Financial Performance - MRC Global reported second quarter 2025 revenue of $798 million, a 12% increase from the first quarter of 2025, with all sectors contributing to this growth [3][10][14] - Adjusted EBITDA for the second quarter of 2025 was $54 million, representing 6.8% of sales, compared to $65 million or 8.1% of sales in the same period of 2024 [11][61] - Net income from continuing operations for the second quarter of 2025 was $13 million, down from $30 million in the second quarter of 2024 [6][7] Sector Performance - The Production and Transmission Infrastructure (PTI) sector led the revenue growth with a 26% increase sequentially, driven by robust project activity [3][19] - Gas Utilities sector revenue increased by 10% sequentially, supported by increased construction projects [3][19] - The Downstream, Industrial, and Energy Transition (DIET) sector experienced a slight decline compared to the same quarter a year ago, but showed a 1% increase sequentially [14][20] Merger Agreement - MRC Global announced a merger agreement with DNOW Inc., which is expected to create a premier energy and industrial solutions provider [4][25] - The merger is subject to shareholder and regulatory approvals, with an anticipated closing in the fourth quarter of 2025 [25][26] Shareholder Returns - The company returned $15 million to shareholders through share repurchases at an average price of $12.35 per share during the second quarter of 2025 [3][24] - The share repurchase program has been suspended due to the pending merger with DNOW [24] Balance Sheet and Cash Flow - As of June 30, 2025, MRC Global had a cash balance of $75 million and long-term debt of $449 million [23] - The company's backlog was $589 million, a 2% decrease from the previous quarter, primarily due to a decline in the PTI sector backlog [22]

Financial Performance - MRC Global reported a net income from continuing operations of $8 million for Q1 2025, down from $20 million in Q1 2024. Adjusted net income from continuing operations was $12 million in Q1 2025 compared to $24 million in Q1 2024 [5][6][12] - The company's sales for Q1 2025 were $712 million, an 8% decrease from $777 million in Q1 2024 but a 7% increase from $665 million in Q4 2024 [11][14][15] - Gross profit for Q1 2025 was $142 million, representing 19.9% of sales, compared to $159 million or 20.5% of sales in Q1 2024. Adjusted gross profit was $153 million or 21.5% of sales in Q1 2025, down from $170 million or 21.9% in Q1 2024 [7][10][44] Market Segments - U.S. sales in Q1 2025 were $591 million, a decrease of $76 million or 11% from Q1 2024, with notable declines in the PTI and DIET sectors. However, Gas Utilities sector revenue increased by $8 million or 3% [15][19] - International sales for Q1 2025 were $121 million, up $11 million or 10% from the same period in 2024, driven by growth in the PTI sector [17][18] Backlog and Future Outlook - As of April 30, 2025, the company's backlog increased by 13% compared to year-end levels, totaling $603 million, indicating strong demand across all market sectors [3][23] - The company anticipates that second quarter revenues will increase sequentially by a high-single to low-double digit percentage due to backlog growth and improving project visibility [3] Cash Flow and Debt - Operating cash flows from continuing operations were $21 million in Q1 2025, with a net debt leverage ratio of 1.7 times as of March 31, 2025 [11][24][68] - The company had a cash balance of $63 million and total long-term debt of $371 million as of March 31, 2025 [24][68] Shareholder Returns - MRC Global has initiated a share buyback program in Q2 2025, taking advantage of recent stock market volatility to repurchase shares at attractive prices [4]

Financial Data and Key Metrics Changes - Total company sales for Q4 2024 were $664 million, a 14% sequential decrease and 10% lower than the same quarter a year ago [28] - Adjusted EBITDA for Q4 was $32 million, or 4.8% of sales, with full year adjusted EBITDA reaching $220 million, or 6.7% [34][39] - The company generated $268 million in operating cash flow from continuing operations for the full year, the highest level in years [12][36] Business Line Data and Key Metrics Changes - Gas utility sales in Q4 were $253 million, a decline of $40 million or 14%, primarily due to reduced customer activity and delayed spending [29] - The diet sector revenue for Q4 was $208 million, a decrease of $31 million or 13% due to timing of project deliveries [30] - DTI sector revenue for Q4 was $203 million, down $36 million or 15% due to reduced upstream activity [31] Market Data and Key Metrics Changes - International revenue for Q4 was $122 million, down $5 million or 4% from lower turnaround activity [31] - The international segment achieved 14% year-on-year revenue growth in 2024, marking the second consecutive year of double-digit growth [32] Company Strategy and Development Direction - The company simplified its capital structure by repurchasing convertible preferred shares and extending its asset-based lending facility maturity to 2029 [10][11] - A three-pronged capital allocation strategy targets a net debt leverage ratio of less than 1.5 times, returning cash to shareholders, and investing in future growth [12] - The company initiated several growth initiatives and strategic supply agreements to enhance customer service and product offerings [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, projecting low to upper single-digit percentage revenue increases compared to 2024 [15][39] - Key growth drivers include improving fundamentals in the gas utilities sector, inflationary pressures on product pricing, and a strong outlook for midstream natural gas projects [16][20] - The company expects to maintain adjusted gross margins of approximately 21% and generate at least $100 million in operating cash flow in 2025 [39][42] Other Important Information - The company has initiated a remediation plan to address inventory cycle count compliance issues detected late in the year [9] - The Emtek joint venture aims to enhance gas meter sales by incorporating automatic meter reading technology, potentially unlocking tens of millions in revenue [24][72] Q&A Session Summary Question: Revenue guidance and strength sustainability - Management noted a 19% increase in backlog in the U.S. segment, indicating strong customer signals and optimism for revenue growth in 2025 [51][52] Question: Gross margin guidance - Management indicated that the 21% gross margin guidance includes a modest amount of inflation but does not fully account for potential tariff impacts [62][68] Question: International market outlook - Management highlighted strong project activity in Europe and Asia Pacific, with a significant international backlog of $254 million, the largest in years [79] Question: Capital allocation priorities - Management emphasized a focus on maintaining a prudent balance sheet while executing the $125 million share repurchase program and considering M&A opportunities as the balance sheet improves [85][88]