COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 $0.01 | |
Trading Symbol | DXPE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,928,305 | |
Entity Central Index Key | 0001020710 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Sales | $ 412,635 | $ 424,267 |
Cost of sales | 288,753 | 299,226 |
Gross profit | 123,882 | 125,041 |
Selling, general and administrative expenses | 94,751 | 89,642 |
Income from operations | 29,131 | 35,399 |
Other income, net | (1,968) | (469) |
Interest expense | 15,544 | 11,521 |
Income before income taxes | 15,555 | 24,347 |
Provision for income taxes | 4,223 | 6,767 |
Net income | 11,332 | 17,580 |
Preferred stock dividend | 23 | 23 |
Net income attributable to common shareholders | 11,309 | 17,557 |
Foreign currency translation adjustments | (614) | 98 |
Comprehensive income | $ 10,718 | $ 17,678 |
Earnings per share (Note 9): | ||
Basic (in dollars per share) | $ 0.70 | $ 1 |
Diluted (in dollars per share) | $ 0.67 | $ 0.95 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 16,128 | 17,596 |
Diluted (in shares) | 16,968 | 18,436 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 139,697 | $ 173,120 |
Restricted cash | 91 | 91 |
Accounts receivable, net of allowance of $4,946 and $5,584, respectively | 313,791 | 311,171 |
Inventories | 108,186 | 103,805 |
Costs and estimated profits in excess of billings | 35,259 | 42,323 |
Prepaid expenses and other current assets | 19,808 | 18,044 |
Total current assets | 616,832 | 648,554 |
Property and equipment, net | 64,039 | 61,618 |
Goodwill | 370,949 | 343,991 |
Other intangible assets, net | 67,675 | 63,895 |
Operating lease right of use assets, net | 53,443 | 48,729 |
Other long-term assets | 11,217 | 10,649 |
Total assets | 1,184,155 | 1,177,436 |
Current liabilities: | ||
Current maturities of debt | 5,500 | 5,500 |
Trade accounts payable | 97,324 | 96,469 |
Accrued wages and benefits | 31,655 | 36,238 |
Customer advances | 12,619 | 12,160 |
Billings in excess of costs and estimated profits | 8,195 | 9,506 |
Short-term operating lease liabilities | 15,796 | 15,438 |
Other current liabilities | 58,313 | 48,854 |
Total current liabilities | 229,402 | 224,165 |
Long-term debt, net of unamortized debt issuance costs and discounts | 520,217 | 520,697 |
Long-term operating lease liabilities | 38,914 | 34,336 |
Other long-term liabilities | 20,158 | 17,359 |
Total long-term liabilities | 579,289 | 572,392 |
Total liabilities | 808,691 | 796,557 |
Commitments and Contingencies (Note 10) | ||
Shareholders' equity: | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 15,928,305 and 16,177,237 outstanding, respectively | 345 | 345 |
Additional paid-in capital | 217,292 | 216,482 |
Retained earnings | 330,580 | 319,271 |
Accumulated other comprehensive loss | (31,854) | (31,240) |
Treasury stock, at cost $4,468,354 and 4,141,989 shares, respectively | (140,915) | (123,995) |
Total DXP Enterprises, Inc. equity | 375,464 | 380,879 |
Total liabilities and equity | 1,184,155 | 1,177,436 |
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized | ||
Shareholders' equity: | ||
Preferred stock | 1 | 1 |
Series B preferred stock, $1.00 par value; 1,000,000 shares authorized | ||
Shareholders' equity: | ||
Preferred stock | $ 15 | $ 15 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Allowance for accounts receivable | $ 4,946 | $ 5,584 |
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) | 15,928,305 | 16,177,237 |
Treasury stock, at cost (shares) | 4,468,354 | 4,141,989 |
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized | ||
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, $1.00 par value; 1,000,000 shares authorized | ||
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, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 11,332 | $ 17,580 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation | 2,208 | 2,024 |
Amortization of intangibles and fixed assets | 5,330 | 4,758 |
(Recovery of) provision for credit losses | (1,200) | 498 |
Payment of contingent consideration liability in excess of acquisition-date fair value | (17) | 0 |
Fair value adjustment on contingent consideration | (194) | 342 |
Amortization of debt issuance costs | 895 | 642 |
Restricted stock compensation expense | 864 | 476 |
Deferred income taxes | (3,056) | (2,799) |
Changes in operating assets and liabilities, net of effects of businesses acquired: | ||
Accounts receivable, net | 8,993 | 9,070 |
Costs and estimated profits in excess of billings | 7,052 | (18,378) |
Accounts payable and accrued expenses | (2,165) | 13,311 |
Prepaid expenses and other assets | 3,366 | 8,844 |
Inventories | 754 | (8,006) |
Billings in excess of costs and estimated profits | (1,301) | (231) |
Other long-term liabilities | (5,872) | (1,682) |
Net cash provided by operating activities | 26,989 | 26,449 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (2,894) | (3,804) |
Acquisition of businesses, net of cash acquired | (39,261) | 0 |
Net cash used in investing activities | (42,155) | (3,804) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments under term loan facility | (1,375) | (1,092) |
Payment for acquisition contingent consideration liability | (983) | 0 |
Preferred stock dividends paid | (23) | (23) |
Shares repurchased held in treasury | (14,815) | (9,135) |
Payment for employee taxes withheld from stock awards | (54) | (104) |
Principal payments on finance leases | (896) | 0 |
Net cash used in financing activities | (18,146) | (10,354) |
Effect of foreign currency on cash | (111) | (35) |
Net change in cash and restricted cash | (33,423) | 12,256 |
Cash and restricted cash at beginning of period | 173,211 | 46,117 |
Cash and restricted cash at end of period | $ 139,788 | $ 58,373 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Preferred stock Series A preferred stock, $1.00 par value; 1,000,000 shares authorized | Preferred stock Series B preferred stock, $1.00 par value; 1,000,000 shares authorized | Common stock | Paid-in capital | Retained earnings | Treasury stock | Accum other comp loss |
Beginning Balance at Dec. 31, 2022 | $ 365,392 | $ 1 | $ 15 | $ 345 | $ 213,937 | $ 250,549 | $ (67,780) | $ (31,675) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (23) | (23) | ||||||
Compensation expense for restricted stock | 476 | 476 | ||||||
Tax related items for share based awards | (104) | (104) | ||||||
Currency translation adjustment | 98 | 98 | ||||||
Repurchases of shares | (9,135) | (9,135) | ||||||
Net income | 17,580 | 17,580 | ||||||
Ending Balance at Mar. 31, 2023 | 374,284 | 1 | 15 | 345 | 214,309 | 268,106 | (76,915) | (31,577) |
Beginning Balance at Dec. 31, 2023 | 380,879 | 1 | 15 | 345 | 216,482 | 319,271 | (123,995) | (31,240) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (23) | (23) | ||||||
Compensation expense for restricted stock | 864 | 864 | ||||||
Tax related items for share based awards | (54) | (54) | ||||||
Currency translation adjustment | (614) | (614) | ||||||
Repurchases of shares | (16,920) | (16,920) | ||||||
Net income | 11,332 | 11,332 | ||||||
Ending Balance at Mar. 31, 2024 | $ 375,464 | $ 1 | $ 15 | $ 345 | $ 217,292 | $ 330,580 | $ (140,915) | $ (31,854) |
THE COMPANY
THE COMPANY | 3 Months Ended |
Mar. 31, 2024 | |
THE COMPANY [Abstract] | |
THE COMPANY | THE COMPANY DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," the "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 business-to-business customers. Additionally, DXP provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to energy and broad industrial customers. The Company is currently organized into three business segments: Service Centers ("SC"), Innovative Pumping Solutions ("IPS"), and Supply Chain Services ("SCS"). 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, 2024 | |
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 generally accepted accounting principles in the United States of America ("U.S. GAAP"). For interim financial reporting not all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP are required. The unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2023 that are included in our annual report on Form 10-K filed with the SEC on March 11, 2024 (“Annual Report”). The results of operations for the three months ended March 31, 2024 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 intercompany accounts and transactions have been eliminated in consolidation. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed within this Quarterly Report on Form 10-Q were assessed and determined as either not applicable or not material to the Company’s consolidated financial position or result of operations. |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES 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 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 consideration are measured each reporting period and reflected in our results of operations. As of March 31, 2024, we recorded $6.1 million in other current and other long-term liabilities for contingent consideration associated with the recent acquisitions. The following table provides a reconciliation of the beginning and ending balances and gains or losses recognized during the three months ended March 31, 2024 ( in thousands ): Contingent Consideration *Beginning balance at December 31, 2023 $ 8,753 Acquisitions ( Note 12 ) 6,108 Settlements (1,000) Total remeasurement adjustments: Changes in fair value recorded in other income, net (194) *Ending Balance at March 31, 2024 $ 13,667 *Amounts included in other current liabilities were $8.1 million and $5.4 million for the periods ending March 31, 2024 and December 31, 2023, respectively. Amounts included in other long-term liabilities were $5.6 million and $3.4 million for the periods ending March 31, 2024 and December 31, 2023, respectively. Sensitivity to Changes in Significant Unobservable Inputs The significant Level 3 unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions 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 calculations was 10.6 percent. Changes in our unobservable inputs in isolation would result in a change to our fair value measurement. As of March 31, 2024, the maximum amount of contingent consideration payable under these arrangements is $17.5 million. Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at March 31, 2024 and December 31, 2023, but which require disclosure of their fair values include: cash, restricted cash, accounts receivable, trade accounts payable and accrued expenses. The Company believes that the estimated fair value of such instruments at March 31, 2024 and December 31, 2023 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets due to the relative short maturity of these instruments. See Note 8 - Long-term Debt for fair value disclosures on our asset-backed line of credit and term loan debt under our syndicated credit agreement facilities. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are made up of equipment purchased for resale, and materials utilized in the fabrication of industrial and wastewater equipment stated at lower of cost and net realizable value, primarily determined using the weighted average cost method. The Company reviews inventory and records provisions for the difference between cost and net realizable value arising from excess and obsolete items on hand based upon the aging of the inventories, market trends, and continued demand. The carrying values of inventories are as follows ( in thousands ): March 31, 2024 December 31, 2023 Finished goods $ 96,999 $ 94,031 Work in process 11,187 9,774 Inventories $ 108,186 $ 103,805 |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Contractors [Abstract] | |
CONTRACT ASSETS AND LIABILITIES | CONTRACT ASSETS AND LIABILITIES Under our customized pump production and water and wastewater project contracts, 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 presented as "Costs and estimated profits in excess of billings". 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, 2024 December 31, 2023 Costs incurred on uncompleted contracts $ 91,469 $ 92,363 Estimated profits, thereon 40,099 37,379 Total costs and estimated profits on uncompleted contracts 131,568 129,742 Less: billings to date 104,504 96,928 Net $ 27,064 $ 32,814 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2024 and December 31, 2023 under the following captions ( in thousands ): March 31, 2024 December 31, 2023 Costs and estimated profits in excess of billings $ 35,259 $ 42,323 Billings in excess of costs and estimated profits (8,195) (9,506) Translation adjustment — (3) Net $ 27,064 $ 32,814 During the three months ended March 31, 2024 and 2023, $1.4 million and $9.7 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues, respectively. 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, 2024 | |
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 27.2 percent for the three months ended March 31, 2024 compared to a tax expense of 27.9 percent for the three months ended March 31, 2023. Compared to the U.S. statutory rate for the three months ended March 31, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, earnout payments, 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. The Organization of Economic Cooperation and Development (OECD) continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. As of March 31, 2024 DXP anticipates the impact of Pillar Two to be immaterial to the Company based on current legislation that has been enacted to date. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 December 31, 2023 ABL Revolver $ — $ — Senior Secured Term Loan B due October 13, 2030 (1) 547,250 548,625 Total debt 547,250 548,625 Less: current maturities (5,500) (5,500) Total long-term debt $ 541,750 $ 543,125 Unamortized discount and debt issuance costs 21,533 22,428 Long-term debt, net of unamortized discount and debt issuance costs $ 520,217 $ 520,697 (1) The fair value of the Term Loan B due October 13, 2030 was $551.4 million and $554.1 million as of March 31, 2024 and December 31, 2023, respectively. Senior Secured Term Loan B: On October 13, 2023, the Company entered into an amendment on its existing Senior Secured Term Loan B (the "Term Loan Amendment"), which provides for, among other things, an additional $125 million in new incremental commitments. The Term Loan Amendment refinanced the existing Senior Term Loan B and replaced it with a new Senior Secured Term Loan B with total borrowings of $550.0 million. The new Senior Secured Term Loan B amortizes in equal quarterly installments of 0.25%, with the remaining balance being payable on October 13, 2030, when the facility matures. Deferred financing costs associated with the Term Loan Amendment were $11.7 million, which is being amortized to interest expense using the interest method over the remaining maturity of the Senior Secured Term Loan B. The interest rate for the Senior Secured Term Loan B was 10.29% and 10.44% as of March 31, 2024 and December 31, 2023, respectively. In connection with the Term Loan Amendment the Company expensed third-party fees of $0.8 million and recognized a $1.2 million loss on debt extinguishment, which were included in interest expense during 2023. Quarterly interest payments accrue on outstanding borrowings under the new Senior Secured Term Loan B at a rate equal to Term SOFR (with a floor of 1.00%) plus 4.75%, or base rate plus 3.75%. The new Senior Secured Term Loan B is guaranteed by each of the Company’s direct and indirect material wholly owned subsidiaries, other than any of the Company’s Canadian subsidiaries and certain other excluded subsidiaries. As of March 31, 2024 there was $547.3 million outstanding under the Senior Secured Term Loan B. ABL Revolver: 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"). Subject to the conditions set forth in the ABL Credit Agreement, the ABL Revolver may be increased in increments of $10.0 million up to an aggregate of $50.0 million. The ABL Revolver matures on July 19, 2027. Interest accrues on outstanding borrowings at a rate equal to SOFR plus a margin ranging from 1.25% to 1.75% per annum, or at an alternate base rate, Canadian prime rate or Canadian base rate plus a margin ranging from 0.25% to 0.75% per annum, in each case, based upon the average daily excess availability under the ABL Revolver for the most recently completed calendar quarter. Fees payable on the unused portion of the facility range from 0.25% to 0.375% per annum. At March 31, 2024 the unused line fee was 0.375% and there were no amounts outstanding under the ABL Revolver. As of March 31, 2024, the borrowing availability under our credit facility was $131.8 million compared to $132.1 million at December 31, 2023, primarily as a result of outstanding letters of credit. The interest rate for the ABL Revolver was 8.75% as of March 31, 2024 and December 31, 2023, respectively. Financial Covenants: The Company's principal financial covenants under the ABL Credit Agreement and Term Loan B Agreement include: Fixed Charge Coverage Ratio – The Fixed Charge Coverage Ratio under the ABL Credit Agreement is defined as the ratio for the most recently completed four-fiscal quarter period, of (a) EBITDA minus capital expenditures (excluding (i) those financed or funded with debt (other than the ABL Loans), (ii) the portion thereof funded with the net proceeds from asset dispositions of equipment or real property which the Company is permitted to reinvest pursuant to the Term Loan and (iii) the portion thereof funded with the net proceeds of casualty insurance or condemnation awards in respect of any equipment and real estate which DXP is not required to use to prepay the ABL Loans pursuant to the Term Loan B Agreement or with the proceeds of casualty insurance or condemnation awards in respect of any other property) minus cash taxes paid (net of cash tax refunds received during such period), to (b) fixed charges. The Company is restricted from allowing its fixed charge coverage ratio to be less than 1.00 to 1.00 during a compliance period, which is triggered when the availability under the ABL Revolver falls below a threshold set forth in the ABL Credit Agreement. As of March 31, 2024, the Company's Fixed Charge Coverage Ratio was 2.28 to 1.00. Secured Leverage Ratio – The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of unrestricted cash, not to exceed $200 million) as of such day to EBITDA, beginning with the fiscal quarter ending March 31, 2024, is either equal to or less than as indicated in the table below: Fiscal Quarter Secured Leverage Ratio March 31, 2024 5.75:1.00 June 30, 2024 5.50:1.00 September 30, 2024 5.50:1.00 December 31, 2024 5.50:1.00 March 31, 2025 5.25:1.00 June 30, 2025 5.25:1.00 September 30, 2025 5.25:1.00 December 31, 2025 5.00:1.00 March 31, 2026 5.00:1.00 June 30, 2026 and thereafter 4.75:1.00 As of March 31, 2024, the Company’s Secured Leverage Ratio was 2.27 to 1.00. EBITDA as defined under the Term Loan B Agreement for financial covenant purposes means, without duplication, for any period of determination, the sum of, consolidated net income during such period; plus to the extent deducted from consolidated net income in such period: (i) income tax expense, (ii) franchise tax expense, (iii) interest expense, (iv) amortization and depreciation during such period, (v) all non-cash charges and adjustments, and (vi) non-recurring cash expenses related to the Term Loan, provided , that if the Company acquires or disposes of any property during such period (other than under certain exceptions specified in the Term Loan B Agreement, including the sale of inventory in the ordinary course of business), then EBITDA shall be calculated, after giving pro forma effect to such acquisition or disposition, as if such acquisition or disposition had occurred on the first day of such period. The Company was in compliance with all financial covenants as of March 31, 2024. As of March 31, 2024, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands ): Amount 2024 $ 4,125 2025 5,500 2026 5,500 2027 5,500 2028 5,500 Thereafter 521,125 Total $ 547,250 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE 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, 2024 2023 Basic earnings per share: Weighted average shares outstanding 16,128 17,596 Net income attributable to DXP Enterprises, Inc. $ 11,332 $ 17,580 Convertible preferred stock dividend 23 23 Net income attributable to common shareholders $ 11,309 $ 17,557 Per share amount $ 0.70 $ 1.00 Diluted earnings per share: Weighted average shares outstanding 16,128 17,596 Assumed conversion of convertible preferred stock 840 840 Total dilutive shares 16,968 18,436 Net income attributable to common shareholders $ 11,309 $ 17,557 Convertible preferred stock dividend 23 23 Net income attributable to DXP Enterprises, Inc. $ 11,332 $ 17,580 Per share amount $ 0.67 $ 0.95 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From 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, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company's reportable business segments are: Service Centers ("SC"), Innovative Pumping Solutions ("IPS"), and Supply Chain Services ("SCS"). The Service Centers segment is engaged in providing MRO products, equipment and integrated services, including logistics capabilities, to business-to-business 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. Our chief operating decision maker ("CODM") is the Chief Executive Officer. The Company's CODM directs the allocation of resources to operating or business segments based on revenue and operating income of each respective segment. As a part of the Company's annual business planning, the CODM reviews our reportable segment composition and financial performance. As a result of this review, on January 1st, 2024, we moved certain branch locations previously reported under our IPS segment to our SC segment. Prior period segment disclosures have been recast. The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended March 31, 2024 2023 Sales Service Centers $ 288,435 $ 305,813 Innovative Pumping Solutions 62,216 51,411 Supply Chain Services 61,984 67,043 Total Sales $ 412,635 $ 424,267 Operating Income Service Centers $ 40,320 $ 45,820 Innovative Pumping Solutions 6,970 9,190 Supply Chain Services 5,262 5,514 Total Segments Operating Income $ 52,552 $ 60,524 The following table presents reconciliations of income from operations for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended March 31, 2024 2023 Income from operations for reportable segments $ 52,552 $ 60,524 Adjustment for: Amortization of intangible assets 4,369 4,758 Corporate expenses 19,052 20,367 Income from operations $ 29,131 $ 35,399 Interest expense 15,544 11,521 Other income, net (1,968) (469) Income before income taxes $ 15,555 $ 24,347 |
SHARE REPURCHASES
SHARE REPURCHASES | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
SHARE REPURCHASES | SHARE REPURCHASES 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 from the date of the announcement. Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury stock. Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Total number of shares purchased 326.4 339.5 Amount paid $ 16,805 $ 9,135 Average price paid per share $ 51.49 $ 27.26 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS The Company enters into strategic acquisitions in an effort to better service existing customers and to attract new customers. A summary of the allocation of the total purchase consideration of our three business acquisitions during the three months ended March 31, 2024 is presented as follows ( in thousands ): Purchase Price Consideration Cash payments $ 40,346 Future consideration 6,108 Total purchase price consideration 46,454 Net Tangible Assets Acquired 11,065 Purchased Intangible Assets 8,155 Goodwill $ 27,234 The total purchase consideration related to our acquisitions during the three months ended March 31, 2024 consisted primarily of cash consideration. The total cash and cash equivalents acquired for these acquisitions was $1.2 million. Transaction-related costs included within selling, general, and administrative expenses in the consolidated statements of operations were not material for the three months ended March 31, 2024. The Company makes an initial allocation of the purchase price at the date of acquisition based upon its estimate of the fair value of the acquired assets and assumed liabilities. Additional information that existed as of the acquisition date but at that time was unknown to us may become known during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. The goodwill total of approximately $27.2 million is attributable primarily to expected synergies and the assembled workforce of each entity and is generally not deductible for tax purposes. $6.9 million of goodwill was assigned to our SC segment and $20.3 million was assigned to our IPS segment relating to these acquisitions. The operating results of these acquisitions are included within the Company's consolidated statements of operations from the date of acquisition. Pro forma results of operations information have not been presented, as the effects of the acquisitions were not material to our financial results. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended March 31, (in thousands) 2024 2023 Supplemental disclosures of cash flow information: Cash paid for interest $ 14,649 $ 10,879 Cash paid for income taxes 14,693 379 Non-cash investing and financing activities: Treasury shares repurchase accruals $ 2,105 $ — |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company's financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). For interim financial reporting not all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP are required. The unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2023 that are included in our annual report on Form 10-K filed with the SEC on March 11, 2024 (“Annual Report”). The results of operations for the three months ended March 31, 2024 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 intercompany accounts and transactions have been eliminated in consolidation. |
Accounting Pronouncements Not Yet Adopted | The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed within this Quarterly Report on Form 10-Q were assessed and determined as either not applicable or not material to the Company’s consolidated financial position or result of operations. |
Fair Value of Financial Assets and Liabilities | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES 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 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 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, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Reconciliation of the Beginning and Ending Balance and Gains or Losses Recognized | The following table provides a reconciliation of the beginning and ending balances and gains or losses recognized during the three months ended March 31, 2024 ( in thousands ): Contingent Consideration *Beginning balance at December 31, 2023 $ 8,753 Acquisitions ( Note 12 ) 6,108 Settlements (1,000) Total remeasurement adjustments: Changes in fair value recorded in other income, net (194) *Ending Balance at March 31, 2024 $ 13,667 *Amounts included in other current liabilities were $8.1 million and $5.4 million for the periods ending March 31, 2024 and December 31, 2023, respectively. Amounts included in other long-term liabilities were $5.6 million and $3.4 million for the periods ending March 31, 2024 and December 31, 2023, respectively. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Carrying Values of Inventories | The carrying values of inventories are as follows ( in thousands ): March 31, 2024 December 31, 2023 Finished goods $ 96,999 $ 94,031 Work in process 11,187 9,774 Inventories $ 108,186 $ 103,805 |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 December 31, 2023 Costs incurred on uncompleted contracts $ 91,469 $ 92,363 Estimated profits, thereon 40,099 37,379 Total costs and estimated profits on uncompleted contracts 131,568 129,742 Less: billings to date 104,504 96,928 Net $ 27,064 $ 32,814 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2024 and December 31, 2023 under the following captions ( in thousands ): March 31, 2024 December 31, 2023 Costs and estimated profits in excess of billings $ 35,259 $ 42,323 Billings in excess of costs and estimated profits (8,195) (9,506) Translation adjustment — (3) Net $ 27,064 $ 32,814 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 December 31, 2023 ABL Revolver $ — $ — Senior Secured Term Loan B due October 13, 2030 (1) 547,250 548,625 Total debt 547,250 548,625 Less: current maturities (5,500) (5,500) Total long-term debt $ 541,750 $ 543,125 Unamortized discount and debt issuance costs 21,533 22,428 Long-term debt, net of unamortized discount and debt issuance costs $ 520,217 $ 520,697 (1) The fair value of the Term Loan B due October 13, 2030 was $551.4 million and $554.1 million as of March 31, 2024 and December 31, 2023, respectively. |
Schedule of Covenant Compliance | Secured Leverage Ratio – The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of unrestricted cash, not to exceed $200 million) as of such day to EBITDA, beginning with the fiscal quarter ending March 31, 2024, is either equal to or less than as indicated in the table below: Fiscal Quarter Secured Leverage Ratio March 31, 2024 5.75:1.00 June 30, 2024 5.50:1.00 September 30, 2024 5.50:1.00 December 31, 2024 5.50:1.00 March 31, 2025 5.25:1.00 June 30, 2025 5.25:1.00 September 30, 2025 5.25:1.00 December 31, 2025 5.00:1.00 March 31, 2026 5.00:1.00 June 30, 2026 and thereafter 4.75:1.00 |
Schedule of Maturities of Long-Term Debt | As of March 31, 2024, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands ): Amount 2024 $ 4,125 2025 5,500 2026 5,500 2027 5,500 2028 5,500 Thereafter 521,125 Total $ 547,250 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 2023 Basic earnings per share: Weighted average shares outstanding 16,128 17,596 Net income attributable to DXP Enterprises, Inc. $ 11,332 $ 17,580 Convertible preferred stock dividend 23 23 Net income attributable to common shareholders $ 11,309 $ 17,557 Per share amount $ 0.70 $ 1.00 Diluted earnings per share: Weighted average shares outstanding 16,128 17,596 Assumed conversion of convertible preferred stock 840 840 Total dilutive shares 16,968 18,436 Net income attributable to common shareholders $ 11,309 $ 17,557 Convertible preferred stock dividend 23 23 Net income attributable to DXP Enterprises, Inc. $ 11,332 $ 17,580 Per share amount $ 0.67 $ 0.95 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 2023 Sales Service Centers $ 288,435 $ 305,813 Innovative Pumping Solutions 62,216 51,411 Supply Chain Services 61,984 67,043 Total Sales $ 412,635 $ 424,267 Operating Income Service Centers $ 40,320 $ 45,820 Innovative Pumping Solutions 6,970 9,190 Supply Chain Services 5,262 5,514 Total Segments Operating Income $ 52,552 $ 60,524 |
Schedule of Reconciliation of Operating Income for Reportable Segments to Consolidated Income Before Taxes | The following table presents reconciliations of income from operations for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended March 31, 2024 2023 Income from operations for reportable segments $ 52,552 $ 60,524 Adjustment for: Amortization of intangible assets 4,369 4,758 Corporate expenses 19,052 20,367 Income from operations $ 29,131 $ 35,399 Interest expense 15,544 11,521 Other income, net (1,968) (469) Income before income taxes $ 15,555 $ 24,347 |
SHARE REPURCHASES (Tables)
SHARE REPURCHASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Share Repurchase | Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury stock. Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Total number of shares purchased 326.4 339.5 Amount paid $ 16,805 $ 9,135 Average price paid per share $ 51.49 $ 27.26 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Consideration | A summary of the allocation of the total purchase consideration of our three business acquisitions during the three months ended March 31, 2024 is presented as follows ( in thousands ): Purchase Price Consideration Cash payments $ 40,346 Future consideration 6,108 Total purchase price consideration 46,454 Net Tangible Assets Acquired 11,065 Purchased Intangible Assets 8,155 Goodwill $ 27,234 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Three Months Ended March 31, (in thousands) 2024 2023 Supplemental disclosures of cash flow information: Cash paid for interest $ 14,649 $ 10,879 Cash paid for income taxes 14,693 379 Non-cash investing and financing activities: Treasury shares repurchase accruals $ 2,105 $ — |
THE COMPANY (Details)
THE COMPANY (Details) | 3 Months Ended |
Mar. 31, 2024 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 Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Maximum contingent consideration payable | $ 17.5 |
PMI, Burlingame, Drydon, Cisco and Sullivan | Valuation Technique, Discounted Cash Flow And Weighted Probability Of Possible Payments | Fair Value, Inputs, Level 3 | Annualized EBITDA And Probability Of Achievement | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate | 0.106 |
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, 2024 USD ($) | |
Contingent Consideration | |
Beginning balance | $ 8,753 |
Acquisitions | 6,108 |
Settlements | (1,000) |
Changes in fair value recorded in other income, net | (194) |
Ending Balance | 13,667 |
Other Current Liabilities | |
Contingent Consideration | |
Beginning balance | 5,400 |
Ending Balance | 8,100 |
Other Noncurrent Liabilities | |
Contingent Consideration | |
Beginning balance | 3,400 |
Ending Balance | $ 5,600 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 96,999 | $ 94,031 |
Work in process | 11,187 | 9,774 |
Inventories | $ 108,186 | $ 103,805 |
CONTRACT ASSETS AND LIABILITI_3
CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of costs and estimated earnings on uncompleted contracts [Abstract] | |||
Costs incurred on uncompleted contracts | $ 91,469 | $ 92,363 | |
Estimated profits, thereon | 40,099 | 37,379 | |
Total costs and estimated profits on uncompleted contracts | 131,568 | 129,742 | |
Less: billings to date | 104,504 | 96,928 | |
Net | 27,064 | 32,814 | |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets [Abstract] | |||
Costs and estimated profits in excess of billings | 35,259 | 42,323 | |
Billings in excess of costs and estimated profits | (8,195) | (9,506) | |
Translation adjustment | 0 | (3) | |
Net | 27,064 | $ 32,814 | |
Balances previously classified as contract liabilities at the beginning of the period that have shipped | $ 1,400 | $ 9,700 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate from continuing operations, expense (benefit) | 27.20% | 27.90% |
LONG-TERM DEBT - Components of
LONG-TERM DEBT - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Borrowings [Abstract] | ||
Unamortized debt issuance costs | $ 21,533 | $ 22,428 |
Total long-term debt | 520,217 | 520,697 |
Carrying Value | ||
Borrowings [Abstract] | ||
Total debt | 547,250 | 548,625 |
Less: current maturities | (5,500) | (5,500) |
Total long-term debt | 541,750 | 543,125 |
Total long-term debt | 520,217 | 520,697 |
Carrying Value | ABL Revolver | ||
Borrowings [Abstract] | ||
Total debt | 0 | 0 |
Carrying Value | Senior Secured Term Loan B | ||
Borrowings [Abstract] | ||
Total debt | 547,250 | 548,625 |
Fair Value | Senior Secured Term Loan B | ||
Borrowings [Abstract] | ||
Total debt | $ 551,400 | $ 554,100 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) $ in Thousands | 3 Months Ended | ||||
Oct. 13, 2023 USD ($) | Jul. 19, 2022 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Dec. 23, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||
Fixed charge coverage ratio | 228% | ||||
Senior Secured Term Loan B | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Maximum amount of consolidated debt | $ 200,000 | ||||
Asset-backed Revolving Line of Credit | ABL Revolver | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity under credit agreement | $ 135,000 | ||||
Increase in borrowing capacity under credit agreement | 50,000 | ||||
Minimum increments under credit agreement | $ 10,000 | ||||
Amount outstanding under credit facility | $ 0 | ||||
Borrowing capacity | $ 131,800 | $ 132,100 | |||
Commitment fee percentage | 0.375% | ||||
Interest rate | 8.75% | 8.75% | |||
Asset-backed Revolving Line of Credit | ABL Revolver | Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.25% | ||||
Asset-backed Revolving Line of Credit | ABL Revolver | Maximum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.375% | ||||
Asset-backed Revolving Line of Credit | ABL Revolver | Secured Overnight Financing Rate (SOFR) Or Canadian Dollar Offered Rate (CDOR) | Minimum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1.25% | ||||
Asset-backed Revolving Line of Credit | ABL Revolver | Secured Overnight Financing Rate (SOFR) Or Canadian Dollar Offered Rate (CDOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1.75% | ||||
Asset-backed Revolving Line of Credit | ABL Revolver | Canadian Prime Rate Or Canadian Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 0.25% | ||||
Asset-backed Revolving Line of Credit | ABL Revolver | Canadian Prime Rate Or Canadian Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 0.75% | ||||
Secured Debt | Senior Secured Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Debt issued | $ 550,000 | ||||
Increase in borrowing capacity | $ 125,000 | ||||
Quarterly installments of term loan payable | 0.25% | ||||
Secured leverage ratio | 227% | ||||
Financing costs | $ 11,700 | ||||
Third-party fees | $ 800 | ||||
Loss on debt extinguishment | $ 1,200 | ||||
Fixed charge coverage ratio | 1 | ||||
Interest rate | 10.29% | 10.44% | |||
Secured Debt | Senior Secured Term Loan B | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 4.75% | ||||
Variable rate floor | 1% | ||||
Secured Debt | Senior Secured Term Loan B | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 3.75% |
LONG-TERM DEBT - Secured Levera
LONG-TERM DEBT - Secured Leverage Ratio to EBITDA (Details) | Dec. 31, 2020 | Dec. 23, 2020 |
Secured Debt | Senior Secured Term Loan B | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 1 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period One | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.75 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Two | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.50 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Three | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.50 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Four | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.50 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Five | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.25 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Six | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.25 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Seven | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5.25 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Eight | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Nine | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 5 | |
Secured Debt | Senior Secured Term Loan B | Debt Covenant Period Ten | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 4.75 |
LONG-TERM DEBT - Maturities of
LONG-TERM DEBT - Maturities of Long-term Debt (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 4,125 |
2025 | 5,500 |
2026 | 5,500 |
2027 | 5,500 |
2028 | 5,500 |
Thereafter | 521,125 |
Total debt | $ 547,250 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic earnings per share: | ||
Weighted average shares outstanding (in shares) | 16,128 | 17,596 |
Net income attributable to DXP Enterprises, Inc. | $ 11,332 | $ 17,580 |
Convertible preferred stock dividend | 23 | 23 |
Net income attributable to common shareholders | $ 11,309 | $ 17,557 |
Per share amount (in dollars per share) | $ 0.70 | $ 1 |
Diluted earnings per share: | ||
Weighted average shares outstanding (in shares) | 16,128 | 17,596 |
Assumed conversion of convertible preferred stock (in shares) | 840 | 840 |
Total dilutive shares (in shares) | 16,968 | 18,436 |
Net income attributable to common shareholders | $ 11,309 | $ 17,557 |
Convertible preferred stock dividend | 23 | 23 |
Net income attributable to DXP Enterprises, Inc. | $ 11,332 | $ 17,580 |
Per share amount (in dollars per share) | $ 0.67 | $ 0.95 |
SEGMENT REPORTING - Financial I
SEGMENT REPORTING - Financial Information of Company's Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total Sales | $ 412,635 | $ 424,267 |
Total Segments Operating Income | 52,552 | 60,524 |
Service Centers | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total Sales | 288,435 | 305,813 |
Total Segments Operating Income | 40,320 | 45,820 |
Innovative Pumping Solutions | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total Sales | 62,216 | 51,411 |
Total Segments Operating Income | 6,970 | 9,190 |
Supply Chain Services | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total Sales | 61,984 | 67,043 |
Total Segments Operating Income | $ 5,262 | $ 5,514 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Operating Income to Consolidated Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Income from operations for reportable segments | $ 52,552 | $ 60,524 |
Adjustment for: | ||
Amortization of intangibles and fixed assets | 4,369 | 4,758 |
Corporate expenses | 19,052 | 20,367 |
Income from operations | 29,131 | 35,399 |
Interest expense | 15,544 | 11,521 |
Other income, net | (1,968) | (469) |
Income before income taxes | $ 15,555 | $ 24,347 |
SHARE REPURCHASES - Narrative (
SHARE REPURCHASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 15, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | |
Class of Stock [Line Items] | |||
Share repurchased | $ 16,920 | $ 9,135 | |
Common stock | |||
Class of Stock [Line Items] | |||
Total number of shares repurchased (in shares) | 326,400 | 339,500 | |
Share repurchased | $ 16,805 | $ 9,135 | |
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 REPURCHASES - Schedule of
SHARE REPURCHASES - Schedule of Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class of Stock [Line Items] | ||
Amount paid | $ 16,920 | $ 9,135 |
Common stock | ||
Class of Stock [Line Items] | ||
Total number of shares repurchased (in shares) | 326,400 | 339,500 |
Amount paid | $ 16,805 | $ 9,135 |
Average price paid per share (in dollars per share) | $ 51.49 | $ 27.26 |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase Price Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 370,949 | $ 343,991 |
Acquisitions 2024 | ||
Business Acquisition [Line Items] | ||
Cash payments | 40,346 | |
Future consideration | 6,108 | |
Total purchase price consideration | 46,454 | |
Assets acquired | 11,065 | |
Purchased Intangible Assets | 8,155 | |
Goodwill | $ 27,234 |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) business_acquired | Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | ||
Goodwill | $ 370,949 | $ 343,991 |
Number of acquisitions | business_acquired | 3 | |
Acquisition related costs | $ 0 | |
Acquisitions 2024 | ||
Business Acquisition [Line Items] | ||
Cash | 1,200 | |
Total purchase price consideration | 46,454 | |
Future consideration | 6,108 | |
Goodwill | 27,234 | |
Purchased Intangible Assets | 8,155 | |
Acquisitions 2024 | Service Centers | ||
Business Acquisition [Line Items] | ||
Goodwill | 6,900 | |
Acquisitions 2024 | Innovative Pumping Solutions | ||
Business Acquisition [Line Items] | ||
Goodwill | 20,300 | |
Acquisitions 2024 | Non-compete agreements | ||
Business Acquisition [Line Items] | ||
Purchased Intangible Assets | $ 900 | |
Amortization period of acquired intangible assets (in years) | 5 years | |
Acquisitions 2024 | Customer relationships | ||
Business Acquisition [Line Items] | ||
Purchased Intangible Assets | $ 7,200 | |
Amortization period of acquired intangible assets (in years) | 8 years |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 14,649 | $ 10,879 |
Cash paid for income taxes | 14,693 | 379 |
Non-cash investing and financing activities: | ||
Treasury shares repurchase accruals | $ 2,105 | $ 0 |