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DNOW (DNOW) M&A Announcement Transcript
2025-06-26 22:15
Summary of DNOW and MRC Global Merger Conference Call Industry and Companies Involved - **Industry**: Energy and Industrial Solutions - **Companies**: DNOW (DistributionNOW) and MRC Global Core Points and Arguments 1. **Merger Announcement**: DNOW and MRC Global announced a transformational merger aimed at creating a premier energy and industrial solutions provider, enhancing long-term sustainable growth and shareholder value [4][5][6] 2. **Transaction Structure**: The merger is an all-stock transaction with an enterprise value of approximately $3 billion. MRC Global shareholders will receive 0.9489 shares of DNOW common stock for each share of MRC Global common stock [7][8] 3. **Ownership Post-Merger**: Upon closing, DNOW and MRC Global shareholders will own approximately 56.5% and 43.5% of the combined company, respectively [7] 4. **Expected Synergies**: The merger is projected to generate annual run rate pretax synergies of $70 million within three years, primarily from operational efficiencies and cost reductions [7][23] 5. **Financial Strength**: The combined company is expected to have revenues of approximately $5.3 billion and a strong balance sheet, with a net cash position anticipated by the end of the first year post-close [13][25] 6. **Geographic and Product Expansion**: The merger will enhance geographic reach and product offerings, allowing the combined entity to serve customers across more than 350 service and distribution locations globally [14][15] 7. **Customer-Centric Approach**: Both companies emphasize a customer-first mindset, aiming to leverage their combined strengths to better serve existing customers and attract new ones [29][30] 8. **Focus on Growth**: The primary focus post-merger will be on organic growth through cross-selling opportunities, with no specific revenue synergy targets established yet [47][48] Additional Important Content 1. **Regulatory Approval**: The companies do not anticipate significant regulatory issues, believing the merger will enhance customer choice and service capabilities [49] 2. **Integration Strategy**: The integration will focus on consolidating duplicate systems and optimizing the distribution network, although immediate priorities will be on revenue growth and talent retention [51][60] 3. **Capital Allocation**: Post-merger capital deployment will prioritize organic growth, followed by inorganic growth through M&A, and maintaining a share repurchase program [58] 4. **Cultural Alignment**: Both companies share a commitment to innovation and operational excellence, which will be foundational in the integration process [29][30] This summary encapsulates the key points discussed during the conference call regarding the merger between DNOW and MRC Global, highlighting the strategic rationale, expected benefits, and future focus areas for the combined entity.
NOW(DNOW) - 2025 Q1 - Quarterly Report
2025-05-07 19:07
Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents DNOW Inc.'s unaudited consolidated financial statements for Q1 2025 and 2024, accompanied by detailed notes on accounting policies and financial items [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $1,651 million as of March 31, 2025, from $1,621 million at December 31, 2024, primarily driven by increases in receivables and inventories Consolidated Balance Sheets (in millions) | | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,067 | $1,028 | | **Total assets** | **$1,651** | **$1,621** | | **Total current liabilities** | $460 | $442 | | **Total liabilities** | $507 | $493 | | **Total stockholders' equity** | $1,144 | $1,128 | | **Total liabilities and stockholders' equity** | **$1,651** | **$1,621** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, revenue increased to $599 million from $563 million year-over-year, with net income attributable to DNOW Inc. at $22 million and diluted EPS at $0.20 Consolidated Statements of Operations (Unaudited, in millions, except per share data) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | **$599** | **$563** | | Operating profit | $30 | $28 | | Net income attributable to DNOW Inc. | $22 | $21 | | **Diluted EPS** | **$0.20** | **$0.19** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $16 million in Q1 2025, a significant shift from $81 million provided by operations in Q1 2024, mainly due to increased working capital Consolidated Statements of Cash Flows (Unaudited, in millions) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(16) | $81 | | Net cash provided by (used in) investing activities | $(5) | $(188) | | Net cash provided by (used in) financing activities | $(17) | $(4) | | **Net change in cash and cash equivalents** | **$(37)** | **$(111)** | | Cash and cash equivalents, end of period | $219 | $188 | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes detail DNOW's operations, accounting policies, and significant financial events, including a new share repurchase program, credit facility, and a post-quarter acquisition - DNOW operates as a distributor of energy and industrial products through **165 locations** in the U.S., Canada, and internationally, serving upstream, midstream, and downstream energy sectors as well as other industrial markets[20](index=20&type=chunk)[21](index=21&type=chunk) - The company has a **$500 million** global revolving credit facility maturing in December 2026, with no borrowings and approximately **$434 million** in availability as of March 31, 2025[38](index=38&type=chunk)[40](index=40&type=chunk) - In January 2025, the Board authorized a new share repurchase program for up to **$160 million** of common stock, with **443,806 shares** repurchased for approximately **$8 million** in Q1 2025[42](index=42&type=chunk)[43](index=43&type=chunk) - Subsequent to the quarter's end, the company completed a non-material acquisition in Singapore to expand its electrical supply capabilities in the Asia Pacific region[58](index=58&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses DNOW's Q1 2025 financial performance, highlighting revenue growth, segment contributions, and a strong liquidity position, while addressing market volatility and future growth opportunities Q1 2025 vs Q1 2024 Key Financials (in millions) | Metric | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $599 | $563 | +$36 | +6.4% | | Operating Profit | $30 | $28 | +$2 | +7.1% | | Net Income (DNOW Inc.) | $22 | $21 | +$1 | +4.8% | - The company's outlook is linked to volatile oil and gas prices and geopolitical uncertainty, but DNOW aims to capitalize on energy transition investments and expand into non-oil and gas markets[89](index=89&type=chunk)[90](index=90&type=chunk) Non-GAAP EBITDA Reconciliation (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP net income attributable to DNOW Inc. | $22 | $21 | | **EBITDA excluding other costs** | **$46** | **$39** | | *as a % of revenue* | *7.7%* | *6.9%* | [Operating Environment Overview](index=24&type=section&id=Operating%20Environment%20Overview) The operating environment in Q1 2025 showed mixed signals compared to Q1 2024, with a decrease in worldwide active drilling rigs but a surge in natural gas prices Key Industry Indicators Change (Q1 2025 vs. Q1 2024) | Indicator | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Worldwide Active Drilling Rigs | 1,707 | 1,797 | (5.0%) | | WTI Crude Prices ($/barrel) | $71.84 | $77.56 | (7.4%) | | Natural Gas Prices ($/MMBtu) | $4.15 | $2.13 | 94.8% | | Hot-Rolled Coil Prices ($/short ton) | $753.21 | $961.95 | (21.7%) | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Total revenue for Q1 2025 increased by 6.4% to $599 million, driven by a 9.0% rise in the U.S. segment due to acquisitions, partially offset by a decline in Canada Revenue by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | $474 | $435 | +9.0% | | Canada | $62 | $66 | (6.1%) | | International | $63 | $62 | +1.6% | | **Total** | **$599** | **$563** | **+6.4%** | Operating Profit by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $22 | $23 | | Canada | $4 | $3 | | International | $4 | $2 | | **Total** | **$30** | **$28** | - The increase in Warehousing, selling and administrative expenses to **$109 million** from **$101 million** was primarily driven by expenses related to acquisitions completed in 2024[99](index=99&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2025 with a strong liquidity position, holding $219 million in cash and no debt, with full availability on its $500 million credit facility - As of March 31, 2025, the company had **$219 million** in cash and cash equivalents, with **$112 million** held by foreign subsidiaries[108](index=108&type=chunk) - The company has a **$500 million** revolving credit facility maturing in Dec 2026, with no borrowings and **$434 million** in availability as of March 31, 2025[109](index=109&type=chunk) - Net cash used in operating activities was **$16 million**, primarily due to a **$32 million** investment in inventory and a **$52 million** increase in accounts receivable[112](index=112&type=chunk) - Under the new **$160 million** share repurchase program, the company repurchased **$8 million** worth of shares in Q1 2025, with **$152 million** remaining authorized[117](index=117&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) DNOW's primary market risks stem from foreign currency fluctuations and commodity steel prices, with a significant portion of sales exposed to currency changes, particularly the Canadian dollar - The company's primary market risks are foreign currency fluctuations and changes in commodity steel prices[119](index=119&type=chunk)[127](index=127&type=chunk) - Approximately **one-fifth** of net sales for Q1 2025 were outside the U.S., with the most significant foreign currency exposure to the Canadian dollar, followed by the British pound[121](index=121&type=chunk) - A sensitivity analysis showed that a hypothetical **10%** adverse change in foreign currency rates would have resulted in an approximate **$1 million** change in net income for Q1 2025[126](index=126&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[128](index=128&type=chunk) - No changes occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[129](index=129&type=chunk) Part II [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details DNOW's Q1 2025 share repurchase activities, including the authorization of a new $160 million program and the shares repurchased during the period Share Repurchases for Q1 2025 | Period | Total Shares Purchased | Average Price Paid | Shares Purchased as Part of Program | Value Remaining in Program (millions) | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | — | $160 | | Feb 2025 | 393,483 | $17.41 | — | $160 | | Mar 2025 | 443,806 | $17.14 | 443,806 | $152 | - On January 24, 2025, the Board of Directors authorized a new share repurchase program for up to **$160 million** of its outstanding common stock[131](index=131&type=chunk) [Other Information](index=26&type=section&id=Item%205.%20Other%20Information) The company reports that during the first quarter of 2025, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended March 31, 2025[131](index=131&type=chunk) [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q, including corporate governance documents, incentive plans, credit agreements, and officer certifications - This section lists the exhibits filed with the report, including the Amended and Restated Certificate of Incorporation, various incentive plan documents, credit agreements, and required officer certifications[132](index=132&type=chunk)
NOW(DNOW) - 2025 Q1 - Earnings Call Transcript
2025-05-07 14:02
Financial Data and Key Metrics Changes - The first quarter of 2025 saw EBITDA of $46 million, up 2% sequentially and 18% year over year, marking the second-best first quarter EBITDA results in the company's history [9][10] - Revenue for Q1 2025 was $599 million, an increase of 4.9% from Q4 2024 and 6.4% year over year [10][26] - Gross margins remained resilient at 23.2%, better than expected [11][28] - Net income attributable to DNOW Inc. for Q1 was $22 million or $0.20 per fully diluted share [30] Business Line Data and Key Metrics Changes - U.S. revenue totaled $474 million, up $23 million or 5% sequentially, with U.S. energy centers contributing approximately 69% of total U.S. revenue [26][27] - U.S. Process Solutions achieved a new quarterly revenue record, contributing approximately 31% to total U.S. revenue [27] - Canadian revenue was $62 million, down $4 million sequentially, while international revenue was $63 million, up $9 million or 17% sequentially [22][27] Market Data and Key Metrics Changes - In the U.S., revenue growth was driven by increased midstream demand, particularly from the Witco business [18] - Internationally, revenue growth was attributed to increased project activity, with a notable $15 million project not expected to repeat in Q2 [23][27] - The company reported that approximately 70% of products sold in U.S. operations are sourced domestically, reducing dependence on international sources [13] Company Strategy and Development Direction - The company is focused on diversifying its market mix and investing in core markets while capturing additional revenues from energy evolution opportunities [11] - A small international acquisition was completed in April to enhance the McLean International brand, expanding its market presence in Singapore and the Asia Pacific region [12] - The company aims to balance growth with capital returns, having repurchased $16 million in shares year-to-date under a new $160 million share repurchase program [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs and macroeconomic uncertainties but noted that customer spending has not significantly declined [35][36] - For Q2, the company expects flat to mid-single-digit percentage growth in revenues, driven by increased midstream activity [37] - Full-year guidance for 2025 remains flat to up in the high single-digit percentage range from 2024 levels, with EBITDA potentially approaching 8% of revenue [38] Other Important Information - The company has zero debt and a cash position of $219 million, with total liquidity of $567 million [30][31] - The effective tax rate for 2025 is estimated to be approximately 26% to 29%, with no material U.S. Federal cash income taxes expected due to available NOL carryforwards [29] Q&A Session Summary Question: How is inflation tracking in the business? - Management noted that inventory costs are currently low, but normal inflationary pressures are resuming, with some products seeing price increases of 3% to 35% due to tariffs [43][44][46] Question: Are smaller competitors staying rational in the market? - Management indicated that competitors are being careful with inventory, but there is still intense bidding on projects, maintaining a competitive environment [47][48] Question: What are the opportunities for market share gains? - The company has significant global buying power, allowing it to leverage volume for better product availability and cost advantages against smaller competitors [50][51] Question: What is the outlook for geographic growth? - Management expects flat growth internationally, with stronger performance anticipated in the U.S. driven by midstream activity and the Trojan acquisition [66][67] Question: How does the company plan to navigate potential drilling and completion activity curtailments? - The focus is on growing with E&C customers and expanding the energy transition business, which is expected to offset upstream declines [80] Question: What is the current state of the M&A landscape? - Management reported active conversations regarding potential acquisitions, with some caution expected due to oil price volatility [101][102]
NOW(DNOW) - 2025 Q1 - Earnings Call Transcript
2025-05-07 14:00
Financial Data and Key Metrics Changes - The first quarter of 2025 saw EBITDA of $46 million, up 2% sequentially and 18% year over year, marking the second-best first quarter EBITDA results in the company's history [8][10] - Total revenue for the first quarter was $599 million, an increase of 4.9% from the previous quarter and 6.4% year over year [10][26] - Gross margins remained resilient at 23.2%, better than expected [11][29] - Net income attributable to DNOW Inc. for the first quarter was $22 million, or $0.20 per fully diluted share [31] Business Line Data and Key Metrics Changes - U.S. revenue totaled $474 million, up $23 million or 5% sequentially, driven by increased midstream demand [17][27] - U.S. Process Solutions contributed approximately 31% of total U.S. revenue, marking the highest revenue dollar contribution yet for this segment [28] - Canadian revenue was $62 million, down $4 million sequentially, while international revenue was $63 million, up $9 million or 17% sequentially [22][28] Market Data and Key Metrics Changes - In the U.S., revenue growth was driven by a full quarter contribution from the Trojan acquisition and increased midstream demand [17] - Internationally, revenue growth was primarily due to increased project activity, with a notable $15 million project not expected to repeat in the second quarter [23][28] - The company reported that approximately 70% of products sold in U.S. operations are sourced domestically, reducing dependence on international sources [13] Company Strategy and Development Direction - The company is focused on diversifying its market mix and investing in core markets while capturing additional revenues from energy evolution opportunities [11] - A small but strategic acquisition in Singapore was completed to enhance the McLean International brand, allowing for increased revenue synergies [12] - The company aims to balance growth with capital returns, having repurchased $16 million in shares year-to-date under a new $160 million share repurchase program [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic tariff situation and its potential impact on margins, stating that they are passing supplier cost increases through as quickly as possible [15][37] - The company expects second quarter growth driven by increased midstream activity, despite anticipated declines in Canadian revenue due to seasonal factors [39][68] - Full year guidance for 2025 remains flat to up in the high single-digit percentage range from 2024 levels, with EBITDA potentially approaching 8% of revenue [40] Other Important Information - The company ended the first quarter with zero debt and a cash position of $219 million, providing significant liquidity for future investments [31][32] - The company is actively pursuing opportunities in adjacent markets, including water, wastewater, and data centers, which are expected to contribute to growth [55][58] Q&A Session Summary Question: How is inflation tracking in the business? - Management noted that while normal inflationary pressures are emerging, tariff impacts have not yet significantly affected gross margins [46][47] Question: Are smaller competitors staying rational in the market? - Management indicated that while competitors are cautious about inventory, there is still intense bidding on projects, maintaining a competitive environment [50][51] Question: What are the opportunities for market share gains? - The company highlighted its global buying power as an advantage over smaller competitors, allowing for better product availability and cost management [53] Question: What is the outlook for geographic growth? - Management reaffirmed expectations for U.S. growth, particularly in midstream, while anticipating flat performance in international markets [66][68] Question: How does the company plan to navigate potential declines in drilling and completion activity? - The focus is on growing the energy transition business and leveraging gains in midstream to offset potential upstream declines [80]
DNOW (DNOW) Beats Q1 Earnings and Revenue Estimates
ZACKS· 2025-05-07 12:55
Core Insights - DNOW reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and showing an increase from $0.21 per share a year ago, resulting in an earnings surprise of 15.79% [1] - The company achieved revenues of $599 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.66% and increasing from $563 million year-over-year [2] - DNOW shares have increased approximately 23.2% since the beginning of the year, contrasting with a decline of -4.7% in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.23, with projected revenues of $630.3 million, and for the current fiscal year, the EPS estimate is $0.93 on revenues of $2.48 billion [7] - The estimate revisions trend for DNOW is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which DNOW belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact DNOW's stock performance [5]
NOW(DNOW) - 2025 Q1 - Earnings Call Presentation
2025-05-07 12:11
Financial Performance - First quarter revenue reached $599 million, a 5% sequential increase and a 6% year-over-year increase[9] - GAAP Net Income attributable to DNOW Inc was $22 million for the first quarter, with GAAP diluted EPS at $0.20[9] - Non-GAAP Net Income was $24 million for the first quarter, with Non-GAAP diluted EPS at $0.22[9] - EBITDA reached $46 million, representing 7.7% of revenue for the first quarter[9] - Gross margins for 1Q25 were 23.2%[9] Capital Allocation - The company repurchased $8 million in shares during the first quarter and $16 million year-to-date, as part of a newly authorized $160 million share repurchase program[9] - Total liquidity stood at $567 million as of March 31, 2025[29, 32] Market Indicators - DNOW annualized revenue per rig was $1.4 million for 1Q25[11] - U.S completions totaled 2,801 in 1Q25, a 2% sequential decrease[12] Segment Results (Year-over-Year) - United States revenue increased due to acquisitions, offsetting weaker drilling and completion activity[13, 17] - Canada revenue decreased by 6% year-over-year[17] - International revenue increased by 2% year-over-year[17] Outlook - The company expects 2Q25 revenue to increase flat-to-up in the mid-single-digits percentage range sequentially and EBITDA approaching 8% of revenue[49] - Full-year 2025 revenue is expected to be flat-to-up in the high-single-digit percent range from 2024, with EBITDA approaching 8% of revenue and free cash flow targeted at $150 million[49]
NOW(DNOW) - 2025 Q1 - Quarterly Results
2025-05-07 10:57
[DNOW First Quarter 2025 Results](index=1&type=section&id=DNOW%20Reports%20First%20Quarter%202025%20Results) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) DNOW reported strong Q1 2025 results with **$599 million** revenue and **$46 million** non-GAAP EBITDA, executing strategic capital allocation and maintaining a strong balance sheet Q1 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Revenue | $599 million | | Net Income (GAAP) | $22 million | | Diluted EPS (GAAP) | $0.20 | | Net Income (Non-GAAP) | $24 million | | Diluted EPS (Non-GAAP) | $0.22 | | EBITDA (Non-GAAP) | $46 million (7.7% of revenue) | | Cash and Cash Equivalents | $219 million | | Long-Term Debt | Zero | - The company repurchased **$8 million** of common stock in Q1 2025 and **$16 million** year-to-date under its **$160 million** share repurchase program[9](index=9&type=chunk) - Completed the acquisition of Natron International Pte Ltd in Singapore, expanding electrical supply capabilities in the Asia Pacific region under the MacLean International brand[9](index=9&type=chunk) - Strategically invested **$33 million** in additional inventory, resulting in cash used in operating activities of **$16 million** for the quarter[9](index=9&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted Q1 2025 outperformance with strong revenue and EBITDA growth, successful capital allocation, and a robust financial position for future opportunities - Achieved **5%** sequential revenue growth to **$599 million** and the second-best first-quarter EBITDA of **$46 million**, exceeding expectations in a challenging market[4](index=4&type=chunk) - Executed on capital allocation by acquiring a company in Singapore to expand the MacLean International brand and repurchasing **$16 million** of common stock year-to-date[5](index=5&type=chunk) - The company is well-capitalized with a significant cash balance and no debt, allowing for selective and patient acquisition strategies[6](index=6&type=chunk) - Despite market uncertainties from oil price declines and trade disruptions, management believes the company is well-positioned for organic and inorganic growth[7](index=7&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents unaudited consolidated financial statements, including balance sheets, statements of operations, and revenue breakdowns by segment for Q1 2025 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) DNOW's balance sheet as of March 31, 2025, shows increased total assets to **$1.651 billion**, driven by inventory and receivables, with zero long-term debt Balance Sheet Comparison (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $219 | $256 | | Inventories, net | $385 | $352 | | Total current assets | $1,067 | $1,028 | | Total assets | $1,651 | $1,621 | | Total current liabilities | $460 | $442 | | Total liabilities | $507 | $493 | | Total stockholders' equity | $1,144 | $1,128 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 statements of operations show DNOW's revenue at **$599 million**, with an operating profit of **$30 million** and net income of **$22 million** Quarterly Statement of Operations (in millions) | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | Revenue | $599 | $563 | $571 | | Operating profit | $30 | $28 | $29 | | Net income attributable to DNOW Inc. | $22 | $21 | $23 | | Diluted EPS | $0.20 | $0.19 | $0.21 | [Business Segments Revenue](index=4&type=section&id=Business%20Segments%20Revenue) The United States segment remains the primary revenue driver, contributing **$474 million** in Q1 2025, with sequential and year-over-year growth Revenue by Business Segment (in millions) | Segment | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | United States | $474 | $435 | $451 | | Canada | $62 | $66 | $66 | | International | $63 | $62 | $54 | | **Total revenue** | **$599** | **$563** | **$571** | [Non-GAAP Financial Measures & Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section reconciles GAAP to non-GAAP financial measures, including EBITDA, net income, diluted EPS, and free cash flow, used for operational performance evaluation - The company uses non-GAAP measures like EBITDA excluding other costs, non-GAAP net income, non-GAAP diluted EPS, and free cash flow to evaluate and manage its operations[20](index=20&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) Non-GAAP EBITDA excluding other costs for Q1 2025 was **$46 million**, representing **7.7%** of revenue, an increase from prior periods EBITDA Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | GAAP net income attributable to DNOW Inc. | $22 | $21 | $23 | | Adjustments (Interest, Tax, D&A, Other) | $24 | $18 | $22 | | **EBITDA excluding other costs** | **$46** | **$39** | **$45** | [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) Non-GAAP net income attributable to DNOW Inc. was **$24 million** in Q1 2025, adjusted from GAAP net income by removing specific charges Non-GAAP Net Income Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | GAAP net income attributable to DNOW Inc. | $22 | $21 | $23 | | Other, net of tax | $2 | $2 | $4 | | **Net income attributable to DNOW Inc. excluding other costs** | **$24** | **$23** | **$27** | [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) Non-GAAP diluted EPS for Q1 2025 was **$0.22**, reflecting an increase from Q1 2024 after adjusting for other costs Non-GAAP Diluted EPS Reconciliation | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | GAAP diluted EPS | $0.20 | $0.19 | $0.21 | | Other, net of tax | $0.02 | $0.02 | $0.04 | | **Diluted EPS excluding other costs** | **$0.22** | **$0.21** | **$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 reported a free cash outflow of **$22 million** in Q1 2025, primarily due to a strategic inventory investment and capital expenditures Free Cash Flow Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(16) | $81 | | Less: Purchases of property, plant and equipment | $(6) | $(1) | | **Free cash flow** | **$(22)** | **$80** | - Other costs in Q1 2025 primarily included approximately **$2 million** of transaction-related charges and **$1 million** of International restructuring charges[25](index=25&type=chunk)
3 of the Best Breakout Stocks to Buy Now
ZACKS· 2025-04-02 13:10
Core Insights - The article discusses an active investing approach focused on identifying breakout stocks within specific price ranges, recommending to sell if prices drop below the lower band and hold for gains if they surpass the upper band [1] Group 1: Breakout Stock Identification - Breakout stocks are identified by calculating support and resistance levels, where support is the lower bound and resistance is the upper bound of stock movements [2] - Demand for a stock is lowest at the support level, while traders are more inclined to buy at the resistance level, indicating potential breakout candidates [3] - A genuine breakout occurs when the previous resistance level becomes the new support level, which can be confirmed through long-term price trend analysis [5] Group 2: Screening Criteria - The screening criteria for identifying breakout stocks include a percentage price change over four weeks between 10% and 20%, current price being at least 90% of the 52-week high, and a Zacks Rank of 1 [6] - Additional criteria include a beta of 2 or less, and a current price of $20 or less, narrowing the stock universe to only six candidates [7] Group 3: Featured Stocks - EMX Royalty Corporation focuses on exploring and generating royalties from metal and mineral properties, with an expected earnings growth rate of 200% for the current year [7] - DNOW Inc. distributes energy and industrial products globally, with an expected earnings growth rate of 18.6% for the next year [8] - EZCORP, Inc. provides pawn services in the U.S. and Latin America, with an expected earnings growth rate of 17.9% for the current year [8]
International Markets and DNOW (DNOW): A Deep Dive for Investors
ZACKS· 2025-02-19 15:15
Core Insights - DNOW's international revenue performance is crucial for assessing its financial resilience and growth prospects [1][2] - The company's total revenue for the recent quarter reached $571 million, reflecting a 2.9% increase year-over-year [4] International Revenue Breakdown - Canada contributed $66 million, accounting for 11.56% of total revenue, with a surprise increase of 7.67% compared to analyst expectations [5] - International revenue was $54 million, representing 9.46% of total revenue, which was a 15.09% miss against the consensus estimate [6] - In the previous quarter, international revenue was $59 million (9.74%), and in the same quarter last year, it was $72 million (12.97%) [6] Future Projections - Analysts project total revenue of $583.5 million for the current fiscal quarter, a 3.6% increase year-over-year, with expected contributions of 11% from Canada ($64.2 million) and 9.7% from International ($56.6 million) [7] - For the full year, total revenue is anticipated to be $2.48 billion, a 4.6% increase from last year, with Canada and International expected to contribute 10.1% ($250.9 million) and 9.4% ($234.2 million) respectively [8] Market Performance - DNOW's stock has gained 25.2% over the past month, outperforming the S&P 500's 4.7% increase, and has increased 14.9% over the past three months compared to the S&P 500's 3.1% increase [12]
Best Value Stocks to Buy for February 19th
ZACKS· 2025-02-19 09:00
Group 1: Oportun Financial Corporation (OPRT) - Oportun Financial Corporation is a financial services provider with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 9.2% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 7.11, significantly lower than the S&P's 22.11, and possesses a Value Score of A [1] Group 2: Priority Technology Holdings, Inc. (PRTH) - Priority Technology Holdings, Inc. is a payment technology company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its next year earnings has increased by 4.1% over the last 60 days [2] - The company has a price-to-earnings ratio (P/E) of 15.04, compared to the S&P's 24.81, and possesses a Value Score of A [2] Group 3: DNOW Inc. (DNOW) - DNOW Inc. is a downstream energy services provider with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its next year earnings has increased by 18.6% over the last 60 days [3] - The company has a price-to-earnings ratio (P/E) of 22.03, which is slightly lower than the industry average of 22.90, and possesses a Value Score of B [3]