0001020710false00010207102024-08-082024-08-08

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):  August 8, 2024
Commission file number 0-21513
DXP Enterprises, Inc.
(Exact name of registrant as specified in its charter)

Texas76-0509661
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
5301 Hollister(713)996-4700
Houston, Texas77040
(Address of principal executive offices)(Registrant’s telephone number, including area code)
_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each ClassTrading SymbolName of Exchange on which Registered
Common Stock par value $0.01DXPENASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ⃞
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following information is furnished pursuant to Regulation FD.
On August 8, 2024, DXP Enterprises, Inc., issued a press release announcing financial results for the second quarter ended June 30, 2024. A copy of the release is furnished herewith as Exhibit 99.1, and incorporated herein by reference. Such exhibit (i) is furnished pursuant to Item 2.02 of Form 8-K, (ii) is not to be considered "filed" under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and (iii) shall not be incorporated by reference into any previous or future filings made by or to be made by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act.




ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
99.1     Press Release dated August 8, 2024 announcing the earnings results for the second quarter ended June 30, 2024.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DXP ENTERPRISES, INC.
(Registrant)
 
By:/s/ Kent Yee
Kent Yee
Senior Vice President/Finance and Chief Financial Officer
By:/s/ David Molero Santos
David Molero Santos
Vice President/Finance and Chief Accounting Officer
 
Dated:August 8, 2024



INDEX TO EXHIBITS
Introductory Note: The following exhibit is furnished pursuant to Item 2.02 of Form 8-K and is not to be considered “filed” under the Exchange Act and shall not be incorporated by reference into any of the Company’s previous or future filings under the Securities Act or the Exchange Act.
Exhibit No.Description
99.1


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NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com

DXP ENTERPRISES, INC. REPORTS SECOND QUARTER 2024 RESULTS

•$49.9 million in cash
•$445.6 million in sales, an 8.0 percent sequential and 4.1 percent year-over-year increase
•GAAP diluted EPS of $1.00
•$48.2 million in earnings before interest, taxes, depreciation & amortization and other non-cash charges ("Adjusted EBITDA")
•Free Cash Flow of $30.0 million for the six months ended June 30, 2024
•Completed four acquisitions through Q2; two water, and two industrial rotating equipment companies

Houston, TX – August 8, 2024 – DXP Enterprises, Inc. ("DXP" or the "Company") (NASDAQ: DXPE) today announced financial results for the second quarter ended June 30, 2024. The following are results for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, and March 31, 2024, where appropriate. A reconciliation of the non-GAAP financial measures can be found in the back of this press release.

Second Quarter 2024 Financial Highlights:

•Sales increased 8.0 percent sequentially to $445.6 million, compared to $412.6 million for the first quarter of 2024 and increased 4.1 percent compared to $428.0 million for the second quarter of 2023.
•Net income for the second quarter was $16.7 million, compared to $19.1 million for the second quarter of 2023 and $11.3 million for the first quarter of 2024.
•Earnings per diluted share for the second quarter was $1.00 based upon 16.7 million diluted shares, compared to $1.06 earnings per diluted share in the second quarter of 2023, based on 18.1 million diluted shares. Adjusted diluted earnings per share was $1.02 for the second quarter compared to $1.06 in the second quarter of 2023.
•Adjusted EBITDA for the second quarter was $48.2 million compared to $45.3 million for the second quarter of 2023. Adjusted EBITDA as a percentage of sales, or Adjusted EBITDA margin, was 10.8 percent and 10.6 percent, respectively.
•Free Cash Flow (cash flow from operating activities less capital expenditures) for the second quarter was $5.9 million, compared to $(4.2) million for the second quarter of 2023.
David R. Little, Chairman and Chief Executive Officer commented, "Second quarter results reflect the execution of our growth strategy and 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 $1.00. DXP’s second quarter 2024 sales were $445.6 million, or an 8.0 percent increase over the first quarter of 2024. Sequential organic sales for the quarter increased 5.3 percent or $21.3 million and acquisitions added another $23.4 million in sales during Q2. Adjusted EBITDA grew $7.9 million, or 19.5 percent over the first quarter of 2024. During the second quarter of 2024, sales were $306.5 million for Service Center, $73.4 million for Innovative Pumping Solutions, and $65.7 million for Supply Chain Services. Overall, we are very pleased with our performance and the progress DXP continues to make as a growth company.”

Kent Yee, Chief Financial Officer and Senior Vice President, remarked, “DXP achieved another high watermark quarter with an 8.0 percent sequential sales increase to $445.6 million in sales and 10.8 percent Adjusted EBITDA margins. We have closed four acquisitions through the second quarter, and we anticipate closing at least two more acquisitions during the second half of 2024. This quarters financial results reflect continued execution of our strategic goals and the impact of our diversification efforts, an overall reduced energy industry exposure, and a strong balance sheet to support our key initiatives. Total debt outstanding as of June 30, 2024, was $545.9 million. DXP’s secured leverage ratio or net debt to EBITDA ratio was 2.64:1.0 with a covenant EBITDA of $187.6 million for the last twelve months ending June 30, 2024.”
Page 1
dxplogoa02a.jpg
NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com
Conference Call Information
DXP Enterprises, Inc. management will host a conference call, August 9, 2024, at 10:30 a.m. Central Time, to discuss the Company’s financial results. The conference call may be accessed by going to https://ir.dxpe.com.
Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at https://ir.dxpe.com. The online replay will be available on the same website immediately following the call. A slide presentation highlighting the Company’s results and key performance indicators will also be available on the Investor Relations section of the Company’s website.

To learn more about DXP Enterprises, Inc., please visit the Company's website at https://www.dxpe.com

About DXP Enterprises, Inc.

DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout North America and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.

Non-GAAP Financial Measures

DXP supplements reporting of net income with certain non-GAAP measurements, including EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, and Free Cash Flow. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Free Cash Flow and net debt referred to in this press release are included below under "Unaudited Reconciliation of Non-GAAP Financial Information".

The Company believes EBITDA provides additional information about: (i) operating performance, because it assists in comparing the operating performance of the business, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from core operations such as interest expense and income taxes and (ii) the performance and the effectiveness of operational strategies. Additionally, EBITDA performance is a component of a measure of the Company’s financial covenants under its credit facilities. Furthermore, some investors use EBITDA as a supplemental measure to evaluate the overall operating performance of companies in the industry. Management believes that some investors’ understanding of performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing ongoing results of operations. By providing this non-GAAP financial measure, together with a reconciliation to its most directly comparable GAAP financial measure, the Company believes it is enhancing investors’ understanding of the business and results of operations, as well as assisting investors in evaluating how well the Company is executing strategic initiatives. Free Cash Flow reconciles to the most directly comparable GAAP financial measure of cash flows from operations as provided below. We believe Free Cash Flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to fund acquisitions, make investments, repay debt obligations, repurchase shares of the Company's common stock, and for certain other activities.

Page 2
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NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com
Information Related to Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. These forward-looking statements include, without limitation, those about the Company’s expectations regarding the Company's expectations regarding the filing of the Form 10-Q; the description of the anticipated changes in the Company's consolidated balance sheet and the results of operations and the Company's assessment of the impact of such anticipated changes; the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to: the effectiveness of management’s strategies and decisions; our ability to implement our internal growth and acquisition growth strategies; general economic and business conditions specific to our primary customers; changes in government regulations; our ability to effectively integrate businesses we may acquire; new or modified statutory or regulatory requirements; availability of materials and labor; inability to obtain or delay in obtaining government or third-party approvals and permits; non-performance by third parties of their contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto; cyber-attacks adversely affecting our operations; other geological, operating and economic considerations and declining prices and market conditions, including supply or demand for maintenance, repair and operating products, equipment and service; inability of the Company or its independent auditors to complete the work necessary in order to file the Form 10-Q in the expected time frame; unanticipated changes to the Company's operating results in the Form 10-Q as filed or in relation to prior periods, including as compared to the anticipated changes stated here; unanticipated impact of such changes and its materiality; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, ability to manage changes and the continued health or availability of management personnel and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Page 3
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NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com

DXP ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ thousands, except share amounts)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Sales$445,556 $428,040 $858,191 $852,307 
Cost of sales307,763 296,188 596,516 595,414 
Gross profit137,793 131,852 261,675 256,893 
Selling, general and administrative expenses100,441 94,372 195,192 184,014 
Income from operations37,352 37,480 66,483 72,879 
Other income, net
(1,035)(242)(3,004)(712)
Interest expense15,384 11,863 30,928 23,384 
Income before income taxes23,003 25,859 38,559 50,207 
Provision for income taxes 6,310 6,805 10,534 13,573 
Net income 16,693 19,054 28,025 36,634 
Preferred stock dividend22 22 45 45 
Net income attributable to common shareholders$16,671 $19,032 $27,980 $36,589 
Net income$16,693 $19,054 $28,025 $36,634 
Foreign currency translation adjustments93 659 (521)757 
Comprehensive income$16,786 $19,713 $27,504 $37,391 
Earnings per share:
Basic$1.05 $1.11 $1.75 $2.10 
Diluted$1.00 $1.06 $1.66 $2.01 
Weighted average common shares outstanding:
Basic15,868 17,211 15,998 17,402 
Diluted16,708 18,051 16,838 18,242 

Page 4
dxplogoa02a.jpg
NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com
DXP ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ thousands, except share amounts)

June 30, 2024December 31, 2023
ASSETS
Current assets:
Cash$49,936 $173,120 
Restricted cash90 91 
Accounts receivable, net of allowance of $5,511 and $5,584, respectively326,583 311,171 
Inventories107,483 103,805 
Costs and estimated profits in excess of billings36,741 42,323 
Prepaid expenses and other current assets23,262 18,044 
Total current assets544,095 648,554 
Property and equipment, net68,407 61,618 
Goodwill426,821 343,991 
Other intangible assets, net85,895 63,895 
Operating lease right of use assets, net50,520 48,729 
Other long-term assets13,408 10,649 
Total assets$1,189,146 $1,177,436 
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of debt$5,500 $5,500 
Trade accounts payable101,185 96,469 
Accrued wages and benefits32,987 36,238 
Customer advances13,286 12,160 
Billings in excess of costs and estimated profits12,080 9,506 
Short-term operating lease liabilities15,218 15,438 
Other current liabilities47,447 48,854 
Total current liabilities227,703 224,165 
Long-term debt, net of unamortized debt issuance costs and discounts519,735 520,697 
Long-term operating lease liabilities36,617 34,336 
Other long-term liabilities20,410 17,359 
Total long-term liabilities576,762 572,392 
Total liabilities804,465 796,557 
Commitments and Contingencies
Shareholders' equity:
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized11
Series B preferred stock, $1.00 par value; 1,000,000 shares authorized15 15 
Common stock, $0.01 par value, 100,000,000 shares authorized; 15,788,714 and 16,177,237 outstanding, respectively345 345 
Additional paid-in capital216,803 216,482 
Retained earnings347,251 319,271 
Accumulated other comprehensive loss(31,761)(31,240)
Treasury stock, at cost 4,607,773 and 4,141,989 shares, respectively
(147,973)(123,995)
Total DXP Enterprises, Inc. equity384,681 380,879 
Total liabilities and equity$1,189,146 $1,177,436 
Page 5
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NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com
Business segment financial highlights:

•Service Centers’ revenue for the second quarter was $306.5 million, a decrease of 2.3 percent year-over-year, with a 14.3 percent operating income margin.
•Innovative Pumping Solutions’ revenue for the second quarter was $73.4 million, an increase of 52.7 percent year-over-year, with a 18.2 percent operating income margin.
•Supply Chain Services’ revenue for the second quarter was $65.7 million, a decrease of 0.8 percent year-over-year, with a 8.9 percent operating income margin.

SEGMENT DATA
($ thousands, unaudited)
Three Months Ended June 30,Six Months Ended June 30,
Sales2024202320242023
Service Centers$306,516 $313,806 $594,952 $619,619 
Innovative Pumping Solutions73,377 48,067 135,592 99,478 
Supply Chain Services65,663 66,167 127,647 133,210 
Total Sales$445,556 $428,040 $858,191 $852,307 
Three Months Ended June 30,Six Months Ended June 30,
Operating Income2024202320242023
Service Centers$43,855 $46,823 $84,175 $92,637 
Innovative Pumping Solutions13,366 6,760 20,336 15,956 
Supply Chain Services5,823 5,416 11,085 10,930 
Total Segments Operating Income
$63,044 $58,999 $115,596 $119,523 

RECONCILIATION OF OPERATING INCOME FOR REPORTABLE SEGMENTS
($ thousands, unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Income from operations for reportable segments$63,044 $58,999 $115,596 $119,523 
Adjustment for:
Amortization of intangibles
4,719 4,582 9,088 9,340 
Corporate expenses20,973 16,937 40,025 37,304 
Income from operations$37,352 $37,480 $66,483 $72,879 
Interest expense15,384 11,863 30,928 23,384 
Other income, net
(1,035)(242)(3,004)(712)
Income before income taxes$23,003 $25,859 $38,559 $50,207 
Page 6
dxplogoa02a.jpg
NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
($ thousands, unaudited)

The following table sets forth the reconciliation of EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable U.S. GAAP financial measure (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Income before income taxes
$23,003 $25,859 $38,559 $50,207 
Plus: Interest expense
15,384 11,863 30,928 23,384 
Plus: Depreciation and amortization
8,127 6,703 15,665 13,485 
EBITDA$46,514 $44,425 $85,152 $87,076 
Plus: other non-recurring items(1)
500 — 1,342 — 
Plus: stock compensation expense1,212 871 2,076 1,347 
Adjusted EBITDA$48,226 $45,296 $88,570 $88,423 
Operating Income Margin8.4 %8.8 %7.7 %8.6 %
EBITDA Margin10.4 %10.4 %9.9 %10.2 %
Adjusted EBITDA Margin10.8 %10.6 %10.3 %10.4 %
(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs not related to continuing business operations.

The following table sets forth the reconciliation of Organic Sales and Organic Sales per Business Day to the most comparable U.S. GAAP financial measure (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Sales by Business Segment
Service Centers$306,516 $313,806 $594,952 $619,619 
Innovative Pumping Solutions73,377 48,067 135,592 99,478 
Supply Chain Services65,663 66,167 127,647 133,210 
Total DXP Sales$445,556 $428,040 $858,191 $852,307 
Acquisition Sales23,403 7,265 35,178 26,398 
Organic Sales$422,153 $420,775 $823,013 $825,909 
Business Days6464127128
Sales per Business Day$6,962 $6,688 $6,757 $6,659 
Organic Sales per Business Day$6,596 $6,575 $6,480 $6,452 
Page 7
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NEWS RELEASE
CONTACT: Kent Yee
Senior Vice President, CFO
713-996-4700
www.dxpe.com

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION CONTINUED
($ thousands, unaudited)

The following table sets forth the reconciliation of Free Cash Flow to the most comparable GAAP financial measure (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net cash from operating activities$14,735 $(2,430)$41,724 $24,017 
Less: purchases of property and equipment(8,825)(1,813)(11,719)(5,617)
Free Cash Flow$5,910 $(4,243)$30,005 $18,400 

The following table is a reconciliation of adjusted net income attributable to DXP Enterprises, Inc., a non-GAAP financial measure, to net income, calculated and reported in accordance with U.S. GAAP (in thousands).


Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net Income
$16,693 $19,054 $28,025 $36,634 
One-time non-cash items
500 — 1,342 — 
Adjustment for taxes
(137)— (367)— 
Adjusted Net Income
$17,056 $19,054 $29,000 $36,634 
Weighted average common shares and common equivalent shares outstanding
Diluted16,708 18,051 16,838 18,242 
Diluted Earnings per Share $1.00 $1.06 $1.66 $2.01 
Adjusted Diluted Earnings per Share$1.02 $1.06 $1.72 $2.01 
Page 8
v3.24.2.u1
Cover Page
Aug. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity File Number 0-21513
Entity Registrant Name DXP Enterprises, Inc.
Entity Incorporation, State or Country Code TX
Entity Tax Identification Number 76-0509661
Entity Address, City or Town Houston,
Entity Address, State or Province TX
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock par value $0.01
Trading Symbol DXPE
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001020710
Amendment Flag false
Entity Address, Address Line One 5301 Hollister
Local Phone Number 996-4700
City Area Code (713)
Entity Address, Postal Zip Code 77040
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