Release Details

NOW Inc. Reports Second Quarter 2021 Results

August 4, 2021
PDF Version

Earnings Conference Call
August 4, 2021
8:00 a.m. CT
1 (800) 446-1671 (within North America)
1 (847) 413-3362 (outside of North America)
Webcast: ir.dnow.com

HOUSTON--(BUSINESS WIRE)--Aug. 4, 2021-- NOW Inc. (NYSE: DNOW) announced results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights

  • Revenue was $400 million for the second quarter of 2021
  • Net loss was $2 million and non-GAAP net income excluding other costs was nil for the second quarter of 2021
  • Diluted loss per share was $0.02 and non-GAAP diluted earnings per share excluding other costs was $0.00 for the second quarter of 2021
  • Non-GAAP EBITDA excluding other costs for the second quarter of 2021 was $6 million
  • Cash and cash equivalents was $293 million and long-term debt was zero at June 30, 2021
  • Free cash flow for the second quarter of 2021 was $7 million

David Cherechinsky, President and CEO of NOW Inc., commented, “I am encouraged by the stronger than anticipated performance this quarter, driven by sequential revenue growth of 11% and record gross margins, as the impact of our strategy produced gains to both the top and bottom lines. With total liquidity of $528 million and zero debt, we are uniquely positioned to grow organically and capitalize on promising inorganic opportunities.

Looking ahead, we remain focused on generating greater operating efficiencies while enhancing our differentiated offering to customers. Our size and scale strengthen our value proposition that customers can depend on as they navigate industry consolidation, supply disruptions and the energy transition.”

Prior to the earnings conference call a presentation titled “NOW Inc. Second Quarter 2021 Key Takeaways” will be available on the Company’s Investor Relations website.

About NOW Inc.

NOW Inc. is one of the largest distributors to energy and industrial markets on a worldwide basis, with a legacy of over 150 years. NOW Inc. operates primarily under the DistributionNOW and DNOW brands. Through its network of approximately 195 locations and 2,450 employees worldwide, NOW Inc. offers a comprehensive line of products and solutions for the upstream, midstream and downstream energy and industrial sectors. Our locations provide products and solutions to exploration and production companies, energy transportation companies, refineries, chemical companies, utilities, manufacturers and engineering and construction companies.

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 NOW Inc. with the U.S. Securities and Exchange Commission, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

NOW INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
 
June 30, December 31,

2021

2020

(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents

$

293

 

$

387

 

Receivables, net

 

271

 

 

198

 

Inventories, net

 

250

 

 

262

 

Prepaid and other current assets

 

17

 

 

14

 

Total current assets

 

831

 

 

861

 

Property, plant and equipment, net

 

120

 

 

98

 

Deferred income taxes

 

1

 

 

1

 

Goodwill

 

66

 

 

−

 

Intangibles, net

 

12

 

 

−

 

Other assets

 

40

 

 

48

 

Total assets

$

1,070

 

$

1,008

 

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

217

 

$

172

 

Accrued liabilities

 

99

 

 

95

 

Other current liabilities

 

25

 

 

5

 

Total current liabilities

 

341

 

 

272

 

Long-term operating lease liabilities

 

19

 

 

25

 

Other long-term liabilities

 

14

 

 

12

 

Total liabilities

 

374

 

 

309

 

Commitments and contingencies
Stockholders' equity:
Preferred stock - par value $0.01; 20 million shares authorized;
no shares issued and outstanding

 

−

 

 

−

 

Common stock - par value $0.01; 330 million shares authorized; 110,558,831 and
109,951,610 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

1

 

 

1

 

Additional paid-in capital

 

2,057

 

 

2,051

 

Accumulated deficit

 

(1,220

)

 

(1,208

)

Accumulated other comprehensive loss

 

(142

)

 

(145

)

Total stockholders' equity

 

696

 

 

699

 

Total liabilities and stockholders' equity

$

1,070

 

$

1,008

 

NOW INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In millions, except per share data)
 
Three Months Ended Six Months Ended
June 30, March 31, June 30,

2021

2020

2021

2021

2020

 
Revenue

$

400

 

$

370

 

$

361

 

$

761

 

$

974

 

Operating expenses:
Cost of products

 

315

 

 

302

 

 

286

 

 

601

 

 

789

 

Warehousing, selling and administrative

 

85

 

 

97

 

 

79

 

 

164

 

 

227

 

Impairment charges

 

−

 

 

−

 

 

4

 

 

4

 

 

320

 

Operating profit (loss)

 

−

 

 

(29

)

 

(8

)

 

(8

)

 

(362

)

Other expense

 

(1

)

 

(2

)

 

(1

)

 

(2

)

 

(2

)

Loss before income taxes

 

(1

)

 

(31

)

 

(9

)

 

(10

)

 

(364

)

Income tax provision (benefit)

 

1

 

 

(1

)

 

1

 

 

2

 

 

(3

)

Net loss

$

(2

)

$

(30

)

$

(10

)

$

(12

)

$

(361

)

Loss per share:
Basic loss per common share

$

(0.02

)

$

(0.27

)

$

(0.09

)

$

(0.11

)

$

(3.30

)

Diluted loss per common share

$

(0.02

)

$

(0.27

)

$

(0.09

)

$

(0.11

)

$

(3.30

)

Weighted-average common shares outstanding, basic

 

110

 

 

109

 

 

110

 

 

110

 

 

109

 

Weighted-average common shares outstanding, diluted

 

110

 

 

109

 

 

110

 

 

110

 

 

109

 

NOW INC.
SUPPLEMENTAL INFORMATION
 
BUSINESS SEGMENTS (UNAUDITED)
(In millions)
 
Three Months Ended Six Months Ended
June 30, March 31, June 30,

2021

2020

2021

2021

2020

Revenue:
United States

$

296

$

260

$

252

$

548

$

701

Canada

 

51

 

41

 

58

 

109

 

119

International

 

53

 

69

 

51

 

104

 

154

Total revenue

$

400

$

370

$

361

$

761

$

974

NOW INC.
SUPPLEMENTAL INFORMATION (CONTINUED)
U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS
NET INCOME (LOSS) TO NON-GAAP EBITDA EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED)
(In millions)
 
Three Months Ended Six Months Ended
June 30, March 31, June 30,

2021

2020

2021

2021

2020

 
GAAP net loss (1)

$

(2

)

$

(30

)

$

(10

)

$

(12

)

$

(361

)

Interest, net

 

−

 

 

−

 

 

−

 

 

−

 

 

−

 

Income tax provision (benefit)

 

1

 

 

(1

)

 

1

 

 

2

 

 

(3

)

Depreciation and amortization

 

6

 

 

7

 

 

6

 

 

12

 

 

17

 

Other costs (2)

 

1

 

 

9

 

 

4

 

 

5

 

 

334

 

EBITDA excluding other costs

$

6

 

$

(15

)

$

1

 

$

7

 

$

(13

)

EBITDA % excluding other costs (3)

 

1.5

%

 

(4.1

%)

 

0.3

%

 

0.9

%

 

(1.3

%)

NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS) EXCLUDING OTHER COSTS RECONCILIATION (UNAUDITED)
(In millions)
 
Three Months Ended Six Months Ended
June 30, March 31, June 30,

2021

2020

2021

2021

2020

 
GAAP net loss (1)

$

(2

)

$

(30

)

$

(10

)

$

(12

)

$

(361

)

Other costs, net of tax (4) (5)

 

2

 

 

12

 

 

5

 

 

7

 

 

335

 

Net income (loss) excluding other costs (5)

$

–

 

$

(18

)

$

(5

)

$

(5

)

$

(26

)

 
DILUTED EARNINGS (LOSS) PER SHARE TO NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE EXCLUDING OTHER COSTS
RECONCILIATION (UNAUDITED)
 
Three Months Ended Six Months Ended
June 30, March 31, June 30,

2021

2020

2021

2021

2020

 
GAAP diluted loss per share (1)

$

(0.02

)

$

(0.27

)

$

(0.09

)

$

(0.11

)

$

(3.30

)

Other costs, net of tax (4)

 

0.02

 

 

0.11

 

 

0.05

 

 

0.06

 

 

3.07

 

Diluted earnings (loss) per share excluding other costs (5)

$

–

 

$

(0.16

)

$

(0.04

)

$

(0.05

)

$

(0.23

)

(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 (loss) excluding other costs and (iii) diluted earnings (loss) per share excluding other costs. Each of these financial measures excludes the impact of certain other costs and therefore has not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein.

(2)

Other costs primarily included impairment charges, as well as, net separation and transaction expenses associated with acquisitions, which were included in operating loss for the six months ended June 30, 2021.

(3)

EBITDA % excluding other costs is defined as EBITDA excluding other costs divided by Revenue.

(4)

Other costs, net of tax, for the six months ended June 30, 2021 included an expense of $2 million from changes in the valuation allowance recorded against the Company’s deferred tax assets; and $5 million related to the impairment charges and net separation and transaction expenses associated with acquisitions. The Company has excluded the impact of these items on its valuation allowance in computing net income (loss) excluding other costs.

(5)

Totals may not foot due to rounding.

 

Mark Johnson
Senior Vice President and Chief Financial Officer
(281) 823-4754

Source: NOW Inc.