Oilfield products distributor and energy services provider NOW Inc. — which drastically downsized its business and company footprint between late 2019 and early 2020 — reported its 2021 second quarter financial results on Tuesday, showing a long-awaited return to year-over-year sales growth, while sequential sales continued solid growth and the company's net loss narrowed to near breakeven.
The Houston-based company, which does business at DistributionNOW, reported total Q2 sales of $400 million, up 8.1 percent year-over-year and up 10.8 percent from Q1.
The company said digital revenue comprised 43 percent of SAP revenue.
NOW had a Q2 gross profit of $85 million on margin of 21.3 percent, up from $68 million and 18.4 percent a year earlier and up from $75 million and 20.8 percent in Q1. The company's Q2 operating profit was flat, which was far better than a $29 million operating loss a year earlier and an $8 million operating loss in Q1. The company had a Q2 net loss of $2 million, likewise much improved from a $30 million loss a year earlier and a $10 million loss in Q1.
NOW has zero long-term debt.
"I am encouraged by the stronger than anticipated performance this quarter, driven by sequential revenue growth of 11 percent and record gross margins, as the impact of our strategy produced gains to both the top and bottom lines," said David Cherechinsky, NOW president and CEO. "With total liquidity of $528 million and zero debt, we are uniquely positioned to grow organically and capitalize on promising inorganic opportunities."
Geographically, the US comprised 74 percent of Q2 revenue; Canada had 12.8 percent; and International had 13.3 percent. US revenue was up 13.8 percent year-over-year and up 17.5 percent from Q1, with Energy representing 80 percent of revenue and Process Solutions at 20 percent.
Looking forward, NOW expects Q3 sequential revenue to improve in the mid-single digits.