MRC Global, which brands itself as the largest global distributor of PVF products and services, reported its 2021 fourth quarter and full-year financial results on Feb. 15, showing modest growth in 2021 overall, accelerating down the stretch with a strong Q4.
Fourth Quarter
Houston-based MRC posted total Q4 sales of $686 million, up 18.5 percent year-over-year and barely ahead of Q3's $685 million that was up 17.1 percent. The company said that sequential sales were up from historical season trends in which Q4 revenue typically declines 5-10 percent. MRC added the improvement was driven by Canada, as several deliveries in upstream and gas utilities took place in Q4.
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"As compared to the fourth quarter of 2020, the increase in sales was across all sectors, driven by the gas utilities sector, the largest end-market, as activity levels continue to rise, economic conditions improve and customers execute their projects," MRC said in its earnings release.
MRC's Q4 gross profit margin of 15.6 percent edged out the 15.5 percent of a year earlier and topped Q3's 13.9 percent. The company had a Q4 operating profit of $1 million, compared to a $7 million loss both a year earlier and in Q3. The company had a Q4 net loss of $4 million, compared to an $5 million loss a year earlier and an $11 million loss in Q3. Meanwhile, MRC's Q4 adjusted EBITDA of $47 million was up 47 percent from Q3.
Geographically, MRC's U.S. sales totaled $566 million (82.5 percent of total), up 26 percent year-over-year and down slightly from $570 million in Q3. Canada sales of $40 million jumped 74 percent, while International sales of $80 million fell 26 percent.
By end market in Q4:
- Gas utilities sales of $258 million (38 percent of total) improved 19 percent year-over-year and were down 5 percent from Q3.
- Downstream, industrial and energy transition (DIET) sales of $201 million (29 percent of total) improved 16 percent year-over-year and increased 2 percent from Q3.
- Upstream production sales of $140 million (20 percent of total) increased 11 percent year-over-year and increased 6 percent from Q3.
- Midstream pipeline sales of $87 million (13 percent of total) increased 40 percent year-over-year and increased 2 percent from Q3.
By product line in Q4:
- Line pipe sales of $113 million (16.5 percent of total) jumped 73.8 percent year-over-year
- Carbon fittings and flanges sales of $89 million (13.0 percent of total) increased 17.1 percent year-over-year
- Valves, automation, measurement and instrumentation sales of $233 million (34.0 percent of total) increased 7.9 percent year-over-year
- Gas products sales of $164 million (23.9 percent of total) increased 18.8 percent year-over-year
- Stainless steel and alloy pipe and fittings sales of $31 million (4.5 percent of total) dipped 3.1 percent year-over-year
- General products sales of $56 million (8.2 percent of total) increased 7.7 percent year-over-year
Full Year
For all of 2021, MRC's sales totaled $2.67 billion, up 4.1 percent over 2020. Gross profit of 15.6 percent trailed 2020's 16.8 percent, while operating profit of $7 million was a reversal of 2020's loss of $260 million. MRC had a 2021 net loss of $14 million, compared to a $274 loss in 2020.
The company said that e-commerce represented 42 percent of total 2021 revenue, up 600 basis points from 2020.
Outlook
Going forward, MRC said it is expecting 2022 full-year revenue of $3 billion or greater, expecting Q1 sequential growth growth of low to mid-single digits.
By geography and sector, MRC expects the following full-year growth in 2022:
- U.S.: up double-digits, across all sectors
- Canada: up double-digits
- International: up mid-single digits
- Gas utilities: up double-digits
- DIET: up high single-digits
- Upstream: up double digits
- Midstream: up double-digits
