DXP Enterprises (DXPE) 10-Q 15 May 23 2023 Q1 Quarterly report Financial data

COVER

COVER - shares	3 Months Ended
	Mar. 31, 2023	May 05, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	0-21513
Entity Registrant Name	DXP Enterprises, Inc.
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	76-0509661
Entity Address, Address Line One	5301 Hollister
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77040
City Area Code	713
Local Phone Number	996-4700
Title of 12(b) Security	Common Stock par value $0.01
Trading Symbol	DXPE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,393,456
Entity Central Index Key	0001020710
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement and Statement of Comprehensive Income [Abstract]
Sales	$ 424,267	$ 319,411
Cost of sales	299,226	224,527
Gross profit	125,041	94,884
Selling, general and administrative expenses	89,642	73,325
Income from operations	35,399	21,559
Other (income) expense	(469)	536
Interest expense	11,521	5,162
Income before income taxes	24,347	15,861
Provision for income tax expense	6,767	3,332
Net income	17,580	12,529
Net loss attributable to noncontrolling interest	0	(113)
Net income attributable to DXP Enterprises, Inc.	17,580	12,642
Preferred stock dividend	23	23
Net income attributable to common shareholders	17,557	12,619
Net income	17,580	12,529
Currency translation adjustments	98	1,669
Comprehensive income	$ 17,678	$ 14,198
Earnings per share (Note 9) :
Basic (in dollars per share)	$ 1	$ 0.68
Diluted (in dollars per share)	$ 0.95	$ 0.65
Weighted average common shares outstanding :
Basic (in shares)	17,596	18,534
Diluted (in shares)	18,436	19,374

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash	$ 58,282	$ 46,026
Restricted cash	91	91
Accounts Receivable, net of allowance of $8,090 and $7,610	311,387	320,880
Inventories	109,403	101,392
Costs and estimated profits in excess of billings	41,967	23,588
Prepaid expenses and other current assets	17,238	21,644
Income taxes receivable	972	2,493
Total current assets	539,340	516,114
Property and equipment, net	47,754	45,964
Goodwill	333,816	333,759
Other intangible assets, net	74,830	79,585
Operating lease ROU assets	52,353	57,402
Other long-term assets	5,068	4,456
Total assets	1,053,161	1,037,280
Current liabilities:
Current maturities of debt	4,369	4,369
Trade accounts payable	106,320	100,784
Accrued wages and benefits	26,617	26,260
Customer advances	14,507	20,128
Billings in excess of costs and estimated profits	10,183	10,411
Federal income taxes payable	6,266	0
Short-term operating lease liabilities	17,698	18,083
Other current liabilities	38,795	32,866
Total current liabilities	224,755	212,901
Long-term debt, net of unamortized debt issuance costs	408,755	409,205
Long-term operating lease liabilities	38,507	40,189
Other long-term liabilities	4,770	4,701
Deferred income taxes liability	2,090	4,892
Total long-term liabilities	454,122	458,987
Total liabilities	678,877	671,888
Commitments and contingencies (Note 10)
Shareholders' equity:
Series A and B preferred stock, $1.00 par value each; 1,000,000 shares authorized each	16	16
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,548,600 and 17,690,069 outstanding	345	345
Additional paid-in capital	214,309	213,937
Retained earnings	268,106	250,549
Accumulated other comprehensive loss	(31,577)	(31,675)
Treasury stock, at cost 2,774,887 and 2,435,352 shares	(76,915)	(67,780)
Total DXP Enterprises, Inc. equity	374,284	365,392
Total liabilities and equity	$ 1,053,161	$ 1,037,280

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Allowance for accounts receivable	$ 8,090	$ 7,610
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares outstanding (in shares)	17,548,600	17,690,069
Treasury stock, at cost (in shares)	2,774,887	2,435,352
Series A preferred stock
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Series B preferred stock
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 17,580	$ 12,529
Reconciliation of net income to net cash provided by operating activities:
Depreciation	2,024	2,517
Amortization of intangible assets and deferred financing costs	5,400	4,693
Provision for credit losses	498	(147)
Fair value adjustment on contingent consideration	342	531
Restricted stock compensation expense	476	370
Deferred income taxes	(2,799)	411
Changes in operating assets and liabilities, and other:
Changes in Accounts receivables, net	9,070	(9,485)
Accounts payable and accrued expenses	13,311	9,603
Prepaid expenses and other assets	8,844	(3,603)
Inventories	(8,006)	(10,910)
Other	(20,291)	(3,829)
Net cash provided by operating activities	26,449	2,680
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(3,804)	(740)
Acquisition of business, net of cash acquired	0	(5,316)
Net cash used in investing activities	(3,804)	(6,056)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal debt payments	(1,092)	(825)
Preferred stock dividends paid	(23)	(23)
Purchase of treasury stock	(9,135)	(8,315)
Payment for employee taxes withheld from stock awards	(104)	(159)
Net cash provided by (used in) financing activities	(10,354)	(9,322)
Effect of foreign currency on cash	(35)	268
Net change in cash and restricted cash	12,256	(12,430)
Cash and restricted cash at beginning of period	46,117	49,080
Cash and restricted cash at end of period	58,373	36,650
Supplemental schedule of non-cash investing and financing activities:
Shares issued for acquisitions (Note 12)	$ 0	$ 527

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Preferred stock Series A preferred stock	Preferred stock Series B preferred stock	Common stock	Paid-in capital	Retained earnings	Treasury stock	Non controlling interest	Accum other comp loss
Beginning Balance at Dec. 31, 2021	$ 346,727	$ 1	$ 15	$ 195	$ 206,772	$ 202,484	$ (33,511)	$ 53	$ (29,282)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred dividends paid	(23)					(23)
Restricted stock compensation expense	370				370
Tax related items for share based awards	(159)				(159)
Issuance of shares of common stock	527				527
Currency translation adjustment	1,669								1,669
Purchase of treasury stock	(1,513)						(1,513)
Net income (loss)	12,529					12,642		(113)
Ending Balance at Mar. 31, 2022	360,127	1	15	195	207,510	215,103	(35,024)	(60)	(27,613)
Beginning Balance at Dec. 31, 2022	365,392	1	15	345	213,937	250,549	(67,780)	0	(31,675)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred dividends paid	(23)					(23)
Restricted stock compensation expense	476				476
Tax related items for share based awards	(104)				(104)
Currency translation adjustment	98								98
Purchase of treasury stock	(9,135)						(9,135)
Net income (loss)	17,580					17,580
Ending Balance at Mar. 31, 2023	$ 374,284	$ 1	$ 15	$ 345	$ 214,309	$ 268,106	$ (76,915)	$ 0	$ (31,577)

THE COMPANY

THE COMPANY	3 Months Ended
	Mar. 31, 2023
THE COMPANY [Abstract]
THE COMPANY	THE COMPANY DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") was incorporated in Texas on July 26, 1996. DXP Enterprises, Inc. and its subsidiaries are engaged in the business of distributing maintenance, repair and operating ("MRO") products and services to a variety of end markets and industrial customers. Additionally, DXP provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to energy and industrial customers. The Company is organized into three business segments: Service Centers ("SC"), Supply Chain Services ("SCS") and Innovative Pumping Solutions ("IPS"). See Note 11 - Segment Reporting for discussion of the business segments.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES Basis of Presentation The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2023. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company's financial position, results of operations and cash flows for the interim periods presented. All inter-company accounts and transactions have been eliminated in consolidation.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	RECENT ISSUED ACCOUNTING PRONOUNCEMENTS The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including the new Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers standard. The Company does not have any acquisitions during the current period and does not believe the new accounting pronouncement to have a material impact on its financial position or results of operations for recent acquisitions.. Accounting Pronouncements Not Yet Adopted All other new accounting pronouncements that have been issued, but not yet effective, are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

FAIR VALUE OF FINANCIAL ASSETS

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES	3 Months Ended
	Mar. 31, 2023
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES	FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Authoritative guidance for financial assets and liabilities measured on a recurring basis applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Fair value, as defined in the authoritative guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance affects the fair value measurement of an investment with quoted market prices in an active market for identical instruments, which must be classified in one of the following categories: Level 1 inputs come from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices that are observable for an asset or liability. These inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. Level 3 inputs are unobservable inputs for an asset or liability which require the Company's own assumptions. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include management's assumptions about the likelihood of payment based on the established benchmarks, discount rates, and an internal rate of return analysis. The fair value measurement includes inputs that are Level 3 inputs as discussed above, as they are not observable in the market. Should actual results increase or decrease as compared to the assumptions used in our analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent earn-out consideration are measured each reporting period and reflected in our results of operations. As of March 31, 2023, we recorded liabilities in other current and long-term liabilities for contingent consideration associated with the acquisitions of Process Machinery, Inc. ("PMI"), Burlingame Engineers, Inc. ("Burlingame"), Drydon Equipment, Inc. ("Drydon"), Cisco Air Systems, Inc. ("Cisco") and Sullivan Environmental Technologies, Inc. ("Sullivan") of $1.2 million, $0.5 million, $2.8 million, $4.8 million, and $1.2 million, respectively. For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the three months ended March 31, 2023: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Liability for Accrued Consideration (in thousands) *Beginning balance at December 31, 2022 $ 10,166 Changes in fair value recorded in other (income) expense, net 342 *Ending Balance at March 31, 2023 $ 10,508 Total losses included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at March 31, 2023. $ 342 *Amounts included in other current liabilities were $5.7 million and $5.5 million for the periods ending March 31, 2023 and December 31, 2022, respectively. Amounts included in long-term liabilities were $4.8 million and $4.7 million for the periods ending March 31, 2023 and December 31, 2022, respectively. Quantitative Information about Level 3 Fair Value Measurements The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: (in thousands, unaudited) Fair value at March 31, 2023 Valuation Technique Significant Unobservable Contingent consideration: $ 10,508 Discounted cash flow and weighted probability of possible payments Annualized EBITDA and probability of achievement Sensitivity to Changes in Significant Unobservable Inputs As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions of PMI, Burlingame, Drydon, Cisco and Sullivan are annualized EBITDA forecasts developed by the Company's management and the probability of achievement of those EBITDA results. The discount rate used in the calculation was 8.1 percent. Changes in our unobservable inputs in isolation would result in a change to our fair value measurement. Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at March 31, 2023 and December 31, 2022, but which require disclosure of their fair values include: cash, trade accounts receivable, trade accounts payable and accrued expenses, accrued payroll and related benefits, and the revolving line of credit and term loan debt under our syndicated credit agreement facility ( Note 8

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
INVENTORIES	INVENTORIES The carrying values of inventories are as follows ( in thousands ): March 31, 2023 December 31, 2022 Finished goods $ 106,039 $ 82,906 Work in process 3,364 18,486 Inventories $ 109,403 $ 101,392

CONTRACT ASSETS AND LIABILITIES

CONTRACT ASSETS AND LIABILITIES	3 Months Ended
	Mar. 31, 2023
Contractors [Abstract]
CONTRACT ASSETS AND LIABILITIES	CONTRACT ASSETS AND LIABILITIES Under our customized pump production and long-term water and wastewater project contracts in our IPS segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contract assets are presented as “Cost and estimated profits in excess of billings” on our unaudited condensed consolidated balance sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as “Billings in excess of costs and estimated profits” on our unaudited condensed consolidated balance sheets. Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ): March 31, 2023 December 31, 2022 Costs incurred on uncompleted contracts $ 94,100 $ 70,329 Estimated profits, thereon 28,096 23,274 Total costs and estimated profits on uncompleted contracts 122,196 93,603 Less: billings to date 90,412 80,421 Net $ 31,784 $ 13,182 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2023 and December 31, 2022 under the following captions ( in thousands ): March 31, 2023 December 31, 2022 Costs and estimated profits in excess of billings $ 41,967 $ 23,588 Billings in excess of costs and estimated profits (10,183) (10,411) Translation adjustment — 5 Net $ 31,784 $ 13,182 During the three months ended March 31, 2023, $9.7 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues. Contract asset and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur. Our effective tax rate from continuing operations was a tax expense of 27.9 percent for the three months ended March 31, 2023 compared to a tax expense of 21.0 percent for the three months ended March 31, 2022. Compared to the U.S. statutory rate for the three months ended March 31, 2023, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, and uncertain tax positions recorded for research and development tax credits and was partially offset by research and development tax credits and other tax credits. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts would be classified as a component of income tax provision (benefit) in the financial statements consistent with the Company’s policy.

LONG-TERM DEBT

LONG-TERM DEBT	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
LONG-TERM DEBT	LONG-TERM DEBT The components of the Company's long-term debt consisted of the following ( in thousands ): March 31, 2023 December 31, 2022 Carrying Value (1) Fair Value Carrying Value (1) Fair Value ABL Revolver $ — $ — $ — $ — Term Loan B 427,041 407,824 428,133 411,008 Total long-term debt 427,041 407,824 428,133 411,008 Less: current portion (4,369) (4,172) (4,369) (4,194) Long-term debt less current maturities $ 422,672 $ 403,652 $ 423,764 $ 406,814 (1) Carrying value amounts do not include unamortized debt issuance costs of $13.9 million and $14.6 million for March 31, 2023 and December 31, 2022, respectively. Credit Agreements On July 19, 2022, the Company entered into an Amended and Restated Loan and Security Agreement (the “ABL Credit Agreement”) that provided for a $135.0 million asset-backed revolving line of credit (the "ABL Revolver"). The ABL Credit Agreement amends and restates the Loan and Security Agreement dated as of August 29, 2017. Subject to the conditions set forth in the ABL Credit Agreement, the ABL Revolver may be increased by up to an aggregate of $50.0 million, in minimum increments of $10.0 million. The ABL Revolver matures on July 19, 2027. As of March 31, 2023, the Company had no borrowings outstanding under the ABL Revolver. Total borrowing capacity under the ABL Revolver was $132.4 million, net of the letters of credit outstanding. On November 22, 2022, the Company entered into an amendment to its existing $330 million Senior Secured Term Loan (the "Term Loan Amendment"), borrowing an additional $105 million that was added to the existing $330 million Senior Secured Term Loan (the “Term Loan Agreement”). As of March 31, 2023 there was $427.0 million outstanding under the Term Loan Agreement. The Company was in compliance with all financial covenants under the ABL Revolver and Term Loan B Agreements as of March 31, 2023.

EARNINGS PER SHARE DATA

EARNINGS PER SHARE DATA	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
EARNINGS PER SHARE DATA	EARNINGS PER SHARE DATA Basic earnings per share is computed based on weighted average shares outstanding and excludes dilutive securities. Diluted earnings per share is computed including the impacts of all potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ): Three Months Ended March 31, 2023 2022 Basic: Weighted average shares outstanding 17,596 18,534 Net income attributable to DXP Enterprises, Inc. $ 17,580 $ 12,642 Convertible preferred stock dividend 23 23 Net income attributable to common shareholders $ 17,557 $ 12,619 Per share amount $ 1.00 $ 0.68 Diluted: Weighted average shares outstanding 17,596 18,534 Assumed conversion of convertible preferred stock 840 840 Total dilutive shares 18,436 19,374 Net income attributable to common shareholders $ 17,557 $ 12,619 Convertible preferred stock dividend 23 23 Net income attributable to DXP Enterprises, Inc. $ 17,580 $ 12,642 Per share amount $ 0.95 $ 0.65

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIESFrom time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While DXP is unable to predict the outcome or estimate the financial impact of these disputes, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on DXP's consolidated financial position, cash flows, or results of operations.

SEGMENT REPORTING

SEGMENT REPORTING	3 Months Ended
	Mar. 31, 2023
Segment Reporting [Abstract]
SEGMENT REPORTING	SEGMENT REPORTING The Company's reportable business segments are: Service Centers, Innovative Pumping Solutions and Supply Chain Services. The Service Centers segment is engaged in providing MRO products, equipment and integrated services, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, industrial supply, safety products and safety services categories. The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, re-manufactures pumps, manufactures branded private label pumps and provides products and process lines for the water and wastewater treatment industries. The Supply Chain Services segment provides a wide range of MRO products and manages all or part of a customer's supply chain, including warehouse and inventory management. Sales are shown net of inter-segment eliminations. The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended March 31, 2023 2022 SC IPS SCS Total SC IPS SCS Total Total Revenue $ 295,226 $ 61,998 $ 67,043 $ 424,267 218,797 53,058 47,556 $ 319,411 Income from operations $ 44,705 $ 10,305 $ 5,514 $ 60,524 $ 27,351 $ 7,069 $ 4,020 $ 38,440 The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended March 31, 2023 2022 Income from operations for reportable segments $ 60,524 $ 38,440 Adjustment for: Amortization of intangible assets 4,758 4,235 Corporate expenses 20,367 12,646 Income from operations $ 35,399 $ 21,559 Interest expense 11,521 5,162 Other expense (income), net (469) 536 Income before income taxes $ 24,347 $ 15,861

SHARE REPURCHASE

SHARE REPURCHASE	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
SHARE REPURCHASE	SHARE REPURCHASE On December 15, 2022, the Company announced a new Share Repurchase Program pursuant to which it may repurchase up to $85.0 million worth, or 2.8 million shares of the Company's outstanding common stock over the next 24 months. During the three months ended March 31, 2023, the Company repurchased 339,535 shares of its common stock for approximately $9.1 million compared to 58,887 shares of its common stock for approximately $1.5 million for the three months ended March 31, 2022. Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury shares. Three Months Ended March 31, Three Months Ended March 31, (in thousands, except per share data) 2023 2022 Total number of shares purchased 339.5 58.9 Amount paid $ 9,135 $ 1,511 Average price paid per share $ 27.26 $ 25.66

SUBSEQUENT EVENT

SUBSEQUENT EVENT	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENT	SUBSEQUENT EVENTOn May 1, 2023, the Company completed the acquisition of Florida Valve & Equipment, LLC and Environmental MD, Inc., (collectively, “Florida Valve EMD”). Florida Valve EMD is a leading provider of valve and related products and services for the municipal water markets in the State of Florida. Total consideration for the transaction was approximately $3.0 million, funded with cash on hand. The preliminary purchase price allocation is not complete as of the date of this quarterly financial issuance and will be an ongoing process for up to one year subsequent to the closing date of the transaction.On May 1, 2023, the Company completed the acquisition of Riordan Materials Corporation (“Riordan”). Riordan is a leading provider of products for water treatment, wastewater treatment, odor control, solids handling, pumping and bio solid processes in the States of Maryland, New Jersey, Pennsylvania, Delaware and Virginia. Total consideration for the transaction was approximately $6.2 million, funded with cash on hand.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Policies)	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of PresentationThe Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2023. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company's financial position, results of operations and cash flows for the interim periods presented.
Consolidation	All inter-company accounts and transactions have been eliminated in consolidation.
Accounting Pronouncements Not Yet Adopted	The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including the new Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers standard. The Company does not have any acquisitions during the current period and does not believe the new accounting pronouncement to have a material impact on its financial position or results of operations for recent acquisitions.. Accounting Pronouncements Not Yet Adopted All other new accounting pronouncements that have been issued, but not yet effective, are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
Fair Value of Financial Assets and Liabilities	FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Authoritative guidance for financial assets and liabilities measured on a recurring basis applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Fair value, as defined in the authoritative guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance affects the fair value measurement of an investment with quoted market prices in an active market for identical instruments, which must be classified in one of the following categories: Level 1 inputs come from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices that are observable for an asset or liability. These inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. Level 3 inputs are unobservable inputs for an asset or liability which require the Company's own assumptions. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include management's assumptions about the likelihood of payment based on the established benchmarks, discount rates, and an internal rate of return analysis. The fair value measurement includes inputs that are Level 3 inputs as discussed above, as they are not observable in the market. Should actual results increase or decrease as compared to the assumptions used in our analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent earn-out consideration are measured each reporting period and reflected in our results of operations.

FAIR VALUE OF FINANCIAL ASSET_2

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2023
Fair Value Disclosures [Abstract]
Schedule of Reconciliation of the Beginning and Ending Balance and Gains or Losses Recognized	For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the three months ended March 31, 2023: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Liability for Accrued Consideration (in thousands) *Beginning balance at December 31, 2022 $ 10,166 Changes in fair value recorded in other (income) expense, net 342 *Ending Balance at March 31, 2023 $ 10,508 Total losses included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at March 31, 2023. $ 342 *Amounts included in other current liabilities were $5.7 million and $5.5 million for the periods ending March 31, 2023 and December 31, 2022, respectively. Amounts included in long-term liabilities were $4.8 million and $4.7 million for the periods ending March 31, 2023 and December 31, 2022, respectively.
Schedule of Quantitative Information About Level 3 Fair Value Measurements	The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: (in thousands, unaudited) Fair value at March 31, 2023 Valuation Technique Significant Unobservable Contingent consideration: $ 10,508 Discounted cash flow and weighted probability of possible payments Annualized EBITDA and probability of achievement

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Schedule of Carrying Values of Inventories	The carrying values of inventories are as follows ( in thousands ): March 31, 2023 December 31, 2022 Finished goods $ 106,039 $ 82,906 Work in process 3,364 18,486 Inventories $ 109,403 $ 101,392

CONTRACT ASSETS AND LIABILITI_2

CONTRACT ASSETS AND LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2023
Contractors [Abstract]
Schedule of Costs and Estimated Profits on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets	Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ): March 31, 2023 December 31, 2022 Costs incurred on uncompleted contracts $ 94,100 $ 70,329 Estimated profits, thereon 28,096 23,274 Total costs and estimated profits on uncompleted contracts 122,196 93,603 Less: billings to date 90,412 80,421 Net $ 31,784 $ 13,182 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2023 and December 31, 2022 under the following captions ( in thousands ): March 31, 2023 December 31, 2022 Costs and estimated profits in excess of billings $ 41,967 $ 23,588 Billings in excess of costs and estimated profits (10,183) (10,411) Translation adjustment — 5 Net $ 31,784 $ 13,182

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Schedule of Components of Company's Long-term Debt	The components of the Company's long-term debt consisted of the following ( in thousands ): March 31, 2023 December 31, 2022 Carrying Value (1) Fair Value Carrying Value (1) Fair Value ABL Revolver $ — $ — $ — $ — Term Loan B 427,041 407,824 428,133 411,008 Total long-term debt 427,041 407,824 428,133 411,008 Less: current portion (4,369) (4,172) (4,369) (4,194) Long-term debt less current maturities $ 422,672 $ 403,652 $ 423,764 $ 406,814 (1) Carrying value amounts do not include unamortized debt issuance costs of $13.9 million and $14.6 million for March 31, 2023 and December 31, 2022, respectively.

EARNINGS PER SHARE DATA (Tables

EARNINGS PER SHARE DATA (Tables)	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Schedule of Computation of Basic and Diluted Earnings per Share	The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ): Three Months Ended March 31, 2023 2022 Basic: Weighted average shares outstanding 17,596 18,534 Net income attributable to DXP Enterprises, Inc. $ 17,580 $ 12,642 Convertible preferred stock dividend 23 23 Net income attributable to common shareholders $ 17,557 $ 12,619 Per share amount $ 1.00 $ 0.68 Diluted: Weighted average shares outstanding 17,596 18,534 Assumed conversion of convertible preferred stock 840 840 Total dilutive shares 18,436 19,374 Net income attributable to common shareholders $ 17,557 $ 12,619 Convertible preferred stock dividend 23 23 Net income attributable to DXP Enterprises, Inc. $ 17,580 $ 12,642 Per share amount $ 0.95 $ 0.65

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	3 Months Ended
	Mar. 31, 2023
Segment Reporting [Abstract]
Schedule of Financial Information Regarding Company's Segments	The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended March 31, 2023 2022 SC IPS SCS Total SC IPS SCS Total Total Revenue $ 295,226 $ 61,998 $ 67,043 $ 424,267 218,797 53,058 47,556 $ 319,411 Income from operations $ 44,705 $ 10,305 $ 5,514 $ 60,524 $ 27,351 $ 7,069 $ 4,020 $ 38,440
Schedule of Reconciliation of Operating Income for Reportable Segments to Consolidated Income Before Taxes	The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended March 31, 2023 2022 Income from operations for reportable segments $ 60,524 $ 38,440 Adjustment for: Amortization of intangible assets 4,758 4,235 Corporate expenses 20,367 12,646 Income from operations $ 35,399 $ 21,559 Interest expense 11,521 5,162 Other expense (income), net (469) 536 Income before income taxes $ 24,347 $ 15,861

SHARE REPURCHASE (Tables)

SHARE REPURCHASE (Tables)	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
Schedule of Share Repurchase	Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury shares. Three Months Ended March 31, Three Months Ended March 31, (in thousands, except per share data) 2023 2022 Total number of shares purchased 339.5 58.9 Amount paid $ 9,135 $ 1,511 Average price paid per share $ 27.26 $ 25.66

THE COMPANY (Details)

THE COMPANY (Details)	3 Months Ended
	Mar. 31, 2023 segment
THE COMPANY [Abstract]
Number of business segments	3

FAIR VALUE OF FINANCIAL ASSET_3

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Narrative (Details) $ in Thousands	Mar. 31, 2023 USD ($)
PMI, Burlingame, Drydon, Cisco and Sullivan | Discounted cash flow and weighted probability of possible payments | Fair Value, Inputs, Level 3 | Annualized EBITDA and probability of achievement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	$ 10,508
Discount rate	0.081
PMI | Other Current and Long-term Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	$ 1,200
Burlingame | Other Current and Long-term Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	500
Drydon | Other Current and Long-term Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	2,800
Cisco | Other Current and Long-term Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	4,800
Sullivan | Other Current and Long-term Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	$ 1,200

FAIR VALUE OF FINANCIAL ASSET_4

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Reconciliation of Beginning and Ending Balances (Details) - Fair Value, Measurements, Recurring - Fair Value, Inputs, Level 3 - Contingent Consideration Liability $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Contingent Liability for Accrued Consideration
Beginning balance	$ 10,166
Changes in fair value recorded in other (income) expense, net	342
Ending Balance	10,508
Total losses included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at March 31, 2023.	342
Other Current Liabilities
Contingent Liability for Accrued Consideration
Beginning balance	5,500
Ending Balance	5,700
Other Noncurrent Liabilities
Contingent Liability for Accrued Consideration
Beginning balance	4,700
Ending Balance	$ 4,800

FAIR VALUE OF FINANCIAL ASSET_5

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Quantitative Information About Level 3 (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Fair Value, Inputs, Level 3 | Discounted cash flow and weighted probability of possible payments | Annualized EBITDA and probability of achievement | PMI, Burlingame, Drydon, Cisco and Sullivan
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration: (PMI, Burlingame, Drydon, Cisco and Sullivan acquisitions)	$ 10,508

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Finished goods	$ 106,039	$ 82,906
Work in process	3,364	18,486
Inventories	$ 109,403	$ 101,392

CONTRACT ASSETS AND LIABILITI_3

CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Schedule of costs and estimated earnings on uncompleted contracts [Abstract]
Costs incurred on uncompleted contracts	$ 94,100	$ 70,329
Estimated profits, thereon	28,096	23,274
Total costs and estimated profits on uncompleted contracts	122,196	93,603
Less: billings to date	90,412	80,421
Net	31,784	13,182
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets [Abstract]
Costs and estimated profits in excess of billings	41,967	23,588
Billings in excess of costs and estimated profits	(10,183)	(10,411)
Translation adjustment	0	5
Net	31,784	$ 13,182
Balances previously classified as contract liabilities at the beginning of the period that have shipped	$ 9,700

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate from continuing operations, expense (benefit)	27.90%	21%

LONG-TERM DEBT - Components of

LONG-TERM DEBT - Components of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Borrowings [Abstract]
Unamortized debt issuance costs	$ 13,900	$ 14,600
Carrying Value
Borrowings [Abstract]
Total long-term debt	427,041	428,133
Less: current portion	(4,369)	(4,369)
Long-term debt less current maturities	422,672	423,764
Carrying Value | ABL Revolver
Borrowings [Abstract]
Total long-term debt	0	0
Carrying Value | Term Loan B
Borrowings [Abstract]
Total long-term debt	427,041	428,133
Fair Value
Borrowings [Abstract]
Total long-term debt	407,824	411,008
Less: current portion	(4,172)	(4,194)
Long-term debt less current maturities	403,652	406,814
Fair Value | ABL Revolver
Borrowings [Abstract]
Total long-term debt	0	0
Fair Value | Term Loan B
Borrowings [Abstract]
Total long-term debt	$ 407,824	$ 411,008

LONG-TERM DEBT - Narrative (Det

LONG-TERM DEBT - Narrative (Details) - USD ($) $ in Millions	Nov. 22, 2022	Jul. 19, 2022	Mar. 31, 2023
Asset-backed Revolving Line of Credit | ABL Revolver
Debt Instrument [Line Items]
Maximum borrowing capacity under credit agreement		$ 135
Increase in borrowing capacity under credit agreement		50
Minimum increments under credit agreement		$ 10
Amount outstanding under credit facility			$ 0
Borrowing capacity, including impact of letter of credit			132.4
Secured Debt | Senior Secured Term Loan B
Debt Instrument [Line Items]
Debt issued	$ 330
Increase in borrowing capacity	$ 105
Total long-term debt			$ 427

EARNINGS PER SHARE DATA (Detail

EARNINGS PER SHARE DATA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Basic:
Weighted average shares outstanding (in shares)	17,596	18,534
Net income attributable to DXP Enterprises, Inc.	$ 17,580	$ 12,642
Convertible preferred stock dividend	23	23
Net income attributable to common shareholders	$ 17,557	$ 12,619
Per share amount (in dollars per share)	$ 1	$ 0.68
Diluted:
Weighted average shares outstanding (in shares)	17,596	18,534
Assumed conversion of convertible preferred stock (in shares)	840	840
Total dilutive shares (in shares)	18,436	19,374
Net income attributable to common shareholders	$ 17,557	$ 12,619
Convertible preferred stock dividend	23	23
Net income attributable to DXP Enterprises, Inc.	$ 17,580	$ 12,642
Per share amount (in dollars per share)	$ 0.95	$ 0.65

SEGMENT REPORTING - Financial I

SEGMENT REPORTING - Financial Information of Company's Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	$ 424,267	$ 319,411
Income from operations	60,524	38,440
SC
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	295,226	218,797
Income from operations	44,705	27,351
IPS
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	61,998	53,058
Income from operations	10,305	7,069
SCS
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	67,043	47,556
Income from operations	$ 5,514	$ 4,020

SEGMENT REPORTING - Reconciliat

SEGMENT REPORTING - Reconciliation of Operating Income to Consolidated Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information, Operating Income (Loss) [Abstract]
Income from operations for reportable segments	$ 60,524	$ 38,440
Adjustment for:
Amortization of intangible assets	4,758	4,235
Corporate expenses	20,367	12,646
Income from operations	35,399	21,559
Interest expense	11,521	5,162
Other expense (income), net	(469)	536
Income before income taxes	$ 24,347	$ 15,861

SHARE REPURCHASE - Narrative (D

SHARE REPURCHASE - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Dec. 15, 2022	Mar. 31, 2023	Mar. 31, 2022
Class of Stock [Line Items]
Share repurchased		$ 9,135	$ 1,513
Common stock
Class of Stock [Line Items]
Total number of shares repurchased (in shares)		339,535	58,887
Share repurchased		$ 9,135	$ 1,511
Share Repurchase Program December 2022
Class of Stock [Line Items]
Share repurchase period (in months)	24 months
Share Repurchase Program December 2022 | Common stock
Class of Stock [Line Items]
Share repurchase, amount authorized	$ 85,000
Shares repurchase, shares authorized (in shares)	2,800,000

SHARE REPURCHASE - Schedule of

SHARE REPURCHASE - Schedule of Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Class of Stock [Line Items]
Amount paid	$ 9,135	$ 1,513
Common stock
Class of Stock [Line Items]
Total number of shares repurchased (in shares)	339,535	58,887
Amount paid	$ 9,135	$ 1,511
Average price paid per share (in dollars per share)	$ 27.26	$ 25.66

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - Subsequent Event $ in Millions	May 01, 2023 USD ($)
Florida Valve EMD
Subsequent Event [Line Items]
Total purchase price consideration	$ 3
Riordan
Subsequent Event [Line Items]
Total purchase price consideration	$ 6.2