Core Insights - MRC Global Inc. reported a net loss of $9 million for Q3 2025, a significant decline from a net income of $29 million in Q3 2024, primarily due to challenges in implementing a new ERP system in the U.S. segment [3][5][12] - The company anticipates a recovery in performance, expecting mid-to-high single-digit percentage revenue growth sequentially in Q4 2025 as backlog growth is released into revenue [3][19] - MRC Global is in the process of merging with DNOW Inc., which is expected to enhance its capabilities and market position [3][22] Financial Performance - Sales for Q3 2025 were $678 million, a 12% decrease year-over-year and a 15% decrease sequentially [12][7] - Gross profit was $125 million, representing 18.4% of sales, down from 20.4% in Q3 2024 [6][12] - Adjusted EBITDA for Q3 2025 was $36 million, or 5.3% of sales, compared to $47 million, or 6.1% of sales, in Q3 2024 [9][12] Segment Performance - U.S. sales decreased by $94 million, or 15%, year-over-year, with all sectors affected by ERP implementation challenges [13][14] - International sales were $128 million, a slight increase of 1% year-over-year, but down 9% sequentially [15][12] - The backlog as of September 30, 2025, was $571 million, a 4% increase compared to the same period last year, with a 21% increase in the U.S. segment backlog [19][12] Cost Structure - Selling, general and administrative (SG&A) expenses were $128 million, or 18.9% of sales, up from $120 million, or 15.6% of sales, in Q3 2024 [8][12] - Adjusted SG&A for Q3 2025 was $116 million, or 17.1% of sales, excluding non-recurring costs related to the merger and ERP implementation [8][12] Balance Sheet and Cash Flow - As of September 30, 2025, MRC Global had a cash balance of $59 million and long-term debt of $476 million [20][12] - Cash used in continuing operations was $36 million in Q3 2025, reflecting the impact of ERP challenges [20][12] Merger and Future Outlook - The merger with DNOW Inc. is expected to close in Q4 2025, creating a larger and more diversified enterprise [3][22] - The company has suspended its share repurchase program due to the pending merger [21][12]

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]