NOW Inc. Q1 Sales, Profit Suffer From Rig Decline

Despite completing three acquisitions in Q1 and seven since the company's spinoff in 2014, a 28 percent U.S. oil rig decline in the quarter was too much to offset.

Id 7049 Dnowa

​DistributionNOW – No. 10 on Industrial Distribution's 2014 Big 50 List – reported its 2015 first quarter financial earnings on Thursday for the period ended March 31.

The company reported total sales of $863 million, a 24.8 percent year-over-year decrease from Q1 2014's $1.08 billion, and a 14 percent decrease from Q4 2014. The company says last quarter's revenue decline is consistent with the global rib count decline from the prior quarter. DistributionNow, which operates as Now Inc., says U.S. rig count decline was 28 percent in Q1.

Now Inc. took a Q1 net loss of $10 million, compared to Q1 2014's profit of $41 million and Q4 2014's profit of $16 million. Excluding $9 million in acquisition and severance related charges, Q1 net loss was $3 million.

Robert Workman, President and CEO of NOW Inc., commented, “The first quarter of 2015 was a period of rapid decline in North American rig count, and as a result, the Company’s revenues and product margins were impacted accordingly. We have and will continue to take steps to respond to market conditions, including actions to improve efficiencies and our balance sheet. We believe we are well positioned to operate effectively through this cycle. While the timing of when this market recovers is still uncertain, we will continue to position our company for long-term growth and success.

Now Inc. completed three acquisitions in Q1, and says its seven combined acquisitions completed since its spin-off in 2014 have added over 450 employees to the company.

First quarter sales in the U.S. were $601 million, an 15 percent year-over-year decrease and an 11 percent decrease from Q4 2014.

First quarter revenues for the United States were $601 million, a decrease of 11 percent from the fourth quarter of 2014 and a decrease of 15 percent from the first quarter of 2014.

Canada Q1 sales were $116 million, down 39 percent year-over-year and down 36 percent from Q4 2014. The company says Canada saw contractions in line with rig count and foreign currency changes, highlighted by a steep decline within its fiberglass product and project-based orders, which tend to be larger-dollar transactions which were deferred or cut by Now Inc. customers.

International sales for the quarter were $146 million, down 20 percent year-over-year and down one percent from Q4 2014.

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