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 Reports Fourth Quarter and Fiscal 2023 Results By: DXP Enterprises, Inc. via Business Wire March 07, 2024 at 09:15 AM EST Fiscal 2023 sales of $1.7 billion, up 13.4 percent from fiscal 2022 Solid full Year GAAP diluted EPS of $3.89 $174.3 million in adjusted earnings before interest, taxes, depreciation, amortization and other non-cash charges ("Adjusted EBITDA") Net income of $68.8 million versus $48.2 million in fiscal 2022 Refinanced Senior Secured Term Loan B raising $550 million Repurchased 1.7 million shares for $54.7 million in fiscal 2023 $173.2 million in cash and restricted cash Closed three acquisitions during the fiscal year - Florida Valve, Riordan, and Alliance Pump & Mechanical DXP Enterprises, Inc. (NASDAQ: DXPE) today announced financial results for the fourth quarter and fiscal year ended December 31, 2023. The following are results for the three and twelve months ended December 31, 2023, compared to the three and twelve months ended December 31, 2022. A reconciliation of the non-GAAP financial measures can be found in the back of this press release. Fourth Quarter 2023 financial highlights: Sales were $407.0 million or $6.7 million per day for the fourth quarter of 2023, compared to $406.3 million or $6.6 million per day for the fourth quarter of 2022. Diluted earnings per share for the fourth quarter was $0.94 based upon 17.0 million diluted shares, compared to $0.37 per share in the fourth quarter of 2022 based on 19.3 million diluted shares. Adjusted diluted earnings per shares was $1.12 per share compared to $0.50 per share for the fourth quarter of 2022. Adjusted earnings before interest, taxes, depreciation and amortization and other non-cash charges ("Adjusted EBITDA") for the fourth quarter of 2023 was $41.9 million compared to $31.6 million for the fourth quarter of 2022. Adjusted EBITDA as a percentage of sales was 10.3 percent and 7.8 percent, respectively. Free cash flow (cash flow from operating activities less capital expenditures) for the fourth quarter was $37.3 million or 92.1 percent of EBITDA. Fiscal Year 2023 financial highlights: Sales increased 13.4 percent to $1.7 billion or $6.7 million per day, compared to $1.5 billion or $5.9 million per day for fiscal 2022. Diluted earnings per share for 2023 was $3.89 based upon 17.7 million diluted shares, compared to $2.47 per share in 2022, based on 19.5 million basic shares. Adjusted diluted earnings per share was $4.09 per share compared to $2.69 per share in 2022. Net income for the year increased $20.7 million to $68.8 million, compared to $48.2 million for fiscal 2022. Adjusted EBITDA for 2023 was $174.3 million compared to $126.8 million for 2022. Adjusted EBITDA as a percentage of sales was 10.4 percent and 8.6 percent, respectively. Free cash flow (cash flow from operating activities less capital expenditures) for fiscal 2023 was $94.0 million or 55.2 percent of EBITDA compared to $1.0 million in fiscal 2022. Business segment financial highlights: Service Centers’ revenue for the fiscal year was $1.1 billion, an increase of 13.4 percent year-over-year with a 14.3 percent operating income margin. Innovative Pumping Solutions’ revenue for the fiscal year was $273.2 million, an increase of 18.2 percent year over year with a 16.2 percent operating income margin. Supply Chain Services’ revenue for the fiscal year was $260.4 million, an increase of 8.3 percent year-over-year with a 8.3 percent operating margin. David R. Little, Chairman and CEO commented, "Fiscal 2023 was another great year for DXP. DXPeople drove fourth quarter results, with strong performance across all business segments. Broad based business strength across the business helped us deliver 13.4 percent revenue growth on a year-over-year basis. This growth has fueled a healthy momentum coming into 2024. DXP’s Innovative Pumping Solutions sales were up 18.2 percent to $273.2 million, followed by Service Centers sales growing 13.4 percent to $1.1 billion and Supply Chain Services sales growing 8.3 percent at $260.4 million. Congratulations to all of our DXPeople for their hard work and efforts to serve our customers." Mr. Little continued, "The sales momentum from the fourth quarter accompanied by our backlogs has positioned us for further success as we move into 2024. Additionally, we strengthened our balance sheet in the fourth quarter, raising a new Term Loan B which put an incremental $125 million in cash on the balance sheet. DXP’s balanced end markets, and our ability to continue to execute on acquisitions have set the stage for 2024. We see positive dynamics in our traditional end markets like oil & gas, as well as positive outlooks for end markets like water & wastewater. We are confident our growth strategy, coupled with a continued focus on improving margins and maintaining operational discipline will drive shareholder value." Kent Yee, CFO commented, "Fiscal 2023 financial performance reflects the execution of our end market diversification efforts, our plans to grow both organically and through acquisitions, and continuous improvement in our operations and efficiency. Total sales and adjusted EBITDA grew 13.4 percent and 37.5 percent, respectively. Our fiscal 2023 diluted earnings per share was $3.89. We are pleased with the fourth quarter, and year-end results. We positioned our balance sheet in the fourth quarter to support our growth plans in 2024. DXP ended the year with $173.2 million in cash on the balance sheet and net debt of $375.5 million. DXP’s secured leverage ratio or net debt to EBITDA was 2.1:1.0 with a covenant EBITDA of $178.4 million for fiscal 2023. We expect to drive both organic and acquisition driven growth while driving shareholder and stakeholder value." Non-GAAP Financial Measures DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, adjusted EBITDA, free cash flow, Adjusted Net Income attributable to DXP Enterprises, Inc., 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, free cash flow and Adjusted Net Income attributable to DXP Enterprises, Inc. 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 facility. 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. Conference Call Information DXP Enterprises, Inc. management will host a conference call, March 7, 2024, at 3:30 p.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://ir.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 the United States, Canada, Mexico 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 the COVID-19 pandemic and the impact of low commodity prices of oil and gas; 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; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, economic risks related to the impact of COVID-19, 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 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share amounts) Twelve Months Ended December 31, 2023 2022 2021 Sales $ 1,678,600 $ 1,480,832 $ 1,113,921 Cost of sales 1,173,309 1,058,794 785,415 Gross profit 505,291 422,038 328,506 Selling, general and administrative expenses 366,569 324,286 288,649 Income from operations 138,722 97,752 39,857 Other (income) expense, net (1,355 ) 2,716 (414 ) Interest expense 53,146 29,135 21,089 Income before income taxes 86,931 65,901 19,182 Provision for income tax expense 18,119 17,799 3,431 Net income 68,812 48,102 15,751 Net loss attributable to noncontrolling interest — (53 ) (745 ) Net income attributable to DXP Enterprises, Inc. 68,812 48,155 16,496 Preferred stock dividend 90 90 90 Net income attributable to common shareholders $ 68,722 $ 48,065 $ 16,406 Net income $ 68,812 $ 48,102 $ 15,751 Foreign currency translation adjustments 435 (2,393 ) 747 Comprehensive income $ 69,247 $ 45,709 $ 16,498 Basic $ 4.07 $ 2.58 $ 0.87 Diluted $ 3.89 $ 2.47 $ 0.83 Weighted average common shares outstanding: Basic 16,870 18,631 18,949 Diluted 17,710 19,471 19,789 DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS ($ thousands, except per share amounts) As of December 31, 2023 2022 ASSETS Current assets: Cash $ 173,120 $ 46,026 Restricted cash 91 91 Accounts receivable, net of allowance of $5,584 and $7,610, respectively 311,171 320,880 Inventories 103,805 101,392 Costs and estimated profits in excess of billings 42,323 23,588 Prepaid expenses and other current assets 18,044 24,137 Total current assets 648,554 516,114 Property and equipment, net 61,618 45,964 Goodwill 343,991 333,759 Other intangible assets, net 63,895 79,585 Operating lease right of use assets, net 48,729 57,402 Other long-term assets 10,649 4,456 Total assets $ 1,177,436 $ 1,037,280 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt $ 5,500 $ 4,369 Trade accounts payable 96,469 92,805 Accrued wages and benefits 36,238 26,260 Customer advances 12,160 20,128 Billings in excess of costs and estimated profits 9,506 10,411 Short-term operating lease liabilities 15,438 18,083 Other current liabilities 48,854 40,845 Total current liabilities 224,165 212,901 Long-term debt, net of unamortized debt issuance costs and discounts 520,697 409,205 Long-term operating lease liabilities 34,336 40,189 Other long-term liabilities 17,359 9,593 Total long-term liabilities 572,392 458,987 Total liabilities 796,557 671,888 Shareholders' Equity: Series A preferred stock, $1.00 par value; 1,000,000 shares authorized 1 1 Series B convertible preferred stock, $1.00 par value; 1,000,000 shares authorized 15 15 Common stock, $0.01 par value, 100,000,000 shares authorized; 16,177,237 and 17,690,069 outstanding, respectively 345 345 Additional paid-in capital 216,482 213,937 Retained earnings 319,271 250,549 Accumulated other comprehensive loss (31,240 ) (31,675 ) Treasury stock, at cost 4,141,989 and 2,435,352 shares, respectively (123,995 ) (67,780 ) Total DXP Enterprises, Inc. equity 380,879 365,392 Total liabilities and equity $ 1,177,436 $ 1,037,280 SEGMENT DATA ($ thousands, unaudited) Three Months Ended December 31, Twelve Months Ended December 31, Sales 2023 2022 2023 2022 Service Centers $ 256,966 $ 279,378 $ 1,145,082 $ 1,009,356 Innovative Pumping Solutions 88,748 61,212 273,150 231,102 Supply Chain Services 61,330 65,704 260,368 240,374 Total DXP Sales $ 407,044 $ 406,294 $ 1,678,600 $ 1,480,832 Three Months Ended December 31, Twelve Months Ended December 31, Operating Income 2023 2022 2023 2022 Service Centers $ 33,603 $ 31,807 $ 163,877 $ 127,174 Innovative Pumping Solutions 12,622 6,826 44,260 30,037 Supply Chain Services 5,001 5,238 21,524 19,530 Total segment operating income $ 51,226 $ 43,871 $ 229,661 $ 176,741 Reconciliation of Operating Income for Reportable Segments ($ thousands, unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Operating income for reportable segments $ 51,226 $ 43,871 $ 229,661 $ 176,741 Adjustment for: Amortization of intangibles 3,025 4,957 18,231 18,915 Corporate and other expense, net 18,214 15,180 72,708 60,074 Total operating income $ 29,987 $ 23,734 $ 138,722 $ 97,752 Interest expense 17,078 11,525 53,146 29,135 Other (income) expense, net (1,876 ) (227 ) (1,355 ) 2,716 Income before income taxes $ 14,785 $ 12,436 $ 86,931 $ 65,901 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands, unaudited) The following table is a reconciliation of EBITDA and adjusted EBITDA, a non-GAAP financial measure, to income (loss) before income taxes, calculated and reported in accordance with U.S. GAAP. Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net income attributable to DXP Enterprises, Inc. $ 16,005 $ 7,154 $ 68,812 $ 48,155 Less: Net loss attributable to non-controlling interest (NCI) — 885 — (53 ) Plus: Interest expense 17,078 11,525 53,146 29,135 Plus: Provision for income tax expense (1,220 ) 4,397 18,119 17,799 Plus: Depreciation and amortization 8,637 7,175 30,105 28,500 EBITDA $ 40,500 $ 31,136 $ 170,182 $ 123,536 Plus: NCI income before tax — — — 227 Plus: other non-recurring items(1) 500 — 1,051 1,193 Plus: stock compensation expense 861 482 3,072 1,850 Adjusted EBITDA $ 41,861 $ 31,618 $ 174,305 $ 126,806 (1) Other non-recurring items primarily include the loss associated with closing an international location for the year ended December 31, 2023 and the loss associated with the sale of a variable interest entity (VIE) for the year ended December 31, 2022. 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 (unaudited). Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net cash from operating activities $ 42,444 $ 3,638 $ 106,222 $ 5,894 Less: purchases of property and equipment, net (5,160 ) (1,490 ) (12,263 ) (4,916 ) Free Cash Flow $ 37,284 $ 2,148 $ 93,959 $ 978 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands, unaudited) The following table is a reconciliation of adjusted net income attributable to DXP Enterprises, Inc., a non-GAAP financial measure, to net income attributable to DXP Enterprises, Inc., calculated and reported in accordance with U.S. GAAP. Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income attributable to DXP Enterprises, Inc. $ 16,005 $ 7,154 $ 68,812 $ 48,155 One-time non-cash loss — — — 1,193 One-time debt financing costs 1,981 1,972 1,981 2,103 Other non-recurring items 500 — 1,051 — Adjustment for taxes* 517 533 632 890 Adjusted Net Income attributable to DXP Enterprises, Inc. $ 19,003 $ 9,659 $ 72,476 $ 52,341 Weighted average common shares and common equivalent shares outstanding Basic 16,177 18,422 16,870 18,631 Diluted 17,017 19,262 17,710 19,471 Diluted Earnings per Share $ 0.94 $ 0.37 $ 3.89 $ 2.47 Adjusted Diluted Earnings per Share $ 1.12 $ 0.50 $ 4.09 $ 2.69 * Adjustment for taxes relates to the tax effects of the adjustments that we incorporated into non-GAAP measures in order to provide a more meaningful measure of Adjusted Net Income attributable to DXP Enterprises, Inc. Also, we have included an adjustment for the normalizing of tax credits and adjustments. The year-to-date effective tax rate of 20.8 percent was applied to the one-time charges associated with the disposal of DXP's variable interest entity and one-time debt financing costs. 2023 Sales Per Business Day Reconciliation ($ thousands, except Business days, unaudited) Q1 Q2 Q3 Q4 Total Sales $424 $428 $419 $407 Business Days 64 64 63 61 Sales Per Business Day $6,629 $6,688 $6,655 $6,673 Organic Sales and Acquisition Sales ($ thousands, unaudited) Twelve Months Ended December 31, 2023 2022 2021 Service Centers $ 1,145,082 $ 1,009,356 $ 816,496 Innovative Pumping Solutions 273,150 231,102 139,591 Supply Chain Services 260,368 240,374 157,834 Total DXP Sales 1,678,600 1,480,832 1,113,921 Acquisition Sales 33,078 41,527 147,472 Organic Sales $ 1,645,522 $ 1,439,305 $ 966,449 View source version on businesswire.com: https://www.businesswire.com/news/home/20240307539845/en/Contacts Kent Yee Senior Vice President, CFO - 713-996-4700 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 Reports Fourth Quarter and Fiscal 2023 Results By: DXP Enterprises, Inc. via Business Wire March 07, 2024 at 09:15 AM EST Fiscal 2023 sales of $1.7 billion, up 13.4 percent from fiscal 2022 Solid full Year GAAP diluted EPS of $3.89 $174.3 million in adjusted earnings before interest, taxes, depreciation, amortization and other non-cash charges ("Adjusted EBITDA") Net income of $68.8 million versus $48.2 million in fiscal 2022 Refinanced Senior Secured Term Loan B raising $550 million Repurchased 1.7 million shares for $54.7 million in fiscal 2023 $173.2 million in cash and restricted cash Closed three acquisitions during the fiscal year - Florida Valve, Riordan, and Alliance Pump & Mechanical DXP Enterprises, Inc. (NASDAQ: DXPE) today announced financial results for the fourth quarter and fiscal year ended December 31, 2023. The following are results for the three and twelve months ended December 31, 2023, compared to the three and twelve months ended December 31, 2022. A reconciliation of the non-GAAP financial measures can be found in the back of this press release. Fourth Quarter 2023 financial highlights: Sales were $407.0 million or $6.7 million per day for the fourth quarter of 2023, compared to $406.3 million or $6.6 million per day for the fourth quarter of 2022. Diluted earnings per share for the fourth quarter was $0.94 based upon 17.0 million diluted shares, compared to $0.37 per share in the fourth quarter of 2022 based on 19.3 million diluted shares. Adjusted diluted earnings per shares was $1.12 per share compared to $0.50 per share for the fourth quarter of 2022. Adjusted earnings before interest, taxes, depreciation and amortization and other non-cash charges ("Adjusted EBITDA") for the fourth quarter of 2023 was $41.9 million compared to $31.6 million for the fourth quarter of 2022. Adjusted EBITDA as a percentage of sales was 10.3 percent and 7.8 percent, respectively. Free cash flow (cash flow from operating activities less capital expenditures) for the fourth quarter was $37.3 million or 92.1 percent of EBITDA. Fiscal Year 2023 financial highlights: Sales increased 13.4 percent to $1.7 billion or $6.7 million per day, compared to $1.5 billion or $5.9 million per day for fiscal 2022. Diluted earnings per share for 2023 was $3.89 based upon 17.7 million diluted shares, compared to $2.47 per share in 2022, based on 19.5 million basic shares. Adjusted diluted earnings per share was $4.09 per share compared to $2.69 per share in 2022. Net income for the year increased $20.7 million to $68.8 million, compared to $48.2 million for fiscal 2022. Adjusted EBITDA for 2023 was $174.3 million compared to $126.8 million for 2022. Adjusted EBITDA as a percentage of sales was 10.4 percent and 8.6 percent, respectively. Free cash flow (cash flow from operating activities less capital expenditures) for fiscal 2023 was $94.0 million or 55.2 percent of EBITDA compared to $1.0 million in fiscal 2022. Business segment financial highlights: Service Centers’ revenue for the fiscal year was $1.1 billion, an increase of 13.4 percent year-over-year with a 14.3 percent operating income margin. Innovative Pumping Solutions’ revenue for the fiscal year was $273.2 million, an increase of 18.2 percent year over year with a 16.2 percent operating income margin. Supply Chain Services’ revenue for the fiscal year was $260.4 million, an increase of 8.3 percent year-over-year with a 8.3 percent operating margin. David R. Little, Chairman and CEO commented, "Fiscal 2023 was another great year for DXP. DXPeople drove fourth quarter results, with strong performance across all business segments. Broad based business strength across the business helped us deliver 13.4 percent revenue growth on a year-over-year basis. This growth has fueled a healthy momentum coming into 2024. DXP’s Innovative Pumping Solutions sales were up 18.2 percent to $273.2 million, followed by Service Centers sales growing 13.4 percent to $1.1 billion and Supply Chain Services sales growing 8.3 percent at $260.4 million. Congratulations to all of our DXPeople for their hard work and efforts to serve our customers." Mr. Little continued, "The sales momentum from the fourth quarter accompanied by our backlogs has positioned us for further success as we move into 2024. Additionally, we strengthened our balance sheet in the fourth quarter, raising a new Term Loan B which put an incremental $125 million in cash on the balance sheet. DXP’s balanced end markets, and our ability to continue to execute on acquisitions have set the stage for 2024. We see positive dynamics in our traditional end markets like oil & gas, as well as positive outlooks for end markets like water & wastewater. We are confident our growth strategy, coupled with a continued focus on improving margins and maintaining operational discipline will drive shareholder value." Kent Yee, CFO commented, "Fiscal 2023 financial performance reflects the execution of our end market diversification efforts, our plans to grow both organically and through acquisitions, and continuous improvement in our operations and efficiency. Total sales and adjusted EBITDA grew 13.4 percent and 37.5 percent, respectively. Our fiscal 2023 diluted earnings per share was $3.89. We are pleased with the fourth quarter, and year-end results. We positioned our balance sheet in the fourth quarter to support our growth plans in 2024. DXP ended the year with $173.2 million in cash on the balance sheet and net debt of $375.5 million. DXP’s secured leverage ratio or net debt to EBITDA was 2.1:1.0 with a covenant EBITDA of $178.4 million for fiscal 2023. We expect to drive both organic and acquisition driven growth while driving shareholder and stakeholder value." Non-GAAP Financial Measures DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, adjusted EBITDA, free cash flow, Adjusted Net Income attributable to DXP Enterprises, Inc., 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, free cash flow and Adjusted Net Income attributable to DXP Enterprises, Inc. 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 facility. 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. Conference Call Information DXP Enterprises, Inc. management will host a conference call, March 7, 2024, at 3:30 p.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://ir.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 the United States, Canada, Mexico 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 the COVID-19 pandemic and the impact of low commodity prices of oil and gas; 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; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, economic risks related to the impact of COVID-19, 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 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share amounts) Twelve Months Ended December 31, 2023 2022 2021 Sales $ 1,678,600 $ 1,480,832 $ 1,113,921 Cost of sales 1,173,309 1,058,794 785,415 Gross profit 505,291 422,038 328,506 Selling, general and administrative expenses 366,569 324,286 288,649 Income from operations 138,722 97,752 39,857 Other (income) expense, net (1,355 ) 2,716 (414 ) Interest expense 53,146 29,135 21,089 Income before income taxes 86,931 65,901 19,182 Provision for income tax expense 18,119 17,799 3,431 Net income 68,812 48,102 15,751 Net loss attributable to noncontrolling interest — (53 ) (745 ) Net income attributable to DXP Enterprises, Inc. 68,812 48,155 16,496 Preferred stock dividend 90 90 90 Net income attributable to common shareholders $ 68,722 $ 48,065 $ 16,406 Net income $ 68,812 $ 48,102 $ 15,751 Foreign currency translation adjustments 435 (2,393 ) 747 Comprehensive income $ 69,247 $ 45,709 $ 16,498 Basic $ 4.07 $ 2.58 $ 0.87 Diluted $ 3.89 $ 2.47 $ 0.83 Weighted average common shares outstanding: Basic 16,870 18,631 18,949 Diluted 17,710 19,471 19,789 DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS ($ thousands, except per share amounts) As of December 31, 2023 2022 ASSETS Current assets: Cash $ 173,120 $ 46,026 Restricted cash 91 91 Accounts receivable, net of allowance of $5,584 and $7,610, respectively 311,171 320,880 Inventories 103,805 101,392 Costs and estimated profits in excess of billings 42,323 23,588 Prepaid expenses and other current assets 18,044 24,137 Total current assets 648,554 516,114 Property and equipment, net 61,618 45,964 Goodwill 343,991 333,759 Other intangible assets, net 63,895 79,585 Operating lease right of use assets, net 48,729 57,402 Other long-term assets 10,649 4,456 Total assets $ 1,177,436 $ 1,037,280 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt $ 5,500 $ 4,369 Trade accounts payable 96,469 92,805 Accrued wages and benefits 36,238 26,260 Customer advances 12,160 20,128 Billings in excess of costs and estimated profits 9,506 10,411 Short-term operating lease liabilities 15,438 18,083 Other current liabilities 48,854 40,845 Total current liabilities 224,165 212,901 Long-term debt, net of unamortized debt issuance costs and discounts 520,697 409,205 Long-term operating lease liabilities 34,336 40,189 Other long-term liabilities 17,359 9,593 Total long-term liabilities 572,392 458,987 Total liabilities 796,557 671,888 Shareholders' Equity: Series A preferred stock, $1.00 par value; 1,000,000 shares authorized 1 1 Series B convertible preferred stock, $1.00 par value; 1,000,000 shares authorized 15 15 Common stock, $0.01 par value, 100,000,000 shares authorized; 16,177,237 and 17,690,069 outstanding, respectively 345 345 Additional paid-in capital 216,482 213,937 Retained earnings 319,271 250,549 Accumulated other comprehensive loss (31,240 ) (31,675 ) Treasury stock, at cost 4,141,989 and 2,435,352 shares, respectively (123,995 ) (67,780 ) Total DXP Enterprises, Inc. equity 380,879 365,392 Total liabilities and equity $ 1,177,436 $ 1,037,280 SEGMENT DATA ($ thousands, unaudited) Three Months Ended December 31, Twelve Months Ended December 31, Sales 2023 2022 2023 2022 Service Centers $ 256,966 $ 279,378 $ 1,145,082 $ 1,009,356 Innovative Pumping Solutions 88,748 61,212 273,150 231,102 Supply Chain Services 61,330 65,704 260,368 240,374 Total DXP Sales $ 407,044 $ 406,294 $ 1,678,600 $ 1,480,832 Three Months Ended December 31, Twelve Months Ended December 31, Operating Income 2023 2022 2023 2022 Service Centers $ 33,603 $ 31,807 $ 163,877 $ 127,174 Innovative Pumping Solutions 12,622 6,826 44,260 30,037 Supply Chain Services 5,001 5,238 21,524 19,530 Total segment operating income $ 51,226 $ 43,871 $ 229,661 $ 176,741 Reconciliation of Operating Income for Reportable Segments ($ thousands, unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Operating income for reportable segments $ 51,226 $ 43,871 $ 229,661 $ 176,741 Adjustment for: Amortization of intangibles 3,025 4,957 18,231 18,915 Corporate and other expense, net 18,214 15,180 72,708 60,074 Total operating income $ 29,987 $ 23,734 $ 138,722 $ 97,752 Interest expense 17,078 11,525 53,146 29,135 Other (income) expense, net (1,876 ) (227 ) (1,355 ) 2,716 Income before income taxes $ 14,785 $ 12,436 $ 86,931 $ 65,901 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands, unaudited) The following table is a reconciliation of EBITDA and adjusted EBITDA, a non-GAAP financial measure, to income (loss) before income taxes, calculated and reported in accordance with U.S. GAAP. Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net income attributable to DXP Enterprises, Inc. $ 16,005 $ 7,154 $ 68,812 $ 48,155 Less: Net loss attributable to non-controlling interest (NCI) — 885 — (53 ) Plus: Interest expense 17,078 11,525 53,146 29,135 Plus: Provision for income tax expense (1,220 ) 4,397 18,119 17,799 Plus: Depreciation and amortization 8,637 7,175 30,105 28,500 EBITDA $ 40,500 $ 31,136 $ 170,182 $ 123,536 Plus: NCI income before tax — — — 227 Plus: other non-recurring items(1) 500 — 1,051 1,193 Plus: stock compensation expense 861 482 3,072 1,850 Adjusted EBITDA $ 41,861 $ 31,618 $ 174,305 $ 126,806 (1) Other non-recurring items primarily include the loss associated with closing an international location for the year ended December 31, 2023 and the loss associated with the sale of a variable interest entity (VIE) for the year ended December 31, 2022. 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 (unaudited). Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net cash from operating activities $ 42,444 $ 3,638 $ 106,222 $ 5,894 Less: purchases of property and equipment, net (5,160 ) (1,490 ) (12,263 ) (4,916 ) Free Cash Flow $ 37,284 $ 2,148 $ 93,959 $ 978 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands, unaudited) The following table is a reconciliation of adjusted net income attributable to DXP Enterprises, Inc., a non-GAAP financial measure, to net income attributable to DXP Enterprises, Inc., calculated and reported in accordance with U.S. GAAP. Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income attributable to DXP Enterprises, Inc. $ 16,005 $ 7,154 $ 68,812 $ 48,155 One-time non-cash loss — — — 1,193 One-time debt financing costs 1,981 1,972 1,981 2,103 Other non-recurring items 500 — 1,051 — Adjustment for taxes* 517 533 632 890 Adjusted Net Income attributable to DXP Enterprises, Inc. $ 19,003 $ 9,659 $ 72,476 $ 52,341 Weighted average common shares and common equivalent shares outstanding Basic 16,177 18,422 16,870 18,631 Diluted 17,017 19,262 17,710 19,471 Diluted Earnings per Share $ 0.94 $ 0.37 $ 3.89 $ 2.47 Adjusted Diluted Earnings per Share $ 1.12 $ 0.50 $ 4.09 $ 2.69 * Adjustment for taxes relates to the tax effects of the adjustments that we incorporated into non-GAAP measures in order to provide a more meaningful measure of Adjusted Net Income attributable to DXP Enterprises, Inc. Also, we have included an adjustment for the normalizing of tax credits and adjustments. The year-to-date effective tax rate of 20.8 percent was applied to the one-time charges associated with the disposal of DXP's variable interest entity and one-time debt financing costs. 2023 Sales Per Business Day Reconciliation ($ thousands, except Business days, unaudited) Q1 Q2 Q3 Q4 Total Sales $424 $428 $419 $407 Business Days 64 64 63 61 Sales Per Business Day $6,629 $6,688 $6,655 $6,673 Organic Sales and Acquisition Sales ($ thousands, unaudited) Twelve Months Ended December 31, 2023 2022 2021 Service Centers $ 1,145,082 $ 1,009,356 $ 816,496 Innovative Pumping Solutions 273,150 231,102 139,591 Supply Chain Services 260,368 240,374 157,834 Total DXP Sales 1,678,600 1,480,832 1,113,921 Acquisition Sales 33,078 41,527 147,472 Organic Sales $ 1,645,522 $ 1,439,305 $ 966,449 View source version on businesswire.com: https://www.businesswire.com/news/home/20240307539845/en/Contacts Kent Yee Senior Vice President, CFO - 713-996-4700 www.dxpe.com
Fiscal 2023 sales of $1.7 billion, up 13.4 percent from fiscal 2022 Solid full Year GAAP diluted EPS of $3.89 $174.3 million in adjusted earnings before interest, taxes, depreciation, amortization and other non-cash charges ("Adjusted EBITDA") Net income of $68.8 million versus $48.2 million in fiscal 2022 Refinanced Senior Secured Term Loan B raising $550 million Repurchased 1.7 million shares for $54.7 million in fiscal 2023 $173.2 million in cash and restricted cash Closed three acquisitions during the fiscal year - Florida Valve, Riordan, and Alliance Pump & Mechanical
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced financial results for the fourth quarter and fiscal year ended December 31, 2023. The following are results for the three and twelve months ended December 31, 2023, compared to the three and twelve months ended December 31, 2022. A reconciliation of the non-GAAP financial measures can be found in the back of this press release. Fourth Quarter 2023 financial highlights: Sales were $407.0 million or $6.7 million per day for the fourth quarter of 2023, compared to $406.3 million or $6.6 million per day for the fourth quarter of 2022. Diluted earnings per share for the fourth quarter was $0.94 based upon 17.0 million diluted shares, compared to $0.37 per share in the fourth quarter of 2022 based on 19.3 million diluted shares. Adjusted diluted earnings per shares was $1.12 per share compared to $0.50 per share for the fourth quarter of 2022. Adjusted earnings before interest, taxes, depreciation and amortization and other non-cash charges ("Adjusted EBITDA") for the fourth quarter of 2023 was $41.9 million compared to $31.6 million for the fourth quarter of 2022. Adjusted EBITDA as a percentage of sales was 10.3 percent and 7.8 percent, respectively. Free cash flow (cash flow from operating activities less capital expenditures) for the fourth quarter was $37.3 million or 92.1 percent of EBITDA. Fiscal Year 2023 financial highlights: Sales increased 13.4 percent to $1.7 billion or $6.7 million per day, compared to $1.5 billion or $5.9 million per day for fiscal 2022. Diluted earnings per share for 2023 was $3.89 based upon 17.7 million diluted shares, compared to $2.47 per share in 2022, based on 19.5 million basic shares. Adjusted diluted earnings per share was $4.09 per share compared to $2.69 per share in 2022. Net income for the year increased $20.7 million to $68.8 million, compared to $48.2 million for fiscal 2022. Adjusted EBITDA for 2023 was $174.3 million compared to $126.8 million for 2022. Adjusted EBITDA as a percentage of sales was 10.4 percent and 8.6 percent, respectively. Free cash flow (cash flow from operating activities less capital expenditures) for fiscal 2023 was $94.0 million or 55.2 percent of EBITDA compared to $1.0 million in fiscal 2022. Business segment financial highlights: Service Centers’ revenue for the fiscal year was $1.1 billion, an increase of 13.4 percent year-over-year with a 14.3 percent operating income margin. Innovative Pumping Solutions’ revenue for the fiscal year was $273.2 million, an increase of 18.2 percent year over year with a 16.2 percent operating income margin. Supply Chain Services’ revenue for the fiscal year was $260.4 million, an increase of 8.3 percent year-over-year with a 8.3 percent operating margin. David R. Little, Chairman and CEO commented, "Fiscal 2023 was another great year for DXP. DXPeople drove fourth quarter results, with strong performance across all business segments. Broad based business strength across the business helped us deliver 13.4 percent revenue growth on a year-over-year basis. This growth has fueled a healthy momentum coming into 2024. DXP’s Innovative Pumping Solutions sales were up 18.2 percent to $273.2 million, followed by Service Centers sales growing 13.4 percent to $1.1 billion and Supply Chain Services sales growing 8.3 percent at $260.4 million. Congratulations to all of our DXPeople for their hard work and efforts to serve our customers." Mr. Little continued, "The sales momentum from the fourth quarter accompanied by our backlogs has positioned us for further success as we move into 2024. Additionally, we strengthened our balance sheet in the fourth quarter, raising a new Term Loan B which put an incremental $125 million in cash on the balance sheet. DXP’s balanced end markets, and our ability to continue to execute on acquisitions have set the stage for 2024. We see positive dynamics in our traditional end markets like oil & gas, as well as positive outlooks for end markets like water & wastewater. We are confident our growth strategy, coupled with a continued focus on improving margins and maintaining operational discipline will drive shareholder value." Kent Yee, CFO commented, "Fiscal 2023 financial performance reflects the execution of our end market diversification efforts, our plans to grow both organically and through acquisitions, and continuous improvement in our operations and efficiency. Total sales and adjusted EBITDA grew 13.4 percent and 37.5 percent, respectively. Our fiscal 2023 diluted earnings per share was $3.89. We are pleased with the fourth quarter, and year-end results. We positioned our balance sheet in the fourth quarter to support our growth plans in 2024. DXP ended the year with $173.2 million in cash on the balance sheet and net debt of $375.5 million. DXP’s secured leverage ratio or net debt to EBITDA was 2.1:1.0 with a covenant EBITDA of $178.4 million for fiscal 2023. We expect to drive both organic and acquisition driven growth while driving shareholder and stakeholder value." Non-GAAP Financial Measures DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, adjusted EBITDA, free cash flow, Adjusted Net Income attributable to DXP Enterprises, Inc., 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, free cash flow and Adjusted Net Income attributable to DXP Enterprises, Inc. 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 facility. 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. Conference Call Information DXP Enterprises, Inc. management will host a conference call, March 7, 2024, at 3:30 p.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://ir.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 the United States, Canada, Mexico 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 the COVID-19 pandemic and the impact of low commodity prices of oil and gas; 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; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, economic risks related to the impact of COVID-19, 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 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share amounts) Twelve Months Ended December 31, 2023 2022 2021 Sales $ 1,678,600 $ 1,480,832 $ 1,113,921 Cost of sales 1,173,309 1,058,794 785,415 Gross profit 505,291 422,038 328,506 Selling, general and administrative expenses 366,569 324,286 288,649 Income from operations 138,722 97,752 39,857 Other (income) expense, net (1,355 ) 2,716 (414 ) Interest expense 53,146 29,135 21,089 Income before income taxes 86,931 65,901 19,182 Provision for income tax expense 18,119 17,799 3,431 Net income 68,812 48,102 15,751 Net loss attributable to noncontrolling interest — (53 ) (745 ) Net income attributable to DXP Enterprises, Inc. 68,812 48,155 16,496 Preferred stock dividend 90 90 90 Net income attributable to common shareholders $ 68,722 $ 48,065 $ 16,406 Net income $ 68,812 $ 48,102 $ 15,751 Foreign currency translation adjustments 435 (2,393 ) 747 Comprehensive income $ 69,247 $ 45,709 $ 16,498 Basic $ 4.07 $ 2.58 $ 0.87 Diluted $ 3.89 $ 2.47 $ 0.83 Weighted average common shares outstanding: Basic 16,870 18,631 18,949 Diluted 17,710 19,471 19,789 DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS ($ thousands, except per share amounts) As of December 31, 2023 2022 ASSETS Current assets: Cash $ 173,120 $ 46,026 Restricted cash 91 91 Accounts receivable, net of allowance of $5,584 and $7,610, respectively 311,171 320,880 Inventories 103,805 101,392 Costs and estimated profits in excess of billings 42,323 23,588 Prepaid expenses and other current assets 18,044 24,137 Total current assets 648,554 516,114 Property and equipment, net 61,618 45,964 Goodwill 343,991 333,759 Other intangible assets, net 63,895 79,585 Operating lease right of use assets, net 48,729 57,402 Other long-term assets 10,649 4,456 Total assets $ 1,177,436 $ 1,037,280 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt $ 5,500 $ 4,369 Trade accounts payable 96,469 92,805 Accrued wages and benefits 36,238 26,260 Customer advances 12,160 20,128 Billings in excess of costs and estimated profits 9,506 10,411 Short-term operating lease liabilities 15,438 18,083 Other current liabilities 48,854 40,845 Total current liabilities 224,165 212,901 Long-term debt, net of unamortized debt issuance costs and discounts 520,697 409,205 Long-term operating lease liabilities 34,336 40,189 Other long-term liabilities 17,359 9,593 Total long-term liabilities 572,392 458,987 Total liabilities 796,557 671,888 Shareholders' Equity: Series A preferred stock, $1.00 par value; 1,000,000 shares authorized 1 1 Series B convertible preferred stock, $1.00 par value; 1,000,000 shares authorized 15 15 Common stock, $0.01 par value, 100,000,000 shares authorized; 16,177,237 and 17,690,069 outstanding, respectively 345 345 Additional paid-in capital 216,482 213,937 Retained earnings 319,271 250,549 Accumulated other comprehensive loss (31,240 ) (31,675 ) Treasury stock, at cost 4,141,989 and 2,435,352 shares, respectively (123,995 ) (67,780 ) Total DXP Enterprises, Inc. equity 380,879 365,392 Total liabilities and equity $ 1,177,436 $ 1,037,280 SEGMENT DATA ($ thousands, unaudited) Three Months Ended December 31, Twelve Months Ended December 31, Sales 2023 2022 2023 2022 Service Centers $ 256,966 $ 279,378 $ 1,145,082 $ 1,009,356 Innovative Pumping Solutions 88,748 61,212 273,150 231,102 Supply Chain Services 61,330 65,704 260,368 240,374 Total DXP Sales $ 407,044 $ 406,294 $ 1,678,600 $ 1,480,832 Three Months Ended December 31, Twelve Months Ended December 31, Operating Income 2023 2022 2023 2022 Service Centers $ 33,603 $ 31,807 $ 163,877 $ 127,174 Innovative Pumping Solutions 12,622 6,826 44,260 30,037 Supply Chain Services 5,001 5,238 21,524 19,530 Total segment operating income $ 51,226 $ 43,871 $ 229,661 $ 176,741 Reconciliation of Operating Income for Reportable Segments ($ thousands, unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Operating income for reportable segments $ 51,226 $ 43,871 $ 229,661 $ 176,741 Adjustment for: Amortization of intangibles 3,025 4,957 18,231 18,915 Corporate and other expense, net 18,214 15,180 72,708 60,074 Total operating income $ 29,987 $ 23,734 $ 138,722 $ 97,752 Interest expense 17,078 11,525 53,146 29,135 Other (income) expense, net (1,876 ) (227 ) (1,355 ) 2,716 Income before income taxes $ 14,785 $ 12,436 $ 86,931 $ 65,901 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands, unaudited) The following table is a reconciliation of EBITDA and adjusted EBITDA, a non-GAAP financial measure, to income (loss) before income taxes, calculated and reported in accordance with U.S. GAAP. Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net income attributable to DXP Enterprises, Inc. $ 16,005 $ 7,154 $ 68,812 $ 48,155 Less: Net loss attributable to non-controlling interest (NCI) — 885 — (53 ) Plus: Interest expense 17,078 11,525 53,146 29,135 Plus: Provision for income tax expense (1,220 ) 4,397 18,119 17,799 Plus: Depreciation and amortization 8,637 7,175 30,105 28,500 EBITDA $ 40,500 $ 31,136 $ 170,182 $ 123,536 Plus: NCI income before tax — — — 227 Plus: other non-recurring items(1) 500 — 1,051 1,193 Plus: stock compensation expense 861 482 3,072 1,850 Adjusted EBITDA $ 41,861 $ 31,618 $ 174,305 $ 126,806 (1) Other non-recurring items primarily include the loss associated with closing an international location for the year ended December 31, 2023 and the loss associated with the sale of a variable interest entity (VIE) for the year ended December 31, 2022. 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 (unaudited). Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net cash from operating activities $ 42,444 $ 3,638 $ 106,222 $ 5,894 Less: purchases of property and equipment, net (5,160 ) (1,490 ) (12,263 ) (4,916 ) Free Cash Flow $ 37,284 $ 2,148 $ 93,959 $ 978 Unaudited Reconciliation of Non-GAAP Financial Information ($ thousands, unaudited) The following table is a reconciliation of adjusted net income attributable to DXP Enterprises, Inc., a non-GAAP financial measure, to net income attributable to DXP Enterprises, Inc., calculated and reported in accordance with U.S. GAAP. Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income attributable to DXP Enterprises, Inc. $ 16,005 $ 7,154 $ 68,812 $ 48,155 One-time non-cash loss — — — 1,193 One-time debt financing costs 1,981 1,972 1,981 2,103 Other non-recurring items 500 — 1,051 — Adjustment for taxes* 517 533 632 890 Adjusted Net Income attributable to DXP Enterprises, Inc. $ 19,003 $ 9,659 $ 72,476 $ 52,341 Weighted average common shares and common equivalent shares outstanding Basic 16,177 18,422 16,870 18,631 Diluted 17,017 19,262 17,710 19,471 Diluted Earnings per Share $ 0.94 $ 0.37 $ 3.89 $ 2.47 Adjusted Diluted Earnings per Share $ 1.12 $ 0.50 $ 4.09 $ 2.69 * Adjustment for taxes relates to the tax effects of the adjustments that we incorporated into non-GAAP measures in order to provide a more meaningful measure of Adjusted Net Income attributable to DXP Enterprises, Inc. Also, we have included an adjustment for the normalizing of tax credits and adjustments. The year-to-date effective tax rate of 20.8 percent was applied to the one-time charges associated with the disposal of DXP's variable interest entity and one-time debt financing costs. 2023 Sales Per Business Day Reconciliation ($ thousands, except Business days, unaudited) Q1 Q2 Q3 Q4 Total Sales $424 $428 $419 $407 Business Days 64 64 63 61 Sales Per Business Day $6,629 $6,688 $6,655 $6,673 Organic Sales and Acquisition Sales ($ thousands, unaudited) Twelve Months Ended December 31, 2023 2022 2021 Service Centers $ 1,145,082 $ 1,009,356 $ 816,496 Innovative Pumping Solutions 273,150 231,102 139,591 Supply Chain Services 260,368 240,374 157,834 Total DXP Sales 1,678,600 1,480,832 1,113,921 Acquisition Sales 33,078 41,527 147,472 Organic Sales $ 1,645,522 $ 1,439,305 $ 966,449 View source version on businesswire.com: https://www.businesswire.com/news/home/20240307539845/en/