[DXP Enterprises, Inc. Second Quarter 2024 Results](index=1&type=section&id=DXP%20Enterprises%2C%20Inc.%20Second%20Quarter%202024%20Results) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company reported strong Q2 sales growth, increased Adjusted EBITDA, and continued its strategic acquisition plan Q2 2024 Key Metrics | Metric | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | | Sales | $445.6 million | +4.1% | | GAAP Diluted EPS | $1.00 | -5.7% | | Adjusted EBITDA | $48.2 million | +6.4% | | Net Income | $16.7 million | -12.3% | | Free Cash Flow (YTD) | $30.0 million | +63.1% | - Completed **four acquisitions** through the second quarter of 2024, consisting of two water companies and two industrial rotating equipment companies[1](index=1&type=chunk) - Cash on hand at the end of the quarter was **$49.9 million**[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes strong sequential sales growth to organic execution and acquisitions, planning further expansion - CEO David R. Little emphasized that strong sequential sales growth and gross profit margins produced a **GAAP EPS of $1.00**, with acquisitions adding **$23.4 million** in sales[2](index=2&type=chunk) - CFO Kent Yee noted the company's diversification efforts, reduced energy industry exposure, and strong balance sheet with a **net debt to EBITDA ratio of 2.64:1.0**[2](index=2&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The company's financial statements detail changes in operations, assets, liabilities, and equity for the period [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Sales increased year-over-year, but higher expenses led to a decline in net income and diluted EPS Consolidated Statements of Operations Highlights ($ thousands, except EPS) | Account | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Sales** | **$445,556** | **$428,040** | **$858,191** | **$852,307** | | Gross Profit | $137,793 | $131,852 | $261,675 | $256,893 | | Income from Operations | $37,352 | $37,480 | $66,483 | $72,879 | | **Net Income** | **$16,693** | **$19,054** | **$28,025** | **$36,634** | | **Diluted EPS** | **$1.00** | **$1.06** | **$1.66** | **$2.01** | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets grew slightly, driven by an increase in goodwill from acquisitions offset by a decrease in cash Condensed Consolidated Balance Sheet Highlights ($ thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash | $49,936 | $173,120 | | Goodwill | $426,821 | $343,991 | | **Total Assets** | **$1,189,146** | **$1,177,436** | | Total Current Liabilities | $227,703 | $224,165 | | Long-term Debt, net | $519,735 | $520,697 | | **Total Liabilities** | **$804,465** | **$796,557** | | **Total Equity** | **$384,681** | **$380,879** | [Business Segment Performance](index=6&type=section&id=Business%20Segment%20Performance) The Innovative Pumping Solutions segment drove performance with significant revenue and operating income growth Q2 2024 Segment Revenue & Operating Income ($ thousands) | Segment | Revenue (Q2 2024) | Revenue (Q2 2023) | % Change | Operating Income (Q2 2024) | Operating Income (Q2 2023) | | :--- | :--- | :--- | :--- | :--- | :--- | | Service Centers | $306,516 | $313,806 | -2.3% | $43,855 | $46,823 | | Innovative Pumping Solutions | $73,377 | $48,067 | +52.7% | $13,366 | $6,760 | | Supply Chain Services | $65,663 | $66,167 | -0.8% | $5,823 | $5,416 | [Non-GAAP Financial Measures & Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) Reconciliations show increased Adjusted EBITDA and a significant improvement in Free Cash Flow year-over-year Reconciliation of Adjusted EBITDA ($ thousands) | Account | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Income before income taxes | $23,003 | $25,859 | | Plus: Interest expense | $15,384 | $11,863 | | Plus: Depreciation & amortization | $8,127 | $6,703 | | **EBITDA** | **$46,514** | **$44,425** | | Plus: Adjustments | $1,712 | $871 | | **Adjusted EBITDA** | **$48,226** | **$45,296** | Reconciliation of Free Cash Flow ($ thousands) | Account | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $14,735 | $(2,430) | | Less: purchases of property and equipment | $(8,825) | $(1,813) | | **Free Cash Flow** | **$5,910** | **$(4,243)** | Reconciliation of Adjusted Diluted EPS | Account | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Diluted Earnings per Share | $1.00 | $1.06 | | **Adjusted Diluted Earnings per Share** | **$1.02** | **$1.06** | [Company Information](index=2&type=section&id=Company%20Information) The company operates as an industrial distributor and advises on forward-looking statement risks - DXP is a leading products and service distributor providing value-added solutions to industrial customers in North America and Dubai[4](index=4&type=chunk) - The company's business segments are **Service Centers, Innovative Pumping Solutions, and Supply Chain Services**[4](index=4&type=chunk) - The press release contains **forward-looking statements** protected under the Private Securities Litigation Reform Act of 1995, which involve significant risks and uncertainties[8](index=8&type=chunk)

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outsideaudited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, DXP Enterprises possesses a Zacks Rank of #5 (Strong Sell). Market participants will be closely following the financial results of DXP Enterprises in its upcoming release. Our research reveals that these estimate ...

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Shares of the industrial products supplier have appreciated by 11.86% over the course of the past month, outperforming the Industrial Products sector's gain of 3.98% and the S&P 500's gain of 1.96%. Investors might also notice recent changes to analyst estimates ...

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, May 29: DXP Enterprises, Inc. (DXPE) : Thisindustrial distributor company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 13% over the last 60 days. DXP Enterprises' shares gained 39.5% over the last three months compared with the S&P 500's advance of 0.2%. The company possesses a Momentum Score of B. Engie SA (ENGIY) : This energy company has a Zac ...

Here are three stocks with buy rank and strong value characteristics for investors to consider today, May 29: Navios Maritime Partners L.P. (NMM) : This dry bulk shipping company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.3% over the last 60 days. Navios Maritime has a price-to-earnings ratio (P/E) of 3.21 compared with 11.60 for the industry. The company possesses a Value Score of A. See the full list of top ranked stocks here. Learn m ...

Company Performance - DXP Enterprises (DXPE) has returned 47.2% year-to-date, significantly outperforming the average gain of 14.5% in the Industrial Products group [4] - The Zacks Consensus Estimate for DXPE's full-year earnings has increased by 13% over the past 90 days, indicating improved analyst sentiment and a more positive earnings outlook [3] Industry Context - DXP Enterprises is part of the Manufacturing - General Industrial industry, which consists of 44 companies and currently ranks 68 in the Zacks Industry Rank [5] - The Manufacturing - General Industrial industry has gained an average of 6.1% year-to-date, showing that DXP Enterprises is performing better than its peers in this sector [5] Comparative Analysis - Luxfer (LXFR) is another stock in the Industrial Products group that has outperformed the sector, with a year-to-date increase of 35.9% [4] - Luxfer's consensus EPS estimate for the current year has surged by 185.2% over the past three months, and it holds a Zacks Rank of 2 (Buy) [5]

While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy. Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, ...

Howmet Aerospace (HWM) : This company which engages in providing engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries, has a Zacks Rank #1(Strong Buy), and witnessed the Zacks Consensus Estimate for its current year earnings increasing 10.1% over the last 60 days. Howmet Aerospace's shares gained 31.5% over the last three month compared with the S&P 500's gain of 6.8%. The company possesses a Momentum Score of B. DXP Enterprises (DXPE) : This compan ...

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potent ...

Financial Data and Key Metrics Changes - Total DXP sales for Q1 increased 1.4% sequentially to $412.6 million, averaging $6.6 million per business day [14][44] - Adjusted EBITDA for Q1 was $40.3 million, with adjusted EBITDA margins at 9.8%, slightly below the recent 10%-plus trends due to seasonality and one-time costs [23][40] - Gross profit margins improved to 30%, a 55 basis point increase compared to Q1 2023 [22][40] - Net income for Q1 was $11.3 million, with diluted earnings per share at $0.67, adjusted to $0.74 when accounting for one-time items [68] Business Line Data and Key Metrics Changes - Innovative Pumping Solutions (IPS) grew sales 3.2% sequentially and 21% year-over-year, driven by energy-related backlog growth [20][21] - Service Centers experienced a 1.1% sequential growth but a 5.7% decline year-over-year [20] - Supply Chain Services also grew 1.1% sequentially but saw a 7.6% decline year-over-year due to facility closures and efficiency improvements [39][46] Market Data and Key Metrics Changes - The ISM PMI manufacturing index improved from 49.1% in January to 50.3% in March, indicating a shift from contraction to growth, but fell back to 49.2% in April [36] - Sales per business day increased from $5.9 million in January to $7.5 million in March, reflecting typical quarter-end activity [37][44] Company Strategy and Development Direction - The company is focused on organic and inorganic growth, with a strategy to diversify through acquisitions, having closed three acquisitions in Q1 [11][26] - DXP aims to enhance gross profit margins and EBITDA margins through strategic capital allocation and operational efficiencies [4][17] - The company is positioning itself to capture market share in industrial, energy, and utility sectors, with a strong emphasis on ESG objectives [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of industrial end markets, attributing growth to price increases and market share gains [12][34] - The company anticipates continued strong demand in the oil and gas sector and expects to benefit from a good cycle in energy-related project work [13][15] - Management acknowledged inflationary pressures but emphasized their ability to manage costs and maintain profitability [41][81] Other Important Information - DXP produced over $24.1 million in free cash flow, marking a solid start to the year [17][49] - The company repurchased 326,000 shares for $16.8 million during the quarter, reflecting a commitment to returning capital to shareholders [17][51] - Return on invested capital (ROIC) was reported at 36.3% at the end of Q1 [70] Q&A Session Summary Question: Trends in sales per business day for April and early May - Management noted that sales per business day in April were $6.8 million, reflecting a 2.7% year-over-year increase [74][75] Question: Expectations for revenue progression in Q2 - Management indicated that typically Q2 outperforms Q1, and they expect similar trends this year [78] Question: Attainability of 10% EBITDA margin - Management believes the 10% EBITDA margin is attainable in Q2, citing seasonality and one-time costs as factors affecting Q1 results [59][60] Question: Insights on growth initiatives and acquisitions - Management discussed ongoing efforts to capture national accounts and the potential for significant sales from integrated supply services [62][63] Question: Details on upcoming acquisitions - Management mentioned plans for a tuck-in acquisition with expected revenue of $25 million to $35 million, maintaining strong profitability [91]