DNOW Inc. Reports Fourth Quarter and Full-Year 2023 Results
Earnings Conference Call
1 (888) 660-6431 (within
1 (929) 203-2118 (outside of
Access Code: 7372055
Webcast: ir.dnow.com
Financial Highlights
- Cash provided by operating activities was
$105 million for the fourth quarter of 2023 and$188 million for the full-year 2023 - Revenue was
$555 million for the fourth quarter of 2023 - Net income attributable to
DNOW Inc. was$147 million , or$1.35 per diluted share, for the fourth quarter of 2023, which included a non-cash deferred tax benefit of$126 million from the release of valuation allowances on deferred tax assets - Non-GAAP net income attributable to
DNOW Inc. excluding other costs was$24 million , or$0.22 per diluted share, for the fourth quarter of 2023 - EBITDA excluding other costs was
$44 million or 7.9% of revenue for the fourth quarter of 2023 - Cash and cash equivalents was
$299 million and long-term debt was zero atDecember 31, 2023 with total liquidity of approximately$626 million
I am thrilled about the agreement we reached to acquire
I want to thank the highly talented women and men of
Prior to the earnings conference call a presentation titled “DNOW Fourth Quarter and Full-Year 2023 Key Takeaways” will be available on the Company’s Investor Relations website.
About
Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by
DNOW INC. CONSOLIDATED BALANCE SHEETS (In millions, except share data) |
|||||||
|
2023 |
|
|
2022 |
|
||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents |
$ |
299 |
|
$ |
212 |
|
|
Receivables, net |
|
384 |
|
|
398 |
|
|
Inventories, net |
|
366 |
|
|
381 |
|
|
Prepaid and other current assets |
|
19 |
|
|
26 |
|
|
Total current assets |
|
1,068 |
|
|
1,017 |
|
|
Property, plant and equipment, net |
|
131 |
|
|
119 |
|
|
Deferred income taxes |
|
118 |
|
|
− |
|
|
|
139 |
|
|
116 |
|
||
Intangibles, net |
|
28 |
|
|
25 |
|
|
Other assets |
|
45 |
|
|
43 |
|
|
Total assets |
$ |
1,529 |
|
$ |
1,320 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable |
$ |
288 |
|
$ |
304 |
|
|
Accrued liabilities |
|
120 |
|
|
126 |
|
|
Other current liabilities |
|
10 |
|
|
9 |
|
|
Total current liabilities |
|
418 |
|
|
439 |
|
|
Long-term operating lease liabilities |
|
30 |
|
|
25 |
|
|
Deferred income taxes |
|
− |
|
|
1 |
|
|
Other long-term liabilities |
|
18 |
|
|
11 |
|
|
Total liabilities |
|
466 |
|
|
476 |
|
|
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock - par value |
|
− |
|
|
− |
|
|
Common stock - par value |
|
1 |
|
|
1 |
|
|
Additional paid-in capital |
|
2,032 |
|
|
2,066 |
|
|
Accumulated deficit |
|
(828 |
) |
|
(1,075 |
) |
|
Accumulated other comprehensive loss |
|
(145 |
) |
|
(150 |
) |
|
|
1,060 |
|
|
842 |
|
||
Noncontrolling interest |
|
3 |
|
|
2 |
|
|
Total stockholders' equity |
|
1,063 |
|
|
844 |
|
|
Total liabilities and stockholders' equity |
$ |
1,529 |
|
$ |
1,320 |
|
|
DNOW INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In millions, except per share data) |
|||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
2023 |
2022 |
2023 |
2023 |
2022 |
|||||||||||||
Revenue |
$ |
555 |
|
$ |
547 |
|
$ |
588 |
$ |
2,321 |
|
$ |
2,136 |
||||
Operating expenses: | |||||||||||||||||
Cost of products |
|
425 |
|
|
415 |
|
|
454 |
|
1,786 |
|
|
1,630 |
||||
Warehousing, selling and administrative |
|
98 |
|
|
97 |
|
|
97 |
|
395 |
|
|
365 |
||||
Impairment and other charges |
|
− |
|
|
− |
|
|
− |
|
− |
|
|
10 |
||||
Operating profit |
|
32 |
|
|
35 |
|
|
37 |
|
140 |
|
|
131 |
||||
Other income (expense) |
|
(1 |
) |
|
(1 |
) |
|
− |
|
(2 |
) |
|
8 |
||||
Income before income taxes |
|
31 |
|
|
34 |
|
|
37 |
|
138 |
|
|
139 |
||||
Income tax provision (benefit) |
|
(116 |
) |
|
2 |
|
|
2 |
|
(110 |
) |
|
10 |
||||
Net income |
|
147 |
|
|
32 |
|
|
35 |
|
248 |
|
|
129 |
||||
Net income attributable to noncontrolling interest |
|
− |
|
|
− |
|
|
− |
|
1 |
|
|
1 |
||||
Net income attributable to |
$ |
147 |
|
$ |
32 |
|
$ |
35 |
$ |
247 |
|
$ |
128 |
||||
Earnings per share attributable to |
|||||||||||||||||
Basic |
$ |
1.36 |
|
$ |
0.28 |
|
$ |
0.32 |
$ |
2.26 |
|
$ |
1.14 |
||||
Diluted |
$ |
1.35 |
|
$ |
0.28 |
|
$ |
0.32 |
$ |
2.24 |
|
$ |
1.13 |
||||
Weighted-average common shares outstanding, basic |
|
106 |
|
|
110 |
|
|
107 |
|
107 |
|
|
111 |
||||
Weighted-average common shares outstanding, diluted |
|
107 |
|
|
111 |
|
|
108 |
|
108 |
|
|
111 |
||||
DNOW INC. SUPPLEMENTAL INFORMATION BUSINESS SEGMENTS (UNAUDITED) (In millions) |
||||||||||||||
Three Months Ended | Year Ended | |||||||||||||
2023 |
2022 |
2023 |
2023 |
2022 |
||||||||||
Revenue: | ||||||||||||||
$ |
418 |
$ |
414 |
$ |
448 |
$ |
1,749 |
$ |
1,591 |
|||||
|
65 |
|
75 |
|
68 |
|
282 |
|
315 |
|||||
International |
|
72 |
|
58 |
|
72 |
|
290 |
|
230 |
||||
Total revenue |
$ |
555 |
$ |
547 |
$ |
588 |
$ |
2,321 |
$ |
2,136 |
||||
DNOW INC. SUPPLEMENTAL INFORMATION (CONTINUED) NET INCOME ATTRIBUTABLE TO DNOW INC. TO NON-GAAP EBITDA EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) (In millions) |
|||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|||||
GAAP net income attributable to |
$ |
147 |
|
$ |
32 |
|
$ |
35 |
|
$ |
247 |
|
$ |
128 |
|
||||
Net income attributable to noncontrolling interest (2) |
|
− |
|
|
− |
|
|
− |
|
|
1 |
|
|
1 |
|
||||
Interest expense (income), net |
|
(1 |
) |
|
− |
|
|
(2 |
) |
|
(4 |
) |
|
(1 |
) |
||||
Income tax provision (benefit) |
|
(116 |
) |
|
2 |
|
|
2 |
|
|
(110 |
) |
|
10 |
|
||||
Depreciation and amortization |
|
7 |
|
|
5 |
|
|
7 |
|
|
26 |
|
|
19 |
|
||||
Other costs: | |||||||||||||||||||
Stock-based compensation |
|
4 |
|
|
4 |
|
|
4 |
|
|
15 |
|
|
11 |
|
||||
Other (3) |
|
3 |
|
|
4 |
|
|
− |
|
|
9 |
|
|
7 |
|
||||
EBITDA excluding other costs |
$ |
44 |
|
$ |
47 |
|
$ |
46 |
|
$ |
184 |
|
$ |
175 |
|
||||
EBITDA % excluding other costs (4) |
|
7.9 |
% |
|
8.6 |
% |
|
7.8 |
% |
|
7.9 |
% |
|
8.2 |
% |
||||
NET INCOME ATTRIBUTABLE TO DNOW INC. TO NON-GAAP NET INCOME ATTRIBUTABLE TO DNOW INC. EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) (In millions) |
|||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|||||
GAAP net income attributable to |
$ |
147 |
|
$ |
32 |
|
$ |
35 |
|
$ |
247 |
|
$ |
128 |
|
||||
Other, net of tax (5) (6) |
|
(123 |
) |
|
(3 |
) |
|
(7 |
) |
|
(140 |
) |
|
(21 |
) |
||||
Net income attributable to |
$ |
24 |
|
$ |
29 |
|
$ |
28 |
|
$ |
107 |
|
$ |
107 |
|
||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS TO NON-GAAP DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED) |
|||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|||||
GAAP diluted earnings per share attributable to |
$ |
1.35 |
|
$ |
0.28 |
|
$ |
0.32 |
|
$ |
2.24 |
|
$ |
1.13 |
|
||||
Other, net of tax (5) (6) |
|
(1.13 |
) |
|
(0.03 |
) |
|
(0.07 |
) |
|
(1.27 |
) |
|
(0.18 |
) |
||||
Diluted earnings per share attributable to |
$ |
0.22 |
|
$ |
0.25 |
|
$ |
0.25 |
|
$ |
0.97 |
|
$ |
0.95 |
|
||||
(1) |
In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) net income attributable to |
|
|
||
(2) |
Net income attributable to noncontrolling interest represents the income retained by the noncontrolling party of a joint venture in our international segment which we consolidate into our financials as we are the primary beneficiary and controlling member. |
|
|
||
(3) |
Other includes certain income and expenses not included in stock-based compensation. |
|
|
||
For the three months ended |
||
|
||
For the year ended |
||
|
||
(4) |
EBITDA % excluding other costs is defined as EBITDA excluding other costs divided by Revenue. |
|
|
||
Other, net of tax includes certain income and expenses and does not include stock-based compensation expense. |
||
|
||
For the three months ended |
||
|
||
For the year ended |
||
|
||
The Company has excluded the impact of these items on its valuation allowance in computing net income excluding other costs. |
||
|
||
(5) |
Totals may not foot due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240215195391/en/
Senior Vice President and Chief Financial Officer
(281) 823-4754
Source: