DXP Enterprises(US:DXPE)2024-08-08 21:27Financial Performance - For the six months ended June 30, 2024, DXP reported total sales of approximately $858.2 million, a slight increase from $852.3 million in the same period of 2023, representing a growth of about 0.9%[63] - Organic sales for the same period were approximately $823.0 million, down from $825.9 million in 2023, indicating a decrease of about 0.2%[63] - The Service Centers segment generated sales of $594.9 million for the six months ended June 30, 2024, compared to $619.6 million in 2023, reflecting a decline of approximately 4.0%[63] - The Innovative Pumping Solutions segment saw sales increase to $135.6 million for the six months ended June 30, 2024, up from $99.5 million in 2023, marking a significant growth of approximately 36.3%[63] - The Supply Chain Services segment reported sales of $127.6 million, a decrease of approximately 4.2% compared to $133.2 million in the same period of 2023[72] - Sales for the three months ended June 30, 2024 increased by $17.5 million, or 4.1%, to approximately $445.6 million from $428.0 million for the prior year's corresponding period[75] - Innovative Pumping Solutions segment sales increased by $25.3 million, or 52.7%, for the three months ended June 30, 2024, compared to the prior year's corresponding period[77] - For the six months ended June 30, 2024, sales increased by $5.9 million, or 0.7%, to approximately $858.2 million from $852.3 million for the prior year's corresponding period[81] Profitability Metrics - Gross profit for the six months ended June 30, 2024, was $261.7 million, compared to $256.9 million in 2023, resulting in a gross profit margin of 30.5%[63] - EBITDA for the six months ended June 30, 2024, was $85.2 million, down from $87.1 million in 2023, with an EBITDA margin of 9.9%[63] - Adjusted EBITDA for the same period was $88.6 million, slightly up from $88.4 million in 2023, with an adjusted EBITDA margin of 10.3%[63] - Net income for the three months ended June 30, 2024 was $16.7 million, or 3.7% of sales, down from $19.1 million, or 4.5% of sales, in the prior year's corresponding period[75] - Operating income for the six months ended June 30, 2024 decreased by $6.4 million, or 8.8%, to $66.5 million from $72.9 million in the prior year's corresponding period[86] - Net income attributable to DXP Enterprises, Inc. for Q2 2024 was $16.7 million, a decrease of 12.0% from $19.1 million in Q2 2023[91] - Adjusted EBITDA for Q2 2024 was $48.2 million, up 4.1% from $45.3 million in Q2 2023, with an Adjusted EBITDA Margin of 10.8%[91] Cash Flow and Liquidity - Free cash flow for the six months ended June 30, 2024, was $30.0 million, compared to $18.4 million in 2023, indicating an increase of approximately 63.0%[63] - Cash provided by operating activities for the six months ended June 30, 2024, was $41.7 million, up from $24.0 million in the prior year[97] - Free Cash Flow for the six months ended June 30, 2024, was $30.0 million, compared to $18.4 million for the same period in 2023, indicating a significant increase[93] - As of June 30, 2024, the company had available cash of $49.9 million and credit facility availability of $131.4 million, with no borrowings on the ABL Revolver[94] - The Fixed Charge Coverage Ratio as of June 30, 2024, was 1.39 to 1.00, indicating compliance with financial covenants[102] - The Secured Leverage Ratio as of June 30, 2024, was 2.64 to 1.00, below the maximum threshold of 5.50 to 1.00 set for the fiscal quarter[102] - The company believes it has adequate funding and liquidity to meet its normal working capital needs over the next twelve months[106] Future Outlook - DXP expects to benefit from increased oil and gas activity and recent acquisitions in the water and wastewater markets throughout the remainder of 2024[71] - The company plans to pursue additional acquisition targets, primarily funded through cash flows from operations and borrowings[105] Expenses - Selling, general and administrative expenses increased by $6.1 million, or 6.4%, to $100.4 million for the three months ended June 30, 2024[79] - Interest expense for the second quarter of 2024 increased by $3.5 million compared to the prior year's corresponding period, primarily due to additional borrowing[80] Taxation - The effective tax rate from continuing operations was 27.4% for the three months ended June 30, 2024, compared to 26.3% for the same period in 2023[81] Organic Sales - Organic sales for the three months ended June 30, 2024 were $422.2 million, compared to $420.8 million for the prior year's corresponding period[89]