MRC Global Inc. (NYSE:MRC) Q1 2023 Earnings Conference Call May 9, 2023 10:00 AM ET Company Participants Monica Broughton - Vice President, Investor Relations and Treasury Rob Saltiel - President and Chief Executive Officer Kelly Youngblood - Executive Vice President and Chief Financial Officer Conference Call Participants Tommy Moll - Stephens Adam Farley - Stifel Ken Newman - KeyBanc Capital Markets Operator Greetings. Welcome to MRC Global's First Quarter 2023 Earnings Conference Call. At this time, all ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 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 ...

Financial Performance - MRC Global Inc. reported consolidated revenue of $2.1 billion for the year ended December 31, 2022, representing a 10% increase compared to $1.9 billion in 2021[6]. - The company achieved a net income of $120 million for 2022, up from $100 million in 2021, reflecting a 20% year-over-year growth[6]. - Gross profit margin improved to 25% in 2022, compared to 23% in 2021, indicating enhanced operational efficiency[6]. - MRC Global's cash flow from operations for 2022 was $150 million, a 15% increase from $130 million in 2021[6]. - The company plans to expand its market presence in the Asia-Pacific region, targeting a 15% growth in that segment by 2024[6]. - New product lines are expected to contribute an additional $50 million in revenue in 2023, driven by increased demand in the energy sector[6]. - MRC Global is investing $30 million in technology development to enhance supply chain efficiency over the next two years[6]. - The company has set a performance guidance of $2.3 billion in revenue for 2023, reflecting a 10% growth target[6]. - MRC Global has no disagreements with accountants on financial disclosures, ensuring transparency in reporting[274]. Operational Highlights - The company operates a global distribution network across major oil and natural gas regions, segmented into U.S. ($539 million), Canada ($45 million), and International ($158 million) markets, with a total backlog of $742 million as of December 31, 2022[50]. - The company sources products from over 9,000 suppliers in more than 50 countries, with purchases from the 25 largest suppliers accounting for approximately 43% of total purchases in 2022[37]. - The company has a large customer base of approximately 10,000 customers, with no single customer representing more than 10% of revenue, indicating a diversified revenue stream[49]. - The company continues to invest in IT systems, including an enterprise resource planning (ERP) system, to enhance digital transaction exchanges and improve customer service[33]. - The company provides integrated supply services, allowing customers to outsource procurement and inventory management, which strengthens customer relationships[34]. - The company has designed and constructed valve assemblies in its engineering centers, enhancing its service offerings to midstream pipeline customers[35]. - The company’s sales model includes regional and national teams, with over 190 account managers and 700 customer service representatives to address customer needs effectively[44][46]. - The company’s product offerings include a complete line of PVF products, essential for gas utilities and industrial infrastructure applications, ensuring rapid delivery to meet customer demands[30]. Safety and Compliance - The total recordable incident rate (TRIR) was 0.78 in 2022, significantly lower than the 2021 U.S. Bureau of Labor Statistics average of 3.4 for wholesalers of metal products[29]. - The company’s operations are subject to safety regulatory standards, with a focus on maintaining high safety standards to prevent liabilities and ensure employee safety[28]. - The company is committed to maintaining a harassment and discrimination-free workplace, actively monitoring hiring and promotion processes for diversity[57]. - The company is subject to various environmental laws, and while compliance costs have not been material, future regulations could impact operations[66]. - Environmental regulations are evolving, and stricter laws could increase operational costs, affecting financial performance[95]. - Compliance with U.S. and foreign laws, including anti-corruption regulations, is critical, as violations could result in significant penalties and harm to reputation[133]. Workforce and Diversity - As of December 31, 2022, MRC Global had 2,800 employees, with approximately 68% located in the U.S., 25% in the International segment, and 7% in Canada[52]. - In the U.S., hourly employees are paid at least $15 per hour, and the company offers a defined contribution retirement plan in the U.S., Canada, and Australia[53]. - In 2022, 29% of the global workforce were female, with 24% of directors and above being female[59]. - The company has implemented a new human capital management system to enhance employee initiatives and development since 2020[60]. - The company's employee development process includes twice yearly check-ins and a tuition reimbursement plan for employees with over six months of service[55]. Market Risks - A significant portion of the company's revenue is dependent on capital expenditures in the industries served, particularly in gas utilities and oil and gas sectors[76]. - General economic conditions, including interest rates and inflation, can adversely affect customer demand and capital expenditures, impacting overall revenue[77]. - Geopolitical events and instability may disrupt operations and affect demand for products, leading to potential revenue declines[78]. - Volatile oil and gas prices directly impact capital spending by customers, which could materially affect the company's financial performance[79]. - Supply chain shortages and unexpected demand fluctuations may hinder the ability to meet customer needs, adversely affecting service offerings[80]. - The company does not have contracts with most suppliers, making it vulnerable to the loss of significant suppliers, which could impact product availability[85]. - Price reductions by suppliers could lead to inventory value declines and pressure on margins, negatively affecting profitability[86]. - A transition to alternative energy sources could reduce demand for oil and gas, adversely impacting sales and financial results[91]. - Changes in customer and product mix may lead to fluctuations in gross profit margins, impacting overall profitability[96]. - The company's 25 largest customers accounted for approximately 54% of sales for the year ended December 31, 2022[100]. Financial Position and Debt - As of December 31, 2022, the company had $447 million of goodwill and other intangible assets recorded on its consolidated balance sheet[111]. - The company had total debt outstanding of $340 million and excess availability of $606 million under its credit facilities as of December 31, 2022[116]. - The company may incur significant additional indebtedness in the future, which could increase operational risks[116]. - The company is highly leveraged, which limits its ability to obtain additional financing for working capital, acquisitions, and other corporate purposes[120]. - As of December 31, 2022, all outstanding debt was at floating rates, with a $250 million interest rate swap in place to manage variable rate exposure[267]. - A 1% increase in the LIBOR or Term SOFR rate would result in an increase in interest expense of less than $1 million per year if outstanding amounts remain unchanged[268]. - The company is exposed to foreign currency exchange rate risk, managed primarily through forward foreign exchange contracts, which are not used for trading or speculative purposes[269]. - Steel prices significantly impact product pricing, with carbon steel line pipe prices being the most sensitive; the company manages this risk by maintaining appropriate inventory levels[270]. - The ability of subsidiaries to make payments to the parent company is dependent on their earnings and existing debt terms, which may limit dividend payments[123]. - Changes in the credit profile may affect supplier relationships, potentially leading to shortened payment terms and adversely impacting liquidity[125]. - The company may require additional capital in the future, which may not be available on favorable terms, potentially forcing a reduction in operations or expansion opportunities[126]. Legal and Competitive Risks - The company faces competition from both large companies with substantial resources and smaller regional players, which could adversely affect revenue and earnings[99]. - The company does not have long-term contracts with many customers, leading to potential revenue volatility if significant customers reduce their purchasing volume[100]. - The company relies on its sales and marketing teams to generate demand, and losing key personnel could adversely affect operations[102]. - The company is subject to customer audit clauses in many contracts, which could lead to negotiated settlements if proper documentation is not provided[100]. - The company faces risks associated with conducting business in international markets, including geopolitical events and regulatory changes[114]. - The company faces potential legal liabilities from asbestos-related lawsuits, with approximately 1,112 claims currently pending[132].

MRC Global Inc. (NYSE:MRC) Q4 2022 Earnings Conference Call February 14, 2023 10:00 AM ET Company Participants Monica Broughton - IR Rob Saltiel - President and CEO Kelly Youngblood - EVP and CFO Conference Call Participants Nathan Jones - Stifel Cole Couzens - Stephens Inc. Katie Fleischer - KeyBanc Capital Markets Operator Greetings, welcome to the MRC Global's Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will f ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------|----------------------------|-------------|-----------------------------|-------------|----------------------------|--------------|---------------|-------------|---------------|-----------| | ($ millions) | December 31, 2022 \nAmount | \nPer Share | September 30, 2022 \nAmount | \nPer Share | December 31, 2021 \nAmount | \nPer Share* | 2022 \nAmount | \nPer Share | 2021 \nAmount | ...

Revenue Growth - Revenue increased by 7% sequentially from Q2 2022, with a 49% growth in backlog from December 31, 2021, to September 30, 2022[71] - Company expects revenue growth in 2022 to exceed 25% compared to 2021, despite a projected seasonal decline of approximately 5% in Q4 2022[71] - Sales for the three months ended September 30, 2022, were $904 million, an increase of $219 million, or 32%, compared to $685 million for the same period in 2021[94] - Sales for the nine months ended September 30, 2022, were $2,494 million, an increase of $514 million, or 26%, compared to $1,980 million for the same period in 2021[113] Sector Performance - Gas utility sector accounted for 38% of total revenue, with a 26% increase in sales compared to the first nine months of 2021[72] - Downstream, Industrial and Energy Transition (DIET) sector generated 30% of total revenue, growing 31% from the first nine months of 2021[75] - Upstream production revenue increased by 27% and midstream pipeline revenue increased by 13% from the first nine months of 2021[77] Profitability - Gross profit for the three months ended September 30, 2022, was $165 million (18.3% of sales), compared to $95 million (13.9% of sales) for the same period in 2021, an increase of $70 million[98] - Adjusted Gross Profit increased to $198 million (21.9% of sales) for the three months ended September 30, 2022, from $137 million (20.0% of sales) for the same period in 2021, an increase of $61 million[99] - Operating income was $45 million for the three months ended September 30, 2022, compared to an operating loss of $7 million for the same period in 2021, an increase of $52 million[101] - Net income for the three months ended September 30, 2022, was $24 million, compared to a net loss of $11 million for the same period in 2021[106] Cash Flow and Liquidity - Total liquidity as of September 30, 2022, was $641 million, consisting of $29 million in cash and $612 million in excess availability under the Global ABL Facility[131] - Net cash used in operating activities was $30 million for the nine months ended September 30, 2022, compared to $16 million provided in the same period of 2021, primarily due to increased working capital[136] - Net cash provided by financing activities was $24 million for the nine months ended September 30, 2022, a significant improvement from $82 million used in financing activities in the same period of 2021[138] Capital Expenditures and Debt - Capital expenditures for the nine months ended September 30, 2022, totaled $8 million, compared to $6 million in the same period of 2021[137] - The outstanding balance on the Term Loan as of September 30, 2022, was $296 million, with no excess cash flow payment required for 2021[129] - The Global ABL Facility was amended to mature in September 2026, providing $705 million in revolver commitments in the U.S.[130] Market Conditions - Brent crude oil prices averaged over $100 per barrel and WTI prices averaged approximately $93 per barrel during Q3 2022[77] - Significant increases in transportation costs have been observed, although sequentially, these costs have begun to decline[82] - The company is well-positioned to benefit from new LNG infrastructure projects as Europe seeks alternatives to Russian gas supplies[81] - The energy transition business is growing rapidly, particularly for biofuels refinery projects, supported by government incentives[76] Tax and Compliance - Income tax expense for the nine months ended September 30, 2022, was $23 million, compared to a $1 million benefit in 2021, with effective tax rates of 30% and 9%, respectively[124] - The company expects to remain in compliance with covenants contained in its various credit facilities based on current forecasts[132]

MRC Global Inc. (NYSE:MRC) Q3 2022 Earnings Conference Call November 9, 2022 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 Tommy Moll - Stephens Ken Newman - KeyBanc Capital Markets Adam Farley - Stifel Operator Greetings, welcome to the MRC Global's Third Quarter 2022 Earnings Conference Call. At this time, all participants are in ...

MRC Global 3Q 2022 Earnings Presentation November 8, 2022 Rob Saltiel President & CEO Kelly Youngblood Executive Vice President & CFO 1 2 Forward Looking Statements Non-GAAP Disclaimer • long-term debt, net (net debt) In this presentation, the company is providing certain non-GAAP financial measures. These are not measures of financial performance calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and should not be considered as alternatives. The following GAAP measures have ...

MRC Global Inc. (NYSE:MRC) Q2 2022 Earnings Conference Call August 9, 2022 10:00 AM ET Company Participants Monica Broughton - IR Robert Saltiel - President & CEO Kelly Youngblood - EVP & CFO Conference Call Participants Tommy Moll - Stephens Doug Becker - Benchmark Research Nathan Jones - Stifel Kenneth Newman - KeyBanc Capital Markets Operator Greetings, and welcome to the MRC Global's Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-an ...

MRC Global 2Q 2022 Earnings Presentation August 8, 2022 Rob Saltiel President & CEO Kelly Youngblood Executive Vice President & CFO 1 2 Forward Looking Statements Non-GAAP Disclaimer • long-term debt, net (net debt) In this presentation, the company is providing certain non-GAAP financial measures. These are not measures of financial performance calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and should not be considered as alternatives. The following GAAP measures have th ...