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DXP Enterprises Announces 2012 Third Quarter Results



  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
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