HOUSTON, April 27, 2021 /PRNewswire/ -- MRC Global
Inc. (NYSE: MRC), the largest global distributor, based on sales,
of pipe, valves and fittings and related infrastructure products
and services to the energy industry, today announced
first quarter 2021 results.
The company's sales were $609 million for the
first quarter of 2021, which was 5% higher than the
fourth quarter of 2020 and 23% lower than the
first quarter of 2020. Sequentially, all sectors experienced
an increase in sales, except for gas utilities, which was
lower due to an unseasonably higher than average fourth
quarter. As compared to the first quarter of 2020, the
gas utility sector sales were higher due to market share gains, and
all other sectors and segments declined as the impact of the
COVID-19 pandemic reduced customer spending.
Net loss attributable to common stockholders for the
first quarter of 2021 was ($9) million, or ($0.11) per diluted share, as compared to the
first quarter of 2020 net income of $3 million, or
$0.04 per diluted
share.
Rob Saltiel, MRC Global's
president and chief executive officer stated, "I am pleased with
the solid first quarter performance that our team
delivered. Despite a slow start to the quarter resulting from
customer budget resets and extreme weather conditions, we were able
to achieve a 5% sequential revenue increase, a stronger bottom
line and continued cash flow generation, reflecting an improved
business environment.
"In my first few weeks at MRC Global, I have been very impressed
with the caliber of our employees and the long-standing
relationships we enjoy with our customers and suppliers. These
strengths, along with our commitment to operational excellence and
superior customer service, have allowed our company to become the
leading PVF distributor and will support our growth ambitions in
the years ahead," Mr. Saltiel added.
MRC Global's first quarter of 2021 gross profit
was $103 million, or 16.9% of sales as compared to the
first quarter of 2020 gross profit of $148 million,
or 18.6% of sales. Gross profit for the first quarter of
2021 includes $4 million of expense in cost of sales
relating to the use of the last-in, first out (LIFO) method of
inventory cost accounting as compared to the
first quarter of 2020, which includes income of
$3 million relating to LIFO inventory cost accounting.
Adjusted gross profit, which excludes the impact of LIFO, for the
first quarter of 2021 was $118 million or
19.4% of revenue.
Selling, general and administrative (SG&A) expenses were
$100 million, or 16.4% of sales, for the
first quarter of 2021 compared to $126 million,
or 15.9% of sales, for the same period in 2020. Adjusted
SG&A of $98 million for the first
quarter of 2021 excludes $2 million of employee separation
expense.
Income tax expense was $0 for the first quarter
of 2021 as compared to $5 million for the
first quarter of 2020. In the first quarter of 2021,
the 0% effective tax rate is a result of tax expense on foreign
income offsetting U.S. tax benefits on pre-tax losses. The
company's rates generally differ from the U.S. federal statutory
rate of 21% as a result of state income taxes and differing foreign
income tax rates.
Please refer to the reconciliation of non-GAAP measures
(adjusted gross profit, adjusted SG&A, adjusted EBITDA) to
GAAP measures (gross profit, SG&A, net income) in this
release.
Sales by Geographic Segment
Sales for the first quarter of 2021 as compared to
first quarter of 2020 were adversely impacted by the
COVID-19 pandemic and the related mitigation measures, which
negatively affected demand.
U.S. sales in the first quarter of 2021 were
$484 million, down $154 million, or 24%, from the same
quarter in 2020. All sectors were down due to reduced activity
levels related to the pandemic and related restrictions, except for
gas utilities. Gas utilities' sector sales were
up $10 million, or 5%, primarily due to market share
gains and customers increasing activity levels in preparation
for the construction season. Upstream production sector sales
decreased by $71 million, or 51%, primarily due to reduced
spending by customers and a 47% reduction in well
completions. Downstream and industrial sector sales declined
$52 million, or 27%, due to delayed or reduced
maintenance spending from lower demand related to the pandemic.
Midstream pipeline sector sales declined $41 million, or 37%,
due to lower production levels and associated lower demand for
infrastructure as well as the timing of project activity.
Sequentially, midstream pipeline, downstream and industrial and
upstream production sectors increased as market conditions
improved.
Canada sales in the first quarter of 2021 were
$32 million, down $18 million, or 36%, from the same
quarter in 2020 driven primarily by the upstream production
sector, which was adversely affected by the pandemic. The
strengthening of the Canadian dollar relative to the U.S.
dollar favorably impacted sales by $2 million, or 4%.
Sequentially, Canada sales improved primarily due to the
upstream production sector as capital spending increased in
response to higher commodity prices.
International sales in the first quarter of 2021 were
$93 million, down $13 million, or 12%, from the same
period in 2020 driven primarily by reduced spending due to
lower activity levels associated with reduced customer budgets.
Stronger foreign currencies relative to the U.S. dollar favorably
impacted sales by $8 million or 8%.
Sales by End-Market Sector
Gas utilities sector sales in the first quarter of
2021 were $210 million, or 34% of total sales, an
increase of $8 million, or 4%, from the
first quarter of 2020 driven by the U.S.
segment.
Downstream and industrial sector sales in the first quarter
of 2021 were $194 million, or 32% of total sales,
a decrease of $57 million, or 23%, from the
first quarter of 2020. The decrease in the downstream and
industrial sector sales was across all segments led by the
U.S. segment. Sequentially, downstream and industrial sector
sales were up 11% as customers completed repair, maintenance,
and turnaround work initially postponed in 2020 as well
as recovery work related to inclement weather
in February.
Upstream production sector sales in the first quarter of
2021 were $127 million, or 21% of total sales, a
decline of $95 million, or 43%, from the
first quarter of 2020. The decrease in upstream production
sales was across all segments led by the U.S. segment.
Sequentially, the upstream production sector sales increased
slightly, driven by North America
as customers increased spending for completions and facility
construction.
Midstream pipeline sector sales in the first quarter of
2021 were $78 million, or 13% of total sales, a
reduction of $41 million, or 34%, from the first quarter
of 2020 driven by the U.S. segment. Sequentially, midstream
pipeline sales improved 26% as customers reallocated resources to
smaller pipeline projects and some increased valve purchases.
Balance Sheet
Cash provided by operations was $24 million in the
first quarter of 2021. The cash balance was
$132 million, long-term debt was $382 million, and net
debt was $250 million as of March 31, 2021. As of
March 31, 2021, availability under
the company's asset-based lending facility
was $395 million and available liquidity
was $527 million. The company intends to make an excess
cash flow payment of $105 million in
April, in accordance with the debt agreement. Available
liquidity, pro forma for the excess cash payment, will
be $422 million, which is sufficient to support
the business and capital needs of the company.
Please refer to the reconciliation of non-GAAP measures (Net
Debt) to GAAP measures (Long-term Debt) in this release.
Conference Call
The company will hold a conference call to discuss its
first quarter 2021 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on April 28, 2021.
To participate in the call, please dial 412-902-0003 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 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 May
12, 2021 and can be accessed by dialing 201-612-7415
and using pass code 13717293#. Also, an archive of the webcast will
be available shortly after the call at www.mrcglobal.com for 90
days.
About MRC Global Inc.
MRC Global is the largest distributor of pipe, valves and
fittings (PVF) and other infrastructure products and services to
the energy industry, based on sales. Through approximately
230 service locations worldwide, approximately 2,600 employees
and with 100 years of history, MRC Global provides
innovative supply chain solutions and technical product expertise
to customers globally across diversified end-markets including the
upstream production, midstream pipeline, gas utility and downstream
and industrial. MRC Global manages a complex network of over
200,000 SKUs and 10,000 suppliers simplifying the supply chain for
its over 12,000 customers. With a focus on technical products,
value-added services, a global network of valve and engineering
centers and an unmatched quality assurance program, MRC
Global is the trusted PVF expert. Find out more
at www.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," "intend," "believes," "on-track," "well
positioned," "strong position," "looking forward," "guidance,"
"plans," "can," "target," "targeted" 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, achieving cost savings and cash flow,
debt reduction, liquidity, 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 MRC Global's
control, including the factors described in the company's SEC
filings that may cause the company's 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 prices; decreases in oil and
natural gas industry expenditure levels, which may result from
decreased oil and natural gas prices or other factors; 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 Global'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 success of the company's acquisition
strategies; the potential adverse effects associated with
integrating acquisitions into the company's business and whether
these acquisitions will yield their intended benefits; the
company's significant indebtedness; the dependence on the
company's subsidiaries for cash to meet its 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 or imposed; significant
substitution of alternative fuels for oil and gas; 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; adverse health
events such as a pandemic; interruption in the proper functioning
of the company's information systems and the occurrence of cyber
security incidents; loss of third-party transportation
providers; potential inability to obtain necessary
capital; risks related to adverse weather events or natural
disasters; impairment of the company's goodwill or other
intangible assets; 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 U.S.
Foreign Corrupt Practices Act and the U.K. Bribery Act and other
economic sanction programs; risks associated with international
stability and geopolitical developments; risks relating to ongoing
evaluations of internal controls required by Section 404 of the
Sarbanes-Oxley Act; risks related to the company's intention not to
pay dividends; and risks arising from compliance with and changes
in law in the countries in which we operate, including (among
others) changes in tax law, tax rates and interpretation in tax
laws.
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. MRC Global's filings and other
important information are also available on the Investor Relations
page of the company's 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 Broughton
Investor Relations
MRC Global Inc.
Monica.Broughton@mrcglobal.com
832-308-2847
MRC Global
Inc.
Condensed
Consolidated Balance Sheets (Unaudited)
(in millions,
except shares)
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
132
|
|
|
$
|
119
|
|
Accounts receivable,
net
|
|
|
369
|
|
|
|
319
|
|
Inventories,
net
|
|
|
504
|
|
|
|
509
|
|
Other current
assets
|
|
|
24
|
|
|
|
19
|
|
Total current
assets
|
|
|
1,029
|
|
|
|
966
|
|
|
|
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
|
|
|
Operating lease
assets
|
|
|
195
|
|
|
|
200
|
|
Property, plant and
equipment, net
|
|
|
98
|
|
|
|
103
|
|
Other
assets
|
|
|
19
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets:
|
|
|
|
|
|
|
|
|
Goodwill,
net
|
|
|
264
|
|
|
|
264
|
|
Other intangible
assets, net
|
|
|
222
|
|
|
|
229
|
|
|
|
$
|
1,827
|
|
|
$
|
1,781
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
|
338
|
|
|
$
|
264
|
|
Accrued expenses and
other current liabilities
|
|
|
85
|
|
|
|
94
|
|
Operating lease
liabilities
|
|
|
35
|
|
|
|
37
|
|
Current portion of
long-term debt
|
|
|
105
|
|
|
|
4
|
|
Total current
liabilities
|
|
|
563
|
|
|
|
399
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
|
277
|
|
|
|
379
|
|
Operating lease
liabilities
|
|
|
181
|
|
|
|
187
|
|
Deferred income
taxes
|
|
|
71
|
|
|
|
70
|
|
Other
liabilities
|
|
|
36
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.5% Series A
Convertible Perpetual Preferred Stock, $0.01 par value; authorized
363,000 shares; 363,000 shares issued and outstanding
|
|
|
355
|
|
|
|
355
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Common stock, $0.01
par value per share: 500 million shares authorized, 106,721,847 and
106,315,296 issued, respectively
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in
capital
|
|
|
1,742
|
|
|
|
1,739
|
|
Retained
deficit
|
|
|
(790)
|
|
|
|
(781)
|
|
Less: Treasury stock
at cost: 24,216,330 shares
|
|
|
(375)
|
|
|
|
(375)
|
|
Accumulated other
comprehensive loss
|
|
|
(234)
|
|
|
|
(234)
|
|
|
|
|
344
|
|
|
|
350
|
|
|
|
$
|
1,827
|
|
|
$
|
1,781
|
|
MRC Global
Inc.
Condensed
Consolidated Statements of Operations (Unaudited)
(in millions,
except per share amounts)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
609
|
|
|
$
|
794
|
|
Cost of
sales
|
|
|
506
|
|
|
|
646
|
|
Gross
profit
|
|
|
103
|
|
|
|
148
|
|
Selling, general and
administrative expenses
|
|
|
100
|
|
|
|
126
|
|
Operating
income
|
|
|
3
|
|
|
|
22
|
|
Other
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(6)
|
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
|
(3)
|
|
|
|
14
|
|
Income tax
expense
|
|
|
-
|
|
|
|
5
|
|
Net (loss)
income
|
|
|
(3)
|
|
|
|
9
|
|
Series A preferred
stock dividends
|
|
|
6
|
|
|
|
6
|
|
Net (loss) income
attributable to common stockholders
|
|
$
|
(9)
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) income
per common share
|
|
$
|
(0.11)
|
|
|
$
|
0.04
|
|
Diluted (loss) income
per common share
|
|
$
|
(0.11)
|
|
|
$
|
0.04
|
|
Weighted-average
common shares, basic
|
|
|
82.3
|
|
|
|
81.7
|
|
Weighted-average
common shares, diluted
|
|
|
82.3
|
|
|
|
82.4
|
|
MRC Global
Inc.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(in
millions)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(3)
|
|
|
$
|
9
|
|
Adjustments to
reconcile net (loss) income to net cash provided by
operations:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5
|
|
|
|
5
|
|
Amortization of
intangibles
|
|
|
6
|
|
|
|
7
|
|
Equity-based
compensation expense
|
|
|
5
|
|
|
|
2
|
|
Deferred income tax
benefit
|
|
|
-
|
|
|
|
1
|
|
Increase (decrease) in
LIFO reserve
|
|
|
4
|
|
|
|
(3)
|
|
Provision for credit
losses
|
|
|
-
|
|
|
|
6
|
|
Other
|
|
|
-
|
|
|
|
1
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(50)
|
|
|
|
(33)
|
|
Inventories
|
|
|
-
|
|
|
|
(4)
|
|
Other current
assets
|
|
|
(6)
|
|
|
|
2
|
|
Accounts
payable
|
|
|
75
|
|
|
|
49
|
|
Accrued expenses and
other current liabilities
|
|
|
(12)
|
|
|
|
(5)
|
|
Net cash provided by
operations
|
|
|
24
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(2)
|
|
|
|
(2)
|
|
Other investing
activities
|
|
|
1
|
|
|
|
-
|
|
Net cash used in
investing activities
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Payments on revolving
credit facilities
|
|
|
(2)
|
|
|
|
(228)
|
|
Proceeds from
revolving credit facilities
|
|
|
2
|
|
|
|
205
|
|
Payments on long-term
obligations
|
|
|
(1)
|
|
|
|
(4)
|
|
Dividends paid on
preferred stock
|
|
|
(6)
|
|
|
|
(6)
|
|
Repurchases of shares
to satisfy tax withholdings
|
|
|
(2)
|
|
|
|
(3)
|
|
Net cash used in
financing activities
|
|
|
(9)
|
|
|
|
(36)
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash
|
|
|
14
|
|
|
|
(1)
|
|
Effect of foreign
exchange rate on cash
|
|
|
(1)
|
|
|
|
(3)
|
|
Cash -- beginning of
period
|
|
|
119
|
|
|
|
32
|
|
Cash -- end of
period
|
|
$
|
132
|
|
|
$
|
28
|
|
MRC Global
Inc.
Supplemental Sales
Information (Unaudited)
(in
millions)
|
|
Disaggregated
Sales by Segment and Sector
|
|
Three Months
Ended
|
March
31,
|
|
|
|
U.S.
|
|
|
Canada
|
|
|
International
|
|
|
Total
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
utilities
|
|
$
|
209
|
|
|
$
|
1
|
|
|
$
|
-
|
|
|
$
|
210
|
|
Downstream &
industrial
|
|
|
138
|
|
|
|
4
|
|
|
|
52
|
|
|
|
194
|
|
Upstream
production
|
|
|
68
|
|
|
|
23
|
|
|
|
36
|
|
|
|
127
|
|
Midstream
pipeline
|
|
|
69
|
|
|
|
4
|
|
|
|
5
|
|
|
|
78
|
|
|
|
$
|
484
|
|
|
$
|
32
|
|
|
$
|
93
|
|
|
$
|
609
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
utilities
|
|
$
|
199
|
|
|
$
|
3
|
|
|
$
|
-
|
|
|
$
|
202
|
|
Downstream &
industrial
|
|
|
190
|
|
|
|
6
|
|
|
|
55
|
|
|
|
251
|
|
Upstream
production
|
|
|
139
|
|
|
|
37
|
|
|
|
46
|
|
|
|
222
|
|
Midstream
pipeline
|
|
|
110
|
|
|
|
4
|
|
|
|
5
|
|
|
|
119
|
|
|
|
$
|
638
|
|
|
$
|
50
|
|
|
$
|
106
|
|
|
$
|
794
|
|
MRC Global
Inc.
Supplemental Sales
Information (Unaudited)
(in
millions)
|
|
Sales by Product
Line
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
Type
|
|
2021
|
|
|
2020
|
|
Line pipe
|
|
$
|
65
|
|
|
$
|
100
|
|
Carbon fittings and
flanges
|
|
|
85
|
|
|
|
115
|
|
Total carbon pipe,
fittings and flanges
|
|
|
150
|
|
|
|
215
|
|
Valves, automation,
measurement and instrumentation
|
|
|
241
|
|
|
|
323
|
|
Gas
products
|
|
|
134
|
|
|
|
134
|
|
Stainless steel and
alloy pipe and fittings
|
|
|
29
|
|
|
|
37
|
|
General
products
|
|
|
55
|
|
|
|
85
|
|
|
|
$
|
609
|
|
|
$
|
794
|
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Reconciliation of
Gross Profit to Adjusted Gross Profit (a non-GAAP
measure)
(in
millions)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
Percentage
|
|
|
March
31,
|
|
|
Percentage
|
|
|
|
2021
|
|
|
of
Revenue
|
|
|
2020
|
|
|
of
Revenue*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as
reported
|
|
$
|
103
|
|
|
|
16.9
|
%
|
|
$
|
148
|
|
|
|
18.6
|
%
|
Depreciation and
amortization
|
|
|
5
|
|
|
|
0.8
|
%
|
|
|
5
|
|
|
|
0.6
|
%
|
Amortization of
intangibles
|
|
|
6
|
|
|
|
1.0
|
%
|
|
|
7
|
|
|
|
0.9
|
%
|
Increase (decrease)
in LIFO reserve
|
|
|
4
|
|
|
|
0.7
|
%
|
|
|
(3)
|
|
|
|
(0.4)
|
%
|
Adjusted Gross
Profit
|
|
$
|
118
|
|
|
|
19.4
|
%
|
|
$
|
157
|
|
|
|
19.8
|
%
|
|
Notes to
above:
|
* Does not foot due
to rounding
|
|
The company defines
Adjusted Gross Profit as sales, less cost of sales, plus
depreciation and amortization, plus amortization of intangibles,
plus inventory-related charges and plus or minus the impact of
its LIFO inventory costing methodology. The company presents
Adjusted Gross Profit because the company believes it is a useful
indicator of the company's operating performance without regard to
items, such as amortization of intangibles, that can vary
substantially from company to company depending upon the nature and
extent of acquisitions of which they have been involved. Similarly,
the impact of the LIFO inventory costing method can cause results
to vary substantially from company to company depending upon
whether they elect to utilize LIFO and depending upon which method
they may elect. The company uses Adjusted Gross Profit as a key
performance indicator in managing its business. The company
believes that gross profit is the financial measure calculated and
presented in accordance with U.S. generally accepted accounting
principles that is most directly comparable to Adjusted Gross
Profit.
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Reconciliation of
Selling, General and Administrative Expenses to
Adjusted Selling,
General and Administrative Expenses (a non-GAAP
measure)
(in
millions)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
$
|
100
|
|
|
$
|
126
|
|
Employee separation
(1)
|
|
|
(2)
|
|
|
|
-
|
|
Adjusted Selling,
general and administrative expenses
|
|
$
|
98
|
|
|
$
|
126
|
|
|
Notes to
above:
|
(1)
Charges (pre-tax) related to employee
separation of which $1 million is non-cash share-based
compensation.
|
|
|
The company defines
Adjusted Selling, general and administrative (SG&A)
expenses as SG&A, less severance and restructuring
expenses, employee separation costs, facility closures plus
the recovery of supplier bad debt. The company presents Adjusted
SG&A because the company believes it is a useful indicator of
the company's operating performance without regard to items that
can vary substantially from company to company. The company
presents Adjusted SG&A because the company believes Adjusted
SG&A is a useful indicator of the company's operating
performance. Among other things, Adjusted SG&A measures
the company's operating performance without regard to certain
non-recurring, non-cash or transaction-related expenses. The
company uses Adjusted SG&A as a key performance indicator
in managing its business. The company believes that SG&A is the
financial measure calculated and presented in accordance with U.S.
generally accepted accounting principles that is most directly
comparable to Adjusted SG&A.
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Reconciliation of
Net Income to Adjusted EBITDA (a non-GAAP measure)
(in
millions)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(3)
|
|
|
$
|
9
|
|
Income tax
expense
|
|
|
-
|
|
|
|
5
|
|
Interest
expense
|
|
|
6
|
|
|
|
8
|
|
Depreciation and
amortization
|
|
|
5
|
|
|
|
5
|
|
Amortization of
intangibles
|
|
|
6
|
|
|
|
7
|
|
Employee separation
(1)
|
|
|
1
|
|
|
|
-
|
|
Increase (decrease)
in LIFO reserve
|
|
|
4
|
|
|
|
(3)
|
|
Equity-based
compensation expense (2)
|
|
|
5
|
|
|
|
2
|
|
Gain on early
extinguishment of debt (3)
|
|
|
-
|
|
|
|
(1)
|
|
Foreign currency
losses
|
|
|
-
|
|
|
|
2
|
|
Adjusted
EBITDA
|
|
$
|
24
|
|
|
$
|
34
|
|
|
Notes to
above:
|
(1)
Charge (pre-tax) recorded in
SG&A.
|
(2)
Charges (pre-tax) recorded in SG&A.
$1 million relates to employee separation.
|
(3)
Gain (pre-tax) related to the purchase of
the Term Loan recorded in Other, net.
|
|
|
The company defines
Adjusted EBITDA as net income plus interest, income taxes,
depreciation and amortization, amortization of intangibles, and
certain other expenses, including non-cash expenses, (such as
equity-based compensation, severance and restructuring, changes in
the fair value of derivative instruments and asset impairments,
including intangible assets and inventory) 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 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.
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Reconciliation of
Net Income Attributable to Common Stockholders to
Adjusted Net
Income Attributable to Common Stockholders (a non-GAAP
measure)
(in millions,
except per share amounts)
|
|
|
|
Three Months Ended
March 31, 2021
|
|
|
|
Amount
|
|
|
Per
Share
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders
|
|
$
|
(9)
|
|
|
$
|
(0.11)
|
|
Increase in LIFO
reserve, net of tax
|
|
|
3
|
|
|
|
0.04
|
|
Adjusted net loss
attributable to common stockholders
|
|
$
|
(6)
|
|
|
$
|
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2020
|
|
|
|
Amount
|
|
|
Per
Share
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
|
3
|
|
|
$
|
0.04
|
|
Decrease in LIFO
reserve, net of tax
|
|
|
(2)
|
|
|
|
(0.03)
|
|
Adjusted net income
attributable to common stockholders
|
|
$
|
1
|
|
|
$
|
0.01
|
|
|
Notes to
above:
|
The company defines
Adjusted Net Income Attributable to Common Stockholders (a non-GAAP
measure) as Net Income Attributable to Common Stockholders less
after-tax goodwill and intangible impairment, inventory-related
charges, facility closures, severance and restructuring, plus or
minus the after-tax impact of its LIFO inventory costing
methodology. The company presents Adjusted Net Income Attributable
to Common Stockholders and related per share amounts because
the company believes it provides useful comparisons of the
company's operating results to other companies, including those
companies with whom we compete in the distribution of pipe, valves
and fittings to the energy industry, without regard to the
irregular variations from certain restructuring events not
indicative of the on-going business. Those items include goodwill
and intangible asset impairments, inventory-related charges,
facility closures, severance and restructuring as well as the LIFO
inventory costing methodology. The impact of the LIFO inventory
costing methodology can cause results to vary substantially from
company to company depending upon whether they elect to utilize
LIFO and depending upon which method they may elect. The
company believes that Net Income Attributable to Common
Stockholders is the financial measure calculated and presented in
accordance with U.S. generally accepted accounting principles that
is most directly compared to Adjusted Net Income Attributable to
Common Stockholders.
|
MRC Global
Inc.
Supplemental
Information (Unaudited)
Reconciliation of
Long-term Debt to Net Debt (a non-GAAP measure) and the
Leverage Ratio Calculation
(in
millions)
|
|
|
|
March
31,
|
|
|
|
2021
|
|
|
|
|
|
|
Long-term debt,
net
|
|
$
|
277
|
|
Plus: current portion
of long-term debt
|
|
|
105
|
|
Long-term
debt
|
|
|
382
|
|
Less: cash
|
|
|
132
|
|
Net Debt
|
|
$
|
250
|
|
|
|
|
|
|
Net Debt
|
|
$
|
250
|
|
Trailing twelve
months adjusted EBITDA
|
|
|
87
|
|
Leverage
ratio
|
|
|
2.9
|
|
|
Notes to
above:
|
Net Debt and related
leverage metrics may be considered non-GAAP measures. We define Net
Debt as total long-term debt, including current portion, minus
cash. We define our leverage ratio as Net Debt divided by trailing
twelve months Adjusted EBITDA. We believe Net Debt is an indicator
of the extent to which the company's outstanding debt obligations
could be satisfied by cash on hand and a useful metric for
investors to evaluate the company's leverage position. We believe
the leverage ratio is a commonly used metric that management and
investors use to assess the borrowing capacity of the company. We
believe total long-term debt (including the current portion) is the
financial measure calculated and presented in accordance with U.S.
generally accepted accounting principles that is most directly
comparable to Net Debt.
|
View original
content:http://www.prnewswire.com/news-releases/mrc-global-announces-first-quarter-2021-results-301278268.html
SOURCE MRC Global Inc.