UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State or other jurisdiction of (I.R.S. Employer incorporation or organiz ...

NOW Inc. (NYSE:DNOW) Q1 2021 Earnings Conference Call May 5, 2021 9:00 AM ET Company Participants Brad Wise - Vice President, Marketing & Investor Relations David Cherechinsky - President & Chief Executive Officer Mark Johnson - Senior Vice President & Chief Financial Officer Conference Call Participants Jon Hunter - Cowen Doug Becker - Northland Capital Operator Good morning, and welcome to the First Quarter Earnings Conference Call. My name is Brandon, and I will be your operator for today. At this time, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State or other jurisdiction of (I.R.S. Employer incorporation or organi ...

NOW Inc. (NYSE:DNOW) Q4 2020 Results Conference Call February 17, 2021 9:00 AM ET Company Participants Brad Wise - Vice President, Marketing and Investor Relations David Cherechinsky - President and Chief Executive Officer Mark Johnson - Senior Vice President and Chief Financial Officer Conference Call Participants Jon Hunter - Cowen Sean Meakim - JPMorgan Nathan Jones - Stifel Operator Hello, and welcome to the Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Cheryl, and I will be you ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State of Incorporation) (IRS Identification No.) 7402 North Eldridge Parkway, Houst ...

NOW Inc. (NYSE:DNOW) Q3 2020 Earnings Conference Call November 4, 2020 9:00 AM ET Company Participants Brad Wise – Vice President, Marketing and Investor Relations Dave Cherechinsky – President and Chief Executive Officer Mark Johnson – Senior Vice President and Chief Financial Officer Conference Call Participants Sean Meakim – J.P. Morgan Jon Hunter – Cowen Doug Becker – Northland Capital Walter Liptak – Seaport Operator Welcome to third quarter 2020 earnings conference call. My name is Sylvia, and I’ll be ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State or other jurisdiction of (I.R.S. Employer incorporation or or ...

Financial Data and Key Metrics Changes - Revenue for Q2 2020 was $370 million, down $406 million or 52% compared to the same period in 2019, and sequentially declined $234 million or 39% [23][15] - Free cash flow for Q2 was $66 million, with a cash position expanded to $269 million, remaining debt-free [15][31] - EBITDA decrementals were low at 7%, indicating solid execution despite steep revenue declines [15][31] Business Line Data and Key Metrics Changes - U.S. segment revenue was $260 million, down 41% sequentially, outperforming a rig count decline of 50% [23][24] - U.S. energy center revenue declined 40% sequentially due to reduced customer spending [24] - U.S. Process Solutions business revenue was down 30% sequentially, impacted by lower upstream completions [26] Market Data and Key Metrics Changes - Canadian segment revenue was $41 million, down 45% year-over-year, with rig count declining 70% [27] - International segment revenue was $69 million, down 29% year-over-year, reflecting reduced activity in the UK [28] - Gross margins were 18.4%, a decline of 100 basis points sequentially, driven by elevated inventory charges [28] Company Strategy and Development Direction - The company is committed to transforming its operations by uniting geographic footprints and enhancing digital innovation [8][10] - Focus on diversifying end markets beyond upstream to include midstream, downstream, and alternative energy markets [10][36] - Structural transformation includes eliminating non-essential costs and pursuing a zero-based mindset [12][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the current market environment but remains confident in the company's ability to weather the storm [7][36] - Future revenue is expected to decline in the low to mid-teen percentages for Q3 2020 due to lower rig counts [35] - The company aims to maintain a leaner cost structure while preparing for potential market recovery [44][36] Other Important Information - The company has successfully implemented a vendor-managed inventory program with a renewable bio-fuels energy customer [27] - DigitalNOW platform is expected to enhance customer engagement and streamline operations [19][21] - The company is actively pursuing M&A opportunities while being cautious with its balance sheet [34] Q&A Session Summary Question: What is the right WSA amount for the future? - Management is cautious about predicting future WSA levels due to market uncertainties but aims for a leaner cost structure moving forward [38] Question: How much revenue is generated from DigitalNOW? - Currently, about one-third of revenues go through some electronic interface, with expectations for growth as technology evolves [39] Question: How will the company expand into midstream and downstream markets? - Most growth is expected to be organic, with some potential acquisitions in the Process Solutions space [40] Question: Will the leaner cost structure require adding more costs in a recovery? - Management believes that while some costs will be added, the goal is to maintain a low-cost base to improve margins during recovery [43] Question: Are competitors folding or trying to differentiate? - The company is observing both scenarios, with some competitors closing locations while others are aggressively liquidating inventory [55] Question: Will there be more inventory impairments going forward? - Elevated inventory charges are expected to persist for a few more quarters as the company assesses profitability on various product lines [57]

[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) This part presents the company's financial statements, management's analysis of operations, market risks, and internal controls for the reporting period [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) NOW Inc. reported a significant net loss in Q2 and H1 2020, driven by revenue decline and a $320 million impairment, yet maintained positive operating cash flow and a debt-free balance sheet Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2020 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $269 | $183 | +$86 | | Receivables, net | $242 | $370 | -$128 | | Inventories, net | $370 | $465 | -$95 | | Goodwill | $0 | $245 | -$245 | | Intangibles, net | $0 | $90 | -$90 | | **Total Assets** | **$1,069** | **$1,591** | **-$522** | | Total liabilities | $322 | $447 | -$125 | | **Total stockholders' equity** | **$747** | **$1,144** | **-$397** | Consolidated Statement of Operations Highlights (in millions, except EPS) | Metric | Q2 2020 | Q2 2019 | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $370 | $776 | $974 | $1,561 | | Operating profit (loss) | $(29) | $17 | $(362) | $40 | | Net income (loss) | $(30) | $14 | $(361) | $32 | | Diluted EPS | $(0.27) | $0.12 | $(3.30) | $0.29 | Consolidated Statement of Cash Flows Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash from operating activities | $74 | $49 | | Net cash from investing activities | $20 | $(13) | | Net cash from financing activities | $(4) | $(73) | | **Net change in cash** | **$86** | **$(36)** | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Key notes detail the adoption of new accounting standards, a $320 million asset impairment, segment performance, and a non-core business sale in the first half of 2020 - In Q1 2020, the company performed an interim impairment test due to a significant decline in its market capitalization, the collapse of oil prices, and decreased demand caused by the COVID-19 pandemic[44](index=44&type=chunk) Asset Impairment Charges - Q1 2020 (in millions) | Asset Category | Impairment Amount | | :--- | :--- | | Goodwill | $230 | | Intangibles, net | $84 | | Property, plant and equipment, net | $4 | | Operating right-of-use assets | $2 | | **Total Impairment** | **$320** | - The company had no borrowings against its **$750 million** revolving credit facility as of June 30, 2020, with approximately **$256 million** in availability[54](index=54&type=chunk)[55](index=55&type=chunk) - On January 31, 2020, the company completed the sale of its business that sold cutting tools to the aerospace and automotive markets, resulting in a loss of less than **$1 million**[81](index=81&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the severe downturn to oil price collapse and COVID-19, leading to cost-cutting, strengthened liquidity, and an uncertain outlook tied to economic recovery Key Industry Indicators (Q2 2020 vs. Prior Periods) | Indicator | Q2 2020 | % Change vs. Q2 2019 | % Change vs. Q1 2020 | | :--- | :--- | :--- | :--- | | U.S. Active Drilling Rigs | 396 | (60.0%) | (49.6%) | | Worldwide Active Drilling Rigs | 1,255 | (42.5%) | (38.9%) | | WTI Crude Price (per barrel) | $27.79 | (53.5%) | (39.3%) | - The company's outlook is tied to oil and gas commodity prices, global drilling activity, and global oil demand, all of which face significant uncertainty due to the COVID-19 pandemic[112](index=112&type=chunk)[113](index=113&type=chunk) - To navigate the challenging environment, management has prioritized cost transformation, accelerated structural changes, and deployed technology to optimize processes. The company had **zero debt** at June 30, 2020[114](index=114&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) All segments experienced sharp revenue declines in Q2 and H1 2020, with the U.S. segment hit hardest, leading to significant operating losses due to lower revenues and $320 million in impairment charges Segment Revenue (in millions) | Segment | Q2 2020 | Q2 2019 | % Change | | :--- | :--- | :--- | :--- | | United States | $260 | $605 | (57.0%) | | Canada | $41 | $74 | (44.6%) | | International | $69 | $97 | (28.9%) | Segment Operating Profit (Loss) (in millions) | Segment | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | | United States | $(228) | $35 | | Canada | $(63) | $3 | | International | $(71) | $2 | - Impairment charges for the six months ended June 30, 2020, totaled **$320 million**, consisting of **$230 million** for goodwill and **$90 million** for intangible and other long-lived assets[125](index=125&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved in H1 2020, with cash increasing by **$86 million** to **$269 million** due to positive operating cash flow and a business divestiture, ending with no debt - As of June 30, 2020, the company had cash and cash equivalents of **$269 million**, up from **$183 million** at December 31, 2019[133](index=133&type=chunk) - The company had **no borrowings** against its revolving credit facility and **$256 million** in availability as of June 30, 2020[134](index=134&type=chunk) Net Cash Flow Summary (in millions) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Operating Activities | $74 | $49 | | Investing Activities | $20 | $(13) | | Financing Activities | $(4) | $(73) | [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency exchange rates, particularly the Canadian dollar and British pound, and commodity steel pricing, with hedging used for some currency exposure - The company's main market risks are foreign currency exchange rate risk and commodity steel pricing[145](index=145&type=chunk)[153](index=153&type=chunk) - Approximately **one-fourth** of net sales for the first six months of 2020 were outside the United States, creating exposure to currency fluctuations[147](index=147&type=chunk) - For the six months ended June 30, 2020, the company realized a net foreign currency translation loss of **$31 million**, which was included in other comprehensive income (loss)[148](index=148&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective as of the end of the period covered by this report[155](index=155&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[156](index=156&type=chunk) [Part II - Other Information](index=27&type=section&id=Part%20II%20-%20Other%20Information) This section details additional risk factors related to the COVID-19 pandemic and crude oil price declines, along with a list of exhibits filed with the report [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company identifies significant risks from the COVID-19 pandemic, which reduced global oil demand and disrupted supply chains, and the sharp, sustained decline in crude oil prices - The COVID-19 pandemic has adversely affected the global economy, reduced demand for crude oil, and created significant uncertainty regarding the future impact on the company's business and financial condition[159](index=159&type=chunk)[160](index=160&type=chunk) - Crude oil prices fell sharply in 2020 due to decreased demand from COVID-19 and OPEC+ disagreements. If prices remain at low levels for a prolonged period, the company's operations and financial condition may be materially and adversely affected[161](index=161&type=chunk)[162](index=162&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, material agreements, and CEO/CFO certifications required by Sarbanes-Oxley - The report lists numerous exhibits, including the Credit Agreement, various employment agreements, and certifications pursuant to Rules 13a-14a and 15d-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002[164](index=164&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2020 was $604 million, a sequential decline of $35 million or 5%, and down $181 million or 23% compared to Q1 2019 [17][41] - Gross margins were 19.4%, a decline of 20 basis points sequentially and 70 basis points year-over-year, primarily due to $9 million in inventory charges [45] - Net loss for Q1 was $331 million or $3.03 per diluted share, with other costs totaling $325 million pretax [50][52] - Cash totaled $202 million at the end of Q1, the highest cash position since Q2 2014, with no outstanding borrowings [53][55] Business Segment Data and Key Metrics Changes - U.S. revenue was $441 million, a sequential decline of $27 million or 6%, with rig count down 4% and average completions down 12% [17][43] - Canadian revenue was $78 million, a sequential increase of $2 million or 3%, while International revenue was $85 million, a sequential decline of $10 million or 11% [17][44] - U.S. Supply Chain Services revenue declined 15% sequentially, primarily due to lower activity with major partners [20] - U.S. Process Solutions revenue was down 3%, partially offset by midstream and downstream activity [21] Market Data and Key Metrics Changes - Market conditions deteriorated significantly in March, with revenues down 33% in April compared to the Q1 monthly average [42] - U.S. rig counts averaged 791 in the first 11 weeks of Q1 but dropped by 384 rigs in the last seven weeks [42] - International revenue declines were attributed to closures in the U.K. and reduced activity in the Middle East and Asia [24] Company Strategy and Development Direction - The company is focused on a structural transformation to reduce costs and improve efficiency, including significant personnel reductions and technology investments [30][63] - The DigitalNOW initiative aims to enhance customer engagement and operational efficiency through digital tools [35][96] - The company plans to maintain a strong balance sheet with zero debt and ample liquidity to navigate the downturn and position for future growth [16][73] Management's Comments on Operating Environment and Future Outlook - Management noted that the oil and gas industry is facing unprecedented challenges due to COVID-19 and falling oil prices, but emphasized the company's resilience and commitment to ESG goals [13][11] - The outlook for Q2 and the full year remains uncertain, with no specific revenue guidance provided due to market volatility [40][67] - Management expressed confidence in the company's ability to capture market share during the downturn and emphasized the importance of cash preservation [68][72] Other Important Information - The company has implemented a series of cost reduction initiatives and expects to achieve $100 million in savings for 2020 compared to 2019 [64] - The CEO search process has been temporarily slowed due to COVID-19, with expectations to select a new CEO by Q3 2020 [75][76] Q&A Session Summary Question: Outlook for Q2 revenues and activity declines - Management acknowledged the significant declines in activity and indicated that a 10% to 15% decline in International revenues seems reasonable, while U.S. upstream revenues may also see substantial declines [80][81] Question: Expectations for free cash flow and working capital - Management projected free cash flow for the year could range from $75 million to $125 million, depending on revenue declines and asset liquidity [88][90] Question: Differentiation of DigitalNOW offering - Management highlighted that DigitalNOW is aimed at improving internal efficiencies and enhancing customer engagement, positioning the company ahead of smaller competitors [93][96] Question: G&A reductions and target exit rate for WSA - Management expects WSA to be in the low $110 million range for Q2, with a long-term goal of reducing WSA to 15% or better of revenue [102][104]