HOUSTON, Feb. 20, 2014 /PRNewswire/ -- MRC Global Inc.
(NYSE: MRC), the largest global distributor, based on sales, of
pipe, valves and fittings (PVF) and related products and services
to the energy industry, today announced fourth quarter and full
year 2013 results and introduced 2014 guidance.
The company's sales increased 3% from $1.31 billion in the fourth quarter of 2012 to
$1.34 billion in the same
quarter of 2013. The increase of $37
million came from the acquisitions of Production Specialty
Services Inc. (PSS), Flow Control Products (Flow Control) and
Flangefitt Stainless Ltd. (Flangefitt), all of which are primarily
in the upstream sector.
Net income for the fourth quarter of 2013 was $23.3 million, or $0.23 per diluted share, compared to a fourth
quarter 2012 net loss of ($6.4)
million, or ($0.06) per
diluted share.
Adjusted diluted EPS for the fourth quarter of 2013 was
$0.32 per diluted share and excludes
the impact of a total of $9.7 million
in after-tax charges ($0.09 per
diluted share) related to re-pricing of debt, the accelerated
recognition of equity-based compensation and an increase in
valuation allowances for certain deferred tax assets. Adjusted
diluted EPS for the fourth quarter of 2012 was $0.55 per diluted share and excluded $62.8 million in after-tax charges ($0.61 per diluted share) related to the purchase
and early retirement of a portion of MRC Global's previously
outstanding senior secured notes and the termination of a pension
plan in the Netherlands. See the
reconciliation of adjusted net income (a non-GAAP measure) to net
income (a GAAP measure) included in this release.
Andrew R. Lane, MRC Global's
chairman, president and chief executive officer, stated, "While
2013 didn't result in the growth we had initially expected, we
completed our strategic rebalance of OCTG which resulted in a
$251 million drop in annual revenue
compared to 2012 but accomplished our goal of reducing our exposure
to our most volatile, lowest margin product line."
Mr. Lane also noted, "The year finished on a positive note, with
the highest sales quarter of the year, up 2% from the previous
quarter despite poor weather and fewer billing days. We were
successful in expanding several of our major customer framework
agreements, adding international scope for future growth. We are
also very pleased with our strategic acquisitions of Flangefitt in
December 2013 and Stream in
January 2014. These two acquisitions
significantly increase our international scale as well as add new
offshore and project capabilities in the upstream sector to our
business model. We successfully managed our working capital in the
slower than expected year, generating $324
million in cash flow from operations in 2013 and reduced our
long-term debt."
In conclusion, Mr. Lane stated, "We are looking forward to
returning to a year of growth in 2014, with annual sales expected
to grow in the high single digits."
MRC Global's fourth quarter 2013 gross profit of $226.0 million declined to 16.8% of sales from
fourth quarter 2012 gross profit of $258.3 million, or 19.8% of sales. Fourth
quarter 2013 reflected a charge of $1.1
million in cost of sales relating to the use of the last-in,
first-out (LIFO) method of inventory cost accounting while fourth
quarter 2012 reflected a benefit of $27.2
million. Gross profit was also negatively impacted by
pricing pressure and product mix changes in the line pipe product
line.
Selling, general and administrative expenses were $167.4 million for the fourth quarter of
2013 compared to $154.2 million in
the same period of 2012. This increase included a
$5.2 million charge associated with
the accelerated recognition of equity-based compensation expense as
a result of the November 2013
secondary common stock offering in which our private equity sponsor
sold its remaining interest in MRC Global. The increase also
included $5.0 million of incremental
expense from the PSS, Flow Control and Flangefitt acquisitions as
well as costs associated with our ongoing acquisition-related
activities.
Adjusted EBITDA was $87.2 million
for the fourth quarter of 2013 compared to $99.2 million for the same period in 2012. See
reconciliation of adjusted EBITDA (a non-GAAP measure) to net
income (a GAAP measure) in this release.
Interest expense for the fourth quarter of 2013 was $14.7 million as compared to $19.9 million in the fourth quarter of 2012. The
decrease in interest expense was the result of lower interest rates
from refinancing the company's senior secured notes in November 2012 and the re-pricing of the senior
secured Term Loan B in November 2013,
as well as lower average debt balances in 2013.
Sales by Segment
U.S. sales in the fourth quarter of 2013 were up 6% to
$1.01 billion from the same quarter
in 2012. A majority of the increase was due to the acquisitions of
PSS and Flow Control. In addition, the company experienced organic
growth in the sales of its gas utility and line pipe product
lines.
Canadian sales in the fourth quarter of 2013 were $189.3 million, down 10.6% from the same quarter
in 2012. Adjusting for a 5% decline in the Canadian dollar, the
company experienced an underlying reduction in sales of
approximately 6% due to a lower level of project-related sales.
International sales in the fourth quarter of 2013 were
$143.1 million, an increase of
1.8% from the same period in 2012. The company experienced growth
in sales from Europe and
Asia, but were partially offset by
a decline in sales from Australasia.
Sales by Sector
Upstream sales in the fourth quarter of 2013 increased 5.5% from
the fourth quarter of 2012 to $606.0 million, or 45% of total sales. The
improvement in upstream sales is substantially attributable to the
acquisitions of PSS and Flow Control, partially offset by weak
sales in Canada.
Midstream sales in the fourth quarter of 2013 increased 7.2%
from the fourth quarter of 2012 to $392.2 million, or 29% of total sales.
Spending from transmission and gas utility customers was up by 4%
and 14%, respectively.
Downstream sales in the fourth quarter of 2013 decreased 5.6%
from the fourth quarter of 2012 to $346.0
million, or 26% of total sales. The company continued to
experience weak market conditions in the international and Canadian
segments although the company experienced growth in the U.S.
Balance sheet
Debt outstanding was $986.8
million at December 31, 2013,
a reduction of $57 million during the
fourth quarter of 2013. Cash provided by operations was
$82.2 million during the fourth
quarter of 2013 and $323.6 million
for the year ended December 31,
2013.
Calendar Year 2014 Guidance
MRC Global's expected full year 2014 results, excluding the
impact of any future acquisitions, are as follows:
|
Low
|
|
High
|
Sales
|
$5.5
billion
|
|
$5.8
billion
|
Adjusted
EBITDA
|
$ 400
million
|
|
$ 450
million
|
Tax rate
|
35%
|
|
36%
|
Capital
expenditures
|
$25
million
|
|
$30
million
|
Cash flow from
operations
|
$175
million
|
|
$ 200
million
|
Conference Call
The company will hold a conference call to discuss its fourth
quarter and full year 2013 results at 10:00
a.m. Eastern (9:00 a.m.
Central) on February 21, 2014.
To participate in the call, dial (480) 629-9692 and ask for
the MRC Global conference call at least 10 minutes prior to the
start time. To access the conference call live over the Internet,
please log onto the web at http://www.mrcglobal.com and go to the
"Investor Relations" page of the company's website at least fifteen
minutes early to register, download and install any necessary audio
software. For those who cannot listen to the live call, a replay
will be available through March 8,
2014 and may be accessed by dialing (303) 590-3030 and using
pass code 4660955#. Also, an archive of the webcast will be
available shortly after the call at
http://www.mrcglobal.com for 90 days.
About MRC Global Inc.
Headquartered in Houston,
Texas, MRC Global, a Fortune 500 company, is the largest
global distributor, based on sales, of pipe, valves and fittings
(PVF) and related products and services to the energy industry and
supplies these products and services across each of the upstream,
midstream and downstream sectors. More information about MRC Global
can be found on our website mrcglobal.com.
This news release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. Words such as "will,"
"expect," "expected", "looking forward", "guidance" and similar
expressions are intended to identify forward-looking
statements.
Statements about the company's business, including its
strategy, its industry, the company's future profitability, the
company's guidance on its sales, adjusted EBITDA, tax rate, capital
expenditures and cash flow, growth in the company's various markets
and the company's expectations, beliefs, plans, strategies,
objectives, prospects and assumptions are not guarantees of future
performance. These statements are based on management's
expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ
materially from those expressed in or implied by the
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors, most of which are
difficult to predict and many of which are beyond our control,
including the factors described in the company's SEC filings that
may cause our actual results and performance to be materially
different from any future results or performance expressed or
implied by these forward-looking statements.
These risks and uncertainties include (among others)
decreases in oil and natural gas industry expenditure levels, which
may result from decreased oil and natural gas prices or other
factors; increased usage of alternative fuels, which may negatively
affect oil and natural gas industry expenditure levels; U.S.
and international general economic conditions; the company's
ability to compete successfully with other companies in MRC
Global's industry; the risk that manufacturers of the
products the company distributes will sell a substantial amount of
goods directly to end users in the industry sectors the
company serves; unexpected supply
shortages; cost increases by the company's suppliers;
the company's lack of long-term contracts with most of its
suppliers; suppliers' price reductions of products that the company
sells, which could cause the value of the company's
inventory to decline; decreases in steel
prices, which could significantly lower MRC's
profit; increases in steel prices, which
the company may be unable to pass along to its customers
which could significantly lower its profit; the company's lack of
long-term contracts with many of its customers and the
company's lack of contracts with customers that require
minimum purchase volumes; changes in the
company's customer and product mix; risks
related to the company's customers' creditworthiness;
the potential adverse effects associated with integrating
acquisitions into the company's business and whether these
acquisitions will yield their intended benefits;
the success of the company's acquisition
strategies; the company's significant indebtedness;
the dependence on the company's subsidiaries for
cash to meet its debt obligations; changes in
the company's credit profile; a decline in
demand for certain of the products the company distributes if
import restrictions on these products are lifted; environmental,
health and safety laws and regulations and the
interpretation or implementation thereof; the sufficiency of
the company's insurance policies to cover losses, including
liabilities arising from litigation; product
liability claims against the company; pending
or future asbestos-related claims against the company;
the potential loss of key personnel;
interruption in the proper functioning of the
company's information systems; loss of
third-party transportation providers; potential
inability to obtain necessary capital; risks
related to adverse weather events or natural disasters; impairment
of our goodwill or other intangible assets;
changes in tax laws or adverse positions taken by taxing
authorities in the countries in which the company operates;
adverse changes in political or economic conditions in the
countries in which the company operates; exposure to U.S.
and international laws and regulations, including the Foreign
Corrupt Practices Act and the U.K. Bribery Act and other economic
sanction programs; risks relating to ongoing evaluations of
internal controls required by Section 404 of the Sarbanes-Oxley
Act; the impact on us of the SEC's move toward convergence
with IFRS; and the occurrence of cyber security
incidents.
For a discussion of key risk factors, please see the risk
factors disclosed in the company's SEC filings, which are available
on the SEC's website at www.sec.gov and on the company's
website, www.mrcglobal.com. Our filings and other important
information are also available on the Investor Relations page of
our website at www.mrcglobal.com.
Undue reliance should not be placed on the company's
forward-looking statements. Although forward-looking statements
reflect the company's good faith beliefs, reliance should not be
placed on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors, which may cause the
company's actual results, performance or achievements or future
events to differ materially from anticipated future results,
performance or achievements or future events expressed or implied
by such forward-looking statements. The company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
changed circumstances or otherwise, except to the extent required
by law.
Contact:
Monica
Schafer
Vice President Investor
Relations
MRC Global
Inc.
Monica.Schafer@mrcglobal.com
832-308-2847
MRC Global
Inc.
Condensed
Consolidated Balance Sheets (Unaudited)
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2013
|
|
2012
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash
|
$
25,188
|
|
$
37,090
|
Accounts receivable,
net
|
812,147
|
|
823,236
|
Inventories,
net
|
971,567
|
|
970,228
|
Other current
assets
|
37,091
|
|
20,020
|
Total current
assets
|
1,845,993
|
|
1,850,574
|
|
|
|
|
Other
assets
|
30,473
|
|
37,031
|
|
|
|
|
Property, plant and
equipment, net
|
118,923
|
|
122,458
|
|
|
|
|
Intangible
assets:
|
|
|
|
Goodwill,
net
|
632,284
|
|
610,392
|
Other intangible
assets, net
|
708,009
|
|
749,272
|
|
|
|
|
|
$
3,335,682
|
|
$
3,369,727
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Trade accounts
payable
|
$
550,393
|
|
$
438,344
|
Accrued expenses and
other current liabilities
|
124,925
|
|
125,599
|
Deferred income
taxes
|
78,844
|
|
79,661
|
Current portion of
long-term debt
|
7,935
|
|
6,500
|
Total current
liabilities
|
762,097
|
|
650,104
|
|
|
|
|
Long-term
obligations:
|
|
|
|
Long-term debt,
net
|
978,899
|
|
1,250,089
|
Deferred income
taxes
|
241,116
|
|
261,448
|
Other
liabilities
|
15,302
|
|
22,164
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.01
par value per share: 500,000 shares authorized, 101,913 and 101,563
issued and outstanding, respectively
|
1,019
|
|
1,016
|
Preferred stock, $0.01
par value per share; 100,000 shares authorized, no shares
issued and outstanding
|
-
|
|
-
|
Additional paid-in
capital
|
1,644,406
|
|
1,625,900
|
Retained
deficit
|
(266,735)
|
|
(418,830)
|
Accumulated other
comprehensive loss
|
(40,422)
|
|
(22,164)
|
|
1,338,268
|
|
1,185,922
|
|
$
3,335,682
|
|
$
3,369,727
|
|
|
|
|
MRC Global
Inc.
Condensed
Consolidated Statements of Income (Unaudited)
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
Sales
|
$
1,344,203
|
|
$
1,306,733
|
|
$
5,230,792
|
|
$
5,570,858
|
Cost of
sales
|
1,118,241
|
|
1,048,429
|
|
4,276,033
|
|
4,557,115
|
Gross
profit
|
225,962
|
|
258,304
|
|
954,759
|
|
1,013,743
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
167,352
|
|
154,225
|
|
642,994
|
|
606,753
|
Operating
income
|
58,610
|
|
104,079
|
|
311,765
|
|
406,990
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(14,697)
|
|
(19,898)
|
|
(60,685)
|
|
(112,519)
|
Loss on early
extinguishment of debt
|
-
|
|
(92,215)
|
|
-
|
|
(113,961)
|
Expenses associated
with refinancing
|
(5,136)
|
|
-
|
|
(5,136)
|
|
(1,685)
|
Change in fair value
of derivative instruments
|
4,142
|
|
416
|
|
4,731
|
|
2,186
|
Other, net
|
(293)
|
|
(2,869)
|
|
(13,764)
|
|
685
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
42,626
|
|
(10,487)
|
|
236,911
|
|
181,696
|
Income tax
expense
|
19,323
|
|
(4,045)
|
|
84,816
|
|
63,738
|
Net income
|
$
23,303
|
|
$
(6,442)
|
|
$
152,095
|
|
$
117,958
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
0.23
|
|
$
(0.06)
|
|
$
1.50
|
|
$
1.22
|
Diluted earnings per
common share
|
$
0.23
|
|
$
(0.06)
|
|
$
1.48
|
|
$
1.22
|
Weighted-average
common shares, basic
|
101,829
|
|
101,518
|
|
101,712
|
|
96,465
|
Weighted-average
common shares, diluted
|
102,720
|
|
101,518
|
|
102,522
|
|
96,925
|
MRC Global
Inc.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in
thousands)
|
|
|
|
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2013
|
|
2012
|
|
|
|
|
Operating
activities
|
|
|
|
Net income
|
$
152,095
|
|
$
117,958
|
Adjustments to
reconcile net income to net cash provided by operations:
|
|
|
|
Depreciation and
amortization
|
22,338
|
|
18,585
|
Amortization of
intangibles
|
52,072
|
|
49,466
|
Equity-based
compensation expense
|
15,488
|
|
8,475
|
Deferred income tax
benefit
|
(19,823)
|
|
(20,432)
|
Amortization of debt
issuance costs
|
5,777
|
|
8,782
|
Write off of debt
issuance costs
|
2,865
|
|
1,685
|
Loss on early
extinguishment of debt
|
-
|
|
113,961
|
(Decrease) increase
in LIFO reserve
|
(20,180)
|
|
(24,140)
|
Change in fair value
of derivative instruments
|
(4,731)
|
|
(2,186)
|
Provision for
uncollectible accounts
|
(298)
|
|
2,428
|
Foreign currency
losses (gains)
|
12,913
|
|
(766)
|
Other non-cash
items
|
1,137
|
|
7,727
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
2,069
|
|
22,399
|
Inventories
|
4,479
|
|
26,674
|
Income taxes
payable
|
(7,057)
|
|
(12,593)
|
Other current
assets
|
(8,738)
|
|
(681)
|
Accounts
payable
|
117,320
|
|
(84,380)
|
Accrued expenses and
other current liabilities
|
(4,138)
|
|
7,110
|
Net cash provided by
operations
|
323,588
|
|
240,072
|
|
|
|
|
Investing
activities
|
|
|
|
Purchases of
property, plant and equipment
|
(22,068)
|
|
(26,189)
|
Proceeds from the
disposition of property, plant and equipment
|
4,583
|
|
2,272
|
Acquisitions, net of
cash acquired of $2,433, $0 and $2,036
|
(46,794)
|
|
(152,367)
|
Other investment and
notes receivable transactions
|
(5,130)
|
|
(6,755)
|
Net cash used in
investing activities
|
(69,409)
|
|
(183,039)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from the
sale of common stock
|
-
|
|
333,342
|
Payments on revolving
credit facilities
|
(2,150,188)
|
|
(2,422,136)
|
Proceeds from
revolving credit facilities
|
1,738,213
|
|
2,571,835
|
Purchases and
redemption of senior secured notes
|
-
|
|
(1,135,223)
|
Proceeds from
issuance of term loan
|
150,000
|
|
643,500
|
Payments on long-term
obligations
|
(6,859)
|
|
(33,081)
|
Debt issuance costs
paid
|
(697)
|
|
(20,038)
|
Proceeds from
exercise of stock options
|
3,285
|
|
677
|
Tax benefit on stock
options
|
1,261
|
|
629
|
Other financing
activities
|
(6)
|
|
3
|
Net cash used in
financing activities
|
(264,991)
|
|
(60,492)
|
|
|
|
|
Decrease in
cash
|
(10,812)
|
|
(3,459)
|
Effect of foreign
exchange rate on cash
|
(1,090)
|
|
(5,578)
|
Cash -- beginning of
year
|
37,090
|
|
46,127
|
Cash -- end of
year
|
$
25,188
|
|
$
37,090
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Reconciliation of
Net Income to Adjusted Net Income
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Net
Income
|
|
Per
Share
|
|
Net
Income
|
|
Per
Share*
|
Net income
|
$
23,303
|
|
$
0.23
|
|
$
152,095
|
|
$
1.48
|
Executive separation
expense (1)
|
-
|
|
-
|
|
1,295
|
|
0.01
|
Insurance charge
(2)
|
-
|
|
-
|
|
1,291
|
|
0.01
|
Expenses associated
with refinancing (3)
|
3,338
|
|
0.03
|
|
3,338
|
|
0.03
|
Equity-based
compensation acceleration (4)
|
3,403
|
|
0.03
|
|
3,403
|
|
0.03
|
Deferred tax asset
adjustment (5)
|
3,000
|
|
0.03
|
|
3,000
|
|
0.03
|
Adjusted Net
Income
|
$
33,044
|
|
$
0.32
|
|
$
164,422
|
|
$
1.60
|
|
|
|
|
|
|
|
|
|
December 31,
2012
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Net
Income
|
|
Per
Share
|
|
Net
Income
|
|
Per
Share
|
Net income
|
$
(6,442)
|
|
$
(0.06)
|
|
$
117,958
|
|
$
1.22
|
Loss on early
extinguishment of debt (6)
|
59,940
|
|
0.58
|
|
74,075
|
|
0.76
|
Write off of debt
issuance costs (7)
|
-
|
|
-
|
|
1,095
|
|
0.01
|
Pension settlement
(8)
|
2,873
|
|
0.03
|
|
2,873
|
|
0.03
|
Adjusted Net
Income
|
$
56,371
|
|
$
0.55
|
|
$
196,001
|
|
$
2.02
|
Note to
above:
|
(1)
|
Cash and equity-based
compensation charges associated with the separation of an executive
officer recorded in SG&A.
|
|
|
(2)
|
Charge resulting from
the bankruptcy of a workers' compensation insurance carrier, which
required the company to assume the obligation for existing workers'
compensation claims, recorded in other expenses.
|
|
|
(3)
|
Expenses related to
the re-pricing of the company's senior secured Term Loan B in
November 2013. Write off of debt issuance costs associated with the
refinancing of our credit facilities in 2012.
|
|
|
(4)
|
Accelerated
recognition of equity-based compensation expense as a result of the
November 2013 secondary common stock offering in which our private
equity sponsor sold its remaining interest in MRC Global, which was
recorded in SG&A.
|
|
|
(5)
|
Net adjustment to
increase the valuation allowance on deferred tax assets for certain
foreign jurisdictions.
|
|
|
(6)
|
Loss on the
extinguishment of debt associated with the purchase and redemption
of previously outstanding senior secured notes.
|
|
|
(7)
|
Charges related to
termination of a defined benefit pension plan in the Netherlands
recorded in other expenses.
|
|
|
* Column does not
foot due to rounding.
|
|
The company presents
adjusted net income and adjusted net income per share because the
company believes these measures are useful indicators of what the
company's net income and net income per share would have been
without the impact of these events being included and believes that
many analysts and investors will want to know this information when
comparing the company's results against the results of other
companies. Adjusted net income and adjusted net income per share,
however, does not represent and should not be considered as an
alternative to net income and net income per share calculated and
presented in accordance with GAAP. Because net income and net
income per share does not account for certain expenses, its utility
as a measure of our performance has material limitations. Because
of these limitations, management does not view adjusted net income
and net income per share in isolation or as a primary performance
measure and also uses other measures, such as net income and net
income, to measure performance.
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Calculation of
Adjusted EBITDA
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Net income
|
$
23.3
|
|
$
(6.4)
|
|
$
152.1
|
|
$
118.0
|
Income tax
expense
|
19.3
|
|
(4.0)
|
|
84.8
|
|
63.7
|
Interest
expense
|
14.7
|
|
19.9
|
|
60.7
|
|
112.5
|
Loss on early
extinguishment of debt
|
-
|
|
92.2
|
|
-
|
|
114.0
|
Expenses associated
with refinancing
|
5.1
|
|
-
|
|
5.1
|
|
1.7
|
Depreciation and
amortization
|
5.6
|
|
5.4
|
|
22.3
|
|
18.6
|
Amortization of
intangibles
|
12.9
|
|
12.3
|
|
52.1
|
|
49.5
|
Increase (decrease)
in LIFO reserve
|
1.1
|
|
(27.2)
|
|
(20.2)
|
|
(24.1)
|
Change in fair value
of derivative instruments
|
(4.1)
|
|
(0.4)
|
|
(4.7)
|
|
(2.2)
|
Equity-based
compensation expense
|
6.9
|
|
2.6
|
|
15.5
|
|
8.5
|
Executive separation
expense (cash portion)
|
-
|
|
-
|
|
0.8
|
|
-
|
Insurance
charge
|
-
|
|
-
|
|
2.0
|
|
-
|
Pension
settlement
|
-
|
|
4.4
|
|
-
|
|
4.4
|
Foreign currency
losses (gains)
|
0.9
|
|
(0.3)
|
|
12.9
|
|
(0.8)
|
Other
expense
|
1.5
|
|
0.7
|
|
3.0
|
|
(0.6)
|
Adjusted
EBITDA
|
$
87.2
|
|
$
99.2
|
|
$
386.4
|
|
$
463.2
|
|
|
|
|
|
|
|
|
Note to
above:
|
MRC Global defines
Adjusted EBITDA as net income plus interest, income taxes,
depreciation and amortization, amortization of intangibles, and
certain other expenses (such as gain/losses on the early
extinguishment of debt, changes in the fair value of derivative
instruments and goodwill impairment) and plus or minus the impact
of its LIFO inventory costing methodology. The company
presents Adjusted EBITDA because the company believes Adjusted
EBITDA is a useful indicator of the company's operating
performance. Among other things, Adjusted EBITDA measures the
company's operating performance without regard to certain
non-recurring, non-cash or transaction-related expenses.
Adjusted EBITDA, however, does not represent and should not be
considered as an alternative to net income, cash flow from
operations or any other measure of financial performance calculated
and presented in accordance with U.S. generally accepted accounting
principles (GAAP). Because Adjusted EBITDA does not account for
certain expenses, its utility as a measure of the company's
operating performance has material limitations. Because of these
limitations, the company does not view Adjusted EBITDA in isolation
or as a primary performance measure and also uses other measures,
such as net income and sales, to measure operating
performance. See the company's Annual Report filed on Form
10-K for a more thorough discussion of the use of Adjusted
EBITDA.
|
SOURCE MRC Global Inc.