Houston-based NOW Inc., which does business as DistributionNOW, reported its 2017 second quarter fiscal performance on Wednesday, led by a spike in year-over-year sales, and a net loss that continues to shrink.
The company posted Q2 sales of $651 million, up 30.0 percent year-over-year and up 3.2 percent from Q1. Meanwhile, NOW took a net loss of $17 million in Q2, an improvement from a $44 million loss a year earlier and a $23 million loss in Q1. Q2's gross margin improved 2.4 percent year-over-year and 0.9 percent from Q1 to a mark of 19.0 percent. Q2’s operating loss was $14 million.
Q2 was the company’s second straight quarter of year-over-year sales growth, following 11 straight quarters of decline that dated back to the company’s inception. Q2 had the highest sales since Q2 2015 ($753 million) and the smallest net loss since Q1 2015 (-$10 million).
“Solid gross margin gains and tightly managed expenses produced exceptionally strong incrementals of 35 percent in the quarter,” said NOW president and CEO Robert Workman. ‘Our ability to capitalize in a recovering market, with a focus on more lucrative transactions, while right-sizing our business, drove meaningful impacts to profitability. Moreover, even though DUCs (drilled but uncompleted wells) continued to climb, as service providers worked to refurbish and staff frac fleets, our upstream operations in the U.S. performed better than expected, as did our Canadian business despite a seasonal pull-back.”
Here's how the past two-plus years of quarterly performance have fared for DNOW, which is No. 12 on Industrial Distribution's Big 50 List.
Quarter |
Sales |
YOY Sales Change |
Net Profit |
Q2 2017 |
$651 million |
+30.0% |
-$17 million |
Q1 2017 |
$631 million |
+15.1% |
-$23 million |
Q4 2016 |
$538 million |
-16.5% |
-$71 million |
Q3 2016 |
$520 million |
-30.9% |
-$56 million |
Q2 2016 |
$501 million |
-33.2% |
-$44 million |
Q1 2016 |
$548 million |
-36.5% |
-$63 million |
Q4 2015 |
$644 million |
-36% |
-$249 million |
Q3 2015 |
$753 million |
-29.6% |
-$224 million |
Q2 2015 |
$750 million |
-21.2% |
-$19 million |
Q1 2015 |
$863 million |
-24.8% |
-$10 million |
Q4 2014 |
$1.01 billion |
-3.4% |
+16 million |
By geographic segment in Q2 2017:
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U.S. sales of $481 million (73.9 percent of total) increased 42.7 percent year-over-year and 9.6 percent from Q1. The company said the gains were due to increased U.S. Energy Centers, Supply Chain Services and midstream activity and product margin expansion.
-
International sales of $91 million (14.0 percent of total) decreased 16.5 percent year-over-year and 5.2 percent from Q1.
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Canada sales of $79 million increased 43.6 percent year-over-year and decreased 17.7 percent from Q1.