HIGHLIGHTS Assays confirm uranium mineralization across the Mineralized RIB Corridor ("MRC") at RIB South, East and West Discoveries, where results from twelve drillholes intersected uranium mineralization (Figures 2 & 3). These results are in addition to the previously announced RIB North Discovery, where the maiden drillhole, RIBN-DD-001, returned assays with 34.7 m of total composite uranium mineralization1, including 13.6 m grading 0.53% UO, 1.1 m grading 4.81% UO, and grades up to 8.16% UO over 0.5 m ( ...

Core Viewpoint - DNOW Inc. has successfully completed its acquisition of MRC Global Inc., creating a leading solutions provider in the energy and industrial markets [1][11]. Company Overview - DNOW is a premier energy and industrial solutions provider with over 160 years of experience, specializing in the distribution of pipe, valves, fittings, pumps, and fabricated equipment [5]. - The company is headquartered in Houston, Texas, employing approximately 5,000 individuals and operating a global network of distribution and engineering locations [5]. Merger Details - Under the merger agreement, each share of MRC Global's common stock was converted into the right to receive 0.9489 shares of DNOW's common stock [2]. - The total value of the all-stock transaction is approximately $1.5 billion, which includes MRC Global's net debt [13]. Strategic Benefits - The merger is expected to enhance DNOW's earnings durability, cash flow, and financial position, allowing the company to capitalize on growth opportunities across various sectors [3]. - DNOW anticipates generating $70 million in annual cost synergies within three years post-merger through operational efficiencies and streamlined corporate structures [6]. Market Position and Growth Opportunities - The combined entity will serve a broader mix of customers in essential energy infrastructure, including sectors such as chemical processing, municipal water, utilities, mining, and power generation [6]. - The merger expands DNOW's geographic footprint and distribution presence across the U.S., Canada, and other international markets, with over 350 service and distribution locations in more than 20 countries [6].

Core Insights - MRC Global reported quarterly earnings of $0.13 per share, missing the Zacks Consensus Estimate of $0.28 per share, and down from $0.22 per share a year ago, representing an earnings surprise of -53.57% [1] - The company posted revenues of $678 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 18.8%, and down from $797 million year-over-year [2] - MRC shares have increased by approximately 8.3% since the beginning of the year, compared to the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $738.4 million, and for the current fiscal year, it is $0.71 on revenues of $3.08 billion [7] - The estimate revisions trend for MRC was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Steel - Pipe and Tube industry, to which MRC belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting that stocks in the top 50% of Zacks-ranked industries outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, Mueller Water Products, is expected to report quarterly earnings of $0.34 per share, reflecting a year-over-year increase of +54.6%, with revenues projected at $362.05 million, up 4% from the previous year [9][10]

Company Overview - MRC Global is the leading global distributor of pipe, valves, fittings (PVF) and other infrastructure products, serving over 8,300 customers through approximately 200 service locations[99]. - The company has approximately 200,000 SKUs and a global network of over 7,100 suppliers, with over 2,500 employees[99]. - MRC Global's revenue is predominantly derived from the sale of PVF and infrastructure supplies to gas utility, energy, and industrial customers globally[102]. Merger and Acquisitions - The planned merger with DNOW Inc. is expected to be consummated during the fourth quarter of 2025, with MRC Global shareholders receiving 0.9489 shares of DNOW common stock for each share of MRC Global[106][107]. Financial Performance - Revenue for the three months ended September 30, 2025, decreased by $93 million, or 12%, to $678 million compared to $771 million for the same period in 2024[127]. - U.S. sales decreased by $94 million, or 15%, to $550 million for the three months ended September 30, 2025, primarily due to operational challenges from the ERP system implementation[128]. - The Gas Utilities sector accounted for 40% of total revenue for the first nine months of 2025, with a 2% increase compared to the same period in 2024[112]. - The Downstream, Industrial and Energy Transition (DIET) sector generated 29% of total revenue for the first nine months of 2025, but saw a 16% decrease compared to the same period in 2024[115]. - The Production and Transmission Infrastructure (PTI) sector represented 31% of total revenue for the first nine months of 2025, with an 8% decrease compared to the same period in 2024[117]. - Sales for the nine months ended September 30, 2025, were $2,188 million, a decrease of $159 million (7%) compared to $2,347 million in the same period of 2024, driven by declines in the DIET and PTI sectors[152]. Operational Challenges - The implementation of a new cloud-based ERP system in August 2025 faced significant challenges, adversely affecting revenue, profitability, and cash flow in the U.S. segment for Q3 2025[109]. - U.S. segment operating loss was $14 million in Q3 2025, compared to operating income of $30 million in Q3 2024, a decrease of $44 million primarily due to lower sales[135]. - The company anticipates that fluctuations in steel prices will impact the pricing and availability of its products, influencing sales and operating profitability[104]. - MRC Global's business is influenced by economic conditions, oil and natural gas demand, and inventory levels of PVF and related products[104]. Profitability Metrics - Gross profit for Q3 2025 was $125 million (18.4% of sales), down from $157 million (20.4% of sales) in Q3 2024, a decrease of $32 million primarily due to lower sales[129]. - Adjusted Gross Profit decreased to $148 million (21.8% of sales) in Q3 2025 from $162 million (21.0% of sales) in Q3 2024, a decrease of $14 million attributed to lower sales[130]. - Operating loss for Q3 2025 was $3 million, compared to operating income of $37 million in Q3 2024, a decrease of $40 million due to lower sales and ERP system implementation challenges[134]. - Net loss from continuing operations was $9 million in Q3 2025, down from net income of $29 million in Q3 2024, a decrease of $38 million due to lower sales and higher SG&A expenses[142]. Expenses and Cash Flow - SG&A expenses increased to $128 million (18.9% of sales) in Q3 2025 from $120 million (15.6% of sales) in Q3 2024, primarily due to a $6 million increase in legal and professional fees related to mergers[133]. - Interest expense increased to $10 million in Q3 2025 from $4 million in Q3 2024, an increase of $6 million due to higher average debt balances and interest rates[138]. - Net cash used in operating activities from continuing operations was $61 million for the nine months ended September 30, 2025, compared to $195 million provided in the same period of 2024[181]. - Net cash used in investing activities from continuing operations was $25 million for the nine months ended September 30, 2025, compared to $22 million in the same period of 2024[182]. - Net cash provided by financing activities was $65 million for the nine months ended September 30, 2025, compared to $242 million used in the same period of 2024[183]. Market Conditions and Future Outlook - Ongoing maintenance and upgrading of existing energy facilities and pipelines are critical drivers for business, particularly in the Gas Utilities sector[104]. - The company expects substantial growth in the energy transition portion of its business, supported by government incentives and commitments from customers to achieve net zero emissions[116]. - The average Brent crude oil price for the first nine months of 2025 was approximately $71 per barrel, while West Texas Intermediate (WTI) averaged approximately $67 per barrel[117]. Debt and Liquidity - The company had $134 million in borrowings and $477 million of Excess Availability under its Global ABL Facility as of September 30, 2025[175]. - As of September 30, 2025, the outstanding balance on the Term Loan was $342 million, with annual repayments required based on excess cash flow[176]. - Total liquidity as of September 30, 2025, was $536 million, consisting of cash on hand and amounts available under the Global ABL Facility[177]. Credit Ratings - Moody's upgraded the Company's corporate family rating to 'B1' from 'B2' in October 2024, with a stable outlook based on moderate leverage and solid operating performance[178]. - S&P affirmed the Company's issuer-credit rating of 'B' with a 'CreditWatch Positive' rating in June 2025, pending regulatory approval of the DNOW merger[178].

Financial Performance - Third quarter 2025 sales were $678 million, a 12% decrease year-over-year and a 15% decrease sequentially [6][13]. - Net loss from continuing operations for Q3 2025 was $9 million, compared to net income of $29 million in Q3 2024 [4][7]. - Adjusted EBITDA for Q3 2025 was $36 million, or 5.3% of sales, down from $47 million, or 6.1% of sales in Q3 2024 [10]. - Gross profit for Q3 2025 was $125 million, or 18.4% of sales, compared to $157 million, or 20.4% of sales in Q3 2024 [8]. - U.S. sales in Q3 2025 were $550 million, a 15% decrease from Q3 2024, with all sectors experiencing declines due to ERP system challenges [14][15]. - The company reported a net loss of $9 million for the three months ended September 30, 2025, compared to a net income of $29 million for the same period in 2024, indicating a significant decline in profitability [39]. - Sales for the three months ended September 30, 2025, were $678 million, a decrease of 12.1% from $771 million in the same period of 2024 [39]. - Gross profit for the three months ended September 30, 2025, was $125 million, down from $157 million in the prior year, reflecting a decrease of 20.4% [39]. - Net income for the nine months ended September 30, 2025, was $12 million, a decrease from $79 million in the same period of 2024 [41]. - Total sales for the nine months ended September 30, 2025, were $2,188 million, down from $2,347 million in 2024, representing a decrease of approximately 6.8% [44]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $126 million, down from $169 million in 2024 [57]. - Adjusted net income from continuing operations for the three months ended September 30, 2025, was $11 million, while for the same period in 2024, it was $24 million [61]. - For the nine months ended September 30, 2025, the adjusted net income from continuing operations was $81 million [61]. Expenses and Liabilities - Selling, general and administrative (SG&A) expenses were $128 million, or 18.9% of sales, up from $120 million, or 15.6% of sales in Q3 2024 [9]. - Selling, general and administrative expenses for the three months ended September 30, 2025, were $128 million, up from $120 million in the same period of 2024, reflecting an increase of 6.7% [39]. - The company's long-term debt increased to $472 million as of September 30, 2025, compared to $384 million at December 31, 2024, marking an increase of 22.9% [37]. - The company's total current liabilities rose to $588 million as of September 30, 2025, compared to $508 million at December 31, 2024, indicating an increase of 15.7% [37]. - The company incurred $5 million in costs related to ERP system implementation for the three months ended September 30, 2025 [66]. - Non-recurring legal and consulting costs amounted to $5 million for the three months ended September 30, 2025 [66]. Cash Flow and Assets - Cash balance as of September 30, 2025, was $59 million, with long-term debt of $476 million and net debt of $417 million [21]. - MRC Global's total assets increased to $1,795 million as of September 30, 2025, up from $1,624 million at December 31, 2024, representing a growth of approximately 10.5% [37]. - Cash at the end of the period was $59 million, a decrease from $62 million at the end of September 2024 [41]. - The company reported a significant increase in payments on revolving credit facilities, totaling $504 million in 2025 compared to $276 million in 2024 [41]. - The company experienced a decrease in inventories by $129 million for the nine months ended September 30, 2025, compared to an increase of $88 million in 2024 [41]. - MRC Global's accounts receivable rose to $473 million as of September 30, 2025, compared to $378 million at December 31, 2024, an increase of 25.1% [37]. Future Outlook - The company anticipates mid-to-high single-digit percentage revenue growth sequentially for Q4 2025 as backlog is expected to convert to revenue [4][6]. - The merger with DNOW Inc. is expected to close in Q4 2025, which will enhance MRC Global's capabilities and scale [4][23]. - Revenue backlog as of September 30, 2025, was $571 million, a 4% increase year-over-year and a 21% increase in the U.S. segment backlog [6][20].

Core Insights - MRC Global Inc. reported a net loss of $9 million for Q3 2025, a significant decline from a net income of $29 million in Q3 2024, primarily due to challenges in implementing a new ERP system in the U.S. segment [3][5][12] - The company anticipates a recovery in performance, expecting mid-to-high single-digit percentage revenue growth sequentially in Q4 2025 as backlog growth is released into revenue [3][19] - MRC Global is in the process of merging with DNOW Inc., which is expected to enhance its capabilities and market position [3][22] Financial Performance - Sales for Q3 2025 were $678 million, a 12% decrease year-over-year and a 15% decrease sequentially [12][7] - Gross profit was $125 million, representing 18.4% of sales, down from 20.4% in Q3 2024 [6][12] - Adjusted EBITDA for Q3 2025 was $36 million, or 5.3% of sales, compared to $47 million, or 6.1% of sales, in Q3 2024 [9][12] Segment Performance - U.S. sales decreased by $94 million, or 15%, year-over-year, with all sectors affected by ERP implementation challenges [13][14] - International sales were $128 million, a slight increase of 1% year-over-year, but down 9% sequentially [15][12] - The backlog as of September 30, 2025, was $571 million, a 4% increase compared to the same period last year, with a 21% increase in the U.S. segment backlog [19][12] Cost Structure - Selling, general and administrative (SG&A) expenses were $128 million, or 18.9% of sales, up from $120 million, or 15.6% of sales, in Q3 2024 [8][12] - Adjusted SG&A for Q3 2025 was $116 million, or 17.1% of sales, excluding non-recurring costs related to the merger and ERP implementation [8][12] Balance Sheet and Cash Flow - As of September 30, 2025, MRC Global had a cash balance of $59 million and long-term debt of $476 million [20][12] - Cash used in continuing operations was $36 million in Q3 2025, reflecting the impact of ERP challenges [20][12] Merger and Future Outlook - The merger with DNOW Inc. is expected to close in Q4 2025, creating a larger and more diversified enterprise [3][22] - The company has suspended its share repurchase program due to the pending merger [21][12]

Core Insights - DNOW Inc. announced its future leadership team following the pending transaction with MRC Global Inc. [1] - The new leadership team will consist of leaders from both DNOW and MRC Global, emphasizing expertise in customer service, operational excellence, and supply chain management [1] - The combined leadership team is expected to leverage deep industry knowledge across the energy and industrial sectors [1]

Group 1 - DNOW Inc. is merging with MRC Global to create a dominant industrial distributor in North America, with DNOW shareholders receiving 57% and MRC shareholders 43% of the combined company [2] - The merger is expected to close in the fourth quarter, resulting in a company valued at $2.6 billion with $200 million in net debt, which management plans to reduce over the next year [2] - The combined entity is positioned to benefit from growth in alternative energy, data center infrastructure, and mining, while achieving operational and purchasing synergies [3][4] Group 2 - Both DNOW and MRC have improved their business models over the past decade, focusing on higher-margin products and integrated supply chain solutions, with DNOW transitioning from distribution to purpose-built solutions [4] - The merger is expected to create significant cost synergies and revenue enhancements, providing a strong platform for future mergers and acquisitions or share repurchases [5] - The combined business trades at a discount relative to peers, with a conservative synergy estimate of $70 million, indicating a compelling investment opportunity [3][5]

Core Viewpoint - The proposed sale of MRC Global Inc. to DNOW Inc. is under investigation to assess whether the transaction adequately values MRC Global and the process leading to this valuation is appropriate [1]. Group 1 - MRC Global shareholders will receive 0.9489 shares of DNOW for each share of MRC they own as part of the proposed transaction [1]. - Kahn Swick & Foti, LLC is investigating the adequacy of the consideration offered to MRC Global shareholders [1]. - The investigation aims to determine if the proposed sale undervalues MRC Global [1].

Core Insights - MRC Global Inc. reported second-quarter 2025 adjusted earnings of 25 cents per share, exceeding the Zacks Consensus Estimate of 23 cents, but down from 31 cents per share in the same quarter last year [1][7] - Total revenues reached $798 million, surpassing the consensus estimate of $772 million, although this represented a slight decrease of 0.1% year over year due to lower sales volumes in the Downstream, Industrial and Energy Transition (DIET) sector [1][7] Revenue Breakdown by Product Line - Revenues from carbon pipe, fittings, and flanges decreased by 11.9% year over year to $200 million [2] - Revenues from valves, automation, measurement, and instrumentation increased by 3.5% year over year to $294 million [2] - Gas product revenues rose by 8.3% year over year to $209 million [2] - Sales of general products increased by 1.7% to $61 million [2] - Sales of stainless steel and alloy pipe and fittings decreased by 2.9% to $34 million [2] Revenue Breakdown by Sector - Revenues from Gas Utilities increased by 4% year over year to $299 million [3] - DIET sales declined by 13% to $223 million [3] - Sales from the PTI sector increased by 8% year over year to $276 million [3] Revenue Breakdown by Segment - Sales from the U.S. segment, which represents 82% of total revenues, totaled $658 million, down 3% year over year due to reduced demand in the DIET and PTI sectors [4] - Sales from the International segment, accounting for 18% of revenues, grew by 15% year over year to $140 million, driven by higher revenues from the PTI sector [4] Margin Profile - MRC Global's cost of sales increased by 2.7% year over year to $647 million [5] - Adjusted gross profit decreased by 4.4% year over year to $172 million, resulting in an adjusted gross margin of 21.6%, down from 22.5% in the previous year [5][7] - Selling, general, and administrative expenses rose by 6.6% year over year to $130 million [5] - Adjusted EBITDA decreased by 16.9% year over year to $54 million [5] Balance Sheet and Cash Flow - As of the end of the second quarter 2025, MRC had a cash balance of $75 million, up from $63 million at the end of December 2024 [6] - Long-term debt, including the current portion, was $449 million, with net debt at $374 million [6] - In the first half of 2025, the company used net cash of $30 million in operating activities, compared to $101 million used in the same period last year [6] 2025 Outlook - MRC Global anticipates its 2025 revenues to increase in the low to high-single-digit range on a year-over-year basis [9]