National Presto Industries, Inc. (NPK) Income Statement

The revenue trajectory shows clear acceleration, with quarterly growth rates climbing from 7.7% in 2024Q2 to 41.6% in 2025Q2, before settling at 21.7% in 2026Q2. This pattern indicates a significant ramp in Defense segment deliveries, likely tied to multi-year DOD contracts. The durability of this growth hinges on continued government procurement, which appears favorable given geopolitical tensions, but investors should monitor backlog conversion rates.

Despite revenue growth, gross margins have been volatile, peaking at 24.3% in 2024Q4 but falling to 13.9% in 2025Q3. The latest quarter's 19.5% margin is above the trailing average but still below the 2024Q4 peak. This suggests NPK may be facing rising raw material costs (aluminum, brass) and fixed-price defense contracts that limit pass-through. The low absolute margin relative to peers like HBB (25.7%) underscores a lack of pricing power in Housewares.

The latest quarter shows clear operating leverage: revenue grew 21.7% YoY while operating income jumped from $6.1M to $19.4M, a 218% increase. This suggests that fixed costs in the Defense segment are being spread over a larger revenue base. However, SG&A data is sparse, with only two quarters showing SG&A expenses, making it difficult to assess overhead efficiency. The absence of R&D expenses in all quarters is notable, possibly indicating that Safety segment investments are being expensed elsewhere.

The cost structure is heavily weighted toward COGS, which averaged 84% of revenue over the last year. This is typical for a manufacturer but leaves little room for error. SG&A expenses were only reported in 2025Q4 and 2024Q4, suggesting that other quarters may have had negligible SG&A or that it is embedded elsewhere. The lack of R&D spending is surprising for a company investing in a Safety segment, implying that those costs may be capitalized or included in SG&A when incurred.

2024Q4 stands out as a peak profitability quarter, with gross margin of 24.3% and operating margin of 17.3%, far above the surrounding quarters. This likely reflects a favorable product mix or a one-time contract settlement. The subsequent decline to sub-20% gross margins suggests that this was not sustainable, and the company has since settled into a lower margin regime. Investors should view this as a cautionary tale about the volatility of defense-related earnings.