Mark: U.S., where upstream and downstream end markets saw the steepest year-over-year declines. I'll also note the adjusted EBITDA bridge highlights a higher-than-normal decremental of 31% for the MRC Global U.S. business, as gross margin pressure and temporary yet considerable costs to stabilize the ERP environment impacted profitability in the first quarter of 2026. Moving to the geographic segment results for D-NOW. U.S. revenue for the first quarter of 2026 was $985 million, an increase of 220 million or 29% from the fourth quarter of 2025. Year over year, U.S. revenue increased $511 million. The upstream sector contributed approximately 37% to total U.S. revenue in the first quarter, followed by the gas utility sector contributing 27%, midstream 20%, and downstream and industrial 16% for the U.S. In Canada, revenue for the first quarter totaled $51 million, flat sequentially. And international revenue was $147 million in the first quarter, up $4 million, or 3% sequentially. As the full period contribution from MRC Global was offset by $35 million of MRC Global project-related revenue in the fourth quarter that did not repeat in 1Q2026, as I mentioned in February. That project revenue is tied to the completion of a multi-year project award cycle in Europe, contributing close to $200 million in revenue over a two-year period, ending in 2025 for MRC Global International. These project cycles go in waves as customers initiate life extensions on existing platforms or incremental development in response to the energy needs in the region. Adjusted gross profit for the first quarter was $256 million, or 21.6% compared to the $217 million, or 22.6% in the fourth quarter of 2025. The decline in margin percentage was primarily attributable to the inclusion of a full quarter of MRC Global's historically lower gross profit margin profile, paired with reduced higher margin international project sales. In addition, margin compression was experienced in the first quarter in the U.S. as MRC Global works to better recapture various costs from tariffs, freight, and pricing enhancements through system optimization initiatives, among other things. SG&A expense for the first quarter was $243 million compared to $226 million in the fourth quarter. Reflecting a full quarter of MRC Global expenses increased bad debt expense of $5 million in the quarter partially offset by reduced transaction-related costs. Moving to operating profit by geographic segment, in the first quarter, the U.S. reported a $54 million operating loss, while international delivered $3 million operating profit, with both segments impacted by transaction costs in the quarter. The Canadian segment reported $1 million of operating profit. Adjusted EBITDA for the first quarter was $39 million, or 3.3% of revenue, down $22 million sequentially. The decline in EBITDA dollars was primarily driven by MRC Global U.S. operating at a loss, reflecting higher costs on lower than historical revenue levels, a reduced international bottom line contribution due to the absence of project revenue recognized in the fourth quarter, and an increase of bad debt expense mentioned earlier. Depreciation and amortization expense totaled $23 million in the first quarter with approximately $24 million forecast for the second quarter depreciation and amortization. Interest expense was $8 million in the first quarter of 2026, compared to $4 million in the fourth quarter, reflecting higher average debt balances. Our effective tax rate for the quarter was 26.7%. Cash taxes for the quarter were $2 million, whereas we expect to pay approximately $11 million in the second quarter. The majority of this expected cash taxes and the second quarter are outside the U.S. from Europe. For modeling purposes, we expect a full year 2026 effective tax rate of approximately 26% to 27%. Net loss attributable to D-NOW for the first quarter was a loss of $44 million, or a loss of 24 cents per diluted share, and was unfavorably impacted by $41 million in inventory step-up to fair market value amortization charges related to the merger. reduced margins, and increased SG&A expenses. On an adjusted non-GAAP basis, Q1 2026 adjusted net income attributable to D-NOW was $3 million, or one cent per fully diluted share. Now moving to the balance sheet, at the end of the first quarter, accounts receivable was $889 million, an increase of $15 million from the prior quarter. Days sales outstanding, or DSO, was 69 days. Inventory was $1.2 billion at the end of the first quarter, relatively flat from year end, with an annualized turn rate of 3.3 times. As we move through 2026, inventory reduction and optimization are key focuses as we continue to realize integration synergies and align working capital and demand trends. Accounts payable was $662 million at the end of the first quarter, or 61 days payable outstanding. with working capital excluding cash as a percentage of annualized first quarter revenue was 25.5%. In the first quarter of 2026, net cash used in operating activities was $95 million. Due to changes in working capital balances, most notably the reduction in accrued liabilities as merger-related costs, including change of control severance payments, were made in the first quarter. Consistent with historical seasonality, we typically consume cash in the first quarter and expect improving cash generation in the second half of the year, supported by improved working capital efficiency and synergy realization. During the quarter, we invested $46 million in acquisitions and $8 million in capital expenditures. Additionally, we opportunistically returned capital to shareholders by repurchasing $50 million in shares, retiring 4.2 million shares in the quarter, To date, we've repurchased $87 million under the current share repurchase program, and a total of $167 million in shares under both the 160 million current share repurchase program and the previous 80 million completed share repurchase program. Our total debt balance was $571 million at the end of the first quarter, and net debt was $455 million, resulting in a trailing 12 months debt net debt leverage ratio of 2.3 times. Turning to liquidity, our balance sheet remains strong with total liquidity of $379 million, including $263 million in availability under our revolving credit facility and $116 million of cash at quarter end. Our $850 million revolving credit facility with access to a $500 million accordion matures into November 2030. providing us with long-term financial flexibility. And with that, let me turn the call back to Dave. Thank you, Mark.
Dave: Today, our priority is to reinforce the fundamental strengths of the business by reclaiming, safeguarding, and expanding revenue streams that optimize earnings, support growth, and durable pre-cash flow. We are pursuing opportunities where customers clearly perceive differentiated value, avoiding commoditization to drive higher gross margins through an efficient operating model and achieve stronger flow-through to profitability. We are actively addressing the defined set of customer relationships where revenue attrition has been the most acute, implementing targeted account-level initiatives aimed at arresting leakage while ensuring the economics of those relationships are aligned. We have an ample supply of inventory and are aligning inventory with demand to drive cash generation in 2026. We have targeted efforts to speed collections currently aggravated by ERP challenges to produce cash. We are aligning our cost structure with revenue on a phased basis to maximize revenue recovery, maintain organization agility in response to market dynamics. Alongside this focus on the fundamentals, we are executing a set of offensive initiatives designed to grow revenues and expand market share. An important opportunity lies in the growth of midstream feed gas infrastructure driven by rising power generation needs, particularly from expanding data centers, while we simultaneously increase our broader exposure to midstream markets in line with continued investment in natural gas infrastructure supported by power demand and growing LNG exports. This growth highlights the need for midstream PBF infrastructure to support additional demand. Our products and service offerings match both current and future investments. putting us in a strong position to benefit from this multi-year demand trend. At the data center level, we are successfully targeting opportunities to supply industrial PVF and pumps that are critical to cooling systems and associated infrastructure. We are also ramping revenue opportunities tied to gas meters through our in-tech solution to grow, share, and gas utilities, a sector we expect to continue expanding. We are focused on unlocking revenue synergies across the portfolio by extending process solutions pump products into downstream markets, expanding fabrication capabilities into gas utilities, and increasing ecovapor product penetration in Europe. Overall, we are committed to executing a clear strategy, strengthening the core of the business, and positioning the company for sustainable, profitable growth going forward. Now switching to our outlook for the second quarter and full year of 2026. 2026 is a transition year. focused on execution of both D-NOW's home field and emerging markets alongside merger benefit realization. We expect sequential second quarter growth in the U.S. as we continue on our path to stabilize and optimize ERP issues for our U.S. businesses. We also expect sequential growth in the international segment. In Canada, seasonal factors are expected to result in a sequential revenue decline. Historically, second quarter breakup conditions have driven an approximate 20% decrease from first quarter levels. However, we expect the decrease to be less pronounced this year. Taken together, we expect D-NOW's second quarter revenues to be up sequentially in the mid to high single-digit percentage range from the first quarter, with EBITDA flow-throughs to revenue approaching 25% at this revenue growth rate. well above our normal expected flow-throughs of 10% to 15%. On a full year basis, we expect 2026 revenues to approach $5 billion, with EBITDA as a percentage of revenue to approach 4.5%. In closing, I am confident that the overall D-NOW business has bottomed in 1Q26, and we expect EBITDA dollars to improve as we progress throughout the year when compared to the first quarter. Finally, we anticipate 2026 full-year cash-from-operating activities could range from 100 to 200 million. As we look ahead, we are increasingly confident in the trajectory of the business and the strength of the platform we are building. I'm excited that we are beginning to see tangible benefits of operating together. Our combined capabilities are enabling us to compete for and win opportunities that would not have been accessible to either company on a stand-alone basis. For example, the integration of our customer relationships, supplier partnerships, and expanded inventory visibility is already translating into incremental wins and a broader project pipeline. At the same time, we are making deliberate progress in aligning our physical footprint. The consolidation and co-location of facilities is not simply about efficiency, it's about enhancing our ability to deliver a more comprehensive suite of solutions. We are also seeing encouraging signals from our core product and service offerings. Growth in areas such as valve automation and actuation continues to support both our upstream and midstream exposure, while improving manufacturer activity levels are creating additional quoting opportunities for the team. Taken together, these factors reinforce our view that the foundation we are building today through integration, expanded capabilities, and discipline execution position us well to capture growth, and create value over time. With that, let's open the call for questions.
Operator: At this time, I would like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question will come from Adam Farley with Stifel.
Carrie: Good morning, everyone. Good morning, Adam.
Adam Farley: You know, first on the ERP optimization, could you quantify the impact of the temporary cost to stabilize the ERP system in 2026? You know, what additional resources are required to optimize the system? And then, you know, how long in duration do you expect these temporary costs to persist?
Dave: Okay, so let me give some color, a little more than I did in the last quarter. So in terms of the cost of the teams in place to stabilize and enhance the MRC Global platform, that's around $4.5 million a quarter. That's going to be pretty stable for much of the year. And then there are additional costs, some of which I did talk about in the last call, which are we have additional overtime, we have additional temp costs, and we've added Warehouse people, for example, as one of the big bottlenecks was experience at the warehouse level. Now, that number has come down a bit. On the last call, I said we had about 200 additional people that we added to cope with the system issues. That number is almost half. It's about 115. But those costs, overtime, temps, added personnel at the warehouse costs about $4 million a quarter. So there's the stabilization costs, about $4.5 and $4 million for overtime, temps, and warehouse people. So in terms of looking at those costs on a go-forward basis, I expect that $4.5 million a quarter to be pretty stable during the year. But the $2 million for overtime temps, et cetera, that number will come down. We saw some progress there in the first quarter. I expect that to come down. We characterize the Oracle platform that MRC uses primarily as stabilized. And as such, you should see some of those costs come out of the system, which is part of the reason we're talking about pretty generous flow-throughs going into the second and third quarters. In terms of what additional resources we need, I think the answer is none. Like I said, I expect some of those operating costs to decline as we go through the year. And in terms of What was the last question, Mark? What was the last part of your question? Adam, I'm sorry.
Adam Farley: Just the duration. I mean, should we expect this issue to be almost fully resolved by the end of the year, or should we expect that to continue into 27?
Dave: That's a good question. I think, you know, I talked about us being on dual tracks. We are... migrating as fast as possible all upstream and midstream activity to an optimized platform. In the meantime, we're making improvements to the systems that MRC uses primarily on the downstream and gas utility side, and we think we'll make substantial progress by year-end. You know, in exact end dates, you know, I don't have that right now. But we are seeing progress in our projects ability to compete, and we're forecasting some growth on the MRC side, and we expect that to stabilize as we go through the year. In terms of a better... 2027 is going to be where we'll start to see real meaningful change in ERP not being the standard conversation around here we're going to be moving into. growing market share and gross margins and becoming more efficient and driving significantly improved earnings. But I don't have an exact time date to that question, Adam.
Adam Farley: That's really helpful, Dave. Thank you for that. You know, and to that point, you know, if we look ahead into the, you know, into the near medium term future, say the temporary ERP issue costs are resolved, The growth environment's, you know, relatively stable. You know, how should we think about, you know, the normalized earning potential of the denial business?
Dave: Normalized earnings. Well, let me talk a little bit about what I expect to happen in the sectors. And then, you know, we gave some color in 2026, and maybe I'll give a glimpse into 2027. But where we're seeing some real strength in our business today is in midstream. We're seeing nice growth there. And when you combine the MRC talent from a centralized perspective on relationships, manufacturers around the world, the procurement talent, the negotiating talent, the inventory that MRC has, with D-NOW's presence in the Permian and Key Basins, especially in the upstream and midstream space, MRC's VAMI or valve actuation processes, shops around the country, we expect midstream to be a big opportunity for growth for us. So, you know, we grew year over year in midstream in 1Q. We grew sequentially. We see some real opportunity there. Gas utilities is, you know, probably the second sector we're most interested in. Well, actually, it's upstream and midstream is what I was speaking to initially. Upstream and midstream, we will gain market share in upstream and midstream from here forward. Gas utility has been the most durable sector impacted in the first quarter due to ERP issues. And we expect growth in that sector in 2026. And as we improve our ability to service our customers, we expect to capitalize on that growth. So that's some sector perspective. Downstream is going to be one of the trickier end markets for us to recover revenues in. We think we have a shot at significantly improving our credibility in that space, you know, come later in the year when we start bidding on early next year turnarounds. But in terms of sectors, it's going to be upstream, midstream as, you know, a real powerhouse for regaining lost revenues and gas utilities in terms of sector growth. Now, in terms of a look forward into what happens with earnings. So we gave some guidance on how 2026 ends. And, you know, we'll update that guidance each quarter, of course. But in terms of 2027, so in 2027 I expect meaningful improvements in the systems that support how we delight the customer. And, you know, going into next year as we regain revenues, as we're better able to regain revenues, you know, we could see revenue growth in the 7% range, especially as we expect midstream growth to continue, gas utility growth to continue, and then recovery of revenues. We expect revenues could grow 7% going into next year. If you look at adjusted gross margins, we can improve that by 30 basis points, which would be about 60 basis points in the MRC arena, where we've lost the most in terms of gross margins. And then we get more efficient at the SG&A line, You know, we could be at $350 million in EBITDA next year. Now, we're not guiding to that, but those are the internal marching orders we're discussing. You know, how do we align? How do we, you know, I alluded to it in my prepared remarks. We're keeping some extra costs in the business because we want to go and retrieve that revenue. That's our first order of business. Retrieve revenue, grow gross margin in absolute dollar terms, get pricing right, increase gross margins, and then become more efficient, in part due to more revenues, in part because we're going to be on a platform that makes it easier for us to perform. So, you know, I'm looking forward to 2020, or looking at 2026 as a transition year, and 2027 to be where things start to really kick in.
Carrie: That's incredibly helpful. Thank you. I'll hop back in queue. Thank you, Adam.
Operator: Your next question will come from Alex Regal with Texas Capital.
Alex Regal: Thank you. Do you want to find the potential improvement in working capital by year end?
Dave: I'll take a shot and then Mark might chime in. Good morning, Alex. So, right now, although we view our inventory position, and pardon the term, as a commercial weapon, On the one hand, we really like all the inventory we have. On the other hand, we have excess months of supply. We think we could generate $100 million by reducing inventory by year end. We think most of that's going to happen in the second half of the year. In terms of collections, I think I said this on our last call, MRC was better at collecting bills than Dena was in terms of the metrics. Some of their customers paid faster. Their DSOs were lower. We expect to revert back to a better DSO picture for the MRC side of the business, which is 50% of our U.S. business. So we think we could generate, you know, at least $50 million in cash from AR. Of course, these are approximations. And then finally, as we march through the rest of the year, earnings improve, driving increased growth. earnings and cash being generated from those improved activities. And in the meantime, we'll be buying back shares and paying down debt. So I think they're, like I said on our last call, I think we'd be able to generate cash this year in the $100 to $200 million range. We're sticking with that range right now. But I think those are the main movers for generating that kind of cash.
Alex Regal: And then you mentioned data center demand and load growth a couple different times. Any chance you could kind of bracket the revenue opportunity in that sector?
Dave: I'll give a little color on that. So this is, we've generated orders, most of which will ship this year in the $30 million range. And this is kind of early going. We were able to do so because of MRC Global's connections with manufacturers, relationships D-NOW didn't have, and In the meantime, over the last three or four years, our team's been cultivating relationships with the companies that are going to drive these revenues and D-NOW sales efforts for these particular customers, MRC's ability to negotiate the right kind of product availability timing and pricing enabled us to significantly improve our position in gas and data centers. So this is early going. We expect we'll generate at least $30 million this year. And we expect that will grow. And I said earlier that we see our inventory position as a competitive tool, a softer term. And we're going to be helped by our inventory position in terms of grabbing market share in this emerging market.
Alex Regal: And one last question, if you don't mind. Last year, you had sort of the one-off kind of project in the international market. Do you, on your radar right now, do you see any potential uplift from project opportunities that sort of pop into sort of backlog or visibility in the next kind of six, nine months that could generate revenue later in 2026?
Dave: Well, we do have, you know, data centers is one of those projects. And discreetly to the international arena, that was MRC, one of their European operations, had a $200 million project that spanned primarily 2024 and 2025. We don't expect a project like that to occur, and certainly not this year, maybe not next year. Of course, we're working to secure a position in big projects like that. But no, we don't have any large international projects along those lines. But we are seeing increased, significantly increased bidding in the U.S. for projects. We're starting to see some bigger ones. And then, of course, the most attractive near-term, you know, new revenue line for us is in data centers, but not in particular in terms of the international projects, Alex.
Alex Regal: Very helpful. Thank you.
Dave: Okay.
Operator: Your next question will come from Chuck Minervino with Esquihanna.
Chuck Minervino: Hi. Good morning. Hi, Chuck. You touched on some of the expenses. I think you said something like $4.5 million a quarter related to ERP and then something like $2 million related to temps on top of that. I'm sure there was even more of an EBITDA impact from maybe lost revenues. I don't know if you have a thought there or an estimate on how much maybe sequentially 4Q to 1Q was the EBITDA in total impacted related to ERP.
Dave: Well, in terms of SG&A, and what I said was we had about $2 million we have in the first quarter, about $2 million in overtime and temps and another $2 million in terms of additional personnel to, I call it, coping with the more burdensome system compared to an optimized platform. So that's about $4 million a quarter in SG&A. But that doesn't consider, you know, On the MRC side, and if you look at the deck we published, you get some pretty good specificity of where revenues changed per segment. We give some granularity between MRC and DENOW. That'll give you some flavor for it. But there's excess cost in the business on a relative basis because revenues are down. And like I said earlier, we've largely kept our cost structure in place, although we do have about 100 fewer people in the business today than we did 11 weeks ago. But we see excess costs in the business, which is an opportunity to the extent we don't see the revenue growth we expect later in the year and in 2027. But there's at least $4 million in excess costs. It's probably much higher than that if you consider the the relative increase in SG&A expense as a percent of revenue given the drop in revenues.
Chuck Minervino: Gotcha. And the cash flow from operations range the $100 to $200 million for the year. Can you just talk about, you know, what needs to happen for the bottom end of that to be hit versus what you think could happen for the top end for that to hit? Is there... Is there a timeline on ERP that you're kind of using as your baseline there, or is it a collections issue? Just any kind of thoughts there.
Dave: I think the main difference between the... I feel pretty good about the bottom number. I think we're going to get there just through collecting bills faster and some inventory declines. I think the biggest, you know, opportunity there is how much inventory can we reduce? Now again, as a distributor, inventory is very important. It's the lifeblood of the business, but we have some excess inventory. So we have an estimate for how much we're going to pull out of the system, but all the same, we want to win every project out there. And so whether that number is 200, 175, 150, it's going to be probably most dependent on our success in reduce in inventory.
Chuck Minervino: And then just one last one for me. You made some comments there about upstream or the U.S. market inquiries picking up, and it sounds like the business might be strengthening there or there's some prospects for the business strengthening there, obviously given the commodity environment. Can you just give us a little bit more detail on what you're seeing there potentially on the upstream side?
Dave: Yeah. You know, I think the biggest opportunity for us is to recoup lost activity during the disruption period of the ERP. So I think that's going to be the biggest opportunity for us as we go through the year, you know, so in the U S 40% of our upstream business happens in the Permian. Now, all of our overlap, uh, D now MRC locations are on, on our optimized SAP platform. So our teams have access to a lot more inventory than they did. So I see the opportunity for growing, recouping lost upstream. And I said earlier in the call that our biggest percentage revenue decline happened in upstream on the MRC side. We see that's prime targeting. We can get so much of that revenue back because we have combined organizations. We've co-located. We've begun synergies at the field level. by combining locations or consolidating locations, and we're focused on the customer, I see upstream growth is going to be mostly organic or mostly coming from efforts to recoup what we've lost on a temporary basis. But we could see some upstream momentum going into 2027. We're not forecasting that. We don't sense we'll have the market expanding much in 2026. But we think most of that's going to come from us combined now no longer competing in the Permian, where we were going to head to head against each other, we're going to grow organically. We do expect, as we see oil prices in the $90 range, we do expect the majors to kind of stick to their capital discipline strategies. We expect, you know, the the smaller firms and larger independents to start spending some money. We do expect some benefits there, and we're seeing a little bit of that so far.
Chuck Minervino: Thank you.
Carrie: Thanks, John.
Operator: There are no further questions at this time. Oh, no.
Dave: Yeah, well, thank you, Carrie, and thank you for everybody joining us today and your interest in D-NOW. We look forward to discussing our second quarter 2026 results on our next earnings call in August. We hope everybody has a wonderful Thursday. With that, we'll turn it back to the operator.
Operator: Thank you for joining today's conference call. You may now disconnect.
