18.0 million, respectively, of net assets were included in the consolidated balance sheets, reflecting receivables and deferred consideration due from the Purchaser net of estimated liabilities due to the Purchaser.

Net assets related to the Sale Transaction consisted of the following:

Receivables due from the Purchaser $ — $ 15,978

Estimated deferred consideration due from the Purchaser 1,287 3,550

Note receivable due from the Purchaser 5,000 5,000

Estimated liabilities due to the Purchaser (2,637) (6,488)

Net assets due from the Purchaser $ 3,650 $ 18,040

Receivables due from the Purchaser at December 31, 2024 primarily reflected additional consideration for the actual working capital delivered at closing, which was fully received in 2025. Estimated deferred consideration due from the

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Purchaser reflects certain pre-closing tax assets and other receivables, of which $1.8 million was received in the fourth quarter of 2025 with $1.3 million expected to be substantially realized in 2026. The note receivable due from the Purchaser matures in March 2030 and bears interest at a rate of 12.5% per year. The receivables and deferred consideration due from the Purchaser are included in other receivables and the note receivable due from the Purchaser is included in other noncurrent assets in the consolidated balance sheet.

Estimated liabilities due to the Purchaser includes certain payables for pre-closing tax liabilities and obligations attributable to the Fluids Systems business, as well as an estimated liability for contractual indemnifications related to various pre-closing contingencies of the Fluids Systems business. We paid $1.2 million of these estimated liabilities and revised certain of our estimates for the remaining obligations in 2025. These estimated liabilities due to the Purchaser are included in accrued liabilities and other noncurrent liabilities in the consolidated balance sheet.

Our estimates for the fair value of deferred consideration due from the Purchaser and liabilities due to the Purchaser may change and any income or expense associated with such changes will be presented in discontinued operations.

The criteria for discontinued operations presentation were met during the third quarter of 2024, and consequently, the results of the former Fluids Systems segment are reported as income (loss) from discontinued operations within the consolidated statements of operations for all periods presented. We elected not to adjust the consolidated statements of cash flows to separately present cash flows attributable to discontinued operations. Accordingly, we have disclosed the depreciation, capital expenditures and significant operating and investing non-cash items related to discontinued operations below.

The following table summarizes the significant items included in income (loss) from discontinued operations in the consolidated statements of operations.

Year Ended December 31,

Other operating (income) loss, net — (1,447) (1,114)

Impairments and other charges — — 6,356

Operating income (loss) from discontinued operations (1,319) 7,868 10,690

Foreign currency exchange (gain) loss 121 825 1,156

Income (loss) from discontinued operations $ 2,994 $ (185,861) $ 367

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Operating results from discontinued operations shown above include the following items:

Year Ended December 31,

Fluids Systems sale process transaction expenses $ — $ 8,348 $ 619

Impairments and other charges — — 6,356

Gain on insurance recovery — (807) —

Facility exit costs and other, net — 741 4,594

Significant operating and investing items related to the former Fluids Systems segment were as follows:

Year Ended December 31,

Operating activities of discontinued operations:

Impairments and other non-cash charges $ — $ — $ 6,356

Depreciation and amortization — 4,874 7,776

Investing activities of discontinued operations:

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 3 — Inventories

Inventories consisted of the following at December 31:

Raw materials consist primarily of resins and other materials used to manufacture composite mats, as well as materials that are consumed in providing spill containment and other services to our customers. Finished goods consist primarily of newly manufactured composite mats, which are available for deployment into our rental fleet or sale to customers.

Note 4 — Property, Plant and Equipment

Property, plant and equipment consisted of the following at December 31:

Less accumulated depreciation - Rental assets (87,291) (75,924)

Depreciation expense was $23.4 million, $20.5 million, and $21.2 million in 2025, 2024 and 2023, respectively.

In November 2025, we completed the acquisition of Grassform, which resulted in additions to property, plant and equipment of $15.4 million. See Note 2 for additional information.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 5 — Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill are as follows:

(In thousands)

Effects of foreign currency (61)

Effects of foreign currency 940

We completed the annual evaluation of the carrying value of our goodwill as of November 1, 2025 and determined that the fair value exceeded the net carrying value, and therefore, no impairment was required.

In November 2025, we completed the acquisition of Grassform, which resulted in additions to goodwill of $28.2 million and amortizable intangible assets of $12.8 million. See Note 2 for additional information.

Other intangible assets consisted of the following:

Total amortization expense related to other intangible assets was $2.1 million, $2.1 million and $2.4 million in 2025, 2024 and 2023, respectively.

Estimated future amortization expense for the years ended December 31 is as follows:

The weighted average amortization period for technology related and customer related intangible assets is 15 years and 13 years, respectively.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 6 — Financing Arrangements

Financing arrangements consisted of the following:

Credit Facility $ 5,300 $ — $ 5,300 $ — $ — $ —

Credit Facility. In June 2025, we entered into a U.S. senior secured revolving credit agreement (the “Credit Facility”) with a group of lenders that provides financing of up to $150 million available for borrowings (inclusive of letters of credit), which can be increased up to $250 million, subject to certain conditions. The Credit Facility and the loans made under the Credit Facility are secured by a first priority lien on substantially all of the personal property of the Company and its significant U.S. subsidiaries as guarantors (subject to customary exceptions and exclusions). The Credit Facility will mature in June 2030. In connection with the Credit Facility, we terminated our U.S. asset-based revolving credit agreement and recognized a charge of $0.2 million in interest expense for the write-off of debt issuance costs in connection with the termination in the second quarter of 2025.

In addition, at December 31, 2025, we had $10.3 million in outstanding letters of credit (inclusive of the amount outstanding under the Credit Facility as described above), performance bonds, and other guarantees.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Interest expense, net was minimal for 2025. We incurred net interest expense of $2.6 million and $4.1 million for 2024 and 2023, respectively. There was no capitalized interest for the years ended December 31, 2025, 2024 or 2023. As of December 31, 2025, we had undiscounted future payments for financing arrangements of approximately $6.0 million in 2026, $4.1 million in 2027, $1.9 million in 2028, $0.8 million in 2029, and $5.4 million in 2030.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 7 — Fair Value of Financial Instruments and Concentrations of Credit Risk

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, receivables, payables, and debt. We believe the carrying values of these instruments approximated their fair values at December 31, 2025 and 2024. Cash equivalents primarily consist of money market accounts which are measured at fair value on a recurring basis using a market approach based on quoted prices in active markets.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk primarily consist of cash, cash equivalents, and trade accounts receivable. At December 31, 2025, substantially all of our cash and cash equivalents reside in U.K. and U.S. financial institutions or money market funds. As part of our investment strategy, we perform periodic evaluations of the relative credit standing of these financial institutions and money market funds.

Customer Revenue Concentration

We derive a significant portion of our revenues and profitability from customers operating within the utilities sector, which include power transmission service providers as well as large regulated electrical utility providers. For 2025, 2024 and 2023, revenues from our 20 largest customers represented approximately 74%, 67% and 67%, respectively, of our consolidated revenues. For 2025, our three largest customers represented 19%, 15%, and 10%, respectively, of our revenues. For 2024, our largest customer represented 19% of our revenues. For 2023, no single customer accounted for more than 10% of our consolidated revenues.

Receivables

Receivables consisted of the following at December 31:

Trade receivables:

Allowance for credit losses (330) (948)

Other receivables as of December 31, 2025 and December 31, 2024 included $1.3 million and $23.2 million, respectively, for amounts due from the Purchaser, including the receivables and estimated deferred consideration related to the Sale Transaction (see Note 2) as well as amounts due under the transition services agreement. Other receivables as of December 31, 2025 and December 31, 2024 also included an insurance receivable of $0.4 million and $1.7 million related to a cybersecurity event.

Changes in our allowance for credit losses were as follows:

Write-offs, net of recoveries (653) (54) (255)

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 8 — Leases

We lease certain office space, warehouses, land, and equipment. Leases in the consolidated balance sheets consisted of the following at December 31:

(In thousands) Balance Sheet Classification 2025 2024

Assets:

Finance Property, plant and equipment, net 12,816 7,316

Liabilities:

Current:

Operating Accrued liabilities $ 2,442 $ 2,162

Noncurrent:

Operating Noncurrent operating lease liabilities 9,877 10,896

Finance Long-term debt, less current portion 6,392 4,827

Lease costs in the consolidated statements of operations were as follows:

Year Ended December 31,

Operating lease expenses

Amortization of leased assets for finance leases 3,544 2,818 1,744

Total operating lease expenses approximate cash paid during each period. Interest for finance leases is not material. Operating lease expenses and amortization of leased assets for finance leases are included in either cost of revenues or selling, general and administrative expenses. Interest for finance leases is included in interest expense, net.

The sublease income in the table above relates to our principal executive offices in The Woodlands, Texas. In addition, we own a facility containing approximately 108,000 square feet of office space (approximately 85,000 square feet of which is currently being leased or available to be leased to third parties) on approximately 11 acres of land in Katy, Texas, which houses certain other administrative offices. From this facility, we generated lease income of $2.9 million, $0.8 million, and $0.5 million for 2025, 2024, and 2023, respectively. Such sublease and lease income associated with our principal executive offices and other administrative offices is included in selling, general and administrative expenses, or other operating income.

We also enter into certain cross-rentals as required to meet customer demand in which we rent matting systems from vendors and then re-rent them to our customers. These leases generally have initial terms of 12 months or less and therefore are not recorded in the balance sheet. For 2025, we recognized approximately $11 million of lease expense (included in cost of revenues) and re-rent revenue (included in rental revenues) associated with the cross-rentals. We had minimal cross-rentals in 2024 or 2023.

For information regarding revenues from the rental of our matting systems, see Note 13.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The maturity of lease liabilities as of December 31, 2025 is as follows:

(In thousands) Operating Leases Finance Leases Total

During 2025, we entered into $1.7 million and $4.7 million of new operating lease liabilities and finance lease liabilities, respectively, in exchange for leased assets. In addition, the November 2025 Grassform acquisition resulted in $1.2 million and $2.9 million of new operating lease liabilities and finance lease liabilities, respectively. See Note 2 for additional information. During 2024, we entered into $1.1 million and $3.5 million of new operating lease liabilities and finance lease liabilities, respectively, in exchange for leased assets.

Weighted-average remaining lease terms and the weighted average discount rates are as follows:

Lease Term and Discount Rate December 31, 2025

Weighted-average remaining lease term (years)

Operating leases 5.0

Finance leases 2.5

Weighted-average discount rate

Operating leases 5.1 %

Finance leases 8.5 %

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 9 — Income Taxes

The provision (benefit) for income taxes from continuing operations is as follows:

Year Ended December 31,

Current:

Deferred:

Income from continuing operations before income taxes is as follows:

Year Ended December 31,

Income from continuing operations before income taxes $ 47,650 $ 28,861 $ 19,722

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The effective income tax rate from continuing operations for the year ended December 31, 2025 is reconciled to the statutory federal income tax rate as follows:

(In thousands) Amount Percentage

Foreign tax effects:

Other foreign jurisdictions (51) (0.1) %

Tax credits (84) (0.2) %

Nontaxable or nondeductible items:

Nondeductible executive compensation 1,447 3.0 %

Other items, net (7) — %

Changes in unrecognized tax benefits (67) (0.1) %

Other items, net (56) (0.1) %

Total provision for income taxes from continuing operations $ 11,705 24.6 %

(1) State and local income taxes in Texas, New Jersey, Pennsylvania, Florida, and Louisiana comprise the majority of this category in 2025.

The effective income tax rate from continuing operations for the years ended December 31, 2024 and 2023 is reconciled to the statutory federal income tax rate as follows:

Nondeductible executive compensation 1,486 999

Stock-based compensation (1,087) (52)

Change in valuation allowance (15,161) (231)

State tax expense (benefit), net 1,566 886

The provision for income taxes from continuing operations was $11.7 million for 2025 compared to a benefit for income taxes of $6.7 million for 2024. The years ended 2025 and 2024 include income tax benefits of $1.5 million and $15.9 million, respectively, primarily reflecting the release of valuation allowances on U.S. federal and state net operating losses and other tax credit carryforwards following the sale of the Fluids Systems business. The provision for income taxes from continuing operations was $5.6 million for 2023.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Temporary differences and carryforwards which give rise to deferred tax assets and liabilities consisted of the following at December 31:

Deferred tax assets:

Accruals not currently deductible 1,133 3,579

Unrealized foreign exchange losses, net — 372

Research and development credits 6,163 6,282

Capitalized inventory costs 718 705

Capitalized research and development expenditures — 7,396

Total deferred tax assets, net of allowances 47,077 44,220

Deferred tax liabilities:

Accelerated depreciation and amortization (46,289) (29,830)

Total net deferred tax liabilities $ (1,941) $ 14,390

Noncurrent deferred tax assets $ 5,535 $ 15,593

Noncurrent deferred tax liabilities (7,476) (1,203)

Net deferred tax liabilities $ (1,941) $ 14,390

We have U.S. federal income tax net operating loss carryforwards (“NOLs”) of approximately $134.9 million available to reduce future U.S. taxable income, which do not expire. We also have state NOLs of approximately $142.6 million available to reduce future state taxable income, including approximately $69.4 million which do not expire and approximately $73.2 million which expire in varying amounts beginning in 2026 through 2045. Foreign NOLs of approximately $8.1 million are available to reduce future taxable income, some of which expire beginning in 2034. U.S. federal capital loss carryforwards of approximately $72.8 million expire in 2029.

The realization of our net deferred tax assets is dependent on our ability to generate taxable income in future periods. At December 31, 2025 and 2024, we have recorded a valuation allowance in the amount of $25.8 million and $34.3 million, respectively, primarily related to U.S. capital loss carryforwards, certain U.S. state and foreign NOL carryforwards, as well as foreign tax credits, which may not be realized. The change in the valuation allowance in 2025 is primarily related to the decrease in capital loss related to the sale of the Fluids Systems business upon finalizing our U.S. federal income tax return, as well as by the release of approximately $1.5 million of valuation allowances primarily related to U.S. state net operating losses that are now expected to be realized.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A reconciliation of the beginning and ending provision for uncertain tax positions is as follows:

Additions (reductions) for tax positions of prior years — — —

Additions (reductions) for tax positions of current year — — —

Reductions for settlements with tax authorities — — —

Reductions for lapse of statute of limitations (85) (24) (84)

Balance at December 31 $ — $ 85 $ 109

We recognize accrued interest and penalties related to uncertain tax positions in operating expenses. The amount of interest and penalties was immaterial for all periods presented.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 10 — Capital Stock

Common Stock

Changes in outstanding common stock were as follows:

Shares issued for time vested restricted stock (net of forfeitures) — — 129

Shares issued for employee stock purchase plan — — 88

Shares cancelled (21,535) — —

Outstanding shares of common stock include shares held as treasury stock totaling 5,616,798, 25,114,978 and 26,471,738 as of December 31, 2025, 2024 and 2023, respectively.

Treasury Stock

Changes in treasury stock were as follows:

Shares purchased under our Repurchase Program 3,039 — 6,523

Shares cancelled (21,535) — —

During 2025, 2024 and 2023, we purchased shares surrendered in lieu of taxes upon vesting of restricted shares for an aggregate cost of $2.3 million, $4.5 million and $2.2 million, respectively.

Repurchase Program

Our Board of Directors has authorized a securities repurchase program available for repurchases of our common stock. In April 2025, our Board of Directors increased the remaining authorization under the repurchase program to $100.0 million.

Our repurchase program authorizes us to purchase outstanding shares of our common stock in the open market or as otherwise determined by management, subject to certain limitations under the Credit Facility (as defined in Note 6) and other factors. The repurchase program has no specific term. Repurchases are expected to be funded from operating cash flows, available cash on hand, and borrowings under our Credit Facility. As part of the share repurchase program, our management has been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934.

During 2025, we repurchased an aggregate of 3.0 million shares of our common stock under the repurchase program for a cost of $20.4 million. Due to restrictions associated with the Fluids Systems sale process and other events, no shares of common stock were repurchased under the repurchase program during 2024.

As of December 31, 2025, we had $91.7 million of authorization remaining under the program.

Preferred Stock

We are authorized to issue up to 1,000,000 shares of preferred stock, $0.01 par value. There were no outstanding shares of preferred stock as of December 31, 2025, 2024 or 2023.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 11 — Earnings Per Share

The following table presents the reconciliation of the numerator and denominator for calculating net income (loss) per share:

Year Ended December 31,

Numerator

Denominator

Dilutive effect of restricted stock awards and stock options 899 1,576 1,914

Income (loss) per common share - basic:

Income from continuing operations $ 0.42 $ 0.41 $ 0.16

Income (loss) from discontinued operations 0.04 (2.17) —

Income (loss) per common share - diluted:

Income from continuing operations $ 0.42 $ 0.41 $ 0.16

Income (loss) from discontinued operations 0.03 (2.13) —

We excluded the following weighted-average potential shares from the calculations of diluted net income (loss) per share during the applicable periods because their inclusion would have been anti-dilutive for continuing operations:

Year Ended December 31,

Restricted stock awards and stock options 257 341 785

Note 12 — Stock-Based Compensation and Other Benefit Plans

The following describes stockholder approved plans utilized by us for the issuance of stock-based awards.

2014 Non-Employee Directors’ Restricted Stock Plan

In May 2014, our stockholders approved the 2014 Non-Employee Directors’ Restricted Stock Plan (“2014 Director Plan”) which authorizes grants of restricted stock to non-employee directors. Each restricted share granted to a non-employee director vests in full on the earlier of the day prior to the next annual meeting of stockholders following the grant date or the first anniversary of the grant. At December 31, 2025, 0.3 million shares remained available for award under the 2014 Director Plan.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2015 Employee Equity Incentive Plan

In May 2015, our stockholders approved the 2015 Employee Equity Incentive Plan (“2015 Plan”) pursuant to which the Compensation Committee of our Board of Directors (“Compensation Committee”) may grant to key employees, including executive officers and other employees, a variety of forms of equity-based compensation, including shares of restricted common stock, restricted stock units, options to purchase shares of common stock, stock appreciation rights, other stock-based awards, and performance-based awards. At December 31, 2025, 3.0 million shares remained available for award under the 2015 Plan.

In June 2017, our Board of Directors approved the Long-Term Cash Incentive Plan (“Cash Plan”), a sub-plan to the 2015 Plan, pursuant to which the Compensation Committee may grant time-based cash awards or performance-based cash awards to key employees, including executive officers and other employees, to provide an opportunity for employees to receive a cash payment upon either completion of a service period or achievement of predetermined performance criteria at the end of a performance period.

Activity under each of these programs is described below.

Restricted Stock Awards and Units

Time-vested restricted stock awards and restricted stock units are periodically granted to key employees, as well as to members of our Board of Directors. Employee awards provide for vesting periods ranging from three to four years. Non-employee director grants vest in full on the earlier of the day prior to the next annual meeting of stockholders following the grant date or the first anniversary of the grant. Upon vesting of these grants, shares are issued to award recipients.

The following tables summarize the activity for our outstanding time-vested restricted stock awards (granted to our Board of Directors) and restricted stock units (granted to employees) for the year ended December 31, 2025:

Total compensation cost recognized for restricted stock awards and restricted stock units inclusive of discontinued operations was $5.4 million, $5.0 million and $6.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. During the years ended December 31, 2025, 2024 and 2023, the total fair value of shares vested was $7.2 million, $15.6 million and $9.0 million, respectively. For the years ended December 31, 2025, 2024 and 2023, we recognized tax benefits resulting from the vesting of restricted stock awards and units of $1.2 million, $3.1 million and $1.8 million, respectively. No awards related to employees of our former Fluids Systems remained outstanding at December 31, 2025 or 2024.

Total compensation cost recognized for restricted stock awards and restricted stock units for continuing operations was $4.6 million, $4.5 million and $4.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Total

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

unrecognized compensation cost at December 31, 2025 related to restricted stock awards and restricted stock units was approximately $6.4 million which is expected to be recognized over the next 1.6 years.

Performance-Based Restricted Stock Units

In addition to the time-based restricted stock units described above, during 2025, the Compensation Committee approved the issuance of 0.4 million performance-based restricted stock units, instead of cash-based awards as granted in prior years, to certain executive officers with the payout of shares for each executive ranging from 0% to 200% of target. There were no performance-based restricted stock units granted in 2024 or 2023. The performance-based restricted stock units will be settled in shares of common stock, with 70% to be settled based on the relative ranking of the Company’s total shareholder return (“TSR”) as compared to the TSR of a designated peer group and 30% to be settled based on the Company’s consolidated return on net capital employed (“RONCE”), each measured over a three-year performance period. TSR performance for the 2025 grants will be determined based on the Company’s and peer group’s average closing share price for the 30-calendar day period ending May 31, 2028, adjusted for dividends, as compared to the 30-calendar day period ending June 1, 2025. RONCE performance for the 2025 grants will be determined based on the Company’s average three-year RONCE performance for the fiscal years ending December 31, 2025, 2026 and 2027.

The TSR portion of the performance-based restricted stock units had a grant-date fair value of $11.57 per share using a Monte-Carlo valuation model, which will be recognized ratably over the service period. Assumptions used in the model included a risk-free interest rate of 4.0%, an expected life of 3 years, and an expected volatility of 49.8%. The RONCE portion of the performance-based restricted stock units had a grant-date fair value of $8.45 per share, which will be recognized ratably over the service period using the probable number of shares expected to vest based on the RONCE performance condition.

Total compensation cost recognized for performance-based restricted stock units was $0.9 million.

Cash-Based Awards

During 2024 and 2023 the Compensation Committee approved the issuance of cash-based awards to certain executive officers with a target value of $2.6 million and $2.5 million, respectively. The cash payout for each award ranges from 0% to 200% of target. As of December 31, 2025, the 2024 and 2023 awards had a target value outstanding of $2.3 million and $2.2 million, respectively.

Of the outstanding cash-based awards for 2024 and 2023, 70% will be settled based on the relative ranking of our TSR as compared to the TSR of our designated peer group and 30% will be settled based on the consolidated return on net capital employed (“RONCE”), each measured over a three-year performance period. For TSR awards, the performance period for the 2024 award is measured from May 2024 to May 2027 and the performance period for the 2023 awards is measured from May 2023 to May 2026. RONCE performance for the 2024 and 2023 awards will be determined based upon the Company’s average three-year RONCE performance for the fiscal years 2024 through 2026, and fiscal years 2023 through 2025, respectively.

The performance-based cash awards are accrued as a liability award over the performance period based on the estimated fair value. The fair value of the performance-based cash awards is remeasured each period using a Monte Carlo valuation model with changes in fair value recognized in the consolidated statement of operations.

Total compensation cost recognized for cash-based awards was $4.0 million, $2.7 million and $3.8 million for the years ended December 31, 2025, 2024 and 2023 respectively. As of December 31, 2025 and 2024, the total liability for cash-based awards was $4.8 million and $4.3 million, respectively.

Stock Options

Stock options granted by the Compensation Committee are granted with a three-year vesting period and a term of ten years. There have been no options granted since 2016.

NPK INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes activity for our outstanding stock options for the year ended December 31, 2025:

Outstanding at beginning of period 775,438 $ 6.14

Granted — —

There was no compensation cost recognized for stock options during the years ended December 31, 2025, 2024 or 2023. The total intrinsic value of options exercised was $1.7 million, $0.1 million, and $0.4 million for the years ended December 31, 2025, 2024 and 2023, while cash from option exercises totaled $1.5 million, $0.1 million and $0.6 million, respectively.

Defined Contribution Plan

Substantially all of our U.S. employees are covered by a defined contribution plan (“401(k) Plan”). Employees may voluntarily contribute up to 50% of compensation, as defined in the 401(k) Plan. Participants’ contributions, up to 4% of compensation, are matched 100% by the Company, and the participants’ contributions, from 4% to 6% of compensation, are matched 50% by the Company. Under the 401(k) Plan, our cash contributions were $1.9 million, $2.9 million and $3.2 million for 2025, 2024 and 2023, respectively.

Note 13 — Segment and Related Information

Following the sale of the Fluids Systems segment in September 2024, we have one reportable segment. See Note 2 for financial information for our previously reported Fluids Systems segment, now reported as discontinued operations.

The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, allocates resources and assesses financial performance on a consolidated basis. The Company’s operations, currently in the United States and United Kingdom, are substantially similar with respect to services provided, type of customers, and sourcing of materials. Resource allocations are based on the capacity of the Company’s existing rental fleet, manufacturing facility and current status of operations, including projected demand for our products and services in the industries and locations we serve. Consolidated income from continuing operations as presented in the consolidated statements of operations is used to measure performance. As such, management has determined that the Company functions as a single operating segment, and reports as a single reportable segment.

NPKI US Equity

NPKI · 10-K · period ended 2025-12-31

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

ITEM 8. Financial Statements and Supplementary Data

NPKI US Equity☆

NPKI · 10-K · period ended 2025-12-31

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

ITEM 8. Financial Statements and Supplementary Data

NPKI US Equity