Houston-based NOW Inc., which operates as DistributionNOW, reported its 2015 second quarter financial earnings on Wednesday for the period ended June 30.
The numbers were highlighted by the company – No. 10 on Industrial Distribution's 2014 Big 50 List – taking a net loss of $19 million for the quarter, compared to last year's profit of $27 million. Q1 also had a net loss of $10 million. Q4's had a profit of $16 million, while the company's full year 2014 profit was $116 million.
DNOW posted a Q2 revenue of $750 million, down 21.2 percent from last year and down 13 percent from Q1. Excluding acquisitions, revenue declined 17 percent. The sales figure was better than analysts expectations of $685 million, and the decrease was better than quarter's global rig count decline of 26 percent. The company also noted a price erosion impact of $11 million in the quarter, the same as in Q1.
The earnings report came just a day after DNOW announced the acquisition of Bismarck, ND-based Challenger Industries, and a little more than a month after announcing the purchase of Odessa, TX-based Odessa Pumps.
"It’s been a challenging first half of the year across the industry," said NOW Inc. President and CEO Robert Workman. "Even though market conditions remain difficult during the second quarter of 2015, we did see some exciting things in our business, including, on the M&A front, the acquisition of a European-based company, building on the Company’s product line growth strategies in electrical products. We continued the integration of our previously announced acquisitions and have started to realize benefits to both our revenues and margins."
Workman went on to say recent oil price declines make a timetable for recovery uncertain. He shared that since Q4 2014, DNOW has reduced its quarterly warehousing, selling and administrative expenses by approximately $28 million, or $41 million of reductions when excluding acquisitions.
"We will continue to manage through this cycle, be nimble and position DNOW to achieve our objectives as the market recovers," Workman said.
By geography, DNOW U.S. revenue was $496 million in Q2, a 25 percent yearly decrease, and a 17 percent decrease from Q1. Excluding acquisitions, U.S. Q2 revenue was down 28 percent from last year, but outperformed the 51 percent U.S. rig count decline in the same period. Q2 Canada sales of $89 million were down 23 percent from Q1 and down 25 percent from last year. International sales of $165 million were up 13 percent from Q1 and flat compared to last year.