MRC Global Inc., a global industrial pipe distributor, is relying more on digital commerce to connect with customers, grow sales and increase operational efficiency, the century-old company says.
Rob Saltiel, president and CEO, MRC Global Inc.
“Our revenue grew for a third straight year in 2023 to $3.4 billion, and we generated $181 million of operating cash flow, resulting in our lowest net debt level ever as a public company,” president and CEO Rob Saltiel said in a statement on the company’s fourth quarter and fiscal year ended Dec. 31.
MRC Global, which launched in 1921, emphasizes its global supply chain expertise and its “robust digital platform” for its ability to offer over 300,000 SKUs from over 8,500 suppliers for approximately 10,000 customers worldwide. Its ecommerce site, MRCGO, processes orders for products ranging from steel and polyethylene pipe to related valves and fittings.
In the fourth quarter, MRC reported a 12% year-over-year drop in total sales to $768 million. MRC said ecommerce accounted for 65.5% of U.S. orders and 53% worldwide. That’s up from 50.2% of worldwide orders in the year-earlier quarter.
Ecommerce drives a big share of sales
MRC didn’t break out the percentages of Q4 2023 U.S. of sales transacted online. Based on its reported figures for 2023 and 2022, Digital Commerce 360 estimates ecommerce accounted for about $340 million in Q4 2023 sales.
In its 2022 annual report, MRC said ecommerce accounted for 41% of total Q4 2022 revenue, or $356.3 million out of total sales of $869 million, while accounting for half of customer orders.
For the full year 2023, MRC said total sales grew 1% year over year to $3.41 billion. Saltiel noted on an earnings call today that, despite the drop in Q4 sales, “we maintain strong profit margins and cash generation that exceeded our expectations.”
He added, “We have seen a meaningful improvement in our backlog of new orders over the first few weeks of 2024. This gives us optimism that our business is stabilizing, and we expect to return to growth in the coming quarters.”
For the fourth quarter ended Dec. 31, MRC reported:
- Gross profit of $153 million, down 3.2% from a year earlier. But a sharp drop in the cost of sales led to a gross profit margin of 20.0%. That’s up from 18.2% a year earlier.
- Net income of $21 million, unchanged.
For the full year, MRC reported:
- Gross profit of $690 million, up 13.1%.
- Net income of $114 million, up 52%.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s MRC Global report.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.
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