Part I - Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2025, show stable performance with increased six-month revenue and net income, and total assets growing to $1,661 million, while cash flow from operations decreased due to working capital investments, alongside a definitive merger agreement to acquire MRC Global [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $1,661 million from $1,621 million at year-end 2024, primarily due to higher receivables and inventories, with total liabilities seeing a minor increase to $500 million and total stockholders' equity rising to $1,161 million Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,080 | $1,028 | | Cash and cash equivalents | $232 | $256 | | Receivables, net | $440 | $388 | | Inventories, net | $383 | $352 | | **Total Assets** | **$1,661** | **$1,621** | | **Total Current Liabilities** | $455 | $442 | | **Total Liabilities** | $500 | $493 | | **Total Stockholders' Equity** | $1,161 | $1,128 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, revenue was $628 million, a slight decrease from $633 million in Q2 2024, with net income remaining flat at $25 million, while six-month revenue increased to $1,227 million from $1,196 million year-over-year, and net income attributable to DNOW Inc. rose to $47 million from $45 million Quarterly Financial Performance (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $628 | $633 | | Operating Profit | $32 | $33 | | Net Income (to DNOW Inc.) | $25 | $24 | | Diluted EPS | $0.23 | $0.21 | Six-Month Financial Performance (in millions, except EPS) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | $1,227 | $1,196 | | Operating Profit | $62 | $61 | | Net Income (to DNOW Inc.) | $47 | $45 | | Diluted EPS | $0.43 | $0.41 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was $29 million, a significant decrease from $102 million in the prior-year period, driven by increased investment in receivables and inventories, with investing activities using $16 million and financing activities using $40 million Six-Month Cash Flow Summary (in millions) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $29 | $102 | | Net cash used in investing activities | $(16) | $(188) | | Net cash used in financing activities | $(40) | $(15) | | **Net change in cash** | **$(24)** | **$(102)** | | Cash at end of period | $232 | $197 | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Key notes highlight the company's operations as a distributor to energy and industrial markets, segment performance, and significant corporate actions, with the U.S. segment remaining the largest contributor to revenue and profit, and a new $160 million share repurchase program temporarily suspended due to the pending $1.5 billion merger with MRC Global expected to close in Q4 2025 - The company operates as a distributor of energy and industrial products through 160 locations in the U.S., Canada, and internationally, serving upstream, midstream, and downstream energy sectors as well as other industrial markets[19](index=19&type=chunk)[20](index=20&type=chunk) Segment Revenue and Operating Profit (Six Months Ended June 30, 2025, in millions) | Segment | Revenue | Operating Profit | | :--- | :--- | :--- | | United States | $1,002 | $52 | | Canada | $110 | $4 | | International | $115 | $6 | | **Total** | **$1,227** | **$62** | - On June 26, 2025, DNOW entered into a definitive merger agreement to acquire MRC Global in an all-stock transaction valued at approximately **$1.5 billion**. The deal is expected to close in Q4 2025, subject to shareholder and regulatory approvals[68](index=68&type=chunk) - A new share repurchase program of up to **$160 million** was authorized in January 2025. For the six months ended June 30, 2025, the company repurchased **$27 million** worth of stock. The program is currently suspended pending the MRC Global merger[43](index=43&type=chunk)[47](index=47&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes 2.6% year-over-year revenue growth to U.S. acquisitions, offsetting weaker international project activity, amidst declining rig counts and oil prices, while maintaining strong liquidity with a strategic focus on energy transition markets [Operating Environment Overview](index=24&type=section&id=Operating%20Environment%20Overview) The second quarter of 2025 saw a challenging operating environment compared to the prior year and quarter, with worldwide active drilling rigs declining and West Texas Intermediate (WTI) crude prices falling significantly, though natural gas prices showed a strong year-over-year increase Key Industry Indicators - Q2 2025 vs. Q2 2024 | Indicator | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Worldwide Active Rigs | 1,597 | 1,703 | (6.2%) | | U.S. Active Rigs | 571 | 603 | (5.3%) | | WTI Crude Price ($/barrel) | $64.63 | $81.71 | (20.9%) | | Natural Gas Price ($/MMBtu) | $3.19 | $2.08 | 53.4% | - Sequentially, from Q1 2025 to Q2 2025, the worldwide rig count declined by **6.4%**, WTI crude prices fell by **10.0%**, and natural gas prices dropped by **23.1%**[91](index=91&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) For the first six months of 2025, the U.S. segment's revenue grew 5.8% to $1,002 million, driven by acquisitions, which offset declines in Canada (down 9.8%) and International (down 9.4%) segments caused by weaker project activity, with overall operating profit for the six-month period increasing slightly to $62 million from $61 million in the prior year - **United States:** Revenue for H1 2025 increased by **$55 million (5.8%)** YoY, primarily due to incremental revenue from acquisitions completed in 2024[98](index=98&type=chunk) - **Canada:** Revenue for H1 2025 decreased by **$12 million (9.8%)** YoY, driven by weaker project activity and unfavorable foreign exchange rates[100](index=100&type=chunk) - **International:** Revenue for H1 2025 decreased by **$12 million (9.4%)** YoY, also due to weaker project activity[102](index=102&type=chunk) - Warehousing, selling, and administrative expenses for H1 2025 increased to **$221 million** from **$206 million** in H1 2024, mainly due to expenses related to 2024 acquisitions[105](index=105&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $232 million in cash and cash equivalents as of June 30, 2025, a $500 million revolving credit facility with no borrowings and approximately $445 million in availability, though cash from operations decreased to $29 million for H1 2025 from $102 million in H1 2024 due to a $70 million increase in working capital investment - As of June 30, 2025, the company had **$232 million** in cash and cash equivalents and no borrowings against its **$500 million** revolving credit facility[114](index=114&type=chunk)[115](index=115&type=chunk) - Availability under the credit facility was approximately **$445 million**. In connection with the MRC Global merger, the company has secured committed debt financing to increase the facility's potential capacity to **$750 million**[115](index=115&type=chunk)[116](index=116&type=chunk) - Net cash from operating activities decreased by **$73 million** YoY for the first six months, primarily due to a **$45 million** growth in accounts receivable and a **$28 million** investment in inventory[119](index=119&type=chunk) - During H1 2025, the company repurchased **$27 million** of its common stock under its new **$160 million** authorization. The program is now paused pending the merger completion[121](index=121&type=chunk)[124](index=124&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, with one-fifth of H1 2025 sales outside the U.S., and commodity steel pricing, which it mitigates through active inventory management and hedging strategies - The company is exposed to foreign currency risk as about one-fifth of its H1 2025 revenue was generated outside the U.S. The most significant exposures are to the Canadian dollar and British pound[128](index=128&type=chunk) - A sensitivity analysis indicates that a hypothetical **10%** change in foreign currency rates would have resulted in an approximate **$1 million** change in net income for the first six months of 2025[133](index=133&type=chunk) - The business is sensitive to steel prices, particularly for tubular products. This risk is mitigated through active inventory management to balance supply with demand and limit overstocking[134](index=134&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the second quarter - Based on an evaluation as of the end of the reporting period, the CEO and CFO concluded that the company's disclosure controls and procedures are effective at a reasonable assurance level[135](index=135&type=chunk) - There were no changes in internal control over financial reporting during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[136](index=136&type=chunk) Part II - Other Information [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) New risk factors primarily relate to the pending MRC Global merger, including integration challenges, failure to realize anticipated synergies, and the uncertainty of achieving financial forecasts, alongside the dependency on shareholder and regulatory approvals - A primary risk is the potential inability to successfully integrate MRC Global's business, which could prevent the achievement of enhanced revenue, cost savings, and other anticipated benefits from the merger[138](index=138&type=chunk)[145](index=145&type=chunk) - The success of the merger depends on combining the businesses effectively; failure to do so could lead to the loss of key employees, disruption of ongoing business, and unforeseen expenses[143](index=143&type=chunk) - Completion of the merger is subject to conditions beyond the company's control, including shareholder approvals from both DNOW and MRC Global. Failure to complete the merger could adversely affect the company's business and financial standing[146](index=146&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased **1,349,930 shares** at an average price of **$15.11**, with **$133 million** remaining available under the suspended program as of June 30, 2025 Share Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid | Value Remaining in Program (end of period) | | :--- | :--- | :--- | :--- | | April 2025 | 466,841 | $15.51 | $145 million | | May 2025 | 560,874 | $14.91 | $138 million | | June 2025 | 322,215 | $14.86 | $133 million | | **Q2 Total** | **1,349,930** | **$15.11** | **$133 million** | [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2025 - During the three months ended June 30, 2025, no director or officer adopted or terminated a pre-arranged stock trading plan as defined under Regulation S-K[150](index=150&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the MRC Global merger agreement, corporate governance documents, and officer certifications - Key exhibits filed include the merger agreement with MRC Global Inc. and certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act[152](index=152&type=chunk)

Financial Data and Key Metrics Changes - The company reported total revenue of $628 million for the second quarter, up 5% from the previous quarter and twice the midpoint of the sequential guidance provided in May [11][25] - EBITDA for the quarter was $51 million, marking an 11% sequential increase and representing the best second quarter EBITDA results in the company's public history [10][25] - Gross margins remained resilient at 22.9%, consistent with expectations and better than the full year 2024 average [11][27] - Free cash flow for the quarter was $41 million, with a cash balance of $232 million and no debt [13][14][30] Business Line Data and Key Metrics Changes - U.S. revenue totaled $528 million, an increase of $54 million or 11% sequentially, driven by midstream strength [17][26] - The midstream business grew to approximately 27% of total revenue, more than doubling its contribution over the past six quarters [12] - Canadian revenue was $48 million, down $14 million primarily due to seasonal impacts [20][26] - International revenue was $52 million, down 17% sequentially, in line with guidance due to non-repeating project activity [21][27] Market Data and Key Metrics Changes - U.S. midstream project investments drove strong sequential revenue gains, while upstream production remained disciplined with limited project backlogs [12][18] - The company noted a projected 2% increase in produced water volumes and a 13% increase in produced water recycling volumes for 2025, indicating growth opportunities in water management solutions [20] - The acquisition of Natron International expanded the company's electrical products opportunities in Singapore and the Asia Pacific region [21] Company Strategy and Development Direction - The company is focused on integrating with MRC Global to enhance service offerings and capture growth opportunities in alternative energy, AI infrastructure, and other industrial markets [14][15] - The strategic combination aims to realize $70 million in annual cost synergies within three years post-closing [15] - The company plans to balance organic and inorganic growth while pursuing potential bolt-on acquisitions [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds but emphasized solid execution and customer focus as key to success [8][10] - The outlook for the third quarter anticipates relatively flat revenue compared to the second quarter, with expectations of low single-digit percentage growth for the full year [34][36] - Management reaffirmed a target of $150 million in free cash flow for 2025 [36] Other Important Information - The company has a strong balance sheet with zero debt and total liquidity of $582 million [30] - The effective tax rate for the quarter was 21.9%, favorably impacted by tax benefits associated with stock awards [29] Q&A Session Summary Question: What are the most difficult parts of the integration likely to be? - Management emphasized focusing on customer needs and aligning teams early in the integration process to ensure a smooth transition [44] Question: Is it safe to assume the year is heading towards the top half of the current guidance? - Management indicated a bias towards the top end of the guidance but acknowledged potential budget exhaustion in the fourth quarter [46][48] Question: Are there opportunities to drive synergies with vendors and customers? - Management stated that while estimating synergies is ongoing, the focus remains on growth rather than immediate cost reductions [52] Question: Do you expect increased visibility in future earnings power with less exposure to upstream? - Management confirmed that diversification is a key opportunity, allowing for growth in both upstream and other markets [54] Question: How do you think about the impact from tariffs in the back half of the year? - Management noted that while tariffs have increased product costs, most sales growth has come from volume rather than price increases [67] Question: Were there specific factors that drove the outperformance in EBITDA? - Management attributed the improved EBITDA performance primarily to growth in the midstream sector [79]

Financial Performance - DNOW Inc achieved revenue of $628 million in Q2 2025, a 5% sequential increase[14,15] - GAAP net income attributable to DNOW Inc was $25 million, with a diluted EPS of $0.23[17] - Non-GAAP net income attributable to DNOW Inc, excluding other costs, was $29 million, with a diluted EPS of $0.27[18,19] - EBITDA reached $51 million, representing 8.1% of revenue[20,21] - Gross margins were 22.9%, showing an increase year-over-year and compared to full-year 2024[21] Capital Allocation and Liquidity - $19 million in shares were repurchased during Q2 2025, with $27 million repurchased year-to-date, as part of a newly authorized $160 million share repurchase program[22,23,30] - The company maintains a strong balance sheet with $582 million in total liquidity and no debt[25] Segment Performance - United States revenue increased to $528 million, a 3% increase compared to Q2 2024[37,40] - Canada revenue decreased to $48 million, a 14% decrease compared to Q2 2024[38,40] - International revenue decreased to $52 million, a 20% decrease compared to Q2 2024[39,40] Strategic Initiatives - DNOW Inc announced a merger agreement with MRC Global, expected to increase scale and scope across diverse industries and global markets[31,57,60] - The company closed the Natron International acquisition in April 2025[31] Outlook - DNOW Inc expects Q3 2025 revenue to increase in the low single-digits percentage range sequentially and EBITDA approaching 8% of revenue[63] - The company reaffirms its full-year 2025 revenue outlook to be flat-to-up in the high single-digit percentage range compared to 2024, with EBITDA approaching 8% of revenue and free cash flow targeted at $150 million[63]

Company Performance - DNOW reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing an increase from $0.25 per share a year ago, representing an earnings surprise of +22.73% [1] - The company posted revenues of $628 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.19%, although this is a slight decrease from year-ago revenues of $633 million [2] - DNOW has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Stock Performance - DNOW shares have increased approximately 17.1% since the beginning of the year, compared to a 7.1% gain in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $618.25 million, and for the current fiscal year, it is $0.86 on revenues of $2.42 billion [7] Industry Outlook - The Manufacturing - General Industrial industry, to which DNOW belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact DNOW's stock performance [5]

[Financial and Strategic Highlights](index=1&type=section&id=Financial%20and%20Strategic%20Highlights) DNOW reported strong Q2 2025 results, including **$628 million revenue** and **$51 million EBITDA**, while announcing a merger with MRC Global and reaffirming full-year guidance. - Announced a definitive merger agreement with MRC Global in an all-stock transaction valued at approximately **$1.5 billion**, expected to close in **Q4 2025**, aiming to create a premier energy industrial solutions provider[5](index=5&type=chunk)[7](index=7&type=chunk) Q2 2025 Key Financial Metrics | Metric | Value (in millions, except EPS) | | :--- | :--- | | Revenue | $628 | | Net Income (attributable to DNOW Inc.) | $25 | | Diluted EPS | $0.23 | | Non-GAAP Net Income | $29 | | Non-GAAP Diluted EPS | $0.27 | | EBITDA (excluding other costs) | $51 (8.1% of revenue) | | Cash from Operating Activities | $45 | | Stock Repurchases | $19 | - The company maintains a strong balance sheet with **$232 million** in cash and cash equivalents, **zero long-term debt**, and total liquidity of approximately **$582 million** as of June 30, 2025[7](index=7&type=chunk) - DNOW reaffirmed its full-year 2025 guidance for revenue and EBITDA, and also reaffirmed its free cash flow guidance targeted at **$150 million**[6](index=6&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents DNOW Inc.'s unaudited consolidated financial statements, including the balance sheet, statement of operations, and revenue breakdown by geographic segment. [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, DNOW's balance sheet showed **total assets of $1,661 million**, **$232 million in cash**, and **zero long-term debt**, with **stockholders' equity at $1,161 million**. Balance Sheet Summary (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $232 | $256 | | Total current assets | $1,080 | $1,028 | | Total assets | $1,661 | $1,621 | | Total current liabilities | $455 | $442 | | Total liabilities | $500 | $493 | | Total stockholders' equity | $1,161 | $1,128 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue reached **$628 million**, with net income attributable to DNOW Inc. at **$25 million** or **$0.23 per diluted share**, reflecting improved per-share profitability. Q2 2025 Statement of Operations Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | Revenue | $628 | $633 | $599 | | Operating Profit | $32 | $33 | $30 | | Net Income (to DNOW Inc.) | $25 | $24 | $22 | | Diluted EPS | $0.23 | $0.21 | $0.20 | [Business Segments Revenue](index=4&type=section&id=Business%20Segments%20Revenue) United States segment revenue grew to **$528 million** in Q2 2025, while Canada and International segments experienced year-over-year declines. Revenue by Geographic Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | United States | $528 | $512 | +3.1% | | Canada | $48 | $56 | -14.3% | | International | $52 | $65 | -20.0% | | **Total Revenue** | **$628** | **$633** | **-0.8%** | [Non-GAAP Financial Measures and Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section reconciles GAAP results to non-GAAP financial measures, adjusting for 'other costs' to present metrics like EBITDA, non-GAAP net income, EPS, and free cash flow. - The company discloses non-GAAP measures like EBITDA excluding other costs, non-GAAP net income, non-GAAP diluted EPS, and free cash flow to help investors evaluate operational performance[18](index=18&type=chunk) - For Q2 2025, 'Other costs' primarily included approximately **$6 million** of transaction-related charges associated with acquisitions[23](index=23&type=chunk) [Reconciliation of Net Income to EBITDA excluding other costs](index=5&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20excluding%20other%20costs) Q2 2025 EBITDA excluding other costs was **$51 million** (8.1% margin), reconciled from GAAP net income by adding back interest, taxes, D&A, and other costs. EBITDA Reconciliation Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP net income (to DNOW Inc.) | $25 | $24 | | Adjustments (Taxes, D&A, etc.) | $16 | $18 | | Other costs | $10 | $9 | | **EBITDA excluding other costs** | **$51** | **$50** | [Reconciliation of Net Income to Non-GAAP Net Income excluding other costs](index=5&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Non-GAAP%20Net%20Income%20excluding%20other%20costs) Q2 2025 non-GAAP net income attributable to DNOW Inc. was **$29 million**, an increase from Q2 2024, primarily adjusted by adding back **$4 million** in 'Other, net of tax' costs. Non-GAAP Net Income Reconciliation (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP net income (to DNOW Inc.) | $25 | $24 | | Other, net of tax | $4 | $4 | | **Net income excluding other costs** | **$29** | **$28** | [Reconciliation of Diluted EPS to Non-GAAP Diluted EPS excluding other costs](index=6&type=section&id=Reconciliation%20of%20Diluted%20EPS%20to%20Non-GAAP%20Diluted%20EPS%20excluding%20other%20costs) Q2 2025 non-GAAP diluted EPS was **$0.27**, a **$0.04** per share difference from GAAP diluted EPS, due to the exclusion of transaction-related and other costs. Non-GAAP Diluted EPS Reconciliation | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP diluted EPS | $0.23 | $0.21 | | Other, net of tax | $0.04 | $0.04 | | **Diluted EPS excluding other costs** | **$0.27** | **$0.25** | [Reconciliation of Net Cash from Operating Activities to Free Cash Flow](index=6&type=section&id=Reconciliation%20of%20Net%20Cash%20from%20Operating%20Activities%20to%20Free%20Cash%20Flow) DNOW generated **$41 million** in free cash flow in Q2 2025, a significant increase from the prior year, derived from **$45 million** in operating cash flow less **$4 million** in capital expenditures. Free Cash Flow Reconciliation (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45 | $21 | | Less: Purchases of PP&E | ($4) | ($3) | | **Free cash flow** | **$41** | **$18** | [About DNOW](index=2&type=section&id=About%20DNOW) DNOW is a Houston-based supplier of energy and industrial products with a 160-year legacy, offering supply chain solutions to diverse traditional and emerging energy markets. - DNOW is a supplier of energy and industrial products, as well as engineered process and production equipment, with a history spanning over **160 years**[8](index=8&type=chunk) - The company serves a wide array of end markets, including exploration and production, midstream, refineries, chemical companies, utilities, mining, and companies in the decarbonization, energy evolution, and renewables sectors[8](index=8&type=chunk)

Financial Performance - MRC Global reported second quarter 2025 revenue of $798 million, a 12% increase from the first quarter of 2025, with all sectors contributing to this growth [3][10][14] - Adjusted EBITDA for the second quarter of 2025 was $54 million, representing 6.8% of sales, compared to $65 million or 8.1% of sales in the same period of 2024 [11][61] - Net income from continuing operations for the second quarter of 2025 was $13 million, down from $30 million in the second quarter of 2024 [6][7] Sector Performance - The Production and Transmission Infrastructure (PTI) sector led the revenue growth with a 26% increase sequentially, driven by robust project activity [3][19] - Gas Utilities sector revenue increased by 10% sequentially, supported by increased construction projects [3][19] - The Downstream, Industrial, and Energy Transition (DIET) sector experienced a slight decline compared to the same quarter a year ago, but showed a 1% increase sequentially [14][20] Merger Agreement - MRC Global announced a merger agreement with DNOW Inc., which is expected to create a premier energy and industrial solutions provider [4][25] - The merger is subject to shareholder and regulatory approvals, with an anticipated closing in the fourth quarter of 2025 [25][26] Shareholder Returns - The company returned $15 million to shareholders through share repurchases at an average price of $12.35 per share during the second quarter of 2025 [3][24] - The share repurchase program has been suspended due to the pending merger with DNOW [24] Balance Sheet and Cash Flow - As of June 30, 2025, MRC Global had a cash balance of $75 million and long-term debt of $449 million [23] - The company's backlog was $589 million, a 2% decrease from the previous quarter, primarily due to a decline in the PTI sector backlog [22]

Core Viewpoint - Dnow Inc. (NYSE: DNOW) has announced a $1.5 billion all-stock acquisition of MRC Global Inc. (NYSE: MRC), which could significantly impact the energy supply chain sector, leading to increased investor interest and an 11% rise in DNOW's stock year-to-date, outperforming the S&P 500's 5% increase [2][3]. Acquisition Details - MRC shareholders will receive 0.9489 shares of DNOW for each MRC share, representing an 8.5% premium to MRC's 30-day volume-weighted average price of $12.77 as of June 25 [3]. - The total enterprise value of the transaction is approximately $3.0 billion, with DNOW shareholders owning about 56.5% of the new entity post-merger [3]. Financial Performance - DNOW's revenues have shown growth, with a 4.7% increase from $2.3 billion to $2.4 billion over the last 12 months, compared to a 5.5% growth for the S&P 500 [9]. - The company has a price-to-sales (P/S) ratio of 0.7, significantly lower than the S&P 500's 3.1, indicating a potentially undervalued stock [8]. Profitability Metrics - DNOW's operating income over the last four quarters was $121 million, resulting in an operating margin of 5.0%, which is below the S&P 500's average of 14.9% [10]. - The net income margin for DNOW stands at 3.4%, compared to 11.6% for the S&P 500, highlighting weaker profitability [10]. Financial Stability - DNOW's debt was reported at $41 million, leading to a low debt-to-equity ratio of 2.6%, which is favorable compared to the S&P 500's 19.4% [11]. - The company holds $219 million in cash, contributing to a strong cash-to-assets ratio of 13.3% [11]. Market Conditions - Despite the positive developments, macroeconomic challenges persist, including a 5% decline in WTI crude prices year-to-date and potential trade tensions that could impact industrial and energy demand [4].

Group 1 - Class Action Attorney Juan Monteverde's firm, Monteverde & Associates PC, has recovered millions for shareholders and is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1] - The firm is investigating DNOW Inc. (NYSE: DNOW) in relation to its merger with MRC Global Inc., where current DNOW shareholders will own approximately 56.5% of the combined company on a fully diluted basis upon completion of the transaction [1] Group 2 - Monteverde & Associates PC is a national class action securities firm with a successful track record in trial and appellate courts, including the U.S. Supreme Court [2] - The firm operates from the Empire State Building in New York City [2]

Transaction Overview - DNOW 将以全股票合并交易方式收购 MRC[28] - MRC 股东每股 MRC 股份将获得 0.9489 股 DNOW 股份[28] - 合并后的企业价值约为 30 亿美元，包括 MRC 的净债务[28] Financial Synergies and Accretion - 预计在交易完成后三年内实现 7000 万美元的年度成本协同效应[28] - 预计交易完成后第一年调整后的每股收益将实现两位数的增长[28] - 预计交易完成后的 Pro Forma 净杠杆率低于 0.5 倍，并在交易完成后的第一年实现净现金头寸[28] Combined Company Profile - 合并后的公司预计年收入约为 53 亿美元[37, 58, 71] - 调整后的 EBITDA 约为 4.3 亿美元[37] - 调整后的 EBITDA 利润率约为 8.0%[37] - 运营产生的现金流约为 5 亿美元[37] Geographic Reach - DNOW 在美国拥有 165 个分支机构，MRC 在美国拥有 197 个分支机构[32] - 合并后的公司在超过 20 个国家/地区拥有业务[53] - 合并后的公司收入的 82% 来自美国，14% 来自加拿大，4% 来自国际市场[51] Cost Synergies Breakdown - 预计 2026 年实现 1700 万美元的税前运行率协同效应[81] - 预计 2027 年实现 4200 万美元的税前运行率协同效应[81] - 预计 2028 年实现 7000 万美元的税前运行率协同效应[81]

Transaction Overview - DNOW 将以全股票合并交易方式收购 MRC，交易的企业价值约为 30 亿美元，包括 MRC 的净债务[28] - MRC 股东每股 MRC 股份将获得 0.9489 股 DNOW 股份[28] - 合并后的公司预计在交易完成后的三年内实现 7000 万美元的年度成本协同效应[28] - 预计交易完成后第一年调整后的每股收益将实现两位数的增长[28] Financial Highlights - 合并后的公司预计收入约为 53 亿美元[37] - 预计调整后的 EBITDA 约为 4300 万美元，调整后的 EBITDA 利润率约为 8.0%[37] - 预计运营现金流约为 5 亿美元[37] Synergy Realization - 预计第一年实现 1700 万美元的税前协同效应，第二年实现 4200 万美元，交易完成后第三年实现 7000 万美元[39] - 预计 2026 年每股收益将增加 25%[83] Geographic Footprint - 合并后的公司在美国拥有 235 个服务地点和 10 个配送中心和超级中心[45, 46] - 合并后的公司在加拿大拥有 35 个地点，在欧洲、中东和非洲地区 (EMEA) 拥有 45 个地点，在亚太地区 (APAC) 拥有 40 个地点[50] - 美国占合并后收入的 82%，加拿大占 4%，国际市场占 14%，总收入为 53 亿美元[51] Revenue Breakdown by Product - 合并后的公司收入中，管道、配件和法兰占 37%，泵和生产占 26%，阀门占 22%，气体产品占 7%，磨具、MRO、安全和其他产品占 11%，总收入为 53 亿美元[73]