DNOW Inc. Reports Fourth Quarter and Full-Year 2023 Results
Earnings Conference Call
February 15, 2024
8:00 a.m. CT
1 (888) 660-6431 (within
1 (929) 203-2118 (outside of
Access Code: 7372055
Webcast: ir.dnow.com
Financial Highlights
-
Cash provided by operating activities was
for the fourth quarter of 2023 and$105 million for the full-year 2023$188 million -
Revenue was
for the fourth quarter of 2023$555 million -
Net income attributable to DNOW Inc. was
, or$147 million per diluted share, for the fourth quarter of 2023, which included a non-cash deferred tax benefit of$1.35 from the release of valuation allowances on deferred tax assets$126 million -
Non-GAAP net income attributable to DNOW Inc. excluding other costs was
, or$24 million per diluted share, for the fourth quarter of 2023$0.22 -
EBITDA excluding other costs was
or$44 million 7.9% of revenue for the fourth quarter of 2023 -
Cash and cash equivalents was
and long-term debt was zero at December 31, 2023 with total liquidity of approximately$299 million $626 million
David Cherechinsky, President and CEO of DNOW, added, “I am excited by our strong fourth quarter finish, capping off another stellar year. In 2023, revenues grew
I am thrilled about the agreement we reached to acquire Whitco Supply and believe this partnership will delight our customers, enhance earnings, free cash flow and shareholder value.
I want to thank the highly talented women and men of DNOW who have delivered these results and positioned our company to be the critical link in supplying the world’s evolving energy needs.”
Prior to the earnings conference call a presentation titled “DNOW Fourth Quarter and Full-Year 2023 Key Takeaways” will be available on the Company’s Investor Relations website.
About DNOW
DNOW is a worldwide supplier of energy and industrial products and packaged, engineered process and production equipment with a legacy of 160 years. Headquartered in
Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by DNOW Inc. with the
DNOW INC. CONSOLIDATED BALANCE SHEETS (In millions, except share data) |
|||||||
December 31, | December 31, | ||||||
|
2023 |
|
|
2022 |
|
||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ |
299 |
|
$ |
212 |
|
|
Receivables, net |
|
384 |
|
|
398 |
|
|
Inventories, net |
|
366 |
|
|
381 |
|
|
Prepaid and other current assets |
|
19 |
|
|
26 |
|
|
Total current assets |
|
1,068 |
|
|
1,017 |
|
|
Property, plant and equipment, net |
|
131 |
|
|
119 |
|
|
Deferred income taxes |
|
118 |
|
|
− |
|
|
Goodwill |
|
139 |
|
|
116 |
|
|
Intangibles, net |
|
28 |
|
|
25 |
|
|
Other assets |
|
45 |
|
|
43 |
|
|
Total assets | $ |
1,529 |
|
$ |
1,320 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ |
288 |
|
$ |
304 |
|
|
Accrued liabilities |
|
120 |
|
|
126 |
|
|
Other current liabilities |
|
10 |
|
|
9 |
|
|
Total current liabilities |
|
418 |
|
|
439 |
|
|
Long-term operating lease liabilities |
|
30 |
|
|
25 |
|
|
Deferred income taxes |
|
− |
|
|
1 |
|
|
Other long-term liabilities |
|
18 |
|
|
11 |
|
|
Total liabilities |
|
466 |
|
|
476 |
|
|
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock - par value |
|
− |
|
|
− |
|
|
Common stock - par value |
|
1 |
|
|
1 |
|
|
Additional paid-in capital |
|
2,032 |
|
|
2,066 |
|
|
Accumulated deficit |
|
(828 |
) |
|
(1,075 |
) |
|
Accumulated other comprehensive loss |
|
(145 |
) |
|
(150 |
) |
|
DNOW Inc. stockholders' equity |
|
1,060 |
|
|
842 |
|
|
Noncontrolling interest |
|
3 |
|
|
2 |
|
|
Total stockholders' equity |
|
1,063 |
|
|
844 |
|
|
Total liabilities and stockholders' equity | $ |
1,529 |
|
$ |
1,320 |
|
|
DNOW INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In millions, except per share data) |
|||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||
2023 |
2022 |
2023 |
2023 |
2022 |
|||||||||||||
Revenue | $ |
555 |
|
$ |
547 |
|
$ |
588 |
$ |
2,321 |
|
$ |
2,136 |
||||
Operating expenses: | |||||||||||||||||
Cost of products |
|
425 |
|
|
415 |
|
|
454 |
|
1,786 |
|
|
1,630 |
||||
Warehousing, selling and administrative |
|
98 |
|
|
97 |
|
|
97 |
|
395 |
|
|
365 |
||||
Impairment and other charges |
|
− |
|
|
− |
|
|
− |
|
− |
|
|
10 |
||||
Operating profit |
|
32 |
|
|
35 |
|
|
37 |
|
140 |
|
|
131 |
||||
Other income (expense) |
|
(1 |
) |
|
(1 |
) |
|
− |
|
(2 |
) |
|
8 |
||||
Income before income taxes |
|
31 |
|
|
34 |
|
|
37 |
|
138 |
|
|
139 |
||||
Income tax provision (benefit) |
|
(116 |
) |
|
2 |
|
|
2 |
|
(110 |
) |
|
10 |
||||
Net income |
|
147 |
|
|
32 |
|
|
35 |
|
248 |
|
|
129 |
||||
Net income attributable to noncontrolling interest |
|
− |
|
|
− |
|
|
− |
|
1 |
|
|
1 |
||||
Net income attributable to DNOW Inc. | $ |
147 |
|
$ |
32 |
|
$ |
35 |
$ |
247 |
|
$ |
128 |
||||
Earnings per share attributable to DNOW Inc. stockholders: | |||||||||||||||||
Basic | $ |
1.36 |
|
$ |
0.28 |
|
$ |
0.32 |
$ |
2.26 |
|
$ |
1.14 |
||||
Diluted | $ |
1.35 |
|
$ |
0.28 |
|
$ |
0.32 |
$ |
2.24 |
|
$ |
1.13 |
||||
Weighted-average common shares outstanding, basic |
|
106 |
|
|
110 |
|
|
107 |
|
107 |
|
|
111 |
||||
Weighted-average common shares outstanding, diluted |
|
107 |
|
|
111 |
|
|
108 |
|
108 |
|
|
111 |
||||
DNOW INC. SUPPLEMENTAL INFORMATION BUSINESS SEGMENTS (UNAUDITED) (In millions) |
||||||||||||||
Three Months Ended | Year Ended | |||||||||||||
December 31, | September 30, | December 31, | ||||||||||||
2023 |
2022 |
2023 |
2023 |
2022 |
||||||||||
Revenue: | ||||||||||||||
$ |
418 |
$ |
414 |
$ |
448 |
$ |
1,749 |
$ |
1,591 |
|||||
|
65 |
|
75 |
|
68 |
|
282 |
|
315 |
|||||
International |
|
72 |
|
58 |
|
72 |
|
290 |
|
230 |
||||
Total revenue | $ |
555 |
$ |
547 |
$ |
588 |
$ |
2,321 |
$ |
2,136 |
||||
DNOW INC. SUPPLEMENTAL INFORMATION (CONTINUED)
NET INCOME ATTRIBUTABLE TO DNOW INC. TO NON-GAAP EBITDA EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) (In millions) |
|||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|||||
GAAP net income attributable to DNOW Inc. (1) | $ |
147 |
|
$ |
32 |
|
$ |
35 |
|
$ |
247 |
|
$ |
128 |
|
||||
Net income attributable to noncontrolling interest (2) |
|
− |
|
|
− |
|
|
− |
|
|
1 |
|
|
1 |
|
||||
Interest expense (income), net |
|
(1 |
) |
|
− |
|
|
(2 |
) |
|
(4 |
) |
|
(1 |
) |
||||
Income tax provision (benefit) |
|
(116 |
) |
|
2 |
|
|
2 |
|
|
(110 |
) |
|
10 |
|
||||
Depreciation and amortization |
|
7 |
|
|
5 |
|
|
7 |
|
|
26 |
|
|
19 |
|
||||
Other costs: | |||||||||||||||||||
Stock-based compensation |
|
4 |
|
|
4 |
|
|
4 |
|
|
15 |
|
|
11 |
|
||||
Other (3) |
|
3 |
|
|
4 |
|
|
− |
|
|
9 |
|
|
7 |
|
||||
EBITDA excluding other costs | $ |
44 |
|
$ |
47 |
|
$ |
46 |
|
$ |
184 |
|
$ |
175 |
|
||||
EBITDA % excluding other costs (4) |
|
7.9 |
% |
|
8.6 |
% |
|
7.8 |
% |
|
7.9 |
% |
|
8.2 |
% |
||||
NET INCOME ATTRIBUTABLE TO DNOW INC. TO NON-GAAP NET INCOME ATTRIBUTABLE TO DNOW INC. EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) (In millions) |
|||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|||||
GAAP net income attributable to DNOW Inc. (1) | $ |
147 |
|
$ |
32 |
|
$ |
35 |
|
$ |
247 |
|
$ |
128 |
|
||||
Other, net of tax (5) (6) |
|
(123 |
) |
|
(3 |
) |
|
(7 |
) |
|
(140 |
) |
|
(21 |
) |
||||
Net income attributable to DNOW Inc. excluding other costs (6) | $ |
24 |
|
$ |
29 |
|
$ |
28 |
|
$ |
107 |
|
$ |
107 |
|
||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS TO NON-GAAP DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) |
|||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|||||
GAAP diluted earnings per share attributable to DNOW Inc. stockholders (1) | $ |
1.35 |
|
$ |
0.28 |
|
$ |
0.32 |
|
$ |
2.24 |
|
$ |
1.13 |
|
||||
Other, net of tax (5) (6) |
|
(1.13 |
) |
|
(0.03 |
) |
|
(0.07 |
) |
|
(1.27 |
) |
|
(0.18 |
) |
||||
Diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs (6) | $ |
0.22 |
|
$ |
0.25 |
|
$ |
0.25 |
|
$ |
0.97 |
|
$ |
0.95 |
|
||||
(1) |
In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) net income attributable to DNOW Inc. excluding other costs and (iii) diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs. Each of these financial measures excludes the impact of certain other costs and therefore has not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein. |
|
|
||
(2) |
Net income attributable to noncontrolling interest represents the income retained by the noncontrolling party of a joint venture in our international segment which we consolidate into our financials as we are the primary beneficiary and controlling member. |
|
|
||
(3) |
Other includes certain income and expenses not included in stock-based compensation. |
|
|
||
For the three months ended December 31, 2023, Other of |
||
|
||
For the year ended December 31, 2023, Other of |
||
|
||
(4) |
EBITDA % excluding other costs is defined as EBITDA excluding other costs divided by Revenue. |
|
|
||
Other, net of tax includes certain income and expenses and does not include stock-based compensation expense. |
||
|
||
For the three months ended December 31, 2023, Other, net of tax included a benefit of approximately |
||
|
||
For the year ended December 31, 2023, Other, net of tax included a benefit of approximately |
||
|
||
The Company has excluded the impact of these items on its valuation allowance in computing net income excluding other costs. |
||
|
||
(5) |
Totals may not foot due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240215195391/en/
Mark Johnson
Senior Vice President and Chief Financial Officer
(281) 823-4754
Source: DNOW Inc.