Core Insights - DXP Enterprises (NASDAQ: DXPE) reported double-digit growth in its topline as it exits 2024, driven by strong performance in the Innovative Pumping Solutions segment and expansion into new, robust end markets [1] Group 1: Financial Performance - The company achieved significant revenue growth, indicating a strong market position and operational efficiency [1] Group 2: Market Dynamics - The growth is attributed to robust momentum in the Innovative Pumping Solutions segment, highlighting the company's focus on innovation and market adaptation [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K For the transition period from _________ to _________. Commission file number 0-21513 DXP Enterprises, Inc. (Exact name of registrant as specified in its charter) Texas 5301 Hollister, Houston, Texas 77040 76-0509661 (State of incorporation) (Address of principal executive of ices, including zip code) (I.R.S. Employer Identification Number) (713) 996-4700 (Registrant's telephone number, including area code) Securities register ...

Financial Performance - Fiscal 2024 sales reached $1.8 billion, representing a 7.4% increase from fiscal 2023[5] - Fourth quarter sales were $470.9 million, up from $407.0 million in the same quarter of 2023, marking a year-over-year growth of 15.6%[6] - Full year GAAP diluted EPS was $4.22, compared to $3.89 in fiscal 2023, reflecting an increase of 8.5%[6] - Adjusted EBITDA for fiscal 2024 was $191.3 million, a 9.8% increase from $174.3 million in 2023[6] - Adjusted net income for the twelve months ended December 31, 2024, was $75,396, up from $71,212 in 2023, representing a 5.5% increase[27] - The company reported a diluted earnings per share of $1.29 for the three months ended December 31, 2024, compared to $0.94 in 2023, a 37.2% increase[27] Cash Flow and Debt - Free cash flow for fiscal 2024 was $77.1 million, which is 42.3% of EBITDA, down from $94.0 million in fiscal 2023[6] - Free cash flow for the three months ended December 31, 2024, was $22,748, down from $37,287 in 2023, indicating a decrease of 39%[27] - The company ended fiscal 2024 with $148.4 million in cash and net debt of $500.6 million, resulting in a secured leverage ratio of 2.4:1.0[8] - Long-term debt rose to $621,684 as of December 31, 2024, from $520,697 in 2023, reflecting a 19.4% increase[18] Sales and Market Position - Innovative Pumping Solutions sales surged 47.7% to $323.0 million, while Supply Chain Services sales declined 1.5% to $256.4 million[8] - Organic sales for the three months ended December 31, 2024, were $436,127, compared to $404,232 in 2023, showing an 8% growth[25] - Total DXP sales for the three months ended December 31, 2024, reached $470,914, a 15.6% increase from $407,044 in the same period of 2023[20] Operational Efficiency - Operating income for the total segments increased to $64,948 for the three months ended December 31, 2024, compared to $51,142 in 2023, reflecting a 27% growth[20] - EBITDA for the three months ended December 31, 2024, was $48,984, up from $40,501 in 2023, representing a 21.5% increase[24] Assets and Liabilities - Total assets increased to $1,349,494 as of December 31, 2024, compared to $1,177,436 in 2023, marking a growth of 14.6%[18] - The total current liabilities increased to $243,984 as of December 31, 2024, from $224,165 in 2023, reflecting an 8.9% rise[18] Strategic Growth - DXP completed seven acquisitions during fiscal 2024, enhancing its market position[5] - The company expects continued growth driven by both organic and acquisition strategies, supported by a strong balance sheet[8]

Financial Data and Key Metrics Changes - DXP Enterprises reported a 7.4% increase in total sales for fiscal 2024, reaching $1.8 billion, with adjusted EBITDA of $191.3 million, reflecting a 9.8% year-over-year increase [9][30][37] - Gross profit margins improved by 77 basis points to 30.9%, marking a second consecutive fiscal year with adjusted EBITDA margins exceeding 10% [9][29][50] - Diluted earnings per share for fiscal 2024 increased to $4.22, up from $3.89 in the previous year, with adjusted diluted EPS in Q4 at $1.38 [51][63] Business Line Data and Key Metrics Changes - Innovative Pumping Solutions (IPS) experienced significant growth of 47.7% year-over-year, contributing $323 million to total sales [22][40] - Service Centers grew by 1.9% to $1.2 billion, while Supply Chain Services saw a slight decline of 1.5% [22][40] - IPS sales contribution increased to 18% of total sales in 2024, up from 13% in 2023 [30][46] Market Data and Key Metrics Changes - DXP's end-market diversification included oil and gas at 23%, water and wastewater at 10%, and food and beverage at 7% [11] - The DXP Water backlog grew by 108% year-over-year, with organic growth of 39.5% [42] - Regions showing year-over-year growth included North Central, South Rockies, and Southwest, with notable strength in Canadian rotating equipment and U.S. safety services [27][43] Company Strategy and Development Direction - The company aims to double its size over the next 3 to 5 years through strategic investments and acquisitions, having completed 7 acquisitions in fiscal 2024 [15][18] - DXP continues to focus on diversifying end markets, particularly in water and wastewater, while maintaining operational efficiencies [13][19] - The strategy combines the strengths of a large company with the agility of local businesses to enhance customer value and growth opportunities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for fiscal 2025, anticipating continued organic and acquisition-driven growth, with a strong pipeline of opportunities [18][21] - The company is well-positioned to navigate inflationary pressures, with a history of passing on cost increases to customers [34][80] - Management highlighted the importance of maintaining margins while driving long-term operational efficiencies [31][79] Other Important Information - DXP generated $77 million in free cash flow for fiscal 2024, reflecting a focus on consistent cash generation while investing in working capital [17][57] - The company successfully refinanced its Term Loan B, reducing borrowing costs and raising an additional $105 million for acquisitions [55][61] - Capital expenditures for fiscal 2024 were $25.1 million, up from $12.3 million in fiscal 2023, indicating a commitment to reinvestment [56] Q&A Session Summary Question: Can you share daily sales trends by month for Q4 and into Q1? - In Q4, sales per business day were $7.2 million in October, $7.5 million in November, and $8.1 million in December. For January and February 2025, sales per business day were $6.8 million and $7.8 million respectively [68][69] Question: How are margins trending quarter-over-quarter? - Margins increased significantly from Q3 to Q4, driven by a favorable mix, particularly from water and wastewater acquisitions, which typically have higher gross and EBITDA margins [70][72] Question: What are the company's goals regarding EBITDA margins? - The company aims to achieve 11% EBITDA margins, having previously set a goal of 10%, which has been met [74][79]

Company Performance - DXP Enterprises (DXPE) closed at $88.29, down 1.8% from the previous trading session, underperforming the S&P 500's loss of 0.5% [1] - Over the past month, DXP Enterprises' shares have decreased by 15.38%, significantly trailing the Industrial Products sector's loss of 6.92% and the S&P 500's loss of 0.47% [1] Earnings and Analyst Estimates - The upcoming earnings release of DXP Enterprises is highly anticipated by investors, with recent changes to analyst estimates indicating evolving near-term business trends [2] - Positive estimate revisions are interpreted as a favorable sign for the company's business outlook [2][3] Zacks Rank and Valuation - DXP Enterprises currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining stagnant over the past month [4] - The company has a Forward P/E ratio of 20.86, which is a discount compared to the industry's average Forward P/E of 23.15 [5] - The Manufacturing - General Industrial industry, part of the Industrial Products sector, has a Zacks Industry Rank of 141, placing it in the bottom 44% of over 250 industries [5]

Company Performance - DXP Enterprises (DXPE) closed at $101.90, with a +0.25% change from the previous day, outperforming the S&P 500's daily loss of 0.27% [1] - Over the past month, shares of DXP Enterprises have appreciated by 5.7%, surpassing the Industrial Products sector's gain of 3.78% and the S&P 500's gain of 4.27% [1] Earnings and Analyst Estimates - The investment community is closely monitoring DXP Enterprises' forthcoming earnings report, with a focus on any recent changes to analyst estimates [2] - Upward revisions in estimates indicate analysts' positivity towards the company's business operations and profit generation capabilities [2] Valuation and Ranking - DXP Enterprises has a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining stagnant over the past month [4] - The company is currently traded at a Forward P/E ratio of 23.58, which is a premium compared to the industry's average Forward P/E of 23.27 [4] Industry Context - The Manufacturing - General Industrial industry, part of the Industrial Products sector, has a Zacks Industry Rank of 160, placing it in the bottom 37% of over 250 industries [5] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [5]

Core Viewpoint - DXP Enterprises, Inc. (DXPE) has experienced significant stock performance, with shares trading above $100 and a 113.5% increase over the past six months, outperforming both the S&P 500 and industry peers [1][2][3]. Stock Performance - The stock closed at $102.44, nearing its 52-week high of $107.06 [1] - Over the last six months, DXPE's stock surged 113.5%, compared to the S&P 500's growth of 13.5% and the industry's 9.5% [2]. Market Sentiment - DXPE is trading above its 50-day and 200-day moving averages, indicating strong upward momentum and price stability, reflecting positive market sentiment [4][5]. Growth Drivers - The Service Centers segment grew approximately 8% year over year in Q3 2024, driven by strong demand for MRO products and contributions from acquisitions [7]. - The Innovative Pumping Solutions segment saw a 52% revenue increase in Q3, supported by a strong project pipeline in energy and water markets [9]. - The company expects to recognize revenues from large project wins in energy and water markets starting Q1 2025, supported by a healthy backlog [10]. Acquisitions - Recent acquisitions, including Arroyo Process Equipment, Burt Gurney & Associates, and MaxVac Inc., are expected to enhance DXPE's product offerings and market reach [11][12]. Financial Challenges - The company faces high operating costs, with cost of sales increasing by 11.3% year over year in Q3 2024, and selling, general, and administrative expenses rising by 18.7% [13]. - Long-term debt stood at $519.3 million, with a debt-to-capital ratio of 56.34%, significantly higher than the industry average [15]. Valuation Concerns - DXPE's forward P/E ratio is 23.77X, above the industry average of 21.59X and higher than peers like The Middleby Corporation at 17.10X, indicating potential vulnerability to market sentiment shifts [17]. Earnings Estimates - Consensus earnings estimate for 2024 is $4.07 per share, reflecting a slight decline of 0.5% year over year [20]. Overall Outlook - The company is well-positioned for growth due to strong performance in key segments, but faces challenges from rising operating expenses, high debt levels, and premium stock valuation [21].

Group 1 - DXP Enterprises (DXPE) ended the recent trading session at $98.97, showing a -1.89% change from the previous day's closing price, underperforming compared to the S&P 500's daily gain of 0.92% [1] - Over the past month, shares of DXP Enterprises have gained 22.9%, significantly outperforming the Industrial Products sector's gain of 3.83% and the S&P 500's gain of 0.81% [1] Group 2 - Analysts and investors are closely monitoring DXP Enterprises ahead of its upcoming earnings disclosure, with recent changes in analyst estimates indicating a favorable outlook on the company's business health and profitability [2] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with stocks rated 1 producing an average annual return of +25% since 1988 [4] Group 3 - DXP Enterprises has a Forward P/E ratio of 23.41, which is lower than the industry average Forward P/E of 23.86, indicating that DXP Enterprises is trading at a discount compared to its peers [5] - The Manufacturing - General Industrial industry, which includes DXP Enterprises, currently ranks in the bottom 28% of all industries, with a Zacks Industry Rank of 182 [5][6]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, capitalizing on established price movements [1][2]. Company Overview: DXP Enterprises (DXPE) - DXP Enterprises currently holds a Momentum Style Score of B, indicating a favorable momentum outlook [3]. - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [4]. Performance Metrics - Over the past week, DXP Enterprises' shares increased by 3.49%, outperforming the Zacks Manufacturing - General Industrial industry, which rose by 1.01% [6]. - In a longer timeframe, DXP's shares have risen by 98.11% over the past three months and 204.96% over the past year, significantly outperforming the S&P 500's gains of 3.88% and 24.54%, respectively [7]. - The average 20-day trading volume for DXP Enterprises is 292,081 shares, indicating a bullish trend when combined with rising stock prices [8]. Earnings Outlook - Recent earnings estimate revisions for DXP Enterprises show one upward revision for the full year, increasing the consensus estimate from $3.56 to $4.07 over the past 60 days [10]. - For the next fiscal year, there has been one upward revision with no downward revisions, indicating a positive earnings outlook [10]. Conclusion - Given the strong performance metrics and positive earnings outlook, DXP Enterprises is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a compelling investment option [12].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: DXP Enterprises (DXPE) Analysis - DXP Enterprises has shown significant price momentum, with a four-week price change of 22.9%, indicating growing investor interest [4] - The stock has gained 98.1% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [5] - DXPE has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [6] - The stock has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - DXPE is trading at a Price-to-Sales ratio of 0.91, indicating it is reasonably valued at 91 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides DXPE, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to various investing styles, aimed at outperforming the market [9]