DNOW Inc (DNOW) 2024 Q1 法說會逐字稿

Good morning. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the DNOW first-quarter 2024 earnings conference call. (Operator Instructions)

早安.我叫伊恩，今天我將擔任你們的會議操作員。此時此刻，我歡迎大家參加 DNOW 2024 年第一季財報電話會議。（操作員說明）

Thank you. I would like to hand things over to Mr. Brad Wise, Vice President of Digital Strategy and Investor Relations. You may begin your conference.

謝謝。我想將工作交給數位策略和投資者關係副總裁 Brad Wise 先生。您可以開始您的會議了。

Well, thank you, Ian, and good morning, and welcome to DNOW's first-quarter 2024 earnings conference call. We appreciate you joining us and thank you for your interest in DNOW. With me today is David Cherechinsky, President and Chief Executive Officer; and Mark Johnson, Senior Vice President and Chief Financial Officer.

好的，謝謝你，Ian，早安，歡迎參加 DNOW 的 2024 年第一季財報電話會議。我們感謝您加入我們，並感謝您對 DNOW 的興趣。今天與我在一起的是總裁兼執行長 David Cherechinsky；以及高級副總裁兼財務長馬克·約翰遜。

We operate under the DNOW brand, which is also our New York Stock Exchange ticker symbol.

我們以 DNOW 品牌經營，這也是我們的紐約證券交易所股票代碼。

Please note that some of the statements we make during this call, including responses to your questions, may contain forecasts, projections, and estimates, including but not limited to, comments about the outlook for the company's business.

請注意，我們在本次電話會議中所做的一些聲明（包括對您的問題的答案）可能包含預測、預測和估計，包括但不限於有關公司業務前景的評論。

These are forward-looking statements within the meaning of the US Federal Securities Laws based on limited information as of today, May 10, 2024, which is subject to change. They are subject to risks and uncertainties and actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or later in the year. We do not undertake any obligation to publicly update or revise any forward-looking statements for any reason.

這些是美國聯邦證券法含義內的前瞻性陳述，基於截至 2024 年 5 月 10 日的有限信息，可能會發生變化。它們面臨風險和不確定性，實際結果可能存在重大差異。任何人都不應認為這些前瞻性陳述在本季稍後或今年稍後仍然有效。我們不承擔以任何理由公開更新或修改任何前瞻性陳述的義務。

In addition, this conference call contains time-sensitive information that reflects management's best judgment at the time of the live call. I refer you to the latest forms 10-K and 10-Q that DNOW has on file with the US Securities and Exchange Commission for a more detailed discussion of the major risk factors affecting our business. Further information, as well as supplemental financial and operating information, may be found within our earnings release on our website at ir.dnow.com or in our filings with the SEC.

此外，本次電話會議包含時間敏感的訊息，反映了管理層在現場電話會議時的最佳判斷。我建議您參閱 DNOW 向美國證券交易委員會備案的最新表格 10-K 和 10-Q，以更詳細地討論影響我們業務的主要風險因素。更多資訊以及補充財務和營運資訊可在我們網站 ir.dnow.com 的收益發布或我們向 SEC 提交的文件中找到。

In an effort to provide investors with additional information relative to our results as determined by US GAAP, you'll note that we also disclose various non-GAAP financial measures including EBITDA, excluding other costs sometimes referred to as EBITDA, net income attributable to DNOW Inc., excluding other costs, and diluted earnings per share attributable to DNOW Inc., excluding other costs. Each excludes the impact of certain other costs, and therefore, have not been calculated in accordance with GAAP.

為了向投資者提供與我們按美國公認會計原則確定的業績相關的更多信息，您會注意到，我們還披露了各種非公認會計原則財務指標，包括EBITDA，不包括有時稱為EBITDA 的其他成本、歸屬於DNOW 的淨利Inc.，不包括其他成本，以及 DNOW Inc. 的攤薄每股收益，不包括其他成本。每一項都排除了某些其他成本的影響，因此並未依照 GAAP 進行計算。

Please refer to reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure in the supplemental information available at the end of the earnings release. As of this morning, the Investor Relations section of our website contains a presentation covering our results and key takeaways for the first quarter of 2024. A replay of today’s call will also be available on the site for the next 30 days. We plan to file our 2024 Form 10-Q for the first quarter later today and it will also be available on our website.

請參閱收益發布末尾提供的補充資訊中的每項非公認會計原則財務指標與其最具可比性的公認會計原則財務指標的調節表。截至今天上午，我們網站的投資者關係部分包含一份介紹我們 2024 年第一季業績和主要要點的簡報。在接下來的 30 天內，網站上還將提供今天電話會議的重播。我們計劃今天稍後提交 2024 年第一季的 10-Q 表格，該表格也將在我們的網站上提供。

Now, let me turn the call over to Dave.

現在，讓我把電話轉給戴夫。

Thank you, Brad, and good morning, everyone. I'm incredibly pleased with the progress we made in the first quarter generating strong free cash flow of $80 million towards our $150 million full-year target, which we expect could now approach $200 million in 2024. Free cash flow is represented by cash flows from operating activities, reduced by capital expenditures made during the period.

謝謝布拉德，大家早安。我對我們在第一季的進展感到非常高興，我們實現了 1.5 億美元的全年目標，產生了 8000 萬美元的強勁自由現金流，我們預計到 2024 年該目標可能接近 2 億美元。自由現金流量是指經營活動所產生的現金流量減去期間的資本支出。

Our enhanced free cash flow dynamics are the result of DNOW's pedigree of sound balance sheet management, supported by a strong transformed business on a path that could make 2024 our best year yet. Assuming an increase in market activity as modeled, and that is on top of a record EBITDA margin years in 2022, surpassed again in 2023, we believe 2024 could top that yet again.

我們增強的自由現金流動態是 DNOW 健全的資產負債表管理的結果，並得到強大的業務轉型的支持，這可能使 2024 年成為我們迄今為止最好的一年。假設市場活動如模型所示增加，並且在 2022 年 EBITDA 利潤率創歷史新高的基礎上，2023 年再次超過，我們相信 2024 年可能會再次超過這一水平。

Our quarterly cash haul was much better than expected as we guided to negative free cash flow in the first quarter, but instead generated $80 million in free cash flow in 1Q '24 and $262 million in free cash flow over the last four quarters, the best trailing four-quarter period of cash generation since 2016.

我們的季度現金收入遠好於預期，因為我們第一季的自由現金流為負，但在24 年第一季產生了8,000 萬美元的自由現金流，在過去四個季度產生了2.62 億美元的自由現金流，這是最好的。

In the first quarter, we were privileged to welcome and onboard Whitco Supply to the DNOW family, one of our largest acquisitions yet, and we still ended the quarter debt-free with $188 million in cash. The addition of Whitco's talented team, rich culture, and technical expertise enhances our service levels and capabilities, enabling us to better support our customers midstream and energy evolution investments.

在第一季度，我們很榮幸歡迎 Whitco Supply 加入 DNOW 家族，這是我們迄今為止最大的收購之一，我們在本季度結束時仍然沒有債務，擁有 1.88 億美元的現金。Whitco 才華橫溢的團隊、豐富的文化和技術專長的加入增強了我們的服務水準和能力，使我們能夠更好地支持客戶的中游和能源發展投資。

With our first US energy centers acquisition since 2015, Whitco Supply expands our US footprint and customer base across the midstream energy sector. Whitco operates eight locations where they've carved out a devout customer following and effectively deploy a supercenter-like strategy where the main active centers of commerce support and embed efficiencies in the fulfillment model.

透過自 2015 年以來首次收購美國能源中心，Whitco Supply 擴大了我們在美國中游能源產業的足跡和客戶群。Whitco 經營著八個地點，他們在這些地點培養了忠實的客戶群，並有效地部署了類似超級中心的策略，其中主要的活躍商業中心支援並在履行模式中嵌入效率。

While I have already had the privilege of sharing the best employee-caught and home-fried South Louisiana catfish, shrimp, and rice with over 100 of our Whitco employees, I'm honored to welcome everyone from Whitco Supply to the DNOW family.

雖然我已經有幸與 100 多名 Whitco 員工分享最好的員工捕獲和自製的南路易斯安那鯰魚、蝦和米飯，但我很榮幸歡迎 Whitco Supply 的每個人加入 DNOW 大家庭。

The now larger DNOW enjoys a solid balance sheet, an expanding diversified customer base, a proactive approach to seizing value-enhancing acquisition opportunities, and the best people in the business. I'm excited about our future together. We are focused on opportunities that drive accretive gross and operating margins while diversifying our market mix.

現在規模更大的 DNOW 擁有穩健的資產負債表、不斷擴大的多元化客戶群、積極主動抓住增值收購機會的方法以及業內最優秀的人才。我對我們共同的未來感到興奮。我們專注於推動毛利率和營業利潤成長的機會，同時實現市場組合多元化。

Our strategy is to defend, invest, and grow our core market, capture additional revenues from the growing energy evolution market, and diversify our customer base by targeting and realizing revenue opportunities from adjacent industrial markets while driving efficiencies across our business. With our current liquidity and capital allocation framework, we have the ability to strike deals at the right time and repurchase shares opportunistically, thus balancing the return of capital with the growth of our business to produce sustainable, long-term value for our shareholders.

我們的策略是捍衛、投資和發展我們的核心市場，從不斷增長的能源發展市場中獲取額外收入，並透過瞄準和實現鄰近工業市場的收入機會來實現我們的客戶群多元化，同時提高我們整個業務的效率。憑藉我們目前的流動性和資本配置框架，我們有能力在正確的時間達成交易並擇機回購股票，從而平衡資本回報與業務成長，為股東創造可持續的長期價值。

We run our business like a successful gardener might, and I'm often reminded how much the two are alike. We plant the seeds to sow innovative ideas for our customers and provide the necessary resources for growth. We nourish the soil to foster a collaborative environment that continuously enriches our culture. We water abundantly and fertilize by making prudent investments in inventory, new products, capital expenditures, and process improvements, while rewarding our people for the results they produce to fuel progress and expansion.

我們像成功的園丁一樣經營我們的業務，我經常被提醒兩者有多相似。我們為客戶播下創新想法的種子，並提供成長所需的資源。我們滋養土壤，營造協作環境，不斷豐富我們的文化。我們透過在庫存、新產品、資本支出和流程改進方面進行審慎投資來充分澆水和施肥，同時獎勵我們的員工為推動進步和擴張而取得的成果。

We try to make sure we are sell -- we sell aging inventory before it goes bad and while it's still in season, and offer new products as we liquidate or remove less desirable ones to produce the greatest yield and adapt to changing customer tastes. We seek and promote self-starter leaders who don't wait to act, those who prune to drive efficiencies, and trim unnecessary processes, promoting healthy growth and optimized performance, seeking a nexus between where we shine and where the customer sees value.

我們努力確保我們的銷售——我們在老化的庫存變質之前和當季的時候出售它們，並在我們清算或去除不太理想的產品時提供新產品，以產生最大的產量並適應不斷變化的客戶口味。我們尋求並提拔那些積極主動、不等待採取行動的領導者，那些透過精簡來提高效率、削減不必要的流程、促進健康成長和優化績效、在我們的閃光點和客戶看到的價值之間尋求聯繫的人。

We care about and protect each other, focus on safety, act with integrity, guard our processes and competitive information and identify and weed out potential threats, protecting our business from harm. We're mindful of the seasons and how their changing affects our garden so we can adapt, embrace change, adjust our tactics as our business evolves and grows.

我們關心並保護彼此，注重安全，誠信行事，保護我們的流程和競爭訊息，識別並消除潛在威脅，保護我們的業務免受損害。我們關注季節以及它們的變化如何影響我們的花園，以便我們能夠隨著業務的發展和成長而適應、擁抱變化、調整我們的策略。

We harvest the fruits of hard work, celebrate accomplishments, and learn from challenges so we can reinvest in our business, make smart acquisitions, and return cash to shareholders, and repeat. You can have an impressive garden or a great business simply by being more disciplined than your competitors, tending in a year like this more stringently to the fundamentals.

我們收穫辛勤工作的成果，慶祝成就，從挑戰中學習，這樣我們就可以對我們的業務進行再投資，進行明智的收購，並向股東返還現金，如此周而復始。只要你比你的競爭對手更自律，在這樣的一年裡更嚴格地關注基本面，你就可以擁有一個令人印象深刻的花園或一個偉大的企業。

Some comments on a regional basis. In the US, revenue is $435 million, up $17 million, or 4% sequentially, resulting from the added acquisition activity from Whitco Supply. US rig count was essentially flat quarter over quarter, while US completions declined 11% sequentially and 15% year over year.

一些基於區域的評論。在美國，由於 Whitco Supply 的收購活動增加，營收為 4.35 億美元，比上一季增加 1,700 萬美元，成長 4%。美國鑽機數量季減 15%。

During the quarter, we renewed a master service agreement with one of our major supply chain services customers that will continue to drive future revenue while presenting opportunities for increased wallet share on their newly acquired assets.

在本季度，我們與主要供應鏈服務客戶之一續簽了主服務協議，該客戶將繼續推動未來收入，同時提供增加其新收購資產的錢包份額的機會。

With a large IOC activity in the Permian was robust with an assortment of capital projects and day-to-day maintenance operations, activity remains strong with another integrated supply customer with assets in the Eagle Ford and Bakken. Punctuating the strength of our supply chain service partnerships, one of our customers recognized the DNOW team's performance in helping them achieve an important operational performance target, demonstrating the impact our partnership has on delivering their operational objectives.

由於二疊紀盆地的大型 IOC 活動十分活躍，包括各種資本項目和日常維護操作，另一家在 Eagle Ford 和 Bakken 擁有資產的綜合供應客戶的活動也仍然強勁。我們的一位客戶認可了 DNOW 團隊在幫助他們實現重要營運績效目標方面的表現，證明了我們的合作關係對實現其營運目標的影響，這凸顯了我們供應鏈服務合作夥伴關係的實力。

The effect our employees have on our customers operations is a source of pride as our customers trust us to help them deliver on their production goals.

我們的員工對客戶營運的影響令人感到自豪，因為我們的客戶相信我們能夠幫助他們實現生產目標。

In US process solutions, demand for our products was mixed across our brands as MRO business continued to grow as we experienced some lumpiness in projects with a number of those projects pushed to later in the year. Demand for our fabricated process and production equipment remains steady, servicing a variety of operators for the upstream, midstream, and downstream sectors.

在美國的流程解決方案中，隨著 MRO 業務持續成長，我們的各個品牌的產品需求參差不齊，因為我們的專案出現了一些波動，其中許多專案被推遲到了今年稍後。對我們的製造流程和生產設備的需求保持穩定，為上游、中游和下游產業的各種營運商提供服務。

Demand for our industrial air compressor package offerings remain strong as operators work to eliminate the venting of methane as they replace it with the compressed air systems. Outside of oil and gas and the municipal water market, we delivered a large shipment of pumps for a sizable project in North Texas in addition to providing pumps for a pulp and paper customer, a food and beverage protein company, and chilled water pumps for a Bitcoin data mining facility.

由於營運商努力消除甲烷排放，並用壓縮空氣系統取代甲烷，因此對我們的工業空氣壓縮機組產品的需求仍然強勁。除了石油和天然氣和市政水市場之外，我們還為德克薩斯州北部的一個大型項目交付了大量泵，此外還為紙漿和造紙客戶、食品和飲料蛋白質公司提供泵，並為一家食品飲料本公司提供冷凍水泵。

During the quarter, we expanded a pump territorial distribution agreement across several US Western states targeting the mining industry. The agreement will create opportunities and compliments our current efforts within this growing end market. Demand for our flex flow horizontal pump products remain steady as operators sought rental pump assets for produced water disposal and transfer applications.

本季度，我們在美國西部幾個州擴大了針對採礦業的泵浦區域分銷協議。該協議將創造機會並補充我們目前在這個不斷增長的終端市場中所做的努力。由於營運商為採出水處理和輸送應用尋求租賃泵浦資產，因此對我們的柔性流臥式泵浦產品的需求保持穩定。

For our EcoVapor line, demand for our Sulfur Sentinel product increased in the quarter as operators sought solutions to remove H2S from low pressure gas, thus eliminating emissions that would've occurred from flaring the gas. Our EcoVapor rental fleet has been steady despite low natural gas prices.

對於我們的 EcoVapor 系列，本季對 Sulfur Sentinel 產品的需求有所增加，因為營運商尋求從低壓氣體中去除 H2S 的解決方案，從而消除因燃燒氣體而產生的排放。儘管天然氣價格較低，但我們的 EcoVapor 租賃車隊一直保持穩定。

And finally, we tapped into new market share by receiving orders from several new RNG customers as we continue to grow our EcoVapor ZerO2 product line in the renewable natural gas space.

最後，隨著我們繼續在再生天然氣領域發展 EcoVapor ZerO2 產品線，我們收到了幾個新 RNG 客戶的訂單，從而開拓了新的市場份額。

In Canada, revenue was $66 million for the quarter. From an activity perspective, the year started off sluggish where our Canadian operations were adversely impacted by two weather events. In January, there was a nine-day time frame where the extreme sub-zero temperatures halted activity and delayed the start of the joint season.

在加拿大，本季營收為 6,600 萬美元。從活動角度來看，年初表現低迷，我們的加拿大業務受到兩次天氣事件的不利影響。一月份，有九天的時間框架內，極端零下的氣溫導致活動停止，並推遲了聯合季節的開始。

In March, we experienced an early spring break-up that limited what has historically been a very active month. From conversations with customers, we are hearing drilling plans that were impacted in 1Q '24 that, at this time, remain intact for the full year. So we're optimistic that the delayed activity will come later in 2024.

三月，我們經歷了早春的分手，限制了歷史上非常活躍的一個月。從與客戶的對話中，我們得知 24 年第一季受到影響的鑽井計畫目前全年保持不變。因此，我們樂觀地認為推遲的活動將在 2024 年晚些時候到來。

We were successful in being selected by a top Canadian producer to provide pipe fittings and flanges and MRO products. The producer had recently acquired a DNOW customer we already service, so we should benefit from that as well.

我們成功被加拿大一家頂級生產商選中提供配件和法蘭以及MRO產品。該生產商最近獲得了我們已經服務的 DNOW 客戶，因此我們也應該從中受益。

Finally, with the Trans Mountain expansion pipeline expected to come online this month, we expect the increased takeaway capacity could narrow the WTI Western Canadian select differential and lead to increased future activity for our current -- our Canadian business.

最後，隨著跨山擴建管道預計將於本月上線，我們預計外送能力的增加可能會縮小 WTI 加拿大西部精選價差，並導致我們目前的加拿大業務未來的活動增加。

For our International segment, revenue is $62 million, sequentially lower as expected and guided last quarter by $10 million, primarily due to non-repeating projects in the fourth quarter in the Middle East and Australia. In Europe and the UK, we are seeing steady activity and demand for our electrical and safety products tied to Brownfield and modernization investment projects.

對於我們的國際部門，收入為 6200 萬美元，環比低於預期，上季度指導收入為 1000 萬美元，主要是由於第四季度中東和澳大利亞的非重複項目。在歐洲和英國，我們看到與棕地和現代化投資項目相關的電氣和安全產品的穩定活動和需求。

But we are also observing headwinds in customer investment and traditional energy greenfield investments due to instability caused in part by the windfall test. In Norway, we saw an increase in investment on the Norwegian Continental shelf as we supplied electrical cable for offshore joint contractors and drilling rig re-certifications.

但我們也觀察到客戶投資和傳統能源綠地投資面臨阻力，部分原因是意外之財測試造成的不穩定性。在挪威，我們看到挪威大陸架的投資增加，因為我們為海上聯合承包商提供了電纜並進行了鑽機重新認證。

We are seeing an increasing level of FID projects across the number of EPCs as investment in hydrogen, CCS, and floating wind continue to gain steam. These types of projects require many of the PBF and electrical products we provide.

隨著對氫能、CCS 和浮式風電的投資持續增長，我們看到 EPC 數量中的 FID 項目數量不斷增加。這些類型的專案需要我們提供的許多 PBF 和電氣產品。

In Australia, we are seeing project activity growing from several IOCs related to CO2 injection, LNG, and biofuel projects. Finally, during the quarter, we provided electrical products tied to a carbon capture project and a lighting modernization project through an EPC for a large energy producer.

在澳大利亞，我們看到多個國際石油公司與二氧化碳注入、液化天然氣和生物燃料項目相關的項目活動不斷增長。最後，在本季度，我們透過 EPC 為一家大型能源生產商提供了與碳捕獲專案和照明現代化專案相關的電氣產品。

And now a few additional comments related to the energy evolution. For DNOW, the energy transition includes activity primarily associated with carbon capture utilization and storage, hydrogen, and RNG-related projects. We are tracking a number of projects in this target market, which fit nicely into DNOW's core product line offerings -- core product offers.

現在還有一些與能源演化相關的附加評論。對於 DNOW 來說，能源轉型包括主要與碳捕獲利用和儲存、氫和 RNG 相關項目相關的活動。我們正在追蹤這個目標市場中的許多項目，這些項目非常適合 DNOW 的核心產品線——核心產品。

And as we have mentioned on prior calls, many of the projects are being funded by DNOW customers who are familiar with our quality products, services, and solutions, combined with our differentiated level of service.

正如我們在先前的電話中提到的，許多項目都是由 DNOW 客戶資助的，他們熟悉我們的優質產品、服務和解決方案，以及我們差異化的服務水準。

In 2023, we submitted quotes and proposals for a number of energy evolution projects. Comparing last year's quote activity to this year's first-quarter quote activity, the value this quarter has grown and surpassed last year's total quote value.

2023 年，我們提交了多個能源演化專案的報價和建議。與去年的報價活動和今年第一季的報價活動相比，本季的報價有所增長並超過了去年的總報價值。

We delivered PBF products for several CCUS projects, one for a gas storage project in support of a low carbon power plant that uses the gas when other intermittent power generation sources are interrupted. Another energy evolution project in the quarter was for a natural gas [gassing] project, combined with the carbon capture and sequestration component that will remove 100% of the CO2 and permanently stored it underground.

我們為多個 CCUS 項目提供了 PBF 產品，其中一個是用於支援低碳發電廠的儲氣項目，該發電廠在其他間歇性發電來源中斷時使用天然氣。本季的另一個能源發展項目是天然氣[加氣]項目，結合碳捕獲和封存部分，將去除 100% 的二氧化碳並將其永久儲存在地下。

For our digital initiatives, our digital revenue as a percent of total SAP revenue increased to 49% during the quarter, driving improved efficiencies through integrated systems. With a major IOC, we completed a system integration project that eliminates redundancies across multiple systems, allowing for efficiency gains using DNOW systems, technology, and people in order for fulfillment, procurement, and inventory management functionality.

對於我們的數位計劃，本季我們的數位收入佔 SAP 總收入的百分比增加到 49%，並透過整合系統提高了效率。透過主要的 IOC，我們完成了一個系統整合項目，消除了多個系統之間的冗餘，從而使用 DNOW 系統、技術和人員來提高履行、採購和庫存管理功能的效率。

For another major IOC, we successfully expanded our customer consignment program, capturing a real-time order processing and inventory visibility through the use of our DNOW mobile app. We launched Flex Flow's OptiWatch 2.0, our second-generation, digital real-time monitoring and optimization software for horizontal pumping system that includes enhanced data sampling, combined with an upgraded dashboard visualization that has been well received by OptiWatch customers.

對於另一個主要的 IOC，我們成功擴展了我們的客戶寄售計劃，透過使用我們的 DNOW 行動應用程式捕獲即時訂單處理和庫存可見性。我們推出了 Flex Flow 的 OptiWatch 2.0，這是我們用於水平泵送系統的第二代數位即時監控和優化軟體，其中包括增強的數據採樣以及升級的儀表板可視化功能，受到 OptiWatch 客戶的好評。

Operators are realizing financial benefits that reduced expenditures in power consumption, maintenance, and downtime and other efficiency gains from using OptiWatch 2.0.

營運商正在透過使用 OptiWatch 2.0 來實現經濟效益，減少功耗、維護和停機時間的支出以及其他效率提升。

And finally, our process solutions field service technicians have been equipped with new digital tablets that are connected to our ERP service app, thus eliminating manual paperwork while streamlining work orders to deliver efficiencies through digital transformation on after-market service orders.

最後，我們的流程解決方案現場服務技術人員配備了連接到我們的ERP 服務應用程式的新型數位平板電腦，從而消除了手動文書工作，同時簡化了工作訂單，透過售後服務訂單的數位轉型提高了效率。

With that, let me hand it over to Mark.

那麼，讓我把它交給馬克。

Thank you, Dave, and good morning, everyone. Total first-quarter 2024 revenue was $563 million, up 1%, or $8 million from the fourth quarter of 2023. EBITDA excluding other costs, or EBITDA, for the first quarter was $39 million, or 6.9% of revenue. US revenue for the first quarter 2024 totaled $435 million, a $17 million increase, or 4% higher than the fourth quarter of 2023.

謝謝戴夫，大家早安。2024 年第一季總營收為 5.63 億美元，比 2023 年第四季成長 1%，即 800 萬美元。第一季不計其他成本的 EBITDA（EBITDA）為 3,900 萬美元，佔營收的 6.9%。2024年第一季美國營收總計4.35億美元，比2023年第四季增加1,700萬美元，成長4%。

Year-over-year US revenue increased $8 million or 2% from the first quarter of 2023. The US energy centers contributed approximately 70% of total US revenue in the first quarter, and US process solutions contributed approximately 30%.

與 2023 年第一季相比，美國營收年增 800 萬美元，即 2%。美國能源中心第一季貢獻了美國總收入的約70%，美國流程解決方案貢獻了約30%。

In Canada, for the first quarter, revenue totaled $66 million, an increase of $1 million, or 2% from the fourth quarter of 2023. International revenue for the first quarter of 2024 was $62 million, down $10 million, or 14% sequentially.

在加拿大，第一季營收總計 6,600 萬美元，比 2023 年第四季增加 100 萬美元，成長 2%。2024 年第一季的國際營收為 6,200 萬美元，比上一季減少 1,000 萬美元，成長 14%。

Gross margins for the first quarter were 22.9%, down 20 basis points from the 2023 average, driven primarily by $1 million in inventory step up amortization charges related to the acquisition. Attributing to the decline, we estimate the remaining $4 million in inventory step-up charges will be recorded in the second quarter, temporarily impacting gross margins in 2Q.

第一季的毛利率為 22.9%，比 2023 年的平均值下降 20 個基點，這主要是由與收購相關的 100 萬美元庫存逐步攤銷費用推動的。由於下降，我們估計剩餘的 400 萬美元庫存增加費用將在第二季記錄，暫時影響第二季的毛利率。

And I want to highlight, we exclude these acquisition-related charges when computing our non-GAAP measures like EBITDA and net income and EPS, excluding other costs.

我想強調的是，在計算 EBITDA、淨利潤和每股盈餘等非公認會計原則指標時，我們排除了這些與收購相關的費用，不包括其他成本。

Gross margins declined 50 basis points from the fourth-quarter level, considering the 1Q acquisition purchase accounting impact mentioned earlier for 20 basis points and the expected margin decline from non-recurring fourth-quarter projects and year-end vendor consideration impacts.

考慮到前面提到的第一季收購採購會計影響 20 個基點以及非經常性第四季專案和年底供應商考慮因素影響的預期利潤率下降，毛利率較第四季水準下降 50 個基點。

Warehousing, selling, and administrative, or WSA, for the quarter was $101 million, up $3 million sequentially primarily related to the acquisition that closed late in the quarter. We forecast the second-quarter WSA level should be in the $110 million range with the full-quarter contribution of the recent acquisition.

本季的倉儲、銷售和管理 (WSA) 為 1.01 億美元，比上一季增加 300 萬美元，主要與本季末完成的收購有關。我們預計，根據最近收購的全季貢獻，第二季 WSA 水準應在 1.1 億美元左右。

In the first quarter, we reported $7 million of depreciation and amortization expense, and for the second quarter of 2024, we forecast depreciation and amortization to be approximately $9 million due to the full quarter contribution of the acquisition.

第一季度，我們報告了 700 萬美元的折舊和攤銷費用，由於收購對整個季度的貢獻，我們預計 2024 年第二季的折舊和攤銷費用約為 900 萬美元。

Now moving to operating profit. In the first quarter, total company operating profit was $28 million. Respectively, the US generated $23 million; Canada delivered $3 million; and international contributing the remaining $2 million in the first quarter of 2024. Interest income in the period was $2 million and we forecast that to reduce slightly in the second quarter.

現在轉向營業利潤。第一季度，公司營業利潤總額為 2,800 萬美元。美國分別創收 2,300 萬美元；加拿大交付了300萬美元； International 將於 2024 年第一季貢獻剩餘的 200 萬美元。該期間的利息收入為 200 萬美元，我們預計第二季將略有減少。

Moving to income taxes. In the first quarter of 2024, DNOW's income tax expense was $8 million and our effective tax rate was 27.6%. We continue to estimate our 2024 full-year effective tax rate will be approximately 27% to 28%.

轉向所得稅。2024 年第一季度，DNOW 的所得稅費用為 800 萬美元，有效稅率為 27.6%。我們繼續估計 2024 年全年有效稅率約為 27% 至 28%。

In prior periods, our tax expense as reported for GAAP, included the benefits from changes in valuation allowances recorded against our deferred tax assets. We excluded the impacts from the changes in our valuation allowances for calculations of net income and EPS, excluding other costs.

在先前的會計期間，我們按照公認會計原則報告的稅務費用包括根據我們的遞延稅資產記錄的估值備抵變化所帶來的收益。我們在計算淨利和每股盈餘時排除了估值備抵變動的影響，不包括其他成本。

At year-end 2023, as a result of releasing the majority of our valuation allowances, and as discussed on our last call, starting in 2024, we expect that our go-forward GAAP effective tax rate will be more closely aligned with our non-GAAP effective tax rate. And from a cash income tax perspective, we do not expect to pay US federal cash income taxes in 2024 due to available net operating loss carry forwards.

到 2023 年底，由於釋放了我們的大部分估值準備金，並且正如我們上次電話會議中所討論的，從 2024 年開始，我們預計我們未來的 GAAP 有效稅率將與我們的非GAAP 有效稅率。從現金所得稅的角度來看，由於可用的淨營業虧損結轉，我們預計 2024 年不會繳納美國聯邦現金所得稅。

Net income attributable to DNOW Inc., for the first quarter was $21 million, or $0.19 per fully diluted share, and on a non-GAAP basis, Q1 2024 net income attributable to DNOW Inc., excluding other costs was $23 million, or $0.21 per fully diluted share.

第一季歸屬於DNOW Inc. 的淨利為2,100 萬美元，或完全稀釋每股0.19 美元；以非GAAP 計算，2024 年第一季歸屬於DNOW Inc. 的淨利（不包括其他成本）為2300萬美元，即0.21 美元每完全稀釋股。

Now moving to the balance sheet. At the end of the quarter, we had a cash position of $188 million and zero debt. Cash decrease by $111 million in the first quarter, driven by the $185 million acquisition of Whitco Supply that was partially offset by cash generation from operating activities.

現在轉向資產負債表。截至本季末，我們的現金部位為 1.88 億美元，債務為零。第一季現金減少 1.11 億美元，這是由於以 1.85 億美元收購 Whitco Supply 造成的，但部分被經營活動產生的現金所抵消。

Also worth noting, we acquired $93 million in net working capital, excluding cash as part of the acquisition. We ended the quarter with total liquidity of $564 million, comprising our net cash position of $188 million plus $376 million in additional credit facility availability. Our existing $500 million revolving credit facility extends into December 2026, providing DNOW with immediate access to capital under the facility.

另外值得注意的是，我們收購了 9,300 萬美元的淨營運資本，不包括收購中的現金。本季結束時，我們的流動性總額為 5.64 億美元，其中包括 1.88 億美元的淨現金部位以及 3.76 億美元的額外信貸額度。我們現有的 5 億美元循環信貸額度將延長至 2026 年 12 月，使 DNOW 能夠立即獲得該額度下的資金。

Ending accounts receivable was $410 million, an increase of $26 million from the fourth quarter driven by the acquired receivables. And days sales outstanding, or DSO, was 66 days at the end of the first quarter, impacted by the incongruent contribution between the full balance sheet of the acquired accounts receivable and only a partial quarter of sales contribution.

期末應收帳款為 4.1 億美元，較第四季增加 2,600 萬美元，主要是由於收購的應收帳款所致。第一季末的應收帳款週轉天數 (DSO) 為 66 天，這是由於所收購的應收帳款的完整資產負債表與僅部分季度的銷售貢獻之間的貢獻不一致的影響。

Excluding the acquisition contribution, DSO improved from the fourth quarter. Inventory was $428 million at the end of the first quarter, an increase of $62 million from the fourth quarter with an annualized turn rate of 4.1 times, also impacted by the acquired inventory on a partial quarter of sales contribution. When excluding the acquisition contribution, turn rates would have been similar to their fourth-quarter levels.

剔除收購貢獻後，DSO 較第四季有所改善。一季末庫存為4.28億美元，較第四季增加6,200萬美元，年化週轉率為4.1倍，也受到收購庫存對部分季度銷售貢獻的影響。如果排除收購貢獻，週轉率將與第四季的水準相似。

We expect a slight inventory build in the second quarter based on increased activity in the timing of project deliveries. And accounts payable was $339 million at the end of the first quarter, an increase of $51 million from the fourth quarter, impacted by the acquired payables and the timing of inventory purchases late in the first quarter.

由於專案交付時間活動的增加，我們預計第二季庫存將略有增加。第一季末應付帳款為 3.39 億美元，較第四季增加 5,100 萬美元，受到第一季末收購的應付帳款和庫存採購時間的影響。

We expect the second-quarter ending accounts payable balance decreased slightly from the first quarter levels. And for the first quarter of 2024, working capital, excluding cash as a percentage of annualized first quarter revenue, was 17.5%.

我們預計第二季期末應付帳款餘額較第一季水準略有下降。2024 年第一季度，不包括現金的營運資本佔第一季年化收入的百分比為 17.5%。

Excluding the ending first-quarter working capital balances from the acquisition and the related partial quarter of sales contribution, working capital, excluding cash as a percentage of annualized first quarter revenue, was 14.4%. In the first quarter, we generated $80 million of free cash flow, net of capital expenditures of $1 million in the quarter, attributable to resilient earnings contribution and a reduction in year-end net working capital.

剔除收購帶來的第一季末營運資本餘額以及相關部分季度的銷售貢獻，營運資本（不包括現金佔第一季年化收入的百分比）為14.4%。第一季度，我們產生了 8,000 萬美元的自由現金流，扣除本季 100 萬美元的資本支出，這歸因於彈性的獲利貢獻和年末淨營運資本的減少。

We continue to execute our share repurchase program that is authorized through December 31, 2024, and as of March 31, our cumulative repurchases under our $80 million authorized share repurchase program totaled $58 million.

我們繼續執行截至 2024 年 12 月 31 日授權的股票回購計劃，截至 3 月 31 日，我們在 8,000 萬美元授權股票回購計劃下的累計回購總額為 5,800 萬美元。

Our commitment to growing the company through a creative, organic, and inorganic growth remains a key priority, while also having the ability to repurchase shares opportunistically as we use the tools in our capital allocation framework to generate attractive shareholder returns without deviating from our disciplined approach to balance sheet management. We continue to be debt free and keep cash flow generation a top priority.

我們致力於透過創意、有機和無機成長來發展公司，這仍然是一個關鍵優先事項，同時我們也有能力回購股票，因為我們使用資本配置框架中的工具，在不偏離我們嚴格方法的情況下產生有吸引力的股東回報到資產負債表管理。我們繼續保持無債務狀態，並將創造現金流作為首要任務。

And with that, let me turn the call back to Dave.

接下來，讓我把電話轉回給戴夫。

Thank you, Mark. Now switching to our outlook for the second quarter and full year 2024. We are encouraged by our prospects for the remainder of the year and are upgrading our 2024 full-year outlook, assuming increased market activity.

謝謝你，馬克。現在轉向我們對 2024 年第二季和全年的展望。我們對今年剩餘時間的前景感到鼓舞，並在假設市場活動增加的情況下上調了 2024 年全年展望。

We expect sequential second quarter growth in the US and international, and in Canada, the expected seasonality will drive sequential revenue lower. Canada's revenue historically declines approximately 20% sequentially from the first quarter due to the second-quarter break-up. However, due to the weather implications I mentioned earlier that impacted our 1Q '24 revenue, we believe the sequential decline could be less.

我們預計美國和國際市場第二季將出現環比成長，而在加拿大，預期的季節性因素將導致環比收入下降。由於第二季的分崩離析，加拿大的營收歷史上比第一季連續下降了約 20%。然而，由於我之前提到的天氣影響影響了我們 24 年第一季的收入，我們認為連續下降的幅度可能會較小。

Taken altogether, we expect DNOW second-quarter sequential revenues to increase in the 10% to 15% range from 1Q '24. And for the full year of 2024, our view is to increase revenue in the mid-to-high single-digit range compared to the full-year 2023 revenue.

總的來說，我們預計 DNOW 第二季連續營收將比 2024 年第一季成長 10% 至 15%。對於 2024 年全年，我們的觀點是與 2023 年全年收入相比，收入將成長在中高個位數範圍內。

And our 2024 full-year EBITDA percent of revenue would be similar to full-year 2023 EBITDA as a percent of revenue. As mentioned earlier, we are upgrading our prior $150 million full-year free cash flow target, which we expect could now approach $200 million in 2024.

我們 2024 年全年 EBITDA 佔收入的百分比將與 2023 年全年 EBITDA 佔收入的百分比相似。如前所述，我們正在升級先前 1.5 億美元的全年自由現金流目標，我們預計該目標現在可能在 2024 年將接近 2 億美元。

So to close, this month marks an important milestone in our company history. May 30 will be our 10-year anniversary as a publicly-traded company, and today, I'm excited to unveil DNOW's new brand and logo. Together, we embrace the new symbol, knowing that it represents seeds planted in 1862 when we were founded, but more so to where we are heading.

最後，本月標誌著我們公司歷史上的一個重要里程碑。5 月 30 日將是我們作為上市公司成立 10 週年紀念日，今天，我很高興揭曉 DNOW 的新品牌和標誌。我們共同擁抱這個新標誌，因為我們知道它代表著 1862 年我們成立時播下的種子，但更代表我們前進的方向。

Our journey began with a vision to redefine DNOW, not just financially, but culturally, as we align around our ethos, inspire one another, delight the customer, and fuel the future. Beyond its visual appeal, our new logo tells a new DNOW story, a story of growth, transformation, and an exciting future.

我們的旅程始於重新定義 DNOW 的願景，不僅在財務上，而且在文化上，因為我們圍繞我們的精神，互相激勵，取悅客戶，並為未來提供動力。除了視覺吸引力之外，我們的新標誌還講述了一個新的 DNOW 故事，一個關於成長、轉型和令人興奮的未來的故事。

As we execute on our strategy to leverage our solid position in upstream and midstream markets, achieve leadership and energy evolution, expand our presence in adjacent industrial markets, and leverage M&A as a fuel for growth through an accumulation strategy, our new logo serves as a beacon to who we are and what we stand for.

當我們執行策略，利用我們在上游和中游市場的穩固地位，實現領導地位和能源進化，擴大我們在鄰近工業市場的影響力，並透過累積策略利用併購作為成長動力時，我們的新標誌作為我們是誰以及我們代表什麼的燈塔。

With that, let's open the call for questions.

接下來，讓我們開始提問。

(Operator Instructions) Nathan Jones, Stifel.

（操作員說明）Nathan Jones，Stifel。

Good morning, everyone.

大家，早安。

Good morning, Nathan.

早安，內森。

Good morning.

早安.

I guess I'll start with some of the obvious questions around the Whitco acquisition. Now that it's closed [$185 million] purchase price, can you give us some details on what the annual revenue is? What the margin profile is? And I guess what the plans are for improving their business, leveraging your supply chain, leveraging the business model, et cetera?

我想我將從圍繞 Whitco 收購的一些明顯問題開始。現在它的收購價格已經確定 [1.85 億美元]，您能給我們一些有關年收入的詳細資訊嗎？保證金概況是什麼？我猜想改善他們的業務、利用你的供應鏈、利用商業模式等等的計畫是什麼？

Okay. I'll attack those questions this way, Nathan. So the purchase price was around $185 million. The multiples are probably in the five, six range, given where the market is right now. Their EBITDA performance as percent of revenue is similar to ours, maybe a little bit stronger, and their working capital turns are a little bit slower based on their accounts payable profile.

好的。我會這樣回答這些問題，內森。所以收購價格約1.85億美元。考慮到目前的市場狀況，倍數可能在五到六的範圍內。他們的 EBITDA 表現（佔收入的百分比）與我們相似，也許更強一些，而且根據其應付帳款情況，他們的營運資金週轉速度稍慢一些。

But from a P&L perspective accretive, good strong multiples on the business. They contributed -- we said in our opening comments that the US business grew by $17 million and we bought Whitco. It was kind of a stub period last couple weeks of the quarter. They added about $17 million-plus in revenues. So they have parallel performance metrics with us, maybe a little better on the P&L.

但從損益表的角度來看，該業務的倍數成長良好且強勁。他們做出了貢獻——我們在開場白中表示，美國業務成長了 1700 萬美元，我們收購了 Whitco。這是本季最後幾週的一段短暫時期。他們增加了約 1700 萬美元以上的收入。所以他們與我們有平行的績效指標，也許在損益表上好一點。

And in terms of what we're going to focus on as we onboard the business, our primary and almost solitary focus is going to be around revenue synergies. So they have a heavy midstream component, which is in the 60% to 80% range of their business. They do business with a lot of customers that aren't on our top 25. So that's a real opportunity for us.

就我們在開展業務時要關注的重點而言，我們的主要且幾乎唯一的關注點將是收入協同效應。因此，他們的中游部分很重，佔其業務的 60% 到 80%。他們與許多不屬於我們前 25 名的客戶開展業務。所以這對我們來說是一個真正的機會。

So we have limited overlap on our customer lists. So we're going to -- in the case of Whitco, be able to introduce our wide ranging and ever-growing process solution brands and our fabrication competencies to Whitco. That's going to be a big thing for us.

因此，我們的客戶名單上的重疊有限。因此，就 Whitco 而言，我們將能夠向 Whitco 介紹我們廣泛且不斷增長的工藝解決方案品牌以及我們的製造能力。這對我們來說將是一件大事。

We'll be a little more important to the suppliers and we will -- that'll work to our advantage. But the main thing is their ability to penetrate customers and our ability to do the same with other customers and how do we synergize that. In terms of the balance sheet, I think I mentioned that, but what else -- anything else I missed there, Nathan?

我們對供應商來說會更加重要，這對我們有利。但最重要的是他們滲透客戶的能力以及我們與其他客戶做同樣的事情的能力，以及我們如何協同這一點。就資產負債表而言，我想我提到了這一點，但是還有什麼——我還錯過了什麼，內森？

No, I think that answered the questions. I would be interested in -- maybe it's a little too early to tell given you've only owned it for less than two months here, but I think the information around the revenue synergy potential going forward, maybe when you have a better handle on it will be good.

不，我認為這回答了問題。我感興趣的是——也許現在說還為時過早，因為你在這裡只擁有它不到兩個月，但我認為有關未來收入協同潛力的信息，也許當你能更好地處理時會很好的。

I guess my follow up question then has to be on the free cash flow generation, which was extremely strong in the first quarter. Can you maybe talk a little bit more about the main contributors to the cash flow number, given that 1Q is usually a seasonally weak quarter, usually consumes cash, not produces cash?

我想我的後續問題必須是自由現金流的產生，這在第一季非常強勁。鑑於第一季通常是季節性疲軟季度，通常消耗現金，而不是產生現金，您能否多談談現金流數字的主要貢獻者？

Yeah. So about half of that -- And just for context, of course, we guided -- to your point that we would consume cash in the first quarter. We generally tighten our belts at year-end and generated as much cash as we can and clean up old receivables and those kinds of things. Half of that contribution was from earnings and the other half was from improved organic accounts receivable.

是的。所以大約有一半——當然，我們指導的只是為了背景——就你的觀點而言，我們將在第一季消耗現金。我們通常會在年底勒緊褲腰帶，盡可能多地賺取現金，並清理舊應收帳款之類的東西。其中一半來自收益，另一半來自改善的有機應收帳款。

So I think our organic US DSOs went down by three days. So real nice improvement in collections and that really helped. In terms of the prospects for the full year being increased, well we've now since closed Whitco, they'll generate potentially in that $30 million to $50 million range or $20 million to $50 million range. All of this is going to get murkier as we go through the year.

所以我認為我們的有機美國 DSO 減少了三天。收藏方面的改進非常好，這確實很有幫助。就全年成長的前景而言，我們現在已經關閉了 Whitco，他們將產生 3,000 萬至 5,000 萬美元或 2,000 萬至 5,000 萬美元的潛在收入。隨著這一年的過去，所有這一切都將變得更加模糊。

And we -- our legacy business was -- and the year was off to a slow start, so we didn't generate the kind of revenue growth on our legacy business as we expected. So we certainly generated some cash there in the first quarter, but we're very excited about achieving some momentum here with hopefully some increases in rigs going into the second half and completions, which were down 11%, sequentially bottoming and growing as the year goes on.

我們的傳統業務今年開局緩慢，因此我們的傳統業務沒有產生我們預期的收入成長。因此，我們在第一季確實創造了一些現金，但我們對在這裡取得一些勢頭感到非常興奮，希望下半年鑽機數量和完工量有所增加，完工量下降了11%，逐年觸底並隨著今年的成長而成長持續。

That's it. Thank you for taking questions. I'll pass it on

就是這樣。感謝您提出問題。我會把它傳給你

Thank you.

謝謝。

Max Kane, Stephens.

馬克斯凱恩、史蒂芬斯。

Hey, guys. Thanks for taking my questions.

大家好。感謝您回答我的問題。

You're welcome. Hi, Max.

不客氣。嗨，馬克斯。

So first question is on 2Q and four-year revenue guide. I appreciate the color you all gave on the embedded assumptions for 2Q revenue, but I mean, how should we be looking at the rest of the year? Should we be assuming a typical sequential slowdown in 4Q? And just, yeah, once again, could you maybe just reiterate what the drivers were for 2Q revenue step up? I'd appreciate that.

第一個問題是關於第二季和四年的收入指南。我很欣賞你們對第二季收入的嵌入假設的看法，但我的意思是，我們應該如何看待今年剩餘時間？我們是否應該假設第四季會出現典型的連續放緩？只是，是的，您能否再重申第二季度營收成長的驅動因素是什麼？我將不勝感激。

Yeah, I think if you look at what we're expecting going into 2Q, of course the bulk of that growth is going to be the addition of a full-year quarter for Whitco. So the great majority of those revenue gains will come from Whitco discreetly. We're going to see some growth internationally. We're going to see a seasonal decline in Canada. As I talked about in my opening comments, those are largely offset.

是的，我認為如果你看看我們對第二季的預期，當然，大部分成長將來自 Whitco 全年季度的成長。因此，這些收入收益的絕大部分將來自 Whitco。我們將看到國際上的一些成長。我們將看到加拿大出現季節性下降。正如我在開場白中談到的，這些在很大程度上被抵消了。

We'll see some growth in our energy business in the US and flatness primarily in our process solutions business. If you recall last year, our process solutions business grew 46%. They're at a very high run rate. They're maintaining that level. So we expect a meager gain there.

我們將看到我們在美國的能源業務成長，而我們的流程解決方案業務將保持穩定。如果您還記得去年，我們的流程解決方案業務成長了 46%。他們的運行率非常高。他們正在維持這個水準。所以我們預計那裡會有微薄的收益。

But most of the contribution in the second quarter is Whitco. We expect summer growth and emergence from break-up in Canada in the third quarter. So that'll be our best quarter of the year. And then we do expect a seasonal decline. Whitco experiences a seasonal decline as well. So those will be the contours. We often see Q2 being a little -- very similar to 1Q, but that won't be the case, of course, because we'll have a full quarter of Whitco contribution.

但第二季的貢獻大部分來自Whitco。我們預計加拿大將在第三季實現夏季成長和擺脫分裂。所以這將是我們今年最好的季度。然後我們確實預計會出現季節性下降。Whitco 也經歷了季節性下降。這些就是輪廓。我們經常看到第二季與第一季非常相似，但當然情況並非如此，因為我們將擁有 Whitco 的整整一個季​​度的貢獻。

Okay. Great. Thanks for the color on that. And what has given you all confidence on margins improving throughout the year?

好的。偉大的。謝謝你的顏色。是什麼讓您對全年利潤率的改善充滿信心？

Well, the margins we posted -- Mark, you want to talk to that, because some of that includes accounting for the acquisition, but you want to give some color on that?

好吧，我們發布的利潤率——馬克，你想談談這一點，因為其中一些包括對收購的會計處理，但你想對此給予一些說明嗎？

Yeah, that's correct. Yeah, the first quarter included about 20 basis points for inventory step up, just part of the purchase accounting.

是的，這是正確的。是的，第一季包括大約 20 個基點的庫存增加，只是採購核算的一部分。

Negative impact.

負面影響。

Negative impact. And due to the partial quarter, that'll flush out fully in the second quarter. So we do expect the phase to return to where they were full-year average last year in 23%.

負面影響。由於部分季度的影響，這一情況將在第二季完全消除。因此，我們確實預計這一階段將恢復到去年全年平均 23%。

Probably in the third quarter, right?

應該是第三季吧？

Right, in third quarter. Yes, sir.

對了，第三季。是的先生。

Okay. Got it. Yeah, thanks for the color on that. I'll turn it back.

好的。知道了。是的，謝謝你的顏色。我會把它轉回來。

Jeff Robertson, Water Tower Research.

傑夫·羅伯遜，水塔研究。

Thanks and good morning.

謝謝，早安。

Hi.

你好。

Dave or Mark, can you talk about any cost synergies with Whitco as you -- since you mentioned they follow a supercenter model similar to DNOW? Are there overlaps or basins that you can bring them into or go in where they're strong and create some cost synergies?

Dave 或 Mark，既然您提到 Whitco 遵循類似於 DNOW 的超級中心模式，您能談談與 Whitco 的成本協同效應嗎？是否存在重疊或盆地，您可以將它們引入或進入它們強大的地方並創造一些成本協同效應？

Yeah. Our focus for Whitco is on revenue synergies. Like I said earlier, the customer lists are different. The focus is different. We want to grow market share where we're really strong in upstream and where they're really strong in midstream. So while there might be some cost savings opportunities for us to leverage each other's facilities, service models, sales talent, that's not our objective with Whitco.

是的。我們對 Whitco 的關注點是收入綜效。正如我之前所說，客戶名單是不同的。側重點不同。我們希望擴大我們在上游真正強大的市場份額以及他們在中游真正強大的市場份額。因此，雖然我們可能有一些節省成本的機會來利用彼此的設施、服務模式、銷售人才，但這並不是我們與 Whitco 的目標。

With Whitco, we want to drive a pure revenue synergy play where we might see some, quote-unquote, cost savings is on the product side. We expect to see some of that, especially for pipe and some valve brands where we're a big buyer and we overlap with them on the supplier side. But our objective is to grow, take market share in this kind of sideways market, and invest in the infrastructure to do so. And we did so with Whitco.

透過 Whitco，我們希望推動純粹的收入協同效應，我們可能會在產品方面看到一些成本節約。我們預計會看到其中的一些，特別是對於管道和一些閥門品牌，我們是這些品牌的大買家，並且我們在供應商方面與他們重疊。但我們的目標是成長，在這種橫向市場中佔據市場份額，並為此投資基礎設施。我們和 Whitco 一起這樣做了。

Is the revenue opportunity with -- to expand DNOW's business with Whitco's customers, is that margin enhancing in terms of the product mix that those types of customers would need DNOW to supply?

擴大 DNOW 與 Whitco 客戶的業務的收入機會是否會在這些類型的客戶需要 DNOW 提供的產品組合方面提高利潤？

It could be. I mean if we -- we're having a lot of fun and interest, certainly from the Whitco side and introducing some of the process solutions opportunities to their customers, we're starting that. We're pretty new in the onboarding process.

它可能是。我的意思是，如果我們 - 我們有很多樂趣和興趣，當然來自 Whitco 方面，並向他們的客戶介紹一些流程解決方案機會，我們就開始了。我們在入職流程方面還很陌生。

But we see opportunities there. Process solutions at this point in the cycle tends to have a little bit better margins. So that could be margin accretive to the extent we can introduce our process solutions branch to the Whitco customers.

但我們在那裡看到了機會。週期中此時的流程解決方案往往有更好的利潤。因此，如果我們能夠向 Whitco 客戶介紹我們的流程解決方案分支，那麼這可能會增加利潤。

Thanks. And then lastly, does the addition of Whitco alter the types of acquisition or types of product lines that makes sense for DNOW in terms of industrial logic or the type of things you might be looking for?

謝謝。最後，Whitco 的加入是否會改變收購類型或產品線類型，這對於 DNOW 來說在工業邏輯或您可能正在尋找的事物類型方面是有意義的？

Very good question. So Whitco is our first energy centers' acquisition since 2015. We've been careful to really focus on process solutions. We made 10 process solutions acquisitions in a row. I think that's where you'll see most of our investments being made going forward. Whitco is different. This is a company that grew over a 20-year period to be a powerhouse in midstream.

非常好的問題。因此，Whitco 是我們自 2015 年以來收購的第一個能源中心。我們一直非常小心地真正關注流程解決方案。我們連續進行了 10 次流程解決方案收購。我認為這就是我們未來進行大部分投資的地方。惠特科則不同。這是一家經過20多年發展成為中游巨頭的公司。

So they're very specialized. They have a devout customer base, like I said in my opening remarks and they have a special quality to them that you don't really see with all distribution pipe, valves, fittings distributors. So this was a kind of a -- timing is right. It was a great opportunity. And I think you'll see most of our acquisitions in the near-term anyway being pumped and process solutions-oriented.

所以他們非常專業。他們擁有虔誠的客戶群，就像我在開場白中所說的那樣，他們有一種特殊的品質，這是你在所有分配管道、閥門、配件分銷商中看不到的。所以這是一個——時機是正確的。這是一個很好的機會。我認為您會在短期內看到我們的大部分收購都是以流程解決方案為導向的。

Thank you.

謝謝。

Thank you, Jeff.

謝謝你，傑夫。

There are no further questions at this time. I would like to call -- turn the call back over to Mr. Brad Wise.

目前沒有其他問題。我想打電話給布拉德懷斯先生。

Well, thank you for your questions today and your interest in DNOW. We look forward to talking with everyone on our second-quarter 2024 earnings conference call in August later this year. Have a nice day and we'll turn the call back over to the operator.

好的，感謝您今天提出的問題以及您對 DNOW 的興趣。我們期待在今年 8 月稍後舉行的 2024 年第二季財報電話會議上與大家進行交談。祝您有愉快的一天，我們會將電話轉回給接線生。

This concludes today's conference call. You may now disconnect. Have a good day.

今天的電話會議到此結束。您現在可以斷開連線。祝你有美好的一天。