HOUSTON--(BUSINESS WIRE)--DNOW Inc. (NYSE: DNOW) announced results for the second quarter ended June 30, 2024.
Second Quarter 2024 Highlights
- Revenue was $633 million for the second quarter of 2024
- Net income attributable to DNOW Inc. was $24 million, or $0.21 per diluted share, for the second quarter of 2024
- Non-GAAP net income attributable to DNOW Inc. excluding other costs was $28 million, or $0.25 per diluted share, for the second quarter of 2024
- EBITDA excluding other costs was $50 million or 7.9% of revenue for the second quarter of 2024
- Cash provided by operating activities was $21 million for the second quarter of 2024 and $211 million for the trailing four quarters ending June 30, 2024
- Repurchased $10 million of common stock in the second quarter of 2024
- Cash and cash equivalents was $197 million and long-term debt was zero at June 30, 2024 with total liquidity of approximately $579 million
David Cherechinsky, President and CEO of DNOW, added, "We are delighted with the growth we achieved during the second quarter, in a challenging market, where we delivered $50 million in EBITDA and produced $18 million in free cash flow, bringing our free cash flow haul to $201 million over the past four quarters. We opportunistically repurchased $10 million in shares in the quarter and are on a path to complete the $80 million share repurchase program this year.
We continue to execute on our strategy to bolster DNOW's capabilities and expand our core market, while further penetrating into midstream, energy evolution and adjacent industrial markets, providing additional opportunities for growth. The future remains bright thanks to our dedicated, skilled and passionate employees who work tirelessly and successfully to help solve our customers' complex operational and supply chain challenges.
With $197 million in cash, no debt and $579 million of total liquidity, we continue to pursue complementary, margin accretive acquisitions where the combination would maximize shareholder value and fuel future DNOW success."
Prior to the earnings conference call a presentation titled "DNOW Second Quarter 2024 Key Takeaways" will be available on the Company's Investor Relations website.
About DNOW
DNOW is a worldwide supplier of energy and industrial products and packaged, engineered process and production equipment with a legacy of over 160 years. Headquartered in Houston, Texas, with approximately 2,600 employees and a network of locations worldwide, we offer a broad set of supply chain solutions combined with a suite of digital offerings branded as DigitalNOW® that provide customers world-class technology for digital commerce, data and information management. Our locations provide products and solutions to exploration and production, midstream transmission and storage companies, refineries, chemical companies, utilities, mining, municipal water, manufacturers, engineering and construction as well as companies operating in the decarbonization, energy transition and renewables end markets.
Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by DNOW Inc. with the U.S. Securities and Exchange Commission, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.
DNOW INC. CONSOLIDATED BALANCE SHEETS (In millions, except share data) | |||||||
| June 30, | December 31, | ||||||
2024 | 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 197 | $ | 299 | |||
| Receivables, net | 403 | 384 | |||||
| Inventories, net | 399 | 366 | |||||
| Prepaid and other current assets | 24 | 19 | |||||
| Total current assets | 1,023 | 1,068 | |||||
| Property, plant and equipment, net | 139 | 131 | |||||
| Deferred income taxes | 105 | 118 | |||||
| Goodwill | 192 | 139 | |||||
| Intangibles, net | 57 | 28 | |||||
| Other assets | 47 | 45 | |||||
| Total assets | $ | 1,563 | $ | 1,529 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 278 | $ | 288 | |||
| Accrued liabilities | 123 | 120 | |||||
| Other current liabilities | 11 | 10 | |||||
| Total current liabilities | 412 | 418 | |||||
| Long-term operating lease liabilities | 32 | 30 | |||||
| Other long-term liabilities | 20 | 18 | |||||
| Total liabilities | 464 | 466 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity: | |||||||
| Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding | - | - | |||||
| Common stock - par value $0.01; 330 million shares authorized; 106,549,496 and 106,257,565 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 1 | 1 | |||||
| Additional paid-in capital | 2,028 | 2,032 | |||||
| Accumulated deficit | (783 | ) | (828 | ) | |||
| Accumulated other comprehensive loss | (151 | ) | (145 | ) | |||
| DNOW Inc. stockholders' equity | 1,095 | 1,060 | |||||
| Noncontrolling interest | 4 | 3 | |||||
| Total stockholders' equity | 1,099 | 1,063 | |||||
| Total liabilities and stockholders' equity | $ | 1,563 | $ | 1,529 | |||
DNOW INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In millions, except per share data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 633 | $ | 594 | $ | 563 | $ | 1,196 | $ | 1,178 | ||||||
| Operating expenses: | ||||||||||||||||
| Cost of products | 495 | 460 | 434 | 929 | 907 | |||||||||||
| Warehousing, selling and administrative | 105 | 98 | 101 | 206 | 200 | |||||||||||
| Operating profit | 33 | 36 | 28 | 61 | 71 | |||||||||||
| Other income (expense) | - | (1 | ) | 1 | 1 | (1 | ) | |||||||||
| Income before income taxes | 33 | 35 | 29 | 62 | 70 | |||||||||||
| Income tax provision | 8 | 1 | 8 | 16 | 4 | |||||||||||
| Net income | 25 | 34 | 21 | 46 | 66 | |||||||||||
| Net income attributable to noncontrolling interest | 1 | - | - | 1 | 1 | |||||||||||
| Net income attributable to DNOW Inc. | $ | 24 | $ | 34 | $ | 21 | $ | 45 | $ | 65 | ||||||
| Earnings per share attributable to DNOW Inc. stockholders: | ||||||||||||||||
| Basic | $ | 0.21 | $ | 0.31 | $ | 0.20 | $ | 0.41 | $ | 0.59 | ||||||
| Diluted | $ | 0.21 | $ | 0.31 | $ | 0.19 | $ | 0.41 | $ | 0.59 | ||||||
| Weighted-average common shares outstanding, basic | 107 | 107 | 106 | 107 | 108 | |||||||||||
| Weighted-average common shares outstanding, diluted | 108 | 108 | 107 | 107 | 109 | |||||||||||
DNOW INC. SUPPLEMENTAL INFORMATION | ||||||||||||||
BUSINESS SEGMENTS (UNAUDITED) (In millions) | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||
2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||
| Revenue: | ||||||||||||||
| United States | $ | 512 | $ | 456 | $ | 435 | $ | 947 | $ | 883 | ||||
| Canada | 56 | 66 | 66 | 122 | 149 | |||||||||
| International | 65 | 72 | 62 | 127 | 146 | |||||||||
| Total revenue | $ | 633 | $ | 594 | $ | 563 | $ | 1,196 | $ | 1,178 | ||||
DNOW INC. SUPPLEMENTAL INFORMATION (CONTINUED) U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS NET INCOME ATTRIBUTABLE TO DNOW INC. TO NON-GAAP EBITDA EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) (In millions) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||
2024 | 2023 | 2024 | 2024 | 2023 | |||||||||||||||
| GAAP net income attributable to DNOW Inc. (1) | $ | 24 | $ | 34 | $ | 21 | $ | 45 | $ | 65 | |||||||||
| Net income attributable to noncontrolling interest (2) | 1 | - | - | 1 | 1 | ||||||||||||||
| Interest expense (income), net | (1 | ) | - | (2 | ) | (3 | ) | (1 | ) | ||||||||||
| Income tax provision | 8 | 1 | 8 | 16 | 4 | ||||||||||||||
| Depreciation and amortization | 9 | 6 | 7 | 16 | 12 | ||||||||||||||
| Other costs: | |||||||||||||||||||
| Stock-based compensation | 4 | 4 | 2 | 6 | 7 | ||||||||||||||
| Other (3) | 5 | 2 | 3 | 8 | 6 | ||||||||||||||
| EBITDA excluding other costs | $ | 50 | $ | 47 | $ | 39 |
$ | 89 | $ | 94 | |||||||||
| EBITDA % excluding other costs (4) | 7.9 | % | 7.9 | % | 6.9 | % | 7.4 | % | 8.0 | % | |||||||||
NET INCOME ATTRIBUTABLE TO DNOW INC. TO NON-GAAP NET INCOME ATTRIBUTABLE TO DNOW INC. EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||||
| GAAP net income attributable to DNOW Inc. (1) | $ | 24 | $ | 34 | $ | 21 | $ | 45 | $ | 65 | ||||||
| Other, net of tax (5) (6) | 4 | (7 | ) | 2 | 6 | (10 | ) | |||||||||
| Net income attributable to DNOW Inc. excluding other costs (6) | $ | 28 | $ | 27 | $ | 23 | $ | 51 | $ | 55 | ||||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS TO NON-GAAP DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||||
| GAAP diluted earnings per share attributable to DNOW Inc. stockholders (1) | $ | 0.21 | $ | 0.31 | $ | 0.19 | $ | 0.41 | $ | 0.59 | ||||||
| Other, net of tax (5) (6) | 0.04 | (0.06 | ) | 0.02 | 0.05 | (0.09 | ) | |||||||||
| Diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs (6) | $ | 0.25 | $ | 0.25 | $ | 0.21 | $ | 0.46 | $ | 0.50 | ||||||
(1) | In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) net income attributable to DNOW Inc. excluding other costs and (iii) diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs. Each of these financial measures excludes the impact of certain other costs and therefore has not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein. | |
(2) | Net income attributable to noncontrolling interest represents the income retained by the noncontrolling party of a joint venture in our international segment which we consolidate into our financials as we are the primary beneficiary and controlling member. | |
(3) | Other includes certain income and expenses and does not include stock-based compensation expense.
| |
(4) | EBITDA % excluding other costs is defined as EBITDA excluding other costs divided by Revenue. | |
(5) | Other, net of tax includes certain income and expenses and does not include stock-based compensation expense.
| |
(6) | Totals may not foot due to rounding. |
Contacts
Mark Johnson
Senior Vice President and Chief Financial Officer
(281) 823-4754
