- $114.3 million in cash
- $476.6 million in sales, a 15.5 percent year-over-year increase
- GAAP diluted EPS of $1.25
- $52.5 million in earnings before interest, taxes, depreciation & amortization and other non-cash charges ("Adjusted EBITDA")
- Completed the acquisition of Arroyo Process Equipment
DXP Enterprises, Inc. ("DXP" or the "Company") (NASDAQ: DXPE) today announced financial results for the first quarter ended March 31, 2025. The following are results for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and December 31, 2024, where appropriate. A reconciliation of the non-GAAP financial measures can be found in the back of this press release.
First Quarter 2025 Financial Highlights:
- Sales increased 15.5 percent to $476.6 million compared to $412.6 million for the first quarter of 2024 .
- Net income for the first quarter was $20.6 million, compared to $11.3 million for the first quarter of 2024 and $21.4 million for the fourth quarter of 2024.
- Earnings per diluted share for the first quarter was $1.25 based upon 16.5 million diluted shares, compared to $0.67 earnings per diluted share in the first quarter of 2024, based on 17.0 million diluted shares. Adjusted diluted earnings per share was $1.26 for the first quarter compared to $0.70 in the first quarter of 2024.
- Adjusted EBITDA for the first quarter was $52.5 million compared to $40.3 million for the first quarter of 2024 and $50.3 million for the fourth quarter of 2024. Adjusted EBITDA as a percentage of sales, or Adjusted EBITDA margin, was 11.0 percent, 9.8 percent, and 10.7 percent, respectively.
Business segment financial highlights:
- Service Centers’ revenue for the first quarter was $327.1 million, an increase of 13.4 percent year-over-year, with a 14.4 percent operating income margin.
- Innovative Pumping Solutions’ revenue for the first quarter was $86.2 million, an increase of 38.5 percent year-over-year, with a 15.6 percent operating income margin.
- Supply Chain Services’ revenue for the first quarter was $63.3 million, an increase of 2.1 percent year-over-year, with a 8.8 percent operating income margin.
David R. Little, Chairman and Chief Executive Officer commented, "First quarter results reflect the resilience and durability of DXP’s business. We are pleased with our sequential sales growth and strength in our gross profit margins. This resulted in operating leverage that produced earnings per share of $1.25. DXP’s first quarter 2025 sales were $476.6 million, or a 15.5 percent increase over the first quarter of 2024. Organic sales for the quarter, increased 11.1 percent and acquisitions added $31.1 million in sales. Adjusted EBITDA grew $12.2 million, or 30.2 percent over the first quarter of 2024. During the first quarter of 2025, sales were $327.1 million for Service Centers, $63.3 million for Supply Chain Services, and $86.2 million for Innovative Pumping Solutions. Overall, we are very pleased with our performance and the progress DXP continues to make as a growth company. We are optimistic that we can show continued sales and profit improvement during the remainder of 2025."
Kent Yee, Chief Financial Officer and Senior Vice President, remarked, "Our first quarter year-over-year increase of 15.5 percent was great to see. We continue to see bright spots in the market, and we currently anticipate the second half of the year to drive growth as we benefit from increases in our project backlog and the diversification of our end markets. DXP ended the quarter with $114.3 million in cash on the balance sheet. Specifically, this quarter reflects continued execution of our strategic goals and the confidence we have in our balanced mix of business, tremendous teams, and a strong balance sheet to support our key initiatives. Total debt outstanding as of March 31, 2025, was $647.3 million. DXP’s secured leverage ratio or net debt to EBITDA ratio was 2.50:1.0 with a covenant EBITDA of $212.8 million for the last twelve months ending March 31, 2025."
Conference Call Information
DXP Enterprises, Inc. management will host a conference call, May 8, 2025, at 10:30 a.m. Central Time, to discuss the Company’s financial results. The conference call may be accessed by going to https://ir.dxpe.com.
Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at https://ir.dxpe.com. The online replay will be available on the same website immediately following the call. A slide presentation highlighting the Company’s results and key performance indicators will also be available on the Investor Relations section of the Company’s website.
To learn more about DXP Enterprises, Inc., please visit the Company's website at https://www.dxpe.com
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout North America and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.
Non-GAAP Financial Measures
DXP supplements reporting of net income with certain non-GAAP measurements, including EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, and Free Cash Flow. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Free Cash Flow and net debt referred to in this press release are included below under "Unaudited Reconciliation of Non-GAAP Financial Information".
The Company believes EBITDA provides additional information about: (i) operating performance, because it assists in comparing the operating performance of the business, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from core operations such as interest expense and income taxes and (ii) the performance and the effectiveness of operational strategies. Additionally, EBITDA performance is a component of a measure of the Company’s financial covenants under its credit facilities. Furthermore, some investors use EBITDA as a supplemental measure to evaluate the overall operating performance of companies in the industry. Management believes that some investors’ understanding of performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing ongoing results of operations. By providing this non-GAAP financial measure, together with a reconciliation to its most directly comparable GAAP financial measure, the Company believes it is enhancing investors’ understanding of the business and results of operations, as well as assisting investors in evaluating how well the Company is executing strategic initiatives. Free Cash Flow reconciles to the most directly comparable GAAP financial measure of cash flows from operations as provided below. We believe Free Cash Flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to fund acquisitions, make investments, repay debt obligations, repurchase shares of the Company's common stock, and for certain other activities.
Information Related to Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. These forward-looking statements include, without limitation, those about the Company’s expectations regarding the Company's expectations regarding the filing of the Form 10-Q; the description of the anticipated changes in the Company's consolidated balance sheet and the results of operations and the Company's assessment of the impact of such anticipated changes; the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to: the effectiveness of management’s strategies and decisions; our ability to implement our internal growth and acquisition growth strategies; general economic and business conditions specific to our primary customers; changes in government regulations; our ability to effectively integrate businesses we may acquire; new or modified statutory or regulatory requirements; availability of materials and labor; inability to obtain or delay in obtaining government or third-party approvals and permits; non-performance by third parties of their contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto; cyber-attacks adversely affecting our operations; other geological, operating and economic considerations and declining prices and market conditions, including supply or demand for maintenance, repair and operating products, equipment and service; inability of the Company or its independent auditors to complete the work necessary in order to file the Form 10-Q in the expected time frame; unanticipated changes to the Company's operating results in the Form 10-Q as filed or in relation to prior periods, including as compared to the anticipated changes stated here; unanticipated impact of such changes and its materiality; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, ability to manage changes and the continued health or availability of management personnel and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
|
DXP ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ thousands, except share amounts)
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2025
|
|
|
|
2024
|
|
|
|
|
|
|
|
Sales
|
$
|
476,569
|
|
|
$
|
412,635
|
|
|
Cost of sales
|
|
326,304
|
|
|
|
288,753
|
|
|
Gross profit
|
|
150,265
|
|
|
|
123,882
|
|
|
Selling, general and administrative expenses
|
|
109,750
|
|
|
|
94,751
|
|
|
Income from operations
|
|
40,515
|
|
|
|
29,131
|
|
|
Interest expense
|
|
14,660
|
|
|
|
15,544
|
|
|
Other income, net
|
|
(1,318
|
)
|
|
|
(1,968
|
)
|
|
Income before income taxes
|
|
27,173
|
|
|
|
15,555
|
|
|
Provision for income taxes
|
|
6,584
|
|
|
|
4,223
|
|
|
Net income
|
|
20,589
|
|
|
|
11,332
|
|
|
Preferred stock dividend
|
|
23
|
|
|
|
23
|
|
|
Net income attributable to common shareholders
|
$
|
20,566
|
|
|
$
|
11,309
|
|
|
|
|
|
|
|
Net income
|
$
|
20,589
|
|
|
$
|
11,332
|
|
|
Foreign currency translation adjustments
|
|
86
|
|
|
|
(614
|
)
|
|
Comprehensive income
|
$
|
20,675
|
|
|
$
|
10,718
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
Basic
|
$
|
1.31
|
|
|
$
|
0.70
|
|
|
Diluted
|
$
|
1.25
|
|
|
$
|
0.67
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
Basic
|
|
15,698
|
|
|
|
16,128
|
|
|
Diluted
|
|
16,538
|
|
|
|
16,968
|
|
|
DXP ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ thousands, except share amounts)
|
|
|
|
|
|
|
March 31, 2025
|
|
December 31, 2024
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash
|
$
|
114,283
|
|
|
$
|
148,320
|
|
|
Restricted cash
|
|
—
|
|
|
|
91
|
|
|
Accounts receivable, net of allowance of $3,537 and $5,172, respectively
|
|
357,764
|
|
|
|
339,365
|
|
|
Inventories
|
|
109,876
|
|
|
|
103,113
|
|
|
Costs and estimated profits in excess of billings
|
|
47,844
|
|
|
|
50,735
|
|
|
Prepaid expenses and other current assets
|
|
31,989
|
|
|
|
20,250
|
|
|
Total current assets
|
|
661,756
|
|
|
|
661,874
|
|
|
Property and equipment, net
|
|
97,658
|
|
|
|
81,556
|
|
|
Goodwill
|
|
459,963
|
|
|
|
452,343
|
|
|
Other intangible assets, net
|
|
83,608
|
|
|
|
85,679
|
|
|
Operating lease right of use assets, net
|
|
59,597
|
|
|
|
46,569
|
|
|
Other long-term assets
|
|
19,930
|
|
|
|
21,473
|
|
|
Total assets
|
$
|
1,382,512
|
|
|
$
|
1,349,494
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Current maturities of debt
|
$
|
6,595
|
|
|
$
|
6,595
|
|
|
Trade accounts payable
|
|
114,301
|
|
|
|
103,728
|
|
|
Accrued wages and benefits
|
|
39,334
|
|
|
|
41,650
|
|
|
Customer advances
|
|
13,477
|
|
|
|
13,655
|
|
|
Billings in excess of costs and estimated profits
|
|
19,779
|
|
|
|
12,662
|
|
|
Short-term operating lease liabilities
|
|
16,608
|
|
|
|
14,921
|
|
|
Other current liabilities
|
|
35,323
|
|
|
|
50,773
|
|
|
Total current liabilities
|
|
245,417
|
|
|
|
243,984
|
|
|
Long-term debt, net of unamortized debt issuance costs and discounts
|
|
620,901
|
|
|
|
621,684
|
|
|
Long-term operating lease liabilities
|
|
44,583
|
|
|
|
33,159
|
|
|
Other long-term liabilities
|
|
26,952
|
|
|
|
27,879
|
|
|
Total long-term liabilities
|
|
692,436
|
|
|
|
682,722
|
|
|
Total liabilities
|
|
937,853
|
|
|
|
926,706
|
|
|
Commitments and Contingencies
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized
|
|
1
|
|
|
|
1
|
|
|
Series B preferred stock, $1.00 par value; 1,000,000 shares authorized
|
|
15
|
|
|
|
15
|
|
|
Common stock, $0.01 par value, 100,000,000 shares authorized; 20,402,063 issued and 15,694,290 outstanding at March 31, 2025 and 20,402,861 issued and 15,695,088 outstanding at December 31, 2024
|
|
204
|
|
|
|
204
|
|
|
Additional paid-in capital
|
|
220,702
|
|
|
|
219,511
|
|
|
Retained earnings
|
|
410,236
|
|
|
|
389,670
|
|
|
Accumulated other comprehensive loss
|
|
(33,524
|
)
|
|
|
(33,610
|
)
|
|
Treasury stock, at cost 4,707,773 and 4,707,773 shares, respectively
|
|
(152,975
|
)
|
|
|
(153,003
|
)
|
|
Total DXP Enterprises, Inc. equity
|
|
444,659
|
|
|
|
422,788
|
|
|
Total liabilities and equity
|
$
|
1,382,512
|
|
|
$
|
1,349,494
|
|
|
SEGMENT DATA
($ thousands, unaudited)
|
|
|
|
|
Three Months Ended March 31,
|
|
Sales
|
|
2025
|
|
|
2024
|
|
Service Centers
|
$
|
327,075
|
|
$
|
288,435
|
|
Innovative Pumping Solutions
|
|
86,182
|
|
|
62,216
|
|
Supply Chain Services
|
|
63,312
|
|
|
61,984
|
|
Total Sales
|
$
|
476,569
|
|
$
|
412,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Operating Income
|
|
2025
|
|
|
2024
|
|
Service Centers
|
$
|
47,045
|
|
$
|
40,320
|
|
Innovative Pumping Solutions
|
|
13,406
|
|
|
6,970
|
|
Supply Chain Services
|
|
5,564
|
|
|
5,262
|
|
Total Segments Operating Income
|
$
|
66,015
|
|
$
|
52,552
|
|
RECONCILIATION OF OPERATING INCOME FOR REPORTABLE SEGMENTS
($ thousands, unaudited)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2025
|
|
|
|
2024
|
|
|
Income from operations for reportable segments
|
$
|
66,015
|
|
|
$
|
52,552
|
|
|
Adjustment for:
|
|
|
|
|
Amortization of intangibles
|
|
5,355
|
|
|
|
4,369
|
|
|
Corporate expenses
|
|
20,145
|
|
|
|
19,052
|
|
|
Income from operations
|
$
|
40,515
|
|
|
$
|
29,131
|
|
|
Interest expense
|
|
14,660
|
|
|
|
15,544
|
|
|
Other income, net
|
|
(1,318
|
)
|
|
|
(1,968
|
)
|
|
Income before income taxes
|
$
|
27,173
|
|
|
$
|
15,555
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
($ thousands, unaudited)
We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization minus stock-based compensation expense and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.
We define and calculate EBITDA Margin as EBITDA divided by sales. We define and calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by sales.
The following table sets forth the reconciliation of EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable U.S. GAAP financial measure (in thousands):
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2025
|
|
|
|
2024
|
|
|
Income before income taxes
|
$
|
27,173
|
|
|
$
|
15,555
|
|
|
Plus: Interest expense
|
|
14,660
|
|
|
|
15,544
|
|
|
Plus: Depreciation and amortization
|
|
9,134
|
|
|
|
7,538
|
|
|
EBITDA
|
$
|
50,967
|
|
|
$
|
38,637
|
|
|
Plus: other non-recurring items(1)
|
|
235
|
|
|
|
842
|
|
|
Plus: stock compensation expense
|
|
1,317
|
|
|
|
864
|
|
|
Adjusted EBITDA
|
$
|
52,519
|
|
|
$
|
40,343
|
|
|
|
|
|
|
|
Operating Income Margin
|
|
8.5
|
%
|
|
|
7.1
|
%
|
|
EBITDA Margin
|
|
10.7
|
%
|
|
|
9.4
|
%
|
|
Adjusted EBITDA Margin
|
|
11.0
|
%
|
|
|
9.8
|
%
|
|
(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs not related to continuing business operations.
|
|
|
We define and calculate organic sales to include locations and acquisitions under our ownership for at least twelve months. "Acquisition Sales" are sales from acquisitions that have been under our ownership for less than twelve months and are excluded in our calculation of Organic Sales.
|
|
The following table sets forth the reconciliation of Acquisition Sales, Organic Sales and Organic Sales per Business Day to the most comparable U.S. GAAP financial measure (in thousands):
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2025
|
|
|
2024
|
|
Sales by Business Segment
|
|
|
|
|
Service Centers
|
$
|
327,075
|
|
$
|
288,435
|
|
Innovative Pumping Solutions
|
|
86,182
|
|
|
62,216
|
|
Supply Chain Services
|
|
63,312
|
|
|
61,984
|
|
Total DXP Sales
|
$
|
476,569
|
|
$
|
412,635
|
|
Acquisition Sales
|
$
|
31,112
|
|
$
|
11,775
|
|
Organic Sales
|
$
|
445,457
|
|
$
|
400,860
|
|
|
|
|
|
|
Business Days
|
|
63
|
|
|
63
|
|
Sales per Business Day
|
$
|
7,565
|
|
$
|
6,550
|
|
Organic Sales per Business Day
|
$
|
7,071
|
|
$
|
6,363
|
|
|
|
|
|
|
|
We define and calculate free cash flow as net cash (used in) provided by operating activities less purchases of property and equipment.
|
|
The following table sets forth the reconciliation of Free Cash Flow to the most comparable GAAP financial measure (in thousands):
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2025
|
|
|
|
2024
|
|
|
Net cash from operating activities
|
$
|
2,973
|
|
|
$
|
26,989
|
|
|
Less: purchases of property and equipment
|
|
(19,914
|
)
|
|
|
(2,894
|
)
|
|
Free Cash Flow
|
$
|
(16,941
|
)
|
|
$
|
24,095
|
|
|
|
|
|
|
|
|
|
|
We define and calculate adjusted net income as Net income plus non-recurring items less adjustment for taxes.
|
|
The following table is a reconciliation of adjusted net income attributable to DXP Enterprises, Inc., a non-GAAP financial measure, to net income, calculated and reported in accordance with U.S. GAAP (in thousands).
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2025
|
|
|
|
2024
|
|
|
Net Income
|
$
|
20,589
|
|
|
$
|
11,332
|
|
|
Other non-recurring items
|
|
235
|
|
|
|
842
|
|
|
Adjustment for taxes
|
|
(57
|
)
|
|
|
(256
|
)
|
|
Adjusted Net Income
|
$
|
20,767
|
|
|
$
|
11,918
|
|
|
|
|
|
|
|
Weighted average common shares and common equivalent shares outstanding
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|
|
|
|
Diluted
|
|
16,538
|
|
|
|
16,968
|
|
|
|
|
|
|
|
Diluted Earnings per Share
|
$
|
1.25
|
|
|
$
|
0.67
|
|
|
Adjusted Diluted Earnings per Share
|
$
|
1.26
|
|
|
$
|
0.70
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250507799913/en/