4Q 2021 Earnings Presentation
February 15, 2022
Rob Saltiel
President & CEO
Kelly Youngblood
Executive Vice President & CFO
Forward Looking Statements
This presentation 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," "look forward," "guidance," "targeted", "goals", 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, adjusted net income, adjusted diluted EPS, adjusted SG&A, gross profit, gross profit percentage, adjusted gross profit, adjusted gross profit percentage, net debt, tax rate, capital expenditures and cash from operations, free cash flow, free cash flow after dividends, 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 SEC filings that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements,
including the company's Current Report on Form 8-K dated February 15, 2022.
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.gov and on the company's website, www.mrcglobal.com. Our filings and other important information are also available on the Investor Relations page of our 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.
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Non-GAAP Disclaimer
In this presentation, the company is providing certain non-GAAP financial measures. These are not measures of financial performance calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and should not be considered as alternatives. The following GAAP measures have the following non-GAAP measures presented and derived from the respective GAAP measures:
- net income (adjusted EBITDA)
- net income margin (adjusted EBITDA margin)
- gross profit (adjusted gross profit)
- gross profit percentage (adjusted gross profit percentage)
- net income (adjusted net income)
- diluted earnings per share (adjusted diluted EPS)
- selling, general and administrative expense (adjusted SG&A)
- net cash provided by operations (free cash flow and free cash flow after dividends)
- long-termdebt, net (net debt)
They should be viewed in addition to, and not as a substitute for, analysis of our results reported in accordance with GAAP. Management believes that these non-GAAP financial measures provide investors a view to measures similar to those used in evaluating our compliance with certain financial covenants under our credit facilities and provide meaningful comparisons between current and prior year period results. They are also used as a metric to determine certain components of performance-based compensation. They are not necessarily indicative of future results of operations that may be obtained by the company.
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Fourth Quarter 2021 Results - Key Metrics
Revenue
Generation
4Q21 revenue
$686M
- Sequential change ahead of normal seasonality
- 18% above 4Q20
E-commerce:42% of total revenue in 2021
- 600 bps increase over 2020
Debt
Reduction
Long-term debt of $297M as of 4Q21
Net debt of $249M
as of 4Q21
Leverage ratio 1.7x
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Cost
Control
4Q21 SG&A 15.5%
of revenue
4Q21 adjusted SG&A 15.3% of revenue
Working Capital
Efficiency
Net working capital to
sales ratio
15.6% as of 4Q21
Profitability
Net loss attributable
to common
stockholders $10
million in 4Q21
4Q21 adjusted
EBITDA of $47M or
6.9% of revenue
Highest % since
3Q18
2021 incremental
adjusted EBITDA 46%
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Cash Generation &
Liquidity
Generated cash from
operations:
- $40M in 4Q21
- $56M YTD
Liquidity: $532M
as of 4Q21
Gross Margin
Gross profit percentage
of 15.6% in 4Q21 and 15.6% in 2021
Adjusted gross profit
percentage of:
- 21.6% in 4Q21 and
- 20.1% in 2021
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1. See reconciliation of non-GAAP measures to GAAP measures in the appendix
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Fourth Quarter 2021 Results - Sequential Changes
REGION: Revenue Highlights 4Q21 vs. 3Q21
U.S.: Decreased 1%, due to seasonality in the gas utilities sector. Upstream production and midstream pipeline were up 10% and 9%, respectively. The downstream, industrial and energy transition (DIET) sector was consistent with the prior quarter.
Canada: Increased 33% driven by the upstream production and gas utilities sectors as demand for all products improved particularly valves and line pipe. Upstream production increased due to several project orders as well as a general increase in activity levels.
International: Decreased 6% driven by the upstream production sector partially offset by the DIET sector. Upstream production declined from delayed MRO and project activity driven by pandemic restrictions. DIET increased from MRO, upgrades at various facilities as well as projects related to petrochemicals, refining and energy transition.
INDUSTRY SECTOR: Revenue Highlights 4Q21 vs. 3Q21
Gas Utilities: Decreased 5% due to typical end of the year seasonality.
Downstream, Industrial & Energy Transition: Increased 2% driven by projects in the International segment, as noted above.
Upstream Production: Increased 6% primarily due to the Canada and U.S. segments. The U.S. upstream production sector increased as commodity prices and customer spending improved driving increased well completions, well workovers translating into higher activity levels. The increase in Canada upstream is noted above.
Midstream Pipeline: Increased 2% driven by the U.S. segment as activity for gathering, processing and smaller projects improved including increased demand for valves and line pipe.
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APPENDIX
Quarterly Financial Performance - GAAP | ($ millions, except per share data) |
SALES | ||||
$2,560 | $2,666 | |||
$579 | $685 | $686 | ||
4Q 20 | 3Q 21 | 4Q 21 | 2020 | 2021 |
Net Loss & % MARGIN1
$(5) | $(11) | $(4) | $(14) | |
4Q 20 | 3Q 21 | 4Q 21 | 2020 | 2021 |
(0.9)% | (1.6)% | (0.6)% | (10.7)% | (0.05)% |
$(274) |
GROSS PROFIT & % MARGIN1
$431 | $417 | |||
$90 | $95 | $107 | ||
15.5% | 13.9% | 15.6% | 16.8% | 15.6% |
4Q 20 | 3Q 21 | 4Q 21 | 2020 | 2021 |
DILUTED EPS1
$(0.13) | $(0.21) | $(0.12) | $(0.46) | |
4Q 20 | 3Q 21 | 4Q 21 | 2020 | 2021 |
$(3.63) |
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MRC Global Inc. published this content on 15 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 February 2022 21:35:25 UTC.