DXPE - Earnings call transcript Q1 2018

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Operator

Good afternoon. My name is Kym, and I will be your conference operator today. At this time, I would like to welcome everyone to the DXP Enterprises 2018 First Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Senior your and call. Yee, you Financial Kent begin may Instructions] Vice Chief President Officer, [Operator

Kent Yee

discuss our Thank and XXXX. QX to welcome Kim. to results you, This DXP's XXXX is conference March quarter ended first Kent Yee the XX, of call

me and David our Little. Chairman is today Joining CEO,

A Before these you materially material discussion statements. today's Actual may detailed SEC may I differ call forward-looking and is filings. factors remind started, believe basis business our we recorded contained forward-looking to being are those effect on includes by contemplated from statements. get want many in we the that webcast and our of ongoing on results an that a have

new information future no or DXP information update However, assumes of obligation events. to result that as a

GAAP and included earnings in accompanying GAAP I financial present call, A on and measures. investor this turn release of our a now is may thoughts we financial press to presentation an During measures The the and over are summary non-GAAP his non-GAAP release. the results. available both at of press our first will David provide call quarter now to to ir.dxpe.com. website reconciliation

David Little

first Thanks, to thanks everyone on conference Kent, call today. our and quarter

we prepared great and through profits a XXXX. aim fifth are answered of are off And is and of our aim my and year, start sales sequential to going our our significant I to half will operating consecutive keeping with questions top returning in trend We priority to get in and momentum sustain your our line increases a and growth will this will to up. start key Q&A last is at take details. quarter the we in second the to financial XXXX, This top After drive Kent off all thoughts of summary remarks session. you through

business, hard in Momentum me DXP our is DXPeople thank their all our stakeholders, recovery. and focusing a on our particular, having we for work. smart Let all are building in

bottom line focused our We are on speed, providing as customers growing and for stakeholders. well quality as all and line and top the convenience

part revenues XX.X% Turning for This sequential a family distributor leading are year-over-year. end and reported and quarter in has DXP, who of Auburn, the improvement as reflects This $XXX.X to our Specialties, quarter X.X% of Total as of have as cutting experts stability located Washington. Application excited increase has is continued we results. first a was as that great customer-driven XXXX ASI DXP Application of first increase part Inc., and a the metalworking markets addition the in as a our people to the DXP tool them metalworking solutions. well Specialties of million in and are

acquisition increased for million quarter, For the the $XX.X Adjusting XX.X% sales. ASI first X.X% ASI, and in DXP sales sequentially. year-over-year contributed of

$X.X or In I contribution and increase million IPS the sales IPS growth by onshore $XX.X it Innovative increases still backlogs, with business XX.X% segments year-over-year the was see markets the with growth, driven XX.X% pleased terms Overall, $XXX.X our X great capital is are to our midstream QX of Innovative modular soft. especially million primarily X.X% of segment. to million. in Solutions sales experienced as year-over-year 'XX but MRO both within in million, and Solutions from sales markets an pleased QX for offshore businesses. uptick. sales sales of 'XX $XX.X continued to a sales equipment increase increase packaging Sequentially, while Pumping am Centers year-over-year as Chain Supply XX.X% increased the to Service was Pumping to are Services of by strength we business OEM projects, seeing and segment, all increased increased I

grow growth to improvements XX.X%, to regions. XXXX Centers, by Bearing in in the has product XXXX in of from of increased Trends Transmission the continued Centers continue Equipment, quarter 'XX. was first and from profit and sales from fiscal to quarter in basis percent Rotating remain the overall 'XX. of South QX Southwest, and of by We particular percent backlog Metalworking XX point and saw quarterly divisions. Within first encouraged XX-plus IPS IPS The Service which we QX our Power Southeast average DXP's into increases X-plus driven to for gross strength the the decline XXXX. Service DXP's Central margins QX were backlog, 'XX a

period QX or off However, of continue adjusting the experienced I same am and the XXXX. we to gross for in essentially pleased the acquisition the gross that our margins XX% trough XXXX. flat were we work in of ASI, margins to

they In operating average, below terms produced ASI's DXP's profit gross but margins, of of XX-plus margins income percent. are they

we The factors DXP's business terms are profit improvements, quarter want other margins. And service compensated be. safety DXP's have impacted profit in slight DXP areas other business and that upside our where but we gross have gross to margin: this to of in the engineered-to-order frankly, of experienced not Canada

business facility absorption they in attempt engineered-to-order and to pump strength and within large high-margin their more is IPS a business DXP's margins focus reduced as on in XXX DXP's saw fabrication projects. at overall business. working still level configured-to-order we complex, orders our the private-label increased of cost Specifically, through our

price business, structure we margins safety continuing work we going expect and increases to of the employee order to Canada in implementing gross through DXP's forward. our terms adjusting make In cost are

the XXXX. in this increased 'XX. have season progress SG&A the QX discussed, to Canada expect versus first $X we soft see As on and quarter half of during seasonal we our efforts million for the is second of

basis employees. our and of of XX the 'XX. business investment fiscal At of of reflects in X,XXX to DXP DXP's in SG&A XX.X% to and the had our SG&A As QX going the QX declined XXXX first a people. approximately growth in says points end commentary, from That similar percent sales, quarter, XX.X% QX full-time

Chain bottom per in margins XXXX, X.X% XX.X%. $X.X by of diluted still operating EBITDA as share increase benefiting customer the driving in value compared per of results driven in Overall, and first we expected from XX.X% success in as investment versus operating DXP's a as financial hard who at Chain as to on going year-over-year summary, DXP's to was X.X% share privilege XX.X% a Earnings were XX grow and XX.X% one behalf every line of over earnings and as overall operating driven That points, and corporate DXP percent operating basis team, recovery. the our Centers the income margins or speed, as or well year-over-year share. X.X% our margin 'XX. in the IPS Services DXPeople, basis QX But includes and had to Supply margins basis was $X.XX ASI, by our sales, our quality $X.XX improvement of million of Services expense was a grow point remain quarter move my full by experienced stakeholders. growth, our increase a growing future DXP or and of and sales the organization share. were basis is year-over-year, sales points primarily while first $X.XX in amortization. X.X% margin IPS percent of of of decline. which in a will EBITDA forward. we XX.X% these Service as being our per diluted we is and share first reflects income gross quarter XX.X% said, and versus increase recovery SG&A. This Supply creation. $XX.X customers smart income a improved a for operating it the all time 'XX, 'XX. margins million, go fiscal In increase delivered always, our of about As operating same XX will income people XXXX as day SG&A $XX.X believes X reflect Service SG&A stakeholders which per DXP work an ways the decreased points, X%, addition growth and for top respectively. margins greatest to line income $XX.X income XXX as convenience EBITDA margins. by million DXP by quarter. excited through Centers increase, providing operating increased million for have goal produced the and QX

Before I reiterate I to our to value bring and to suppliers, my capabilities it our and Kent, shareholders. want back to DXPeople turn future excitement over about customers, the

as in to share take and be I suppliers turn review detail. are it fast. being to with now financials customer-driven, great With remains about fired to The up DXP the first stakeholders excited quarter the and was a great well start of from and positioned we by benefit continue more growing our all that, back growth. to and Kent partnered winning will DXP the year. market to return

Kent Yee

Thank you, David.

a turning or statement. our strong year. Starting QX to results consecutive X.X%. sales XXXX with quarter and growth the The reflect first of the fifth financial our was to quarter quarter compounded of our increases rate DXP results. for XXXX sequential a since continued is income Now quarterly QX marks financial of and growth great start sales QX

of quarter over are Average in we $XXX.X of million in reflects and and indicators QX Southeast U.S. key to XX.X%. and average business quarter day seeing first year-over-year to X.X% and day rig XXXX. Adjusting was increased and overall production, or QX segment, the from industrial to average contribution growth show Regions first Central, which with Center the growth, sequentially market all Notable daily for experienced sales continue include we These market performance Adjusting XXXX. experienced which XXXX QX businesses. XX.X% XXXX strength XXXX. our sales some index businesses X, DXP. meaningful PMI. increased line on XX.X%. expectations. the increased ASI, and sales within and Both sales QX which our in The the were key broadly our continue $X.X XX.X% gas $X.X gas indicators metalworking acquisition our the were to sales Average in quarter for growth for our ASI, Application customers engineered end oil million. QX daily for strength. in our within the segment, from in increased including per does first up the Southwest for order, support to include IPS of first daily quarter South The versus organic million regions. This for per the our and count, sales configured remanufacturing January Service what million end year-over-year sales and order Total closed financial metrics include Specialties, $XX.X oil the sales show daily indicators sales

Service the our Service our Chain Centers, was by for IPS X which sales greatest increasing XX.X% improvement, with on growth followed XX.X% X.X% organic growth. business Services of sales Adjusting and year-over-year growth This terms the an experienced segments, experienced year-over-year, basis. Centers Supply showing with all In growth ASI, up were XX.X%.

Turning at of to and our continued to acquisition gross margins flat for XX.X%. businesses. making, QX gross our for margins. ASI. total also are Canadian Service impact order but XX% Gross adjusting the essentially progress were margins slow reflect DXP's ASI Safety were we engineered our margins gross the of the

As the but averages. remain below X continue margin said, on put thus within have there segments, businesses other by we margins. improvement QX, respective businesses discussed, compensating to our pressure the gross for historical in That QX, both have show And were these softness. supported businesses our in

Centers we acquisition see Service experienced points gross Supply gross of XXX a adjusting basis IPS gross points improvement basis the Services declined as essentially margins ASI. to move XX QX. point X expect margins Sequentially, from to flat segment further declined Chain throughout margins improvement basis QX. for QX from XXXX. our Sequentially, or We

points XXX to basis $XX.X which basis increases segment XX.X% operating million followed income; QX to operating by million; Services points operating XX of income primarily operating XX segment $XX.X business SG&A. income Service IPS $X.X QX basis income points, the improvement had X DXP improving business uptick, from in all combined, XXXX XXXX. by terms had point basis and income Centers, segments a increased X Chain Total margins greatest in In driven versus to million. operating declined of margins Supply year-over-year improved

to EBITDA. Turning

million, was up QX EBITDA was $XX.X which from XXXX XXXX. quarter First XX.X%

reflects EBITDA reflecting increase year. Our we the fourth EBITDA million from excuse expanded or of Year-over-year EBITDA in the QX margins margin primarily The decline reflects that EBITDA XX of points primarily margin increase, discussed quarter. gross since growth. XX me, basis $XX.X year-over-year in have points, increase in dollars the declined the last XX.X% primarily -- basis sales dollars XX the

margins. and cycle, our organic As growth continued move should operating steady we we gross to drive long continue the through leverage we experience in improvement as as

QX million or last our year. QX EPS, of net income over up $X.X terms was In is This $X.X of million. XX.X%

was diluted first share the for quarter per earnings $X.XX. Our

Turning to balance the sheet.

main the in million out. and and primarily sales reflects first are million our capital was Working from The remains capital, This percentage with terms business. average a in percentage XX.X%. working ASI increase ranges but due of capital driver to [indiscernible]. from numbers addition increased where In the working sales a quarter. inventory. $XX.X as for is months last finished a million above comfortable we of was $X the investments Inventory XX.X%, of was a This within our as in million increase $X.X the fourth targeted and in goods increase another XX $X.X historical of of came our quarter

at sheet of March net terms cash $XX the have the checks. XX, of balance in cash, In we outstanding million on

CapEx, investments of CapEx profitability CapEx up in stable be the at does supercenters and period ability capital, our reflects business our in and is Compared dollars corporate sales. of increase levels. our operations. it quarter enhance strong within DXP to said, XX% dampened cost or quarter first core or to software to the remains $XXX,XXX. manage and was facilities are in our distribution invested cash. minimal first of investments on a $XXX,XXX improvements sales capital, our needed XXXX, and X.X% That to ROIC, In same but The terms future reflect efforts, Return continues above our making to

actions we have with of including David sales X fixed and was ability growth. ratio room the would our in was leverage our be fixed the covenants position of continuing X.X:X our term. and operating conclusion, to for charge to ratio. ratio and to increases, and terms like while have At strategy, capital smart and our capital I the that to short growth under support to deliberate ABL B, coverage In secured terms will charge profitable significant to growth leverage EPS we quarters and loan EBITDA continue support in secured of a term March XX, as are emphasize our and coverage mentioned, of This we structure, X improvement ratio long diluted main and recovery. pleased X.X:X. take allocate sequential thoughtfully leverage evolution In capture the

Now we will turn the questions. call over for

Operator

comes question from from Instructions] Matt Inc. [Operator Duncan Your first Stephens

Will Steinwart

through with touch and wanted monthly the strong that quarter a on through the Have the seen Matt. April Will you is Yes, or for This trends call you on basis. on I to start quarter? trends can sales the strengthen of kind within

Kent Yee

This you Will. absolutely, Kent. April. I include Sure, day just sales No. can through the then quarter and Yes. the is through walk business per

million, So April in then was sales $X.X million. per $X.X $X.X $X.X million were day million, $X And March. million, January business in

Will Steinwart

throughout that Do to year? throughout should to we we the Okay, thinking IPS that, translate there will are great. be watermark growth then flipping from expect That's further And trend the over how XQ this XXXX? great as backlogs helpful. particular, to to in hear move continuing build. just about high think that sequential or you Or

David Little

much pursuing really we're stuff if complex help and would be have going a that more and our could and in it – projects our ducts, really some you drilling slowdown on the of offshore money. answer with do still this side. and always here lot pump argument of and the have where The see pick and a activity case. and pay with that industrial the don't cars the or all to The and that's any fields We these we expect get is market industries would in be We strong grow. old stuff – not see and they there completing for of need orders continuing so higher product money that. to stuff, pretty would continue enough the activity the okay, that's to really that would from strong too terms offshore companies to that's the one is land is reasonable. then IPS the business old pay business few to also oil There we'll I'll make the smaller We profits of much we good to mean, move activity, too of coast And that perfect normally are up. and yet, make reason the it's stuff. engineered-to-order we make wherever for any or that and I onshore don't need to at I be price kind we go. to to pipeline that

we're And there. think so I

of much see I price think, don't frankly, oil get I higher. too

Will Steinwart

David. helpful, That's

David Little

answer. long a was That

Will Steinwart

it had back the margin to pressures can basis? your Canada going you customers That wage And in speak wage was and to gross back more the Then forward, do you been you spoke then levels Had when margin year-over-year the improve little looking But there? start up negotiations than a you on increases helpful. bit. to more pushing IFS, gross a on expected? expect to about

David Little

pushback much the make cautious is everybody don't sands I States. the The as we so on expenses. Canadians, the as stronger. in been cautious do of But, they're that very oil has make think not in they Not their expenses. the money

becomes of employees hard reasons a pushback $XX the we've all we the one been barrel money is a so it me, to costs. very we and there, social employment also. time make reasonable up I to because Let Canada why our cut at base also whole The make, question is has on mean, the it's

the pushback profit has the yet, a customer And here. organization been So has yes, pushback the we're there. not from the there, employees been from

process slower hoped. a to have are, it's I that we out we figure than all been but So and had

Kent Yee

that I ASI for and organic basis, just I'll adjusting so is margins were did see it XX.XX% comments an did thing we add improvement. only it to you from reemphasize see sequential our on gross The other would

gross do we have from perspective Now comp, huge a will, you if margin a year-over-year.

gross think XX.X%. last margins I year were QX

of measured But seeing think kind improvement, going here some. we probably it's not to expectations we in but So be at fair we'd I are forward. pace like, the are seeing terms of gradual

So…

Will Steinwart

across Okay. some more Kent. That's pursue and to line thing helpful, throughout And here me, continuing last year? expect finish from deals to acquisitions more see bolt-on then you this are the

Kent Yee

yes when it's hard discussions hopefully few always of a always done, our will We sellers ongoing say get goal and time compelling it's our to other ones offers. have but kind a to

David Little

like those offers. compelling I

Operator

question Joe Sidoti line Company. & next of Mondillo comes the Your from from

Your is line open.

Joe Mondillo

to the how than the sort of were quarters. about few last ask wondering seemed bit little expectations stacked a lighter I little margins. Wanted they and Service Center for was and against they they up me a your light

thoughts wondering your in quarter, your for sort the that So of of that sort up expectations went that how, there? of how And up margin looking stacks the the at against year? rest first

Kent Yee

talking just referring operating you are same... or income Joe, to the to the margins

Joe Mondillo

Yes.

Kent Yee

Yes.

think, I yes.

I usually slightly that our and think just margins than a in the few think on dampened terms ever so extra feel of and the this may sometimes at QX so, know think at, where payrolls in side, point. that expenses. some I first they're of had we higher I year but good have we reflects of some I part usual SG&A

David comments. if know, has don't I So some

David Little

IPS think margins too Well, low. Joe, I are

margins because growth. see low. I'd Services bit And I top little think margins lower Service a more too like Chain after to I'm probably John to line are actually Supply Center

yes, back on. mean, buyer's to market, scale And we're had a things not growing we're going being give raises haven't are back on I a like -- orders. been people in new that seller's there into we've that had more I'd and are into see market. It's So But while. to a him raises aggressive

margins gross are cetera. low, et our therefore, too So

on working we're all So that.

percent and of as to Leverage margins up. have north take down, be income. to SG&A come gross need operating XX% will Our we of sales a

Joe Mondillo

segment So -- that it the to operating mean, was close income at I XX%.

think past? And -- XXXX until it seen we this to so we've going till levels is that that the take XX% do going to XX% you wait or are plus we in I'm have you to to get wondering, year just surpass level that can

David Little

a don't have XX% to not income, pretty somewhere, hit much -- XX% Yes. peak whether of see we -- or or reason north we should get so. it's that I'm can of maybe a Centers convinced Service little not really I operating think

a to So little that should may able get but we be to longer, take XX%.

Joe Mondillo

on of And seasonality me you Okay. remind margin Service the can perspective? the just of Center

Kent Yee

I by there, jump again, in going impacted business. our Canadian Safety Once Yes. -- was Joe, of that part Services to is

To QX, it Canadian the So which once we work usually is income as including business, when again, board, is gross across your a segment, in winter question our should in our we about early in Safety see the through seasonality. on answer directly, sometimes and lift cold Services Canada. operating hits There some margin Centers QX, line. Service gets just it's bit pressures

David Little

no, the No, because down the -- they The field. level get no. when people into wet. can't activity can't goes It's breakup is too

the actually out, starts good It's Once when falling it's Canada reverse. it's out dry So then good. to it's then and needs frozen. it

Kent Yee

That's QX, QX.

David Little

Or up.

Kent Yee

Yes. what That's saying. I'm

David Little

I I'm Okay, were that thought commenting you down. sorry. they were

sorry. I'm Okay,

Joe Mondillo

was I are and just then the you gave month down your April. thoughts And the sales about tick your from sequential wondering What thoughts to March daily per that? on right. All wondering

David Little

Yes.

to months end build and the as quarter. builds seems also from business the of to month goes it the the on Our

Kent Yee

at look you $X.X that XXXX average million. was QX our if Joe,

to at $X.X comfortable to million. -- million shoot a little $X.X So coming be bit is we're out April with directional,

Joe Mondillo

then And last on backlog. you Okay. spoke the call IPS about the

the strong there? diversify that know of wondering, starting the is are I then I trying type just any trying to wondering see to and some that to of in wanted at the business continuing see side, high-margin large has you any were been strong to ask you're win ISS, if project environment smaller trends we sequentially? to but on of how all? Just large work? backlog And sort to is order of ramp-up that also project How terms starting

David Little

business and -- a everything. where the the that change with. stuff process, mostly But of we're the particularly back. say just order, of what day that. a got we So, a the little and required that equipment, terms we engineer we molecules dollar bit with overseas engineer engineered it. we're – think it's the We it other offshore more engineering lot whole, went that. I of that that and to couple coming I million of We and mentioned in seeing the not that But is order dealing not was get It

So part why gross to project. And to customer way. onshore people we've of not don't complex. had particular our as profit The need high that doesn't go the stuff. the I therefore, the is margins. with is which along business make business us, the is engineer, as And mean, really the growing stuff, pump good by to IPS and of that's all pipeline we

Joe Mondillo

right. All

sounds these if little is you So sequentially order bit high-margin not quarter, it just the was the like I call. are in even you last on trends, terms backlog the trending? – every more I growing projects looking you the seeing was month how talked mean, in of backlog Could come talk about about the a for how And trends margin better than the back. then large was order

at quarter. So – in XX% were where if go? doesn't do you close could do to IPS. up strong come We're they that they this already back, think Where margins

David Little

Right.

to the to remember we year. when offshore XX% we're missing to feel was XX%, back fact, just will, in work. Joe, go But XX%, not IPS again, that it's we going say So days, like it go this because

we of that's business XX% if I to XX% good or get to want Obviously, it make because though good whatever, mean backlogs eventually or operating the it's business. business income the bad and business. don't – on as I – this the So describe

of But business. So margins and of good cetera, orders it's the as et used as not complexity to still we get. good and once the because the it it's was

business that charge. I and so. is and so really to a do – it it's it's continuing is grown every it's And growing grown month mean,

Joe Mondillo

just All wanted rate. ask lastly, then, I right. about the tax just to And

this the – XX% and below you last in call that for you the quarter. XX% to for think I it were said last XX% expecting on came year

are your the what year? thoughts on updated rate just So effective tax wondering the for

Kent Yee

obviously, expense the deductibility Yes. were Joe. to limitation a No, that higher. of would've upside. income the based that upon we But We thinking interest the bit up ended some made maybe little on we

the change down. that impacted That then rate a range, that, that little way give again, we're call not there we to to of closer Canada, that adjusted XX% probably, XX% And thinking Long probably probably So I'll of for. in winded the is there assumption onetime kind brought it only bit. was revised a getting us XX%.

Operator

Your Steve question from Instructions] Capital [Operator next Markets. Barger KeyBanc from comes

is line Your open.

Ryan Mills

This is Ryan actually.

operating they exceeded or Just wanted like the in back I'd margins there. that your least think go to at performance real IPS, nice at And to expectations to came the at given high-end. But in Does of call, performance hold, belief I significant more that last the half the believe you in you hinted still on improvement towards the back 'XX. had XQ?

David Little

is profit normally margins at. the high Service where that's business safety business I has And gross our believe dribbles into down that operating more that our Centers comment has with, margins. safety with because to do income pretty

unimportant. is bit, Canada with goes little has is, it's a to to it's are they more you Centers. X empty, be the bit the absorb any little than during do Service IPS it not way, will year are stronger is is they that in of second half people, But a it's that bidding their a, overhead. the are shop X so what hungry, through, the against looking for when need meltdown, So Canada people of half first

went them. therefore, market so those it's where, versus through today just times we a And buyers'

going more can pretty more in but deliver goes, well, weeks? this you today, or And concerned. can, is I charge Well, to something. customer so I'm busy somebody And XX you the so now I'm right now,

going are delivery and big projects capital So sensitive those it's different points. just a to market to be

the out And can so are and the deliveries people make that going going to are more money. get out equipment

creep will up. margins So

Ryan Mills

about guys been Okay. then for growth have real going X All having now. quarters to right. And IPS, you back nice

start Just curious, aftermarket gaining to your the come business benefits think should expect through to when do with with share And the you're you private-label that to pump? see from on offering? we that, piggyback

David Little

getting way. we're we wasn't so of that aftermarket. are more It's a make totally the lot I money subjects, in out How my -- -- already? more people did But the on one the money core correct make by pump putting of you there and But on that. know you anyway equipment industry,

pushing is and XX% of pumps pump that about we're new our XX% about business kind -- It's of So aftermarket. that growing. is for of

you make So to sales you're can because if get up that pump to more more die. be fact XX%, if you money. than -- that to we get going we it to But want it up in means would don't

a really point. get a good enough, That I fast good already it another better, So what asked was. you was Well, that I question, but guess. point. forgot And When it's better? never it's will it's getting

You remember, Kent.

Ryan Mills

about your Do you're share? pump. Just you're customer with the you asking gaining think getting private-label traction

David Little

Yes.

extremely days we that. lot for that for that pleased what shipped is get facility, with we're America whole our we America. Made something from in supply don't wait to I lot, means have we're XX China a don't whole fast, know Again, but does So to to casting have channel, a our control mean we own

and speed is today. All of that important means speed

pump. So of cost means oftentimes speed the way that more than

just And tremendous it's gotten day. growing and doing really we're that, it's we every success have -- -- happy traction good. it's So about we're and and growing

Ryan Mills

push me. And pricing Can those conversations able the Are more push your And to easier? increases to suppliers? of more through are to starting you customer an on seeing you What from the give for just through price become price? Good know. with just X is then to you kind update environment?

David Little

lot price think kind So normal last a I'm X% increase. normal see didn't kind increase. -- where we the couple to we're price years the price -- of times a X% we this. I Normal think so saw increases. seeing want and meaning, lot We're then I And now of versus of to report of okay, of back I

I on think think this don't steel -- haven't seeing and et stuff are is and on doing because increases and China putting important. we're in tariffs tariff people were not -- our competitors aluminum, the and cetera, of components. that's that the we not because We overseas price I

that. a use of the just it's aluminum, steel So bulk the we and and bulk lot don't

of to increases are the way though price there, price XX% the So XX% I getting we're of even not seeing hear much increases. others in that

really throw there. we're that just that -- I causes out in we're difficulties market that not us that So not

Ryan Mills

regard then primarily And positive or commentary an from your on Are in Permian? customers upstream in hearing for you me. give your well last to activity Can one anecdotal well the update the basins, completions you Okay. business? in

David Little

mecca of infrastructure. I for So think and cetera. oil kind have – all they And have Permian, we place They of about know they gas the oil, quantities just and companies. et it's

is volume make industrial. that I as price our also, in up. money like to money important on Canada. Canada there have It's A they And starting not robust think in make good, doing to very project the at great. up. low pick there. point. Coast Eagle points the points, excellent and at Ford see there do We company job be, But there us a now, is we're they that's just for more which to pick would Bakken see profits at price as East the But - is the they but have activity of we that's pump project it Canada and we They price there's starting an is is So at to really

been and part's good. still that So good is

So biggest time really of that if with overheated. industrial; and we're on. that gets I because gas – XX%, last That's business oil is happy what's gas. do Like with going we're doesn't yes, said, checked, still our – have to it and XX% is fear happens, I my anything oil

we're good. and We're all there's Well, perfect happy. oil doing happy And are too doing good. So about gas are price. this and that guys that's

Ryan Mills

I time. appreciate Thanks. the

David Little

Thank you.

Operator

further concludes call. are There questions. no conference today's This

disconnect. now may You

DXP Enterprises (DXPE) 12 May 182018 Q1 Earnings call transcript