DNOW - Earnings call 4 2023

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Operator

Good morning. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the DNOW Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Mr. Brad Wise, Vice President of Digital Strategy and Investor Relations, you may begin your conference.

Brad Wise

Ian. you, Thank and Year everyone, DNOW's Quarter Fourth Good Earnings welcome Conference Full XXXX Call. and morning, to We appreciate you interest joining us, and thank in you DNOW. for your Executive Senior With and Financial today is Cherechinsky, and me David Officer. Mark President Vice Chief Johnson, and Chief President Officer;

is under statements or we is any is about year. later our We for that risks differ me, the your comments call, valid subject -- outlook in including, statements of responses as on results but make Stock and assume remain information any XXXX, during securities the to subject New not some subject that questions, to company's brand, Please reason. publicly change. which contain quarter to These for laws symbol. which obligation They this forecasts, and do projections business. ticker to note the and are uncertainties, estimates, No one these DNOW may may within limited We of any York which update actual or operate today, the February the also forward-looking U.S. Exchange the statements based the are forward-looking meaning limited of including should materially. revise the XXXX, to excuse statements forward-looking not in later XX, undertake federal

supplemental found our in our at Further our major the information earnings release with may to for I DNOW the you Commission or information reflects judgment that at best be file discussion risk refer with management's within a of latest the operating and detailed conference as ir.dnow.com that the filings SEC. and In as U.S. well and information affecting this the of live business. financial time-sensitive Exchange on our addition, call. website on contains call Forms has time Securities XX-Q factors the XX-K more

to we earnings other Inc., excludes have determined note financial U.S. of comparable In an to with DNOW in GAAP, our to investors diluted as of relative that attributable to with non-GAAP per excluding calculated also GAAP a therefore, of most been income non-GAAP not earnings GAAP. other other information certain excluding including Each EBITDA; the financial costs. each accordance and end Inc., of attributable in measure effort to Please share the information measures, its costs, at disclose sometimes available results release. net by EBITDA, provide impact measures excluding refer other as referred to and DNOW costs; various you'll additional financial the supplemental reconciliation to our costs, these

As morning, this key be year XXXX will XXXX. Form the XX-K a also site it available plan next the our of website. fourth our and We available takeaways be A today's to today, file of section the results call later on presentation quarter contains and for Investor the on XX covering for of our and days. will full website replay Relations our

let Dave. Now the call to turn over me

David Cherechinsky

XXXX everyone. great year and for when year rosier momentum Thank to budgets and about it we've we XXXX, ago, from the team groundwork in despite levels the and talk the actually I'd was a projected our with was market, for guidance But our full year. when and the customers off and outlook than less growth, unfolded. brighter you, a year gave future like great their then results of Brad, how produced a analysts the morning, the forecast A how that. bright laid beyond start good XXXX

In fact, our yet. it best was year

what was growth producing was what months business. X% the for full demonstrate by free X% working strong strategy about growth X-X to flow. XXXX. we cash to and how capital-intensive Our year XX% we revenue fuel team To will produced while $XX significant free or a flow talk historically of EBITDA and increase committed kind full that punch revenue forecast revenue. XXXX $XXX accumulation approximate solid million in of then was DNOW, driving let's to year compared to delivered. at we flow operations cash million targeted from to XX ago, XXXX an Cash

in revenues climate. expand to the First, rosy in XX% revenues we X% at said they guide, That between We XXXX expand even lower XX%. of X% and our ambitious, and X% said prospects. expanded with a would but softer-than-expected was end would

were really on XX as growth. solid prices of XX product strong revenue see would and to were and XXXX. market, in planned, we given actually margins main points. strained said basis a We about supply chain basis to margins but gross drag comparison as gross contraction Solid margin was closer weren't the Steel points, it the thus

XXXX second gross were really margins strong, year after best our history XX.X%, the in XXXX.

revenues. said of about year X% we Next, was at EBITDA at ended That's targeted how X.X%. we the

actually to $XXX cash our This of million plenty free produce approximate million after year million XXXX, in $XX and dry up the cash said doubled $XXX or balance $XXX Finally, We full $XX free to free generate forecast from allowing flow beefed expenditures. for of flow to was cash million cash XXXX. powder to million at in we it flow in XXXX capital in said grow. year-end we'd cash flow deducting operations

leaders meticulous tirelessly level their after are sought for flows, by solutions I dependable come product provide products who source expect. pros the admired managing and team, of our to operations our worked our our and our our flexible of collaborating to source training customers. our are thank who they speed strategizing and these snags, accuracy planning provide have results, the care being to and responsiveness, customers people, and I'd suppliers, for to conscientious sales when with want like For sales service employees to thank there world-class and

in team market. smart An organization of and equip back the win and lean and or caretakers who to promote brand underpinned defend employee office outfit cheerleaders by a the protect our

you. For accomplished all that XXXX, in thank was

strength. Process I'll Service, Solutions U.S. our FlexFlow U.S. to EcoVapor business our Energy Despite various significant Most later. and business more demonstrable unanticipated Global and Process Centers full about notably, talk unit we Pumps, delivered every in growth double-digit market brands. Odessa revenue showed headwinds in Solutions year include revenue XXXX, business Power

But completions. we the discussed our to and correlation of rigs revenue have drilling first,

in today, rigs As deployed are fewer years are the needed rigs ago. a to more X market compared just efficient to result produce similar

transport are the However, dynamics drives and to DNOW when work to and gas. and wells, goes long-term they process pipe, fittings, efficient in the rig our oil and electrical drill and separate, infrastructure production about as we're performance And for and still And to reflected energy our grow. a demand pumps, our mechanical they highly plumbing that process operating is collect, fabricated as and happy for market outlook equipment. demand customers those valves, market forecast require

speak I'd an to to like the eye future with a strategy. and DNOW longer-term

high flow investment on drive We free like improved earnings wastewater, existing and developing growth industrial adjacent in water, revenue evolution processing. levels cash of and midstream, chemical new mining continuing to businesses our capturing by unlocking by energy customer markets and are focused streams and

reducing them are power eliminating In flaring systems. helping the energy gas of as evolution with used routine elimination well landscape, by pneumatic as to our or replacing customers decarbonize devices compressed methane the industrial-grade we air by

DNOW gas EcoVapor for of sales to targeting EcoVapor X sales products, fabricated and and year, products solutions RNG afford an the renewable product are provide market, with pump facilities. specifically the in Zero packages, other biofuel fuels pull-through our growing in past opportunity the landfill Over by PBF form consumables.

current We capture our being customers. our and significant directed is primarily capital by are emphasis investment on growing carbon where storage markets

traction. past the some Over capture few this I've to as quarters, wins begins highlighted gain carbon market

expect and more a we to beyond provide amplify ahead, meaningful growth. revenue contribution, XXXX helping to Looking

industrial mining processing. We in the and our towards see areas. water relationships, capture to investments from migration organic population markets water, Leveraging like growth organic partner growth chemical warmer we ability infrastructure resulting from growth and U.S. have several opportunities

we technology market, market, investment minerals in batteries see used AI continued demand and applications. as other by For as earth driven the rare to in minerals EV rare bringing for the well mining

opportunities to promising existing service and of seal capture that pump see to base the an mechanical partnership markets, installed processing deploy revenue allows also technicians. service from manufacturing us leveraging We field our our chemical products

quality markets. are Solutions requirements, Whitco Supply acquire or I further looking agreement was in financial an complementary pleased in businesses to into announce Process an last week growth acquisition business the transaction. our to Finally, that for entered our would and DNOW we meet the to U.S. The that strategy, more earnings X our all-cash reach into expand our highly either support midstream space. we expand together extend and companies grow highly diversified acquisitive, bring

strengthen enhance our We closes. our profile look sharing free to But bring shareholder the transaction, will increase when flow and cash acquisition about earnings detail completed, expect this we are and the the forward will deal after to excited more opportunities value. ability and

better improved to revenue In and some Fourth quarter. sequentially, margin million, hit highlights. financial benefited we XQ mix additional from dynamics. I'll than market expected the quarter Now also $XXX consideration pipe gross 'XX, vendor given improved product fourth overall was in margins, by and aided XX.X%

revenues quarter year-over-year year full increase. an the above were up billion, guide XXXX, of $X.XX For year-over-year, previous X% our X%

business $XXX cash XXXX, year operating full or X.X% growth the where strong a million and less an or activities in $XXX generally of in our cash produce We revenue. contracts expands. business business our the produce cash $XXX the or million Generating revenue added free stronger For in expanded nearly was million flow accomplishment. quite from is when period when from X% in cash EBITDA $XXX years million market

back our flow years since going buying also our generated shares greatest XXXX, $XX public, XXXX. free best of one in while million in In earnings cash produced we and

regional X% U.S. was the X%, In being strong response due $XX with the to seasonal X% a some impacts. dynamics. sequentially and completions basis. a while comments million, rig the revenue decreased or revenue given count U.S. implication Now million market down on decreased expected sequentially, seasonal U.S., $XXX

the activity Our declines in drilling rigs. model for associated with revenue to workover rig remained steady products fewer helping supplying buttress quarter,

service our fulfillment I limit center regional Mark cash of we supercenters, from in in North period. to we network. centralize wanted in will continue efficiencies our saw about the coming working we redundancies result initiative efficiencies the in level mega and regional Across Dakota, contributing where our to Williston capital capital area flow the inventory working improvement to the in as supply improved the significant highlight but see our in quarter, Northwest talk our at a

pump XXXX million with On business fabrication revenue units. from our Process acquisitions. Solutions for Solutions or about added improved year-over-year products, demand Solutions, packages grew Process U.S. X/X a Process XX% coming rental of and basis, growth U.S. U.S. of In $XXX

since For of the DNOW's building steady the new represented out a of high fourth operators quarter, from U.S. skids created we tank pump division. units, X/X battery Process U.S. separator Demand facilities. variety remained and vessels LACT Solutions for revenue, a

in but revenues industrial water For our such pump pump the day-to-day in maintenance only mining increase more distribution market Aiding higher steadily the lithium as areas, rental When quarter, opportunities businesses, We're we we year full reach, core municipal for increased markets looking incremental and and increased pumping demand Flex in markets uranium water expanded expanding operations. Flex trailer-mounted with not during demand at from and saw and programs transfer. our oil growth by our districts our preventative also solutions business XXXX, at provided adding horizontal disposal additional our gas Flow. margins. activity produced seeing Flow

revenue due quarter, project a Canada, X% headwinds spend. the softer was paired $XX seasonal sequentially, with In to decrease for million of primarily

year and areas, expect and million, full strong first investment grow international affordability in customer not international to projects in new energy XXXX. alternative activity, continues the we oil revenue On grew $XX reliability with in including was security, a gas to revenue XQ XX% coupled of 'XX that international, technologies. million about in continued quarter flat investment and energy in repeat with as in basis, $XX do project For sequentially

for in in in EPCs, added Project ethane West spend saw offset several cable serviced cracker platforms, projects. a accounts increased for Australia, downstream target we project. related We subsea Australia shipped providing remained Africa the large and declines compression project. we products in LNG offshore electrical surface activity by our supplied activity cable and was Norway, finally, electrical as a for maintenance Kuwait, U.K. And for And export steady elsewhere. from model by Activity targeted an for strong procuring project

comments further And energy few evolution. to now I'd a the like to make related

designed COX. markets. the increasing continue renewable with gas of successful and providing capture in track carbon LNG quarter, fuels to project carbon in for permanently were to fourth projects We of products the annum a variety to capture an and a of the into up project. X tons we export investment natural gathering million will This storage In per sequester number combination

for required products that previously follow-up phase. In phase to in carbon we orders scope announced of are addition, adjusts capture originally as day-to-day contemplated air were work items during the win direct not projects and continue capture project construction on and the the

the EXXXXXX sale Turning to operator to our in gas growth units treat business. from used the and a EcoVapor gas to RNG. We landfill quarter saw landfill of market numerous as

initiatives. Moving Digital NOW our to

revenue the for by as with streamline as technology technologies a digital quarter percent systems process. leveraging Our total increased digital and we continue leverage work integrate our to XX% processes to automate sales to of SAP the procure-to-pay to customers

activity a the was Our BXB mobile quarter during by use users programs driven quarter. in from out e-commerce to the revenue also a several our recently rolled having as app acquire higher mobile we material. consignment usage app e-commerce full of onboarded where our users customer prior experienced increased as -- we in customer from Growth quarter customers

to that, it me With over hand Mark. let

Mark Johnson

Thank million, down XXXX other billion, a or was X% year-over-year million EBITDA up revenue. was fourth or an million up X.X% revenue EBITDA year from fourth good basis, basis, quarter. a or million full and the quarter X%. $X.XX the X%. quarter was or $XXX Total morning, XXXX $XXX fourth $XX EBITDA from XXXX for XXXX. million million year third Dave, XXXX total total $XXX you, or or $XX On of revenue of revenue, full or costs basis, up everyone. XXXX X.X% increase was a X% of from $X million was On revenue quarter On the $X excluding

fourth the $XXX from $XXX or Canada nearly million, $XX quarter full from or quarter U.S. totaled year In totaled third impacted full currency quarter, revenue down of $XXX the or of a year revenue $X.XX totaled for million from XXXX. unfavorably a million Canada, $XX XXXX. billion, basis, a XXXX quarter third On for million, by the from of decrease XXXX, XXXX of revenue decrease $X a foreign million XX% or up from the totaled U.S. XX% X.X% fourth XXXX. or X% revenue On $XX of million million, million X% basis, XXXX exchanges. $XX

XXXX. a the gross quarter million million margins and or solid million, the to up at from for up XXXX. XX compared and full XXXX the XX.X% $XXX were revenue fourth margins $XX XXXX. or XXXX, up selling and in full or a Warehousing, revenue WSA for of On flat XX% were was basis, fourth XXXX $XX or international administrative, basis sequentially when million XXXX points WSA, sequentially to On million, of XX.X%. International Gross fourth year $XX as for year million, revenue a the sequentially. or totaled quarter XX% compared basis up for percent year-over-year. $XX quarter $X improved was quarter

and we quarter, reported million amortization In of the expense. depreciation fourth $X

$X Moving in million segments. and to U.S. geographic profit fourth $X delivered respectively. million, the the operating operating profit profit operating by in quarter, $XX the In and international segments million Canadian of delivered

fourth Moving XX% the and release favorably future to be resulting company's rate, DNOW's of $XXX estimate XXXX income. effective we allowances million noncash tax our effective non-GAAP tax tax projections GAAP with was closely XXXX, our to assets carrying impacted the income will its in be effective will of in our the value of approximately quarter taxable go-forward we valuation by taxes. tax rate tax more In rate expect Starting deferred assessment of from of XXXX that rate and aligned GAAP XX%. the

effective from moment, of tax tax statement expected the tax the on which that calculated a rate from face statement, tax differs at rate these basis the income valuation includes on the income tax the you earnings at remind income I favorable the is our the changes GAAP tax in benefit from expense on a allowance assets. levels to deferred the provision due the

effective was XXXX. non-GAAP of As fourth the tax such, valuation in we of the for full resulting XXXX favorable the this purposes, for is year the tax why and for our XX% and non-GAAP changes quarter from when rate modeling imputing the XX.X% exclude the allowance approximately rate, impact

on XXXX From available income was operating fourth Net pay a to to expect income the DNOW federal attributable Inc. fully U.S. quarter QX loss $X.XX for was Inc., basis, to or $XXX share. other fully per non-GAAP million net cash excluding taxes attributable And XXXX for or $X.XX a diluted due to net million DNOW costs, diluted perspective, we $XX income don't carryforwards. share. per

of discussed benefit of valuation impacted assets. As net million QX earlier, of release a recognition from the our on the GAAP XXXX deferred favorably certain noncash income was allowances by the $XXX tax

lower Cash quarter, of and million from fourth the in position availability. quarter primarily ended additional net the to cash paired end increased $XXX position by $XXX At X quarter, million with total and million our inventory facility debt the had we million. sheet. million, of in credit with levels earnings. comprising $XXX the $XXX the $XXX a of Moving We of liquidity balance cash

Our extends years. the the providing existing revolving million immediate under facility capital into facility DNOW to X $XXX access with next December for credit XXXX,

a And quarter decrease of working third XX.X%. the revenue fourth from percentage we a quarter, quarter end was fourth impacted XXXX, Accounts for as the the to Accounts of an the ending fourth or $XX $XX million Days XX fourth Inventory capital, cash receivable project in outstanding, of annualized quarter. expect at the compared the a in deliveries slight of excluding end fourth the million million sequentially was at sales $XXX of $XX DSO, churn The a inventory quarter. a at days was quarter. quarter. into end annualized the the first normal was inventory with of million payable $XXX period, levels, decrease third quarter, the quarter from of was the build rate of balance decrease and this the large of $XXX of X.Xx. timing fourth million million quarter the

In the of operating in year million contribution we cash XXXX. from quarter attributable reduction basis, earnings beat $XXX net to flows activities capital. working a On and and activities cash $XXX expectations generated million XXXX, delivered fourth full strong a in XXXX of we from in operating our

generating in of capital surpassed also We of generated flow. flow, million. target million free we quarter, XXXX, $XXX free $XXX million fourth free expenditures our flow cash including cash in the cash $X In

through to program is execute authorized our XXXX. XX, that repurchase continue on We share December

repurchases $XX XX, December of repurchase program million under authorized our XXXX, cumulative million. our As share $XX equaled

remains accretive we through the as opportunistically acquisitions to attractive company the and a allocation ability disciplined from priority, the deviating our framework balance to growing to use generate repurchase commitment management. while having organic shares broadened to growth and Our without our also tools shareholder key returns sheet capital approach

generation continue flow be debt-free top We to priority. cash keep a and

And let to the call turn with me Dave. that, back

David Cherechinsky

CAC Mark. outlook are that spending the modest expect bottoming Permian. be reset, growth We grow the low be companies what activity we you, as completions to may current grow levels. and production on and allocated announcing we're the public will to Thank reading, to In U.S., levels, some production XXXX. for large second Switching based our counts noting rig customer to of customer believe budgets primarily half January from poised XXXX in U.S. the in maintain

we continue result, a market execute to in grow and markets. we capture As the growing to to and first adjacent year-over-year sequentially from XXXX levels on business basis and share as a our industrial on U.S. in expect quarter look

we the projects revenue expect the that fourth we XXXX. X% to compared expect out that Taking sequential see activity of see the together, had production, XXXX, increase expect we range will declining repeat several quarter a occurred to in X% for quarter to it for playing quarter. we in flat we fourth year. not all scenario the the of to maintain to customers Canada, Internationally, and considering In sequential first

higher vendor expenses due remain flat fourth First in with XXXX combined XXXX levels could consideration. quarter dollars reduced XXXX from quarter resulting first EBITDA reset payroll taxes, a quarter to with

full levels of could year from XXXX XXXX increase expect revenues X% EBITDA XXXX to year to We approach full revenue. X% X% and

cash the movement activity. to of inventory in depending and we quarter to million levels of first cash free we XXXX $XXX these as replenish generate revenues. up forecasted consume in in to pace expect XXXX flow support expect And at in the to on growth We

excited U.S. stellar performance increase, off EBITDA, million by notably line quarter our while revenue top division. flow, or free produced revenues in X%, Process cash excluding top generating XXXX, last increase original company. double-digit costs, twice in I'm Solutions, $XXX line strong other public In to -- a our closing, year our guidance million capping since significant finish, record full $XXX growth In delivered $XXX impressive we provided every becoming in fourth another year. a grew million Adding February.

believe I'm earnings, the call. our acquire say reached partnership value. to and about we I on will shareholder enhance hope cash and our about this this free more Supply to agreement flow Whitco profile thrilled increase May

of needs. to highly the delivered DNOW I the want in and the link world's company have who our and Finally, to thank critical evolving women talented these be positioned men energy supplying results

With call the let's for open that, questions.

Operator

[Operator Instructions] of line Our first question Nathan comes from Stifel. with Jones the

Nathan Jones

free start flow, some give this capital you flow is to leave cash working working XXXX. from normalized you Maybe in any XXXX. for it questions at feel cash commentary I'm free expecting us it cash there. would where great contribution what with level I'll sustainable on in And free on off the of super on kind some going with can you're color from outlook be cash flow revenue. and given capital the like to how strong number of flow

David Cherechinsky

Okay.

revenue our of to -- So was guidance X% growth X%.

So going it's year the a slow into year. new kind growth of

largely average on similar the will be capital working our expect I year. during So basis an

inventory there in So period. P&L. we're that the to off show but are up on balance sheet, Yes, the most cash the the there of throw going in to some will coming is make bit improvements directly of a inflation our from

flow free replenish a it fourth going quarter strong you will is free a to XXXX, is this in notably generally, suggested. like be really after a flow cash. but quarter, strong that we're cash in in cash little first But a we reduced of drag to especially P&L the a the really where where bit like still going be generated, on and our year the So inventory

Nathan Jones

not it's is destocking that of might system. built XXXX lot So of inventory issues. I mean in companies from overordering a There's -- view saying in across basically supply during We're excess you're your excess chain inventory the seeing What you're industrial lot inventory. a done of the system in excess something during this a that there's is not business for of that of cash some revenue. normalized inventory flow big have a that up $XXX contribution from is this level COVID, liquidating assuming like target here this level free -- million the

David Cherechinsky

That's to -- was I is some we the right. overhang in If in in inventory. anything, shortages that experienced destocking anything were quarter. If XXXX. fourth answer some a from million yes did think your around might we That -- have was question. included the the $XX That reduction it

lot that But some won't P&L drawdown. XQ in that's a of the new don't system, from which year, really right, -- up it's bring the some that cleaned of have especially excess the back we inventory So in going in. the and to we products after largely come

Nathan Jones

awesome. using there that Then Great. a was mean, I big cash, in share slowdown That's on repurchase. the I guess,

much half. do You second the didn't in

commentary the for on pipeline. of any And plans the So then actionability that. the

You quarters. acquisitions the over here guys last a small fairly consummated few few have

the outlook for on anything Just that.

David Cherechinsky

Yes.

believe, it's -- the In shares. back, the And repurchase quarter, bought fourth terms of of in quarters, would we've notable ago acquisitions company, million one weeks that in the I back -- we X of in a the we announced the larger first in the bought one history. a In be to X share our in XX difference. a agreed million buy this We few shares.

most that was or terms invest capital organically, were of that deploying saving produce to most the way And in for return. priority up -- a to So we've we all course, first our purchase. the of that's way along said sure profitable

we Secondarily free the which by exploit in accretive accretive flow, that share that us to And market. separate intend to good our cash are repurchase finally, do. companies earnings, to program,

program to. thing and repurchase So it's . a exploit but plan share or we're to complete anything timing Nate, going that than more that

Operator

Out line Instructions] Robertson question the from next with [Operator Jeff Watertown comes of Research.

Jeffrey Robertson

A the Whitco? include on a guidance. from question contribution Does that

David Cherechinsky

It does not.

it's until Our going include a it closed expect be it of of out course, any would, But right position surety, guidance bragging include the come today. really until doesn't in -- not and does now, If May. to those we're about that laid impact. we're fruition, going we it to the in is, we it to it's

Jeffrey Robertson

then question business you in Solutions. a you type transition current energy of energy on Process about your projects? attribute Can talk much how the would to And evolution

David Cherechinsky

Yes.

I think in $XX of was revenues. scale around XXXX activity the million in

little in a the That's organizational number. the to think path it's We not distinguish big estimate in is market. that double XXXX of a But for So in XXXX. pie we in a and us to that in that's opportunity focus going double XXXX. big piece $XX us. We over think that million a the XXXX more than

Jeffrey Robertson

underway? you that would that projects have Or line that anticipate contribution from is be on? doubling, to potential projects from of projects that from are currently sight that's be started are do -- that that some of you just Is yet

David Cherechinsky

of is winning the and half projects Yes. new year is the new Probably half others in the booked $XX for expectations of that that doubling million in business. bag, or approximately

Jeffrey Robertson

question. And then last

about the spoke Whitco Does midstream? energy? the line, and product adjacent expose some mainly outside that it markets water -- traditional of are to energy. You you Or that would just markets you other to is that traditional some

David Cherechinsky

the DNOW for Whitco, going think spot primarily for be opportunity of would is that be that it's now strict kind midstream I we'll of -- terms in we're after. I the think about But it. sweet and questions about

Operator

question comes of the Couzens with next Cole from Our line Stephens.

Cole Couzens

the on but an Sorry, we U.S. land really yet. seemed might in inflection I have rig joined the call bottom to this here hit a late little already, count and you range, seen but bit have haven't XXX

maybe guidance to in through maybe the conversations would as flat assumptions for if could up it up that how baked helpful are customer and into shaping you guys the So X% context kind be are parse of that well?

David Cherechinsky

Okay.

then terms talking We meantime. joint stability, time. In the come. there is were good follow that some to half, XXXs sure second rigs. in There are not think to real U.S. ultimately path completions thing more the We're lift. customers, sentiment stability a Completions in the we that's see And some of the low but it's I rigs. I think contractors about counts, the see period expect for low which rig likely is when general going after uptick we some for a rigs. declined believe some will January of having of a in adding in

we there some So growth expect well. as

Cole Couzens

solutions solutions to kind that rough And of up of process businesses? of frame guys then Is EBIT X or gross mix That's Okay. you process see way higher versus we profiles level kind It can any the go continue the there like margin on helpful. higher. energy. seems

David Cherechinsky

is I'll tend What say better to could strong, bottom from best tends see leaner, in over the now, we it even we line XXXX. our When had XX% margins. When cycle. Process grew are the things Process business, has Yes. XXXX, Solutions out is in -- But higher -- Process business are we is Solutions Solutions cycle. right depends to ever its in year where is see on this

over the little might so is time. periods stronger those of one be versus this that And generally where on but centers, earnings evens energy out a -- the

Operator

Robertson Watertown Research. And Jeff we have of a follow-up with

Jeffrey Robertson

Dave, a consolidation. industry on question

ability provider all customers. with independent to DNOW provider being they to? the relationships among by You that consolidation supply Do turn and your think gain furthers some type of the some of about big aligning chain XXXX maybe as share your you producers the in the talked market choice of strategic some

David Cherechinsky

America few much rule when big of or together. Yes, think come I as businesses North distributors they -- happen, handle consolidations I my me, thumb when expectation think is the only can the these larger a to in

the accrues think like to a benefit So DNOW. I company

We than most these come we're North really together, a in to companies equipped that good America. on. better footprint have When companies take

course, customers always these integrated might very the go our services of chain of as either And business the up we they to picking we're the supply more one pursuing a have the important rest company come models at company the And that they acquire. could together. of in If way. with is customers, companies shot acquiring us,

a be generally, net incumbent very acquirer. if good as supply chain situation positive that see the could we services is customer So it a our and

Operator

no over like are Brad things at Wise. time. There I'd further to hand questions Mr. back to Okay. this

Brad Wise

you, in your conference call to DNOW. everyone with interest XXXX conclude this first I'll back to it to forward . with on the you. May. today look and for thank that, And everyone, later quarter Thank in call. Well, your turn speaking year our questions earnings We operator our

Operator

today's call. conference concludes This you. Thank

now disconnect. may You good a Have day.

NOW (DNOW) 15 Feb 242023 Q4 Earnings call transcript