DNOW DNOW Inc

Earnings Conference Call

May 10, 2024

8:00 a.m. CT

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

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

Access Code: 7372055

Webcast: ir.dnow.com

Cash provided by operating activities was $81 million for the first quarter of 2024 and $275 million for the trailing four quarters ending March 31, 2024

Revenue was $563 million for the first quarter of 2024

Net income attributable to DNOW Inc. was $21 million, or $0.19 per diluted share, for the first quarter of 2024

Non-GAAP net income attributable to DNOW Inc. excluding other costs was $23 million, or $0.21 per diluted share, for the first quarter of 2024

EBITDA excluding other costs was $39 million or 6.9% of revenue for the first quarter of 2024

Completed acquisition of Whitco Supply LLC for $185 million in cash, enhancing capabilities and position primarily in the U.S. midstream market

Cash and cash equivalents was $188 million and long-term debt was zero at March 31, 2024 with total liquidity of approximately $564 million

ASSETS

Current assets:

Cash and cash equivalents

Receivables, net

Inventories, net

Prepaid and other current assets

Total current assets

Property, plant and equipment, net

Deferred income taxes

Goodwill

Intangibles, net

Other assets

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued liabilities

Other current liabilities

Total current liabilities

Long-term operating lease liabilities

Other long-term liabilities

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and
outstanding

Common stock - par value $0.01; 330 million shares authorized; 106,783,725 and 106,257,565
shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

DNOW Inc. stockholders’ equity

Noncontrolling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

Revenue

Operating expenses:

Cost of products

Warehousing, selling and administrative

Operating profit

Other income (expense)

Income before income taxes

Income tax provision (benefit)

Net income

Net income attributable to noncontrolling interest

Net income attributable to DNOW Inc.

Earnings per share attributable to DNOW Inc. stockholders:

Basic

Diluted

Weighted-average common shares outstanding, basic

Weighted-average common shares outstanding, diluted

Revenue:

United States

Canada

International

Total revenue

GAAP net income attributable to DNOW Inc. ⁽¹⁾

Net income attributable to noncontrolling interest ⁽²⁾

Interest expense (income), net

Income tax provision (benefit)

Depreciation and amortization

Other costs:

Stock-based compensation

Other ⁽³⁾

EBITDA excluding other costs

EBITDA % excluding other costs ⁽⁴⁾

GAAP net income attributable to DNOW Inc. ⁽¹⁾

Other, net of tax ^{(5) (6)}

Net income attributable to DNOW Inc. excluding other costs ⁽⁶⁾

GAAP diluted earnings per share attributable to DNOW Inc. stockholders ⁽¹⁾

Other, net of tax ^{(5) (6)}

Diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs ⁽⁶⁾

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) net income attributable to DNOW Inc. excluding other costs and (iii) diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs. Each of these financial measures excludes the impact of certain other costs and therefore has not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein.

Net income attributable to noncontrolling interest represents the income retained by the noncontrolling party of a joint venture in our international segment which we consolidate into our financials as we are the primary beneficiary and controlling member.

Other includes certain income and expenses and does not include stock-based compensation expense.

EBITDA % excluding other costs is defined as EBITDA excluding other costs divided by Revenue.

Other, net of tax includes certain income and expenses and does not include stock-based compensation expense.

Totals may not foot due to rounding.