DNOW Reports Fourth Quarter and Full-Year 2024 Results

Rhea-AI Summary

DNOW (NYSE: DNOW) reported strong financial results for Q4 and full-year 2024. The company announced a new $160 million share repurchase authorization, doubling its previous program, and completed the acquisition of Trojan Rentals for $114 million.

Key financial highlights include: Q4 revenue of $571 million and full-year revenue of $2,373 million; Q4 net income of $23 million ($0.21 per diluted share) and full-year net income of $81 million ($0.74 per diluted share). Operating cash flow reached $122 million in Q4 and $298 million for the full year. The company achieved Q4 EBITDA of $45 million (7.9% of revenue) and full-year EBITDA of $176 million (7.4% of revenue).

DNOW maintains a strong financial position with $256 million in cash, zero long-term debt, and total liquidity of approximately $556 million.

Positive

• New $160M share repurchase program announced, double the size of previous program
• Strategic acquisition of Trojan Rentals for $114M enhancing pump rental and automation capabilities
• Strong cash flow with $122M from operations in Q4, $298M for full-year
• Robust liquidity position with $256M cash and zero long-term debt
• Q4 EBITDA margin improved to 7.9% of revenue
• Generated $289M in free cash flow, nearly double initial projections

Negative

• None.

Insights

Financial Analyst

DNOW's Q4 and full-year 2024 results reveal a company executing with precision on multiple fronts. The doubling of the share repurchase program to $160 million signals management's strong conviction in the company's valuation and future prospects, particularly noteworthy given the robust free cash flow generation of $289 million - nearly double initial projections.

The strategic acquisition of Trojan Rentals for $114 million strengthens DNOW's position in the lucrative water transfer and management space, diversifying revenue streams while enhancing industrial automation capabilities. This move aligns perfectly with the industry's increasing focus on water management efficiency and environmental considerations.

The company's financial health is exemplary, maintaining zero long-term debt while holding $256 million in cash and $556 million in total liquidity. This strong balance sheet provides significant flexibility for future strategic initiatives, whether through additional acquisitions or organic growth investments. The Q4 EBITDA margin of 7.9% demonstrates successful execution of margin expansion initiatives and cost control measures, outperforming market expectations.

The potential achievement of five consecutive years of growth in 2025 would be particularly impressive given the cyclical nature of the energy services sector. This consistent performance, coupled with expanding margins and strategic acquisitions, positions DNOW as a resilient player in the industrial distribution space, with multiple levers for continued value creation.

Earnings Conference Call

February 13, 2025

8:00 a.m. CT

1 (800) 715-9871 (within North America)

1 (646) 307-1963 (outside North America)

Access Code: 7372055

Webcast: ir.dnow.com

HOUSTON--(BUSINESS WIRE)-- DNOW Inc. (NYSE: DNOW) announced results for the fourth quarter and full-year ended December 31, 2024.

Recent Capital Allocation Actions

• Announced a new $160 million share repurchase authorization, double the size of the share repurchase program successfully completed in 2024

• Completed acquisition of Trojan Rentals, LLC in the fourth quarter of 2024, for $114 million in cash, enhancing our pump rental offering and industrial automation capabilities in the water transfer and management space

Financial Highlights

• Cash provided by operating activities was $122 million for the fourth quarter of 2024 and $298 million for the full-year 2024
• Revenue was $571 million for the fourth quarter of 2024 and $2,373 million for the full-year 2024
• Net income attributable to DNOW Inc. was $23 million, or $0.21 per diluted share, for the fourth quarter of 2024 and $81 million, or $0.74 per diluted share, for the full-year 2024
• Non-GAAP net income attributable to DNOW Inc. excluding other costs was $27 million, or $0.25 per diluted share, for the fourth quarter of 2024 and $100 million, or $0.91 per diluted share, for the full-year 2024

• EBITDA excluding other costs was $45 million or 7.9% of revenue for the fourth quarter of 2024 and $176 million or 7.4% of revenue for the full-year 2024
• Cash and cash equivalents was $256 million and long-term debt was zero at December 31, 2024 with total liquidity of approximately $556 million

David Cherechinsky, President and CEO of DNOW, added, “I am proud of the strong results we achieved in 2024, accentuated by $289 million in free cash flow, nearly twice our projections from last February. I am also pleased that fourth quarter EBITDA was markedly higher than expectations, at $45 million, or 7.9% of revenue, thanks to expanded gross margins and implemented cost control initiatives.

The recently announced $160 million share repurchase authorization, which is double in size from our previous program, demonstrates confidence in the strength of our business. This substantial increase signals our strong conviction in DNOW's cash generation capabilities and future earnings potential. Our commitment to maintain an acquisition focus alongside share buybacks provides multiple avenues for shareholder value creation.

I am honored to represent the talented women and men of DNOW who work creatively and enthusiastically to win in the market. Your determination and dedication give me great confidence in our bright future as we lay the groundwork for a successful 2025, a year that could mark the fifth consecutive year of growth for DNOW.”

Prior to the earnings conference call a presentation titled “DNOW Fourth Quarter and Full-Year 2024 Key Takeaways” will be available on the Company’s Investor Relations website.

About DNOW

DNOW is a supplier of energy and industrial products and packaged, engineered process and production equipment with a legacy of over 160 years. Headquartered in Houston, Texas, with approximately 2,575 employees and a network of locations, we offer a broad set of supply chain solutions combined with a suite of digital offerings branded as DigitalNOW® that provide customers access to highly complementary digital commerce, data and information management channels. Our locations provide products and solutions to exploration and production, midstream transmission and storage companies, refineries, chemical companies, utilities, mining, municipal water, manufacturers, engineering and construction as well as companies operating in the decarbonization, energy evolution and renewables end markets.

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 U.S. Securities and Exchange Commission, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

DNOW INC. CONSOLIDATED BALANCE SHEETS (In millions, except share data)
	December 31,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents	$	256			$	299
Receivables, net		388				384
Inventories, net		352				366
Prepaid and other current assets		32				19
Total current assets		1,028				1,068
Property, plant and equipment, net		157				131
Deferred income taxes		93				118
Goodwill		230				139
Intangibles, net		65				28
Other assets		48				45
Total assets	$	1,621			$	1,529
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	300			$	288
Accrued liabilities		130				120
Other current liabilities		12				10
Total current liabilities		442				418
Long-term operating lease liabilities		29				30
Other long-term liabilities		22				18
Total liabilities		493				466
Commitments and contingencies
Stockholders' equity:
Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding		−				−
Common stock - par value $0.01; 330 million shares authorized; 105,652,963 and 106,257,565 shares issued and outstanding at December 31, 2024 and 2023, respectively		1				1
Additional paid-in capital		2,023				2,032
Accumulated deficit		(747	)			(828	)
Accumulated other comprehensive loss		(153	)			(145	)
DNOW Inc. stockholders' equity		1,124				1,060
Noncontrolling interest		4				3
Total stockholders' equity		1,128				1,063
Total liabilities and stockholders' equity	$	1,621			$	1,529

DNOW INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In millions, except per share data)
	Three Months Ended												Year Ended
	December 31,								September 30,				December 31,
	2024				2023				2024				2024					2023
Revenue	$	571			$	555			$	606			$	2,373			$	2,321
Operating expenses:
Cost of products		438				425				471				1,838				1,786
Warehousing, selling and administrative		103				98				107				416				395
Impairment and other charges		1				−				5				6				−
Operating profit		29				32				23				113				140
Other income (expense)		1				(1	)			(1	)			1				(2	)
Income before income taxes		30				31				22				114				138
Income tax provision (benefit)		7				(116	)			9				32				(110	)
Net income		23				147				13				82				248
Net income attributable to noncontrolling interest		−				−				−				1				1
Net income attributable to DNOW Inc.	$	23			$	147			$	13			$	81			$	247
Earnings per share attributable to DNOW Inc. stockholders:
Basic	$	0.22			$	1.36			$	0.12			$	0.75			$	2.26
Diluted	$	0.21			$	1.35			$	0.12			$	0.74			$	2.24
Weighted-average common shares outstanding, basic		106				106				106				106				107
Weighted-average common shares outstanding, diluted		107				107				107				107				108

DNOW INC. SUPPLEMENTAL INFORMATION   BUSINESS SEGMENTS (UNAUDITED) (In millions)
	Three Months Ended												Year Ended
	December 31,								September 30,				December 31,
	2024				2023				2024				2024				2023
Revenue:
United States	$	451			$	418			$	482			$	1,880			$	1,749
Canada		66				65				65				253				282
International		54				72				59				240				290
Total revenue	$	571			$	555			$	606			$	2,373			$	2,321

DNOW INC.
SUPPLEMENTAL INFORMATION (CONTINUED)

U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS

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) EBITDA excluding other costs as a percentage of revenue, (iii) net income attributable to DNOW Inc. excluding other costs, (iv) diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs, and (v) free cash flow. We use these non-GAAP financial measures to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the financial performance of our business. These non-GAAP financial measures are not intended to replace the GAAP financial measures. Free cash flow is net cash provided by (used in) operating activities adjusted for purchases of property, plant and equipment, and the remaining non-GAAP financial measures exclude the impact of certain other items. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein. Totals in the schedules herein may not foot due to rounding.

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,
		2024			As a % of revenue				2023			As a % of revenue				2024			As a % of revenue				2024			As a % of revenue				2023			As a % of revenue
GAAP net income attributable to DNOW Inc.	$	23			4.0	%		$	147			26.5	%		$	13			2.1	%		$	81			3.4	%		$	247			10.6	%
Net income attributable to noncontrolling interest (1)		−							−							−							1							1
Interest expense (income), net		(2	)						(1	)						(1	)						(6	)						(4	)
Income tax provision (benefit)		7							(116	)						9							32							(110	)
Depreciation and amortization		10							7							8							34							26
Other costs:
Stock-based compensation		4							4							3							13							15
Other (2)		3							3							10							21							9
EBITDA excluding other costs	$	45			7.9	%		$	44			7.9	%		$	42			6.9	%		$	176			7.4	%		$	184			7.9	%

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,
	2024				2023				2024					2024				2023
GAAP net income attributable to DNOW Inc.	$	23			$	147			$	13			$	81			$	247
Other (2)		3				3				10				21				9
Other tax expense (benefit) (3)		−				(126	)			−				(2	)			(149	)
Other, net of tax (4)*		4				(123	)			9				19				(140	)
Net income attributable to DNOW Inc. excluding other costs	$	27			$	24			$	22			$	100			$	107
* Totals may not foot due to rounding.

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,
	2024					2023			2024					2024				2023
GAAP diluted earnings per share attributable to DNOW Inc. stockholders	$	0.21			$	1.35			$	0.12			$	0.74			$	2.24
Other, net of tax (4)		0.04				(1.13	)			0.09				0.17				(1.27	)
Diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs	$	0.25			$	0.22			$	0.21			$	0.91			$	0.97

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW RECONCILIATION (UNAUDITED)
	Three Months Ended																				Year Ended
	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,
		2024				2024				2024				2024				2023				2024				2023
Net cash provided by (used in) operating activities	$	122			$	74			$	21			$	81			$	105			$	298			$	188
Less: Purchases of property, plant and equipment		(3	)			(2	)			(3	)			(1	)			(2	)			(9	)			(17	)
Free cash flow	$	119			$	72			$	18			$	80			$	103			$	289			$	171

(1)	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.
(2)	Other includes certain income and expenses not included in stock-based compensation.
	For the three months ended December 31, 2024, Other included transaction-related charges of approximately $2 million included in warehousing, selling and administrative, and International restructuring charges of approximately $1 million related to foreign currency translation losses included in impairment and other charges.
	For the three months ended December 31, 2023, Other of $3 million included approximately $2 million (included in warehousing, selling and administrative) related to legal fees for litigation matters that were not ordinary or routine to the operations of the business where the Company is seeking damages and transaction-related charges, as well as approximately $1 million (included in other income (expense)) related to settlements of the plan assets and benefit obligations of the Company’s defined benefit pension plans.
	For the three months ended September 30, 2024, Other was primarily related to International restructuring charges of $8 million, of which approximately $5 million of foreign currency translation losses included in impairment and other charges, approximately $2 million of inventory write-downs included in cost of products and $1 million of other exit costs included in warehousing, selling and administrative; additionally, Other also included transaction-related charges of approximately $2 million recorded in warehousing, selling and administrative.
	For the year ended December 31, 2024, Other included International restructuring charges of $9 million of which approximately $6 million of foreign currency translation losses included in impairment and other charges, approximately $2 million of inventory write-downs included in cost of products and $1 million of other exit costs included in warehousing, selling and administrative. Additionally, Other also included transaction-related charges of approximately $12 million, of which approximately $5 million were included in cost of products and approximately $7 million were included in warehousing, selling and administrative. Transaction-related charges include transaction costs, inventory fair value step-up, retention bonus accruals and integration expenses associated with acquisitions.
	For the year ended December 31, 2023, Other of $9 million included approximately $5 million (included in warehousing, selling and administrative) related to legal fees for litigation matters that were not ordinary or routine to the operations of the business where the Company is seeking damages and approximately $3 million (included in warehousing, selling and administrative) related to separation and transaction-related charges; as well as approximately $1 million (included in other income and expense) related to settlements of the plan assets and benefit obligations of the Company's defined benefit pension plans.
(3)	For the three months ended December 31, 2024, Other tax expense (benefit) represents tax benefit of less than $1 million related to Other. The tax effect of Other is calculated based on the nature of the item and/or the tax jurisdiction in which the item has been incurred and applying the specific tax rate or tax treatment to each item included in Other.
	For the three months ended December 31, 2023, Other tax expense (benefit) represents tax benefit of $126 million from the release of valuation allowances recorded against the Company's deferred tax assets.
	For the three months ended September 30, 2024, Other tax expense (benefit) represents tax benefit of less than $1 million related to Other. The tax effect of Other is calculated based on the nature of the item and/or the tax jurisdiction in which the item has been incurred and applying the Company's estimated annual effective tax rate to each item included in Other.
	For the year ended December 31, 2024, Other tax expense (benefit) represents tax benefit of $2 million related to Other. The tax effect of Other is calculated based on the nature of the item and/or the tax jurisdiction in which the item has been incurred and applying the specific tax rate or tax treatment to each item included in Other.
	For the year ended December 31, 2023, Other tax expense (benefit) represents tax benefit of $149 million from the release of valuation allowances recorded against the Company's deferred tax assets.
(4)	Other, net of tax comprises Other and Other tax expense (benefit). See footnotes (2) and (3) for details.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250213118003/en/

Mark Johnson

Senior Vice President and Chief Financial Officer

(281) 823-4754

Source: DNOW Inc.

FAQ

What was DNOW's revenue for Q4 and full-year 2024?

DNOW reported revenue of $571 million for Q4 2024 and $2,373 million for the full-year 2024.

How much did DNOW pay for the Trojan Rentals acquisition in Q4 2024?

DNOW acquired Trojan Rentals, for $114 million in cash during the fourth quarter of 2024.

What is the size of DNOW's new share repurchase authorization?

DNOW announced a new $160 million share repurchase authorization, which is double the size of their previous program.

What was DNOW's EBITDA margin in Q4 2024?

DNOW's EBITDA excluding other costs was $45 million or 7.9% of revenue for Q4 2024.

What is DNOW's current cash position and debt level?

As of December 31, 2024, DNOW had $256 million in cash and cash equivalents, zero long-term debt, and total liquidity of approximately $556 million.