DNOW Reports First Quarter 2025 Results

Earnings Conference Call

May 7, 2025

8:00 a.m. CT

1 (888) 660-6431 (within North America)

1 (929) 203-2118 (outside North America)

Access Code: 7372055

Webcast: ir.dnow.com

Recent Capital Allocation Actions

• Repurchased $8 million of common stock in the first quarter of 2025, and $16 million year-to-date, under the $160 million share repurchase program authorized this year
• Completed acquisition of Natron International Pte. Ltd in April, headquartered in Singapore, which expands our electrical supply capabilities under the MacLean International brand in the Asia Pacific region, serving traditional and renewable energy, infrastructure and other commercial and industrial end-markets

Financial Highlights

• Revenue was $599 million for the first quarter of 2025
• Net income attributable to DNOW Inc. was $22 million, or $0.20 per diluted share, for the first quarter of 2025
• Non-GAAP net income attributable to DNOW Inc. excluding other costs was $24 million, or $0.22 per diluted share, for the first quarter of 2025
• EBITDA excluding other costs was $46 million or 7.7% of revenue for the first quarter of 2025
• Invested $33 million in additional inventory, with cash used in operating activities of $16 million for the first quarter of 2025
• Cash and cash equivalents was $219 million and long-term debt was zero at March 31, 2025, with total liquidity of approximately $567 million

David Cherechinsky, President and CEO of DNOW, added, "Following our second-best fourth quarter in history, we beat first-quarter expectations with revenue growth of 5% sequentially to $599 million, and delivered our second-best first-quarter EBITDA of $46 million, in a market with fewer operating rigs and completions.

We executed adroitly on our capital allocation initiatives, closing on a small important acquisition in Singapore to expand our MacLean International offering. We repurchased $16 million of common stock on a year-to-date basis, under our new $160 million share repurchase program, while strategically adding $33 million in inventory for organic growth, which should set us up favorably in this environment.

We are uniquely well-capitalized, with a significant cash balance and no debt or interest payments and can be selective and patient at the acquisition bargaining table while benefiting from our fortuitous inventory planning.

While future market conditions are difficult to predict, given uncertainties stemming from the decline in oil prices and tariff-induced trade disruptions, we believe we are well positioned to seize organic, adjacent and inorganic growth opportunities, pursuing more efficient and cost-effective ways to execute operationally.

I want to extend my sincerest gratitude to the women and men of DNOW who distinguish us in the market with how we promote our key manufacturers and work tirelessly to delight our customers, as we build upon a great start to the year."

Prior to the earnings conference call a presentation titled "DNOW First Quarter 2025 Key Takeaways" will be available on the Company's Investor Relations website.

About DNOW

DNOW is a supplier of energy and industrial products and packaged, engineered process and production equipment with a legacy of over 160 years. Headquartered in Houston, Texas, with approximately 2,600 employees and a network of locations, we offer a broad set of supply chain solutions combined with a suite of digital offerings branded as DigitalNOW® that provide customers access to highly complementary digital commerce, data and information management channels. Our locations provide products and solutions to exploration and production, midstream transmission and storage companies, refineries, chemical companies, utilities, mining, municipal water, manufacturers, engineering and construction as well as companies operating in the decarbonization, energy evolution and renewables end markets.

Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by DNOW Inc. with the U.S. Securities and Exchange Commission, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

DNOW INC.
SUPPLEMENTAL INFORMATION (CONTINUED)

U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) EBITDA excluding other costs as a percentage of revenue, (iii) net income attributable to DNOW Inc. excluding other costs, (iv) diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs, and (v) free cash flow. We use these non-GAAP financial measures to evaluate and manage the Company's operations because we believe they provide useful supplemental information regarding the financial performance of our business. These non-GAAP financial measures are not intended to replace the GAAP financial measures. Free cash flow is net cash provided by (used in) operating activities adjusted for purchases of property, plant and equipment, and the remaining non-GAAP financial measures exclude the impact of certain other items. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein. Totals in the schedules herein may not foot due to rounding.

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