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Greetings, and welcome to MRC Global's First Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Monica Broughton. Thank you, you may begin.

Thank you, and good morning. Welcome to the MRC Global first quarter 2025 conference call and webcast. We appreciate you joining us. On the call today, we have Rob Saltiel, President and CEO; and Kelly Youngblood, Executive Vice President and CFO. There will be a replay of today's call available by webcast on our website, mrcglobal.com, as well as by phone until May 21, 2025 and the dial-in information is in yesterday’s release. Please note that the information reported on this call speaks only as of today, May 7, 2025, and therefore, you are advised that information may no longer be accurate as of the time of replay. In our call today, we will discuss various non-GAAP measures. You are encouraged to read our earnings release and securities filings to learn more about our use of these non-GAAP measures and to see a reconciliation of these measures to related GAAP items, all of which can be found on our website. Unless, we specifically state otherwise, references in this call to EBITDA refer to adjusted EBITDA. In addition, the comments made by the management of MRC Global during this call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of the management of MRC Global; however, actual results could differ materially from those expressed today. You are encouraged to read the company's SEC filings for a more in-depth review of the risk factors concerning these forward-looking statements. As a result of the recent announcement related to the sale of our Canada business, the results of which have been reclassified to discontinued operations. Our comments today will reflect revenue and profitability from continuing operations only unless otherwise stated. And now, I would like to turn the call over to our CEO, Mr. Rob Saltiel.

Thank you, Monica. Good morning, and welcome to everyone joining today's call. I will begin with an overview of the financial highlights and strategic accomplishments from our first quarter, followed by a summary of our first quarter results and an update on our growth initiatives. I will then turn it over to Kelly to provide more detail on our results and outlook. We are off to an excellent start in 2025, and I'm very pleased with the strong improvement in our business that we experienced in the first quarter. We exceeded our expectations on all key financial metrics and each of our three business sectors achieved sequential revenue growth of upper single-digit percentages. In addition, we are very encouraged by our growing backlog, which increased 8% sequentially in the first quarter to $603 million with growth across all sectors. Our backlog has continued to increase in the second quarter, led by our US segment, which has experienced backlog growth of 23% at the end of April, compared to the beginning of the year. This expanding backlog increases our confidence that we will achieve another quarter of strong sequential revenue improvement in the second quarter. Although each of our sectors is performing well, I'm especially optimistic about our gas utilities business, which is our largest end market. After a couple of challenging years, this business is experiencing a significant resurgence, and through the end of April, we have seen a 26% increase in backlog. The prerelease of our first quarter financial results a few weeks ago has allowed us to begin execution of our previously announced a $125 million share repurchase program. Returning cash to shareholders is an important benefit of owning our stock, and the repurchase program reflects confidence in our company's financial strength and our ability to generate substantial cash across the business cycle. The share repurchase program is a key component of our three-pronged capital allocation strategy, along with maintaining a healthy balance sheet with a target net debt leverage ratio of 1.5 times or lower and investing in future growth opportunities. With our current net debt leverage ratio at 1.7 times and strong available liquidity of $570 million, we are well-positioned to execute on all three priorities this year. Turning now to our key first quarter financial highlights. Revenue increased by 7% sequentially to $712 million, with growth in each of our end market sectors, led by gas utilities. We are expecting a recovery in several of our larger gas utilities customers' activity levels with destocking in the rearview mirror. The diet sector also experienced solid increases driven by chemicals, mining and refining activity. Finally, the PTI sector activity also picked up with solid gains in both the US and International segments. Adjusted gross profit margins continued to be strong at 21.5% in the first quarter, above our 21% target. We continue to focus on products and services where we can add the most value for our customers which is exhibited through higher gross margins. We delivered adjusted EBITDA of $36 million or 5.1% of sales, a nice improvement over the fourth quarter. We expect quarterly adjusted EBITDA margin percentages to exceed 6% of sales in the second quarter as revenue improves sequentially. We generated $21 million of operating cash flow from continuing operations for the first quarter, reflecting our focus on working capital management and good cost control. Our net working capital as a percentage of sales was a solid 11.7%, demonstrating our operational efficiency and disciplined inventory management. As stated previously, our ability to generate strong operating cash flows across the business cycle has underpinned our confidence in exercising our share buyback program, and we are on target to generating $100 million or more in cash flow from operations in 2025. Now I will provide an update on some of the growth-related topics we addressed on our March earnings call. First, our gas utility spector is finally back on a growth trajectory. We are forecasting strong demand growth from several of our larger customers in 2025, and some of these customers have recently issued bullish updates to their longer-term spending plans. Our gas utilities backlog is the highest it has been in three quarters. Our customers continue to invest in safety and modernization projects, and they are benefiting from a resurgence in natural gas as a key fuel to support electrification and LNG export opportunities. We remain optimistic about this end market sector regardless of the uncertain macroeconomic conditions. The products we supply to our gas utilities customers are generally sourced from US suppliers. So we are in a strong position to mitigate the impact from the evolving tariff situation. In addition, we are making some nice inroads to new revenue sources with the pursuit of new gas utilities customers and the smart meter benefits of our new IMTEC services joint venture. On our last call, we discussed the potential impact of tariffs on our business and the general benefits of an inflationary environment on our revenues and margins. It is clear that the current tariff situation brings significant uncertainty, not just on product cost for our customers, but also what it could mean for potential demand destruction in the second half of the year. Our company is extremely adept at navigating global supply chain challenges for our customers, a skill we honed during the COVID pandemic. Our supply chain team is spending significant time, advising our customers in all three market sectors about tariff impacts and the benefits of sourcing from different countries and suppliers to minimize the negative impacts on our customers' product costs and availability. It is important to note that over 60% of MRC Global's US product sales are sourced domestically. So we are generally much better positioned than our competitors to insulate our customers from negative tariff impacts. Our China source products represent less than 15% of our total US product mix, and this clearly represents the biggest risk of major business disruptions due to tariffs. We are negotiating with our China-based suppliers to absorb a significant portion of this cost increase for the benefit of our customers and we are working to migrate our China purchases to less tariffed countries where possible. Tariffs remain a fluid situation, and we will continue to update our investors on future calls. We continue to expect a growing role for natural gas and associated investment in midstream infrastructure, playing a bigger role in our US PTI sector sales. While first quarter PTI revenue in the US was up 6% sequentially over the fourth quarter, all of this growth was concentrated in the midstream sub-sector, while upstream revenues remained generally flat. In addition, while US PTI backlog grew 28% in the first quarter, midstream outpaced upstream, and this has continued into the second quarter as well. We have been successful in landing significant orders for projects related to the gathering and transmission of natural gas with both existing and new customers. With WTI oil prices currently at multiyear lows, while natural gas prices have rallied off of 2024 levels, we expect that the US midstream sub-sector will outpace upstream for a while longer. We also expect that the larger E&P players will play an increasingly significant role in US oilfield activity as more price-sensitive producers, reduced activity levels in the second half of this year. And finally, our targeted growth initiatives continue to make increasing contributions to our 2025 revenues and are setting the table for revenue expansion in future years. We have spoken previously about our focus on growing our chemicals business, and this continues to be a bright spot for us. Our US Chemicals backlog at the end of April 2025 is 32% higher than the same time last year, and we expect US Chemicals revenue to be up high-single digits over 2024. Our expansion into data centers and mining applications is also gaining traction. We are negotiating master service agreements with targeted owners and subcontractors for PBF work in new data center cooling systems. Our bookings this year already exceed $10 million, and we have tens of millions of dollars of opportunities under pursuit. Our mining sector initiative is also showing excellent growth potential with increased bidding for MRO and project activity as well as new customer acquisitions. We expect our mining business to grow at a compound annual rate of approximately 10% over the next three to five years. In summary, first quarter results were very strong to start 2025, and we are very optimistic about the second quarter as well. We have seen our total US backlog continue to rise into the second quarter with a 23% increase through the end of April compared to year-end and with all three business sectors increasing double-digit percentages. Along with increased intake levels and near-term project deliveries, this positive momentum underpins our confidence in our second quarter revenue growth projections. We currently expect second quarter revenue to improve by a high single to low double-digit percentage as compared to the first quarter. We recognize that medium-term macroeconomic conditions remain uncertain. But so far, we have not seen significant changes in our customer behaviors or buying patterns. We will continue to monitor the situation closely as we advise our customers on how they can best navigate these market disruptions and uncertainties. Although the second half of 2025 may represent more risk due to these uncertainties, we do not have sufficient evidence to alter our previous annual guidance. We will update our guidance as necessary in future quarters when there is greater clarity regarding the tariff situation and its impact on MRC Global's business. In the meantime, our strong balance sheet, robust free cash flow and ample liquidity should allow us to manage headwinds and respond quickly as new opportunities or threats emerge. And with that, I will now hand it over to Kelly.

Thanks, Rob, and good morning, everyone. My comments today will primarily be focused on sequential results comparing the first quarter of 2025 to the fourth quarter of 2024, unless otherwise stated. Also, as mentioned by Monica, our Canada results are reflected in discontinued operations. So unless stated otherwise, my comments will be referring to the company's financial results from continuing operations. Starting with revenue. We achieved sales of $712 million in the first quarter, representing a 7% sequential increase from Q4 2024 and down 8% compared to the same quarter a year ago. From a sector perspective, gas utilities were $273 million in the first quarter, a $20 million or 8% increase driven by customers returning to normalized buying patterns as they prepare for the construction season and specific customers increasing their 2025 capital budgets. The DIET sector first quarter revenue was $220 million, an increase of $12 million or 6% due to chemical project deliveries mining activity and refinery turnarounds. PTI sector revenue for the first quarter was $219 million, an increase of $16 million or 8% due to several US midstream customer natural gas pipeline projects as well as multiple upstream projects in the North Sea. In the US, the more favorable regulatory environment and the increase in natural gas demand is contributing to the increase in pipeline project activity. From a geographic segment perspective, US revenue was $591 million in the first quarter, a $49 million or 9% increase and all end market sectors improved, led by the gas utility sector with a $21 million increase, followed by the DIET sector, which increased $19 million, and the PTI sector, which increased $9 million. International revenue was $121 million in the first quarter, down $1 million or 1% as the increase in PTI sector revenue was offset by reduced DIET sector revenue, primarily due to the timing of project deliveries. The outlook for the International segment remains positive, with expectations for solid revenue growth in 2025, which will be the fourth year in a row of increased revenues. Now turning to margins. Adjusted gross profit for the first quarter was $153 million or 21.5% compared to $146 million or 22% in the fourth quarter of 2024. The variance in margin percentage is due to geographic and product mix. Reported SG&A for the first quarter was $124 million or 17.4% of sales as compared to $123 million or 18.5% in the fourth quarter. Adjusted SG&A for the first quarter was $121 million, slightly higher than the fourth quarter's $119 million, reflecting the typical increase of employee-related costs at the beginning of the year. Adjusted EBITDA for the first quarter was $36 million or 5.1% of sales, an improvement over the fourth quarter results of $32 million and 4.8% as a result of operating leverage on higher revenue. Interest expense was $9 million in the first quarter of 2025 compared to $7 million in the prior quarter. Tax expense in the first quarter was $1 million with an effective tax rate of 11% as compared to $4 million of expense in the fourth quarter. For the first quarter, net income from continuing operations was $8 million or $0.09 per diluted share as compared to a net loss from continuing operations of $1 million or a negative $0.14 per diluted share in the fourth quarter of 2024. Adjusted net income from continuing operations was $12 million and $4 million for the first quarter of 2025 in the fourth quarter of 2024, respectively. Our capital expenditures were $9 million for the first quarter, above historical averages due to our ERP implementation. Our working capital management remains strong with net working capital this quarter at 11.7% of sales. This efficiency contributed to operating cash flows from continuing operations of $21 million in the first quarter. Moving to liquidity and capital structure. Our balance sheet remains healthy with ample liquidity of $570 million, including $507 million of availability on our ABL and $63 million of cash at the end of the first quarter. Our leverage ratio based on net debt of $308 million was 1.7 times and our total debt balance was $371 million. We continue to target a leverage ratio of 1.5 times, while also executing our share buyback program. Now, I'll cover our outlook. Customer activity levels exceeded our expectations in the first quarter, and based on current backlog trends, we believe we are also on track for a strong second quarter as well. As mentioned by Rob, we are not seeing signs of contraction in any part of our business at this point. However, we recognize there is macroeconomic uncertainty overshadowing the second half. Currently, we are not inclined to make any changes to our previous full year 2025 guidance that is projecting year-on-year growth of low to high single-digit percentages. This outlook may be adjusted if we begin to see any significant negative effect resulting from tariffs, lower oil prices or a potential recession, which are unknown at this time. We will update our guidance as necessary in future quarters when there is greater clarity. We are fortunate to have aspects of our business, which are resilient in periods of turbulence and the diversification we have in our sector mix should also help reduce volatility. For example, our gas utility sector is expected to be the most resilient business this year, because of having no significant exposure related to tariffs or low commodity prices. The budgets for these customers are typically more resistant to changing macroeconomic conditions. The year-to-date increase in backlog for this sector is up 26% as of the end of April. Therefore, we continue to expect 2025 annual revenue to be up mid-single digits or potentially higher in 2025 over 2024. The DIET sector is reasonably resilient as well but could experience some slower growth should projects be delayed. However, with a year-to-date backlog increase of 16% at the end of April, this business is off to a strong start this year. The PTI sector results are more sensitive to lower commodity prices and could experience some strain in the US should the macroeconomic conditions result in reduced demand. We believe this sector of our business has the most risk at this point due to lower oil price expectations. However, we are fortunate with our customer mix in this sector, and it is more heavily levered towards IOC and large public companies, that typically maintain higher activity levels than their smaller competitors in this environment. The year-to-date backlog for this sector is up 7% as of April 30. Specific to the second quarter, our guidance is unchanged from our earnings prerelease. We expect revenue to be up high-single to low-double-digits compared sequentially to the first quarter, supported by a strong backlog position. We are also targeting the following key metrics for 2025. We continue to target operating cash flow of at least $100 million, maintaining our strong cash generation profile, if the market was to contract in the second half of the year, we could generate even more cash and exceed this target. Regarding cadence of cash flow for the upcoming quarters, this year may look a little different. In the first quarter, we generated solid cash flow, which is not always the case. And in the second quarter, we expect to use cash as we plan to pull forward payments to our suppliers from the third quarter into the second to assist with our ERP go-live transition that is expected to occur in the third quarter. The third and fourth quarters are expected to return to positive cash generation. Our adjusted gross margin is projected to average approximately 21% or higher. Capital expenditures are expected to be approximately $45 million for the year, elevated from our normal levels due to our ERP implementation. And moving into 2026, we expect our annual CapEx to return to a more historical run rate of approximately $15 million. We are on budget and on schedule with the ERP project and are very excited about the benefits it is expected to yield. Finally, we remain committed to achieving our target net debt leverage ratio of 1.5 times. Our disciplined approach to balance sheet management, combined with our strong cash flow generation have enabled us to begin executing on our $125 million share repurchase program while also maintaining ample financial flexibility for future growth opportunities. And with that, I'll turn it back over to Rob.

Thanks, Kelly. As we conclude today's call, I want to emphasize our strong start to 2025 and our confidence in the future. We have returned to growth in both revenue and backlog across all three market sectors and we have launched our $125 million share repurchase program. Our financial position remains solid with ample liquidity and excellent working capital efficiency. We are generating healthy cash flow with $21 million from continuing operations in the first quarter, and we are on track to deliver over $100 million for the full year. Looking ahead, we expect growth opportunities across all our sectors driven by improving fundamentals for gas utilities, several promising growth initiatives in our diet sector and a strong US natural gas midstream outlook and our advantaged positioning with large customers in the PTI space. Our capital allocation strategy remains balanced and disciplined. We are committed to our target leverage ratio of 1.5 times, while returning cash to shareholders and investing in growing our business. And with that, we will now take your questions. Operator?

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Nathan Jones with Stifel. Please proceed with your question.

Hey, good morning. This is Adam Farley on for Nathan.

Good morning Adam.

Hey good morning. Wanted to start on the tariff discussion. Maybe just at a higher level, how is inflation tracking in the business today what product areas are seeing the most tariff-related price increases from suppliers? And then maybe any expectation on how gross margins will read through this year.

Yes, I think it's fair to say that the tariff situation is highly dynamic and still evolving. I think we -- I think most people are aware that there are tariffs right now on steel and aluminum products coming from anywhere outside the U.S. And then elsewhere, we've got 10% tariffs on all products from other nations other than China, where we have over 100% tariff today. So, the biggest impacts we're seeing currently are importing steel products, typically pipes, fittings, and flanges and then anything that comes from China. And one of the things that we need to do as a responsible supplier to our customers is work with them to try to navigate through issues related to cost and availability. And as I mentioned in the prepared comments, this is something that our supply chain team is really expert at. We had to do a lot of supply chain management during the COVID pandemic. And here, what we're doing is really a couple of different things. One is, first of all, we are pushing back where we can on any increases related to the tariffs. Obviously, with our business basically returning EBITDA margins of $0.05 or $0.06 on every dollar. We can't assume the cost of these tariffs. We've got to work with our suppliers and our customers to mitigate the impact on our business. But clearly, we want to do everything we can to help our customers get through this period of difficulty. And because of our buying power, because of our ability to source from different suppliers in different nations in some cases, where we have an opportunity to do that, we're doing everything we can to mitigate that impact. And so that's been a big focus of our team, and we'll continue to be a focus of our team as this situation evolves. In terms of what it's actually doing in terms of our pricing right now, I would tell you that most of the tariff impacts are going to be seen in future quarters, right? So, it takes a quarter or two for these impacts to really be seen. But ultimately, as we've talked about before, we do sell a lot of our products on a cost-plus basis. Clearly, the tariff is a price increase. It's the cost of the product that's paid for by the importer of record and then pass through to us to some degree. So if we have increases due to tariffs, we've got to work on passing those through. And obviously, that could create an opportunity for some increased margin dollars for us. But as I said before, our focus is really on maintaining customer relations, making sure our customers are managing through this, and we don't run into issues of cost or availability down the road.

Okay, that's really helpful color. Maybe on inventory, it looks like inventory stepped up a little bit in the first quarter. Did you maybe stock strategically a little bit of additional inventory get ahead of tariffs or maybe just visibility on your backlog? Any color on inventory this year?

Yes. I will tell you that we leaned in a bit on this, expecting that some tariffs were coming. At the same time, the first quarter is typically when we do increase our inventory to prepare for the rest of the year. So our supply chain team, I think, did a good job of making sure that we had ample inventory. But of course, we don't want to get too far over our skis, knowing that this tariff situation is volatile and dynamic. It seems to be changing with some regular frequency. But we did lean in on that. I think that does give us an advantaged inventory position as we work our way through this. So yes, that was something that we had some foresight on, and we did lean in a bit on that in the first quarter.

Okay. And then shifting gears a little bit to Gas Utilities, it sounds like there's solid momentum there, more of a Defensive Market versus the Traditional Energy sector. Maybe do you have any updates on opportunities to gain additional market share or wallet share with some of your larger customers this year?

Yeah. I'll say a couple of things about Gas Utilities. First of all, we are really excited to return to growth in our Gas Utilities business. This has been a consistent growth engine for this company for many years really until the last couple of years. And as we've talked about before, coming out of the pandemic, our customers were holding extra inventory, some of the fabricators were holding extra inventory, and we had extra inventory. So we had to go through this destocking period, which now we can finally declare is fully behind us. So we're really excited about the fact that this business has now returned to growth. We do have growth opportunities in terms of market share, in the sense that there are gas utilities that we don't currently serve and -- or if we serve them, maybe we don't serve them in all regions in which they operate. At the same time, we've got opportunities to increase our wallet share. We talked a lot on our last earnings call about our IMTEC Services joint venture, joint venture, where we're actually going to be providing a very valuable service to help smart meter applications for our customers. And clearly, this opens up an opportunity for us to do more Meter business with our customers, which currently we only do with a handful of them. But obviously, there's a significant revenue opportunity, if we could take over more of that Meter business. And then there are a few other services that we're looking at in accordance with the IMTEC Services venture as well. So we really like our growth prospects in Gas Utilities. We're excited that we're back to growth. We're also excited that the Gas Utility space is largely insulated from the tariff impacts. So that helps our customers focus on their business and worry less about cost and availability. So a good story all around on Gas Utilities.

Hey Adam, I'll just add as well. When you look at the backlog growth, we talked about an 8% growth for the full company in Q1. Gas Utilities was in line with that at 8%. But April -- as of the end of April, if you look at the year-to-date improvement that we've experienced in Gas Utilities compared to March, it is 17%, -- a 17% improvement. So really, when you look at the full year-to-date, it's 26% up since the beginning of the year, with 17% of that just occurring between March and April. And so that gives us tremendous confidence for the coming quarters, not just Q2. And as Rob said, since that business is more insulated, we don't think there's going to be much pressure, if any. We think it's really back to the normal kind of CAGR growth rates that we had historically in that part of our business. And this is typically when we would build backlog because there's a construction season associated with the projects that our gas utilities put in place. And to really see that pick up in backlog here in the early spring really sets us up nicely for summer and autumn construction, which will which is supportive of our expectation of nice growth in gas utilities this year.

Great to hear. Thank you for taking my questions.

You’re welcome. Thank you.

Our next question comes from Chuck Minervino with Susquehanna Financial Group. Please proceed with your question.

Hi, good morning.

Good morning, Chuck.

Just one more on that gas utility side. I think you mentioned that maybe it's a seasonal issue, but was curious that 19 -- I think it was a 19% or so increase in backlog in April versus the one -- in the first quarter. I was kind of curious if that was, like you said, maybe it's a seasonal construction-related issue or I don't know if it was more political or tariff or macro or what. But I was just kind of curious if you kind of think -- if you could touch on that a little bit more? And then also, do you see backlog continuing to grow even with the growth in the revenues in gas utilities as well kind of as we look through the rest of the quarter?

Yes. I think we pretty much hit this one in the sense that this is typically when you would be building backlog associated with the construction season. Again, the gas utilities are much less exposed than our other sectors to potential tariff impacts. So I don't really think the pickup there in backlog is related to the tariffs per se. I will also say, though, that we've talked many times than we did in today's call as well about the build-out of natural gas infrastructure. So the opportunity for gas utilities, some of whom have got transmission assets as well as distribution assets to increase their transmission assets. That's certainly been part of building up the backlog as well. We've seen a really nice pickup in our work with midstream companies and the gas utilities that are in that space are picking up as well. So it's really a combination of those things. But look, it really does set us up nicely for a nice pickup in revenue for gas utilities this year. And we'll continue to look for that backlog to build really through this quarter and set us up nicely for the rest of the year.

Does the gas utilities business carry higher margins? Or does that incremental work there carry kind of margin accretion along with it? Or is it more the volumes will kind of carry that higher?

Yes. We -- I think we've talked about this before, but I would say on a gross margin basis, it's probably at or slightly lower than what we do across the rest of the company. But because of the scale benefits and the fact that we've got very high volume of a more limited number of SKUs on a net margin basis, it probably comes out ahead of the rest of the business. So that kind of gives you a little sense of how that comes out relative to gross and net margins.

Got you. And then just one last one for me. The diet sector, I think you mentioned backlog increase, if I caught that correctly. I know there's a lot of different end markets going on there. So I was just wondering if you can talk a little bit about kind of a little below the surface there, downstream versus energy transition, like where you're seeing kind of some of the strength or weakness there?

Yes. You're right about the 16%, and that's a backlog increase from end of April to the beginning of the year. And I would say that pickup is primarily in the refining and chemical space. We're not really seeing as much an energy transition certainly in the US. Most of our energy transition business now is in international. But it's really a nice pickup in refining turnaround activity that we're getting ready for. And at the same time, we talked a lot about our chemicals initiative, really growing our market share there. We picked up new customers. There are some significant projects in the chemical space that we're involved in. And those have really been driving a lot of that growth in the diet backlog. And then the other thing I will talk about is mining. Mining is an area where we continue to put emphasis. We've got dedicated products and a dedicated sales and marketing effort for the mining business here in the Western United States. We know that mining is going to be a growth area with a focus on strategic minerals and self-sufficiency. So that's a big part of what we're doing in the diet space backlog growth as well.

Thank you.

You are welcome.

Our next question comes from Chris Dankert with Loop Capital Markets. Please proceed with your question.

Good morning guys. Thanks for taking the questions. I guess first off -- maybe first off, just -- I'll call it a tangential question to the tariffs. I guess, given that there is a bit more pricing support here, on line pipe specifically, are we in a position to start seeing some recovery in margins for that product group?

Yes. I think the line pipe situation is also evolving quite a bit in the sense that we saw steel prices come back up and now they really seem to have stabilized. And of course, a lot of steel, of course, is imported into the US, and now we've got significant tariffs on that. As we talked about in an earlier call, we did lean in on some inventory builds earlier in the year. So we feel like our pipe inventory was in a good shape to start the year. So we do have some opportunities, I think, to sell some of that pipe at some reasonably healthy margins. I think the question going forward is, what tariffs stick and how does the overall demand for line pipe go from here? But I would say that generally speaking, we could see some margin strength just coming out of the strategic buys that we made coming into the year, and that will probably manifest itself in future quarters.

Got it. Glad to hear it sounds like a constructive setup for you guys on that front. And then I guess for my second question, I mean, obviously, we've seen oil prices come off quite a bit here. Your customers don't react to that quickly, but maybe just what's the tone from some of your upstream customers in the US and then kind of how they're thinking about investment given the current backdrop?

Well, look, I think we all have to acknowledge that WTI oil is at multiyear lows right now. And dipping below $60 a barrel is clearly going to have some impact on activity in the US oil field. I think we've seen recently some of the larger independents focused on the Permian announced CapEx cuts for this year. We always want to remind our investors that MRC Global is particularly levered to larger players. These are the large publicly traded companies, some of whom are integrated in nature and some of whom we've got strategic deals with. So everybody is going to have some reaction to these lower oil prices in terms of activity on the margin. I would say that our customer base is more resilient, thinks about it more as a manufacturing rather than opportunistic production in terms of how they set their budgets and adjust their activity. But there's no question that lower oil prices and the potential for them to potentially go even lower is going to have an impact on activity. I would tell you that we are not seeing anything from our customers that's indicating that they're going to be either reducing budgets or activity in any significant way. But I think that this is a situation that's evolving as well. And as we talked about the impact of tariffs potentially, what it could do to the overall economic activity in the US and potentially the world, we'll have to see what that impact does to the US oil field. So there are potentially some headwinds going forward. I think we're as insulated as anybody given our customer base and the arrangements that we have with our customers.

That's really great color. And I guess not to put too fine a point on it, but it sounds like you feel comfortable any incremental slowdown would be contemplated in the current guidance range for the year here?

Yeah, I think that's right. And I'll also point out because I've focused on oil, but if you look at the natural gas pricing, natural gas pricing is pretty healthy. And I think everybody understands, as we talked about before, that the natural gas role in electrification as the transition fuel is going to continue to increase. And so a lot of what we're seeing in the PTI space now is really midstream related. We used to break out upstream and midstream, and it got to the point where the midstream was small enough that we really combine them into PTI. I will tell you that almost half of our revenues have -- in the quarter, have really come through midstream opportunities. And going forward, about half of our backlog is in the midstream space as well versus just upstream. So there is some resilience in PTI when you look at the natural gas component, the midstream component of that. It's really the upstream component that's most at risk. And as I mentioned, we're well-insulated there.

Again, great color. Thanks so much for the time guys.

[Operator Instructions] Our next question comes from Blake McLean with Daniel Energy Partners. Please proceed with your question.

Hey, good morning all.

Hey, good morning, Blake.

I wanted to touch on the PTI business internationally. So revenues were up strong in Q1, and I was hoping you could just maybe talk a bit about the runway there, how you're thinking about growth this year and going forward, and maybe walk through some of the specific regions or opportunities that might be useful color.

Yeah. Look, we are projecting growth in our PTI space this year internationally. Keep in mind, international, most of the work we do is project related. And so a lot of the revenues that we'll see in 2025 are based on projects that we secured last year. And we've talked a little bit about this in our prepared commentary, but think about the North Sea, the Norwegian Sea, Europe generally, what's happening there in terms of our involvement with customers who are either doing life extensions on existing platforms or incremental development of hydrocarbons in response to the energy balance disruption that's taken place since the Russian-Ukraine war took place. So we feel good about the growth internationally in PTI. Again, that's almost entirely upstream. There's really not a huge midstream component to that. But having this solid backlog really gives us confidence that we're going to see some healthy growth in PTI this year over where we were in 2024.

Got it. Thanks for that. And then you elaborated a little bit on the opportunity set around mining. Maybe just talk a little bit about the data center opportunity set and how we should think about that and how you guys think about that?

Yeah. Look, we're really excited about data centers. I think everybody knows that there's tremendous demand for data centers themselves. And when you look at the opportunities for pipes, valves and fittings as part of the cooling systems as well as some of the transmission and transportation and natural gas for the power generation part of this. This can be a real exciting development for MRC Global. As we talked about before, it's relatively early days for us in this space. We've been in it for a little over six months. We're over $10-plus million in terms of actual commitments at this point, and we have tens of millions of dollars of opportunities under bid or discussion. And it is a project-related business. We're working with fabricators, general contractors, EPCs. There's a whole, if you will, ecosystem of players involved in this business. We're putting master service agreements in place with a number of these groups so that we're positioned to bid and win on future jobs. This could be a really big business for us. But like a lot of project business, we don't want to call it before we've actually got it in place. Like I said, we've crossed the $10 million threshold in a short period of time. We've got a lot under discussion and bid right now. But this could easily be a $50 million or $100 million business if the right projects go our way.

Excellent. Okay. Thank you, guys very much for the time this morning.

You're welcome.

We have reached the end of the question-and-answer session. I would now like to turn the call over to Monica Broughton for closing comments.

Thank you for joining us today and for your interest in MRC Global. We look forward to having you join us for our second quarter conference call later this year. Have a great day. Thanks.