MRC Global : Announces Second Quarter 2022 Results

MRC Global Announces Second Quarter 2022 Results

Houston, TX - August 8, 2022 - MRC Global Inc. (NYSE: MRC), the leading global distributor of pipe, valves, fittings and infrastructure products and services to diversified energy, industrial and gas utilities' end- markets, today announced second quarter 2022 results.

Net income attributable to common stockholders for the second quarter of 2022 was $8 million, or $0.09 per diluted share, as compared to the second quarter of 2021 net loss of ($2) million, or ($0.02) per diluted share. Adjusted net income attributable to common stockholders for the second quarter of 2022 was $23 million, or $0.27 per diluted share, as compared to the second quarter of 2021 adjusted net income of $6 million, or $0.08 per diluted share.

MRC Global's second quarter 2022 gross profit was $151 million, or 17.8% of sales, as compared to the second quarter 2021 gross profit of $112 million, or 16.3% of sales. Gross profit for the second quarter of 2022 and 2021 includes $20 million and $11 million, respectively, of expense in cost of sales relating to the use of the last-in,first-out (LIFO) method of inventory cost accounting. Adjusted gross profit, which excludes (among other items) the impact of LIFO, was $181 million, or 21.3% of sales, for the second quarter of 2022 and was $134 million, or 19.5% of revenue, for the second quarter of 2021.

Second Quarter 2022 Financial Highlights:

• Sales of $848 million, a 14% sequential increase and a 24% improvement over the same quarter a year ago
• Adjusted EBITDA of $65 million, 7.7% of sales, the highest quarterly adjusted EBITDA margin since 2014
• Adjusted Gross Profit, as a percentage of sales, of 21.3%, an increase of 80 basis points compared to the first quarter of 2022
• Backlog increased 12% compared to the first quarter of 2022 and up 43% compared to year end 2021

Rob Saltiel, MRC Global's President and CEO stated, "Strong double-digit growth in each of our end-market sectors drove second quarter revenue of $848 million, a 14% sequential improvement, while adjusted EBITDA margin was 7.7%, our best quarterly result since 2014. The gas utilities and downstream, industrial and energy transition (DIET) sectors led the sequential improvement and combined represent 68% of our revenue for the quarter. Our targets for the full year remain at $3.3 billion of revenue and $230 million of adjusted EBITDA, supported by strong business fundamentals and our growing backlog, which increased 12% sequentially."

Adjusted EBITDA was $65 million in the second quarter of 2022 compared to $36 million for the same period in 2021.

Selling, general and administrative (SG&A) expenses were $120 million, or 14.2% of sales, for the second quarter of 2022 compared to $102 million, or 14.9% of sales, for the same period in 2021. Adjusted SG&A of $101 million for the second quarter of 2021 excludes $1 million of facility closure costs.

Adjusted net income attributable to common stockholders, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Gross Profit, Adjusted SG&A, Net Debt and Leverage Ratio are all non-GAAP measures. Please refer to the reconciliation of each of these measures to the nearest GAAP measure in this release.

An income tax expense of $6 million was incurred in the second quarter of 2022, with an effective tax rate of 30%, as compared to income tax expense of $1 million for the second quarter of 2021. Our rates generally differ from the U.S. federal statutory rate of 21% as a result of state income taxes and differing foreign income tax rates. The effective tax rate for the three months ended June 30, 2022, was higher primarily due to unbenefited foreign losses.

Sales

The company's sales were $848 million for the second quarter of 2022, which was 14% higher than the first quarter of 2022 and 24% higher than the second quarter of 2021. As compared to the second quarter of 2021, all sectors grew double-digit percentages, led by the gas utilities and DIET sectors followed by the upstream production and midstream pipeline sectors. Sequentially, all sectors increased double-digit percentages led by the gas utilities and DIET sectors, as well.

Sales by Segment

U.S. sales in the second quarter of 2022 were $717 million, up $159 million, or 28%, from the same quarter in 2021. The gas utilities sector revenue increased $44 million, or 16%, driven by increased activity levels related to our customers' integrity upgrade programs, smart meter programs and seasonal demand. DIET sector sales increased $62 million, or 46%, from increased renewable biofuel projects and additional turnaround project and maintenance spending for both refining and chemicals customers. Upstream production sector sales increased by $36 million, or 44%, primarily due to increased customer spending for well completions as oil and gas market conditions have improved. Midstream pipeline sector sales improved $17 million, or 23%, driven by new gathering and processing infrastructure as a result of increased production levels.

Sequentially, as compared to the first quarter, U.S. sales increased $99 million, or 16%, as all sectors were up double-digits, led by the gas utilities sector, which increased $43 million, or 16%, as construction season is underway, and customers take delivery for planned projects. The DIET sector was up $29 million, or 17%, as biofuels project activity, turnaround, and maintenance activity increased. The upstream production and midstream pipeline sectors were up 16% and 14%, respectively, as higher customer capital spending drove increased well completions and production levels.

Canada sales in the second quarter of 2022 were $40 million, up $10 million, or 33%, from the same quarter in 2021, driven by the upstream production sector from increased customer capital budgets due to supportive commodity prices.

Sequentially, as compared to the prior quarter, Canada sales declined $3 million, or 7%, due to seasonality from spring break-up in the upstream production sector.

International sales in the second quarter of 2022 were $91 million, down $7 million, or 7%, from the same period in 2021 primarily due to a $10 million unfavorable impact from weaker foreign currencies, as the underlying business experienced growth in the upstream sector primarily in Norway and Australia from improved market conditions.

Sequentially, as compared to the previous quarter, International sales increased $10 million, or 12%, as all sectors improved, led by the upstream production and DIET sectors, despite a $4 million unfavorable impact from weaker foreign currencies. Upstream production increased as customer activity expanded in Norway and Australia as a result of supportive commodity prices and an increase in oil demand post-pandemic. The DIET sector increased in New Zealand and the Netherlands including energy transition projects.

2

Sales by Sector

Gas utilities sector sales, which is primarily U.S. based, were $314 million, in the second quarter of 2022, or 37% of total sales, an increase of $45 million, or 17%, from the second quarter of 2021.

Sequentially, as compared to the first quarter, the gas utilities sector grew $43 million, or 16%, driven by the U.S.

Downstream, industrial and energy transition sector sales in the second quarter of 2022 were $259 million, or 31% of total sales, an increase of $68 million, or 36%, from the second quarter of 2021. The increase in DIET sector sales was driven by the U.S. segment.

Sequentially, as compared to the previous quarter, sales in the DIET sector were up $33 million, or 15%, driven by the U.S.

Upstream production sector sales in the second quarter of 2022 were $178 million, or 21% of total sales, an improvement of $35 million, or 24%, from the second quarter of 2021. The increase in upstream production sales was led by the U.S. segment, followed by Canada and partially offset by the International segment.

Sequentially, as compared to the prior quarter, upstream production sector sales increased $20 million, or 13%, driven by the U.S. segment.

Midstream pipeline sector sales in the second quarter of 2022 were $97 million, or 11% of total sales, an increase of $14 million, or 17%, from the second quarter of 2021, driven by the U.S. segment.

Sequentially, midstream pipeline sector sales increased $10 million, or 11%, driven by the U.S. segment primarily related to gathering and processing activity.

Backlog

As of June 30, 2022, the company's backlog is up 12% sequentially. The U.S. backlog is up 50% since year- end with all sectors up double-digits including a 66% increase in the gas utilities sector and a 48% increase in the DIET sector.

Balance Sheet and Cash Flow

Cash used in operations was ($50) million in the second quarter of 2022. As of June 30, 2022, the cash balance was $21 million, long-term debt (including current portion) was $356 million, and net debt was $335 million. Availability under the company's asset-based lending facility was $529 million and available liquidity was $550 million as of June 30, 2022.

Please refer to the reconciliation of non-GAAP measures (Net Debt) to GAAP measures (Long-term Debt) in this release.

3

Conference Call

The company will hold a conference call to discuss its second quarter 2022 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 9, 2022. To participate in the call, please dial 201-689-8261 and ask for the MRC Global conference call at least 10 minutes prior to the start time. To access the conference call, live over the Internet, please log onto the web at www.mrcglobal.com and go to the "Investor Relations" page of the company's website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live call, a replay will be available through August 23, 2022, and can be accessed by dialing 201-612-7415 and using pass code 13730617#. Also, an archive of the webcast will be available shortly after the call at www.mrcglobal.com for 90 days.

About MRC Global Inc.

Headquartered in Houston, Texas, MRC Global (NYSE: MRC) is the leading global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, upstream production, and midstream pipeline sectors. With over 100 years of experience, MRC Global has provided customers with innovative supply chain solutions, technical product expertise and a robust digital platform from a worldwide network of 205 locations including valve and engineering centers. The company's unmatched quality assurance program offers over 250,000 SKUs from over 10,000 suppliers, simplifying the supply chain for approximately 10,000 customers. Find out more at www.mrcglobal.com

This news release contains 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," "expected," "intend," "believes," "on-track," "well positioned," "strong position," "looking forward," "guidance," "plans," "can," "target," "targeted" 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, tax rate, capital expenditures, achieving cost savings and cash flow, debt reduction, liquidity, 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 MRC Global's control, including the factors described in the company's SEC filings that may cause the company's actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements.

4

These risks and uncertainties include (among others) decreases in capital and other expenditure levels in the industries that the company serves; U.S. and international general economic conditions; decreases in oil and natural gas prices; unexpected supply shortages; loss of third-party transportation providers; cost increases by the company's suppliers and transportation providers; increases in steel prices, which the company may be unable to pass along to its customers which could significantly lower the company's profit; the company's lack of long-term contracts with most of its suppliers; suppliers' price reductions of products that the company sells, which could cause the value of its inventory to decline; decreases in steel prices, which could significantly lower the company's profit; a decline in demand for certain of the products the company distributes if tariffs and duties on these products are imposed or lifted; holding more inventory than can be sold in a commercial time frame; significant substitution of renewables and low-carbon fuels for oil and gas, impacting demand for the company's products; risks related to adverse weather events or natural disasters; environmental, health and safety laws and regulations and the interpretation or implementation thereof; changes in the company's customer and product mix; the risk that manufacturers of the products that the company distributes will sell a substantial amount of goods directly to end users in the industry sectors that the company serves; failure to operate the company's business in an efficient or optimized manner; the company's ability to compete successfully with other companies; the company's lack of long-term contracts with many of its customers and the company's lack of contracts with customers that require minimum purchase volumes; inability to attract and retain employees or the potential loss of key personnel; adverse health events, such as a pandemic; interruption in the proper functioning of the company's information systems; the occurrence of cybersecurity incidents; risks related to the company's customers' creditworthiness; the success of acquisition strategies; the potential adverse effects associated with integrating acquisitions and whether these acquisitions will yield their intended benefits; impairment of the company's goodwill or other intangible assets; adverse changes in political or economic conditions in the countries in which the company operates; the company's significant indebtedness; the dependence on the company's subsidiaries for cash to meet parent company obligations; changes in the company's credit profile; potential inability to obtain necessary capital; the sufficiency of the company's insurance policies to cover losses, including liabilities arising from litigation; product liability claims against the company; pending or future asbestos-related claims against the company; exposure to U.S. and international laws and regulations, regulating corruption, limiting imports or exports or imposing economic sanctions; risks relating to ongoing evaluations of internal controls required by Section 404 of the Sarbanes-Oxley Act; and risks related to changing laws and regulations including trade policies and tariffs.

For a discussion of key risk factors, please see the risk factors disclosed in the company's SEC filings, which are available on the SEC's website at www.sec.govand on the company's website, www.mrcglobal.com. MRC Global's filings and other important information are also available on the Investor Relations page of the company's website at www.mrcglobal.com.

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.

Contact:

Monica Broughton

Investor Relations

MRC Global Inc. [e-mail] 832-308-2847

5