Q2 2024 DNOW Inc Earnings Call Transcript
Key Points
- Dnow Inc (DNOW) achieved strong earnings with a 12% sequential revenue growth in the second quarter of 2024, driven by the Whitco acquisition and growth in International and legacy US businesses.
- The company generated $50 million in EBITDA for the quarter, showcasing strong bottom-line performance.
- Dnow Inc (DNOW) produced $18 million of free cash flow during the quarter, bringing the year-to-date amount to $98 million.
- The company remains debt-free with $197 million in cash and $579 million in total liquidity, providing flexibility for organic and inorganic growth.
- Dnow Inc (DNOW) is making progress in expanding its industrial adjacent markets, including mining, municipal water, and chemicals, aligning well with its service areas and product lines.
- The US onshore oil and gas activity is challenging due to E&P consolidation, low natural gas prices, and infrastructure constraints, impacting growth.
- Gross margins declined by 110 basis points from the first quarter of 2024, affected by declining steel pipe prices and acquisition purchase accounting impacts.
- The company expects third-quarter sequential revenues to be flat to down 5% from Q2 2024 due to muted US activity and project timing internationally.
- Dnow Inc (DNOW) faces headwinds from lower gas prices, lower US rigs and completions, and the seasonal breakup in Canada.
- Customer consolidations have impacted project timing, resulting in funding and approval delays or project timeline shifts.
Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the DNOW second quarter 2024 earnings conference call. (Operator Instructions)
Mr. Brad Wise, Vice President of Digital Strategy and Investor Relations, you may begin your conference.
Well, thank you, Rob. Good morning, and welcome to DNOW's second quarter 2024 earnings conference call. We appreciate you joining us, and thank you for your interest in DNOW.
With me today is David Cherechinsky, President and Chief Executive Officer; and Mark Johnson, Senior Vice President and Chief Financial Officer. We operate primarily under the DNOW brand, which is also our New York Stock Exchange ticker symbol.
Please note that some of the statements we make during this call, including responses to your questions, may contain forecasts, projections, and estimates, including, but not limited to comments about our outlook for the company's business.
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