This translates to a robust 18% levered free cash flow yield for the year. We are very bullish on the cash generation potential of the company going forward. We also set a company record for full-year adjusted gross margins at 21.5%, which is the second year in a row where we exceeded 21%. Some of our investors have expressed concerns that we might not be able to maintain margins at this level, but I am happy to report that we have now had seven quarters in a row with 21-plus-percent margins. This is a transformational change from the high teens level of margins throughout most of our company's history. Adjusted EBITDA margins were 7.3% for 2023, the second year in a row above 7%. This is a result of both higher adjusted gross margins along with our discipline on cost management.

We've been very focused on working capital efficiency over the last few years, as evidenced by another record set in 2023 with our net working capital as a percentage of sales coming in at 15.5%. Since 2018, we have improved this metric by 490 basis points, which is helping us to consistently generate positive cash flow irrespective of the business cycle. Our balance sheet has never been stronger with ample liquidity and the lowest leverage ratio in our public company history at 0.7 times. We expect this metric to improve even further in 2024. Revenue grew for the third straight year in 2023 to $3.4 billion, with year-over-year growth in our PTI and DIET sectors partially offset by a slowdown in our gas utilities sector. Our PTI sector grew by 6%, driven by increased activity and market share gains in the Permian Basin, partially offset by reduced sales in California and Canada.

The DIET sector improved 5% in 2023, driven by various LNG, chemicals and refining projects. Our international business grew 13% in 2023, and is poised for double-digit improvement in 2024, supported by a healthy backlog that was 55% higher at year-end compared to the beginning of 2023. I will now make a few comments about the fourth quarter results and then turn to our outlook. Despite a revenue pullback in the fourth quarter, we maintained strong profit margins and cash generation that exceeded our expectations. For the quarter, adjusted gross margins were 21.9% and adjusted EBITDA was $48 million, or 6.3% of sales. In addition, we generated cash flow from operations of $89 million in the fourth quarter, aided by excellent stewardship of our working capital that allowed us to achieve $181 million for the full-year.

Turning to our outlook, I will now provide some early perspectives on 2024. First of all, we have seen a meaningful improvement in our backlog and our new orders over the first few weeks of 2024. This gives us optimism that our business is stabilizing, and we expect to return to growth in the coming quarters. From a sector perspective, for our gas utility sector, we expect our customers to continue their destocking efforts in the near term, which could cause capital spending for the first half of the year to lag the levels we saw in the first half of 2023. However, we expect to see an inflection point around mid-year for gas utility spending to improve once the destocking targets have been met. In addition, we expect moderation of inflation and interest rates as we move through 2024, which should improve the overall investment climate for this sector.

Despite the near-term headwinds, the long-term market fundamentals and growth potential of our gas utilities business remain very positive. We continue to expand our market share and wallet share with gas utilities, and we are competing for new utility contracts in 2024 that should expand our presence further. Most of the work we perform with our gas utilities customers is based on multi-year programs where they evaluate and implement measures to improve their local distribution networks and, in some cases, their transmission pipelines to ensure the safety and the integrity of these systems. Since approximately 35% of the U.S. gas distribution network today is over 40 years old or of unknown origin, this creates a steady backlog of work due to the need to upgrade and maintain these networks as they age.

Additionally, as new housing starts improve with lower interest rates, this should result in further growth opportunities for this sector. In the DIET sector, we are optimistic that we will experience modest revenue growth this year from a strong level of refinery and chemical plant maintenance activities, supplemented by a growing slate of projects. We remain excited about energy transition growth opportunities and expect that most of the revenue in 2024 for this sub-sector will occur in the renewable fuel space. We expect a lot of new project bidding activity this year, but we will likely see most of the benefits in 2025 and beyond. Turning to our PTI business, recent industry reports have signaled some potential risk of declining oil prices and customer spending levels in 2024.

However, larger public E&P companies are expected to drive a higher percentage of the activity in 2024 in the U.S. oil field, which bodes well for our company as our revenue for this sector is driven primarily from this customer base. Recent announcements of consolidation by our PTI customers are expected to be beneficial to MRC Global, once completed. We partner more extensively with the acquirers than we do the targets, and the value we bring is generally better recognized by the larger operators who procure higher quality, longer life products for their oil and gas development projects. Another positive for the PTI sector is our international oil and gas market is expected to expand, and we should benefit from our strong position in growth markets such as Norway, the UK and Middle East.

For our international segment, we expect another strong year aided by favorable fundamentals in both the PTI and DIET sectors and a healthy revenue backlog that has grown each of the last five quarters. Our international backlog at the end of the fourth quarter increased 14% over the third quarter. We have lined up exciting projects in both PTI and in DIET and we expect another year of double-digit growth for international in 2024. Given the slower business environment in the US segment, we are laser-focused on improving the things we can control, such as our cost structure. We are working to lower our absolute SG&A cost this year after experiencing an increase in 2023, which will support our ability to maintain healthy adjusted EBITDA margins.

We are implementing a number of cost optimization initiatives, including slower wage growth and reductions in professional fees, overtime, travel and entertainment expenses and logistics costs. We have made significant progress elevating our adjusted gross margins and EBITDA returns over the last few years, and we are committed to not losing this momentum in 2024. In summary, we expect 2024 to be a transitional year for the company in terms of revenue, but it is clear that we have never been a stronger company than we are today. We remain optimistic about the fundamentals of all three business sectors and their long-term outlook, given our strong market position and the expectation of demand for our products and services for decades to come.

With the recent improvements in our cost structure and our working capital efficiencies, we are well-positioned to generate significant earnings and cash flow across the business cycle. We are targeting to generate approximately $200 million in operating cash flow in 2024, which will make us an even stronger company with minimal debt at the end of this year. This will provide us with a lot of flexibility to pursue a capital allocation strategy that is focused on the highest return opportunities for our shareholders, including investing in our growth drivers and distributing capital to our shareholders. I will now hand it over to Kelly.

Kelly Youngblood: Thanks, Rob, and good morning, everyone. My comments today will primarily be focused on sequential results comparing the fourth quarter of 2023 to the third quarter of 2023m unless otherwise stated. Total company sales for the fourth quarter were $768 million, a 14% sequential decline and 12% lower than the same quarter a year ago. From a sector perspective, gas utility sales were $253 million in the fourth quarter, a $61 million or 19% decline. As expected, we continued to see gas utility customers focused on reducing their product inventory levels due to more certainty in supply chain and associated lead times. End of year seasonality, along with higher interest rates and inflation in construction cost, also caused customers to delay project activity.

The DIET sector fourth quarter revenue was $258 million, a decrease of $21 million or 8%, due to the conclusion of various projects in the third quarter and lower year-end turnaround activity in the US. As we have mentioned before, this sector has a significant amount of project activity which can create substantial variability between quarters. The PTI sector revenue for the fourth quarter was $257 million, a decrease of $38 million or 13% sequentially, primarily due to seasonality and lower year-end customer activity in the US. From a geographic segment perspective, U.S. revenue was $633 million in the fourth quarter, a $112 million or 15% decrease from the previous quarter, driven by the gas utilities sector which was down $59 million, followed by the PTI sector which was down $34 million, and finally the DIET sector which was down $19 million.

International revenue was $107 million in the fourth quarter, up $2 million or 2%, driven by improvement in both the PTI and DIET sectors. The PTI sector increase was driven by increased activity in Norway, the Middle East and the U.K. The DIET sector increase was driven by energy transition activity as well as project activity in Europe. We remain very optimistic about the outlook for our international segment, which has experienced a 55% increase in backlog since the beginning of 2023, with double-digit growth in both the PTI and DIET sectors. Canada revenue was $28 million in the fourth quarter, down $10 million compared to the prior quarter, due to year-end budget exhaustion and year-end curtailment in customer spending. Now turning to margins.

Adjusted gross profit for the fourth quarter was $168 million or 21.9%, a 60 basis point improvement over the third quarter. Although we have experienced deflation in our line pipe business this year, along with inflation stabilization across most other product lines, we have been successful maintaining adjusted gross margins in excess of 21% of sales due to a higher margin product mix and a higher contribution of revenue from our international segment, which is accretive to overall company gross margins. This marks the seventh consecutive quarter with adjusted gross margins exceeding 21%. Reported SG&A for the fourth quarter was $125 million or 16.3% of sales as compared to $126 million, or 14.2% for the third quarter. This quarter includes $1 million of pre-tax charges related to activism response, legal and consulting cost.

Excluding these costs from our SG&A or adjusted SG&A for the quarter of 2023 -- for the fourth quarter of 2023 is $124 million. Adjusted EBITDA for the fourth quarter was $48 million or 6.3% of sales, a 160 basis point decline from the third quarter due to the lower sales activity. Tax expense in the fourth quarter was $2 million with an effective tax rate of 9% as compared to $14 million of expense in the third quarter. The fourth quarter was favorably impacted by a net reduction in a foreign valuation allowance provision. For the fourth quarter, we had net income attributable to common shareholders of $15 million, or $0.17 per diluted share. And our adjusted net income attributable to common share -- stockholders on an average cost basis, normalizing for LIFO adjustments and other items was $20 million or $0.23 per diluted share.

In the fourth quarter, we generated $89 million in cash from operations and a net $181 million for the full-year. This is a 65% increase over our previous guidance, due to exceeding our year-end working capital targets, resulting in an 18% levered free cash flow yield for the year. And as Rob pointed out, we also achieved our best net working capital to sales ratio in our history at 15.5%, a significant improvement over our historical trend. Turning to liquidity and capital structure. Our current availability on the ABL is $610 million and including cash, our total liquidity is $741 million. Our leverage ratio based on net debt of $170 million was 0.7 times, a record low for the company. With the cash we expect to generate in 2024, we believe our liquidity and the leverage ratio will continue to show significant improvement.

Based on our current projections, we believe we can comfortably pay off our Term Loan B on or before its maturity date in September of 2024 with a combination of excess cash and our ABL facility. As such, we are now classifying our term loan as current debt. Also, this reduces our ongoing interest expense burden by 150 basis points for any balance that remains on our ABL. I would also like to highlight an exciting initiative we are undertaking this year. We recently launched a project to replace and modernize our North America Enterprise Resource Planning or ERP system. Currently, we are running on a mainframe system which is at the end of its useful life. We will be moving to a modern cloud-based ERP system over the next two years. I am personally the executive sponsor of the project and have the utmost confidence that we will be successful in meeting our budget and timeline goals.

We have spent the past year planning, evaluating software packages and implementation partners, and building a stellar blue ribbon team of some of the company's best resources to implement this ERP system. The new ERP is expected to provide leading-edge functionality, including AI capabilities, allowing us to automate and streamline our processes and systems to improve reporting, forecasting and controls. It will also reduce IT maintenance costs by approximately $2 million a year. The CapEx investment is expected to be approximately $50 million spent over the next two years, and we expect to be fully implemented and running on the new system in the second half of 2025. We are excited about the multitude of opportunities this new cloud-based system will provide to our organization.

Now I'll cover our outlook for the first quarter and full-year 2024. For the first quarter, we expect sequential revenue to be flat to modestly lower for the total company, with PTI and gas utility revenue flattish with the fourth quarter and DIET declining modestly due to the timing of various project deliveries. We expect 2024 to be a transitional year and currently believe total company revenue will come in flat to a potentially modest decline of low to mid-single digits compared to 2023 levels. From a sector perspective, we expect DIET to be modestly higher for the year, PTI to be modestly lower, and gas utilities to also be down for the full-year, but showing a recovery in the second half of 2024. It's noteworthy and encouraging that recent trends in our 2024 year-to-date sales, new order intake and backlog are providing optimism that we are seeing stabilization in the business.

For example, the backlog at the end of January is up $47 million, or 6.8% since December 31, with gains across all sectors and all segments. Also, January sales have improved by about 1% over December. And finally, January's new order intake is up over 30% compared to December, a significant improvement. In 2024, we will also target the following key metrics: average adjusted gross margins of 21% or better; average adjusted EBITDA margins of 7%; average SG&A cost as a percent of revenue below 15%. And for cash flow from operations, we expect to exceed the cash we generated in 2023, targeting to hit $200 million in operational cash generation. Capital expenditures are expected to be elevated this year due to our ERP initiative. We estimate total capital spend in the $40 million to $45 million range in 2024, higher than our normal run rate of approximately $15 million.

And finally, we expect our effective tax rate in 2024 to be in the range of 26% to 28%. And with that, I would like to turn it back to Rob for closing comments.

Rob Saltiel: Thanks, Kelly. It bears repeating that our company is in a very strong position. And despite the pullback in activity in the second half of 2023, we achieved key milestones in profit margins, working capital efficiency and balance sheet strength, setting us up for future success. As we continue to execute our strategy and generate consistently strong levels of free cash flow, we will have ample financial flexibility to deliver shareholder value through an opportunistic shareholder returns focused capital allocation strategy. These are the highlights I want to summarize before opening for Q&A. We are targeting $200 million of cash from operations in 2024. With the working capital efficiencies we have achieved, we are well-positioned to consistently generate cash regardless of the business cycle, which is a transformational change.

We expect average adjusted gross profit to remain in the 21% range in 2024 and are targeting average EBITDA margins of 7% for the full-year. We intended to pay off our Term Loan B on or before its maturity date in September of 2024 without requiring any additional financing. We expect to exit 2024 with a minimal net debt position and be in a positive net cash position in 2025. And lastly, before we open the call for Q&A, similar to last quarter, I want to acknowledge the rumors and speculation about one of our shareholders. As I'm sure you can appreciate, we don't discuss the specifics of our interaction with any of our existing or potential shareholders and we won't be able to comment. As such, we kindly ask that you keep your questions in the Q&A session focused on our results.

And with that, we will now take your questions. Operator?

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