MRC Global Announces $125 Million Share Repurchase Program

Rhea-AI Summary

MRC Global (NYSE: MRC) has announced a new $125 million share repurchase program authorized by its Board of Directors, effective until January 2, 2028. The company can execute the program through various means including open market transactions, block purchases, and privately negotiated transactions, in compliance with federal securities laws.

CEO Rob Saltiel emphasized that this decision reflects confidence in the company's future and improved financial flexibility due to recent balance sheet strengthening. The company's capital allocation strategy focuses on maintaining a net debt leverage ratio below 1.5x, returning cash to shareholders, and investing in growth. The repurchase program is expected to commence in Q2, with timing and execution details to be determined based on market conditions and other factors.

Positive

• Authorization of $125 million share repurchase program
• Strong balance sheet position enabling share buybacks
• Net debt leverage ratio target below 1.5x indicates financial discipline
• Consistent cash flow generation capability

Negative

• Program implementation delayed until Q2
• Significant cash allocation to buybacks may limit other growth opportunities

Insights

Financial Analyst

<p>The announcement of a <money>$125 million</money> share repurchase program is strategically significant for MRC Global. With a market cap of <money>$1.07 billion</money>, this program represents approximately <percent>11.6%</percent> of the company's current market value, indicating a substantial commitment to shareholder returns.</p><p>The three-year duration until January 2028 provides management with flexibility in timing the buybacks to maximize value. The target net debt leverage ratio below <b>1.5x</b> demonstrates prudent balance sheet management while pursuing shareholder returns. This balanced approach suggests the company has reached a maturity phase where it can sustainably generate excess cash flow beyond its operational needs.</p><p>For retail investors, buybacks typically support stock price by reducing share count and increasing EPS. The Q2 2025 start timing allows the company to assess market conditions and potentially take advantage of any price weakness. The program's size relative to market cap could provide meaningful price support, particularly during market downturns.</p>

Corporate Strategy Expert

<p>The implementation of this buyback program reveals a strategic pivot in MRC Global's capital allocation strategy. The company's transition from balance sheet strengthening to shareholder returns signals management's confidence in sustainable cash flow generation and operational efficiency. The three-pronged approach - debt management, shareholder returns and growth investment - represents a well-balanced corporate strategy.</p><p>The decision to initiate buybacks in Q2 rather than immediately suggests thoughtful execution planning and possibly indicates management's view on current valuation levels. The flexible structure of the program, allowing various purchase methods including Rule 10b5-1 plans, provides strategic optionality in execution. This could be particularly valuable if market volatility creates attractive entry points for repurchases.</p>

HOUSTON, Jan. 03, 2025 (GLOBE NEWSWIRE) -- MRC Global Inc. (NYSE: MRC) announced today that its Board of Directors authorized a new $125 million share repurchase program, which expires on January 2, 2028. Under the repurchase program, the Company may purchase its outstanding common shares through various means, including open market transactions, block purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The program may be modified, discontinued or suspended at any time without prior notice.

Rob Saltiel, MRC Global President & CEO commented, “Today’s announcement reflects our confidence in the company’s future and the financial flexibility that we enjoy through the strengthening of our balance sheet over the past few years. Our three-pronged capital allocation strategy consists of targeting a net debt leverage ratio of less than 1.5x, returning cash to shareholders, and investing in our company’s future growth. Our streamlined capital structure, efficient operating model, and anticipated ability to deliver consistent cash flow generation make this the right time to introduce a share repurchase program. We anticipate beginning the execution of the repurchase program in the second quarter.”

The actual timing, manner, number and value of shares repurchased under the program will be determined by management at its discretion and will depend on a number of factors, including the market price of MRC Global common stock, general market and economic conditions, applicable requirements and other business considerations.

About MRC Global Inc.

Headquartered in Houston, Texas, MRC Global (NYSE: MRC) is the leading global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, and production and transmission infrastructure sectors. With over 100 years of experience, MRC Global has provided customers with innovative supply chain solutions, technical product expertise and a robust digital platform from a worldwide network of over 200 locations including valve and engineering centers. The company’s unmatched quality assurance program offers over 300,000 SKUs from over 8,500 suppliers, simplifying the supply chain for approximately 10,000 customers. Find out more at www.mrcglobal.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “will,” “expect,” “target,” “anticipate” and similar expressions are intended to identify forward-looking statements.

Statements about the company’s business, including its capital allocation strategy, its anticipated execution of its share repurchase program and the company’s expectations, beliefs, plans, strategies, objectives, prospects and assumptions are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, most of which are difficult to predict and many of which are beyond MRC Global’s control, including the factors described in the company’s SEC filings that may cause the company’s actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements.

These risks and uncertainties include (among others) decreases in capital and other expenditure levels in the industries that the company serves; U.S. and international general economic conditions; geopolitical events; decreases in oil and natural gas prices; unexpected supply shortages; loss of third-party transportation providers; cost increases by the company’s suppliers and transportation providers; increases in steel prices, which the company may be unable to pass along to its customers which could significantly lower the company’s profit; the company’s lack of long-term contracts with most of its suppliers; suppliers’ price reductions of products that the company sells, which could cause the value of its inventory to decline; decreases in steel prices, which could significantly lower the company’s profit; a decline in demand for certain of the products the company distributes if tariffs and duties on these products are imposed or lifted; holding more inventory than can be sold in a commercial time frame; significant substitution of renewables and low-carbon fuels for oil and gas, impacting demand for the company’s products; risks related to adverse weather events or natural disasters; environmental, health and safety laws and regulations and the interpretation or implementation thereof; changes in the company’s customer and product mix; the risk that manufacturers of the products that the company distributes will sell a substantial amount of goods directly to end users in the industry sectors that the company serves; failure to operate the company’s business in an efficient or optimized manner; the company’s ability to compete successfully with other companies; the company’s lack of long-term contracts with many of its customers and the company’s lack of contracts with customers that require minimum purchase volumes; inability to attract and retain employees or the potential loss of key personnel; adverse health events, such as a pandemic; interruption in the proper functioning of the company’s information systems; the occurrence of cybersecurity incidents; risks related to the company’s customers’ creditworthiness; decisions to undertake significant mergers or acquisitions; the success of acquisition strategies; the potential adverse effects associated with integrating acquisitions and whether these acquisitions will yield their intended benefits; impairment of the company’s goodwill or other intangible assets; adverse changes in political or economic conditions in the countries in which the company operates; the company’s significant indebtedness; the dependence on the company’s subsidiaries for cash to meet parent company obligations; changes in the company’s credit profile; potential inability to obtain necessary capital; the sufficiency of the company’s insurance policies to cover losses, including liabilities arising from litigation; product liability claims against the company; pending or future asbestos-related claims against the company; exposure to U.S. and international laws and regulations, regulating corruption, limiting imports or exports or imposing economic sanctions; risks relating to ongoing evaluations of internal controls required by Section 404 of the Sarbanes-Oxley Act; risks related to changing laws and regulations including trade policies and tariffs; and the potential share price volatility and costs incurred in response to any shareholder activism campaigns.

For a discussion of key risk factors, please see the risk factors disclosed in the company’s SEC filings, which are available on the SEC’s website at www.sec.gov and on the company’s website, www.mrcglobal.com. MRC Global’s filings and other important information are also available on the Investors page of the company’s website at www.mrcglobal.com.

Undue reliance should not be placed on the company’s forward-looking statements. Although forward-looking statements reflect the company’s good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the company’s actual results, performance or achievements or future events to differ materially from anticipated future results, performance or achievements or future events expressed or implied by such forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent required by law.

Contact:

Monica Broughton VP, Investor Relations & Treasury

MRC Global Inc.

Monica.Broughton@mrcglobal.com

832-308-2847

FAQ

What is the size and duration of MRC Global's new share repurchase program?

MRC Global's new share repurchase program is $125 million and will expire on January 2, 2028.

When will MRC begin executing its share repurchase program?

MRC Global plans to begin executing the share repurchase program in the second quarter of 2025.

What is MRC Global's target net debt leverage ratio in their capital allocation strategy?

MRC Global targets a net debt leverage ratio of less than 1.5x as part of their capital allocation strategy.

How will MRC Global implement its share repurchase program?

MRC Global can implement the program through open market transactions, block purchases, and privately negotiated transactions, in accordance with federal securities laws.

What are the three main components of MRC Global's capital allocation strategy?

MRC Global's three-pronged capital allocation strategy consists of targeting a net debt leverage ratio below 1.5x, returning cash to shareholders, and investing in future growth.