NOW Inc. sales fall 52.3 percent
NOW Inc. continues to feel the effects of the COVID-19 pandemic and the struggling oil and gas industry, as revenues declined 52.3 percent in the second quarter to $370 million.
A net loss of $30 million, or a loss of 27 cents per share, compared to income of $14 million, or 12 cents per share, in the same period last year. The 2019 second quarter had sales of $776 million.
In response to the declining sales, the supplier of energy and industrial products has closed several locations, cut sales staff and will transition sales to its DigitalNOW technology platform. The Houston-based company has reduced headcount from 4,400 to 2,650 since the beginning of the year.
"Our structural changes are ambitious, broad and permanent in nature and are foundational to the strategy and necessary to drive improved performance, accountability and financial success," said Dave Cherechinsky, president and chief executive officer. "We are redesigning our supply chain, finding the optimized hub-and-spoke architecture, with a bias toward a centralized structure that will support smaller locations, less inventory risk and lower operating costs."
The company will close its La Porte distribution center in East Houston and relocate those functions, inventory and personnel to the main Houston campus.
"We are positioning a dramatically nimbler, structurally more efficient business enabled by accentuating our strengths, selling underperforming businesses, eliminating all but essential costs, pursuing a zero-based mindset, combining similar purpose divisions, strengthening our distribution center, support structure, streamlining corporate, evolving the branch network and growing the importance of a centralized fulfillment model to lower supply chain costs, all of which is aided and enhanced by continued investment in technology," he said.
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