MRC - Earnings call transcript Q3 2018

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Operator

Ladies and gentlemen, greetings and welcome to MRC Global’s Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Monica Broughton. you. Thank

begin. may You

Monica Broughton

good XXXX Welcome webcast. earnings us you and Global We the third joining quarter conference today. morning, you, to everyone. MRC appreciate Thank call and

we release. XX, and CFO. by as yesterday's will CEO, is call On available President today's replay well XXXX. phone There information Andrew our by in Executive President Braun, as webcast be and on the The Vice dial-in and have of Jim November call a until Lane, mrcglobal.com, website,

be We our which on also information website. file remarks of X, In call margin. gross expect adjusted therefore, of XX-Q replay. be Form November we time today, profit accurate that and as today, this note XXXX, gross advised our report you percentage, to speaks XXXX quarter third no and are of profit, our the EBITDA discuss that only on later will the will adjusted information today, EBITDA adjusted adjusted on longer Please as reported available may

are earnings on of more read GAAP to measures all securities related a these be of can reconciliation and our measures see non-GAAP to release to our use learn of about items, to our these filings website. which found You encouraged and

of securities made federal addition, management laws. forward-looking this of call These statements of statements In may the comments by States MRC forward-looking the the contain the MRC of within management the Global views current United during Global. the reflect meaning

However, MRC expressed from those today. Global's results materially actual could differ

forward-looking Company's for concerning of SEC risk a filings more are these review You the to read in-depth factors the encouraged statements.

of And year the our over like prepared turn now, that our the Andrew first that we references nine to remarks please Lane. referencing. Mr. in year-to-date CEO, note to to call I'd are mean the months Finally,

Andrew Lane

which pleased thank our cover dynamics for then going discussion and and our quarter, which have also quarter us row of three billion year. been going start am am had billion in more the the to represents than the last I moved morning, today. the third we results to Good quarter additional It quarter, of in Then it an outlook a fourth sales a million our has quarter to marks company financial third cover in quarter. the sales, in from $XX where very the very with joining you strong revenue. of third will quarter sales project-related in current a for growth expecting and was sectors. achieved XX% I end the with we Monica. am $X.XX state you, third Jim Nevertheless, Thank $X In I the performance. now detail. our

in XX% year. XXXX, in declined the XXXX, compared E&P cycle we bottom top-line in have expected year capital and gas in oil after our pace XXXX. Total second is growth on would we compared in gas an XXXX, for Following top-line it of exactly to XX% are XXXX as this the from growth XX% and oil recovery recovered evolving will XX% we to as and spending last additional and XXXX, growth XXXX

first were upstream looking Now U.S. the us, nine particularly bright primary to upstream sectors; same XXXX, compared higher completions of at the with The well a of XX% continues as driver prices year. up spending, in in increased three completions. months first, our period be our last to customer is driving spot oil U.S. well U.S. for business the

year, X% Globally, the XX% these matched sales were business Permian upstream XXXX, same the quarter business model, year our total the revenue. midstream due time Overall, third Permian up revenue XX% XXXX. customer contract the the combined quarter geographic standpoint, in periods. to XX% over grew U.S. quarter, upstream independent up represents period. they XXXX. time same with as sequentially from Our our From third increase, the renewed this with add large compared over the our a this XX% the of quarter diversified area XX% same up and and our to of a last with growth the It's third up second largest year-to-date MRO Basin for period scope customer of we remains our contract to Canada. operator new and Permian year-to-date highest upstream to our to upstream our In continued in second compared in

of price as strong $X,XXX In pipe in average same repeat. be X%, We early project is up price an The is the to pipeline active in $X,XXX same business started quarter. $XX and gas Section a market the position revenue third quarter, leveled XXXX new XXXX up pipeline at through had that year-to-date with impact, off the mid-XXXX. ton a Australia we midstream midstream a in midstream steel at with XX% buys gas in In pipe, strong the half the and had Permian year-to-date, the a U.S. oil our in will XXXX. early XXXX tariffs didn't we We XXXX. big line XXX second a in compared period but the compared in line work Northeast ton period year, our in million strategic MRO the in of prices in remain Second, added XXXX pipeline of to have in a XXXX, while being slowing third contracts. in the four pre-tariff work inventory

from integrated the major major petrochemical The won we customer. a increasing are renewed up our U.S. independent XX% XXXX refiner with refining U.S. with and our ramping the MRO Finally, fourth activity year-to-date a project customers of season the activity is in under some quarter, some our active in which sales by We XXXX, with including turnaround business recently had revenue in into the quarter this growth an moving project up the throughout downstream third downstream, agreements, XXXX. increased quarter. to in large year-to-date, led and largest in In in Pennsylvania. with U.S., compared contracts XX% the XXXX revenue grew

also We U.S. refinery in contract the a added new Western

our to the our pre-tariff valves strategy impact flanges, of in third XXXX. result result quarterly is mix the moving best current adjusted is profitability, business to change quarter first stainless very positive of to XX.X% inflationary improvement to pleased the the margin the multi-year margin since XX.X% with fittings of Adjusted products. our of profit The pipe, quarter product and year-to-date profit Now XX.X%. This the I improvement a gross am carbon of our environment valve-centric and and repurchases and of model. gross

on Now costs.

X% up SG&A XX.X% a from gross a or profit in of XXXX, is strategy and periods. margins cost quarter since currently to was the has SG&A SG&A $XXX over global sales the year-to-date Higher in XX.X% third year ago XXX revenue in XX% as and comparable XX% the of year-to-date, our while XXXX. XX.X% and both compared around at XXXX be should to percentage of us. up XXXX EBITDA Our is improvement a periods, for decrease headcount X,XXX, million. XXXX a adjusted sales disciplined a year-to-date XX% led level end sustainable XXXX to

the XX.X%. of adjusted and is EBITDA EBITDA quarter, margin X.X% third highest adjusted quarter in for quarter, is XXXX. third it percentage third incremental the U.S. achieved the since The the XX.X% segment year-to-date of Our

authorized set repurchase allows we opportunistically This The shares the repurchased $XXX months customer of first our to previously program improved Our $X.XX share for shares, the to has nine have of loss buy net rate nine lower available diluted income on since is this million The in the common to profitability is XX for company share per strong authorization a Board XXXX share able is $XX well stockholders last $XXX net improved as to third to a months of from continue share XXXX grow. of income this December also repurchase to to improved week. and a the Directors the open as first year. tax the implemented U.S. XXXX. latest result. having I of and $X are and repurchase market that of am The corporate driving position to be bottom-line pleased shares. in million million program expire

As is report any will we customary, repurchase on share activity. quarterly

final third in some quarter we Normally, fourth year, in spent high declines to the the This being high-single-digits. Now the at on our business the three quarters comments U.S., the mid range. the would budgets quarter. for first more aggressively that the outlook of fourth some in the quarter year with from be seasonal of experiences of end

project from $X the X% delayed revenue expected billion. The resulting of the the excess XXXX quarter between this fourth revenues in to third However, and in quarter quarter net decline somewhat fourth the is will impact quarter of impact. X% sequential from an third

up winding projects from been September of This of from Our major a over down two the is primarily of the on year years. backlog and we XXXX quarter. the reflective the $XXX is ago past some have delivering second customer million,

year, mid-single-digit with higher focus revenue reduction half to outlook spending addition, our in In the down start million the business, back low preliminary each year gross early leads year spending project analysis This wind currently we projects to higher year. to this sectors now in for the and expected often $XXX and sacrificing of me margin growth XXXX, and margins. of improved a considering estimates our top-line year. we slower growth versus revenue customer XXXX as continued in to are next profit a surveys for on major expecting in our our next line have to Based shift pipe about of

could a reduction However, always have our next percentage. some revenue Keep which our around and you want gross that process. capital see we for in give have is expect customer key positive low-margin budgets year and mind I XXXX, I the final project to color develop. we profit how on think for to forecasting yet to in the impact a input additional budgeting

end-markets are I a to the contract forward note our is very the I just next to all advantage what look management MRC call provide plans Global to earnings performing expect I be energy on for team we XXXX broad, XXXX spending feel across MRC third and customary possesses. for long-term continue well take when experienced are of uniquely finishing the Global. the to second PBF in will for XXXX With the employee and practice, customer everything year infrastructure the As customer energy has industry on a MRO it of our investments. is space in our I look of or position and that trends favorable which discussed, then three complete year. the We guidance February diversified in one we distribution growth No to year positioned base strong XXXX, recovery. clearer the remain

the results in quarter now third cover with turn detail. over So I'll call more the Jim to that, to

James Braun

revenues the for in share than primarily out upstream the morning, year, quarter upstream. by good third delayed customers. million from sector of last Beginning quarter of closely second decreased new of from and Pennsylvania driven third Andrew quarter. expanded quarter XX% well downstream downstream deliveries project were U.S. Thanks, third largest Sequentially, followed downstream project the activity deliveries U.S. In and market up of downstream quarter, the as from were last where or billion, as for and was gains quarter higher increased last last third of benefited as upstream as well sales repairs third completion by our maintenance project, and U.S. up contract sectors. our year, the in year, more by The the increased everyone. with business XX% segment, $XX and polymers revenue turnarounds XX% $XXX increased year. from total, by in was $XX pushed was XXXX from outages, led the $X.XX activity driven revenue XX% million the third X% the from quarter, increased, and up sector the quarter U.S. Total from and Permian XX%. Shell's

geography Our growth the completions overall EI in the U.S. increase to outpaced third our upstream customer quarter due in mix. well and

midstream decreased for a or TransCanada. X%, work in Our activity slightly decline non-recurring to project million at primarily due $X

project the capacity utilities grew was X% in international Canadian our a by sector offset million share completion activity. quarter. XXXX. higher of also third revenue pipeline was weakness was segment from X%. X% XXXX work, sub-sector, lower increases from a the was market in dollar in in declined second partially the activity due up $X downstream midstream foreign by from spending the the in segment which Canadian Excluding by impacted The business in pipe of non-recurring due second from the also dollar in $XXX deliveries project, Kazakhstan, U.S. primarily gas ago. quarter from continues sector international muted, million, Sequentially, Canadian Australia. In partially gathering decline upstream also is from Canadian price quarter year large X% declined The sequentially year. quarter from was upstream deliveries and third to increased classified third by to Revenues line segment, X%, the quarter. and midstream and the in the X% from million activity quarter up against X%, a the our project to negatively primarily turnarounds currency TransCanada weakness gains. last XXXX. sales against from $XX the lags differential were revenue U.S. due Canadian offset the International constraints. revenue U.S. due project negatively Sequentially, to somewhat in in due third dollar $X be million U.S. oil the to this transmission quarter, upstream as by segment to from impacted in were revenue midstream quarter Sales down up of

sales turning the X%. million, XXXX Starting completions last ago, quarter and primarily the higher Downstream in upstream grew on downstream sales our based particularly Compared same sales as sector to in international increased XXXX to the United was XX% Kazakhstan segment. well upstream driven project well quarter the as end-sectors. our quarter deliveries by $XXX Now year the to driven while third the from project from same XXXX States, double-digits, with same as in Permian, a to results by last midstream order X% declined non-recurring sector, the quarter lower sales same quarter year pipeline U.S. described grew third sales as increased to to XX% to or from by U.S. quarter the $XXX was third decline $XX primarily earlier. in earlier. in quarter major a for The the million, last U.S. to due year pipe $XXX Australia to year lesser midstream related sub-sectors project downstream and line works the a million sector Midstream XXXX lower primarily down by Both a degree, discussed were million.

our comparable the midstream major business of and in our from gathering by these transmission Excluding two items quarter sub-sector periods, increased XXXX. third both in X%

were million XXXX Now headwind for as to quarter expense due from the profit turning percentage in was increased quarter XXXX points in profit in $XX to percent third the of the third XXXX grow XX larger LIFO quarter to favorable and recorded and XX.X% XXXX. margins, gross $XX of to Despite of XX.X% quarter, million basis we position. inventory respectively. third LIFO a able the LIFO of expense, our cost gross we the

XX.X% up a mentioned in XX% adjusted reflects The earlier the the gross increase $XX project conditions XXXX. expect third of and approximately including inflationary was environment, the inflationary year. to less low-margin of to of quarter now profit work. percentage million gross LIFO impact we the for be product our positive Given The adjusted expense favorable the in full XXXX, the percentage in quarter from third profit mix

inventory We favorable of into expect first the costing XXXX. half continue to our position

only increased X% to volume-related wage million ago, tariffs or line the $XXX quarter increases from leveled incentive increases As inflation of were which levels. of latest on has as noted, due higher than $XX the increase Pipe an prices, adjusted average SG&A X% were quarter the market cost activity Pipe primarily in third Logix the off a of and line and pipe in and higher has from we've All pipe quarter XXXX considerably Items third year higher XXXX for spot third XXXX XXXX. million, $XXX to quotas. of in seen the prices the Index, XX% inflation sequentially. have Based and million

the higher which third third totaled XXXX, million Sequentially to As year, higher as $XX the second a higher balances. was Interest million, percentage SG&A was average last of growth to than of expense debt primarily to revenue XX.X%, XXXX, sales, quarter exceeded SG&A increase $X of up expenses. fell from to due XX.X% expense personnel operating operating costs. quarter the in in of million compared and quarter $X due

no to benefit Our statutory tax related provisional rate related tax the the last recorded a XXXX X%, in the tax was as expense, the a XXXX year effective annual rate law primarily XX%. resulting tax million Consequently, third to of passed favorable the to closer adjustment December. amounts quarter we new to for to $X we expect now tax full be rates

XXX the Adjusted the attributable basis versus year. gross for third X.X% a improved of was XX.X% $X margin expenses same were from of same a year year quarter to as for and year aggressively historical million, end $X.XX income segments quarter of period the adjusted the point quarter shareholders of over common the $XX to taken improvement. continues as profit per up operating was margins Adjusted was up Incremental loss the or a XXXX the cost at including generated our adjusted a levels, million controlled. X.X%, third EBITDA from well XX% ago share, in third EBITDA All last EBITDA net million EBITDA Our in or above quarter ago. were $XX million to for ago, which quarter reduction compared and three XXXX. $X.XX adjusted to restructuring $XX quarter this diluted international, benefit positive actions XXXX, a

year of XXXX. more and of the million, $XXX the the a of Our ago million cash end quarter third of $XXX was working end more million net capital $XXX than at XXXX at than

XX.X%, above the at month result, our cash, our of trailing percentage a excluding XX% capital third was end as quarter a XXXX, target. working the sales As twelve of

which of in year $X in We cash the third begin a inventory operating get However, working slowdown we from XX% pace XXXX, quarter. the capital quarter $XX used in the quarter closer operations quarter to third XXXX, indicates the was of cash million levels down of third should range the we as end our of to the building inflows. in from expected by to used An in of result the This expect where seasonal second slower the million. fourth quarter. decline

As of fourth year in will cash XXXX, will we quarter full the a expect operations of generate in we for the use XXXX. such, that end from cash of position up but as

million, at of debt million compared Our $XXX $XXX end end the was quarter of the to outstanding at third XXXX. the

at the Our of in same at as million debt year. Capital third at the based year. was last quarter was the the first million it net were end on $XX the remained X.X $XXX we cash. ratio availability third million $XX of on ABL expenditures million months end and times, had of The $XXX leverage and quarter facility the million of the $X in for nine our

vacated We new when also received which property, of moved the facility we in $X take questions. your our we proceeds was Porte, in million Texas. And with into now from La sale Darien that, Operator? our will

Operator

gentlemen, you. JPMorgan. from of will the question conducting we Sean now [Operator Q&A Meakim Our our line and be Thank Instructions] session. first from comes Ladies

You live. are now

Sean Meakim

you. Thank Hey, good morning.

Andrew Lane

Good morning, Sean.

Sean Meakim

just So, of on mid-cycle. would. being been XX% Things cycle viewed got revenue the to low that from maybe years. about prior now peak, look about We've Andy, talked X% margin as than peak schedule. right we've the sight last you shifting also it talking said of you to line cycle as X% few

it – to billion get or it am you story. for revenue the to between a that? do XXXX And so, I two? in ahead not of know XX% peak type necessarily how I am you profitability good So bogey I of is takes what margins? I $X somewhere if it's a of that think a framework not wondering about could But on be trying to thinking get ourselves. am have XXXX

Andrew Lane

the in I and Yeah, for are And the know, peaked the And Sean, in X.X%, I said, focused X.X%. we you been last we year. in the over that X.X% as last look reach X.X% XXXX still on on EBITDA I U.S. the you focus product peak at better model billion on old at am with we pace I margins have was as very $X revenue in XXXX feel pleased much model in changes you've that strong really When margins where than seen. you the Peak the this felt at the our at cycle can higher couple X.X%, profitability back with and performance on because, cycle, very this as business less good that years. already and at mix are, and a way. is we

to as We spending percentage that's valve-centric So, get we back. continues runway I and to leverage business increase think in our the still market model now. the in good EBITDA increased U.S. can have we

in on couple of now performance even quarter really still line am next on MRO and that think with first our to my that focused in years accomplishment. the inventory been EBITDA targeting we're XXXX we've sales. with really I and our getting back maybe for strategies for product mid-cycle a track I year for on Jim It's us start been more So, to slow And all and and shift XXXX. purchases goal a

we're years think for on I for to in track much comes bottom still in, that maybe we're of that's spending least how next talked at range on I've And better year. but target that been about. dependent multiple for the the get going and

Sean Meakim

Thank sense. you for that that. Yeah, makes I think

towards maybe here. downstream, and just, the mid to of down I think prepared projects just more shift slug and highlighted follow-on, mentioned that's you winding so MRO in the comments, And you big the

cliff now. for cliff. a and terms I in XXXX. the like you horizon of Maybe I are revenue how understand to the that a project better like It you investors think I probably number midstream, seems decade some investors, backfill CapEx But to you able never been bit one can the those in to of onion in it's generate pushback help from really back think us is it especially materializes. peel hear the just a this expected would projects on

like A to people that. a more would we learn about to how from Just Point little B? I think do get

Andrew Lane

Sean. Okay, Good.

over there accelerated for drop year It’s major that. the really projects and about build-out a we've XXXX is U.S, so that a pipelines $XXX gas to was in midstream is, three and – for go address talking an on One spend me TransCanada Northeast been the we that now. of from million XXXX. that's a Let project

The the plant. U.S. big Shell on These with petrochemical XXXX. projects Done for polymer down other role $XXX one Northeast are that is played million drop is also well same a we but big very them, that winding in downstream, in.

second the in the that's those third million $XXX Winding But is down very Chevron And then with different $XXX project XXXX. upstream projects. an good project So very million. big we TCO for project, also where three, a growth All a future Kazakhstan, in roles. played all us.

a So very expanding and the for contracts, XXXX MRO to renewing really that, well on that. parallel contract in basis. been we and scope, from focused that's whole we've doing project are But on

So tend larger less on around to growth be projects bottom-line the contribution. for the top-line us, but

with smaller are towards pivoting fabricators. And projects projects, so, more we

a this about which at you forecasted small in be base, U.S. U.S., but our XXX our the we lot don't million, fabricator there fabricators talk by to revenue XX%. look cap $XXX year If is growing that, is we projects, and serve

year, an are And replacing and to projects are fabricators, going because business more our the of next see in growth margins model So we are small next the to the better year. much referred than MRO-focused large-cap is projects our to. that really also, profitability primarily you strength in our megaprojects be part we cap of going MRO which the

up going in if market our the position. do in double-digit we projects, the grow. see growth projects, exceed next the you year, So, $XXX end year where - to is with XX in from this million and we'll that math We contract spending think we growth to less

overall to So year. at the guide we gave, preliminary next for guide you get least

Sean Meakim

Thanks helpful. for very That's walking that. through

Andrew Lane

you, Thank Sean.

Operator

you. Thank

of Our Stifel. from next from comes Jones Nathan the line

are live. now You

Nathan Jones

Good morning, everyone.

Andrew Lane

Nathan. morning, Good

Nathan Jones

other there. Just few things following-up on a

about EBITDA than your EBITDA a $X just You at was think about if there go prepared that Is here, $X support? years were some toward where that made you've margins, - on we of number SG&A comments, in of that we structural a Is to in to requires taking reason level, look maybe the revenue business I down SG&A being peak there previous XX line the billion your at down X% get some talked why billion under talked to these were, – those rather XX% getting back higher XX%. revenue. a model a margins sustainable XX%? couldn't you but slightly changes I back SG&A few that of see

Andrew Lane

Yeah, Nathan.

Let of me add a But Jim comments couple say and too. some can start things. I would

I think, XXXX comment XX% really sustainable comment. is a my about

spending think that think, XXXX, could we increases we continue to in to I leverage I as expect we down get XX%.

in business I a Lots to carbon-heavy there low-margin had to. was are growth that is OCTG that that a slight referring cycle. difference you low had back a to think previous When we real SG&A support it. of top-line

have higher-margin don't we business. that So, model,

Plus especially Gulf and personnel. costs, up. inflation areas in in picks and the business we've content where Coast, Permian as the technical back more other personnel have had in We the

So, on some bit cost. impact of inflation little of this is a

sales we say wouldn't change low some high-end in it of it's I of OCTG. I then value-added a but of at XX%. our the Some little certainly think leverage. have - bit commodity value-added technical a services instead And model in sticks more to

we have room I some XXXX think in even do better. to

Nathan Jones

Gotcha.

So some on of bit somewhat that and XXXX. little little of growth lower of the with a of to do a takes puts bit in this revenue a a has rate

So less revenue? leverage less costs in or across revenue to growth those

Andrew Lane

U.S. in XXXX, in last able in And a Nathan. positive be that turns three the quarters, we'd especially leverage more to too. the up if spending little Exactly, to especially better result

Nathan Jones

of the I little bit from more get color margin impacts sense. could absence wonder Got a I of it. on the projects. large That these if makes of some some

to gross that? be might us the to got I've any of you. are? you're kind more give projects color differentials be margin you to have MRO, Or there us any going give you kind figure around Is around for margins that it's that's You can color low what on what in where margins. tailwind XXXX? focused larger said can of primarily to But hit going

Andrew Lane

Yeah, Nathan.

more XX.X% year Let comments. that with to. way in me then transitioning had I quarter were A the project And adjusted we the a model. of fourth shift and business, profit But it's when to would more We'll XX% in February XX.X% I say we slid be to XXXX in second that XXXX - been call, be - into the XX.XX%. February. above this margin going Jim be the will certainly and improvement, in and more will than talk the the get be some am the is less higher third this is a to the And on in fourth quarter, XX.X% couple new steady the XXXX, third adjusted specific I year, projects what from some we'll you quarter we'll expect XX.X% quarter. at as And look that we've percentage general this We quarter. in quarter, focus, XX.X% the in MRO it's with billing of gross some fourth, and finish we're that the year, first and clearer. to I in profit gross give specific transition.

James Braun

are These XX% know to which you color, are the overall the give closer a these million quarter average, company XX%. to that $XXX as of to XX%, just relative again, projects, margins was Nathan, you but little the range. down

forward. you So, certainly as of look at impact has revenue mix the an going

Nathan Jones

I'll pass Thanks very much. it on. helpful. That's

Operator

the Our gentlemen, KeyBanc following line Steve of Ladies and question Barger from you. Thank Capital comes [Operator from Markets. Instructions]

are now live. You

Ryan Mills

This Steve. Ryan on Mills for is guys. morning, Good

Andrew Lane

Ryan. Good morning,

Ryan Mills

be sounds flow here. is it free start to cash going like Yes, positive to

be potentially So, curious debt allocation on your share was could capital I focusing rank priorities, whether or or if you it repurchases M&A? just reduction

James Braun

flow. free let Ryan, address the cash me first Yes,

We've up built our ability first more lower a half the an because in tariff to the We of inventory cost. and of the impacts are year, positive. carry at inventory very position

very fourth we But am shift that off. in I as that So pleased leveling with where projects third the these in of quarter, see major are we some inventory. and

the I the and the quarter million for the we at – year. us quarter we $XXX us at around finished down $XXX of by million. peak third So, second million closer the to was at in expect be to end slightly $XXX

$XX from reduction million from and $XX flow a cash the inventory free from So receivables. million in fourth perspective, quarter

fourth now. a year the as question, always So we'll on million allocation, in carries that customer capital rolling the still organic And really $XX broader year prioritize business we that in projects next into we growth good see the MRO That's positive growth. quarter. off, these even the a and and a We next good right with first, have coming. believe, increase priority spending

So, in of January. that. up position some ramp course, of these we'll And tariffs for

first half XXXX. placing for be us to So for in of the position we'll best certainly ahead of the that position cost inventory orders

authorization. whole the and that so million $XXX for the The us Board, with the new share the and certainly management and the priority. our Board would back pullback be in sector specifically, - a priority repurchase the And as share in top pull the

So very the We'll market we'll in be active. be next week.

that's last so cash be debt of priority business M&A be down then, the growth will we And a priority. flow, excess besides paying and any and would

now. right in anything in major area are We that active not

Ryan Mills

about than kind that's Permian. persist away wanted I XXXX, the further that then, of capacity will there a it more is, little constraints all of of And Is to like what's throughout thought Okay. bit go those out mid-XXXX. into those And mid-year general sounds XXXX? in guide. the constraints your maybe baked The constraints concern in any talk

James Braun

operators. our we've not that And downstream. and that market. between of It's smaller in we balanced base. No, read market. and midstream the you growth and in opening had course, still tremendous The is It's we the That's Permian. about highlighted important are don't our plenty see very a operators, rig comments, as customer a and we equally big in one the two slowdown up

in line XXXX as a valves, pipe in So, and pipelines valves automated out. built get participate both lot the midstream we'll

see us, So, slowdown might little any we mix. with it but you don't customer anticipate our

really are and they customers with have contract pipeline through capacity. We position on focused the proceed because will they major our

have mix is with going offset will in activity we favorable, So, that our be upstream, if even the little there slowdown on. customer the we a midstream will

see going we don't to it. us. It's muted So, for be

seeing and of the track We number more to We're you tank pipeline we are completions. of side completions. big, and in the the very that fracs, fat in as well much things said, not the well we companies like are with slowdown weighted batteries or the

U.S. Our XX%, completions is upstream with up XX%. up the

well early pipeline it. is, fall the the year, metric work the completions offset that's will if in best So the off part of

us couple Permian extending don't first an bright we still So a for be see quarters. we see the will spot and certainly past

Ryan Mills

you. Thank

Operator

gentlemen, Thank back floor we and closing you. Broughton this at the Ladies have questions to Monica no for in queue turn further like comments. time. I'd over to

Monica Broughton

forward outlook. today call, us year XXXX you to complete discuss our quarter we and interest your a fourth full Global. results, on We look Thank you well as and XXXX February bye. in will day. where for join Good having good XXXX conference for our as MRC our us Have joining

Operator

and you gentlemen teleconference. your today's ladies you, does participation. Thank This and for conclude thank

line disconnect day. and a may You your have now wonderful

MRC Global (MRC) 4 Nov 182018 Q3 Earnings call transcript