MRC Global Announces Second Quarter 2024 Results
MRC Global Inc. (NYSE: MRC) announced its second quarter 2024 results, reporting net income of $24 million, or $0.28 per diluted share. This marks an improvement from $18 million, or $0.21 per diluted share, in Q2 2023. The company's sales reached $832 million, a 3% increase from Q1 2024. Notably, MRC Global achieved a record Adjusted Gross Profit margin of 22.1% and generated $63 million in operating cash flow for the quarter. The company's Net Debt leverage ratio reached a historic low of 0.4 times. Despite challenges in the US oilfield and project delays in the DIET sector, MRC Global demonstrated resilience with sequential growth in revenue, adjusted EBITDA, and cash flow from operations.
MRC Global Inc. (NYSE: MRC) ha annunciato i suoi risultati del secondo trimestre 2024, riportando un reddito netto di 24 milioni di dollari, ovvero 0,28 dollari per azione diluita. Questo segna un miglioramento rispetto ai 18 milioni di dollari, o 0,21 dollari per azione diluita, del Q2 2023. Le vendite dell'azienda hanno raggiunto 832 milioni di dollari, con un aumento del 3% rispetto al Q1 2024. Significativamente, MRC Global ha raggiunto un margine di profitto lordo rettificato record del 22,1% e ha generato 63 milioni di dollari in flusso di cassa operativo per il trimestre. Il rapporto di indebitamento netto ha raggiunto un minimo storico di 0,4 volte. Nonostante le sfide nel settore petrolifero statunitense e i ritardi nei progetti nel settore DIET, MRC Global ha dimostrato resilienza con una crescita sequenziale nei ricavi, nell'EBITDA rettificato e nel flusso di cassa dalle operazioni.
MRC Global Inc. (NYSE: MRC) anunció sus resultados del segundo trimestre de 2024, reportando un ingreso neto de 24 millones de dólares, o 0,28 dólares por acción diluida. Esto representa una mejora respecto a los 18 millones de dólares, o 0,21 dólares por acción diluida, del Q2 2023. Las ventas de la empresa alcanzaron los 832 millones de dólares, un aumento del 3% con respecto al Q1 2024. Notablemente, MRC Global logró un margen de beneficio bruto ajustado récord del 22,1% y generó 63 millones de dólares en flujo de efectivo operativo para el trimestre. El índice de apalancamiento de deuda neta alcanzó un mínimo histórico de 0,4 veces. A pesar de los desafíos en el sector petrolero de EE. UU. y los retrasos en proyectos en el sector DIET, MRC Global demostró resiliencia con un crecimiento secuencial en ingresos, EBITDA ajustado y flujo de efectivo de las operaciones.
MRC Global Inc. (NYSE: MRC)는 2024년 2분기 실적을 발표하며 2400만 달러의 순이익, 즉 희석주당 0.28달러를 기록했습니다. 이는 2023년 2분기에 비해 1800만 달러 또는 희석주당 0.21달러에서 개선된 수치입니다. 회사의 매출은 8억 3200만 달러에 달하며, 2024년 1분기 대비 3% 증가했습니다. 특히, MRC Global은 조정된 총 이익률 22.1%의 기록을 달성했으며, 분기 동안 6300만 달러의 운영 현금 흐름을 생성했습니다. 회사의 순부채 비율은 역사적 최저치인 0.4배에 도달했습니다. 미국 유전과 DIET 분야의 프로젝트 지연에도 불구하고 MRC Global은 수익, 조정 EBITDA 및 운영 현금 흐름에서 순차적인 성장을 보여주며 회복력을 입증했습니다.
MRC Global Inc. (NYSE: MRC) a annoncé ses résultats du deuxième trimestre 2024, rapportant un revenu net de 24 millions de dollars, soit 0,28 dollar par action diluée. Cela représente une amélioration par rapport à 18 millions de dollars, ou 0,21 dollar par action diluée, au T2 2023. Les ventes de l'entreprise ont atteint 832 millions de dollars, soit une augmentation de 3 % par rapport au T1 2024. Notamment, MRC Global a atteint un marge de bénéfice brut ajusté record de 22,1% et a généré 63 millions de dollars de flux de trésorerie opérationnels pour le trimestre. Le ratio de levier de la dette nette a atteint un niveau historiquement bas de 0,4 fois. Malgré les défis dans le secteur pétrolier américain et les retards de projets dans le secteur DIET, MRC Global a démontré une résilience avec une croissance séquentielle des revenus, de l'EBITDA ajusté et des flux de trésorerie provenant des opérations.
MRC Global Inc. (NYSE: MRC) hat die Quartalsergebnisse für das zweite Quartal 2024 bekannt gegeben und berichtet von einem Nettoeinkommen von 24 Millionen Dollar, was 0,28 Dollar je verwässerter Aktie entspricht. Dies markiert eine Verbesserung gegenüber 18 Millionen Dollar oder 0,21 Dollar je verwässerter Aktie im Q2 2023. Die Umsätze des Unternehmens beliefen sich auf 832 Millionen Dollar, was einem Anstieg von 3% im Vergleich zum Q1 2024 entspricht. Bemerkenswert ist, dass MRC Global einen rekordverdächtigen ajustierten Bruttogewinnmarge von 22,1% erreicht hat und 63 Millionen Dollar an operativem Cashflow für das Quartal generierte. Die Netto-Schuldenquote erreichte mit 0,4-fach einen historischen Tiefstand. Trotz der Herausforderungen im US-Ölsektor und Projektverzögerungen im DIET-Sektor hat MRC Global Resilienz gezeigt, mit sequenzieller Wachstumssteigerung bei Umsatz, angepasstem EBITDA und Cashflow aus dem operativen Geschäft.
- Net income increased to $24 million ($0.28 per diluted share) from $18 million ($0.21 per diluted share) year-over-year
- Sales grew 3% sequentially to $832 million
- Achieved a record Adjusted Gross Profit margin of 22.1%
- Generated $63 million in operating cash flow for Q2 and $101 million in H1 2024
- Net Debt leverage ratio reached a historic low of 0.4 times
- Repaid Term Loan B entirely, reducing net debt to an all-time low of $103 million
- Overall sales decreased 4% year-over-year
- Gas Utilities sector revenue decreased by $34 million (11%) year-over-year
- Production and Transmission Infrastructure sector sales decreased by $25 million (11%) year-over-year
- Backlog declined 10% from the previous quarter due to large project deliveries and project activity delays
Insights
MRC Global's Q2 2024 results show a mixed performance with some positive indicators. The company reported
Notably, MRC Global achieved a record Adjusted Gross Profit margin of
MRC Global's performance reflects varying trends across sectors. The Gas Utilities sector saw an
However, the Downstream, Industrial and Energy Transition (DIET) sector showed growth, particularly in international markets. This sector's performance, including involvement in carbon capture and offshore wind projects, hints at potential opportunities in the energy transition space. The company's backlog reduction of
MRC Global's position as a leading distributor in the energy sector provides valuable insights into industry supply chain dynamics. The company's ability to maintain a high gross profit margin despite sales fluctuations suggests effective inventory management and pricing strategies. The reduction in Net Debt to an all-time low of
However, the
HOUSTON, Aug. 06, 2024 (GLOBE NEWSWIRE) -- MRC Global Inc. (NYSE: MRC), the leading global distributor of pipe, valves, fittings and infrastructure products and services to diversified energy, industrial and gas utilities end-markets, today announced second quarter 2024 results.
Net income attributable to common stockholders for the second quarter of 2024 was
MRC Global’s second quarter 2024 gross profit was
Second Quarter 2024 Financial Highlights:
- Cash flow provided by operations of
$63 million for the second quarter and$101 million in the first half of 2024 - Sales of
$832 million , a3% improvement compared to the first quarter of 2024 - Adjusted Gross Profit, as a percentage of sales, of
22.1% , and a new MRC Global record - Adjusted EBITDA of
$65 million , or7.8% of sales - Net Debt leverage ratio of 0.4 times, the lowest in MRC Global history
Rob Saltiel, MRC Global’s President and CEO stated, “We achieved sequential growth in revenue, adjusted EBITDA and cash flow from operations in the second quarter, despite slowing activity in the US oilfield and project delays in our DIET sector. We have generated
"During the second quarter we repaid our Term Loan B and reduced our net debt to an all-time low of
Selling, general and administrative (SG&A) expenses were
Adjusted EBITDA was
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Gross Profit, Adjusted Net Income, Adjusted SG&A, Net Debt and Leverage Ratio are all non-GAAP measures. Please refer to the reconciliation of each of these measures to the nearest GAAP measure in this release.
An income tax expense of
Sales
The company’s sales were
Sales by Segment
U.S. sales in the second quarter of 2024 were
Sequentially, as compared to the first quarter of 2024, U.S. sales increased
Canada sales in the second quarter of 2024 were
Sequentially, Canada sales were up
International sales in the second quarter of 2024 were
Sequentially, as compared to the previous quarter, International sales were up
Sales by Sector
Gas Utilities sector sales, which are primarily U.S. based, were
Sequentially, as compared to the first quarter of 2024, the Gas Utilities sector sales increased
DIET sector sales in the second quarter of 2024 were
Sequentially, as compared to the previous quarter, sales in the DIET sector were down
PTI sector sales in the second quarter of 2024 were
Sequentially, as compared to the prior quarter, PTI sector sales increased
Backlog
As of June 30, 2024, the company's backlog was
Balance Sheet and Cash Flow
As of June 30, 2024, the cash balance was
Conference Call
The company will hold a conference call to discuss its second quarter 2024 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 7, 2024. To participate in the call, please dial 201-689-8261 and ask for the MRC Global conference call prior to the start time. To access the conference call, live over the Internet, please log onto the web at www.mrcglobal.com and go to the “Investors” page of the company’s website. For those who cannot listen to the live call, a replay will be available through August 21, 2024, and can be accessed by dialing 201-612-7415 and using pass code 13746014#. Also, an archive of the webcast will be available shortly after the call at www.mrcglobal.com for 90 days.
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 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 219 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.
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,” “expected,” “anticipating,” “intend,” “believes,” "on-track," “well positioned,” “strong position,” “looking forward,” “guidance,” “plans,” “can,” "target," "targeted" and similar expressions are intended to identify forward-looking statements.
Statements about the company’s business, including its strategy, its industry, the company’s future profitability, the company’s guidance on its sales, adjusted EBITDA, adjusted EBITDA margin, tax rate, capital expenditures, achieving cost savings and cash flow, debt reduction, liquidity, growth in the company’s various markets 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; 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 |
| MRC Global Inc. Condensed Consolidated Balance Sheets (Unaudited) (in millions, except shares) | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 49 | $ | 131 | ||||
| Accounts receivable, net | 481 | 430 | ||||||
| Inventories, net | 509 | 560 | ||||||
| Other current assets | 38 | 34 | ||||||
| Total current assets | 1,077 | 1,155 | ||||||
| Long-term assets: | ||||||||
| Operating lease assets | 195 | 205 | ||||||
| Property, plant and equipment, net | 80 | 78 | ||||||
| Other assets | 18 | 21 | ||||||
| Intangible assets: | ||||||||
| Goodwill, net | 264 | 264 | ||||||
| Other intangible assets, net | 153 | 163 | ||||||
| $ | 1,787 | $ | 1,886 | |||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Trade accounts payable | $ | 378 | $ | 355 | ||||
| Accrued expenses and other current liabilities | 105 | 102 | ||||||
| Operating lease liabilities | 34 | 34 | ||||||
| Current portion of debt obligations | - | 292 | ||||||
| Total current liabilities | 517 | 783 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 152 | 9 | ||||||
| Operating lease liabilities | 175 | 186 | ||||||
| Deferred income taxes | 45 | 45 | ||||||
| Other liabilities | 20 | 20 | ||||||
| Commitments and contingencies | ||||||||
| 355 | 355 | |||||||
| Stockholders' equity: | ||||||||
| Common stock, | 1 | 1 | ||||||
| Additional paid-in capital | 1,770 | 1,768 | ||||||
| Retained deficit | (641 | ) | (678 | ) | ||||
| Less: Treasury stock at cost: 24,216,330 shares | (375 | ) | (375 | ) | ||||
| Accumulated other comprehensive loss | (232 | ) | (228 | ) | ||||
| 523 | 488 | |||||||
| $ | 1,787 | $ | 1,886 | |||||
| MRC Global Inc. Condensed Consolidated Statements of Operations (Unaudited) (in millions, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sales | $ | 832 | $ | 871 | $ | 1,638 | $ | 1,756 | ||||||||
| Cost of sales | 659 | 696 | 1,302 | 1,402 | ||||||||||||
| Gross profit | 173 | 175 | 336 | 354 | ||||||||||||
| Selling, general and administrative expenses | 126 | 130 | 251 | 252 | ||||||||||||
| Operating income | 47 | 45 | 85 | 102 | ||||||||||||
| Other expense: | ||||||||||||||||
| Interest expense | (7 | ) | (10 | ) | (15 | ) | (17 | ) | ||||||||
| Other, net | 2 | (1 | ) | (1 | ) | (4 | ) | |||||||||
| Income before income taxes | 42 | 34 | 69 | 81 | ||||||||||||
| Income tax expense | 12 | 10 | 20 | 23 | ||||||||||||
| Net income | 30 | 24 | 49 | 58 | ||||||||||||
| Series A preferred stock dividends | 6 | 6 | 12 | 12 | ||||||||||||
| Net income attributable to common stockholders | $ | 24 | $ | 18 | $ | 37 | $ | 46 | ||||||||
| Basic earnings per common share | $ | 0.28 | $ | 0.21 | $ | 0.44 | $ | 0.55 | ||||||||
| Diluted earnings per common share | $ | 0.28 | $ | 0.21 | $ | 0.43 | $ | 0.54 | ||||||||
| Weighted-average common shares, basic | 85.2 | 84.3 | 84.9 | 84.1 | ||||||||||||
| Weighted-average common shares, diluted | 86.4 | 85.3 | 86.2 | 85.4 | ||||||||||||
| MRC Global Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (in millions) | ||||||||
| Six Months Ended | ||||||||
| June 30, | June 30, | |||||||
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net income | $ | 49 | $ | 58 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operations: | ||||||||
| Depreciation and amortization | 10 | 10 | ||||||
| Amortization of intangibles | 10 | 10 | ||||||
| Equity-based compensation expense | 7 | 7 | ||||||
| Deferred income tax (benefit) expense | 1 | 2 | ||||||
| Other non-cash items | 7 | 14 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (53 | ) | (19 | ) | ||||
| Inventories | 43 | (101 | ) | |||||
| Other current assets | (3 | ) | (9 | ) | ||||
| Accounts payable | 26 | 36 | ||||||
| Accrued expenses and other current liabilities | 4 | (18 | ) | |||||
| Net cash provided by (used in) operations | 101 | (10 | ) | |||||
| Investing activities | ||||||||
| Purchases of property, plant and equipment | (14 | ) | (5 | ) | ||||
| Other investing activities | 1 | - | ||||||
| Net cash used in investing activities | (13 | ) | (5 | ) | ||||
| Financing activities | ||||||||
| Payments on revolving credit facilities | (115 | ) | (497 | ) | ||||
| Proceeds from revolving credit facilities | 258 | 530 | ||||||
| Payments on debt obligations | (295 | ) | (2 | ) | ||||
| Dividends paid on preferred stock | (12 | ) | (12 | ) | ||||
| Repurchases of shares to satisfy tax withholdings | (5 | ) | (4 | ) | ||||
| Net cash (used in) provided by financing activities | (169 | ) | 15 | |||||
| Decrease in cash | (81 | ) | - | |||||
| Effect of foreign exchange rate on cash | (1 | ) | (1 | ) | ||||
| Cash -- beginning of period | 131 | 32 | ||||||
| Cash -- end of period | $ | 49 | $ | 31 | ||||
| MRC Global Inc. Supplemental Sales Information (Unaudited) (in millions) | ||||||||||||||||
| Disaggregated Sales by Segment and Sector | ||||||||||||||||
| Three Months Ended June 30, | ||||||||||||||||
| U.S. | Canada | International | Total | |||||||||||||
| 2024 | ||||||||||||||||
| Gas Utilities | $ | 287 | $ | - | $ | - | $ | 287 | ||||||||
| DIET | 188 | 12 | 68 | 268 | ||||||||||||
| PTI | 202 | 21 | 54 | 277 | ||||||||||||
| $ | 677 | $ | 33 | $ | 122 | $ | 832 | |||||||||
| 2023 | ||||||||||||||||
| Gas Utilities | $ | 321 | $ | 1 | $ | 1 | $ | 323 | ||||||||
| DIET | 179 | 4 | 62 | 245 | ||||||||||||
| PTI | 227 | 33 | 43 | 303 | ||||||||||||
| $ | 727 | $ | 38 | $ | 106 | $ | 871 | |||||||||
| Six Months Ended June 30, | ||||||||||||||||
| U.S. | Canada | International | Total | |||||||||||||
| 2024 | ||||||||||||||||
| Gas Utilities | $ | 552 | $ | 1 | $ | - | $ | 553 | ||||||||
| DIET | 390 | 21 | 133 | 544 | ||||||||||||
| PTI | 402 | 40 | 99 | 541 | ||||||||||||
| $ | 1,344 | $ | 62 | $ | 232 | $ | 1,638 | |||||||||
| 2023 | ||||||||||||||||
| Gas Utilities | $ | 627 | $ | 2 | $ | 1 | $ | 630 | ||||||||
| DIET | 389 | 9 | 125 | 523 | ||||||||||||
| PTI | 451 | 69 | 83 | 603 | ||||||||||||
| $ | 1,467 | $ | 80 | $ | 209 | $ | 1,756 | |||||||||
| MRC Global Inc. Supplemental Sales Information (Unaudited) (in millions) | ||||||||||||||||
| Sales by Product Line | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| Type | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Line Pipe | $ | 129 | $ | 128 | $ | 246 | $ | 269 | ||||||||
| Carbon Fittings and Flanges | 106 | 119 | 206 | 236 | ||||||||||||
| Total Carbon Pipe, Fittings and Flanges | 235 | 247 | 452 | 505 | ||||||||||||
| Valves, Automation, Measurement and Instrumentation | 302 | 299 | 593 | 614 | ||||||||||||
| Gas Products | 193 | 214 | 380 | 421 | ||||||||||||
| Stainless Steel and Alloy Pipe and Fittings | 35 | 36 | 76 | 68 | ||||||||||||
| General Products | 67 | 75 | 137 | 148 | ||||||||||||
| $ | 832 | $ | 871 | $ | 1,638 | $ | 1,756 | |||||||||
| MRC Global Inc. Supplemental Information (Unaudited) Reconciliation of Gross Profit to Adjusted Gross Profit (a non-GAAP measure) (in millions) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| June 30, | Percentage | June 30, | Percentage | |||||||||||||
| 2024 | of Revenue | 2023 | of Revenue | |||||||||||||
| Gross profit, as reported | $ | 173 | 20.8 | % | $ | 175 | 20.1 | % | ||||||||
| Depreciation and amortization | 5 | 0.6 | % | 5 | 0.6 | % | ||||||||||
| Amortization of intangibles | 5 | 0.6 | % | 5 | 0.6 | % | ||||||||||
| Increase in LIFO reserve | 1 | 0.1 | % | 2 | 0.2 | % | ||||||||||
| Adjusted Gross Profit | $ | 184 | 22.1 | % | $ | 187 | 21.5 | % | ||||||||
| Six Months Ended | ||||||||||||||||
| June 30, | Percentage | June 30, | Percentage | |||||||||||||
| 2024 | of Revenue* | 2023 | of Revenue* | |||||||||||||
| Gross profit, as reported | $ | 336 | 20.5 | % | $ | 354 | 20.2 | % | ||||||||
| Depreciation and amortization | 10 | 0.6 | % | 10 | 0.6 | % | ||||||||||
| Amortization of intangibles | 10 | 0.6 | % | 10 | 0.6 | % | ||||||||||
| Increase in LIFO reserve | 2 | 0.1 | % | 1 | 0.1 | % | ||||||||||
| Adjusted Gross Profit | $ | 358 | 21.9 | % | $ | 375 | 21.4 | % | ||||||||
Notes to above:
* Does not foot due to rounding
The company defines Adjusted Gross Profit as sales, less cost of sales, plus depreciation and amortization, plus amortization of intangibles, plus inventory-related charges incremental to normal operations and plus or minus the impact of its LIFO inventory costing methodology. The company presents Adjusted Gross Profit because the company believes it is a useful indicator of the company’s operating performance without regard to items, such as amortization of intangibles, that can vary substantially from company to company depending upon the nature and extent of acquisitions of which they have been involved. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon which costing method they may elect. The company uses Adjusted Gross Profit as a key performance indicator in managing its business. The company believes that gross profit is the financial measure calculated and presented in accordance with U.S. generally accepted accounting principles that is most directly comparable to Adjusted Gross Profit.
| MRC Global Inc. Supplemental Information (Unaudited) Reconciliation of Selling, General and Administrative Expenses (SG&A) to Adjusted SG&A (a non-GAAP measure) (in millions) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Selling, general and administrative expenses | $ | 126 | $ | 130 | $ | 251 | $ | 252 | ||||||||
| Facility closures (1) | (1 | ) | - | (1 | ) | - | ||||||||||
| Non-recurring IT related professional fees | - | (1 | ) | - | (1 | ) | ||||||||||
| Activism response legal and consulting costs | (1 | ) | - | (4 | ) | - | ||||||||||
| Adjusted Selling, general and administrative expenses | $ | 124 | $ | 129 | $ | 246 | $ | 251 | ||||||||
Notes to above:
(1) Charge (pre-tax) associated with a facility closure in our International segment.
The company defines adjusted selling, general and administrative (SG&A) expenses as SG&A, restructuring expenses and other unusual items. The company presents adjusted SG&A because the company believes it is a useful indicator of the company’s operating performance. Among other things, adjusted SG&A measures the company’s operating performance without regard to certain non-recurring, non-cash or transaction-related expenses. The company uses adjusted SG&A as a key performance indicator in managing its business. The company believes that SG&A is the financial measure calculated and presented in accordance with U.S. Generally Accepted Accounting Principles that is most directly comparable to adjusted SG&A.
| MRC Global Inc. Supplemental Information (Unaudited) Reconciliation of Net Income to Adjusted EBITDA (a non-GAAP measure) (in millions) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 30 | $ | 24 | $ | 49 | $ | 58 | ||||||||
| Income tax expense | 12 | 10 | 20 | 23 | ||||||||||||
| Interest expense | 7 | 10 | 15 | 17 | ||||||||||||
| Depreciation and amortization | 5 | 5 | 10 | 10 | ||||||||||||
| Amortization of intangibles | 5 | 5 | 10 | 10 | ||||||||||||
| Facility closures (1) | 1 | - | 1 | - | ||||||||||||
| Non-recurring IT related professional fees | - | 1 | - | 1 | ||||||||||||
| Increase in LIFO reserve | 1 | 2 | 2 | 1 | ||||||||||||
| Equity-based compensation expense (2) | 3 | 4 | 7 | 7 | ||||||||||||
| Activism response legal and consulting costs | 1 | - | 4 | - | ||||||||||||
| Write off of debt issuance costs | - | - | 1 | - | ||||||||||||
| Asset disposal (3) | - | 1 | 1 | 1 | ||||||||||||
| Foreign currency losses | - | 1 | 2 | 4 | ||||||||||||
| Adjusted EBITDA | $ | 65 | $ | 63 | $ | 122 | $ | 132 | ||||||||
Notes to above:
(1) Charges (pre-tax) associated with a facility closure in our International segment.
(2) Charges (pre-tax) recorded in SG&A.
(3) Charge (pre-tax) for an asset disposal in our International segment.
The company defines adjusted EBITDA as net income plus interest, income taxes, depreciation and amortization, amortization of intangibles, and certain other expenses, including non-cash expenses, (such as equity-based compensation, restructuring, changes in the fair value of derivative instruments, asset impairments, including inventory, long-lived asset impairments (including goodwill and intangible assets), inventory-related charges incremental to normal operations, and plus or minus the impact of its LIFO inventory costing methodology. The company presents adjusted EBITDA because the company believes adjusted EBITDA is a useful indicator of the company’s operating performance. Among other things, adjusted EBITDA measures the company’s operating performance without regard to certain non-recurring, non-cash, or transaction-related expenses. Adjusted EBITDA, however, does not represent and should not be considered as an alternative to net income, cash flow from operations or any other measure of financial performance calculated and presented in accordance with GAAP. Because adjusted EBITDA does not account for certain expenses, its utility as a measure of the company’s operating performance has material limitations. Because of these limitations, the company does not view adjusted EBITDA in isolation or as a primary performance measure and uses other measures, such as net income and sales, to measure operating performance. See the company's Annual Report filed on Form 10-K for a more thorough discussion of the use of adjusted EBITDA.
| MRC Global Inc. Supplemental Information (Unaudited) Reconciliation of Net Income Attributable to Common Stockholders to Adjusted Net Income Attributable to Common Stockholders (a non-GAAP measure) (in millions, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2024 | June 30, 2024 | |||||||||||||||
| Amount | Per Share | Amount | Per Share* | |||||||||||||
| Net income attributable to common stockholders | $ | 24 | $ | 0.28 | $ | 37 | $ | 0.43 | ||||||||
| Facility closures, net of tax (1) | 1 | 0.01 | 1 | 0.01 | ||||||||||||
| Asset disposal, net of tax (2) | - | - | 1 | 0.01 | ||||||||||||
| Activism response legal and consulting costs, net of tax | 1 | 0.01 | 3 | 0.03 | ||||||||||||
| Increase in LIFO reserve, net of tax | 1 | 0.01 | 2 | 0.02 | ||||||||||||
| Adjusted net income attributable to common stockholders | $ | 27 | $ | 0.31 | $ | 44 | $ | 0.51 | ||||||||
Notes to above:
* Does not foot due to rounding
(1) An after-tax charge associated with a facility closure in our International segment.
(2) An after-tax charge for an asset disposal in our International segment.
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2023 | June 30, 2023 | |||||||||||||||
| Amount | Per Share* | Amount | Per Share | |||||||||||||
| Net income attributable to common stockholders | $ | 18 | $ | 0.21 | $ | 46 | $ | 0.54 | ||||||||
| Non-recurring IT related professional fees, net of tax | 1 | 0.01 | 1 | 0.01 | ||||||||||||
| Asset disposal, net of tax (1) | 1 | 0.01 | 1 | 0.01 | ||||||||||||
| Increase in LIFO reserve, net of tax | 2 | 0.02 | 1 | 0.01 | ||||||||||||
| Adjusted net income attributable to common stockholders | $ | 22 | $ | 0.26 | $ | 49 | $ | 0.57 | ||||||||
Notes to above:
* Does not foot due to rounding
(1) An after-tax charge for an asset disposal in our International segment.
The company defines adjusted net income attributable to common stockholders (a non-GAAP measure) as net income attributable to common stockholders plus or minus the after-tax impact of items deemed non-standard and plus or minus the after-tax impact of its LIFO inventory costing methodology. After-tax impacts were determined using the company's blended statutory rate. The company presents adjusted net income attributable to common stockholders and related per share amounts because the company believes it provides useful comparisons of the company’s operating results to other companies, including those companies with whom we compete in the distribution of pipe, valves, and fittings to the energy industry, without regard to the irregular variations from certain restructuring events not indicative of the on-going business. Those items include goodwill and intangible asset impairments, inventory-related charges, facility closures, severance and restructuring as well as the LIFO inventory costing methodology. The impact of the LIFO inventory costing methodology can cause results to vary substantially from company to company depending upon which costing method they may elect. The company believes that net income attributable to common stockholders is the financial measure calculated and presented in accordance with U.S. generally accepted accounting principles that is most directly compared to adjusted net income attributable to common stockholders.
| MRC Global Inc. Supplemental Information (Unaudited) Reconciliation of Long-term Debt to Net Debt (a non-GAAP measure) and the Leverage Ratio Calculation (in millions) | ||||
| June 30, | ||||
| 2024 | ||||
| Long-term debt | $ | 152 | ||
| Plus: current portion of debt obligations | - | |||
| Total debt | 152 | |||
| Less: cash | 49 | |||
| Net Debt | $ | 103 | ||
| Net Debt | $ | 103 | ||
| Trailing twelve months adjusted EBITDA | 240 | |||
| Leverage ratio | 0.4 | |||
Notes to above:
Net Debt and related leverage metrics may be considered non-GAAP measures. The company defines Net Debt as total long-term debt, including current portion, minus cash. The company defines its leverage ratio as Net Debt divided by trailing twelve months Adjusted EBITDA. The company believes Net Debt is an indicator of the extent to which the company’s outstanding debt obligations could be satisfied by cash on hand and a useful metric for investors to evaluate the company’s leverage position. The company believes the leverage ratio is a commonly used metric that management and investors use to assess the borrowing capacity of the company. The company believes total long-term debt (including the current portion) is the financial measure calculated and presented in accordance with U.S. generally accepted accounting principles that is most directly comparable to Net Debt.
FAQ
What was MRC Global's net income for Q2 2024?
How much did MRC Global's sales increase in Q2 2024 compared to Q1 2024?
What was MRC Global's Adjusted Gross Profit margin in Q2 2024?
How much operating cash flow did MRC generate in Q2 2024?
What was MRC Global's Net Debt leverage ratio in Q2 2024?
