Houston-based NOW Inc., which does business as DistributionNOW, reported its 2017 fourth quarter and full-year fiscal performance on Wednesday, led by continued significant year-over-year (YoY) sales gains and a small profit loss far improved from a year earlier.
DNOW — No. 13 on Industrial Distribution's Big 50 List — posted Q4 sales of $669 million, up 24.3 percent YoY and down 4.0 percent sequentially from Q3. The company took a Q4 net loss of $3 million, following a $9 million loss in Q3 and a $71 million loss in Q4 2016. DNOW had a neutral operating profit in Q4 compared to a $47 million loss a year earlier.
For the full-year, DNOW's 2017 total sales of $2.648 billion increased 25.7 percent over 2016. A net loss of $52 million greatly improved from a $234 million loss in 2016, while 2017 operating loss of $41 million improved from a $222 million loss in 2016.
DNOW also said it reduced its branch count by 29 during 2017, including nine closures/consolidations in Q4, while adding locations in growth areas.
"Through the downturn, we emerged a stronger, leaner and more agile organization," said Robert Workman, NOW Inc. president and CEO. "The year 2017 was transformative for DNOW in that we added $541 million in revenues, while continuing to lower costs, becoming a business more than 25 percent larger than it was in 2016. Incrementals were greater than 30 percent, signifying a solid financial recovery for DNOW and positioning us to capitalize on a growing market in 2018."
The company's EBITDA in Q4 was $13 million, up $8 million from the $5 million in had in Q3 — which was its first positive EBITDA since the oil and gas downturn that began in the summer of 2014.
Q4 was the company's fourth-straight quarter of YoY sales growth, following 11 straight quarters of decline that dated back to the company’s inception, tied to that oil and gas downturn. Q4 had the smallest net loss since the company began in 2014 when it spun off from National Oilwell Varco.
Here's how the past three years of quarterly performance have fared for DNOW:
|
Quarter |
Sales |
YOY Sales Change |
Net Profit/Loss |
| Q4 2017 | $669 million | +24.3% | -$3 million |
| Q3 2017 | $697 million | +34.0% | -$9 million |
|
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:
- Q4 U.S. sales of $488 million (72.9 percent of total) increased 28.8 percent YoY and decreased 3.6 percent from Q3. Full-year sales of $1.914 billion increased 32.5 percent from 2016. By U.S. business segment in Q4: Energy Centers sales increased 37 percent YoY and decreased 9 percent from Q3, with the sequential decrease attributed to seasonality, negative weather impacts, delayed pipe shipments and one-off Q3 midstream projects; Supply Chain Services (SCS) sales increased 15 percent YoY and increased 3 percent from Q3, with the sequentially gain attributed to SCS Energy and subsidiary Machine Tools Supply strength; Process Solutions sales increased 35 percent and increased 4 percent from Q3, with the sequential gain offsetting labor hour decreases and manufacturing delays.
- Q4 International sales of $96 million increased 11.6 percent YoY and increased 1 percent from Q3. Full-year sales of $378 million decreased 6.4 percent from 2016.
- Q4 Canada sales of $85 million increased 16.4 percent YoY and decreased 11.5 percent from Q3. Full-year sales of $356 million increased 38.0 percent from 2016.
Looking ahead, DNOW said it expects 2018 full-year sales growth in the low double-digit percentage range, with the top-end of that forecast in the mid-teens. The company expects Q1 2018 sales to grow in the mid-to-high single-digit percentage range sequentially.
