PVF distributor MRC Global – No. 7 on Industrial Distribution's 2014 Big 50 List – reported its 2015 first quarter financial earnings Thursday afternoon.
The company had total sales of $1.29 billion, down 1 percent year-over-year from Q1 2014, and 14.5 percent down from Q4 2014. Net income for this past quarter was $29.1 million, up from $23.5 million a year ago.
"The first quarter results were in line with our expectations and our plan remains unchanged," said Andrew Lane, MRC chairman, president, and CEO. "We will continue to focus on generating cash, reducing debt, and driving gains in market share."
MRC Global's first quarter 2015 gross profit of $219.9 million, declined from first quarter 2014 gross profit of $232.1 million. The company said the decline was a result of the impact of product mix changes and margin pressure in certain product categories related to the decline in oil prices.
U.S. sales in the quarter were $971.8 million, a 2.5 percent increase from a year ago. The increase was attributable to increased midstream sales, including organic growth of 21.3 percent. Growth in the midstream sector was offset by reduced customer spending in the upstream sector.
Canadian sales in Q1 2015 were $119.4 million, down 28.2 percent YOY. The decrease reflected a $53 million decrease in the upstream business primarily due to a decline in customer spending. Approximately $14.7 million, or 31 percent of the total decline, was a result of the weaker Canadian dollar.
International sales quarter were $201.1 million, a 5.0 percent increase YOY. The increase was due primarily to the acquisitions of MSD and Hypteck, which added $15.6 million of revenue. Excluding the $31.4 million impact from weaker foreign currencies, international sales experienced organic growth of approximately 13 percent.
Upstream sales decreased 13.9 percent YOY from the first quarter of 2014 to $546.7 million, or 42 percent of total sales. Excluding acquisitions, the decline in upstream sales was across all segments, and the result of reduced customer spending.
Midstream sales increased 23.5 percent to $379.6 million, or 30 percent of total sales. Sales to both transmission and gas utility customers were up by 35.5 percent and 7.0 percent, respectively, over a weak first quarter of 2014. Higher midstream sales were driven by an increase in line pipe sales.
Downstream sales increased 0.7 percent to $366.0 million, or 28 percent of total sales. The downstream sector experienced modest growth in the U.S. and benefitted from the recent acquisitions.
