NOW sees substantial sales gains and modest profit growth

Petroleum products distributor and energy services provider NOW Inc. – doing business with DistributionNOW – announced its fourth quarter and full year 2021 financial results on February 17, led by substantial and continued sales gains of year on year and a second consecutive net profit after several years of losses.

Houston-based NOW – #13 on Industrial distribution2021 Big 50 List – reported fourth quarter revenue of $432 million, up 35.4% year-over-year and just behind the third quarter’s $439 million. Geographically, US revenues also jumped 35.3%; Canada’s revenue of $72 million jumped 50.0%; and international revenue increased by 21.3%.

NOW’s Energy segment accounted for 79% of US revenue in the fourth quarter and declined 4% sequentially, while Process Solutions (21% of US revenue) increased 2% sequentially.

The company said digital revenue through its e-commerce website accounted for 42% of SAP’s revenue in the fourth quarter.

The company’s fourth quarter gross margin of 23.4% was up from 14.1% a year earlier and topped the third quarter’s 21.9%. Operating profit of $7 million was a reversal of a loss of $37 million a year earlier and trailed the $10 million in the third quarter. Fourth-quarter net income of $12 million was also a reversal of a $44 million loss a year earlier and topped the third quarter’s $5 million.

The company’s current state of finances is a remarkable turnaround after suffering losses of $331 million in the first quarter of 2020 and $139 million in the fourth quarter of 2019. The company has significantly reduced its business and footprint between end 2019 and early 2020.

For the full year, NOW reported total revenue of $1.63 billion in 2021, up 0.8% from 2020. Operating profit of $9 million offset the net loss of $420 million of 2020, while the net profit of $5 million also offset the loss of $427 million of 2020.

“I am proud of the strong results we delivered in 2021, punctuated by an expansion of EBITDA excluding other costs of $92 million on revenue growth of $13 million during the year, driven by highest gross margins in our history and a reduction in warehousing, selling and administrative costs of $50 million,” said David Cherechinsky, President and CEO of NOW Inc. “We have accomplished this while modernizing our facilities and investing in the future as we continue to develop a more efficient and customer-centric model. .”

Looking ahead, NOW expects first-quarter 2022 sequential revenue to be up in the single-digit percentage range. Full-year 2022 revenues are expected to be up in the lower to mid-teens, while 2022 gross margins are expected to be about the same as 2021.

NOW has no long-term debt and ended the year with a cash balance of $312 million and total liquidity of $561 million. The company’s credit facility was recently extended through December 2026.