MRC Global Inc. (NYSE:MRC) Q1 2022 Earnings Conference Call May 10, 2022 10:00 AM ET Company Participants Monica Broughton - Investor Relations Robert Saltiel - President & CEO Kelly Youngblood - EVP & CFO Conference Call Participants Cole Couzens - Stephens Inc. Kenneth Newman - KeyBanc Capital Markets Adam Farley - Stifel Operator Greetings, and welcome to the MRC Global's First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session ...

Financial Performance - Q4 2021 - Revenue for 4Q21 was $686 million, an 18% increase compared to 4Q20[10] - Net loss attributable to common stockholders was $10 million in 4Q21[10] - Adjusted EBITDA for 4Q21 was $47 million, representing 6.9% of revenue, the highest percentage since 3Q18[10] - Adjusted gross profit percentage was 21.6% in 4Q21 and 20.1% for the full year 2021[10] - E-commerce accounted for 42% of total revenue in 2021, a greater than 600 basis points increase over 2020[10] Balance Sheet & Cash Flow - Net debt as of 4Q21 was $249 million[10] - Leverage ratio was 1.7x, the best in public company history[10] - Generated $40 million in cash from operations in 4Q21 and $56 million year-to-date[10] - Liquidity as of 4Q21 was $532 million[10] 2022 Outlook - The company anticipates 2022 annual revenue of $3 billion or greater[40] - Adjusted EBITDA is projected to be $190 million or greater in 2022[40]

Financial Data and Key Metrics Changes - The company achieved full-year EBITDA of $146 million, a 51% increase from 2020, with an EBITDA margin of 5.5%, reflecting a 170 basis point increase [4][16] - Fourth-quarter EBITDA was $47 million, up 21% from the third quarter and more than double the amount reported in the fourth quarter of 2020 [7][16] - Adjusted gross margin for the fourth quarter was $148 million, representing 21.6% of revenue, and the annual adjusted gross profit percentage was 20.1%, both new records since going public [14][16] Business Line Data and Key Metrics Changes - Gas utilities revenue grew 21% in 2021, accounting for 38% of total revenue, exceeding the $1 billion target two years early [5][11] - The Downstream Industrial and Energy Transition (DIET) sector revenue for the fourth quarter was $201 million, a 2% increase sequentially, driven by project deliveries [12][10] - Upstream production sector revenue for the fourth quarter was $140 million, a 6% increase, while midstream pipeline sales were $87 million, reflecting a 2% growth [13][12] Market Data and Key Metrics Changes - U.S. revenue was $566 million in the fourth quarter, a 1% decline, while Canadian revenue was $40 million, up 33% [13][12] - International revenue was $80 million, a 6% decline, but backlog increased by 20% during the quarter, indicating strong future demand [14][19] - The company expects double-digit growth in U.S. and Canadian markets, with mid-single-digit growth internationally in 2022 [20][19] Company Strategy and Development Direction - The company aims for a minimum of $3 billion in revenue and $190 million in EBITDA for 2022, reflecting a 12.5% revenue improvement and a 30% EBITDA improvement over 2021 [11][20] - Focus on energy transition opportunities is expected to drive significant growth, with projections for energy transition revenue to grow from tens of millions to hundreds of millions over the next few years [10][63] - The gas utilities business is anticipated to remain a strong growth engine due to long-term drivers such as infrastructure build-outs and safety regulations [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market recovery and the company's ability to maintain cost control while driving profitability [4][6] - The company expects inflation to continue in the near term but anticipates stabilization later in the year, which may impact gross margins [14][29] - The management highlighted a strong backlog position, which is expected to translate into revenue and profitability improvements in 2022 [19][20] Other Important Information - The company reduced its debt by $86 million in 2021, ending the year with a net debt to EBITDA leverage ratio of 1.7 times, a record low since going public [7][19] - Cash generated from operations was $56 million for the year, with expectations for higher cash flows in 2022 despite increased inventory levels [6][21] - The company ended 2021 with a backlog of $520 million, up 18% from the third quarter and over 50% compared to the fourth quarter of 2020 [19][20] Q&A Session Summary Question: On gross margins and inflation expectations - Management acknowledged strong gross margins in 2021 but expects slight moderation in 2022 due to inflation and inventory pricing adjustments [28][29] Question: Top-line guidance and growth outlook - Management confirmed a target of at least $3 billion in revenue for 2022, supported by a growing backlog and strong market response [40][41] Question: G&A costs and adjustments - Management indicated that G&A costs would increase in absolute terms but are expected to trend lower as a percentage of revenue [42][44] Question: Cash flow and working capital considerations - Management projected improved cash generation in 2022, despite anticipated increases in inventory levels [45][49] Question: M&A opportunities and capital structure - Management expressed a focus on maintaining a solid balance sheet to pursue inorganic growth opportunities while continuing organic growth strategies [52][66] Question: Energy transition project visibility and growth - Management highlighted numerous projects in the energy transition space, with expectations for significant growth in this area over the coming years [61][63]

Table of Contents 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 FISCAL YEAR ENDED DECEMBER 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 001-35479 MRC GLOBAL INC. (Exact name of registrant as specified in its charter) Delaware 20-5956993 (State or Other J ...

1 MRC Global Investor Presentation - 3Q 2021 Update November 16, 2021 Rob Saltiel President & CEO Kelly Youngblood Executive Vice President & CFO 2 Forward Looking Statements Non-GAAP Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as "will," "expect," "look forward," "guidance," "targeted", "goals", and similar expressions are intended to identify forward-looking statements. Statements a ...

Financial Data and Key Metrics Changes - The company achieved its highest EBITDA profitability in the last two years, with an absolute dollar amount of $31 million and an EBITDA margin of 5.7% [11][12] - Year-to-date, EBITDA margins improved by 120 basis points from 3.8% to 5%, with an absolute EBITDA increase of $24 million compared to the previous year [12][16] - The company experienced a net loss attributable to common shareholders of $17 million or $0.21 loss per share, but adjusted net income was $8 million or $0.09 per share when normalizing for LIFO expense [49] Business Line Data and Key Metrics Changes - Gas utilities revenue was $271 million in Q3 2021, a 1% increase from the previous quarter and a 30% increase year-over-year [36] - The DIET sector sales were $197 million, up 3%, driven by refinery turnaround activity and biodiesel projects [37] - Upstream production sales declined by 8% to $132 million due to lower MRO and project activity in Europe and Asia-Pacific [38] Market Data and Key Metrics Changes - U.S. revenue was $570 million, up 2%, with increases in all sectors driven by the DIET sector [39] - International revenue declined by 13% to $85 million due to delayed MRO and project activity [41] - The backlog at the end of October was $472 million, up 20% from the end of Q2, indicating strong demand across all segments [54][100] Company Strategy and Development Direction - The company plans to target higher EBITDA margins and anticipates double-digit revenue increases in 2022 compared to 2021 [15][57] - The energy transition sector is a key strategic growth area, with dedicated sales resources added to pursue new opportunities [26][122] - The company is focused on maintaining a strong balance sheet and financial flexibility, with long-term debt at $325 million and net debt at $278 million [16][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for growth driven by a growing backlog, expected increases in customer spending, and improving macroeconomic conditions [18][57] - The company expects fourth-quarter revenue to be consistent with the third quarter, which is better than the typical seasonal decline [55] - Management acknowledged ongoing inflation and supply chain challenges but believes they are well-positioned to navigate these issues [27][31] Other Important Information - The company is investing in its e-commerce platform, MRCGO, which has seen increased usage and digital revenue growth [32][33] - Adjusted gross profit for Q3 was $137 million, or 20% of revenue, the highest margin seen in two years [42][44] - The company has been building inventory to support growing business needs, despite a cash burn of $31 million in Q3 [17][50] Q&A Session Summary Question: Comments on EBITDA margins and future expectations - Management was pleased with the EBITDA margins at 5.7% and expects inflationary pressures to support healthy gross margins in the near term [66][68] Question: Cash flow from operations guidance - The company expects to generate at least $30 million in Q4, resulting in a neutral cash flow for the second half of the year [72][73] Question: Revenue shift between Q3 and Q4 - Management noted that the backlog in Canada and international markets has increased significantly, providing confidence for Q4 revenue [80][81] Question: Inventory levels and pricing - The company has been growing gross inventory purchases, despite a slight decrease in net inventory due to LIFO reserves [85][86] Question: SG&A costs and revenue growth - Historical data suggests that for each dollar of revenue growth, SG&A costs typically increase by about $0.035 [89]

PART I [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20%28UNAUDITED%29) Presents MRC Global Inc.'s unaudited condensed consolidated financial statements and related accounting notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2021, total assets were $1,719 million, a slight decrease from $1,781 million at year-end 2020, primarily due to reduced cash and inventories, while total liabilities increased to $743 million Condensed Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $945 | $966 | | Cash | $47 | $119 | | Inventories, net | $471 | $509 | | **Total Assets** | **$1,719** | **$1,781** | | **Total Current Liabilities** | $440 | $399 | | Trade accounts payable | $329 | $264 | | **Long-term debt, net** | $323 | $379 | | **Total Stockholders' Equity** | $331 | $350 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 2021, the company reported a net loss of $11 million on sales of $685 million, while the nine-month net loss was $10 million, a significant improvement from a $269 million net loss in 2020 Statements of Operations Summary (in millions, except per share data) | Metric | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | Sales | $685 | $585 | $1,980 | $1,981 | | Gross Profit | $95 | $114 | $310 | $341 | | Operating (Loss) Income | $(7) | $14 | $6 | $(253) | | Net (Loss) Income | $(11) | $3 | $(10) | $(269) | | Diluted Loss Per Share | $(0.21) | $(0.04) | $(0.34) | $(3.50) | - The nine-month period in 2020 included a significant **$242 million** goodwill and intangible asset impairment charge, which was the primary driver of the large operating and net losses for that period[7](index=7&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2021, net cash provided by operations was $16 million, a significant decrease from $178 million in the prior-year period, mainly due to increased working capital needs Cash Flow Summary (Nine Months Ended Sep 30, in millions) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operations | $16 | $178 | | Net cash used in investing activities | $(4) | $(7) | | Net cash used in financing activities | $(82) | $(162) | | **(Decrease) increase in cash** | **$(70)** | **$9** | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies and financial statement disclosures, including revenue, LIFO inventory, debt, and 2020 goodwill impairment - Revenue is primarily recognized when products are shipped or delivered, with the Gas Utilities sector generating **$750 million** in revenue for the first nine months of 2021[20](index=20&type=chunk)[30](index=30&type=chunk) - The company uses the last-in, first-out (LIFO) method for its U.S. inventories, with the LIFO reserve at **$183 million** as of September 30, 2021[31](index=31&type=chunk) - In 2020, the company recorded a **$217 million** goodwill impairment charge and a **$25 million** tradename impairment charge due to the sharp decline in oil and gas demand caused by the COVID-19 pandemic, with no impairment charges in 2021[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - As of September 30, 2021, the company had **$297 million** outstanding on its Senior Secured Term Loan B and **$28 million** on its Global ABL Facility[44](index=44&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q3 and YTD 2021 financial performance, including business drivers, operational results, LIFO impact, and liquidity [Recent Trends and Outlook](index=25&type=section&id=Recent%20Trends%20and%20Outlook) The business has seen recovery in 2021 from the 2020 lows, with revenue trending 18% higher than the second half of 2020, driven by diversification into stable sectors like gas utility - The company has diversified its end markets, with **69%** of Q3 2021 revenue derived from the gas utility and downstream, industrial and energy transition (DIET) sectors[86](index=86&type=chunk) - The gas utility sector, the company's largest, grew **22%** in the first nine months of 2021 compared to the same period in 2020[87](index=87&type=chunk) - The company is experiencing significant inflation in certain product categories, especially carbon steel pipe, but is generally able to pass price increases to customers[95](index=95&type=chunk) Backlog by Segment (in millions) | Segment | Sep 30, 2021 | Dec 31, 2020 | Sep 30, 2020 | | :--- | :--- | :--- | :--- | | U.S. | $297 | $193 | $215 | | Canada | $30 | $13 | $15 | | International | $113 | $134 | $145 | | **Total** | **$440** | **$340** | **$375** | [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For Q3 2021, consolidated sales increased 17% year-over-year to $685 million, but reported gross profit fell due to a $32 million unfavorable LIFO impact, while adjusted EBITDA improved Q3 2021 vs Q3 2020 Performance (in millions) | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Sales | $685 | $585 | 17% | | U.S. Sales | $570 | $463 | 23% | | Gross Profit | $95 | $114 | (17)% | | Adjusted Gross Profit | $137 | $115 | 19% | | Operating (Loss) Income | $(7) | $14 | N/M | | Net (Loss) Income | $(11) | $3 | N/M | | Adjusted EBITDA | $39 | $24 | 63% | YTD 2021 vs YTD 2020 Performance (in millions) | Metric | YTD 2021 | YTD 2020 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Sales | $1,980 | $1,981 | (0)% | | Gross Profit | $310 | $341 | (9)% | | Adjusted Gross Profit | $389 | $390 | (0)% | | Operating Income (Loss) | $6 | $(253) | N/M | | Net Loss | $(10) | $(269) | (96)% | | Adjusted EBITDA | $99 | $75 | 32% | - The LIFO inventory costing method significantly impacted reported gross profit, increasing cost of sales by **$32 million** in Q3 2021 compared to an **$11 million** decrease in Q3 2020[106](index=106&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash from operations and its $750 million Global ABL Facility, with total liquidity of $492 million as of September 30, 2021 - Total liquidity as of September 30, 2021, was **$492 million**, comprising **$47 million** in cash and **$445 million** in Excess Availability under the Global ABL Facility[145](index=145&type=chunk) - In September 2021, the Global ABL Facility was amended and renewed, reducing its size to **$750 million** and extending its maturity to **September 2026**[144](index=144&type=chunk) - In April 2021, the company made an **$86 million** payment on its Term Loan as required by the excess cash flow provision for the year 2020[143](index=143&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is primarily exposed to market risks from unfavorable movements in interest rates, foreign currencies, and steel price volatility, with no material changes to these risks since December 31, 2020 - The company's primary market risks are related to interest rates, foreign currency fluctuations, and steel price volatility[154](index=154&type=chunk) - No material changes to market risk policies or positions occurred during the quarter[154](index=154&type=chunk) [Controls and Procedures](index=43&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) As of September 30, 2021, the CEO and CFO concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during Q3 2021 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the quarter[155](index=155&type=chunk) - No changes occurred during the third quarter of 2021 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[156](index=156&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is subject to various claims and legal proceedings incidental to its business, including asbestos-related claims, but management believes no pending proceedings are likely to have a material adverse effect - The company is a defendant in asbestos-related lawsuits but states that insurance should cover a substantial majority of existing and future claims, and the likelihood of a material adverse effect is remote[65](index=65&type=chunk)[161](index=161&type=chunk) - Management's opinion is that no pending legal proceedings are likely to have a material effect on the company's business or financial condition[159](index=159&type=chunk) [Risk Factors](index=44&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020, indicating no new significant risk factors to report - The report directs readers to the risk factors detailed in the Annual Report on Form 10-K for the year ended December 31, 2020[162](index=162&type=chunk) [Other Information](index=45&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company and its named officers amended performance share unit award agreements to adjust the net income calculation for the RANCE metric, removing the impacts of LIFO inventory costing methodology - Performance share unit award agreements for named officers were amended to exclude the impact of LIFO inventory accounting from the RANCE calculation[167](index=167&type=chunk)

1 MRC Global 3Q 2021 Earnings Presentation November 8, 2021 Rob Saltiel President & CEO Kelly Youngblood Executive Vice President & CFO 2 Forward Looking Statements Non-GAAP Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as "will," "expect," "look forward," "guidance," "targeted", "goals", and similar expressions are intended to identify forward-looking statements. Statements about the c ...

MRC Global, Inc. (NYSE:MRC) Q2 2021 Earnings Conference Call July 30, 2021 10:00 AM ET Company Participants Monica Broughton ??? Investor Relations Rob Saltiel ??? President and Chief Executive Officer Kelly Youngblood ??? Executive Vice President and Chief Financial Officer Conference Call Participants Adam Farley ??? Stifel Tommy Moll ??? Stephens Jon Hunter ??? Cowen & Company Ken Newman ??? KeyBanc Capital Markets Operator Greetings, and welcome to MRC Global???s Second Quarter Earnings Conference Call. ...

1 MRC Global 2Q 2021 Earnings Presentation July 29, 2021 Rob Saltiel President & CEO Kelly Youngblood Executive Vice President & CFO 2 Forward Looking Statements Non-GAAP Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as "will," "expect," "look forward," "guidance," "targeted", "goals", and similar expressions are intended to identify forward-looking statements. Statements about the comp ...