MRC Global announces
full-year 2020 results

MRC Global recently announced full-year and fourth-quarter 2020 results. The company’s sales were $579 million for the fourth quarter of 2020, which was 1% lower than Q3 2020 and 24% lower than the fourth quarter of 2019.

Sequential sales were essentially flat as both the gas utilities and upstream production sectors experienced growth, offset by declines in the midstream pipeline and downstream and industrial sectors, the industrial PVF distributor noted. The international segment also experienced growth on a sequential basis, it added. 

As compared to Q4 2019, the decline in sales was across all sectors and segments with the exception of the gas utilities segment, which experienced significant growth. Net loss attributable to common stockholders for the fourth quarter of 2020 was $11 million, or $0.13 per diluted share, as compared to a net loss of $30  million, or $0.37 per diluted share in the fourth quarter of 2019.

“Overcoming enormous challenges in 2020, I am proud of our MRC Global team for staying focused and executing our strategy for long-term shareholder value,” MRC Global President and CEO Andrew Lane said. “We exceeded all the targets we set for 2020, including generating $261 million of cash from operations and reducing our net debt by almost half to $264 million, with a leverage ratio of 2.7 times. We ended the year with $119 million in cash and our term loan does not mature until 2024. 

“We set a new record for adjusted gross margins in 2020 achieving 19.7% for the year. We also reduced our normalized operating costs by $113 million in 2020, with a majority of these structural, positioning the company well for higher incremental margins going forward. I am also very happy that despite the challenges of the pandemic, we stayed focused on our employee safety and finished the year with the best recorded safety performance in our history. As the oil and gas market recovers, we are well-positioned with a great team, $551 million in liquidity and a lean cost structure that will allow us to take full advantage of the opportunities ahead.

“MRC Global is celebrating a significant milestone, our 100-year anniversary, an achievement few can claim. It is just the beginning however, and we look forward to remaining the leading global PVF distributor to the oil and gas industry, providing world-class supply chain solutions for our customers, creating new opportunities for our employees and generating superior returns for our shareholders.”

MRC Global’s fourth quarter 2020 gross profit was $90 million, or 15.5% of sales, as compared to gross profit of $131 million, or 17.1% of sales, in the fourth quarter 2019. Gross profit for the fourth quarter of 2020 and 2019 each reflect expense of $1 million in cost of sales relating to the use of the last-in, first out (LIFO) method of inventory cost accounting. Gross profit for the fourth quarter of 2020 and 2019 was also negatively impacted by $12 million and $5 million of pretax charges related to the noncash write-off of excess and obsolete inventory, respectively. Adjusted gross profit, which excludes these items as well as others was 19.7% in both the fourth quarter of 2020 and 2019.

Victaulic purchases
Waupaca manufacturing plant

Victaulic has purchased a 220,000-squar- foot Waupaca manufacturing plant in Lawrenceville, Pennsylvania. When operating at full capacity, the facility will increase Victaulic’s foundry production capacity by 70% in the U.S., and allow for future growth as Victaulic’s business demands increase, the manufacturer explained. The facility, including two foundry molding lines, will also enable Victaulic to produce larger-scale products.

“The addition of Waupaca’s Lawrenceville foundry will provide the scale and capacity necessary to continue our growth plans and, most importantly, service our valued North American customers,” Victaulic Chairman John F. Malloy said. “Additionally, Victaulic is doing its part to add vital manufacturing jobs within Pennsylvania. “A major aspect of our business strategy has always been to manufacture products in close proximity to our customers.”

Victaulic anticipates adding new jobs to Tioga County in the near future, it said. It is expected many of the new positions will be filled by local talent from the area’s skilled workforce with new hires joining the current Victaulic team of more than 1,600 Pennsylvania employees and about 4,500 people globally, it added.

“Victaulic’s investment in Tioga County is a testament to the company’s incredible track record of growth, vision and passion for the communities they serve,” State Representative Clint Owlett said. “I look forward to welcoming this family-owned business with Pennsylvania roots to our community along with the jobs it will bring to our hard-working residents.”

Rick Bucher, Victaulic President and CEO, added: “Victaulic greatly appreciates the support of Develop Tioga, Tioga County, the Tioga County Commissioners, and its local elected officials, particularly Senator Cris Dush and State Representative Clint Owlett. We are dedicated to building a long-term, mutually beneficial partnership with the region and its hardworking residents.”

The company is also nearing the completion of an additional 400,000-square-foot light assembly operations facility in Lower Nazareth, which is expected to be fully operational in 2021.

AD announces 2020 results

The AD buying and marketing group reported total 2020 member sales were $45.1 billion, a 3% decrease from 2019, with purchases by member companies from AD supplier partners at $12 billion, down 1%. 

Despite the clear impacts of the pandemic, AD achieved a 1% increase in net distributions to its members and was able to offer innovative services and support to help members navigate the rapidly changing environment, it explained.

For 2020 same-store sales by business unit: plumbing, heating, cooling and piping (PHCP) divisions remained at 2019 levels; industrial and safety divisions decreased by 7%; electrical divisions dropped by 5%, while building materials grew by 4%.

By country, same-store sales of members in the U.S. were down 3%, Canada same-store member sales decreased by 2% and Mexico same-store sales decreased by 15%.

“When we look at member purchases from AD suppliers being down only 1% from 2019, we see the powerful effects of the partnership we help facilitate,” AD Chairman and CEO Bill Weisberg said. “In addition, several months in Q4 were all-time records for the group. In spite of 2021 still being a pandemic operating environment, AD is already seeing solid growth over 2020 and 2019 levels.”

Reflecting on how AD centered its activities in 2020 on maximizing support to members, Weisberg noted: “From successful efforts to preserve rebate dollars, to new initiatives such as real-time business intelligence reporting, enhanced market planning activities and increased communications, I’m extremely proud of the way our community adapted to ensure we weathered this storm. I’m looking forward to this new year and a heavy focus on growth for all of AD.”