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]

Company Overview - MRC Global Inc. is a leading global distributor of pipe, valves, fittings (PVF), and other infrastructure products and services, serving diversified end-markets such as gas utilities, downstream, industrial and energy transition, and production and transmission infrastructure sectors [2] - The company has over 100 years of experience and operates a worldwide network of approximately 200 locations, including valve and engineering centers [2] - MRC Global offers around 200,000 SKUs from over 7,100 suppliers, simplifying the supply chain for over 8,300 customers [2] Upcoming Financial Results - MRC Global will release its second quarter 2025 results on August 6, 2025, before the market opens [1] - The company will not host a conference call or webcast to discuss these results due to the pending combination with DNOW Inc. [1]

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]