MRC Global, which brands itself as the largest global distributor of PVF products and services, reported its 2021 third quarter financial results on Nov. 8, showing a second-straight quarter of strong year-over-year sales growth.
Houston-based MRC posted total Q3 sales of $685 million, up 17.1 percent year-over-year — outpacing Q2's growth of 12.6 percent. Sequentially, Q3 sales were flat at down $1 million from Q2.
MRC's Q3 gross profit margin of 13.9 percent was down considerably year-over-year from Q3 2020's 19.5 percent and trailed Q2's 16.3 percent. The company had a Q3 operating loss of $7 million, flipping from a $14 million profit a year earlier and a $10 million profit in Q2. MRC had a Q3 net loss of $11 million, compared to an $8 million profit a year earlier and a $2 million loss in Q2.
"Our third quarter results reflect solid execution and good cost control as we achieved adjusted EBITDA margins of 5.7 percent, the highest for our company in two years," said Rob Saltiel, MRC president and CEO. "Our U.S. business grew 2 percent sequentially while our International segment experienced revenue declines due to delayed MRO and project activity. We expect double-digit revenue growth next year based on our growing backlog and increased customer activity.”
The company said that e-commerce represented 43 percent of its total Q3 revenue, up from 40 percent in Q2 and up 400 basis points year-over-year.
MRC said that, sequentially, its US segment experienced modest growth led by the downstream, industrial and energy transition (DIET) sector, offset by the International segment that declined due to delayed MRO repairs and project activity. Looking year-over-year, the company said broad economic recovery drove sales improvement across all sectors.
Geographically in Q3, MRC's US sales totaled $570 million, up 23 percent year-over-year, led by growth in its gas utilities sector, followed by the upstream production sector. Canada sales increased 11 percent year-over-year, and International sales improved 11 percent.
By end market in Q3, gas utilities sales of $271 million (40 percent of total) jumped 30 percent year-over-year and increased by $2 million over Q2; Downstream, industrial and energy transition sales of $197 million (29 percent of total) increased 6 percent year-over-year and improved $6 million from Q2; Upstream production sales of $132 million (19 percent of total) increased 12 percent year-over-year and decreased $11 million from Q2; Midstream pipeline sales of $85 million (12 percent of total) increased 15 percent year-over-year and increased $2 million from Q2.
Q3 was the first quarter that MRC reorganized its Downstream and Industrial end-market sector as the Downstream, Industrial and Energy Transition (DIET) sector. The company will classify all energy transition MRO project sales in this sector, saying the change reflects "the growing importance of energy transition and MRC Global's commitment to serve customers in their transition efforts." MRC noted DIET represents a relatively small portion of the company's total revenue, but that it is expected to grow within its customer's increasing commitments.
E-commerce represented 40 percent of MRC's total Q2 revenue (38 percent in Q1), including 48 percent of North American revenue (46 percent in Q1).