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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| DXP Enterprises Inc | NASDAQ:DXPE | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 4.79 | 5.24% | 96.17 | 96.40 | 840.00 | 97.09 | 93.144 | 93.51 | 349,949 | 01:00:00 |
From Jan 2024 to Jan 2025
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:
Fiscal Year 2023 financial highlights:
Business segment financial highlights:
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/
Kent Yee Senior Vice President, CFO - 713-996-4700 www.dxpe.com
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