NOW Inc. (NYSE: DNOW) announced results for the second quarter ended June 30, 2023.
Second Quarter 2023 Financial Highlights
- Revenue was $594 million for the second quarter of 2023
- Net income attributable to NOW Inc. was $34 million and non-GAAP net income attributable to NOW Inc. excluding other costs was $27 million for the second quarter of 2023
- Diluted earnings per share attributable to NOW Inc. stockholders was $0.31 and non-GAAP diluted earnings per share attributable to NOW Inc. stockholders excluding other costs was $0.25 for the second quarter of 2023
- EBITDA excluding other costs for the second quarter of 2023 was $47 million or 7.9% of revenue
- Free cash flow for the second quarter of 2023 was $79 million
- Cash and cash equivalents was $203 million and long-term debt was zero at June 30, 2023 with total liquidity of approximately $584 million
- As announced in May, we completed two acquisitions for $33 million in cash, expanding our manufacturer territorial exclusivities for key products
- Repurchased $8 million of common stock in the second quarter of 2023
David Cherechinsky, President and CEO of NOW Inc., added, âI am proud of our DNOW team as strong performance continued in the second quarter, generating $47 million in EBITDA and resulting in our most profitable first half of a year since being a public company. In the second quarter we produced strong free cash flow of $79 million, completed two acquisitions and recorded an impressive 22% year-over-year growth in our international segment.
Looking ahead, I am excited about the traction we are making positioning DNOW as a vital energy evolution partner, deploying our full suite of supply chain management services and decarbonization products and technologies, including our EcoVapor offering, to provide our customers the innovative emissions management solutions necessary to achieve their sustainability goals.
We are focused on executing our strategy and creating shareholder value by growing market share, leveraging our debt-free balance sheet with $584 million of total liquidity, pursuing margin accretive acquisitions and continuing our share repurchase program.â
Prior to the earnings conference call a presentation titled âNOW Inc. Second Quarter 2023 Key Takeawaysâ will be available on the Companyâs Investor Relations website.
About NOW Inc.
DistributionNOW is a worldwide supplier of energy and industrial products and packaged, engineered process and production equipment with a legacy of 160 years. Headquartered in Houston, Texas, with approximately 2,475 employees and a network of locations worldwide, we offer a broad set of supply chain solutions combined with a suite of digital solutions branded as DigitalNOWÂŽ that provide customers world-class technology for digital commerce, data and information management. Our locations provide products and solutions to exploration and production companies, midstream transmission and storage companies, refineries, chemical companies, utilities, mining, municipal water, manufacturers, engineering and construction companies 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 NOW 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.
NOW INC. | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(In millions, except share data) | ||||||
June 30, | December 31, | |||||
2023 | 2022 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 203 | $ | 212 | ||
Receivables, net | 417 | 398 | ||||
Inventories, net | 424 | 381 | ||||
Prepaid and other current assets | 31 | 26 | ||||
Total current assets | 1,075 | 1,017 | ||||
Property, plant and equipment, net | 130 | 119 | ||||
Goodwill | 141 | 116 | ||||
Intangibles, net | 31 | 25 | ||||
Other assets | 43 | 43 | ||||
Total assets | $ | 1,420 | $ | 1,320 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 364 | $ | 304 | ||
Accrued liabilities | 129 | 126 | ||||
Other current liabilities | 8 | 9 | ||||
Total current liabilities | 501 | 439 | ||||
Long-term operating lease liabilities | 26 | 25 | ||||
Deferred income taxes | 1 | 1 | ||||
Other long-term liabilities | 15 | 11 | ||||
Total liabilities | 543 | 476 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding | â | â | ||||
Common stock - par value $0.01; 330 million shares authorized; 106,716,052 and 110,369,266 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 1 | 1 | ||||
Additional paid-in capital | 2,029 | 2,066 | ||||
Accumulated deficit | (1,010 | ) | (1,075 | ) | ||
Accumulated other comprehensive loss | (146 | ) | (150 | ) | ||
NOW Inc. stockholders' equity | 874 | 842 | ||||
Noncontrolling interest | 3 | 2 | ||||
Total stockholders' equity | 877 | 844 | ||||
Total liabilities and stockholders' equity | $ | 1,420 | $ | 1,320 | ||
NOW INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||
(In millions, except per share data) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | March 31, | June 30, | |||||||||||
2023 | 2022 | 2023 | 2023 | 2022 | |||||||||
Revenue | $ | 594 | $ | 539 | $ | 584 | $ | 1,178 | $ | 1,012 | |||
Operating expenses: | |||||||||||||
Cost of products | 460 | 411 | 447 | 907 | 777 | ||||||||
Warehousing, selling and administrative | 98 | 89 | 102 | 200 | 173 | ||||||||
Impairment and other charges | â | 10 | â | â | 10 | ||||||||
Operating profit | 36 | 29 | 35 | 71 | 52 | ||||||||
Other income (expense) | (1 | ) | (1 | ) | â | (1 | ) | 9 | |||||
Income before income taxes | 35 | 28 | 35 | 70 | 61 | ||||||||
Income tax provision | 1 | 2 | 3 | 4 | 5 | ||||||||
Net income | 34 | 26 | 32 | 66 | 56 | ||||||||
Net income attributable to noncontrolling interest | â | â | 1 | 1 | â | ||||||||
Net income attributable to NOW Inc. | $ | 34 | $ | 26 | $ | 31 | $ | 65 | $ | 56 | |||
Earnings per share attributable to NOW Inc. stockholders: | |||||||||||||
Basic | $ | 0.31 | $ | 0.23 | $ | 0.28 | $ | 0.59 | $ | 0.50 | |||
Diluted | $ | 0.31 | $ | 0.23 | $ | 0.28 | $ | 0.59 | $ | 0.50 | |||
Weighted-average common shares outstanding, basic | 107 | 111 | 110 | 108 | 111 | ||||||||
Weighted-average common shares outstanding, diluted | 108 | 111 | 111 | 109 | 111 | ||||||||
NOW INC. | ||||||||||
SUPPLEMENTAL INFORMATION | ||||||||||
BUSINESS SEGMENTS (UNAUDITED) | ||||||||||
(In millions) | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, | March 31, | June 30, | ||||||||
2023 | 2022 | 2023 | 2023 | 2022 | ||||||
Revenue: | ||||||||||
United States | $ | 456 | $ | 408 | $ | 427 | $ | 883 | $ | 742 |
Canada | 66 | 72 | 83 | 149 | 154 | |||||
International | 72 | 59 | 74 | 146 | 116 | |||||
Total revenue | $ | 594 | $ | 539 | $ | 584 | $ | 1,178 | $ | 1,012 |
NOW INC. | |||||||||||||||
SUPPLEMENTAL INFORMATION (CONTINUED) | |||||||||||||||
U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS | |||||||||||||||
NET INCOME ATTRIBUTABLE TO NOW INC. TO NON-GAAP EBITDA EXCLUDING OTHER COSTS | |||||||||||||||
RECONCILIATION (UNAUDITED) | |||||||||||||||
(In millions) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | March 31, | June 30, | |||||||||||||
2023 | 2022 | 2023 | 2023 | 2022 | |||||||||||
GAAP net income attributable to NOW Inc. (1) | $ | 34 | $ | 26 | $ | 31 | $ | 65 | $ | 56 | |||||
Net income attributable to noncontrolling interest (2) | â | â | 1 | 1 | â | ||||||||||
Interest expense (income), net | â |