Houston-based oilfield products distributor DNOW reported its 2023 fourth quarter and full-year financial results on Feb. 15, showing modest year-over-year growth in the October-December period, while overall profit soared on a deferred tax benefit.

The company posted 4Q23 total sales of $555 million, up 1.5% year-over-year, following 3Q23’s 1.9% growth. 4Q23 operating profit of $32 million trailed the $35 million of a year earlier and $37 million in 3Q23.

DNOW’s 4Q23 net profit of $147 million soared compared to the $32 million of a year earlier and $35 million during 3Q23, as 4Q23 included a non-cash deferred tax benefit of $126 million.

DNOW’s 4Q23 adjusted EBITDA was $44 million, or 7.9% of revenue, compared to $47 million and 8.6% a year earlier and $46 million/7.8% in 3Q23.

By geography in DNOW’s 4Q23:

• U.S. revenue of $418 million (75.3% of total) increased 1% year-over-year and fell 6.7% from 3Q
• Canada revenue of $65 million (11.7% of total) dipped 1.3% year-over-year and fell 4.4% from 3Q
• International revenue of $72 million (13.0% of total) jumped 24.1% year-over-year and was identical to 3Q

Full-Year 2023

For the full year, DNOW posted total sales of $2.32 billion, up 8.7% vs. 2022. Operating profit of $140 million topped 2022’s $131 million, while net profit of $247 million nearly doubled 2022’s $128 million — also driven by the $126 million deferred tax benefit. Adjusted EBITDA was $184 million on margin of 7.9%, compared to $175 million and 8.2% in 2022.

In DNOW’s financials news release, President and CEO David Cherchinsky noted that the company’s adjusted EBITDA total was a company record since it became publicly-traded in 2014. He added that DNOW’s U.S. Process Solutions unit delivered significant full-year double-digit revenue growth in each of its Power Service, Odessa Pumps, Flex Flow and EcoVapor businesses.

DNOW produced $171 million in full-year free cash flow, which the company noted was twice its original guidance provided in February 2023. DNOW is targeting $150 million in free cash flow for 2024.

Other Notes

• On Jan. 19, DNOW changed its corporate name from NOW Inc. — which it had used since spinning off from National Oilwell Varco in 2014. 
• On Feb. 6, DNOW announced the pending acquisition of Whitco Supply, a distributor of PVF and automation products headquartered in Broussard, LA.
• On MDM’s 2023 Top Distributors Lists, DNOW was No. 19 for industrial supplies, No. 4 for industrial PVF and No. 18 for MRO.