Latest news with #Cherechinsky
Chicago Tribune
5 days ago
- Business
- Chicago Tribune
Officials: Portage IT changes are saving the city a bundle
Former Valparaiso Community Schools IT director Bill Moran is working with Portage's new one-person information technology department to arrange 'a tremendous amount of cuts and potential savings' for the city, Mayor Austin Bonta said. 'Everything that we're cutting or reducing here is something that we either no longer use or that we can get better or cheaper,' Portage IT director Trevor Cherechinsky said at Tuesday's City Council meeting. That will reduce spending this year, but next year it will make a bigger difference, Bonta said. Moran, who moved to Portage and asked how he could help his new city, is offering his services as a consultant. 'For all intents and purposes, this is our first IT budget,' he said, but he did many of them for the Valparaiso school district. Frontier 'has very little that we can use,' he said. Frontier uses 'antiquated copper wire that in many places is 60 to 80 years old,' he said. It's the same copper wire that dates back to Frontier predecessor Verizon and before that, General Telephone. 'We took a very deep dive into these services that we were looking at to make sure they were no longer being used,' Moran said. 'We wanted to make absolutely sure that the services we were going to cut were no longer being used or would not cause a deficit for that department.' That's especially true for emergency services. 'We made absolutely sure that was not the case,' Moran said. Reviewing the phone system took quite a bit of work. 'Frontier invoices are very confusing. It's like reading the DaVinci Code,' Moran said. The city is using voice over internet protocol instead of landlines, greatly reducing costs. 'I think we're looking at an annual cost of about $87,000 a year that we can reduce the IT budget by,' Moran said. Two months ago, the phone bill was about $3,000 a month but jumped to $7,000, so this was a good time to address it, Cherechinsky said. Going through all this took about a month and a half, he said. The city is working with Portage Township Schools on IT issues. The district pays about $700 a month for its phones compared to $4,500 for the city, and the schools have roughly four times as many phones as the city's 250, Cherechinsky said. Working with the school system as the city's IT provider will help costs drop dramatically, he said. Cybersecurity insurance premiums have dropped, too, because the city is no longer using a private company for its IT provider. That was a barrier to quite a few discounts through Microsoft and state government. Using a state grant, the city got antivirus software for free as well as training for employees on phishing scams. Portage has been safe from ransom attacks and cyberattacks so far, but municipalities and schools can be 'literally crippled' because someone clicked on a link and inadvertently allowed a hacker access to the system, Moran said. 'We're not in a safe world anymore.' Some employees might have been shamed during the training, but it's important to protect the city, he said. For the fire department, the city plans to buy more durable, more reliable tablets with a three-year warranty for $3,000 apiece, Cherechinsky said. The city will also switch from .com to .gov email addresses next year, he said. The IT department is also creating 'acceptable use' policies and determining how often devices should be replaced to keep everything current and functioning smoothly. In other business, the council raised fees for building permits and related work. It's been at least 10 years since the council last raised fees for the Planning and Community Development Department. The city is trying to get caught up on collecting the actual costs incurred by the city, Bonta said. In putting together the new fee structure, the city compared Portage's existing fees with municipalities in Porter and Lake counties and studied the department's actual costs. A permit for new construction will cost $600 plus 28 cents per square foot. A permit for a new industrial building will cost $800 plus 32 cents per square foot. The schedule of fees stretches across two pages. The council also tabled action again, this time indefinitely, a proposed fireworks ordinance that would aim to require safe disposal of used fireworks. Fine-tuning of the proposal, which began a few months ago, still isn't complete.
Yahoo
11-06-2025
- Business
- Yahoo
DNOW Q1 Earnings Call: Margin Resilience and Market Diversification Amid Tariff Uncertainty
Energy and industrial distributor DistributionNOW (NYSE:DNOW) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 6.4% year on year to $599 million. Its non-GAAP profit of $0.22 per share was 26.9% above analysts' consensus estimates. Is now the time to buy DNOW? Find out in our full research report (it's free). Revenue: $599 million vs analyst estimates of $587.8 million (6.4% year-on-year growth, 1.9% beat) Adjusted EPS: $0.22 vs analyst estimates of $0.17 (26.9% beat) Adjusted EBITDA: $46 million vs analyst estimates of $40.4 million (7.7% margin, 13.9% beat) Operating Margin: 5%, in line with the same quarter last year Market Capitalization: $1.57 billion DistributionNOW's first quarter results were shaped by steady demand in U.S. midstream infrastructure and continued momentum in the company's Process Solutions segment, despite a largely unchanged U.S. rig count and lower completions activity. Management pointed to resilient gross margins and a diversified market mix as core reasons for outperforming expectations. CEO David Cherechinsky highlighted that the quarter delivered the second-best first quarter EBITDA in company history, noting, 'This is notable given the misunderstood perception that the upstream sector alone drives opportunities for DNOW.' The company's recent acquisition in Singapore further contributed to expansion in the Asia Pacific region and strengthened its MacLean International brand, underscoring the importance of international diversification. Cherechinsky also emphasized the effectiveness of DNOW's supply chain repositioning in response to previous tariff rounds and supply disruptions, which allowed the company to maintain operational flexibility. Looking ahead, DistributionNOW's outlook hinges on its ability to manage tariff-driven cost pressures, capitalize on U.S. midstream opportunities, and further penetrate adjacent industrial markets. Management reaffirmed full-year revenue guidance with expectations of flat to high-single-digit growth, supported by continued investment in digital initiatives and targeted M&A. Cherechinsky acknowledged ongoing macro uncertainty, driven by evolving tariffs and fluctuating oil prices, stating, 'The dynamics of this environment remain volatile, leading to fluctuations in market sentiment.' The company's strategy includes passing on supplier cost increases, optimizing pricing structures, and leveraging its purchasing power to buffer against inflation and supply chain volatility. While risks remain from potential declines in U.S. rig activity, DNOW anticipates that midstream demand and its inventory planning will help offset upstream headwinds and support earnings stability. Management attributed first quarter performance to execution in U.S. midstream and Process Solutions, strategic inventory planning, and swift adaptation to tariff and supply chain changes. Midstream and Process Solutions momentum: Increased activity in U.S. midstream infrastructure and a full-quarter contribution from the Trojan acquisition boosted growth, with Process Solutions delivering its highest-ever quarterly revenue contribution. Strategic inventory build: The company intentionally increased inventory in anticipation of tariff-related supply disruptions, positioning itself to maintain product availability and optimize procurement costs as tariff impacts unfold. International expansion with acquisition: The acquisition of a Singapore-based distributor expanded DistributionNOW's MacLean International offering in Asia Pacific, targeting diversified end markets such as marine, petrochemical, and data centers. Digital transformation progress: DigitalNOW initiatives drove efficiencies, with digital revenue reaching a record 53% of SAP-related sales. Management highlighted the rollout of AI-powered process automation, including certificate indexing and system integration. Tariff and inflation management: The company's supply chain adjustments reduced dependence on China, with most products sourced domestically or from alternative international suppliers. Management expects to pass on cost increases and adjust pricing to protect margins as new tariffs take effect. DistributionNOW's forward guidance is shaped by tariff-driven pricing, midstream growth, and ongoing diversification into adjacent markets. Tariffs and pricing strategy: Management expects recently announced tariffs and supplier cost inflation to drive higher input costs, but plans to pass these through to customers via pricing adjustments. The company anticipates that its inventory position and sourcing flexibility will help maintain gross margin levels. U.S. midstream and Process Solutions growth: Demand in U.S. midstream, including infrastructure expansions and gathering asset investments, is projected to remain strong. Process Solutions, strengthened by recent acquisitions, is expected to capture additional revenue from industrial and energy transition markets, such as water, wastewater, and data centers. M&A and market adjacencies: DistributionNOW intends to pursue further acquisitions, particularly in U.S. Process Solutions, and seeks to grow in adjacent sectors like mining, chemicals, and renewable energy. Management noted that diversification efforts are designed to reduce reliance on upstream drilling and completion activity, mitigating downside risk from potential rig count declines. Looking forward, the StockStory team will monitor (1) how effectively DistributionNOW passes on tariff-related cost increases to customers and preserves gross margins, (2) continued expansion and integration of recent acquisitions in international and Process Solutions markets, and (3) the pace of digital adoption and AI-driven process improvements. Progress in adjacent market penetration and the impact of rig count trends will also be watched closely. DistributionNOW currently trades at a forward EV-to-EBITDA ratio of 10.3×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. 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