Amid a sudden change in CEO effective Nov. 1, 2019, oilfield and energy service products distributor NOW Inc. reported its 2019 fourth quarter and full-year financial results on Wednesday.
Responding to an industry-wide slowdown in demand for industrial products throughout 2019 and into 2020, the report detailed cost-savings measures the company took last year that included sizable cuts in locations and headcount.
Dick Alario, Interim CEO of NOW Inc., noted, “The North American market slowdown and reduction in customer spending were steeper than expected as the year ended," said Dick Alario, NOW Inc.'s interim CEO. "In response to market conditions, through today, we consolidated, closed or sold 40 locations since the beginning of 2019, and we have reduced headcount by 600 since mid-2019. In addition, we are deploying initiatives to improve our operating performance and bolster our already enviable balance sheet.”
DNOW’s Q4 analyst presentation mentioned that more reductions are projected going forward.
The company reported 2019 Q4 revenue of $639 million, down 16.4 percent year-over-year (YoY) and down 14.9 percent from Q3. DNOW took an operating loss of $137 million in Q4, compared to a $14 million operating profit in Q3 and a $22 million profit in Q4 2018. It should be noted that DNOW took a Q4 $128 million impairment that it didn’t have a year earlier. The company had a total Q4 net loss of $139 million, compared to a Q3 profit of $10 million and a $16 million profit in Q4 2018.
The company’s Q4 cost of products was down 15.3 percent YoY.
By region in Q4, US sales of $468 million fell 19.2 percent YoY; International sales of $95 million declined 2.1 percent; and Canada sales of $76 million declined 13.5 percent.
For the full year, DNOW posted total 2019 sales of $2.95 billion, down 5.6 percent from 2018. Hampered by the aforementioned $128 million impairment charge taken in Q4, DNOW took a total 2019 operating loss of $83 million, compared to a $73 million profit in 2018. The company had a overall net loss of $97 million in 2019, compared to a $52 million profit in 2018.
