DXP Enterprises Announces 2013 Second Quarter Results

DXP Enterprises, Inc. (NASDAQ: DXPE) today announced net income of $13.7 million for the second quarter ended June 30, 2013, with diluted earnings per share of $0.90 compared to net income of $12.2 million and diluted earnings per share of $0.80 for the second quarter of 2012. Sales increased $46.0 million, or 17.6%, to approximately $307.9 million from $261.9 million for the same period in 2012. After excluding sales from acquisitions of $45.3 million, on a same store sales basis, sales for the second quarter of 2013 increased $0.7 million, or 0.3% from 2012 on a same store sales basis.

Net income for the six months ended June 30, 2013 was $27.0 million, with diluted earnings per share of $1.77 compared to net income of $23.8 million and diluted earnings per share of $1.57 for the first half of 2012. Sales for the six months ended June 30, 2013 increased $83.9 million, or 16.3%, to approximately $598.0 million from $514.2 million for the same period in 2012.

Net income for the second quarter sequentially increased 3.9% from $13.2 million to $13.7 million in the second quarter of 2013. Likewise, sales sequentially increased 6.2% from $290.1 million in the first quarter to $307.9 million in the second quarter.

David R. Little, Chairman and Chief Executive Officer, remarked, "We are pleased with our second quarter results and see positive momentum in parts of our businesses. During the quarter, we delivered organic growth consistent with our expectations outlined in the first quarter. We completed two acquisitions in the second quarter, Natpro and Tucker Tool. DXP’s Service Centers, Supply Chain Services and Innovative Pumping Solutions are focused on battling for market share in today’s choppy environment while not losing sight of profitability and cash flow generation.

As we look to the second half of the year, we maintain a conservative macro outlook, while remaining confident in our ability to grow organically and via acquisitions. We will continue to fund growth and initiatives that we believe will strengthen DXP's presence in North America."

Mac McConnell, Senior Vice President and CFO, added, "We are pleased to report sequential sales and earnings growth. While we experienced organic sequential growth, we were impacted by one-time acquisition costs and seasonality in Canada. Our leverage ratio under our credit facility at June 30, 2013 was a modest 1.9:1. Subsequent to the quarter end, we closed two additional acquisitions, Alaska Pump and Tool-Tech."

DXP will host a conference call to be web cast live on the Company’s website ( www.dxpe.com) at 5:00 P.M. Eastern time today.

About DXP Enterprises, Inc.

DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States and Sonora, Mexico. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.

The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to: ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. For more information, review the Company’s filings with the Securities and Exchange Commission.
                 

DXP ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(in thousands, except per share amounts) (unaudited)
 
Three Months Ended

June 30,
Six Months Ended

June 30,
2013 2012 2013 2012
 
Sales $ 307,942 $ 261,894 $ 598,039 $ 514,181
Cost of sales   216,427   185,265   417,417   366,078  
Gross profit 91,515 76,629 180,622 148,103
Selling, general and
administrative expense   68,250   55,782   134,653   107,351  
Operating income 23,265 20,847 45,969 40,752
Other expense (income) 21 3 22 (12 )
Interest expense   1,689   762   3,316   1,591  
Income before income taxes 21,555 20,082 42,631 39,173
Provision for income taxes   7,806   7,905   15,650   15,350  
Net income 13,749 12,177 26,981 23,823
Preferred stock dividend   22   22   45   45  
Net income attributable to
common shareholders $ 13,727 $ 12,155 $ 26,936 $ 23,778  
 
Basic earnings per share $ 0.95 $ 0.84 $ 1.87 $ 1.66  
Weighted average common
shares outstanding   14,451   14,392   14,424   14,360  
Diluted earnings per share $ 0.90 $ 0.80 $ 1.77 $ 1.57  
Weighted average common shares
and common equivalent
shares outstanding   15,291   15,232   15,264   15,200  
 
 

SEGMENT DATA

(in thousands)

 
        Three Months Ended June 30,       Six Months Ended June 30,
        Service

Centers
   

IPS
   

SCS
   

Total
      Service

Centers
   

IPS
   

SCS
   

Total
2013                                                    
Sales       $ 217,925     $ 52,954     $ 37,063     $ 307,942       $ 428,023     $ 94,477     $ 75,539     $ 598,039
Operating income for reportable segments       $ 23,376     $ 8,090     $ 3,160     $ 34,626       $ 48,420     $ 15,208     $ 6,347     $ 69,975
                                                     
2012                                                    
Sales       $ 184,106     $ 35,177     $ 42,611     $ 261,894       $ 359,178     $ 74,612     $ 80,391     $ 514,181
Operating income for reportable segments       $ 22,491     $ 6,939     $ 3,902     $ 33,332       $ 41,045     $ 15,187     $ 6,719     $ 62,951
                                   

Unaudited Reconciliation of Non-GAAP Financial Information

The following table is a reconciliation of EBITDA*, a non-GAAP financial measure, to income before income taxes, calculated and reported in accordance with U.S. GAAP (in thousands):

 
          Three months ended

June 30,
      Six months ended

June 30,
          2013       2012       2013       2012
                                   
Income before income taxes         $ 21,555       $ 20,082       $ 42,631       $ 39,173
Plus interest expense           1,689         762         3,316         1,591
Plus depreciation and amortization           5,602         3,661         10,492         6,809
EBITDA*         $ 28,846       $ 24,505       $ 56,439       $ 47,573

 

*EBITDA - earnings before interest, taxes, depreciation and amortization

Copyright Business Wire 2010

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