Pipe, valves and fittings distributor MRC Global on Wednesday reported a slight increase in its annual sales after a double-digit revenue drop to wrap up the year.
The Houston company — no. 10 on ID’s latest Big 50 — also said it anticipates a sluggish start to the new year before a recovery in business activity in the second half of 2024.
After posting $768 million in fourth-quarter sales — a 12% decrease compared to the final quarter of 2022 — MRC wrapped up 2023 with $3.4 billion in full-year revenue, up 1% over 2022.
Sales particularly fell off in the company’s gas utilities and production and transmission infrastructure businesses, which were down 21% and 15%, respectively, in the fourth quarter. The downstream, industrial and energy transition segment saw sales rise by 4% in the latest quarter.
MRC’s gross profit also dropped in the October-December window, while Q4 net income was flat year-over-year. For the full year, gross profit climbed from $610 million in 2022 up to $690 million; net income jumped from $75 million to $114 million over that span.
MRC President and CEO Rob Saltiel added in a statement that the company anticipates that sales will be “flat to modestly lower” this year compared to 2023 levels, although business activity should be stronger in the latter half of the year as companies — particularly in the oil and gas sector — respond to lower interest rates and improved economic conditions.
Saltiel highlighted strong gross margins and adjusted EBITDA margins throughout 2023 and said the distributor’s net debt is at its lowest since going public. Officials anticipate that MRC could achieve a “positive net cash position” next year.
“This will provide us with a lot of flexibility to pursue a capital allocation strategy that is focused on the highest return opportunities for our shareholders, including investing in our growth drivers and distributing capital to our shareholders,” Saltiel said.
