MRC Global Debuts On Fortune 500, Releases Q1 Results

The company made its debut at 493 on the magazine’s “Fortune 500” list and reports a 39% increase in sales . . .

MRC Global Inc. Debuts on the "Fortune 500"

Houston, TX - MRC Global Inc. (NYSE: MRC) has been recognized as one of America’s largest public companies by Fortune magazine. Based on 2011 sales of $4.8 billion, MRC Global Inc. made its debut at 493 on the magazine’s “Fortune 500” list.

MRC Global Inc. is the largest global distributor of pipe, valve and fitting products to the energy and industrial industries and operates more than 400 service locations in 18 different countries around the world. The company relies on this distribution network and long-standing, global manufacturer
relationships to provide a unique value proposition to energy and industrial end users in the upstream, midstream and downstream sectors.

“We are proud to be recognized by Fortune, especially as a newly public company,” MRC Chairman, President and CEO Andrew Lane said. “After more than 90 years as a successful private organization with a proven reputation for integrity and excellent service, we look forward to continuing to build
upon that legacy as a publicly held company.”

Compiled since 1955, the "Fortune 500" ranks U.S. companies by sales. Companies are ranked by total revenues for their respective fiscal years. Included in the survey are companies that are incorporated and operate in the U.S. and file financial statements with a government agency.

MRC Global Announces First Quarter 2012 Results

  •    Sales of $1.383 billion, up 39%
  •    Net income of $37.5 million and diluted EPS of $0.44
  •    Adjusted EBITDA of $115 million, up 92%

MRC Global Inc. (NYSE: MRC), the largest global distributor of pipe, valves and fittings and related products and services to the energy and industrial sectors based on sales, today announced first quarter 2012 financial results. Sales of $1.383 billion were up 39% from $992 million in the first quarter of 2011. Net income was $37.5 million, or $0.44 per diluted share, as compared to a net loss of $1.1 million, or $0.01 per share, in the first quarter of 2011. Adjusted EBITDA rose 92% to $115.2 million for first quarter of 2012, compared to $60.0 million for the same period in 2011. See the table below for a reconciliation of Adjusted EBITDA to net income and net loss.

Commenting on the company's results, Andrew R. Lane, chairman, president and chief executive officer, stated, "I am very pleased with the financial results in the first quarter. Our first quarter sales and net income reflect the continued strength of our North American segment from both our upstream and midstream sector activity levels and also from our International segment, primarily as a result of improved activity levels in the U.K., Southeast Asia as well as our Australian acquisitions."

Sales of $1.383 billion set a record for the first quarter and increased 39% over the prior year. Within the company's North American segment, sales increased 35% to $1.261 billion, driven by strengthening activity within the North American shale plays, particularly those areas with heavy concentrations of oil and wet gas. International segment sales increased 105% to $122 million, due to the acquisitions of Australia-based Stainless Pipe & Fittings ("MRC SPF") and OneSteel Piping Systems ("MRC PSA") as well as improved overall business activity. Overall, organic growth contributed 34% to the top line increase and acquisitions accounted for the remaining 5%.

Sales to the upstream sector reached $650 million, or 47% of sales, an increase of 39% over the prior year. Midstream sales increased 58% to $360 million, or 26% of sales. The midstream sector continues to be the company's fastest growing sector, driven by the increasing need for gathering and transmission infrastructure, as well as continued strong demand from its natural gas utility customers. Sales to the downstream sector grew 25% to $373 million, driven by the company's Australian acquisitions which are more heavily weighted toward the downstream sector than the company as a whole. In North America, downstream sales increased 12% over the prior year.

Gross profit was $236.6 million, or 17.1% of sales, compared with $147.0 million, or 14.8% of sales, in the first quarter of 2011. The increase in gross profit percentage was driven primarily by improved product sales mix and the leveraging of the fixed cost component of cost of sales.

For the first quarter of 2012, selling, general and administrative expenses ("SG&A") increased $29.0 million compared to the same quarter in 2011. These increases are attributable primarily to an increase in variable personnel expenses and the inclusion of expenses from the acquisitions of MRC SPF and MRC PSA in Australia. As a percentage of sales, SG&A expenses declined to 10.6% versus 11.8% in the first quarter of 2011.

Mr. Lane continued, "We have completed several key objectives thus far in 2012. Our March acquisition of OneSteel Piping Systems was an important addition for us, giving us a complete PVF offering for our customers in Australia. We also closed on a new 5-year global credit facility that provides us with improved availability and financial flexibility to fund our operations. And finally, we completed our initial public offering in April 2012, netting $334 million for the company to pay down debt. This milestone marked the culmination of over three years of effort to position MRC Global Inc. as a public company on the New York Stock Exchange after 90 years as a privately-held company."

Conference Call

The Company will hold a conference call to discuss its first quarter 2012 results at 10:00 a.m. Eastern ( 9:00 a.m. Central) on Monday, May 7, 2012. To participate in the call, dial (480) 629-9692 and ask for the MRC Global conference call at least 10 minutes prior to the start time. To access it live over the Internet, please log onto the web at <> , and go to the "Investor Relations" page of the Company's website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live call, a replay will be available through May 14, 2012 and may be accessed by dialing (303) 590-3030 and using pass code 4533752#. Also, an archive of the webcast will be available shortly after the call at <>  for 90 days.