HOUSTON — MRC Global Inc. (NYSE: MRC), the largest global distributor, based on sales, of pipe, valves and fittings (PVF) and related products and services to the energy industry, on Thursday announced its third quarter 2014 results.
The company's sales were $1.618 billion for the third quarter of 2014, 23 percent higher than Q3 2013 and 8 percent higher than Q2 2014. Net income for the third quarter of 2014 was $50 million compared to Q3 2013 net income of $39 million.
MRC Global is No. 7 on Industrial Distribution's 2014 Big 50 List.
Andrew R. Lane, MRC Global's chairman, president and chief executive officer stated, "Our multi-year strategy to expand internationally, re-balance our product lines, focus on global industrial valve sales and streamline our SG&A is evidenced in our strong third quarter results. We are very pleased with year-to-date revenue growth of 14 percent."
Mr. Lane continued, "The third quarter sales of $1.618 billion set a new all-time record for our company in its 93-year history, surpassing a previous peak set in the fourth quarter of 2008. We also set an all-time record for quarterly valve sales of $531 million, reflecting the results from our valve product line growth strategy. We continued our operating expense reduction efforts, which we now expect to generate more than $17 million in annual savings. Also notable, we ended the quarter with backlog of $1.254 billion, the highest in company history."
MRC Global's third quarter 2014 gross profit was $278.0 million, or 17.2 percent of sales as compared to gross profit of $238.3 million, or 18.1 percent of sales Q3 2013. The decline in gross profit percentage reflects the impact of the company's last-in, first-out (LIFO) inventory costing methodology.
Adjusted EBITDA was $132.3 million for the third quarter of 2014 compared to $96.4 million for the same period in 2013.
U.S. sales in the third quarter of 2014 were up 18.7 percent to $1.205 billion from the same quarter in 2013 due to organic growth. The increase was across each product line as well as each sector due to growth in customer capital spending, an increase in rig and well count as well as market share gains.
Canadian sales in the third quarter of 2014 were $161.2 million, down 0.6 percent from the same quarter in 2013. The decline was primarily attributable to the sale of the progressive cavity pump (PCP) distribution and servicing business, which reduced sales by $20.4 million.
International sales in the third quarter of 2014 were $251.7 million, an increase of 84.3 percent from the same period in 2013. The increase was due primarily to sales from acquired businesses of $92.3 million for the third quarter of 2014.
Upstream sales in the third quarter of 2014 increased 28.1 percent from the third quarter of 2013 to $753.1 million, or 47 percent of total sales.
Midstream sales in the third quarter of 2014 increased organically by 25.7 percent from the third quarter of 2013 to $474.3 million, or 29 percent of total sales.
Downstream sales in the third quarter of 2014 increased 12.2 percent from the third quarter of 2013 to $390.7 million, or 24 percent of total sales.