MRC Global 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 the third quarter of 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 international segment also experienced growth on a sequential basis. As compared to the fourth quarter of 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.
Andrew R. Lane, MRC Global’s president and chief executive officer stated, “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. 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 doe snot 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.
“Next week, MRC Global celebrates 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.” Mr. Lane added.
MRC Global’s fourth quarter 2020 gross profit was $90million, or15.5% of sales, as compared to gross profit of $131 million, or 17.1% of sales, in the fourth quarter of 2019. Gross profit for the fourth quarter of 2020 and 2019each reflect expense of $1million 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 2019was also negatively impacted by $12 million and $5million of pre-tax charges related to the non-cash 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.
For the full financial report and sales by segment click here.