COVER
COVER - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 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 $0.01 | |
Trading Symbol | DXPE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,788,714 | |
Entity Central Index Key | 0001020710 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Sales | $ 445,556 | $ 428,040 | $ 858,191 | $ 852,307 |
Cost of sales | 307,763 | 296,188 | 596,516 | 595,414 |
Gross profit | 137,793 | 131,852 | 261,675 | 256,893 |
Selling, general and administrative expenses | 100,441 | 94,372 | 195,192 | 184,014 |
Income from operations | 37,352 | 37,480 | 66,483 | 72,879 |
Other income, net | (1,035) | (242) | (3,004) | (712) |
Interest expense | 15,384 | 11,863 | 30,928 | 23,384 |
Income before income taxes | 23,003 | 25,859 | 38,559 | 50,207 |
Provision for income taxes | 6,310 | 6,805 | 10,534 | 13,573 |
Net income | 16,693 | 19,054 | 28,025 | 36,634 |
Preferred stock dividend | 22 | 22 | 45 | 45 |
Net income attributable to common shareholders | 16,671 | 19,032 | 27,980 | 36,589 |
Foreign currency translation adjustments | 93 | 659 | (521) | 757 |
Comprehensive income | $ 16,786 | $ 19,713 | $ 27,504 | $ 37,391 |
Earnings per share (Note 9): | ||||
Basic (in dollars per share) | $ 1.05 | $ 1.11 | $ 1.75 | $ 2.10 |
Diluted (in dollars per share) | $ 1 | $ 1.06 | $ 1.66 | $ 2.01 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 15,868 | 17,211 | 15,998 | 17,402 |
Diluted (in shares) | 16,708 | 18,051 | 16,838 | 18,242 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 49,936 | $ 173,120 |
Restricted cash | 90 | 91 |
Accounts receivable, net of allowance of $5,511 and $5,584, respectively | 326,583 | 311,171 |
Inventories | 107,483 | 103,805 |
Costs and estimated profits in excess of billings | 36,741 | 42,323 |
Prepaid expenses and other current assets | 23,262 | 18,044 |
Total current assets | 544,095 | 648,554 |
Property and equipment, net | 68,407 | 61,618 |
Goodwill | 426,821 | 343,991 |
Other intangible assets, net | 85,895 | 63,895 |
Operating lease right of use assets, net | 50,520 | 48,729 |
Other long-term assets | 13,408 | 10,649 |
Total assets | 1,189,146 | 1,177,436 |
Current liabilities: | ||
Current maturities of debt | 5,500 | 5,500 |
Trade accounts payable | 101,185 | 96,469 |
Accrued wages and benefits | 32,987 | 36,238 |
Customer advances | 13,286 | 12,160 |
Billings in excess of costs and estimated profits | 12,080 | 9,506 |
Short-term operating lease liabilities | 15,218 | 15,438 |
Other current liabilities | 47,447 | 48,854 |
Total current liabilities | 227,703 | 224,165 |
Long-term debt, net of unamortized debt issuance costs and discounts | 519,735 | 520,697 |
Long-term operating lease liabilities | 36,617 | 34,336 |
Other long-term liabilities | 20,410 | 17,359 |
Total long-term liabilities | 576,762 | 572,392 |
Total liabilities | 804,465 | 796,557 |
Commitments and Contingencies (Note 10) | ||
Shareholders' equity: | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 15,788,714 and 16,177,237 outstanding, respectively | 345 | 345 |
Additional paid-in capital | 216,803 | 216,482 |
Retained earnings | 347,251 | 319,271 |
Accumulated other comprehensive loss | (31,761) | (31,240) |
Treasury stock, at cost 4,607,773 and 4,141,989 shares, respectively | (147,973) | (123,995) |
Total DXP Enterprises, Inc. equity | 384,681 | 380,879 |
Total liabilities and equity | 1,189,146 | 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 | Jun. 30, 2024 | Dec. 31, 2023 |
Allowance for accounts receivable | $ 5,511 | $ 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) | 15,788,714 | 16,177,237 |
Treasury stock, at cost (in shares) | 4,607,773 | 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 | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 28,025 | $ 36,634 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation | 4,456 | 4,145 |
Amortization of intangibles and fixed assets | 11,209 | 9,340 |
(Recovery of) provision for credit losses | (771) | 1,001 |
Payment of contingent consideration liability in excess of acquisition-date fair value | (17) | (79) |
Fair value adjustment on contingent consideration | (305) | 839 |
Amortization of debt issuance costs | 1,788 | 1,409 |
Restricted stock compensation expense | 2,076 | 1,347 |
Deferred income taxes | (4,944) | (6,313) |
Changes in operating assets and liabilities, net of effects of businesses acquired: | ||
Accounts receivable, net | (3,085) | 3,815 |
Costs and estimated profits in excess of billings | 5,561 | (23,151) |
Accounts payable and accrued expenses | (3,018) | 1,721 |
Prepaid expenses and other assets | 2,267 | 5,226 |
Inventories | 2,548 | (3,179) |
Billings in excess of costs and estimated profits | 2,591 | (5,095) |
Other long-term liabilities | (6,657) | (3,643) |
Net cash provided by operating activities | 41,724 | 24,017 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (11,719) | (5,617) |
Acquisition of businesses, net of cash acquired | (119,017) | (8,488) |
Net cash used in investing activities | (130,736) | (14,105) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on asset-backed credit facility | 0 | 7,870 |
Repayments on asset-backed credit facility | 0 | (7,870) |
Repayments under term loan facility | (2,750) | (2,184) |
Payment for acquisition contingent consideration liability | (4,483) | (3,921) |
Preferred stock dividends paid | (45) | (45) |
Shares repurchased held in treasury | (23,978) | (33,583) |
Payment for employee taxes withheld from stock awards | (1,755) | (432) |
Principal payments on finance leases | (1,992) | 0 |
Net cash used in financing activities | (35,003) | (40,165) |
Effect of foreign currency on cash | 830 | (240) |
Net change in cash and restricted cash | (123,185) | (30,493) |
Cash and restricted cash at beginning of period | 173,211 | 46,117 |
Cash and restricted cash at end of period | $ 50,026 | $ 15,624 |
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 | 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, 2022 | 365,392 | 1 | 15 | 345 | 213,937 | 250,549 | (67,780) | (31,675) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 36,634 | |||||||
Ending Balance at Jun. 30, 2023 | 369,465 | 1 | 15 | 345 | 214,852 | 287,138 | (101,968) | (30,918) |
Beginning Balance at Mar. 31, 2023 | 374,284 | 1 | 15 | 345 | 214,309 | 268,106 | (76,915) | (31,577) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (22) | (22) | ||||||
Compensation expense for restricted stock | 871 | 871 | ||||||
Tax related items for share based awards | (328) | (328) | ||||||
Currency translation adjustment | 659 | 659 | ||||||
Repurchases of shares | (25,053) | (25,053) | ||||||
Net income | 19,054 | 19,054 | ||||||
Ending Balance at Jun. 30, 2023 | 369,465 | 1 | 15 | 345 | 214,852 | 287,138 | (101,968) | (30,918) |
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) |
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] | ||||||||
Net income | 28,025 | |||||||
Ending Balance at Jun. 30, 2024 | 384,681 | 1 | 15 | 345 | 216,803 | 347,251 | (147,973) | (31,761) |
Beginning Balance at Mar. 31, 2024 | 375,464 | 1 | 15 | 345 | 217,292 | 330,580 | (140,915) | (31,854) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (22) | (22) | ||||||
Compensation expense for restricted stock | 1,212 | 1,212 | ||||||
Tax related items for share based awards | (1,701) | (1,701) | ||||||
Currency translation adjustment | 93 | 93 | ||||||
Repurchases of shares | (7,058) | (7,058) | ||||||
Net income | 16,693 | 16,693 | ||||||
Ending Balance at Jun. 30, 2024 | $ 384,681 | $ 1 | $ 15 | $ 345 | $ 216,803 | $ 347,251 | $ (147,973) | $ (31,761) |
THE COMPANY
THE COMPANY | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT 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. Recent Accounting Standards or Updates Not Yet Effective Segment Reporting In November 2023, the FASB issued an accounting standard update that expands the disclosure requirements for reportable segments, primarily through enhanced disclosures around significant segment expenses. The accounting standard update will be effective for our fiscal 2024 Form 10-K on a retrospective basis, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our segment disclosures. Improvements on Income Tax Disclosures In December 2023, the FASB issued an accounting standard update expanding the requirements for disclosure of disaggregated information about the effective tax rate reconciliation and income taxes paid. The accounting standard update will be effective for our fiscal 2025 Form 10-K. We are currently evaluating the impact of this accounting standard update on our income tax disclosures. |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 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 June 30, 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 six months ended June 30, 2024 ( in thousands ): Contingent Consideration *Beginning balance at December 31, 2023 $ 8,753 Acquisitions ( Note 12 ) 6,108 Settlements (4,500) Total remeasurement adjustments: Changes in fair value recorded in other income, net (305) *Ending Balance at June 30, 2024 $ 10,056 *Amounts included in other current liabilities were $5.6 million and $5.4 million for the periods ending June 30, 2024 and December 31, 2023, respectively. Amounts included in other long-term liabilities were $4.5 million and $3.4 million for the periods ending June 30, 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 10.1 percent. Changes in our unobservable inputs in isolation would result in a change to our fair value measurement. As of June 30, 2024, the maximum amount of contingent consideration payable under these arrangements is $12.7 million. Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at June 30, 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 June 30, 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 | 6 Months Ended |
Jun. 30, 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 ): June 30, 2024 December 31, 2023 Finished goods $ 94,104 $ 94,031 Work in process 13,379 9,774 Inventories $ 107,483 $ 103,805 |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 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 ): June 30, 2024 December 31, 2023 Costs incurred on uncompleted contracts $ 95,844 $ 92,363 Estimated profits, thereon 47,723 37,379 Total costs and estimated profits on uncompleted contracts 143,567 129,742 Less: billings to date 119,118 96,928 Net $ 24,449 $ 32,814 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for June 30, 2024 and December 31, 2023 under the following captions ( in thousands ): June 30, 2024 December 31, 2023 Costs and estimated profits in excess of billings $ 36,741 $ 42,323 Billings in excess of costs and estimated profits (12,080) (9,506) Translation adjustment (212) (3) Net $ 24,449 $ 32,814 During the six months ended June 30, 2024 and 2023, $2.9 million and $10.0 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 | 6 Months Ended |
Jun. 30, 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 27.4 percent for the three months ended June 30, 2024 compared to a tax expense of 26.3 percent for the three months ended June 30, 2023. Compared to the U.S. statutory rate for the three months ended June 30, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, contingent consideration 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. Our effective tax rate from continuing operations was a tax expense of 27.3 percent for the six months ended June 30, 2024, compared to a tax expense of 27.0 percent for the six months ended June 30, 2023. Compared to the U.S. statutory rate for the six months ended June 30, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, contingent consideration 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 June 30, 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 | 6 Months Ended |
Jun. 30, 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 ): June 30, 2024 December 31, 2023 ABL Revolver $ — $ — Senior Secured Term Loan B due October 13, 2030 (1) 545,875 548,625 Total debt 545,875 548,625 Less: current maturities (5,500) (5,500) Total long-term debt $ 540,375 $ 543,125 Unamortized discount and debt issuance costs 20,640 22,428 Long-term debt, net of unamortized discount and debt issuance costs $ 519,735 $ 520,697 (1) The fair value of the Term Loan B due October 13, 2030 was $550.7 million and $554.1 million as of June 30, 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 10.16% and 10.44% as of June 30, 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 June 30, 2024 there was $545.9 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 June 30, 2024 the unused line fee was 0.375% and there were no amounts outstanding under the ABL Revolver. As of June 30, 2024, the borrowing availability under our credit facility was $131.4 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 June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands ): Amount 2024 $ 2,750 2025 5,500 2026 5,500 2027 5,500 2028 5,500 Thereafter 521,125 Total $ 545,875 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Basic earnings per share: Weighted average shares outstanding 15,868 17,211 15,998 17,402 Net income attributable to DXP Enterprises, Inc. $ 16,693 $ 19,054 $ 28,025 $ 36,634 Convertible preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 16,671 $ 19,032 $ 27,980 $ 36,589 Per share amount $ 1.05 $ 1.11 $ 1.75 $ 2.10 Diluted earnings per share: Weighted average shares outstanding 15,868 17,211 15,998 17,402 Assumed conversion of convertible preferred stock 840 840 840 840 Total dilutive shares 16,708 18,051 16,838 18,242 Net income attributable to common shareholders $ 16,671 $ 19,032 $ 27,980 $ 36,589 Convertible preferred stock dividend 22 22 45 45 Net income attributable to DXP Enterprises, Inc. $ 16,693 $ 19,054 $ 28,025 $ 36,634 Per share amount $ 1.00 $ 1.06 $ 1.66 $ 2.01 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Sales Service Centers $ 306,516 $ 313,806 $ 594,952 $ 619,619 Innovative Pumping Solutions 73,377 48,067 135,592 99,478 Supply Chain Services 65,663 66,167 127,647 133,210 Total Sales $ 445,556 $ 428,040 $ 858,191 $ 852,307 Operating Income Service Centers $ 43,855 $ 46,823 $ 84,175 $ 92,637 Innovative Pumping Solutions 13,366 6,760 20,336 15,956 Supply Chain Services 5,823 5,416 11,085 10,930 Total Segments Operating Income $ 63,044 $ 58,999 $ 115,596 $ 119,523 The following table presents reconciliations of income from operations for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Income from operations for reportable segments $ 63,044 $ 58,999 $ 115,596 $ 119,523 Adjustment for: Amortization of intangible assets 4,719 4,582 9,088 9,340 Corporate expenses 20,973 16,937 40,025 37,304 Income from operations $ 37,352 $ 37,480 66,483 72,879 Interest expense 15,384 11,863 30,928 23,384 Other income, net (1,035) (242) (3,004) (712) Income before income taxes $ 23,003 $ 25,859 $ 38,559 $ 50,207 |
COMMON STOCK AND SHARE REPURCHA
COMMON STOCK AND SHARE REPURCHASES | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
COMMON STOCK AND SHARE REPURCHASES | COMMON STOCK AND SHARE REPURCHASES The following is a summary of changes in outstanding common stock for the period indicated (in thousands ): Common stock Common stock outstanding at December 31, 2023 16,177.2 Common stock issued related to stock compensation expense (1) 77.3 Total number of shares purchased (465.8) Common stock outstanding at June 30, 2024 15,788.7 (1) The number of common stock issued represents issuance net of tax withholding. 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 June 30, Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Total number of shares purchased 139.4 748.8 465.8 1,088.4 Amount paid $ 6,992 $ 23,935 $ 23,798 $ 33,182 Average price paid per share $ 50.15 $ 31.96 $ 51.09 $ 30.49 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS The Company enters into strategic acquisitions in an effort to better service existing customers and to attract new customers. 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. Subsequent to the acquisition, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate in the reporting period in which the adjustment amounts are determined based on facts and circumstances that existed as of the acquisition date, as applicable. A summary of the allocation of the total purchase consideration of our four business acquisitions during the six months ended June 30, 2024 is presented as follows ( in thousands ): Purchase Price Consideration Cash payments $ 121,377 Future consideration 6,108 Total purchase price consideration 127,485 Net Tangible Assets Acquired 13,091 Purchased Intangible Assets 31,095 Goodwill $ 83,299 The total purchase consideration related to our acquisitions during the period consisted primarily of cash consideration. The total cash and cash equivalents acquired for these acquisitions was $2.5 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 June 30, 2024. The goodwill total of approximately $83.3 million is attributable primarily to expected synergies and the assembled workforce of each entity and is generally not deductible for tax purposes. Goodwill assigned to our SC and IPS segments was $63.0 million and $20.3 million, respectively. The operating results of these acquisitions are included within the Company's consolidated statements of operations from the date of acquisition, which were not material for the three and six months ended June 30, 2024. 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 | 6 Months Ended |
Jun. 30, 2024 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Six Months Ended June 30, (in thousands) 2024 2023 Supplemental disclosures of cash flow information: Cash paid for interest $ 29,140 $ 21,975 Cash paid for income taxes 15,456 16,307 Non-cash investing and financing activities: Treasury shares repurchase accruals $ — $ (605) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Policies) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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. |
Recent Accounting Standards or Updates Not Yet Effective | 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. Recent Accounting Standards or Updates Not Yet Effective Segment Reporting In November 2023, the FASB issued an accounting standard update that expands the disclosure requirements for reportable segments, primarily through enhanced disclosures around significant segment expenses. The accounting standard update will be effective for our fiscal 2024 Form 10-K on a retrospective basis, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our segment disclosures. Improvements on Income Tax Disclosures In December 2023, the FASB issued an accounting standard update expanding the requirements for disclosure of disaggregated information about the effective tax rate reconciliation and income taxes paid. The accounting standard update will be effective for our fiscal 2025 Form 10-K. We are currently evaluating the impact of this accounting standard update on our income tax disclosures. |
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) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 2024 ( in thousands ): Contingent Consideration *Beginning balance at December 31, 2023 $ 8,753 Acquisitions ( Note 12 ) 6,108 Settlements (4,500) Total remeasurement adjustments: Changes in fair value recorded in other income, net (305) *Ending Balance at June 30, 2024 $ 10,056 *Amounts included in other current liabilities were $5.6 million and $5.4 million for the periods ending June 30, 2024 and December 31, 2023, respectively. Amounts included in other long-term liabilities were $4.5 million and $3.4 million for the periods ending June 30, 2024 and December 31, 2023, respectively. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Carrying Values of Inventories | The carrying values of inventories are as follows ( in thousands ): June 30, 2024 December 31, 2023 Finished goods $ 94,104 $ 94,031 Work in process 13,379 9,774 Inventories $ 107,483 $ 103,805 |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 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 ): June 30, 2024 December 31, 2023 Costs incurred on uncompleted contracts $ 95,844 $ 92,363 Estimated profits, thereon 47,723 37,379 Total costs and estimated profits on uncompleted contracts 143,567 129,742 Less: billings to date 119,118 96,928 Net $ 24,449 $ 32,814 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for June 30, 2024 and December 31, 2023 under the following captions ( in thousands ): June 30, 2024 December 31, 2023 Costs and estimated profits in excess of billings $ 36,741 $ 42,323 Billings in excess of costs and estimated profits (12,080) (9,506) Translation adjustment (212) (3) Net $ 24,449 $ 32,814 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 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 ): June 30, 2024 December 31, 2023 ABL Revolver $ — $ — Senior Secured Term Loan B due October 13, 2030 (1) 545,875 548,625 Total debt 545,875 548,625 Less: current maturities (5,500) (5,500) Total long-term debt $ 540,375 $ 543,125 Unamortized discount and debt issuance costs 20,640 22,428 Long-term debt, net of unamortized discount and debt issuance costs $ 519,735 $ 520,697 (1) The fair value of the Term Loan B due October 13, 2030 was $550.7 million and $554.1 million as of June 30, 2024 and December 31, 2023, respectively. |
Schedule of Maturities of Long-Term Debt | As of June 30, 2024, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands ): Amount 2024 $ 2,750 2025 5,500 2026 5,500 2027 5,500 2028 5,500 Thereafter 521,125 Total $ 545,875 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Basic earnings per share: Weighted average shares outstanding 15,868 17,211 15,998 17,402 Net income attributable to DXP Enterprises, Inc. $ 16,693 $ 19,054 $ 28,025 $ 36,634 Convertible preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 16,671 $ 19,032 $ 27,980 $ 36,589 Per share amount $ 1.05 $ 1.11 $ 1.75 $ 2.10 Diluted earnings per share: Weighted average shares outstanding 15,868 17,211 15,998 17,402 Assumed conversion of convertible preferred stock 840 840 840 840 Total dilutive shares 16,708 18,051 16,838 18,242 Net income attributable to common shareholders $ 16,671 $ 19,032 $ 27,980 $ 36,589 Convertible preferred stock dividend 22 22 45 45 Net income attributable to DXP Enterprises, Inc. $ 16,693 $ 19,054 $ 28,025 $ 36,634 Per share amount $ 1.00 $ 1.06 $ 1.66 $ 2.01 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Sales Service Centers $ 306,516 $ 313,806 $ 594,952 $ 619,619 Innovative Pumping Solutions 73,377 48,067 135,592 99,478 Supply Chain Services 65,663 66,167 127,647 133,210 Total Sales $ 445,556 $ 428,040 $ 858,191 $ 852,307 Operating Income Service Centers $ 43,855 $ 46,823 $ 84,175 $ 92,637 Innovative Pumping Solutions 13,366 6,760 20,336 15,956 Supply Chain Services 5,823 5,416 11,085 10,930 Total Segments Operating Income $ 63,044 $ 58,999 $ 115,596 $ 119,523 |
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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Income from operations for reportable segments $ 63,044 $ 58,999 $ 115,596 $ 119,523 Adjustment for: Amortization of intangible assets 4,719 4,582 9,088 9,340 Corporate expenses 20,973 16,937 40,025 37,304 Income from operations $ 37,352 $ 37,480 66,483 72,879 Interest expense 15,384 11,863 30,928 23,384 Other income, net (1,035) (242) (3,004) (712) Income before income taxes $ 23,003 $ 25,859 $ 38,559 $ 50,207 |
COMMON STOCK AND SHARE REPURC_2
COMMON STOCK AND SHARE REPURCHASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Summary of Changes in Outstanding Common Stock | The following is a summary of changes in outstanding common stock for the period indicated (in thousands ): Common stock Common stock outstanding at December 31, 2023 16,177.2 Common stock issued related to stock compensation expense (1) 77.3 Total number of shares purchased (465.8) Common stock outstanding at June 30, 2024 15,788.7 (1) The number of common stock issued represents issuance net of tax withholding. |
Schedule of Share Repurchase | Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury stock. Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Total number of shares purchased 139.4 748.8 465.8 1,088.4 Amount paid $ 6,992 $ 23,935 $ 23,798 $ 33,182 Average price paid per share $ 50.15 $ 31.96 $ 51.09 $ 30.49 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Schedule of Purchase Price Consideration | A summary of the allocation of the total purchase consideration of our four business acquisitions during the six months ended June 30, 2024 is presented as follows ( in thousands ): Purchase Price Consideration Cash payments $ 121,377 Future consideration 6,108 Total purchase price consideration 127,485 Net Tangible Assets Acquired 13,091 Purchased Intangible Assets 31,095 Goodwill $ 83,299 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Six Months Ended June 30, (in thousands) 2024 2023 Supplemental disclosures of cash flow information: Cash paid for interest $ 29,140 $ 21,975 Cash paid for income taxes 15,456 16,307 Non-cash investing and financing activities: Treasury shares repurchase accruals $ — $ (605) |
THE COMPANY (Details)
THE COMPANY (Details) | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Maximum contingent consideration payable | $ 12.7 |
Fair Value, Inputs, Level 3 | PMI, Burlingame, Drydon, Cisco and Sullivan | Valuation Technique, Discounted Cash Flow And Weighted Probability Of Possible Payments | Annualized EBITDA And Probability Of Achievement | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate | 0.101 |
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 | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Contingent Consideration | |
Beginning balance | $ 8,753 |
Acquisitions | 6,108 |
Settlements | (4,500) |
Changes in fair value recorded in other income, net | (305) |
Ending Balance | 10,056 |
Other Current Liabilities | |
Contingent Consideration | |
Beginning balance | 5,400 |
Ending Balance | 5,600 |
Other Noncurrent Liabilities | |
Contingent Consideration | |
Beginning balance | 3,400 |
Ending Balance | $ 4,500 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 94,104 | $ 94,031 |
Work in process | 13,379 | 9,774 |
Inventories | $ 107,483 | $ 103,805 |
CONTRACT ASSETS AND LIABILITI_3
CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Schedule of costs and estimated earnings on uncompleted contracts [Abstract] | |||
Costs incurred on uncompleted contracts | $ 95,844 | $ 92,363 | |
Estimated profits, thereon | 47,723 | 37,379 | |
Total costs and estimated profits on uncompleted contracts | 143,567 | 129,742 | |
Less: billings to date | 119,118 | 96,928 | |
Net | 24,449 | 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 | 36,741 | 42,323 | |
Billings in excess of costs and estimated profits | (12,080) | (9,506) | |
Translation adjustment | (212) | (3) | |
Net | 24,449 | $ 32,814 | |
Balances previously classified as contract liabilities at the beginning of the period that have shipped | $ 2,900 | $ 10,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate from continuing operations, expense (benefit) | 27.40% | 26.30% | 27.30% | 27% |
LONG-TERM DEBT - Components of
LONG-TERM DEBT - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Borrowings [Abstract] | ||
Unamortized debt issuance costs | $ 20,640 | $ 22,428 |
Total long-term debt | 519,735 | 520,697 |
Carrying Value | ||
Borrowings [Abstract] | ||
Total debt | 545,875 | 548,625 |
Less: current maturities | (5,500) | (5,500) |
Total long-term debt | 540,375 | 543,125 |
Total long-term debt | 519,735 | 520,697 |
Carrying Value | ABL Revolver | ||
Borrowings [Abstract] | ||
Total debt | 0 | 0 |
Carrying Value | Senior Secured Term Loan B due October 13, 2030 | ||
Borrowings [Abstract] | ||
Total debt | 545,875 | 548,625 |
Fair Value | Senior Secured Term Loan B due October 13, 2030 | ||
Borrowings [Abstract] | ||
Total debt | $ 550,700 | $ 554,100 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Oct. 13, 2023 | Jul. 19, 2022 | Jun. 30, 2024 | Dec. 31, 2023 | |
Secured Debt | Senior Secured Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Increase in borrowing capacity | $ 125,000 | |||
Debt issued | $ 550,000 | |||
Quarterly installments of term loan payable | 0.25% | |||
Financing costs | $ 11,700 | |||
Interest rate | 10.16% | 10.44% | ||
Third-party fees | $ 800 | |||
Loss on debt extinguishment | $ 1,200 | |||
Secured Debt | Senior Secured Term Loan B | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Variable rate floor | 1% | |||
Margin rate | 4.75% | |||
Secured Debt | Senior Secured Term Loan B | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Margin rate | 3.75% | |||
Asset-backed Revolving Line of Credit | ABL Revolver | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 8.75% | 8.75% | ||
Maximum borrowing capacity under credit agreement | $ 135,000 | |||
Increase in borrowing capacity under credit agreement | 50,000 | |||
Minimum increments under credit agreement | $ 10,000 | |||
Commitment fee percentage | 0.375% | |||
Amount outstanding under credit facility | $ 0 | |||
Borrowing capacity | $ 131,400 | $ 132,100 | ||
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% |
LONG-TERM DEBT - Maturities of
LONG-TERM DEBT - Maturities of Long-term Debt (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 2,750 |
2025 | 5,500 |
2026 | 5,500 |
2027 | 5,500 |
2028 | 5,500 |
Thereafter | 521,125 |
Total | $ 545,875 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Basic earnings per share: | ||||||
Weighted average shares outstanding (in shares) | 15,868 | 17,211 | 15,998 | 17,402 | ||
Net income attributable to DXP Enterprises, Inc. | $ 16,693 | $ 11,332 | $ 19,054 | $ 17,580 | $ 28,025 | $ 36,634 |
Convertible preferred stock dividend | 22 | 22 | 45 | 45 | ||
Net income attributable to common shareholders | $ 16,671 | $ 19,032 | $ 27,980 | $ 36,589 | ||
Per share amount (in dollars per share) | $ 1.05 | $ 1.11 | $ 1.75 | $ 2.10 | ||
Diluted earnings per share: | ||||||
Weighted average shares outstanding (in shares) | 15,868 | 17,211 | 15,998 | 17,402 | ||
Assumed conversion of convertible preferred stock (in shares) | 840 | 840 | 840 | 840 | ||
Total dilutive shares (in shares) | 16,708 | 18,051 | 16,838 | 18,242 | ||
Net income attributable to common shareholders | $ 16,671 | $ 19,032 | $ 27,980 | $ 36,589 | ||
Convertible preferred stock dividend | 22 | 22 | 45 | 45 | ||
Net income attributable to DXP Enterprises, Inc. | $ 16,693 | $ 19,054 | $ 28,025 | $ 36,634 | ||
Per share amount (in dollars per share) | $ 1 | $ 1.06 | $ 1.66 | $ 2.01 |
SEGMENT REPORTING - Financial I
SEGMENT REPORTING - Financial Information of Company's Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Sales | $ 445,556 | $ 428,040 | $ 858,191 | $ 852,307 |
Total Segments Operating Income | 63,044 | 58,999 | 115,596 | 119,523 |
Service Centers | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Sales | 306,516 | 313,806 | 594,952 | 619,619 |
Total Segments Operating Income | 43,855 | 46,823 | 84,175 | 92,637 |
Innovative Pumping Solutions | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Sales | 73,377 | 48,067 | 135,592 | 99,478 |
Total Segments Operating Income | 13,366 | 6,760 | 20,336 | 15,956 |
Supply Chain Services | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Sales | 65,663 | 66,167 | 127,647 | 133,210 |
Total Segments Operating Income | $ 5,823 | $ 5,416 | $ 11,085 | $ 10,930 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Operating Income to Consolidated Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||||
Income from operations for reportable segments | $ 63,044 | $ 58,999 | $ 115,596 | $ 119,523 |
Adjustment for: | ||||
Amortization of intangible assets | 4,719 | 4,582 | 9,088 | 9,340 |
Corporate expenses | 20,973 | 16,937 | 40,025 | 37,304 |
Income from operations | 37,352 | 37,480 | 66,483 | 72,879 |
Interest expense | 15,384 | 11,863 | 30,928 | 23,384 |
Other income, net | (1,035) | (242) | (3,004) | (712) |
Income before income taxes | $ 23,003 | $ 25,859 | $ 38,559 | $ 50,207 |
COMMON STOCK AND SHARE REPURC_3
COMMON STOCK AND SHARE REPURCHASES - Summary of Changes in Outstanding Common Stock (Details) | 6 Months Ended |
Jun. 30, 2024 shares | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Common stock outstanding at beginning of period (in shares) | 16,177,237 |
Common stock outstanding at end of period (in shares) | 15,788,714 |
Common stock | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Common stock outstanding at beginning of period (in shares) | 16,177,200 |
Common stock issued related to stock compensation expense (in shares) | 77,300 |
Total number of shares repurchased (in shares) | (465,800) |
Common stock outstanding at end of period (in shares) | 15,788,700 |
COMMON STOCK AND SHARE REPURC_4
COMMON STOCK AND SHARE REPURCHASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Dec. 15, 2022 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Class of Stock [Line Items] | |||||||
Amount paid | $ 7,058 | $ 16,920 | $ 25,053 | $ 9,135 | |||
Common stock | |||||||
Class of Stock [Line Items] | |||||||
Total number of shares repurchased (in shares) | 139,400 | 748,800 | 465,800 | 1,088,400 | |||
Amount paid | $ 6,992 | $ 23,935 | $ 23,798 | $ 33,182 | |||
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 |
COMMON STOCK AND SHARE REPURC_5
COMMON STOCK AND SHARE REPURCHASES - Schedule of Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Class of Stock [Line Items] | ||||||
Amount paid | $ 7,058 | $ 16,920 | $ 25,053 | $ 9,135 | ||
Common stock | ||||||
Class of Stock [Line Items] | ||||||
Total number of shares repurchased (in shares) | 465,800 | |||||
Common stock | ||||||
Class of Stock [Line Items] | ||||||
Total number of shares repurchased (in shares) | 139,400 | 748,800 | 465,800 | 1,088,400 | ||
Amount paid | $ 6,992 | $ 23,935 | $ 23,798 | $ 33,182 | ||
Average price paid per share (in dollars per share) | $ 50.15 | $ 31.96 | $ 51.09 | $ 30.49 |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase Price Consideration (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 426,821 | $ 343,991 |
Acquisitions 2024 | ||
Business Acquisition [Line Items] | ||
Cash payments | 121,377 | |
Future consideration | 6,108 | |
Total purchase price consideration | 127,485 | |
Net Tangible Assets Acquired | 13,091 | |
Purchased Intangible Assets | 31,095 | |
Goodwill | $ 83,299 |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) | Mar. 31, 2024 business_acquired | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | ||||
Number of acquisitions | business_acquired | 4 | |||
Acquisition related costs | $ 0 | |||
Goodwill | 426,821 | $ 426,821 | $ 343,991 | |
Service Centers | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 63,000 | 63,000 | ||
Innovative Pumping Solutions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 20,300 | 20,300 | ||
Acquisitions 2024 | ||||
Business Acquisition [Line Items] | ||||
Cash | 2,500 | 2,500 | ||
Goodwill | 83,299 | 83,299 | ||
Purchased Intangible Assets | 31,095 | $ 31,095 | ||
Acquisitions 2024 | Non-compete agreements | ||||
Business Acquisition [Line Items] | ||||
Amortization period of acquired intangible assets (in years) | 5 years | |||
Purchased Intangible Assets | 1,900 | $ 1,900 | ||
Acquisitions 2024 | Trade names | ||||
Business Acquisition [Line Items] | ||||
Amortization period of acquired intangible assets (in years) | 10 years | |||
Purchased Intangible Assets | 3,600 | $ 3,600 | ||
Acquisitions 2024 | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Amortization period of acquired intangible assets (in years) | 8 years | |||
Purchased Intangible Assets | $ 25,600 | $ 25,600 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 29,140 | $ 21,975 |
Cash paid for income taxes | 15,456 | 16,307 |
Non-cash investing and financing activities: | ||
Treasury shares repurchase accruals | $ 0 | $ (605) |