DNOW Inc (DNOW) 2024 Q3 法說會逐字稿

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

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。我們主要以 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 of the company's business. These are forward-looking statements within the meaning of the US federal securities laws based on limited information as of today, November 7, 2024, which is subject to change.

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。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 11 月 7 日的有限信息，可能會發生變化。

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 year. We do not undertake any obligation to publicly update or revise any forward-looking statements for any reason.

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，本次電話會議還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.

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，不包括其他成本，有時稱為EBITDA、歸屬淨利潤歸屬於 DNOW Inc，不包括其他成本以及歸屬於 DNOW Inc 的稀釋每股收益，不包括其他成本。

Each excludes the impact of certain other costs and therefore, have not been calculated in accordance with GAAP. Please refer to a reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure and the supplemental information available at the end of our earnings release.

每一項都排除了某些其他成本的影響，因此並未根據 GAAP 進行計算。請參閱這些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以及我們收益發布末尾提供的補充資訊。

As of this morning, the Investor Relations section of our website contains a presentation covering our results and key takeaways for the third quarter of 2024. A replay of today's call will be available on our website for the next 30 days. We plan to file our 2024 Form 10-Q for the third quarter later today and will also be available on our website.

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 年第三季業績和主要要點的簡報。未來 30 天內，我們的網站將提供今天電話會議的重播。我們計劃在今天稍後提交第三季的 2024 年 10-Q 表格，該表格也將在我們的網站上發布。

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 want to start off highlighting the strength in our performance in 2024, which has been one of our best EBITDA years despite being in a smaller market compared to last year in a period now with ample product availability in the supply chain, intensified pricing pressure and reduced customer activity for the things driving DNOW revenue opportunities.

謝謝布拉德，大家早安。我想先強調我們2024 年業績的實力，儘管與去年相比，市場規模較小，但今年是我們EBITDA 最好的年份之一，而目前供應鏈中的產品供應充足，定價壓力加大，並且減少了推動 DNOW 收入機會的客戶活動。

This quarter, we generated significant free cash flow of $72 million, accumulating to $273 million in free cash flow over the trailing four quarters or $281 million in cash from operations during that period. We started the year forecasting 2024 free cash flow at $150 million, and raised our full year outlook to approach $200 million in May.

本季度，我們產生了 7,200 萬美元的大量自由現金流，在過去的四個季度中累積產生了 2.73 億美元的自由現金流，或者說同期營運產生的現金為 2.81 億美元。我們年初預測 2024 年自由現金流為 1.5 億美元，並在 5 月將全年預期上調至接近 2 億美元。

Today, we are upgrading that forecast again with 2024 free cash flow to approach $215 million or cash from operations approximately $225 million in 2024. In the quarter, we improved our working capital, excluding cash as a percent of annualized 3Q revenue to 15.7%, a recent best approximating working capital velocity at 7x.

今天，我們再次上調這項預測，預計 2024 年自由現金流將接近 2.15 億美元，營運現金將在 2024 年達到約 2.25 億美元。本季度，我們的營運資本（不包括現金）佔第三季度年化收入的百分比提高至 15.7%，這是最近最接近的營運資本週轉率 7 倍。

Looking at the US market, the number of active rigs, completions and new wells drilled, the primary activities that drive our revenues have each declined more than 12% year-over-year. But we've been able to mute the full impact because of the solutions we offer, fueled by the excitement, passion and competitive spirit of our people.

看看美國市場，活躍鑽機數量、完井數量和新鑽井數量（推動我們收入成長的主要活動）均較去年同期下降超過 12%。但由於我們提供的解決方案，以及員工的興奮、熱情和競爭精神，我們已經能夠消除全面的影響。

We attribute this revenue resilience to our position in the market, our importance in the supply chain as viewed by our suppliers and customers, our performance against commitments we make to our customers as compared to our competition, our leadership in growing energy evolution revenue streams and our team's adjacent market inroads, all helping to mitigate the impact as oil and gas customer spending has declined.

我們將這種收入彈性歸因於我們在市場中的地位、供應商和客戶認為我們在供應鏈中的重要性、與我們的競爭對手相比我們對客戶所做的承諾的表現、我們不斷成長的能源發展收入流方面的領導地位以及我們團隊進入鄰近市場，所有這些都有助於減輕石油和天然氣客戶支出下降的影響。

Just one notable example of where our organic investments are paying off in the US at our Williston, North Dakota mega center, which houses our PVF-plus projects execution center, where we do quoting, sourcing, expediting, staging, delivery and project fulfillment.

這只是我們的有機投資在美國獲得回報的一個顯著例子，位於北達科他州威利斯頓的大型中心，該中心設有PVF+ 項目執行中心，我們在這裡進行報價、採購、催交、分期、交付和專案履行。

It's also home to our fiberglass composite piping systems to support the region with inventory, technical expertise for their fiberglass piping needs. It's the main service, repair, maintenance and supply stop for Flex Flow for the Rocky Mountain region and our expanding Flex Flow Canadian operations.

它也是我們玻璃纖維複合管道系統的所在地，為該地區提供庫存和技術專業知識，以滿足其玻璃纖維管道需求。它是 Flex Flow 在落基山脈地區以及我們不斷擴大的 Flex Flow 加拿大業務的主要服務、維修、維護和供應站。

Power Service, our pump distribution business provides local field service and aftermarket parts out of the Williston mega center as well. Their local service techs, coupled with the industry leading inside support staff, keep our customers instrument air skids, SWDs, LACT units and production equipment operational.

電力服務，我們的泵浦分銷業務還提供威利斯頓大型中心的本地現場服務和售後零件。他們的本地服務技術加上業界領先的內部支援人員，使我們的客戶的儀表空氣橇、SWD、LACT 裝置和生產設備保持正常運作。

Finally, EcoVapor uses the Williston mega center as its home base, serving the Bakken play for oil and gas as well as the Northern Rockies based RNG customers. EcoVapor provides technical support and field service for their units, which are deployed locally for some of our top customers. The wide ranging Williston mega center offers a bright spot and serves as a robust differentiation against our competition.

最後，EcoVapor 使用威利斯頓大型中心作為其大本營，為巴肯石油和天然氣區以及北落基山脈的 RNG 客戶提供服務。EcoVapor 為其設備提供技術支援和現場服務，這些設備在本地為我們的一些頂級客戶部署。廣泛的威利斯頓大型中心提供了一個亮點，並為我們的競爭提供了強大的差異化優勢。

Contributing to our results in the quarter was US Process Solutions, having its best year ever in terms of financial performance, a business we built from scratch in a series of acquisitions starting in 2015. Over the past nine years, we integrated 11 businesses to produce an outstanding pump distribution, rental and service business, combined with engineering, design and fabrication of highly sought after process production and measurement equipment, which naturally complements our US energy centers business.

US Process Solutions 為我們本季的業績做出了貢獻，該公司在財務業績方面經歷了有史以來最好的一年，這是我們從 2015 年開始透過一系列收購從頭開始建立的業務。在過去的九年裡，我們整合了11 家企業，打造了出色的泵分銷、租賃和服務業務，並結合了備受追捧的工藝生產和測量設備的工程、設計和製造，這自然補充了我們的美國能源中心業務。

Process Solutions has been a growth lever for the company over the years and is an important part of our strategy to expand further into midstream, grow market share from energy evolution activities and advance into adjacent industrial markets.

多年來，流程解決方案一直是公司的成長槓桿，也是我們進一步向中游擴張、透過能源發展活動增加市場份額以及進軍鄰近工業市場的策略的重要組成部分。

And now moving to our results. Third quarter 2024 revenue was $606 million, a sequential decrease of $27 million or 4% within our guided range. We generated $42 million in EBITDA or 6.9% of revenue in the quarter, a solid performance. In the US, revenue was $482 million, down $30 million or 6% sequentially due to the declining rig count, completions and project activity.

現在轉向我們的結果。2024 年第三季營收為 6.06 億美元，季減 2,700 萬美元，也就是在我們的指導範圍內減少 4%。我們本季的 EBITDA 為 4,200 萬美元，佔營收的 6.9%，表現穩健。在美國，由於鑽機數量、完工量和項目活動減少，收入為 4.82 億美元，環比下降 3,000 萬美元，即 6%。

We also had approximately $7 million of 3Q orders that were forecast, but not processed as they were delayed. For the past several quarters, more customer consolidations were announced and underway. And for some of our customers, those pending deals continue to impact project timing, resulting in funding and approval delays or project time line shifts.

我們還有大約 700 萬美元的第三季訂單是預計的，但由於延遲而沒有處理。在過去的幾個季度中，更多的客戶整合已經宣布並正在進行中。對於我們的一些客戶來說，這些懸而未決的交易繼續影響專案進度，導致融資和審批延遲或專案時間表發生變化。

I'd like to mention a few project wins that speak to the execution of our strategy. First, we expanded revenue in the Gulf Coast at an LNG facility as we work to further diversify revenue in the midstream and downstream markets. In chemical processing, we provided a large number of valves to an EPC for the construction of our large-scale chemical plant expansion, an example of growing revenue into downstream chemicals processing tied to the reshoring trend of manufacturing.

我想提及一些與我們的策略執行有關的專案勝利。首先，我們擴大了墨西哥灣沿岸液化天然氣設施的收入，並努力進一步實現中下游市場的收入多元化。在化學加工方面，我們為大型化工廠擴建項目的建設向EPC提供了大量閥門，這是與製造業回流趨勢相關的下游化學加工收入增長的一個例子。

And we grew revenue through the award of a large gas pipeline project for a gas utility customer. Each speaks to winning business through non-upstream markets that we are targeting to diversify our focus.

我們透過為天然氣公用事業客戶授予大型天然氣管道專案來增加收入。每一個都談到了透過非上游市場贏得業務，我們的目標是實現業務重點多元化。

In US Process Solutions, revenue was lower in the quarter due to softer project and completions activity. And as mentioned in my opening remarks, we improved performance sequentially as our teams work to optimize expenses and product costs. On the fabrication side, we vertically integrated a UL-certified panel shop and the packaging of our I&E scope of work on our fabricated products to improve margins in our power service business.

在美國流程解決方案部門，由於專案和竣工活動疲軟，本季收入較低。正如我在開場白中提到的，隨著我們的團隊努力優化費用和產品成本，我們的表現也不斷提高。在製造方面，我們垂直整合了 UL 認證的面板車間以及我們對製造產品的 I&E 工作範圍的包裝，以提高我們電力服務業務的利潤率。

Our engineering and product development team updated and shipped our new LACT unit design, incorporating an optimized footprint with the new pipeline pump. For the customer, the new design improves the reliability of the pipeline pump, provides a smaller footprint with shorter lead times and at a more competitive price.

我們的工程和產品開發團隊更新並交付了新的 LACT 裝置設計，將優化的佔地面積與新的管道泵相結合。對於客戶來說，新設計提高了管道泵的可靠性，提供更小的佔地面積、更短的交貨時間和更具競爭力的價格。

We are continuing to grow our mechanical seals business in Montana, Wyoming and Colorado, which helps improve margins and offers less cyclical revenues when compared to drilling and completions related revenue. At a refinery in the US, we helped an operator reduce emissions and eliminate leaks by upgrading their current pump sealing systems by adding and incorporating secondary containment systems. This is a great example of how we're helping our customers reduce Scope 1 emissions in a downstream refinery.

我們正在繼續發展蒙大拿州、懷俄明州和科羅拉多州的機械密封業務，這有助於提高利潤率，並與鑽井和完井相關收入相比，提供較少的周期性收入。在美國的煉油廠，我們透過添加和合併二級安全殼系統來升級其當前的泵浦密封系統，幫助操作員減少排放並消除洩漏。這是我們如何幫助客戶減少下游煉油廠範圍 1 排放的一個很好的例子。

During the quarter, we expanded our pump distribution products and service geographies by growing our territory with a top-tier manufacturer who offers a broad range of pumping solutions to the US mining industry.

本季度，我們與一家為美國採礦業提供廣泛泵送解決方案的頂級製造商合作擴大了我們的領土，從而擴大了我們的泵分銷產品和服務地域。

Second, we added an additional new line of pumps targeting chemicals and slurries activity. And finally, we added a more robust API pump line for the process related chemicals and refining end markets that will help us expand our downstream revenues.

其次，我們增加了一個針對化學品和漿料活動的新泵浦系列。最後，我們為製程相關化學品和煉油終端市場增加了更強大的 API 幫浦系列，這將有助於我們擴大下游收入。

In the mining sector, we had a number of wins. For example, we supply vertical turbine pump products to a potash customer used in solar evaporation production mining. In the expanding uranium sector to meet the growing demand for commercial nuclear power generation, we provided pump packages as older mines are being brought into production.

在採礦領域，我們取得了許多勝利。例如，我們向一家用於太陽能蒸發生產採礦的鉀肥客戶提供垂直渦輪泵產品。在不斷擴大的鈾行業中，為了滿足商業核能發電不斷增長的需求，我們在舊礦山投產時提供了泵組。

In our Flex Flow business, we grew our Canadian market presence by securing a master service agreement with an oil and gas operator. In the refining sector, we have expanded the number of Flex Flow units in service as we execute on our strategy to seek revenue diversification for our H-pump mobile rental units. In Canada, revenue was $65 million for the quarter, an increase of 16% sequentially, primarily due to the recovery in activity from the breakup period last quarter.

在 Flex Flow 業務中，我們透過與石油和天然氣營運商簽訂主服務協議來擴大加拿大市場份額。在煉油產業，隨著我們執行 H 泵行動租賃裝置收入多元化的策略，我們擴大了正在使用的 Flex Flow 裝置的數量。在加拿大，本季營收為 6,500 萬美元，季增 16%，這主要是由於上季分拆期後業務活動的復甦。

We saw activity increase with several of our top customers and invested in sales efforts to help target the growing opportunities in RNG, hydrogen and CCUS in Canada. Beginning in the third quarter and continuing into the fourth, we are providing steel and alloy pipe to an industrial gas operator for a hydrogen project in Eastern Canada.

我們看到一些頂級客戶的活動增加，並投資於銷售工作，以幫助瞄準加拿大 RNG、氫氣和 CCUS 領域不斷增長的機會。從第三季度開始並持續到第四季度，我們正在為加拿大東部的一家工業天然氣營運商提供鋼鐵和合金管道。

For international, revenue was $59 million, a decrease of $6 million or 9% from the second quarter, primarily due to location closures and lower project activity in the Middle East and UK. We renewed several customer frame agreements for our MacLean electrical distribution business in the UK.

國際業務收入為 5,900 萬美元，較第二季減少 600 萬美元，即 9%，主要是由於中東和英國的地點關閉以及專案活動減少。我們為英國麥克萊恩配電業務續簽了幾項客戶框架協議。

In Australia, we saw an increase in project activity as we provided cable packages and electrical bulks to an IOC for an interconnect and tie in project at the Gorgon LNG facility. And finally, our export group continues to provide a range of products to support a number of oil and gas operators in West Africa.

在澳大利亞，我們看到專案活動增加，因為我們向 IOC 提供電纜包和電力散裝，用於 Gorgon 液化天然氣設施的互連和連接專案。最後，我們的出口團隊繼續提供一系列產品來支援西非的許多石油和天然氣營運商。

And now a few comments related to energy evolution. In terms of potential demand for DNOW products within the CCUS space, in 2024, the number of CCUS projects has increased 60% to 628 facilities from 392 facilities last year. 44 projects are in the construction phase this year, an increase of nearly 70% year-over-year. And during the quarter, we had a few notable energy evolution wins. In the direct air capture space, we provided PVF-plus products during the construction phase of a project in Texas.

現在有一些與能源演化相關的評論。就 CCUS 領域對 DNOW 產品的潛在需求而言，到 2024 年，CCUS 專案數量將從去年的 392 個設施增加到 628 個設施，成長 60%。今年開工工程工程44個，年增近70%。在本季度，我們取得了一些值得注意的能源發展勝利。在直接空氣捕獲領域，我們在德克薩斯州一個專案的施工階段提供了 PVF+ 產品。

We sold PVF products in gas compression stations to a low-carbon power plant in the US. We provided PVF products to expand the capacity of a synfuels plant to capture more CO2 from coal conversion through a pipeline. Operating companies use the CO2 for enhanced oil recovery operations for permanent CO2 geologic sequestration. Finally, we delivered PVF and MRO products to a mining operator who is extracting lithium from a geothermal brine solution.

我們將天然氣壓縮站的PVF產品銷售給美國的低碳發電廠。我們提供 PVF 產品來擴大合成燃料工廠的產能，以透過管道從煤炭轉化中捕獲更多二氧化碳。營運公司將二氧化碳用於強化石油採收作業，以實現永久二氧化碳地質封存。最後，我們向一家從地熱鹽水溶液中提取鋰的採礦業者交付了 PVF 和 MRO 產品。

Moving to our digital NOW initiatives. Our digital revenue as a percent of total SAP revenue improved to 52% during the quarter, passing the 50% mark for the first time. We have been working with a number of customers to connect our respective systems to drive efficiencies and lower the cost of transactions as we work with customers, suppliers and partners to extract value from our technology platforms.

轉向我們的數位化現在計劃。本季我們的數位收入佔 SAP 總營收的百分比提高到 52%，首次突破 50% 大關。我們一直在與許多客戶合作，連接我們各自的系統，以提高效率並降低交易成本，同時我們與客戶、供應商和合作夥伴合作，從我們的技術平台中獲取價值。

We began processing orders through a new B2B digital integrated procurement solution from a top 20 customer using our e-commerce punch out process and digital ordering workflow. This process is a highly efficient method of procurement, enabling the customer to seamlessly order DNOW products through the ERP procurement and requisitioning system.

我們開始使用我們的電子商務打孔流程和數位訂購工作流程，透過新的 B2B 數位整合採購解決方案處理排名前 20 位客戶的訂單。此流程是一種高效的採購方法，使客戶能夠透過 ERP 採購和請購系統無縫訂購 DNOW 產品。

Ultimately, the integration benefit lowers cost per transaction for both parties and ensures when purchasing products from DNOW, the cost to transact compared to nonintegrated suppliers is lower and an advantage for DNOW. In an example of gaining efficiencies, leveraging technology with the supply chain solutions customer, we implemented a customer inventory surplus automation solution for a key customer using automation to streamline and reduce the required systematic processing, resulting in a labor savings of approximately 800 hours per year.

最終，整合優勢降低了雙方的每筆交易成本，並確保從 DNOW 購買產品時，與非整合供應商相比，交易成本更低，這對 DNOW 來說是一個優勢。在提高效率、利用技術與供應鏈解決方案客戶合作的範例中，我們為關鍵客戶實施了客戶庫存過剩自動化解決方案，利用自動化來簡化和減少所需的系統處理，每年節省約 800 小時的勞動力。

And switching to acquisitions with a solid balance sheet, no debt and a strong cash position, inorganic growth is our biggest lever right now and remains a key part of our growth strategy. Historically, we believe acquisitions are the most ripe for us in a market like this. Our strategy prioritizes margin accretive businesses, aiming to strengthen and diversify our capabilities in serving our customers.

轉向具有穩健的資產負債表、無債務和強大現金狀況的收購，無機成長是我們目前最大的槓桿，並且仍然是我們成長策略的關鍵部分。從歷史上看，我們認為在這樣的市場上收購對我們來說是最成熟的。我們的策略優先考慮利潤增值業務，旨在加強和多元化我們服務客戶的能力。

We maintain rigorous standards, investing in opportunities where we are the natural operator, poised to create value, increase the contributions of acquired companies and drive long-term shareholder value. We are confident we can get more of these to the finish line in the near term.

我們保持嚴格的標準，投資於我們作為天然營運商的機會，準備創造價值，增加被收購公司的貢獻並推動長期股東價值。我們有信心在短期內能夠將更多這樣的專案完成。

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 third quarter 2024 revenue was $606 million, up 3% or $18 million year-over-year. EBITDA, excluding other costs or EBITDA for the third quarter was $42 million or 6.9% of revenue. And year-to-date, we produced $131 million or 7.3% of revenue, our second best EBITDA level since going public.

謝謝戴夫，大家早安。2024 年第三季總營收為 6.06 億美元，年增 3%，即 1,800 萬美元。第三季 EBITDA（不包括其他成本）或 EBITDA 為 4,200 萬美元，佔營收的 6.9%。今年迄今為止，我們創造了 1.31 億美元，佔營收的 7.3%，這是我們上市以來第二高的 EBITDA 水準。

US revenue for the third quarter 2024 totaled $482 million, an increase of $34 million or 8% year-over-year. US energy centers contributed approximately three-fourth of total US revenue in the third quarter, and US Process Solutions contributed the remainder. In Canada, for the third quarter 2024, revenue totaled $65 million, down $3 million or 4% year-over-year.

2024年第三季美國營收總計4.82億美元，年增3,400萬美元，成長8%。第三季度，美國能源中心貢獻了美國總收入的約四分之三，美國流程解決方案貢獻了剩餘的收入。在加拿大，2024 年第三季的總收入為 6,500 萬美元，年減 300 萬美元，即 4%。

And when comparing to the second quarter of 2024, Canada revenue increased $9 million or 16%. International revenue for the third quarter of 2024 was $59 million, down $6 million or 9% sequentially, partly impacted by some restructuring of our international operations to align with where our customers see the most value.

與 2024 年第二季相比，加拿大收入增加了 900 萬美元，即 16%。2024 年第三季的國際營收為 5,900 萬美元，比上一季下降 600 萬美元，或 9%，部分原因是我們對國際業務進行了一些重組，以適應客戶認為最大的價值。

In the quarter, we identified and took action on a handful of locations that had suboptimal financial returns and outlook. Year-to-date, revenue across the closed locations accounted for approximately $10 million of the $186 million in international revenue through the third quarter of 2024, or roughly 5% with minimal profit contribution. Through this recalibration, we continue to focus and invest in areas where our strength lie, specifically in the regions of UK, Norway, Netherlands, Australia, the Middle East and export.

在本季度，我們確定了少數財務回報和前景不佳的地點並採取了行動。今年迄今，截至 2024 年第三季度，關閉地點的收入約佔 1.86 億美元國際收入中的 1,000 萬美元，約佔 5%，利潤貢獻極小。透過這次重新調整，我們繼續專注並投資於我們的優勢領域，特別是英國、挪威、荷蘭、澳洲、中東和出口地區。

Now moving back to the income statement. Gross margins increased 50 basis points from the second quarter of 2024 to 22.3% as inventory step-up charges in the first half of 2024 did not repeat. Warehousing, selling and administrative or WSA for the quarter was $107 million, up $2 million from the second quarter as expected, primarily related to favorable WSA impacts in the second quarter.

現在回到損益表。由於 2024 年上半年的庫存增加費用沒有重複，毛利率較 2024 年第二季增加 50 個基點至 22.3%。本季的倉儲、銷售和管理或 WSA 為 1.07 億美元，比第二季預期增加 200 萬美元，主要與第二季 WSA 的有利影響有關。

We forecast the fourth quarter WSA level could lower towards $103 million as we focus on operational efficiencies and resource alignment to regional market activity. In the third quarter, we reported $8 million of depreciation and amortization expense and for the fourth quarter, we forecast depreciation and amortization to be approximately $9 million.

我們預測第四季度 WSA 水準可能會降至 1.03 億美元，因為我們專注於營運效率和資源與區域市場活動的協調。第三季度，我們報告了 800 萬美元的折舊和攤銷費用，第四季度的折舊和攤提費用預計約為 900 萬美元。

Now moving to operating profit. In the third quarter, total company operating profit was $23 million. The US generated $25 million and Canada delivered $3 million of the operating profit in the third quarter of 2024. The International segment recorded a $5 million operating loss in the third quarter of 2024, driven by $8 million of charges related to the restructuring. And those items are excluded for non-GAAP reporting.

現在轉向營業利潤。第三季度，公司營業利潤總額為 2,300 萬美元。2024 年第三季度，美國和加拿大分別創造了 2,500 萬美元和 300 萬美元的營業利潤。由於與重組相關的 800 萬美元費用，國際部門在 2024 年第三季錄得 500 萬美元的營運虧損。這些項目不包括在非公認會計準則報告中。

With the largest component being a non-cash $5 million charge from the customary reclassification of foreign currency translation losses, which is a component of our accumulated other comprehensive income and loss to the P&L in the quarter. This non-cash charge is presented within the impairment and other charges inline of our income statement. Our interest income in the period was $1 million.

其中最大的組成部分是外幣換算損失的慣常重新分類產生的 500 萬美元非現金費用，這是我們本季損益表中累計其他綜合收入和損失的組成部分。此非現金費用在我們損益表的減損及其他費用中列報。我們這段期間的利息收入為 100 萬美元。

And moving to income taxes. In the third quarter of 2024, DNOW's income tax expense was $9 million and $25 million year-to-date. Our effective tax rate as computed on the face of the income statement was 29.8% year-to-date 2024.

並轉向所得稅。2024 年第三季度，DNOW 的所得稅費用為 900 萬美元，年初至今為 2,500 萬美元。2024 年至今，我們根據損益表計算的有效稅率為 29.8%。

Our third quarter tax rate was higher than the US federal statutory rate, primarily due to non-cash restructuring charges in our International segment with no associated tax benefit. We estimate our 2024 full year effective tax rate to be approximately 28% to 30% as reported for GAAP or approximately 27% to 28%, excluding the impact of those restructuring charges.

我們第三季的稅率高於美國聯邦法定稅率，主要是因為我們國際部門的非現金重組費用，沒有相關的稅收優惠。我們預計 2024 年全年有效稅率以 GAAP 計算約為 28% 至 30%，或約 27% 至 28%（不包括這些重組費用的影響）。

Net income attributable to DNOW Inc. for the third quarter was $13 million or $0.12 per fully diluted share. And on a non-GAAP basis, Q3 2024 net income attributable to DNOW Inc, excluding other costs, was strong at $22 million or $0.21 per fully diluted share.

第三季歸屬於 DNOW Inc. 的淨利潤為 1,300 萬美元，即完全稀釋後每股收益 0.12 美元。根據非 GAAP 基準，DNOW Inc 的 2024 年第三季淨利（不含其他成本）強勁，達到 2,200 萬美元，即完全稀釋每股收益 0.21 美元。

Moving to the balance sheet. At the end of the quarter, we had a cash position of $261 million and zero debt. Cash increased by $64 million in the third quarter, driven by our cash generation from operating activities, partially offset by $7 million of stock repurchases in the quarter and $2 million in capital expenditures.

轉向資產負債表。截至本季末，我們的現金部位為 2.61 億美元，負債為零。第三季現金增加了 6,400 萬美元，這主要得益於我們經營活動產生的現金，部分被本季 700 萬美元的股票回購和 200 萬美元的資本支出所抵銷。

We ended the third quarter with total liquidity of $622 million, comprising our net cash position of $261 million and $361 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.

第三季末，我們的流動性總額為 6.22 億美元，其中包括 2.61 億美元的淨現金部位和 3.61 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 $405 million and days sales outstanding or DSO was 61 days at the end of the third quarter. Inventory was $364 million at the end of the third quarter, a decrease of $35 million from the second quarter. Our operating model, incredible talent in the field, partnered with our inventory planning teams have done an outstanding job to ensure the right products on hand that the market demands are located in proximity to our customers, all while managing the perishable risk that comes with inventory. The results of this orchestration can be measured in an impressive and improved inventory velocity of 5.2 turns in the quarter, beating our prior quarter's high mark.

第三季末期末應收帳款為 4.05 億美元，應收帳款天數或 DSO 為 61 天。第三季末庫存為3.64億美元，比第二季減少3,500萬美元。我們的營運模式、該領域令人難以置信的人才以及與我們的庫存規劃團隊的合作，做得非常出色，確保市場需求的正確產品位於我們的客戶附近，同時管理庫存帶來的易腐爛風險。這種協調的結果可以透過本季令人印象深刻且改進的庫存速度 5.2 週轉來衡量，超過了上一季的高點。

Accounts payable was $278 million at the end of the third quarter, flat from the second quarter. And for the third quarter of 2024, working capital, excluding cash, as a percentage of annualized third quarter revenue was 15.7%.

第三季末應付帳款為 2.78 億美元，與第二季持平。2024 年第三季度，不包括現金的營運資本佔第三季年化收入的百分比為 15.7%。

In the third quarter, cash provided by operating activities was $74 million and $280 million for the trailing four quarters ending September 30, 2024. We invested $2 million in capital expenditures in the third quarter, bringing our third quarter free cash flow to $72 million. And for the trailing 12 months, free cash flow has totaled $273 million.

第三季度，經營活動提供的現金為 7,400 萬美元，截至 2024 年 9 月 30 日的過去四個季度為 2.8 億美元。我們在第三季投資了 200 萬美元的資本支出，使第三季的自由現金流達到 7,200 萬美元。過去 12 個月，自由現金流總計 2.73 億美元。

We continue to execute on our share repurchase program that is authorized through December 31, 2024. And as of September 30, our cumulative repurchases under our $80 million authorized share repurchase program totaled $74 million. Our commitment to growing the company through a combination of organic initiatives and margin accretive M&A 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.

我們將繼續執行截至 2024 年 12 月 31 日授權的股票回購計畫。截至 9 月 30 日，我們根據 8,000 萬美元授權股票回購計畫進行的累計回購總額為 7,400 萬美元。我們致力於透過有機措施和利潤增值併購相結合來發展公司，這仍然是我們的首要任務，同時我們也有能力趁機回購股票，因為我們使用資本配置框架中的工具來產生有吸引力的股東回報，而不偏離我們的紀律。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 fourth quarter and full year 2024. In the US and Canada, we expect oil and gas activity to be lower sequentially due to customer budget exhaustion, with normal fourth quarter seasonality.

謝謝你，馬克。現在轉向我們對第四季和 2024 年全年的展望。在美國和加拿大，我們預計由於客戶預算耗盡，石油和天然氣活動將環比下降，第四季季節性正常。

Internationally, we expect activity to be relatively flat sequentially due to favorable project timing offsetting some of the location closures. Taken together, 4Q '24 sequential revenue is expected to be down seasonally in the high single digits from 3Q '24, while anticipating modest full year 2024 revenue growth compared to 2023.

在國際上，由於有利的專案時機抵消了部分地點的關閉，我們預計活動將相對穩定。總而言之，預計 24 年第 4 季的連續收入將比 24 年第 3 季出現季節性高個位數下降，同時預計 2024 年全年營收將較 2023 年溫和成長。

Full year 2024 EBITDA as a percent of revenue could approach 7%. And our full year 2024 cash from operations could approach $225 million with CapEx approaching $10 million. By having a good deal of cash and a strong reliable business that can make more, our strategic options are numerous and obviously well funded.

2024 年全年 EBITDA 佔營收的百分比可能接近 7%。我們 2024 年全年的營運現金可能接近 2.25 億美元，資本支出接近 1,000 萬美元。透過擁有大量現金和可以賺更多錢的強大可靠的業務，我們的策略選擇眾多，而且顯然資金充足。

We can use the cash for expansion to upgrade or expand infrastructure, either by opening new locations, promoting new manufacturers or their products, acquiring complementary businesses or new competencies, entering adjacent markets or increasing earnings per share by repurchasing shares or bolster our digital channels and implement or refine our existing e-commerce platforms. And we are doing all of the above.

我們可以利用現金進行擴張，以升級或擴展基礎設施，方法是開設新地點、推廣新製造商或其產品、收購互補業務或新能力、進入相鄰市場或透過回購股票或加強我們的數位管道來增加每股收益，以及實施或完善我們現有的電子商務平台。我們正在做上述所有事情。

We could also use the cash to pay down debt and reduce interest costs, but right now, we're not burdened with either. And while the upstream market finds its footing with some analysts calling for a reset, moving forward, DNOW possesses a number of growth levers to pull. We continue to focus on expanding our midstream business, now approximately 20% of DNOW revenues.

我們也可以用現金來償還債務並降低利息成本，但現在我們兩者都沒有負擔。儘管上游市場已站穩腳跟，一些分析師呼籲重新調整，但 DNOW 仍擁有許多成長槓桿可供拉動。我們繼續專注於擴大中游業務，目前約佔 DNOW 收入的 20%。

We're excited about the prospects of our existing and new customer investments in energy evolution and see that revenue growing on a year-over-year basis. And we are gaining momentum in our pursuit of growth in industrial adjacent markets like mining, water and wastewater, chemical processing and food and beverage. We expect a reduction in interest rates and improvements in the economic outlook, which is positive for energy companies and in turn, energy supply companies.

我們對現有和新客戶在能源發展方面的投資前景感到興奮，並看到收入逐年增長。我們在採礦、水和廢水、化學加工以及食品和飲料等工業相鄰市場追求成長的勢頭正在增強。我們預期利率會下降，經濟前景會有所改善，這對能源公司有利，反過來對能源供應公司有利。

Finally, we achieved solid results this quarter with year-over-year revenue growth despite project delays in the period, thanks to the hard work of our dedicated employees who provide a differentiated level of service and products to our customers every day. We generated an additional $72 million in free cash flow during the quarter, yielding $273 million for the trailing four quarters, driven by record performance in our US Process Solutions business, strong acquisition contribution and robust inventory velocity.

最後，儘管專案期間出現延誤，但由於我們敬業的員工每天為客戶提供差異化的服務和產品水平，我們本季度取得了堅實的業績，收入同比增長。在美國流程解決方案業務創紀錄的業績、強勁的收購貢獻和強勁的庫存週轉率的推動下，本季度我們額外產生了7,200 萬美元的自由現金流，在過去的四個季度中產生了2.73 億美元的現金流。

These results were produced in a challenging oil and gas environment with the backdrop of lower commodity prices and a wave of customer consolidations. We repurchased $7 million in shares during the quarter and are on a path to complete the $80 million share repurchase program this year as planned.

這些結果是在充滿挑戰的石油和天然氣環境、大宗商品價格下跌和客戶整合浪潮的背景下產生的。我們在本季回購了 700 萬美元的股票，並有望按計畫完成今年 8,000 萬美元的股票回購計畫。

In conclusion, we are well positioned with $261 million in cash and no debt, employing a range of options to pursue growth, deploy capital, drive efficiencies and generate improved returns for our shareholders.

總之，我們處於有利地位，擁有 2.61 億美元現金且無債務，採用一系列選擇來追求成長、部署資本、提高效率並為股東創造更高的回報。

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

接下來，讓我們開始提問。

(Operator Instructions)

（操作員說明）

Nathan Jones, Stifel.

內森瓊斯，斯蒂菲爾。

Good morning, everyone. I wanted to start off, Dave, maybe with some questions on the M&A environment and the potential impact of the results of the election here this week. I know you said that when you're in an environment like this of maybe a bit soft on the demand side that that's a good environment for DNOW to be acquiring in.

大家早安。戴夫，我想先問一些關於併購環境以及本週選舉結果的潛在影響的問題。我知道你說過，當你處於這樣一個需求方面可能有點疲軟的環境時，這對 DNOW 來說是一個很好的收購環境。

Does the result of the election change that at all? Obviously, a Republican administration would be considered more favorable to oil and gas markets, particularly when it looks like they're going to sweep House, Senate and the presidency and could potentially have some more favorable policy positions that they could get through for the oil and gas market. Does that kind of make those targets want to hang on for better days ahead? Or do you think that it's not really an issue?

選舉結果會改變這一點嗎？顯然，共和黨政府將被認為對石油和天然氣市場更有利，特別是當他們看起來將橫掃眾議院、參議院和總統職位，並且可能有一些對石油更有利的政策立場時和天然氣市場。這是否會讓這些目標想要堅持下去，迎接未來更好的日子？或者你認為這不是一個真正的問題？

Well, I do think that the results of the election would be a much more business, provide a much more business-friendly climate for participants in our industry. We would benefit from that as well. I think we've done, we did a deal this year that required government approval. There was very little overlap, and it was not an issue.

嗯，我確實認為選舉的結果將是一個更商業化的結果，為我們行業的參與者提供一個更有利於商業的氛圍。我們也會從中受益。我認為我們已經完成了，我們今年完成了一項需要政府批准的交易。重疊很少，這不是問題。

But there'll be some deals where more favorable administration would make us look at something differently in the first place rather than reject it out of hand. So I think there's a lubricant that comes from a different policymaking body, and we would benefit from that.

但在某些交易中，更有利的政府會讓我們從一開始就以不同的方式看待某些事情，而不是立即拒絕它。所以我認為有一種來自不同決策機構的潤滑劑，我們將從中受益。

Now we are pretty unique right now when we're at the table pursuing target companies, and we're in those conversations now. So we generally have a leg up to begin with, especially for the $100 million, $200 million deals. But I think in a more favorable environment, we'll simply accrue to our benefit and our shareholders as well.

現在，當我們在談判桌上尋找目標公司時，我們是非常獨特的，而且我們現在正在進行這些對話。因此，我們通常在一開始就有優勢，尤其是 1 億美元、2 億美元的交易。但我認為，在一個更有利的環境中，我們只會為我們和股東帶來利益。

Maybe then just talk about the pipeline, how mature it is, how actionable it is, how likely you think getting some more deals done here over the next 12 months?

也許然後只是談談管道，它有多成熟，它有多可操作，你認為在未來 12 個月內在這裡完成更多交易的可能性有多大？

Well, we're, in a few of them, we're at various stages of negotiation. So I don't like to accelerate the possibility. I want us to have total flexibility when we are negotiating deals. So I'm not going to kind of broadcast that. But we do have some active positive conversations where we would be the right suitor, the natural operator. We're one of the few at the table.

嗯，在其中一些方面，我們正處於談判的不同階段。所以我不喜歡加速這種可能性。我希望我們在談判交易時擁有完全的靈活性。所以我不會廣播這一點。但我們確實進行了一些積極的對話，我們將成為合適的追求者，自然的經營者。我們是餐桌上的少數人之一。

And we, for the right price for the right terms, we can pounce. So now those deals are going to generally fit the pattern we've employed for the last several years, which is really a focus on growing process solutions. I said in my opening comments, that's a building, a business we built from scratch.

而我們，只要以適當的價格、適當的條件，就能發動突襲。因此，現在這些交易將大致符合我們過去幾年所採用的模式，這實際上是對不斷增長的流程解決方案的關注。我在開場白中說過，這是一棟建築，是我們從頭開始建立的企業。

And we, I've said since I became CEO, that's where we're going to focus our investment capital, and that's where we're going to focus. We bought Whitco early in the year. It was a PVF-plus or energy centers-related business. That was unique, and we're very happy about that deal. But our sweet spot is going to be in the pumping solutions arena. And that kind of limits the range of the companies we're talking to right now.

自從我成為執行長以來，我就說過，這就是我們將重點投資的地方，這就是我們將重點關注的地方。我們在年初收購了 Whitco。這是一項 PVF+ 或能源中心相關業務。這是獨一無二的，我們對這筆交易感到非常高興。但我們的最佳點將是泵浦解決方案領域。這限制了我們現在正在交談的公司的範圍。

Got it. And then maybe just one more on the, you talked about some project deferrals out of the third quarter. Just maybe a bit more detail of the circumstances of those pushouts, whether or not you think that kind of stuff is going to ship in the fourth quarter or gets pushed out to 2025? Just any color there, please. Thank you.

知道了。然後也許還有一個，您談到了第三季的一些項目推遲。也許只是更詳細地了解這些推出的情況，您是否認為此類產品會在第四季度發貨還是推遲到 2025 年？任何顏色都可以。謝謝。

Yes. In North America, there were about $10 million in projects, $7 million, $7.5 million in the US and the rest in Canada. And there was a couple of million in international. But in North America, product availability, I believe, drove all of the deferrals. And we effectively saw a $10 million push in projects in DNOW from the third quarter.

是的。在北美，大約有1000萬美元的項目，700萬美元，750萬美元在美國，其餘在加拿大。國際上有幾百萬。但我認為，在北美，產品的可用性推動了所有的延期。從第三季開始，我們實際上在 DNOW 中看到了 1000 萬美元的專案推進。

And those largely should ship going into the fourth quarter. We are seeing a similar phenomenon for fourth quarter projects pushing into 1Q. But those projects we missed, again, about $10 million in North America should occur fully within the fourth quarter. And about half of that was energy evolution-oriented projects and the rest were pretty standard, just projects that happened in our pipe valves and fittings business.

這些產品大部分應該在第四季出貨。我們在進入第一季的第四季專案中看到了類似的現象。但我們再次錯過的這些北美約 1000 萬美元的項目應該會在第四季度內全部完成。其中大約一半是以能源發展為導向的項目，其餘的都是非常標準的，只是我們管道閥門和配件業務中發生的項目。

Thanks, David for taking my question.

謝謝大衛回答我的問題。

You're welcome.

不客氣。

(Operator Instructions)

（操作員說明）

Nathan Jones, Stifel.

內森瓊斯，斯蒂菲爾。

Okay. All right. Well, I'll keep going if there's no other questions there. Maybe just talk about the potential impact. I mean, you guys have talked over the last few years of the oil and gas E&Ps showing more capital discipline during the up cycle. Now we're in a bit of a down cycle here. Are you expecting that or do you continue to expect that to kind of mute the level of the downturn relative to what we've seen in past kind of boom and bust oil and gas cycles?

好的。好的。好吧，如果沒有其他問題的話我會繼續說下去。也許只是談談潛在的影響。我的意思是，你們在過去幾年中一直在談論石油和天然氣勘探與生產在上升週期中表現出更多的資本紀律。現在我們正處於一個下行週期。相對於我們在過去的石油和天然氣繁榮和蕭條週期中看到的情況，您是否預計或繼續預計這會減輕經濟衰退的程度？

Yes. And I think we've experienced that through the last seven quarters or so where we've seen rigs decline, completions decline. I think we've enjoyed the discipline our customers exhibited as the market was taking off in 2022 and early 2023 when oil prices got to over $100, I think they showed great restraint. And I think we're seeing and benefit from that restraint on the downside too.

是的。我認為，在過去七個季度左右的時間裡，我們已經經歷過鑽機數量下降、完工量下降的情況。我認為，隨著市場在 2022 年和 2023 年初起飛，當油價升至 100 美元以上時，我們的客戶表現出了極大的克制，我們很享受這一點。我認為我們也看到了這種限制的負面影響並從中受益。

Now, oil, I mean, so I think that helps us where we're at right now. We're in a, however, you characterize this market, it certainly has been declining from a revenue opportunity perspective from DNOW, but we've been able to keep our inventory in really good shape.

現在，我的意思是石油，所以我認為這對我們目前的處境有幫助。然而，我們所處的市場，從 DNOW 的收入機會角度來看，它確實在下降，但我們已經能夠將我們的庫存保持在非常好的狀態。

And by that, I mean strong product availability, and very low excess inventory charges, obsolete inventory charges, inventory risk. And so that one big benefit for a vital asset for us has been helped by the careful behavior of our customers as the market was very strong and as it declined. So yes, we benefited both ways.

我的意思是強大的產品可用性，以及非常低的超額庫存費用、過時庫存費用和庫存風險。因此，我們的客戶在市場非常強勁和下跌時的謹慎行為為我們的重要資產帶來了一大好處。所以，是的，我們雙方都受益。

You also made some comments about customer consolidation, and I understand how the integration of customers businesses can disrupt yours for a period of time. Can you maybe just provide some details on what's going on there? How long you think that disruption lasts and whether you are favored by the consolidation or not?

您也對客戶整合發表了一些評論，我了解客戶業務的整合如何在一段時間內擾亂您的業務。您能否提供一些有關那裡發生的情況的詳細資訊？您認為這種顛覆會持續多久？

Okay. So first of all, there's the period where the two companies come together. There is, well, first of all, it has to be approved by the government. Some of these are bigger deals, so that takes time. And there's some jockeying that happens. In the meantime, some people leave the customer where we're real strong with and we'll pick them up from another customer. So we experienced that.

好的。首先，是兩家公司合併的時期。首先，它必須得到政府的批准。其中一些是更大的交易，因此需要時間。並且會發生一些爭鬥。同時，有些人離開了我們真正擅長的客戶，我們將從另一個客戶那裡接他們。所以我們經歷了這一點。

Once there's an integration process, there is some tiptoeing around. There isn't real strong direction on how procurement is going to happen. Some companies have different procurement strategies like some of our supply chain customers, supply chain services customers, they're advanced in their thinking around partnerships and value and less concerned about unit price for products.

一旦有了整合過程，就需要小心翼翼地進行。對於如何進行採購並沒有真正強而有力的指導。有些公司有不同的採購策略，例如我們的一些供應鏈客戶、供應鏈服務客戶，他們對合作夥伴關係和價值的思考比較先進，不太關心產品的單價。

So sometimes you'll have customers with varying degrees of maturity along those procurement lines. That takes time to integrate the thoughts and those to take shape in the company. Sometimes we win the business of the combined company and had neither of the parties or one of the parties and sometimes we lose the business. So there's a chance of both of those things happening.

因此，有時您會在這些採購線上遇到成熟度不同的客戶。整合想法並在公司中形成需要時間。有時我們會贏得合併後公司的業務，而沒有任何一方或一方，有時我們會失去業務。所以這兩件事都有可能發生。

In a market like this, in the short term, at least, companies are focused on unit cost of product, and we generally don't play in that low-margin business. So with these consolidations, things can go both ways. But our position is we're pretty set in this thinking that these big consolidations, we will benefit from those long term, because there's only a few people with the, few companies with the capabilities that DNOW has, especially in North America to satisfy large customer combinations. So that's kind of our thinking of how we address those. But there is, there are bumps in the road. There are projects deferred simply as that integration process unfolds.

在這樣的市場中，至少在短期內，公司關注的是產品的單位成本，我們通常不會涉足這種低利潤的業務。因此，透過這些整合，事情可以雙向發展。但我們的立場是，我們堅信這些大型整合，從長遠來看，我們將從中受益，因為只有少數人擁有 DNOW 所擁有的能力，特別是在北美，能夠滿足大型客戶的需求。這就是我們如何解決這些問題的想法。但路上也有坎坷。隨著整合過程的展開，有些項目被延後了。

And then I'll just do one more on working capital. Obviously, the last few years we've seen very significant improvements in working capital. I want to just focus primarily on inventory and inventory turns. I mean, you guys are a distributor having product available is a good chunk of what you guys do in that business.

然後我將再做一項關於營運資金的工作。顯然，過去幾年我們看到營運資金有了非常顯著的改善。我想主要關注庫存和庫存週轉率。我的意思是，你們是經銷商，擁有可用的產品是你們在該業務中所做的很大一部分。

Where do you kind of run up against the maximum kind of turns that you can get out of the business where you start risking not having product available for customers and service levels dropping or something like that? Like is there further improvement you can make? Or are we kind of getting to that limit?

當你開始冒著無法為客戶提供產品和服務水準下降或類似情況的風險時，你在哪裡會遇到可以從業務中獲得的最大轉變？例如你還可以做進一步的改進嗎？或者說我們已經接近這個極限了嗎？

Well, I've been asked this question over the years. And I've said, I've always said four to five turns is a pretty good overall turn rate for the business. And now at least for this quarter, we're above five turns. I think we're 5.2 turns. There comes a point where you can strain product availability, diminish or harm your position in the market if you don't have ready access to the products your customers need.

嗯，多年來我一直被問到這個問題。我說過，我一直說四到五週轉對於企業來說是一個相當不錯的整體週轉率。現在至少在本季度，我們已經超過了五輪。我認為我們是 5.2 回合。如果您無法隨時獲得客戶所需的產品，那麼您的產品供應可能會緊張，從而削弱或損害您的市場地位。

So I think five is actually a really good turn rate. And I think the fact that the revenues or the market is declining a little bit and because we're pulling out inventory smartly, I think we benefit from that, and it shows in the turns. My point is, I don't think they could get much better than this. You might be able to get 5.5 turns, which is a really good turn for us.

所以我認為五其實是一個非常好的轉彎率。我認為收入或市場正在略有下降，而且因為我們正在明智地撤出庫存，我認為我們從中受益，這一點在變化中得到了體現。我的觀點是，我不認為他們能做得比這更好。你也許能夠獲得 5.5 個轉彎，這對我們來說是一個非常好的轉彎。

You include commodities like pipe and steel products, fittings and flanges. And this is a real good term rate. And I don't think there's too much upside, Nathan. But of course, we're always striving to improve our working capital velocity.

您包括管道和鋼材產品、配件和法蘭等商品。這是一個真正的好期限利率。我不認為有太多的好處，內森。當然，我們一直在努力提高營運資金周轉率。

Okay, thanks guys. I will leave it there.

好的，謝謝大家。我會把它留在那裡。

Thanks for that question, Nathan. Have a good day.

謝謝你提出這個問題，內森。祝你有美好的一天。

Jeff Robertson, Water Tower Research.

傑夫·羅伯遜，水塔研究。

Thanks, Dave. In your prepared remarks, I think you mentioned that midstream is about 20% of revenues.

謝謝，戴夫。在您準備好的發言中，我想您提到中游約佔收入的 20%。

That's right.

這是正確的。

Was that in the quarter? And does that, or is that what you expect for the full year? And my questions really is where do you see that going in, say, 2025 with the benefit of Whitco and having had that business under your umbrella now for two or three quarters?

那是在季度嗎？是這樣嗎？ 或者說這是您對全年的期望嗎？我的問題是，你認為 2025 年惠特科（Whitco）的好處會怎樣，並且你已經將這項業務納入你的保護範圍內兩到三個季度了？

Yes. Good question, Jeff. Thanks for calling in. I think, so that 20% is a quarter. I think where 22% of our business was midstream last quarter, it's 20% this quarter. So that's probably where our stable level of midstream right now. Going into 2025, and we're not really ready to give guidance there, but we do think midstream activity will be a little bit more buoyant, a little stronger than what we expect in upstream.

是的。好問題，傑夫。感謝您的來電。我認為，20% 就是四分之一。我認為上個季度我們 22% 的業務處於中游狀態，而本季這一比例為 20%。所以這可能就是我們目前中游的穩定水準。進入 2025 年，我們還沒有真正準備好提供指導，但我們確實認為中游活動將更加活躍，比我們對上游的預期更強一些。

So I would expect that midstream component of sales to increase. Now whether it gets to 23%, 25%, I don't know, but we've said for some time that midstream is a target focus for us given the low cost to service large transactions.

因此，我預計銷售額的中游部分會增加。現在我不知道是否會達到 23%、25%，但我們已經說過一段時間了，鑑於服務大額交易的成本較低，中游是我們的目標重點。

The gross margins tend to be a little bit lower, but you can service large transactions. We've got all the supplier relationships, access to all the products, and it's just a real nice coupling with what we do in the upstream. So that's a target environment for us. We'll grow that, and we should benefit in 2025.

毛利率往往會低一些，但可以為大額交易提供服務。我們擁有所有的供應商關係，可以存取所有的產品，這與我們在上游所做的事情確實有很好的結合。這就是我們的目標環境。我們會繼續發展，到 2025 年我們應該會受益。

So Nathan's question around the election this week, do you think midstream is an area that could benefit as you, just from some sort of changes in the approval process for permit applications?

那麼，內森圍繞本週選舉提出的問題是，您認為中游領域是否可以像您一樣受益於許可證申請審批流程的某種變化？

Brad, do you want to take that?

布拉德，你想接受這個嗎？

Yes, Jeff, thanks for dialing in. Yes, I think from what we've heard from the Trump campaign was the general bias toward increasing oil and gas development that may be in federal lands, but also a reduction in kind of the bureaucracy, and that kind of takes you to the permitting side, can we expedite and can our customers get permits quicker, faster. So we think that might be the case.

是的，傑夫，感謝您撥通電話。是的，我認為從我們從川普競選活動中聽到的情況來看，普遍傾向於增加可能在聯邦土地上的石油和天然氣開發，但也減少了官僚機構，這會讓你獲得許可另一方面，我們能否加快速度，我們的客戶能否更快、更快地獲得許可。所以我們認為情況可能是這樣。

And then the Biden administration had the LNG pause. We all have been watching carefully and what that does to the long-term prospects of natural gas development in the US, where DNOW is very favorably positioned to take advantage of dry gas basin production and takeaway capacity to LNG exports.

然後拜登政府暫停了液化天然氣計畫。我們都在仔細關注這對美國天然氣開發的長期前景有何影響，DNOW 在利用乾氣盆地生產和液化天然氣出口能力方面處於非常有利的地位。

So if we can expand the LNG export capacity, I think that will help us in the upstream and help us in the midstream and kind of caveats back to your midstream comment, potentially grow our midstream revenue beyond the 20%. So we see those as positives.

因此，如果我們能夠擴大液化天然氣出口能力，我認為這將有助於我們的上游和中游，並有可能使我們的中游收入成長超過 20%。所以我們認為這些都是正面的。

Maybe last comment on carbon capture, Dave had some notes around carbon capture. We're seeing projects grow a little unclear whether those, how the Trump administration is going to address those. But a lot of the projects that we're aware of, I mean, a number of them are in kind of the red states, if you want to put it that way.

也許是關於碳捕獲的最後評論，戴夫對碳捕獲有一些註釋。我們看到項目變得有點不清楚是否是這些，川普政府將如何解決這些問題。但我們知道的很多項目，我的意思是，如果你想這麼說的話，其中一些項目都處於紅色狀態。

And I think there would be some support to continue with carbon capture and some possible initiatives there. So kind of baking that all in, we see upside from the administration changeover in January and hope to see that transfer the revenues down the road in 2025, 2026.

我認為將會有一些支持來繼續碳捕獲和一些可能的舉措。總而言之，我們看到 1 月政府更迭帶來的好處，並希望看到 2025 年、2026 年收入轉移。

There's been a lot of discussion around the power grid and the need for increased generation capacity to meet the expectations of data centers and things like that. Are those areas where DNOW could maybe develop or expand some new revenue streams?

圍繞電網以及增加發電容量以滿足數據中心等的期望的需要進行了很多討論。DNOW 是否可以在這些領域開發或擴大一些新的收入來源？

Yes, I think so. With respect to data centers, and really the reshoring of manufacturing, I think, will have also a big impact on the ability of the US to provide, I would say, continuous electrical power on the nationwide grids. And to be able to do that, we're going to need more reliable sources for that electrical generation. We've seen some comments around increase in nuclear capability.

是的，我想是的。我認為，就資料中心而言，以及製造業的回流，也將對美國在全國電網上提供持續電力的能力產生重大影響。為了做到這一點，我們將需要更可靠的發電來源。我們看到了一些關於增加核能力的評論。

We've seen some comments around growth in nuclear, excuse me, and natural gas production for power generation. I think both of those could be beneficial to DNOW as new development, new CapEx is spent to be able to accommodate the growing need that reshoring and the data center growth is forecasted for the foreseeable future. So yes, we see those as positives.

對不起，我們看到了一些關於核能成長和發電用天然氣生產的評論。我認為這兩者都可能對 DNOW 有利，因為新的開發、新的資本支出能夠滿足在可預見的未來內回流和資料中心成長的日益增長的需求。所以，是的，我們認為這些都是正面的。

There's not, I've heard comments about utilities comparing, if the utility is going to sign an agreement with the data center, the data center wants 24/7 uptime support. And if you think about are they going to get that through wind and solar with battery backup, I think it's still early there. So I think that speaks to higher reliability of sources and that bodes well for natural gas.

沒有，我聽說過有關公用事業公司比較的評論，如果公用事業公司要與資料中心簽署協議，資料中心需要 24/7 正常運行時間支援。如果你考慮他們是否會透過風能和太陽能以及備用電池來實現這一點，我認為現在還為時過早。所以我認為這意味著來源的可靠性更高，這對天然氣來說是個好兆頭。

On consolidation, Dave, you mentioned some of the resetting that you're seeing among the companies that have completed major transactions. Does that give DNOW or does it help DNOW's digital businesses and just your supply chain strategic partnerships? Are you starting to see some traction there that could help out in 2025?

關於整合，戴夫，您提到了您在已完成重大交易的公司中看到的一些重置。這是否會為 DNOW 帶來好處，或者是否有助於 DNOW 的數位業務以及您的供應鏈策略合作夥伴關係？您是否開始看到一些可能在 2025 年有所幫助的牽引力？

Well, I think because we have a different level of products. We actually sell a range of products for our customers, but the quality control requirements for some of these combined companies, the digital necessity that they, how they interact with their suppliers, those are things that a lot of our competition doesn't have the capacity to do.

嗯，我想是因為我們有不同等級的產品。我們實際上為客戶銷售一系列產品，但其中一些合併後的公司的品質控制要求、他們的數位化必要性、他們與供應商的互動方式，這些都是我們的許多競爭對手所不具備的。的能力。

So we'll benefit from that. Now some of these big combinations are still underway, but we expect as they come together, we'll benefit especially from the, from our strength in digital competencies, et cetera.

所以我們將從中受益。現在，其中一些大型組合仍在進行中，但我們預計，當它們結合在一起時，我們將特別受益於我們在數位能力等方面的實力。

And lastly, on the share returns, I think you all, your cumulative share repurchases so far, $74 million on your $80 million authorization. Can you talk about how you think about continuing to repurchase shares versus an ordinary dividend in light of your strong free cash flow generation?

最後，關於股票回報，我認為你們迄今為止累計股票回購額為 7,400 萬美元，授權金額為 8,000 萬美元。鑑於您擁有強勁的自由現金流，您能否談談您對繼續回購股票與普通股息的看法？

Yes. I mean, I think just in terms of how we use the cash we generate, I just want to reiterate, our first priority always is to organic growth, less risky. It's, we know what we're doing. We can grow, flow through stronger with less risk. Secondarily, it's M&A. That's our, that's really the essence of DNOW is the cobbling together of great talent and new companies over a period of time.

是的。我的意思是，我認為就我們如何使用我們產生的現金而言，我只想重申，我們的首要任務始終是有機成長，風險較小。是的，我們知道我們在做什麼。我們可以以更少的風險成長、變得更強。其次，是併購。這就是我們的，這就是 DNOW 的本質，就是在一段時間內將優秀人才和新公司拼湊在一起。

And third would be a capital allocation strategy beyond that. We've talked about dividends over the years. We generally favor a share repurchase. We have been modeling how much cash we would generate over time. We'll generate $225 million from operations this year, over $170 million last year.

第三是除此之外的資本配置策略。多年來我們一直在談論股息。我們通常贊成股票回購。我們一直在模擬隨著時間的推移我們會產生多少現金。今年我們的營運收入將達到 2.25 億美元，超過去年的 1.7 億美元。

Our strength in earnings, coupled with our continually improved very strong balance sheet management affords us the ability to do a broad range of things, but primarily organic growth, M&A and probably share repurchases. I mean I think over time, we're inclined to use that as the third tranche of value provided to shareholders over something like that dividends.

我們的獲利實力，加上我們不斷改進的非常強大的資產負債表管理，使我們有能力做各種各樣的事情，但主要是有機成長、併購和可能的股票回購。我的意思是，我認為隨著時間的推移，我們傾向於將其用作向股東提供的第三部分價值，而不是股息之類的東西。

Thank you, Dave.

謝謝你，戴夫。

Thanks for the question, Jeff.

謝謝你的提問，傑夫。

There are no further questions at this time. Mr. Brad Wise, I turn the call back over to you.

目前沒有其他問題。布拉德懷斯先生，我將電話轉回給您。

Well, thank you for your questions today and your interest in DNOW. We look forward to talking with everyone on our fourth quarter and full-year 2024 earnings conference call in February. Let's turn it back to the operator to conclude the call.

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 2 月舉行的第四季和 2024 年全年收益電話會議上與大家進行交談。讓我們將其返回給接線員以結束通話。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。