Houston, TX-based MRC Global, No. 7 on Industrial Distribution's 2014 Big 50 List, reported its 2014 Q4 and full-year financial results on Thursday.
The PFV supplier had Q4 sales of $1.51 billion, a 12.5 percent year-over-year increase. Net income jumped 33.9 percent to $31.2 million.
MRC's U.S. sales in Q4 were up 14.5 percent to $1.16 billion YOY, which the company said was due to organic growth. MRC said the increase was across each product line due to growth in customer capital spending, an increase in rig and well count as well as market share gains.
Canadian sales were down 18.1 percent to $155.0 million, with MRC stating the decline was primarily attributable to the sale of the progressive cavity pump (PCP) distribution and servicing business, which reduced sales by $24.1 million and the impact of the decline of the Canadian dollar relative to the U.S. dollar, which amounted to $12.7 million. After adjusting for these items, the Canadian business was up 1.6 percent.
International sales in Q4 were $198.4 million, a 38.7 percent increase. The increase was due primarily to sales from acquired businesses of $84.7 million for the fourth quarter of 2014. Organically, sales declined $29.3 million from the fourth quarter a year ago.
Upstream sales Q4 increased 18.6 percent to $718.5 million, or 48 percent of total sales. The improvement in upstream sales was attributable to organic growth in the U.S., acquisitions, partially offset by the sale of the PCP distribution and servicing business in Canada.
Midstream sales in Q4 increased organically by 15.5 percent to $453.0 million, or 30 percent of total sales. Higher midstream sales were influenced by increased project activity and an increase in market share among our targeted growth accounts within our transmission subsector.
Downstream sales in Q4 decreased 1.6 percent to $340.6 million, or 22 percent of total sales. Sales to downstream customers decreased in the U.S. relative to a strong fourth quarter a year ago.
For the full year, MRC's 2014 total revenue was a record $5.933 billion. Net income was $144 million, which is third-best in company history.
Andrew Lane, MRC Global Chairman, President and CEO stated, "Our management team has an average of 30 years of oil and gas experience, and we've managed through many cycles before. We expect capital spending in North America to be down more than 35 percent, impacting our upstream business most directly. The lower spending will also affect our midstream business somewhat, but not nearly as much as the upstream, while we believe the downstream business will be impacted more modestly. With lower revenue expected in 2015, we will focus on reducing costs and optimizing working capital, which we expect will increase operating cash flow and reduce outstanding debt between $200 and $300 million. Given the macro global energy outlook, we expect 2015 to be a challenging year for our company. However, we feel like we have positioned the company to weather this cycle and be in an even stronger position when we emerge. In particular, the company's credit facilities contain no financial maintenance covenants and have no significant near-term maturities."
