OREANDA-NEWS.  NOW Inc. (NYSE: DNOW) announced results for the third quarter ended September 30, 2017.

 

Earnings Conference Call
November 1, 2017
8:00 a.m. CST
1 (800) 446-1671 (North America)
1 (847) 413-3362 (Outside North America)

Webcast: ir.distributionnow.com

Third Quarter 2017 Financial Highlights

  • Revenue was $697 million for the third quarter of 2017, up 34 percent year over year.
  • Net loss was $9 million for the third quarter of 2017, versus $56 million a year ago. Non-GAAP net loss excluding other costs was $3 million compared to $36 million in the third quarter of 2016.
  • Diluted loss per share was $0.08 for the third quarter of 2017 compared to $0.53 a year ago. Non-GAAP diluted loss per share excluding other costs was $0.03 for the third quarter of 2017 compared to $0.34 in the third quarter of 2016.
  • Non-GAAP EBITDA excluding other costs for the third quarter of 2017 was $5 million compared to a loss of $40 million in the third quarter of 2016.

Refer to Supplemental Information in this release for GAAP to non-GAAP reconciliations.

Robert Workman, President and CEO of NOW Inc., remarked, “I’m pleased with the earnings growth our team produced this quarter. These results reflect our focus on higher product margins, capturing business from new customers and culling costs in areas left behind by the market recovery. Despite weak oil prices in the third quarter and rig counts now softening, we believe consistent execution on improving our core operations, coupled with operators ramping up completions, will enable positive earnings momentum.”

Prior to the earnings conference call a presentation titled “NOW Inc., Third Quarter 2017 Review & Key Takeaways” will be available on the Company’s Investor Relations website.

About NOW Inc.

NOW Inc. is one of the largest distributors to energy and industrial markets on a worldwide basis, with a legacy of over 150 years. NOW Inc. operates primarily under the DistributionNOW and Wilson Export brands. Through its network of approximately 300 locations and 4,600 employees worldwide, NOW Inc. offers a comprehensive line of products and solutions for the upstream, midstream and downstream energy and industrial sectors. Our locations provide products and solutions to exploration and production companies, energy transportation companies, refineries, chemical companies, utilities, manufacturers and engineering and construction companies.

 
NOW INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
                 
        September 30,       December 31,
        2017       2016
        (Unaudited)        
ASSETS
Current assets:                
Cash and cash equivalents       $ 99         $ 106  
Receivables, net         466           354  
Inventories, net         562           483  
Prepaid and other current assets         22           16  
Total current assets         1,149           959  
Property, plant and equipment, net         126           143  
Deferred income taxes         2           1  
Goodwill         328           311  
Intangibles, net         171           184  
Other assets         4           5  
Total assets         1,780           1,603  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                
Accounts payable       $ 310         $ 246  
Accrued liabilities         111           100  
Other current liabilities         1           1  
Total current liabilities         422           347  
Long-term debt         163           65  
Deferred income taxes         7           7  
Other long-term liabilities         1           1  
Total liabilities         593           420  
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; 107,803,100 and                
107,474,904 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively         1           1  
Additional paid-in capital         2,017           2,002  
Accumulated deficit         (727 )         (678 )
Accumulated other comprehensive loss         (104 )         (142 )
Total stockholders' equity         1,187           1,183  
Total liabilities and stockholders' equity       $ 1,780         $ 1,603  
 
NOW INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In millions, except per share data)
                               
      Three Months Ended     Nine Months Ended
      September 30,     June 30,     September 30,
      2017     2016     2017     2017     2016
                               
Revenue     $ 697       $ 520       $ 651       $ 1,979       $ 1,569  
Operating expenses:                              
Cost of products       562         433         527         1,606         1,312  
Warehousing, selling and administrative       141         140         138         414         432  
Operating loss       (6 )       (53 )       (14 )       (41 )       (175 )
Other expense       (3 )       (3 )       (3 )       (8 )       (7 )
Loss before income taxes       (9 )       (56 )       (17 )       (49 )       (182 )
Income tax provision (benefit)       ?         ?         ?         ?         (19 )
Net loss     $ (9 )     $ (56 )     $ (17 )     $ (49 )     $ (163 )
Loss per share:                              
Basic loss per common share     $ (0.08 )     $ (0.53 )     $ (0.16 )     $ (0.45 )     $ (1.52 )
Diluted loss per common share     $ (0.08 )     $ (0.53 )     $ (0.16 )     $ (0.45 )     $ (1.52 )
Weighted-average common shares outstanding, basic       108         107         108         108         107  
Weighted-average common shares outstanding, diluted       108         107         108         108         107  
 
NOW INC.
SUPPLEMENTAL INFORMATION
                               
BUSINESS SEGMENTS (UNAUDITED)
(In millions)
                               
      Three Months Ended     Nine Months Ended
      September 30,     June 30,     September 30,
      2017     2016     2017     2017     2016
                               
Revenue:                              
United States     $ 506     $ 372     $ 481     $ 1,426     $ 1,066
Canada       96       67       79       271       185
International       95       81       91       282       318
Total revenue     $ 697     $ 520     $ 651     $ 1,979     $ 1,569
 
NOW INC.
SUPPLEMENTAL INFORMATION (CONTINUED)
U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS
NET LOSS TO NON-GAAP EBITDA EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED)
(In millions)
                               
      Three Months Ended     Nine Months Ended
      September 30,     June 30,     September 30,
      2017     2016     2017     2017     2016
                               
GAAP net loss     $ (9 )     $ (56 )     $ (17 )     $ (49 )     $ (163 )
Interest, net       2         1         1         4         2  
Income tax provision (benefit)       ?         ?         ?         ?         (19 )
Depreciation and amortization       12         14         13         38         39  
Other costs        ?         1         1         1         8  
EBITDA excluding other costs     $ 5       $ (40 )     $ (2 )     $ (6 )     $ (133 )
EBITDA % excluding other costs        0.7 %       (7.7 %)       (0.3 %)       (0.3 %)       (8.5 %)
       
NET LOSS TO NON-GAAP NET LOSS EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED)
(In millions)
                               
      Three Months Ended     Nine Months Ended
      September 30,     June 30,     September 30,
      2017     2016     2017     2017     2016
                               
GAAP net loss     $ (9 )     $ (56 )     $ (17 )     $ (49 )     $ (163 )
Other costs, net of tax       6         20         6         19         45  
Net loss excluding other costs      $ (3 )     $ (36 )     $ (11 )     $ (30 )     $ (118 )
 
DILUTED LOSS PER SHARE TO NON-GAAP DILUTED LOSS PER SHARE EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED)
                               
      Three Months Ended     Nine Months Ended
      September 30,     June 30,     September 30,
      2017     2016     2017     2017     2016
                               
GAAP diluted loss per share      $ (0.08 )     $ (0.53 )     $ (0.16 )     $ (0.45 )     $ (1.52 )
Other costs, net of tax        0.05         0.19         0.06         0.17         0.42  
Diluted loss per share excluding other costs     $ (0.03 )     $ (0.34 )     $ (0.10 )     $ (0.28 )     $ (1.10 )