MRC Global expects to report a double-digit slide in quarterly sales in its forthcoming Q3 earnings announcement, company officials said Tuesday.
The Houston-based pipe, valves and fittings distributor — no. 10 on ID’s 2024 Big 50 list — revealed select preliminary financial results for the third quarter of 2024 as part of a stock repurchase announcement, including projected three-month revenue of about $797 million. That would be down just more than 10% compared to the company's $888 million in sales during the same quarter last year.
MRC also anticipates adjusted EBITDA of approximately $48 million during the quarter, equating to 6% of sales — down sharply from $70 million and 7.9% of sales during the same window in 2023. Cash flow from operations is expected to drop, as well, from $102 million last year down to $95 million in the latest quarter.
The company remains scheduled to report its completed third-quarter results on Nov. 5, and noted that it has not yet “fully closed” its books for the reporting period.
The projections were outlined in a statement announcing an agreement for MRC to purchase 363,000 shares of its preferred stock from Mario Investments. The company intends to fund the transaction with a new seven-year, $350 million senior secured term loan, borrowings from an asset-based lending facility that would be extended through 2029, and cash. The deal is contingent upon the completion of successful term loan financing and other conditions.
“Our strong execution in recent years has strengthened our balance sheet, and in conjunction with increasingly consistent levels of cash generation, has positioned us to have the financial flexibility to pursue this opportunity now,” MRC President and CEO Rob Saltiel said in a statement. “We believe that repurchasing the preferred stock will simplify our capital structure and eliminate shareholder concerns about potential equity dilution through conversion of the preferred stock into common shares.
“We also expect that this repurchase will be accretive to both cash generation and earnings per share in 2025 and beyond based on current capital market conditions and anticipated financing terms.”
In a separate statement, MRC also announced Tuesday that the company’s credit rating had been upgraded from “B2” to “B1” by Moody’s, and that both Moody’s and S&P Global Ratings had deemed the company’s outlook as “stable.”
