MRC (US:MRC)2025-05-07 17:21Revenue Performance - MRC Global's revenue for Q1 2025 increased by $48 million sequentially from Q4 2024, but decreased by $65 million compared to Q1 2024[96]. - Total sales for the three months ended March 31, 2025, were $712 million, a decrease of $65 million, or 8%, compared to $777 million for the same period in 2024[114]. - U.S. sales decreased to $591 million for the three months ended March 31, 2025, down $76 million, or 11%, from $667 million in the same period in 2024[115]. - International sales increased to $121 million for the three months ended March 31, 2025, up $11 million, or 10%, from $110 million in the same period in 2024[115]. Sector Contributions - The Gas Utilities sector accounted for 38% of total revenue in Q1 2025, with a 3% year-over-year increase and an 8% sequential increase[97]. - The DIET sector generated 31% of total revenue in Q1 2025, experiencing an 18% decline compared to Q1 2024[98]. - Approximately 69% of MRC Global's revenue in Q1 2025 came from the Gas Utilities and DIET sectors[96]. - The PTI sector represented 31% of total revenues in the first three months of 2025, with an 11% decrease compared to the same period in 2024[101]. Profitability and Income - Gross profit was $142 million, representing 19.9% of sales, for the three months ended March 31, 2025, compared to $159 million, or 20.5% of sales, for the same period in 2024[116]. - Adjusted Gross Profit declined to $153 million, or 21.5% of sales, for the three months ended March 31, 2025, from $170 million, or 21.9% of sales, for the same period in 2024[117]. - Operating income was $18 million for the three months ended March 31, 2025, a decrease of $21 million from $39 million for the same period in 2024[121]. - Net income from continuing operations was $8 million for the three months ended March 31, 2025, down from $20 million for the same period in 2024, a decrease of 60%[111]. - Adjusted EBITDA was $36 million (5.1% of sales) for the three months ended March 31, 2025, compared to $57 million (7.3% of sales) for the same period in 2024, representing a decline of 36.8%[130]. - Loss from discontinued operations increased significantly to $30 million for the three months ended March 31, 2025, compared to a loss of $1 million for the same period in 2024, an increase of 2900%[129]. Expenses and Cash Flow - SG&A expenses were $124 million, or 17.4% of sales, for the three months ended March 31, 2025, compared to $120 million, or 15.4% of sales, for the same period in 2024[120]. - Operating cash flows from continuing operations were $21 million for the three months ended March 31, 2025, down from $36 million for the same period in 2024, a decrease of 41.7%[141]. - Interest expense increased to $9 million for the three months ended March 31, 2025, compared to $8 million for the same period in 2024, an increase of 12.5%[126]. - Income tax expense decreased to $1 million for the three months ended March 31, 2025, down from $8 million for the same period in 2024, a decrease of 87.5%[126]. - Net cash used in financing activities was $23 million for the three months ended March 31, 2025, compared to $17 million for the same period in 2024, an increase of 35.3%[143]. Liquidity and Debt - Total liquidity as of March 31, 2025, was $570 million, consisting of cash on hand and amounts available under the Global ABL Facility[137]. - The outstanding balance on the Term Loan was $344 million as of March 31, 2025, net of original issue discount and issuance costs[136]. - The Global ABL Facility has $750 million in total commitments, with $27 million in borrowings outstanding as of March 31, 2025[134]. Market Conditions and Risks - The Pipeline and Hazardous Materials Safety Administration estimates that about 35% of gas distribution infrastructure is over 40 years old, necessitating continuous replacement and maintenance[97]. - Recent U.S. government policies may impact the oil and gas industry, with potential tariffs on steel products affecting costs and pricing strategies[95]. - The company is primarily exposed to market risks related to unfavorable movements in interest rates, foreign currencies, and steel price volatility[146]. - There have been no material changes to the company's market risk policies or market risk sensitive instruments and positions since the last Annual Report[146]. Future Outlook - The company anticipates steady growth in the Gas Utilities sector due to ongoing infrastructure upgrades and new home construction[97]. - The company expects to support energy transition projects, which are anticipated to drive growth in the DIET sector in the coming years[98]. Backlog - The backlog of unshipped customer orders as of March 31, 2025, was $603 million, compared to $558 million as of December 31, 2024[109].