DXP Enterprises(US:DXPE)2025-05-08 16:32Financial Data and Key Metrics Changes - The first quarter adjusted EBITDA was $52.5 million, with adjusted diluted earnings per share of $1.26, supported by a year-over-year sales growth of 15.5% and sequential sales growth of 1.2% [6][18] - Total sales for Q1 increased to $476.6 million, with average daily sales rising from $6.9 million in January to $8.1 million in March [11][19] - Gross margins improved to 31.5%, reflecting a year-over-year increase of 151 basis points [24] Business Line Data and Key Metrics Changes - Innovative Pumping Solutions (IPS) saw a sales growth of 38.5% year over year, while Service Centers grew by 13.4% and Supply Chain Services by 2.1% [11][19] - IPS backlog continued to grow, with energy-related backlog increasing by 5.5% over Q4 [22] - Service Centers achieved a new sales watermark of $327 million, with notable growth in regions like Alaska and Texas Gulf Coast [20][18] Market Data and Key Metrics Changes - The ISM and PMI manufacturing index indicated a slight contraction, moving from 50.9 in January to 49 in March, with expectations that price increases will offset this contraction [9] - Oil and gas, representing 23% of the business, showed consistent demand, with anticipated growth driven by large projects [10] Company Strategy and Development Direction - The company remains focused on organic and inorganic growth, with a commitment to customer-driven expertise and operational improvements [5][7] - DXP is actively pursuing acquisitions to diversify its market presence, having closed one acquisition in Q1 and planning more [8][32] - The company aims to maintain a balance between strategic investments and preserving liquidity amid market uncertainties [15][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future demand despite tariff uncertainties, noting that no significant demand effects have been observed yet [16][44] - The company is well-positioned to navigate market volatility and is focused on improving efficiencies while making strategic investments [15][17] Other Important Information - The company reported a working capital increase to $325.3 million, reflecting a rise in receivables [27] - Cash flow from operations was $3 million, impacted by growth in accounts receivable and tax payments [29] Q&A Session Summary Question: Can you share daily sales trends by month for Q1 and Q2? - Daily sales trends showed an increase from $6.8 million in January to $8.1 million in March, with April at $7.8 million [38][39] Question: Will there be any significant margin differences between Q1 and Q2? - There are no substantive factors expected to cause a significant margin difference between Q1 and Q2 [40][41] Question: Are there signs of slowing down due to tariffs and macro uncertainty? - Management noted no significant effect on demand yet, although there may be some stalling due to uncertainty around tariffs [42][44]