MRC Global, which brands itself as the largest global distributor of PVF products and services, reported its 2020 fourth quarter and full-year financial results on Thursday, showing that while year-over-year and sequential sales continued to improve since the height of the pandemic's impacts, they were still down by the same considerable deficit that the company had a year earlier.
Houston-based MRC — No. 7 on Industrial Distribution's 2020 Big 50 List — said it closed five facilities in Q4 and 27 in 2020, while reducing headcount by 73 in Q4 and 597 in 2020. The company noted that about two-thirds of its recent cost reductions were structural. MRC lowered its operating costs by $113 million in 2020 compared to 2019. It reduced debt by $105 million in Q4 and by $255 million for the full year, ending the year with a net debt of $264 million — almost half of what it started 2020 with.
MRC reported Q4 total sales of $579 million, down 24 percent year-over-year (identical to Q4 2019), and down about 1 percent sequentially from Q3. Those figures compare with Q3 sales that were down 38 percent year-over-year and down 4 percent sequentially. MRC said that sequentially, the flat sales came amid growth in both the gas utilities and upstream production sectors, offset by declines in the midstream pipeline and downstream and industrial sectors. Year-over-year, the sales decline was across all sectors and segments besides gas utilities, which had significant growth.
E-commerce represented 39 percent of MRC's Q4 revenue, and 35 percent of full-year 2020 revenue, including 42 percent in North America.
MRC's Q4 gross profit margin was 15.5 percent, down from 17.1 percent a year earlier and 19.5 percent in Q3. Adjusted Q4 gross profit was 19.7 percent, identical to a year earlier. Q4 operating loss was $7 million, compared to a $10 million loss a year earlier and a $14 million profit in Q3.
MRC took a Q4 net loss of $5 million, compared to a $24 million loss a year earlier and a $3 million profit in Q3.
- By geography in Q4: US sales of $448 million were down 26 percent year-over-year; International sales of $108 million were down 6 percent; and Canadian sales of $23 million were down 47 percent.
- By sector in Q4: Gas utilities sales of $217 million (37 percent of total) were up 21 percent year-over-year; Down stream and industrial sales of $174 million (30 percent of total) were down 29 percent year-over-year; Upstream production sales of $126 million (22 percent of total) were down 44 percent year-over-year; Midstream pipeline sales of $62 million (11 percent of total) were down 47 percent year-over-year.
"The COVID-19 pandemic and related mitigation measures have created significant volatility and uncertainty in the oil and gas industry," the company said Thursday. "Oil demand has significantly deteriorated as a result. The unparalleled demand destruction has resulted in lower spending by our customers and reduced demand for the company's products and services. Although we have seen a modest improvement in oil demand, uncertainty exists as to when a more significant recovery will occur."