DXP Enterprises(US:DXPE)2025-11-06 22:28Financial Performance - For the nine months ended September 30, 2025, DXP Enterprises reported approximately $1.3 billion in sales for its Service Centers and Innovative Pumping Solutions segments, reflecting a 14.1% increase compared to the same period in 2024[100]. - The Supply Chain Services segment generated approximately $191.7 million in sales for the nine months ended September 30, 2025, a decrease of 1.1% compared to the same period in 2024[101]. - Acquisition sales for the nine months ended September 30, 2025, were $74.1 million, up from $63.7 million in the same period in 2024[102]. - Organic sales for the nine months ended September 30, 2025, totaled $1.414 billion, compared to $1.267 billion for the same period in 2024, indicating a significant growth[105]. - The net income for the nine months ended September 30, 2025, was $65.8 million, compared to $49.1 million for the same period in 2024, representing a 33.9% increase[105]. - EBITDA for the nine months ended September 30, 2025, was $161.1 million, an increase from $133.3 million in the same period in 2024, reflecting a growth of 20.8%[105]. - Sales for the three months ended September 30, 2025 increased by $40.8 million, or 8.6%, to approximately $513.7 million from $472.9 million for the prior year's corresponding period[115]. - Net income for the three months ended September 30, 2025 was $21.6 million, or 4.2% of sales, compared to $21.1 million, or 4.5% of sales, for the prior year's corresponding period[114]. - Sales for the nine months ended September 30, 2025 increased by $157.8 million, or 11.9%, to approximately $1.5 billion from $1.3 billion for the prior year's corresponding period[125]. Profitability Metrics - The gross profit margin for the nine months ended September 30, 2025, improved to 31.5%, compared to 30.6% for the same period in 2024[105]. - Gross profit margin for the three months ended September 30, 2025 was 31.4%, compared to 30.9% for the prior year's corresponding period, positively impacted by 50 basis points due to recent acquisitions[119]. - Gross profit margin for the nine months ended September 30, 2025 was 31.5%, compared to 30.6% for the prior year's corresponding period, positively impacted by 90 basis points due to recent acquisitions[129]. - Operating income for the three months ended September 30, 2025 increased by $4.1 million to $43.7 million, primarily driven by increases in the Service Centers segment[121]. - Operating income for the nine months ended September 30, 2025 increased by $24.1 million, or 22.7%, to $130.2 million from $106.1 million in the prior year's corresponding period[131]. Cash Flow and Capital Expenditures - Free cash flow for the nine months ended September 30, 2025, was $19.5 million, down from $54.4 million in the same period in 2024[105]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $56.5 million, down from $70.1 million in the prior year[145]. - Capital expenditures for the nine months ended September 30, 2025, were $37.0 million, compared to $15.7 million in 2024[159]. - Free Cash Flow for the nine months ended September 30, 2025, was $19.5 million, a significant decrease from $54.4 million in 2024[140]. Debt and Working Capital - Total outstanding debt as of September 30, 2025, was $644.0 million, accounting for 56.9% of total capitalization of $1.1 billion[149]. - Net working capital as of September 30, 2025, increased to $364.6 million, up $73.6 million from $291.0 million as of December 31, 2024[157]. - Interest expense for the nine months ended September 30, 2025 decreased by $2.3 million compared with the prior year's corresponding period, primarily due to refinancing of the Term Loan[132]. Strategic Focus - The company is actively monitoring economic conditions and adjusting strategies to mitigate adverse effects from inflation and supply chain challenges[97]. - DXP Enterprises continues to focus on maintaining strong margins despite vendor price increases, demonstrating resilience in its operations[100]. - The Company invested $24.4 million in acquisitions during the nine months ended September 30, 2025, a decrease from $149.4 million in the same period of 2024[158]. Tax and Expenses - The effective tax rate for the three months ended September 30, 2025 was 26.6%, compared to 11.1% for the prior year's corresponding period, primarily due to a lower tax benefit from research and development tax credits[122]. - Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2025 increased by $11.1 million, or 10.4%, to $117.6 million from $106.5 million for the prior year's corresponding period[120]. - Adjusted EBITDA for the three months ended September 30, 2025, was $56.5 million, representing a 7.3% increase from $52.4 million in 2024[138].