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Market ClerkRecap
Tue Oct 27 · markets closed1 signal on Oct 26140 insider buys this week · $73.9MCIRO short report next: Oct 30The week ahead

DXPE

DXP ENTERPRISES INC
NASDAQ · INDUSTRIALS · WHOLESALE-INDUSTRIAL MACHINERY & EQUIPMENT
164.43
+8.17 +5.23%
USD · close Oct 26
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MKT CAP $2.6BP/E 28.9DIV YIELD —FCF YIELD 4.65%REV TTM $2.1B +11.5%NET INCOME $93.2M +7.5%NET DEBT $103.4M52W 85.53 – 200.84SEC XBRL · TTM TO Invalid Date

How DXPE rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
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261
new sentences
Dropped
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sentences removed
Length
+1,747
words, now 27,430

New in FY2025

  • NON-GAAP FINANCIAL MEASURES In an effort to provide investors with additional information regarding our results of operations as determined by U.S.
  • GAAP, we disclose non-GAAP financial measures.
  • The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S.
  • Our primary non-GAAP financial measures are organic sales ("Organic Sales"), sales per business day ("Sales per Business Day"), organic sales per business day ("Organic Sales per Business Day"), free cash flow ("Free Cash Flow"), earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted EBITDA ("Adjusted EBITDA"), EBITDA Margin, and Adjusted EBITDA Margin.
  • The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way.
  • These measures are not substitutes for their comparable U.S.
  • Management uses these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect our underlying operations.
  • Management believes that presenting our non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results.
  • We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S.
  • GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting our business than could be obtained absent these disclosures.
  • Refer to the Non-GAAP Financial Measures and Reconciliation section below for detailed reconciliations of our non-GAAP financial measures.
  • Matters Affecting Comparability Our results of operations are not directly comparable on a year-over-year basis due to various prior acquisitions and the varying size and number of acquisitions in any comparable period.
  • Accordingly, the results of acquisitions are included subsequent to their respective acquisition dates and the Company provides detail around Organic and Acquisition Sales as defined in our Key Business Metrics.
  • During the twelve months ended December 31, 2025, acquisition sales were $96.0 million compared to $98.5 million for the twelve months ended December 31, 2024.
  • The Company's products are marketed in the U.S., Canada, Mexico, U.A.E., India, and Saudi Arabia to customers that are engaged in a variety of industries, many of which may be counter cyclical to each other.
  • Twelve Months Ended December 31, 2025 2024 (1) 2023 (1) Sales by Business Segment ( in thousands, except percentages and days) Service Centers $ 1,373,140 $ 1,236,775 $ 1,214,602 Innovative Pumping Solutions 390,291 308,850 203,630 Supply Chain Services 252,934 256,415 260,368 Total DXP Sales $ 2,016,365 $ 1,802,040 $ 1,678,600 Acquisition Sales $ 96,043 $ 98,500 $ 33,078 Organic Sales $ 1,920,322 $ 1,703,540 $ 1,645,522 Business Days 252 253 252 Sales per Business Day $ 8,001 $ 7,123 $ 6,661 Organic Sales per Business Day $ 7,620 $ 6,733 $ 6,530 Gross Profit $ 635,928 $ 556,277 $ 505,291 Gross Profit Margin 31.5 % 30.9 % 30.1 % Income from Operations $ 176,870 $ 145,382 $ 138,722 Income from Operations Margin 8.8 % 8.1 % 8.3 % Net Income $ 88,677 $ 70,489 $ 68,812 Net Income Margin 4.4 % 3.9 % 4.1 % EBITDA $ 218,602 $ 182,304 $ 170,182 EBITDA Margin 10.8 % 10.1 % 10.1 % Adjusted EBITDA $ 225,302 $ 191,310 $ 174,305 Adjusted EBITDA Margin 11.2 % 10.6 % 10.4 % Net cash provided by operating activities $ 94,264 $ 102,211 $ 106,222 Free Cash Flow $ 53,978 $ 77,143 $ 93,959 (1) Prior period segment disclosures have been recast.
  • Organic Sales and Acquisition Sales We define and calculate organic sales to include locations and acquisitions under our ownership for at least twelve months.
  • EBITDA and Adjusted EBITDA We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization.
  • We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization plus stock-based compensation expense and all other non-cash charges, adjustments, and non-recurring items.
  • Below are readings for the fourth quarter versus the full year average: Index Reading Period MCU PMI IP MBI Active Drilling Rigs (1) October 75.8 48.7 101.5 49.2 1,800 November 76.1 48.2 102.0 48.1 1,813 December 76.3 47.9 102.3 48.5 1,783 Fiscal 2025 Q4 average 76.1 48.3 101.9 48.6 1,799 Fiscal 2025 average 76.4 48.9 102.0 48.6 1,819 Fiscal 2024 average 77.6 48.3 102.6 45.7 1,735 Fiscal 2023 average 79.3 47.1 102.8 46.5 1,814 (1) From Baker Hughes’ Worldwide Rig Counts - Current Data The continued disruption in economic markets due to inflation, changing interest rates, tariffs, trade disputes, business interruptions due to natural disasters and changes in weather patterns, employee shortages, and supply chain issues, all pose challenges which may adversely affect our future performance.
  • Sales for the year ended December 31, 2025 increased $214.3 million, or 11.9%, to approximately $2.0 billion from $1.8 billion for the prior corresponding period.
  • Customer demand was generally healthy throughout fiscal 2025, resulting in industry expected volume growth.
  • Some of the 2025 sales increase was the result of our ability to maintain margins and focus on profitability as well as the contribution from accretive acquisitions over time.
  • These adjustments are of a normal recurring nature but are complicated by the continued uncertainty surrounding these macroeconomic trends.
  • We have seen growth from our supportive served end-markets and our focus on organic and inorganic sales growth.
  • With our strong backlog and improved market environment, we expect to continue to see growth in 2026.
  • Assuming a positive general macroeconomic environment and continued supportive environments in our end markets, we expect fiscal 2026 growth to be comparable to 2025 growth metrics with the continued execution of acquisition activity.
  • We expect our interest expense in 2026 to be relatively higher than the amounts incurred in 2025 due to incremental financing activities, but mitigated by proactively securing favorable terms to reduce overall borrowing costs .
  • We expect to generate sufficient cash from operations and have sufficient capacity under our ABL credit facility to fund any working capital, capital expenditures, share repurchases, and debt payments in 2026.
  • In 2026, our cash flows for investing activities will be focused on strategic initiatives, information technology software and infrastructure, general upgrades and cost reduction opportunities.
  • Consolidated Results of Operations Twelve Months Ended December 31, 2025 % 2024 % 2023 % ( in millions, except percentages and per share amounts ) Sales $ 2,016.4 100.0 $ 1,802.0 100.0 $ 1,678.6 100.0 Cost of sales 1,380.5 68.5 1,245.8 69.1 1,173.3 69.9 Gross profit 635.9 31.5 556.2 30.9 505.3 30.1 Selling, general and administrative expenses 459.1 22.8 410.9 22.8 366.6 21.8 Income from operations 176.8 8.8 145.3 8.1 138.7 8.3 Interest expense 60.5 3.0 63.9 3.5 53.1 3.2 Other (income) expense, net (2.9) (0.1) (3.5) (0.2) (1.4) (0.1) Income before income taxes 119.2 5.9 84.9 4.7 87.0 5.2 Provision for income tax expense 30.5 1.5 14.5 0.8 18.1 1.1 Net income $ 88.7 4.4 $ 70.4 3.9 $ 68.9 4.1 Earning per share: Basic $ 5.65 $ 4.44 $ 4.07 Diluted $ 5.37 $ 4.22 $ 3.89 The following table sets forth the disaggregation of revenue from sales associated with recent acquisitions for the twelve months ended December 31, 2025 and 2024 (in thousands) : Sales Acquisition Sales Organic Sales Twelve Months Ended December 31, 2025 Service Centers $ 1,373,140 $ 56,164 $ 1,316,976 Innovative Pumping Solutions 390,291 39,879 350,412 Supply Chain Services 252,934 — 252,934 Total Sales $ 2,016,365 $ 96,043 $ 1,920,322 Twelve Months Ended December 31, 2024 Service Centers (1) $ 1,236,775 $ 36,944 $ 1,199,831 Innovative Pumping Solutions (1) 308,850 61,556 247,294 Supply Chain Services 256,415 — 256,415 Total Sales $ 1,802,040 $ 98,500 $ 1,703,540 $ Change Service Centers $ 136,365 $ 19,220 $ 117,145 Innovative Pumping Solutions 81,441 (21,677) 103,118 Supply Chain Services (3,481) — (3,481) Total $ Change $ 214,325 $ (2,457) $ 216,782 % Change Service Centers 11.0 % 52.0 % 9.8 % Innovative Pumping Solutions 26.4 % (35.2) % 41.7 % Supply Chain Services (1.4) % N/A (1.4) % Total % Change 11.9 % (2.5) % 12.7 % (1) Prior period segment disclosures have been recast.
  • Year Ended December 31, 2025 compared to Year Ended December 31, 2024 SALES.
  • Sales for the year ended December 31, 2025 increased $214.3 million, or 11.9%, to approximately $2.0 billion from $1.8 billion for the year ended December 31, 2024.
  • The sales increase was primarily due to increased sales within our SC and IPS segments during the year ended December 31, 2025.
  • Sales in our SC and IPS segments increased $136.4 million and $81.4 million, respectively, offset by a decrease in sales in our SCS segment of $3.5 million.
  • Years Ended December 31 (in thousands, except percentages) 2025 % Total 2024 (1) % Total Change Change % Sales by Business Segment Service Centers $ 1,373,140 68.1 $ 1,236,775 68.7 $ 136,365 11.0 % Innovative Pumping Solutions 390,291 19.4 308,850 17.1 81,441 26.4 % Supply Chain Services 252,934 12.5 256,415 14.2 (3,481) (1.4) % Total Sales $ 2,016,365 100.0 $ 1,802,040 100.0 $ 214,325 11.9 % (1) Prior period segment disclosures have been recast.
  • Sales for the SC segment increased by $136.4 million, or 11.0% for the year ended December 31, 2025, compared to the year ended December 31, 2024.
  • Sales from recent acquisitions contributed $56.2 million during the twelve months ended December 31, 2025 compared to $36.9 million in the corresponding period.
  • Total sales excluding recent acquisitions increased $117.1 million from the prior year's corresponding period.
  • This sales increase was primarily due to an increase in larger projects with our customers within our Ohio River Valley, Southwest, Texas Gulf Coast, and California regions as well as metal working and air compressors division.

and 221 more.

Gone since FY2024

  • The Company's products are marketed in the U.S., Canada, Mexico, U.A.E., and India to customers that are engaged in a variety of industries, many of which may be counter cyclical to each other.
  • Twelve Months Ended December 31, 2024 2023 2022 Sales by Business Segment ( in thousands, except percentages and days) Service Centers $ 1,222,599 $ 1,199,501 $ 1,041,462 Innovative Pumping Solutions 323,026 218,731 198,895 Supply Chain Services 256,415 260,368 240,475 Total DXP Sales $ 1,802,040 $ 1,678,600 $ 1,480,832 Acquisition Sales $ 98,500 $ 33,078 $ 41,527 Organic Sales $ 1,703,540 $ 1,645,522 $ 1,439,305 Business Days 253 252 253 Sales per Business Day $ 7,123 $ 6,661 $ 5,853 Organic Sales per Business Day $ 6,733 $ 6,530 $ 5,689 Gross Profit $ 556,277 $ 505,291 $ 422,038 Gross Profit Margin 30.9 % 30.1 % 28.5 % EBITDA $ 182,304 $ 170,182 $ 123,536 EBITDA Margin 10.1 % 10.1 % 8.3 % Adjusted EBITDA $ 191,310 $ 174,305 $ 126,806 Adjusted EBITDA Margin 10.6 % 10.4 % 8.6 % Free Cash Flow $ 77,143 $ 93,959 $ 978 Organic Sales and Acquisition Sales We define and calculate organic sales to include locations and acquisitions under our ownership for at least twelve months.
  • EBITDA and Adjusted EBITDA We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization, and non-controlling interest.
  • We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization minus stock-based compensation expense, non-controlling interest before taxes and all other non-cash charges, adjustments, and non-recurring items.
  • Below are readings for the fourth quarter versus the full year average: Index Reading Period MCU PMI IP MBI Active Drilling Rigs (1) October 77.0 46.5 102.1 43.9 1,754 November 77.0 48.4 102.3 44.7 1,708 December 77.6 49.3 103.2 46.9 1,660 Fiscal 2024 Q4 average 77.2 48.1 102.5 45.2 1,707 Fiscal 2024 average 77.6 48.3 102.6 45.7 1,735 Fiscal 2023 average 79.3 47.1 102.8 46.5 1,814 Fiscal 2022 average 79.7 53.5 103.9 53.9 1,747 (1) From Baker Hughes’ Worldwide Rig Counts - Current Data The continued disruption in economic markets due to inflation, changing interest rates, tariffs, trade disputes, business interruptions due to natural disasters and changes in weather patterns, employee shortages, and supply chain issues, all pose challenges which may adversely affect our future performance.
  • Sales for the year ended December 31, 2024 increased $123.4 million, or 7.4%, to approximately $1.8 billion from $1.7 billion for the prior corresponding period.
  • Customer demand was generally healthy throughout fiscal 2024, resulting in industry expected volume growth, complemented by additional pricing actions taken by the Company's vendors after strong pricing action in 2022 and 2023, which ultimately, gets passed on to customers.
  • As such, some of the 2024 sales increase is the result of increases in price with increases in volume as well as the contribution from acquisitions and the related sales of rotating equipment and air compressors.
  • These adjustments are of a normal recurring nature but are complicated by the continued uncertainty surrounding these macro economic trends.
  • As our operations have generally stabilized from the COVID-19 pandemic and related inflationary pressures, we have seen growth from our supportive served end-markets and our focus on organic and inorganic sales growth.
  • With our strong backlog and improved market environment, we expect to continue to see growth in 2025.
  • Assuming a positive general macroeconomic environment and continued supportive environments in our end markets, we expect fiscal 2025 growth to be comparable to 2024 growth metrics with the continued execution of acquisition activity.
  • We expect our interest expense in 2025 will be relatively higher than the amounts incurred in 2024 due to our refinancing in the fourth quarter of 2024.
  • We expect to generate sufficient cash from operations and have sufficient capacity under our ABL credit facility to fund any working capital, capital expenditures, share repurchases, and debt payments in 2025.
  • In 2025, our cash flows for investing activities will be focused on strategic initiatives, information technology software and infrastructure, general upgrades and cost reduction opportunities and we currently estimate capital expenditures to be between $15.0 million and $25.0 million, before consideration of any acquisition activity.
  • Consolidated Results of Operations Twelve Months Ended December 31, 2024 % 2023 % 2022 % ( in millions, except percentages and per share amounts ) Sales $ 1,802.0 100.0 $ 1,678.6 100.0 $ 1,480.8 100.0 Cost of sales 1,245.8 69.1 1,173.3 69.9 1,058.8 71.5 Gross profit 556.2 30.9 505.3 30.1 422.0 28.5 Selling, general and administrative expenses 410.9 22.8 366.6 21.8 324.3 21.9 Income from operations 145.3 8.1 138.7 8.3 97.7 6.6 Interest expense 63.9 3.5 53.1 3.2 29.1 2.0 Other (income) expense, net (3.5) (0.2) (1.4) (0.1) 2.7 0.2 Income before income taxes 84.9 4.7 87.0 5.2 65.9 4.5 Provision for income tax expense 14.5 0.8 18.1 1.1 17.8 1.2 Net income 70.4 3.9 68.9 4.1 48.1 3.2 Net loss attributable to noncontrolling interest — — — — (0.1) — Net income attributable to DXP Enterprises, Inc. $ 70.4 3.9 $ 68.9 4.1 $ 48.2 3.3 Earning per share: Basic $ 4.44 $ 4.07 $ 2.58 Diluted $ 4.22 $ 3.89 $ 2.47 Year Ended December 31, 2024 compared to Year Ended December 31, 2023 SALES.
  • Sales for the year ended December 31, 2024 increased $123.4 million, or 7.4%, to approximately $1.8 billion from $1.7 billion for the year ended December 31, 2023.
  • The sales increase was primarily due to new acquisitions within our SC and IPS segments during the year ended December 31, 2024.
  • Sales in our SC and IPS segments increased $23.1 million and $104.3 million, respectively, offset by a decrease in sales in our SCS segment of $4.0 million.
  • Years Ended December 31 (in thousands, except percentages) 2024 % Total 2023 (1) % Total Change Change % Sales by Business Segment Service Centers $ 1,222,599 67.9 $ 1,199,501 71.5 $ 23,098 1.9 % Innovative Pumping Solutions 323,026 17.9 218,731 13.0 104,295 47.7 % Supply Chain Services 256,415 14.2 260,368 15.5 (3,953) (1.5) % Total Sales $ 1,802,040 100.0 $ 1,678,600 100.0 $ 123,440 7.4 % (1) Prior period segment disclosures have been recast.
  • Sales for the Service Centers segment increased by $23.1 million, or 1.9% for the year ended December 31, 2024, compared to the year ended December 31, 2023.
  • Sales from acquisitions for the SC segment increased by $17.7 million during the twelve months ended December 31, 2024.
  • Total sales for the SC segment excluding acquisitions increased $5.4 million from the prior year's corresponding period.
  • This sales increase was primarily due to increase in sales within our Ohio River Valley, Southwest, South Rockies, and Canada regions; partially offset by decreases in our North Rockies and Texas Gulf Coast regions.
  • Sales for the IPS segment increased by $104.3 million, or 47.7% for the year ended December 31, 2024, compared to the year ended December 31, 2023.
  • Sales from acquisitions for the IPS segment increased $47.8 million during the twelve months ended December 31, 2024.
  • Total sales for the IPS segment excluding acquisitions increased $56.5 million from the prior year's corresponding period.
  • This sales increase was primarily due to increase in sales within our water and wastewater division, our international division, and overall increases in project related jobs due to increased capital spending by oil and gas producers and the renewables sector.
  • Sales for the SCS segment decreased by $4.0 million, or 1.5%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
  • The decrease in sales was primarily the result of decreases in sales in our oil & gas, resin, and power end-markets.
  • Gross profit as a percentage of sales for the twelve months ended December 31, 2024 increased by approximately 77 basis points from the prior year's corresponding period.
  • The primary driver was an increase in contribution from IPS sales, going from 13.0% of consolidated sales in 2023 to 17.9% of sales in 2024.
  • While IPS overall gross profit percentage decreased 148 basis points from 2023 to 2024, the decrease did not impact consolidated gross profit percentage due to IPS’ overall relative higher gross margins.
  • Additionally, the increase in the gross profit percentage is primarily the result of an approximate 83 basis points and 114 basis points increase in the gross profit percentage in our SC and SCS segments, respectively, partially offset by an approximate 148 basis points decrease in our IPS segment.
  • SG&A for the year ended December 31, 2024 increased by approximately $44.3 million, or 12.1%, to $410.9 million from $366.6 million for the prior year's corresponding period.
  • SG&A attributable to acquisitions during the period increased by $6.4 million.
  • Excluding acquisitions, the increase in SG&A is primarily the result of increased professional fees, payroll expenses, incentive compensation and 401(k) expenses as a result of an increase in headcount during the period.
  • Income from operations for the year ended December 31, 2024 increased by $6.7 million to $145.4 million from $138.7 million in the prior year's corresponding period.
  • Interest expense for the year ended December 31, 2024 increased $10.8 million compared to the prior year's corresponding period, primarily due to an increase outstanding borrowings on the Term Loan B.
  • Both of the Company's facilities are subject to a variable interest rate for the twelve months ended December 31, 2024.

and 188 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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