Item 2.02Results of Operations and Financial Condition
On
In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In
?50% on a three-year total shareholder return relative to the companies in the
Philadelphia OSX Index (the "OSX Index") plus NOW Inc. at the end of the
three-year period ending
?50% on a three-year return on average net capital employed objective for the Performance Period.
The performance stock units vest at the end of the Performance Period, subject to continued employment and certain other provisions of the award agreement.
Below is the number of target performance stock units that the Company granted to each named executive officer:
# of Name Job Title Performance Stock Units Lane, Andrew R. President & Chief Executive Officer 150,125 Youngblood, Kelly Executive Vice President 41,701
Churay, Daniel J. Executive Vice President - Corporate Affairs, General 26,585
Counsel, Corporate Secretary Bates, Grant R. Senior Vice President - Canada, International & 13,553 Operational Excellence
Item 7.01Regulation FD Disclosure.
?The Company expects 2020 revenue to be between
?The Company expects the upstream sector to be down high-single digit percentages and the midstream and downstream sectors to be down mid-single digit percentages in 2020 as compared to 2019.
?The Company expects the
?Sequentially, the Company expects first quarter 2020 revenue to be flat as compared to the fourth quarter of 2019.
?Given
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cause results to vary substantially from company to company depending upon
whether they elect to utilize LIFO and depending upon which method they may
elect. The Company uses Adjusted Gross Profit as a key performance indicator in
managing its business. The Company believes that gross profit is the financial
measure calculated and presented in accordance with
The following table reconciles gross profit and gross profit percentage, GAAP measures, to Adjusted Gross Profit and Adjusted Gross Profit percentage, non-GAAP measures (in millions):
Expected for the Year Ended Percentage of 2020 Expected Revenue* Gross profit $ 625 18.1% Depreciation and amortization 22 0.6% Amortization of intangibles 28 0.8% Increase in LIFO reserve 5 0.1% Adjusted Gross Profit $ 680 19.7%
* Percentages are based on the midpoint of revenue guidance provided above. Column does not foot due to rounding.
?The Company expects LIFO expense to be between
?The Company expects selling, general and administrative expense to be between
?The Company expects equity-based compensation expense to be
?The Company expects to generate between
?The Company expects to have an effective tax rate of 26% to 28% for the full year of 2020.
?The Company expects its total capital expenditures for 2020 to be between
?The Company expects diluted earnings per share to be between
?The Company expects to have net income (before preferred stock dividend)
between
The following table reconciles net income, a GAAP measure, with Adjusted EBITDA, a non-GAAP measure, based on the mid-point of the guidance (in millions):
Expected for the Year Ended 2020 Net income $ 55 Income tax expense 20 Interest expense 33 Depreciation and amortization 22 Amortization of intangibles 28 Increase in LIFO reserve 5 Equity-based compensation expense 17 Adjusted EBITDA $ 180
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The above information, as well as information contained in Exhibit 99.1 referenced under Item 9.01 below, contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as "will," "expect," "expects," "expected," "believes," "looking forward," "guidance" and similar expressions are intended to identify forward-looking statements.
Statements about the company's business, including its strategy, its industry,
the company's future profitability, the company's guidance on its sales,
Adjusted EBITDA, gross profit, gross profit percentage, Adjusted Gross Profit
and Adjusted Gross Profit percentage, tax rate, capital expenditures and cash
from operations, growth in the company's various markets and the company's
expectations, beliefs, plans, strategies, objectives, prospects and assumptions
are not guarantees of future performance. These statements are based on
management's expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ materially from
those expressed in or implied by the forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors,
most of which are difficult to predict and many of which are beyond our control,
including the factors described in the company's
With respect to net income (before preferred stock dividend) and diluted
earnings per share, these risks include actual share count, LIFO expense and the
other component expectations listed above meeting the Company's expectations for
each component. These risks and uncertainties also include (among others)
decreases in oil and natural gas prices; decreases in oil and natural gas
industry expenditure levels, which may result from decreased oil and natural gas
prices or other factors;
For a discussion of key risk factors, please see the risk factors disclosed in
the company's
Undue reliance should not be placed on the company's forward-looking statements. Although forward-looking statements reflect the company's good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the company's actual results, performance or achievements or future events to differ materially from anticipated future results, performance or achievements or future events expressed or implied by such forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent required by law.
The information referenced under Item 7.01 (including Exhibit 99.1 referenced under Item 9.01 below) of this Current Report on Form 8-K is being "furnished" under "Item 7.01. Regulation FD Disclosure" and, as such, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information set forth in this Current Report on Form 8-K (including Exhibit 99.1 referenced under Item 9.01 below) shall not be
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incorporated by reference into any registration statement, report or other
document filed by
Earnings Presentation
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release of
99.2 Earnings Presentation of
Current Report on Form 8-K are imbedded within the Inline XBRL document
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