MRC sales up 5%, income down
MRC Global Inc. reported first quarter sales of $806 million are a 5% improvement over the fourth quarter of 2023. Net income declined from $28 million in Q1 2023 to $13 million.
Gross profit was $163 million, or 20.2% of sales, as compared to the first quarter 2023 gross profit of $179 million, or 20.2% of sales – a 9.3% difference.
“Our commitment to improving capital returns, maintaining cost discipline, and generating cash across the market cycle is reflected in our excellent results this quarter," President and CEO Rob Saltiel said. "We exceeded our expectations with sequential revenue growth of 5% and adjusted EBITDA margins of 7.1%. We believe that our business has turned the corner after the lower activity levels of the fourth quarter of 2023.
“In addition, we generated $38 million of operating cash flow in the first quarter and are on-track to meet or ex-ceed our cash flow guidance of $200 million this year," he added. "Our strengthening balance sheet and strong cash flow generation will allow us to repay our Term Loan B in the second quarter and exit 2024 with minimal net debt. We expect to generate significant cash over the next few years, which would provide us flexibility to consider various capital allocation alternatives."
U.S. sales in the first quarter of 2024 were $667 million, down $73 million, or 10%, from the same quarter in 2023. The Gas Utilities sector revenue decreased $41 million, or 13%, as customers reduce their product in-ventory levels. PTI sector sales decreased by $24 million, or 11%, primarily due to lower line pipe sales. DIET sector sales declined $8 million primarily due to non-recurring projects.
Sequentially, as compared to the fourth quarter of 2023, U.S. sales increased $34 million, or 5%, driven by the U.S. Gas Utilities sector, which increased $13 million, or 5%, as a result of deliveries for upcoming projects and increased customer spending due to normalizing buying patterns. The DIET sector increased $11 million, or 6%, due to increased turnarounds and project activity for mining, refining and chemicals customers. The PTI sector increased $10 million, or 5%, primarily due to the timing of customer projects benefiting valve sales and production infrastructure.
Canada sales in the first quarter of 2024 were $29 million, down $13 million, or 31%, from the same quarter in 2023, as decreases in the PTI sector offset an increase in the DIET sector. Sequentially, Canada sales were up $1 million from the prior quarter.
International sales in the first quarter of 2024 were $110 million, up $7 million, or 7%, from the same period in 2023. The increase was driven by the PTI sector primarily in Europe and Middle East, followed by the DIET sector in Europe and the Middle East for renewable and LNG projects.
Sequentially, as compared to the previous quarter, International sales were up $3 million, or 3%. The increase was driven by the DIET sector for project activity in the Middle East and Europe.
Sales by Sector
Gas Utilities sector sales, which are primarily U.S. based, were $266 million in the first quarter of 2024, or 33% of total sales, a decrease of $41 million, or 13%, from the first quarter of 2023.
Sequentially, as compared to the fourth quarter of 2023, the Gas Utilities sector sales increased $13 million, or 5%.
DIET sector sales in the first quarter of 2024 were $276 million, or 34% of total sales, a decrease of $2 million, or 1%, from the first quarter of 2023. The decrease in DIET sector sales was driven by the U.S. segment.
Sequentially, as compared to the previous quarter, sales in the DIET sector were up $18 million, or 7%, led by the U.S. segment followed by the International segment.
PTI sector sales in the first quarter of 2024 were $264 million, or 33% of total sales, a decline of $36 million, or 12%, from the first quarter of 2023. The decrease in PTI sales was due to declines in the U.S. and Canada segments.
Sequentially, as compared to the prior quarter, PTI sector sales increased $7 million, or 3%, driven by the U.S. segment followed by the International segment.
As of March 31, 2024, the company's backlog was $704 million, a 1% increase compared to the previous quarter.
INDUSTRIAL SUPPLY MAGAZINE
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