MRC Global Inc. (NYSE:MRC) Q3 2023 Earnings Conference Call November 8, 2023 10:00 AM ET

Company Participants

Monica Broughton - Vice President, Investor Relations and Treasury

Rob Saltiel - President and Chief Executive Officer

Kelly Youngblood - Executive Vice President and Chief Financial Officer

Conference Call Participants

Tommy Moll - Stephens Inc.

Nathan Jones - Stifel

Chris Dankert - Loop Capital Markets

Operator

Greetings, and welcome to MRC Global's Third Quarter 2023 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded.

It is now my pleasure to introduce Monica Broughton, Vice President, Investor Relations and Treasury. Thank you. You may begin.

Monica Broughton

Thank you, and good morning. Welcome to the MRC Global third quarter 2023 earnings conference call and webcast. We appreciate you joining us. On the call today, we have Rob Saltiel, President and CEO; and Kelly Youngblood, Executive Vice President and CFO.

There will be a replay of today's call available by webcast on our website, mrcglobal.com as well as by phone until November 22, 2023. The dial-in information is in yesterday's release. We expect to file our quarterly report on Form 10-Q later today, and it will also be available on our website.

Please note that the information reported on this call speaks only as of today, November 8, 2023, and therefore, you are advised that information may no longer be accurate as of the time of replay.

In our call today, we will discuss various non-GAAP measures. You are encouraged to read our earnings release and securities filings to learn more about our use of these non-GAAP measures and to see a reconciliation of these measures to the related GAAP items, all of which can be found on our website. Unless we specifically state otherwise, references in this call to EBITDA refer to adjusted EBITDA. In addition, the comments made by the management of MRC Global during this call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of the management of MRC Global. However, actual results could differ materially from those expressed today. You are encouraged to read the company's SEC filings for a more in-depth review of the risk factors concerning these forward-looking statements.

And now I'd like to call over to our CEO, Mr. Rob Saltiel.

Rob Saltiel

Thank you, Monica. Good morning, and welcome to everyone joining today's call. I will begin with a high-level overview of our third quarter results and sector performance and then provide some preliminary thoughts about 2024. Kelly will provide a detailed review of the third quarter financial results before I end our prepared remarks with a brief recap. We continue to execute well for our customers in the third quarter despite the fact that our rate of top line growth slowed a bit. Revenue for the third quarter was $888 million, up 2% sequentially over the second quarter. We generated $70 million of adjusted EBITDA, up 11% sequentially, resulting in an EBITDA margin of 7.9%. This marked the sixth consecutive quarter for our EBITDA margin to exceed 7% as well as our sixth consecutive quarter for adjusted gross profit margin to exceed 21%. We also realized $102 million of cash flow from operations in the quarter, bringing our year-to-date cash flow to $92 million, exceeding our guidance for the full year. The strong cash flow result was a fee through excellent work by our supply chain and operations teams in managing our inventory levels and our finance team in managing our working capital components effectively.