DXP Enterprises Announces 2013 Second Quarter Results

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DXP Enterprises Announces 2013 Second Quarter Results

HOUSTON--(BUSINESS WIRE)-- 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,

2013201220132012
 
Sales$307,942$261,894$598,039$514,181
Cost of sales 216,427 185,265 417,417 366,078 
Gross profit91,51576,629180,622148,103
Selling, general and
administrative expense 68,250 55,782 134,653 107,351 
Operating income23,26520,84745,96940,752
Other expense (income)21322(12)
Interest expense 1,689 762 3,316 1,591 
Income before income taxes21,55520,08242,63139,173
Provision for income taxes 7,806 7,905 15,650 15,350 
Net income13,74912,17726,98123,823
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



DXP Enterprises, Inc.
Mac McConnell, 713-996-4700
Senior Vice President, Finance & CFO
www.dxpe.com

KEYWORDS:   United States  Mexico  North America  Central America  Texas

INDUSTRY KEYWORDS:

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