Oilfield products distributor and energy services provider NOW Inc. — doing business at DistributionNOW — reported its 2021 fourth quarter and full-year financial results on Feb. 17, led by continued substantial year-over-year sales gains and a second-straight net profit after several years of losses.
Houston-based NOW — No. 13 on Industrial Distribution's 2021 Big 50 List — reported Q4 revenue of $432 million, up 35.4 percent year-over-year and narrowly trailing Q3's $439 million. Geographically, U.S. revenue likewise jumped 35.3 percent; Canada revenue of $72 million jumped 50.0 percent; and International revenue increased 21.3 percent.
NOW's Energy segment comprised 79 percent of U.S. revenue in Q4 and was down 4 percent sequentially, while Process Solutions (21 percent of U.S. revenue) improved 2 percent sequentially.
The company said that digital revenue through its shop.dnow.com e-commerce website comprised 42 percent of SAP revenue in Q4.
The company's Q4 gross margin of 23.4 percent dwarfed the 14.1 percent of a year earlier and topped Q3's 21.9 percent. Operating profit of $7 million was a reversal of a $37 million loss a year earlier and trailed Q3's $10 million. Q4 net profit of $12 million likewise was a reversal of a $44 million loss a year earlier and topped Q3's $5 million.
The current state of the company's financials is a remarkable turnaround after it took losses of $331 million in Q1 2020 and $139 million in Q4 2019. The company drastically downsized its business and company footprint between late 2019 and early 2020.
For the full year, NOW had total 2021 revenue of $1.63 billion, up 0.8 percent from 2020. Operating profit of $9 million reversed 2020's whopping $420 million net loss, while net profit of $5 million likewise reversed 2020's $427 million loss.
“I am proud of the solid results we achieved in 2021, punctuated by an expansion of EBITDA excluding other costs of $92 million on revenue growth of $13 million during the year, driven by the highest full-year gross margins in our history and a reduction in warehousing, selling and administration expenses of $50 million," said David Cherechinsky, NOW Inc. president and CEO. "We accomplished this while modernizing our facilities and investing in the future, as we continue to evolve a more efficient, customer-centric model."
Looking forward, NOW is expecting Q1 2022 sequential revenue to be up in the mid-single-digit percentage range. Full year 2022 revenues are expected to be up in the low-to-mid teens, while 2022 gross margins are expected to be approximately the same as 2021's.
NOW has zero long-term debt, and ended the year with a $312 million cash balance and a total liquidity of $561 million. The company's credit facility was recently extended to December 2026.