Earnings Conference Call

August 3, 2022

8:00 a.m. CT

1 (833) 927-1758 (within North America)

1 (929) 526-1599 (outside of North America)

Access Code: 990303

Webcast: ir.dnow.com

Revenue was $539 million for the second quarter of 2022

Net income was $26 million and non-GAAP net income excluding other costs was $29 million for the second quarter of 2022

Diluted earnings per share was $0.23 and non-GAAP diluted earnings per share excluding other costs was $0.26 for the second quarter of 2022

Non-GAAP EBITDA excluding other costs for the second quarter of 2022 was $47 million or 8.7 percent of revenue

Cash and cash equivalents was $232 million and long-term debt was zero at June 30, 2022

Raising guidance for full-year 2022 revenue to now increase as much as 30 percent and full-year 2022 EBITDA excluding other costs to approximate 7 percent of revenue

Expanded capital allocation strategy with Board of Directors authorized $80 million share repurchase program

ASSETS

Current assets:

Cash and cash equivalents

Receivables, net

Inventories, net

Prepaid and other current assets

Total current assets

Property, plant and equipment, net

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; 110,851,347 and 110,558,831 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

Revenue

Operating expenses:

Cost of products

Warehousing, selling and administrative

Impairment and other charges

Operating profit (loss)

Other income (expense)

Income (loss) before income taxes

Income tax provision

Net income (loss)

Earnings (loss) per share:

Basic earnings (loss) per common share

Diluted earnings (loss) per common share

Weighted-average common shares outstanding, basic

Weighted-average common shares outstanding, diluted

Revenue:

United States

Canada

International

Total revenue

GAAP net income (loss) ⁽¹⁾

Interest, net

Income tax provision

Depreciation and amortization

Other costs:

Stock-based compensation

Other ⁽²⁾

EBITDA excluding other costs

EBITDA % excluding other costs ⁽³⁾

GAAP net income (loss) ⁽¹⁾

Other, net of tax ^{(4) (5)}

Net income (loss) excluding other costs ⁽⁵⁾

GAAP diluted earnings (loss) per share ⁽¹⁾

Other, net of tax ^{(4) (5)}

Diluted earnings (loss) per share excluding other costs ⁽⁵⁾

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 (loss) excluding other costs and (iii) diluted earnings (loss) per share 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.

For the three months ended June 30, 2022, Other primarily included approximately $10 million of impairment and other charges related to the reclassification of accumulated foreign currency translation losses due to the substantial liquidation of certain foreign subsidiaries, as well as, approximately $2 million in separation and transaction-related charges, which were included in operating profit.

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

For the three months ended June 30, 2022, Other, net of tax included approximately $10 million of impairment and other charges related to the reclassification of accumulated foreign currency translation losses due to the substantial liquidation of certain foreign subsidiaries, as well as, approximately $2 million in separation and transaction-related charges, partially offset by a benefit of approximately $9 million from changes in the valuation allowance recorded against the Company’s deferred tax assets.

Totals may not foot due to rounding.