Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries DXP Enterprises, Inc. Reports Second Quarter 2023 Results By: DXP Enterprises, Inc. via Business Wire August 08, 2023 at 17:42 PM EDT $15.5 million in cash $428.0 million in sales, a 16.4 percent year-over-year increase Net income attributable to common shareholders of $19.0 million versus $14.4 million compared to Q2 2022 GAAP diluted EPS of $1.06 $45.3 million in earnings before interest, taxes, depreciation & amortization and other non-cash charges ("Adjusted EBITDA") Completed the acquisitions of Riordan Materials Corporation and Florida Valve & Equipment Corp. and Environmental MD DXP Enterprises, Inc. (NASDAQ: DXPE) today announced financial results for the second quarter ended June 30, 2023. The following are results for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. A reconciliation of the non-GAAP financial measures can be found in the back of this press release. Second Quarter 2023 financial highlights: Sales increased 16.4 percent to $428.0 million, compared to $367.8 million for the second quarter of 2022 and 0.9 percent compared to the first quarter of 2023. Earnings per diluted share for the second quarter were $1.06 based upon 18.1 million diluted shares, compared to earnings of $0.74 per share in the second quarter of June 30, 2022, based on 19.6 million diluted shares. Net income for the second quarter was $19.1 million, compared to $14.4 million for the corresponding prior-year period. Adjusted EBITDA for the second quarter of 2023 was $45.3 million compared to $32.6 million for the second quarter of 2022. Adjusted EBITDA as a percentage of sales was 10.6 percent and 8.9 percent, respectively. David R. Little, Chairman and CEO commented, "Second 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 $1.06. We continue to experience broad-based demand across our key regions, products, and end markets. DXP’s second quarter 2023 sales were $428.0 million, or a 16.4 percent increase over the second quarter of 2022. Organic sales for the quarter, increased 20.2 percent and acquisitions added $7.3 million in sales. Adjusted EBITDA grew $12.7 million, or 38.9 percent over the second quarter of 2022. During the second quarter of 2023, sales were $298.4 million for Service Center, $66.2 million for Supply Chain Services, and $63.4 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 second half of 2023." Kent Yee, CFO remarked, "This is DXP’s eleventh consecutive quarter of sequential sales increases. We closed two acquisitions and look forward to closing more during the second half of 2023. Our second quarter sales and adjusted EBITDA continues to set new high watermarks. 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 June 30, 2023, was $425.9 million. DXP’s secured leverage ratio or net debt to EBITDA ratio was 2.53:1.0 with a covenant EBITDA of $161.9 million for the last twelve months ending June 30, 2023." Non-GAAP Financial Measures DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, Adjusted EBITDA, free cash flow, non-GAAP net income and net debt. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA, Adjusted EBITDA, free cash flow and non-GAAP net income 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 from net income, 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 company shares, and for certain other activities. 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 the United States, Canada 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. 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 impact of low commodity prices of oil and gas; 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; decreases in oil and natural gas prices; decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; 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. For more information, review the Company’s filings with the Securities and Exchange Commission. 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 SEC, 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 for share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Sales $ 428,040 $ 367,812 $ 852,307 $ 687,223 Cost of sales 296,188 263,550 595,414 488,076 Gross profit 131,852 104,262 256,893 199,147 Selling, general and administrative expenses 94,372 78,342 184,014 151,667 Income from operations 37,480 25,920 72,879 47,480 Other (income) expense, net (242 ) 839 (712 ) 1,377 Interest expense 11,863 5,615 23,384 10,777 Income before income taxes 25,859 19,466 50,207 35,326 Provision for income taxes 6,805 4,973 13,573 8,305 Net income 19,054 14,493 36,634 27,021 Net income (loss) attributable to NCI* — 60 — (53 ) Net income attributable to DXP Enterprises, Inc. 19,054 14,433 36,634 27,074 Preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 19,032 $ 14,411 $ 36,589 $ 27,029 Diluted earnings per share attributable to DXP Enterprises, Inc. $ 1.06 $ 0.74 $ 2.01 $ 1.39 Weighted average common shares and common equivalent shares outstanding 18,051 19,606 18,242 19,491 *NCI represents non-controlling interest Business segment financial highlights: Service Centers’ revenue for the second quarter was $298.4 million, a 1.1 percent sequential increase and an increase of 18.9 percent year-over-year with a 14.8 percent operating income margin. Innovative Pumping Solutions’ revenue for the second quarter was $63.4 million, a sequential increase of 2.3 percent and an increase of 9.8 percent year-over-year with a 16.0 percent operating income margin. Supply Chain Services’ revenue for the second quarter was $66.2 million, a 1.3 percent sequential decrease and an increase of 12.3 percent year-over-year with a 8.2 percent operating income margin. SEGMENT DATA ($ thousands, unaudited) Three Months Ended June 30, Six Months Ended June 30, Sales 2023 2022 2023 2022 Service Centers $ 298,432 $ 251,098 $ 593,658 $ 469,894 Innovative Pumping Solutions 63,441 57,788 125,439 110,846 Supply Chain Services 66,167 58,926 133,210 106,483 Total Sales $ 428,040 $ 367,812 $ 852,307 $ 687,223 Three Months Ended June 30, Six Months Ended June 30, Operating Income 2023 2022 2023 2022 Service Centers $ 44,129 $ 32,368 $ 88,834 $ 59,719 Innovative Pumping Solutions 10,178 8,726 20,483 15,795 Supply Chain Services 5,416 4,958 10,929 8,978 Total Segments operating income $ 59,723 $ 46,052 $ 120,246 $ 84,492 Reconciliation of Operating Income for Reportable Segments ($ thousands, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from operations for reportable segments $ 59,723 $ 46,052 $ 120,246 $ 84,492 Adjustment for: Amortization of intangibles 4,582 4,591 9,340 8,826 Corporate expenses 17,661 15,541 38,027 28,186 Income from operations $ 37,480 $ 25,920 $ 72,879 $ 47,480 Interest expense 11,863 5,615 23,384 10,777 Other (income) expense, net (242 ) 839 (712 ) 1,377 Income before income taxes $ 25,859 $ 19,466 $ 50,207 $ 35,326 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands) The following table is a reconciliation of EBITDA and Adjusted EBITDA, non-GAAP financial measures, to income before taxes, calculated and reported in accordance with U.S. GAAP. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income before income taxes $ 25,859 $ 19,466 $ 50,207 $ 35,326 Plus: interest expense 11,863 5,615 23,384 10,777 Plus: depreciation and amortization 6,703 7,080 13,485 13,832 EBITDA $ 44,425 $ 32,161 $ 87,076 $ 59,935 Plus: NCI income (loss) before tax* $ — $ (45 ) $ — $ 68 Plus: stock compensation expense 871 493 1,347 863 Adjusted EBITDA $ 45,296 $ 32,609 $ 88,423 $ 60,866 * NCI represents non-controlling interest DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ($ thousands) June 30, 2023 December 31, 2022 ASSETS Current assets: Cash $ 15,533 $ 46,026 Restricted cash 91 91 Accounts receivable, net of allowances for doubtful accounts 318,651 320,880 Inventories 104,950 101,392 Costs and estimated profits in excess of billings 46,770 23,588 Prepaid expenses and other current assets 15,274 21,644 Income taxes receivable 7,698 2,493 Total current assets $ 508,967 $ 516,114 Property and equipment, net 47,538 45,964 Goodwill 342,273 333,759 Other intangible assets, net of accumulated amortization 72,466 79,585 Operating lease right-of-use assets, net 54,051 57,402 Other long-term assets 9,138 4,456 Total assets $ 1,034,433 $ 1,037,280 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt $ 4,369 $ 4,369 Trade accounts payable 93,978 100,784 Accrued wages and benefits 28,563 26,260 Customer advances 15,555 20,128 Billings in excess of costs and estimated profits 5,333 10,411 Current-portion operating lease liabilities 17,324 18,083 Other current liabilities 42,843 32,866 Total current liabilities $ 207,965 $ 212,901 Long-term debt, less unamortized debt issuance costs 408,430 409,205 Long-term operating lease liabilities 37,650 40,189 Other long-term liabilities 8,718 4,701 Deferred income taxes 2,205 4,892 Total long-term liabilities $ 457,003 $ 458,987 Total Liabilities $ 664,968 $ 671,888 Equity: Total DXP Enterprises, Inc. equity 369,465 365,392 Total liabilities and equity $ 1,034,433 $ 1,037,280 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands) The following table is a reconciliation of free cash flow, a non-GAAP financial measure, to cash flow from operating activities, calculated and reported in accordance with U.S. GAAP. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net cash from operating activities $ (2,430 ) $ 5,686 $ 24,017 $ 5,686 Less: purchases of property and equipment (1,813 ) (1,848 ) (5,617 ) (1,848 ) Free cash flow $ (4,243 ) $ 3,838 $ 18,400 $ 3,838 Note: Supplemental non-cash items include share repurchases which have been excluded. View source version on businesswire.com: https://www.businesswire.com/news/home/20230808582583/en/Contacts Kent Yee 713-996-4700 Senior Vice President, CFO www.dxpe.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
DXP Enterprises, Inc. Reports Second Quarter 2023 Results By: DXP Enterprises, Inc. via Business Wire August 08, 2023 at 17:42 PM EDT $15.5 million in cash $428.0 million in sales, a 16.4 percent year-over-year increase Net income attributable to common shareholders of $19.0 million versus $14.4 million compared to Q2 2022 GAAP diluted EPS of $1.06 $45.3 million in earnings before interest, taxes, depreciation & amortization and other non-cash charges ("Adjusted EBITDA") Completed the acquisitions of Riordan Materials Corporation and Florida Valve & Equipment Corp. and Environmental MD DXP Enterprises, Inc. (NASDAQ: DXPE) today announced financial results for the second quarter ended June 30, 2023. The following are results for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. A reconciliation of the non-GAAP financial measures can be found in the back of this press release. Second Quarter 2023 financial highlights: Sales increased 16.4 percent to $428.0 million, compared to $367.8 million for the second quarter of 2022 and 0.9 percent compared to the first quarter of 2023. Earnings per diluted share for the second quarter were $1.06 based upon 18.1 million diluted shares, compared to earnings of $0.74 per share in the second quarter of June 30, 2022, based on 19.6 million diluted shares. Net income for the second quarter was $19.1 million, compared to $14.4 million for the corresponding prior-year period. Adjusted EBITDA for the second quarter of 2023 was $45.3 million compared to $32.6 million for the second quarter of 2022. Adjusted EBITDA as a percentage of sales was 10.6 percent and 8.9 percent, respectively. David R. Little, Chairman and CEO commented, "Second 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 $1.06. We continue to experience broad-based demand across our key regions, products, and end markets. DXP’s second quarter 2023 sales were $428.0 million, or a 16.4 percent increase over the second quarter of 2022. Organic sales for the quarter, increased 20.2 percent and acquisitions added $7.3 million in sales. Adjusted EBITDA grew $12.7 million, or 38.9 percent over the second quarter of 2022. During the second quarter of 2023, sales were $298.4 million for Service Center, $66.2 million for Supply Chain Services, and $63.4 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 second half of 2023." Kent Yee, CFO remarked, "This is DXP’s eleventh consecutive quarter of sequential sales increases. We closed two acquisitions and look forward to closing more during the second half of 2023. Our second quarter sales and adjusted EBITDA continues to set new high watermarks. 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 June 30, 2023, was $425.9 million. DXP’s secured leverage ratio or net debt to EBITDA ratio was 2.53:1.0 with a covenant EBITDA of $161.9 million for the last twelve months ending June 30, 2023." Non-GAAP Financial Measures DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, Adjusted EBITDA, free cash flow, non-GAAP net income and net debt. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA, Adjusted EBITDA, free cash flow and non-GAAP net income 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 from net income, 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 company shares, and for certain other activities. 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 the United States, Canada 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. 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 impact of low commodity prices of oil and gas; 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; decreases in oil and natural gas prices; decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; 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. For more information, review the Company’s filings with the Securities and Exchange Commission. 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 SEC, 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 for share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Sales $ 428,040 $ 367,812 $ 852,307 $ 687,223 Cost of sales 296,188 263,550 595,414 488,076 Gross profit 131,852 104,262 256,893 199,147 Selling, general and administrative expenses 94,372 78,342 184,014 151,667 Income from operations 37,480 25,920 72,879 47,480 Other (income) expense, net (242 ) 839 (712 ) 1,377 Interest expense 11,863 5,615 23,384 10,777 Income before income taxes 25,859 19,466 50,207 35,326 Provision for income taxes 6,805 4,973 13,573 8,305 Net income 19,054 14,493 36,634 27,021 Net income (loss) attributable to NCI* — 60 — (53 ) Net income attributable to DXP Enterprises, Inc. 19,054 14,433 36,634 27,074 Preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 19,032 $ 14,411 $ 36,589 $ 27,029 Diluted earnings per share attributable to DXP Enterprises, Inc. $ 1.06 $ 0.74 $ 2.01 $ 1.39 Weighted average common shares and common equivalent shares outstanding 18,051 19,606 18,242 19,491 *NCI represents non-controlling interest Business segment financial highlights: Service Centers’ revenue for the second quarter was $298.4 million, a 1.1 percent sequential increase and an increase of 18.9 percent year-over-year with a 14.8 percent operating income margin. Innovative Pumping Solutions’ revenue for the second quarter was $63.4 million, a sequential increase of 2.3 percent and an increase of 9.8 percent year-over-year with a 16.0 percent operating income margin. Supply Chain Services’ revenue for the second quarter was $66.2 million, a 1.3 percent sequential decrease and an increase of 12.3 percent year-over-year with a 8.2 percent operating income margin. SEGMENT DATA ($ thousands, unaudited) Three Months Ended June 30, Six Months Ended June 30, Sales 2023 2022 2023 2022 Service Centers $ 298,432 $ 251,098 $ 593,658 $ 469,894 Innovative Pumping Solutions 63,441 57,788 125,439 110,846 Supply Chain Services 66,167 58,926 133,210 106,483 Total Sales $ 428,040 $ 367,812 $ 852,307 $ 687,223 Three Months Ended June 30, Six Months Ended June 30, Operating Income 2023 2022 2023 2022 Service Centers $ 44,129 $ 32,368 $ 88,834 $ 59,719 Innovative Pumping Solutions 10,178 8,726 20,483 15,795 Supply Chain Services 5,416 4,958 10,929 8,978 Total Segments operating income $ 59,723 $ 46,052 $ 120,246 $ 84,492 Reconciliation of Operating Income for Reportable Segments ($ thousands, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from operations for reportable segments $ 59,723 $ 46,052 $ 120,246 $ 84,492 Adjustment for: Amortization of intangibles 4,582 4,591 9,340 8,826 Corporate expenses 17,661 15,541 38,027 28,186 Income from operations $ 37,480 $ 25,920 $ 72,879 $ 47,480 Interest expense 11,863 5,615 23,384 10,777 Other (income) expense, net (242 ) 839 (712 ) 1,377 Income before income taxes $ 25,859 $ 19,466 $ 50,207 $ 35,326 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands) The following table is a reconciliation of EBITDA and Adjusted EBITDA, non-GAAP financial measures, to income before taxes, calculated and reported in accordance with U.S. GAAP. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income before income taxes $ 25,859 $ 19,466 $ 50,207 $ 35,326 Plus: interest expense 11,863 5,615 23,384 10,777 Plus: depreciation and amortization 6,703 7,080 13,485 13,832 EBITDA $ 44,425 $ 32,161 $ 87,076 $ 59,935 Plus: NCI income (loss) before tax* $ — $ (45 ) $ — $ 68 Plus: stock compensation expense 871 493 1,347 863 Adjusted EBITDA $ 45,296 $ 32,609 $ 88,423 $ 60,866 * NCI represents non-controlling interest DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ($ thousands) June 30, 2023 December 31, 2022 ASSETS Current assets: Cash $ 15,533 $ 46,026 Restricted cash 91 91 Accounts receivable, net of allowances for doubtful accounts 318,651 320,880 Inventories 104,950 101,392 Costs and estimated profits in excess of billings 46,770 23,588 Prepaid expenses and other current assets 15,274 21,644 Income taxes receivable 7,698 2,493 Total current assets $ 508,967 $ 516,114 Property and equipment, net 47,538 45,964 Goodwill 342,273 333,759 Other intangible assets, net of accumulated amortization 72,466 79,585 Operating lease right-of-use assets, net 54,051 57,402 Other long-term assets 9,138 4,456 Total assets $ 1,034,433 $ 1,037,280 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt $ 4,369 $ 4,369 Trade accounts payable 93,978 100,784 Accrued wages and benefits 28,563 26,260 Customer advances 15,555 20,128 Billings in excess of costs and estimated profits 5,333 10,411 Current-portion operating lease liabilities 17,324 18,083 Other current liabilities 42,843 32,866 Total current liabilities $ 207,965 $ 212,901 Long-term debt, less unamortized debt issuance costs 408,430 409,205 Long-term operating lease liabilities 37,650 40,189 Other long-term liabilities 8,718 4,701 Deferred income taxes 2,205 4,892 Total long-term liabilities $ 457,003 $ 458,987 Total Liabilities $ 664,968 $ 671,888 Equity: Total DXP Enterprises, Inc. equity 369,465 365,392 Total liabilities and equity $ 1,034,433 $ 1,037,280 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands) The following table is a reconciliation of free cash flow, a non-GAAP financial measure, to cash flow from operating activities, calculated and reported in accordance with U.S. GAAP. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net cash from operating activities $ (2,430 ) $ 5,686 $ 24,017 $ 5,686 Less: purchases of property and equipment (1,813 ) (1,848 ) (5,617 ) (1,848 ) Free cash flow $ (4,243 ) $ 3,838 $ 18,400 $ 3,838 Note: Supplemental non-cash items include share repurchases which have been excluded. View source version on businesswire.com: https://www.businesswire.com/news/home/20230808582583/en/Contacts Kent Yee 713-996-4700 Senior Vice President, CFO www.dxpe.com
$15.5 million in cash $428.0 million in sales, a 16.4 percent year-over-year increase Net income attributable to common shareholders of $19.0 million versus $14.4 million compared to Q2 2022 GAAP diluted EPS of $1.06 $45.3 million in earnings before interest, taxes, depreciation & amortization and other non-cash charges ("Adjusted EBITDA") Completed the acquisitions of Riordan Materials Corporation and Florida Valve & Equipment Corp. and Environmental MD
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced financial results for the second quarter ended June 30, 2023. The following are results for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. A reconciliation of the non-GAAP financial measures can be found in the back of this press release. Second Quarter 2023 financial highlights: Sales increased 16.4 percent to $428.0 million, compared to $367.8 million for the second quarter of 2022 and 0.9 percent compared to the first quarter of 2023. Earnings per diluted share for the second quarter were $1.06 based upon 18.1 million diluted shares, compared to earnings of $0.74 per share in the second quarter of June 30, 2022, based on 19.6 million diluted shares. Net income for the second quarter was $19.1 million, compared to $14.4 million for the corresponding prior-year period. Adjusted EBITDA for the second quarter of 2023 was $45.3 million compared to $32.6 million for the second quarter of 2022. Adjusted EBITDA as a percentage of sales was 10.6 percent and 8.9 percent, respectively. David R. Little, Chairman and CEO commented, "Second 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 $1.06. We continue to experience broad-based demand across our key regions, products, and end markets. DXP’s second quarter 2023 sales were $428.0 million, or a 16.4 percent increase over the second quarter of 2022. Organic sales for the quarter, increased 20.2 percent and acquisitions added $7.3 million in sales. Adjusted EBITDA grew $12.7 million, or 38.9 percent over the second quarter of 2022. During the second quarter of 2023, sales were $298.4 million for Service Center, $66.2 million for Supply Chain Services, and $63.4 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 second half of 2023." Kent Yee, CFO remarked, "This is DXP’s eleventh consecutive quarter of sequential sales increases. We closed two acquisitions and look forward to closing more during the second half of 2023. Our second quarter sales and adjusted EBITDA continues to set new high watermarks. 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 June 30, 2023, was $425.9 million. DXP’s secured leverage ratio or net debt to EBITDA ratio was 2.53:1.0 with a covenant EBITDA of $161.9 million for the last twelve months ending June 30, 2023." Non-GAAP Financial Measures DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, Adjusted EBITDA, free cash flow, non-GAAP net income and net debt. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA, Adjusted EBITDA, free cash flow and non-GAAP net income 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 from net income, 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 company shares, and for certain other activities. 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 the United States, Canada 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. 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 impact of low commodity prices of oil and gas; 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; decreases in oil and natural gas prices; decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; 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. For more information, review the Company’s filings with the Securities and Exchange Commission. 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 SEC, 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 for share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Sales $ 428,040 $ 367,812 $ 852,307 $ 687,223 Cost of sales 296,188 263,550 595,414 488,076 Gross profit 131,852 104,262 256,893 199,147 Selling, general and administrative expenses 94,372 78,342 184,014 151,667 Income from operations 37,480 25,920 72,879 47,480 Other (income) expense, net (242 ) 839 (712 ) 1,377 Interest expense 11,863 5,615 23,384 10,777 Income before income taxes 25,859 19,466 50,207 35,326 Provision for income taxes 6,805 4,973 13,573 8,305 Net income 19,054 14,493 36,634 27,021 Net income (loss) attributable to NCI* — 60 — (53 ) Net income attributable to DXP Enterprises, Inc. 19,054 14,433 36,634 27,074 Preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 19,032 $ 14,411 $ 36,589 $ 27,029 Diluted earnings per share attributable to DXP Enterprises, Inc. $ 1.06 $ 0.74 $ 2.01 $ 1.39 Weighted average common shares and common equivalent shares outstanding 18,051 19,606 18,242 19,491 *NCI represents non-controlling interest Business segment financial highlights: Service Centers’ revenue for the second quarter was $298.4 million, a 1.1 percent sequential increase and an increase of 18.9 percent year-over-year with a 14.8 percent operating income margin. Innovative Pumping Solutions’ revenue for the second quarter was $63.4 million, a sequential increase of 2.3 percent and an increase of 9.8 percent year-over-year with a 16.0 percent operating income margin. Supply Chain Services’ revenue for the second quarter was $66.2 million, a 1.3 percent sequential decrease and an increase of 12.3 percent year-over-year with a 8.2 percent operating income margin. SEGMENT DATA ($ thousands, unaudited) Three Months Ended June 30, Six Months Ended June 30, Sales 2023 2022 2023 2022 Service Centers $ 298,432 $ 251,098 $ 593,658 $ 469,894 Innovative Pumping Solutions 63,441 57,788 125,439 110,846 Supply Chain Services 66,167 58,926 133,210 106,483 Total Sales $ 428,040 $ 367,812 $ 852,307 $ 687,223 Three Months Ended June 30, Six Months Ended June 30, Operating Income 2023 2022 2023 2022 Service Centers $ 44,129 $ 32,368 $ 88,834 $ 59,719 Innovative Pumping Solutions 10,178 8,726 20,483 15,795 Supply Chain Services 5,416 4,958 10,929 8,978 Total Segments operating income $ 59,723 $ 46,052 $ 120,246 $ 84,492 Reconciliation of Operating Income for Reportable Segments ($ thousands, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from operations for reportable segments $ 59,723 $ 46,052 $ 120,246 $ 84,492 Adjustment for: Amortization of intangibles 4,582 4,591 9,340 8,826 Corporate expenses 17,661 15,541 38,027 28,186 Income from operations $ 37,480 $ 25,920 $ 72,879 $ 47,480 Interest expense 11,863 5,615 23,384 10,777 Other (income) expense, net (242 ) 839 (712 ) 1,377 Income before income taxes $ 25,859 $ 19,466 $ 50,207 $ 35,326 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands) The following table is a reconciliation of EBITDA and Adjusted EBITDA, non-GAAP financial measures, to income before taxes, calculated and reported in accordance with U.S. GAAP. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income before income taxes $ 25,859 $ 19,466 $ 50,207 $ 35,326 Plus: interest expense 11,863 5,615 23,384 10,777 Plus: depreciation and amortization 6,703 7,080 13,485 13,832 EBITDA $ 44,425 $ 32,161 $ 87,076 $ 59,935 Plus: NCI income (loss) before tax* $ — $ (45 ) $ — $ 68 Plus: stock compensation expense 871 493 1,347 863 Adjusted EBITDA $ 45,296 $ 32,609 $ 88,423 $ 60,866 * NCI represents non-controlling interest DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ($ thousands) June 30, 2023 December 31, 2022 ASSETS Current assets: Cash $ 15,533 $ 46,026 Restricted cash 91 91 Accounts receivable, net of allowances for doubtful accounts 318,651 320,880 Inventories 104,950 101,392 Costs and estimated profits in excess of billings 46,770 23,588 Prepaid expenses and other current assets 15,274 21,644 Income taxes receivable 7,698 2,493 Total current assets $ 508,967 $ 516,114 Property and equipment, net 47,538 45,964 Goodwill 342,273 333,759 Other intangible assets, net of accumulated amortization 72,466 79,585 Operating lease right-of-use assets, net 54,051 57,402 Other long-term assets 9,138 4,456 Total assets $ 1,034,433 $ 1,037,280 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt $ 4,369 $ 4,369 Trade accounts payable 93,978 100,784 Accrued wages and benefits 28,563 26,260 Customer advances 15,555 20,128 Billings in excess of costs and estimated profits 5,333 10,411 Current-portion operating lease liabilities 17,324 18,083 Other current liabilities 42,843 32,866 Total current liabilities $ 207,965 $ 212,901 Long-term debt, less unamortized debt issuance costs 408,430 409,205 Long-term operating lease liabilities 37,650 40,189 Other long-term liabilities 8,718 4,701 Deferred income taxes 2,205 4,892 Total long-term liabilities $ 457,003 $ 458,987 Total Liabilities $ 664,968 $ 671,888 Equity: Total DXP Enterprises, Inc. equity 369,465 365,392 Total liabilities and equity $ 1,034,433 $ 1,037,280 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands) The following table is a reconciliation of free cash flow, a non-GAAP financial measure, to cash flow from operating activities, calculated and reported in accordance with U.S. GAAP. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net cash from operating activities $ (2,430 ) $ 5,686 $ 24,017 $ 5,686 Less: purchases of property and equipment (1,813 ) (1,848 ) (5,617 ) (1,848 ) Free cash flow $ (4,243 ) $ 3,838 $ 18,400 $ 3,838 Note: Supplemental non-cash items include share repurchases which have been excluded. View source version on businesswire.com: https://www.businesswire.com/news/home/20230808582583/en/