DXP Enterprises Announces 2012 Third Quarter Results Business Wire HOUSTON -- November 01, 2012 DXP Enterprises, Inc. (NASDAQ: DXPE) today announced net income of $13.1 million for the third quarter ended September 30, 2012, with diluted earnings per share of $0.86 compared to net income of $8.3 million and diluted earnings per share of $0.55 for the third quarter of 2011. Sales increased $82.1 million, or 39.5%, to approximately $289.9 million from $207.9 million for the same period in 2011. After excluding sales from acquisitions, sales increased 7.4% from 2011, on a same store sales basis. Net income for the nine months ended September 30, 2012 was $36.9 million, with diluted earnings per share of $2.43 compared to net income of $22.2 million and diluted earnings per share of $1.47 for the first nine months of 2011. Sales for the nine months ended September 30, 2012 increased $215.5 million, or 36.6%, to approximately $804.1 million from $588.6 million for the same period in 2011. After excluding sales from acquisitions, sales for the first nine months of 2012 increased 13.2% from 2011 on a same store sales basis. Net income for the third quarter sequentially increased 7.5% from $12.2 million to $13.1 from the second quarter 2012. Likewise, sales sequentially increased 10.7% from $261.9 million in the second quarter to $289.9 million in the third quarter. David R. Little, Chairman and Chief Executive Officer remarked, “We are pleased to report a strong third quarter in sales and profitability. On a trailing twelve month basis, we exceeded our sales goal of $1 billion and third quarter EBITDA margins were 10.6%. Congratulations to DXPeople for achieving our financial goals earlier than expected. We also added three new SuperCenters in the third quarter. We believe that our internal and external growth strategies will take market share despite the uncertainty and softness in the market. We look forward to our new financial goals of $2 billion in sales by 2016 at 10% EBITDA margins and our moral goal of providing the opportunity for DXPeople and customers to be more successful." Mac McConnell, Senior Vice President and CFO, added, “We are pleased with our third quarter financial performance. Our quarterly financial results reflect 7.4% organic growth with meaningful sales increase from acquisitions. Additionally, we continue to see improvement in EBITDA margins. While the financial tone of our business remains strong, we are monitoring our results against any changes in customer behavior. Our leverage ratio under our credit facility is a modest 2.1:1." 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, Canada 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 INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands, except per share amounts) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Sales $ 289,923 $ 207,855 $ 804,104 $ 588,617 Cost of sales 206,414 148,384 572,492 419,454 Gross profit 83,509 59,471 231,612 169,163 Selling, general and administrative 58,995 45,035 166,346 129,554 expense Operating 24,514 14,436 65,266 39,609 income Other expense (21 ) (4 ) (33 ) (40 ) (income) Interest 2,287 760 3,878 2,805 expense Income before 22,248 13,680 61,421 36,844 income taxes Provision for 9,156 5,406 24,506 14,617 income taxes Net income $ 13,092 $ 8,274 $ 36,915 $ 22,227 Basic earnings $ 0.91 $ 0.58 $ 2.56 $ 1.55 per share Weighted average common shares 14,411 14,315 14,375 14,307 outstanding Diluted earnings per $ 0.86 $ 0.55 $ 2.43 $ 1.47 share Weighted average common shares and common equivalent shares 15,251 15,155 15,215 15,147 outstanding SALES BY SEGMENT (in thousands) Three months ended Nine months ended September 30, September 30, 2012 2011 2012 2011 Service $ 212,497 $ 141,817 $ 571,675 $ 412,871 Centers Innovative Pumping 38,854 31,342 113,466 69,841 Solutions Supply Chain 38,572 34,696 118,963 105,905 Services Total $ 289,923 $ 207,855 $ 804,104 $ 588,617 Sales 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 Nine months ended September 30, September 30, 2012 2011 2012 2011 Income before $ 22,248 $ 13,680 $ 61,421 $ 36,844 income taxes Plus interest 2,287 760 3,878 2,805 expense Plus depreciation 6,299 2,578 13,108 7,520 and amortization EBITDA* $ 30,834 $ 17,018 $ 78,407 $ 47,169 *EBITDA - earnings before interest, taxes, depreciation and amortization Contact: DXP Enterprises, Inc. Mac McConnell, 713-996-4700 Senior Vice President, Finance & CFO www.dxpe.com
DXP Enterprises Announces 2012 Third Quarter Results
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