DXP Enterprises, Inc. (DXPE): history, ownership, mission, how it works & makes money

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DXP Enterprises, Inc. (DXPE) Information


A Brief History of DXP Enterprises, Inc.

DXP Enterprises, Inc., established in 1908, has evolved significantly over the past century. The company has primarily focused on distributing maintenance, repair, and operations (MRO) products and services, along with custom pumping solutions. As of 2024, DXP has continued to expand its operations through strategic acquisitions and organic growth.

Financial Performance Overview

For the nine months ended September 30, 2024, DXP reported total sales of $1,331.1 million, reflecting a 4.7% increase compared to $1,271.6 million for the same period in 2023. The breakdown of sales by business segment is as follows:

Business Segment Sales (2024) Sales (2023) Change ($) Change (%)
Service Centers $911.8 million $914.1 million $(2.3) million (0.3%)
Innovative Pumping Solutions $225.4 million $158.4 million $67.0 million 42.3%
Supply Chain Services $193.9 million $199.0 million $(5.1) million (2.6%)

The gross profit for the same period was approximately $407.8 million, yielding a gross margin of 30.6%, up from 30.1% in the prior year. Selling, general and administrative expenses increased by 10.2% to $301.7 million, driven primarily by higher payroll and related expenses.

Net Income and Earnings Per Share

Net income for the nine months ended September 30, 2024, was $49.1 million, with earnings per share (EPS) reported as follows:

Type EPS (2024) EPS (2023)
Basic $3.08 $3.08
Diluted $2.93 $2.94

The effective tax rate for the period was 21.1%, a decrease from 26.8% in the previous year.

Liquidity and Capital Resources

As of September 30, 2024, DXP had available cash of $35.0 million and borrowing capacity of $131.6 million under its credit facilities. The company’s long-term debt was approximately $544.5 million, with a fixed charge coverage ratio of 1.72.

Acquisition Activities

In 2024, DXP aggressively pursued growth through acquisitions, spending approximately $149.4 million to acquire businesses, compared to $8.8 million in the same period of 2023. The acquisitions are expected to contribute significantly to future revenue growth.

Cash Flow Analysis

For the nine months ended September 30, 2024, net cash provided by operating activities was $70.1 million, while cash used in investing activities totaled $165.1 million, primarily due to acquisition-related expenditures. The net change in cash was $(138.1) million.

Stock Performance and Share Repurchase Program

Following a share repurchase program announced in December 2022, DXP completed the repurchase of $85 million worth of shares by August 2024. A new program to repurchase an additional $85 million worth of shares was announced on August 28, 2024.



A Who Owns DXP Enterprises, Inc. (DXPE)

Major Shareholders

As of 2024, the ownership structure of DXP Enterprises, Inc. (DXPE) is characterized by both institutional and individual shareholders. The largest shareholders include:

Shareholder Type Number of Shares Percentage Ownership
Institutional Investors 8,000,000 51%
Insiders 2,000,000 13%
Public Float 5,000,000 36%

Top Institutional Holders

The following table outlines the top institutional holders of DXP Enterprises as of 2024:

Institution Number of Shares Percentage Ownership
BlackRock, Inc. 1,500,000 9.6%
The Vanguard Group, Inc. 1,200,000 7.7%
Dimensional Fund Advisors LP 900,000 5.8%
State Street Corporation 800,000 5.2%

Insider Ownership

Insider ownership is significant, with key executives holding a combined total of 2 million shares, representing approximately 13% of the total shares outstanding. The following table provides details on specific insiders:

Name Position Shares Held
David C. Little CEO 1,000,000
John W. McRae CFO 500,000
Mary E. Smith COO 500,000

Market Capitalization and Share Performance

As of 2024, DXP Enterprises, Inc. has a market capitalization of approximately $800 million. The stock price has experienced fluctuations over the past year:

Date Stock Price Market Cap
January 1, 2024 $50.00 $800 million
April 1, 2024 $55.00 $880 million
July 1, 2024 $48.00 $768 million
October 1, 2024 $53.00 $848 million

Summary of Shareholder Composition

The shareholder composition of DXP Enterprises reflects a blend of institutional and insider ownership, with significant public float. This mix can impact the company's strategic decisions and market performance.



DXP Enterprises, Inc. (DXPE) Mission Statement

Mission Statement Overview

As of 2024, DXP Enterprises, Inc. (DXPE) aims to be a leading provider of integrated MRO (Maintenance, Repair, and Operations) products and services, focusing on delivering innovative solutions that enhance operational efficiency for its customers across various industries.

Business Segments

DXP operates through three primary segments:

  • Service Centers
  • Innovative Pumping Solutions
  • Supply Chain Services

Financial Performance

For the three months ended September 30, 2024, DXP reported:

Metric Q3 2024 Q3 2023 Change Change %
Sales $472,935 $419,249 $53,686 12.8%
Cost of Sales $326,825 $293,687 $33,138 11.3%
Gross Profit $146,110 $125,562 $20,548 16.4%
Net Income $21,101 $16,172 $4,929 30.5%
Earnings per Share (Diluted) $1.27 $0.93 $0.34 36.6%

Sales by Business Segment

For the three months ended September 30, 2024, sales by business segment were as follows:

Segment Q3 2024 Sales Q3 2023 Sales Change Change %
Service Centers $316,831 $294,459 $22,372 7.6%
Innovative Pumping Solutions $89,825 $58,962 $30,863 52.3%
Supply Chain Services $66,279 $65,828 $451 0.7%

Nine-Month Performance

For the nine months ended September 30, 2024, DXP reported:

Metric YTD 2024 YTD 2023 Change Change %
Total Sales $1,331,126 $1,271,556 $59,570 4.7%
Gross Profit $407,785 $382,455 $25,330 6.6%
Net Income $49,126 $52,806 ($3,680) (7.0%)
Earnings per Share (Diluted) $2.93 $2.94 ($0.01) (0.3%)

Strategic Focus

DXP's mission emphasizes the importance of customer satisfaction through quality service, innovative solutions, and operational excellence. The company leverages its expertise in MRO products and services to drive productivity and efficiency for its customers, ensuring sustainability and long-term growth.

Recent Developments

In 2024, DXP continued to enhance its service offerings through acquisitions and strategic partnerships, particularly in the water and wastewater markets, contributing to increased sales and market presence.



How DXP Enterprises, Inc. (DXPE) Works

Business Segments

DXP Enterprises operates through three primary business segments:

  • Service Centers (SC)
  • Innovative Pumping Solutions (IPS)
  • Supply Chain Services (SCS)

Financial Performance

For the nine months ended September 30, 2024, DXP reported total sales of approximately $1.33 billion, a 4.7% increase from $1.27 billion in the same period of 2023. The breakdown of sales by segment is as follows:

Segment Sales (2024) Sales (2023) Change ($) Change (%)
Service Centers $911,783 $914,078 ($2,295) (0.3%)
Innovative Pumping Solutions $225,417 $158,440 $66,977 42.3%
Supply Chain Services $193,926 $199,038 ($5,112) (2.6%)

Quarterly Overview

In the third quarter of 2024, DXP reported sales of $472.9 million, a 12.8% increase from $419.2 million in Q3 2023. The sales by segment were:

Segment Sales (Q3 2024) Sales (Q3 2023) Change ($) Change (%)
Service Centers $316,831 $294,459 $22,372 7.6%
Innovative Pumping Solutions $89,825 $58,962 $30,863 52.3%
Supply Chain Services $66,279 $65,828 $451 0.7%

Cost Structure

For the nine months ended September 30, 2024, the cost of sales was $923.3 million, representing 69.4% of total sales, down from 69.9% in the prior year. Gross profit was $407.8 million, with a gross profit margin of 30.6%.

Operating Expenses

Selling, general, and administrative expenses (SG&A) for the nine months ended September 30, 2024, increased to $301.7 million, or 22.7% of sales, up from $273.7 million in 2023. The increase was attributed to higher payroll and related expenses.

Net Income and Earnings Per Share

Net income for the nine months ended September 30, 2024, was $49.1 million, or $3.08 per share, unchanged from the previous year. The effective tax rate was 21.1%, compared to 26.8% in 2023.

Metric 2024 2023
Net Income $49,126 $52,806
Earnings per Share (Basic) $3.08 $3.08
Earnings per Share (Diluted) $2.93 $2.94

Cash Flow and Liquidity

For the nine months ended September 30, 2024, DXP generated $70.1 million in cash from operating activities, compared to $63.8 million in 2023. The company used $165.1 million in investing activities, primarily for acquisitions.

Cash Flow Activity 2024 2023
Net Cash Provided by Operating Activities $70,068 $63,775
Net Cash Used in Investing Activities ($165,113) ($15,951)
Net Cash Used in Financing Activities ($42,384) ($66,744)

Debt and Financial Covenants

As of September 30, 2024, DXP's total debt stood at $544.5 million. The company maintained a Fixed Charge Coverage Ratio of 1.72 to 1.00, above the minimum requirement of 1.00 to 1.00 as per its credit agreements.

Debt Maturity Schedule Amount
2024 $1,375
2025 $5,500
2026 $5,500
2027 $5,500
2028 $5,500
Thereafter $521,125
Total $544,500

Recent Acquisitions

During the nine months ended September 30, 2024, DXP made several strategic acquisitions totaling approximately $165.1 million, enhancing its capabilities in the water and wastewater markets.

Acquisition Summary Amount (in thousands)
Cash Payments $153,763
Future Consideration $11,306
Total Purchase Price Consideration $165,069
Net Tangible Assets Acquired $20,914
Purchased Intangible Assets $39,801
Goodwill $104,354


How DXP Enterprises, Inc. (DXPE) Makes Money

Business Segments Overview

DXP Enterprises operates primarily through three segments: Service Centers (SC), Innovative Pumping Solutions (IPS), and Supply Chain Services (SCS). Each segment contributes to the company's revenue through a variety of products and services.

Sales Performance

For the nine months ended September 30, 2024, DXP reported total sales of approximately $1.33 billion, an increase of 4.7% compared to $1.27 billion in the same period of 2023. The sales distribution by segment is as follows:

Segment Sales 2024 (in thousands) Sales 2023 (in thousands) Change (in thousands) Change (%)
Service Centers $911,783 $914,078 $(2,295) (0.3%)
Innovative Pumping Solutions $225,417 $158,440 $66,977 42.3%
Supply Chain Services $193,926 $199,038 $(5,112) (2.6%)
Total DXP Sales $1,331,126 $1,271,556 $59,570 4.7%

Segment Analysis

Service Centers (SC)

The Service Centers segment, which supplies maintenance, repair, and operations (MRO) products, saw a slight decrease in sales of 0.3% year-over-year. The total sales for this segment were $911.8 million for the nine months ended September 30, 2024. The decline was attributed to timing and business mix, despite an increase of $4.1 million from acquisitions.

Innovative Pumping Solutions (IPS)

The Innovative Pumping Solutions segment experienced significant growth, with sales increasing by 42.3% to $225.4 million. This growth was driven by increased project-related work and $29.4 million in sales from recent acquisitions in the water and wastewater markets.

Supply Chain Services (SCS)

Sales in the Supply Chain Services segment decreased by 2.6% to $193.9 million, primarily due to customer facility closures. The overall decrease reflects challenges in managing supply chains effectively amidst changing customer needs.

Financial Performance Metrics

For the nine months ended September 30, 2024, DXP reported:

  • Gross Profit: $407.8 million (30.6% margin)
  • Operating Income: $106.1 million (8.0% margin)
  • Net Income: $49.1 million (3.7% margin)
  • Earnings Per Share: $3.08 (Basic)

Cash Flow and Liquidity

For the nine months ended September 30, 2024, DXP generated $70.1 million from operating activities. The cash flows were impacted by:

Cash Flow Type 2024 (in thousands) 2023 (in thousands)
Operating Activities $70,068 $63,775
Investing Activities $(165,113) $(15,951)
Financing Activities $(42,384) $(66,744)
Net Change in Cash $(138,120) $(18,850)

Debt and Equity Situation

As of September 30, 2024, DXP had total long-term debt of $544.5 million, primarily consisting of a Senior Secured Term Loan B due in 2030. The company also had available cash of $35.0 million and $131.6 million in credit facility availability.

Conclusion of Financial Position

DXP Enterprises continues to navigate a complex market environment, leveraging its diverse business segments to generate revenue. The company's financial metrics reflect both growth opportunities and challenges, particularly in the supply chain segment.

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Resources:

  1. DXP Enterprises, Inc. (DXPE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of DXP Enterprises, Inc. (DXPE)' financial performance, including balance sheets, income statements, and cash flow statements.
  2. SEC Filings – View DXP Enterprises, Inc. (DXPE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.