Key Takeaways DNOW stock fell 29% in a year, trading at 12.42x forward earnings.DNOW targets $70M synergies but margins fell, with 2025 EBITDA at 7.4%.ERP disruptions led to suspended guidance and ongoing execution risks.DNOW Inc. (DNOW) has sold off sharply, and the debate now is whether the pullback is a value entry or a warning sign. The company has a clear longer-cycle opportunity tied to integration synergies and a broader end-market mix. But near-term execution risk remains high.For investors, the set ...

Key Takeaways DNOW targets $23M first-year synergies, aiming for $70M by year three.Midstream, gas utilities and data centers drive 2026 growth diversification.ERP disruptions risk delaying margin recovery toward 7-8% in late 2026.DNOW Inc. (DNOW) is emerging from its MRC Global combination with a larger footprint and a broader mix of end markets that tend to be less cyclical than pure upstream exposure. The setup for 2026 is centered on diversification, synergy capture and a recovery in activity in the sec ...

Fourth Quarter and Full-Year 2025 Earnings Presentation February 20, 2026 Disclosure Statement Statements made in the course of this presentation that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward -looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward -looking statements. Additional information concerning factors that could cause actual results to diffe ...

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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]

Transaction Overview - DNOW 将以全股票合并交易方式收购 MRC[28] - MRC 股东每股 MRC 股份将获得 0.9489 股 DNOW 股份[28] - 合并后的企业价值约为 30 亿美元，包括 MRC 的净债务[28] Financial Synergies and Accretion - 预计在交易完成后三年内实现 7000 万美元的年度成本协同效应[28] - 预计交易完成后第一年调整后的每股收益将实现两位数的增长[28] - 预计交易完成后的 Pro Forma 净杠杆率低于 0.5 倍，并在交易完成后的第一年实现净现金头寸[28] Combined Company Profile - 合并后的公司预计年收入约为 53 亿美元[37, 58, 71] - 调整后的 EBITDA 约为 4.3 亿美元[37] - 调整后的 EBITDA 利润率约为 8.0%[37] - 运营产生的现金流约为 5 亿美元[37] Geographic Reach - DNOW 在美国拥有 165 个分支机构，MRC 在美国拥有 197 个分支机构[32] - 合并后的公司在超过 20 个国家/地区拥有业务[53] - 合并后的公司收入的 82% 来自美国，14% 来自加拿大，4% 来自国际市场[51] Cost Synergies Breakdown - 预计 2026 年实现 1700 万美元的税前运行率协同效应[81] - 预计 2027 年实现 4200 万美元的税前运行率协同效应[81] - 预计 2028 年实现 7000 万美元的税前运行率协同效应[81]

Transaction Overview - DNOW 将以全股票合并交易方式收购 MRC，交易的企业价值约为 30 亿美元，包括 MRC 的净债务[28] - MRC 股东每股 MRC 股份将获得 0.9489 股 DNOW 股份[28] - 合并后的公司预计在交易完成后的三年内实现 7000 万美元的年度成本协同效应[28] - 预计交易完成后第一年调整后的每股收益将实现两位数的增长[28] Financial Highlights - 合并后的公司预计收入约为 53 亿美元[37] - 预计调整后的 EBITDA 约为 4300 万美元，调整后的 EBITDA 利润率约为 8.0%[37] - 预计运营现金流约为 5 亿美元[37] Synergy Realization - 预计第一年实现 1700 万美元的税前协同效应，第二年实现 4200 万美元，交易完成后第三年实现 7000 万美元[39] - 预计 2026 年每股收益将增加 25%[83] Geographic Footprint - 合并后的公司在美国拥有 235 个服务地点和 10 个配送中心和超级中心[45, 46] - 合并后的公司在加拿大拥有 35 个地点，在欧洲、中东和非洲地区 (EMEA) 拥有 45 个地点，在亚太地区 (APAC) 拥有 40 个地点[50] - 美国占合并后收入的 82%，加拿大占 4%，国际市场占 14%，总收入为 53 亿美元[51] Revenue Breakdown by Product - 合并后的公司收入中，管道、配件和法兰占 37%，泵和生产占 26%，阀门占 22%，气体产品占 7%，磨具、MRO、安全和其他产品占 11%，总收入为 53 亿美元[73]

Summary of DNOW and MRC Global Merger Conference Call Industry and Companies Involved - **Industry**: Energy and Industrial Solutions - **Companies**: DNOW (DistributionNOW) and MRC Global Core Points and Arguments 1. **Merger Announcement**: DNOW and MRC Global announced a transformational merger aimed at creating a premier energy and industrial solutions provider, enhancing long-term sustainable growth and shareholder value [4][5][6] 2. **Transaction Structure**: The merger is an all-stock transaction with an enterprise value of approximately $3 billion. MRC Global shareholders will receive 0.9489 shares of DNOW common stock for each share of MRC Global common stock [7][8] 3. **Ownership Post-Merger**: Upon closing, DNOW and MRC Global shareholders will own approximately 56.5% and 43.5% of the combined company, respectively [7] 4. **Expected Synergies**: The merger is projected to generate annual run rate pretax synergies of $70 million within three years, primarily from operational efficiencies and cost reductions [7][23] 5. **Financial Strength**: The combined company is expected to have revenues of approximately $5.3 billion and a strong balance sheet, with a net cash position anticipated by the end of the first year post-close [13][25] 6. **Geographic and Product Expansion**: The merger will enhance geographic reach and product offerings, allowing the combined entity to serve customers across more than 350 service and distribution locations globally [14][15] 7. **Customer-Centric Approach**: Both companies emphasize a customer-first mindset, aiming to leverage their combined strengths to better serve existing customers and attract new ones [29][30] 8. **Focus on Growth**: The primary focus post-merger will be on organic growth through cross-selling opportunities, with no specific revenue synergy targets established yet [47][48] Additional Important Content 1. **Regulatory Approval**: The companies do not anticipate significant regulatory issues, believing the merger will enhance customer choice and service capabilities [49] 2. **Integration Strategy**: The integration will focus on consolidating duplicate systems and optimizing the distribution network, although immediate priorities will be on revenue growth and talent retention [51][60] 3. **Capital Allocation**: Post-merger capital deployment will prioritize organic growth, followed by inorganic growth through M&A, and maintaining a share repurchase program [58] 4. **Cultural Alignment**: Both companies share a commitment to innovation and operational excellence, which will be foundational in the integration process [29][30] This summary encapsulates the key points discussed during the conference call regarding the merger between DNOW and MRC Global, highlighting the strategic rationale, expected benefits, and future focus areas for the combined entity.