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

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

Current assets:

Cash and cash equivalents

Receivables, net

Inventories, net

Prepaid and other current assets

Total current assets

Property, plant and equipment, net

Deferred income taxes

Goodwill

Intangibles, net

Other assets

Total assets

Current liabilities:

Accounts payable

Accrued liabilities

Other current liabilities

Total current liabilities

Long-term operating lease liabilities

Other long-term liabilities

Total liabilities

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

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

Revenue

Operating expenses:

Cost of products

Warehousing, selling and administrative

Impairment charges

Operating profit (loss)

Other expense

Loss before income taxes

Income tax provision (benefit)

Net loss

Loss per share:

Basic loss per common share

Diluted loss per common share

Weighted-average common shares outstanding, basic

Weighted-average common shares outstanding, diluted

Revenue:

United States

Canada

International

Total revenue

GAAP net loss ⁽¹⁾

Interest, net

Income tax provision (benefit)

Depreciation and amortization

Other costs ⁽²⁾

EBITDA excluding other costs

EBITDA % excluding other costs ⁽³⁾

GAAP net loss ⁽¹⁾

Other costs, net of tax ^{(4) (5)}

Net income (loss) excluding other costs ⁽⁵⁾

GAAP diluted loss per share ⁽¹⁾

Other costs, net of tax ⁽⁴⁾

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

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.

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.

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

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.

Totals may not foot due to rounding.