MRC (MRC)2022-11-09 19:28Revenue 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]