DXP ENTERPRISES REPORTS FOURTH QUARTER AND FISCAL 2023 RESULTS

Fourth Quarter 2023 financial highlights:

Fiscal Year 2023 financial highlights:

Business segment financial highlights:

Non-GAAP Financial Measures

About DXP Enterprises, Inc.

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. These forward-looking statements include without limitation those about the Company’s expectations regarding the impact of the COVID-19 pandemic and the impact of low commodity prices of oil and gas; the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. 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; decreases in oil and natural gas prices; decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, economic risks related to the impact of COVID-19, ability to manage changes and the continued health or availability of management personnel and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

DXP ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share amounts)

			Twelve Months Ended December 31,
			2023						2022						2021
Sales			$	1,678,600					$	1,480,832					$	1,113,921
Cost of sales			1,173,309						1,058,794						785,415
Gross profit			505,291						422,038						328,506
Selling, general and administrative expenses			366,569						324,286						288,649
Income from operations			138,722						97,752						39,857
Other (income) expense, net			(1,355)						2,716						(414)
Interest expense			53,146						29,135						21,089
Income before income taxes			86,931						65,901						19,182
Provision for income tax expense			18,119						17,799						3,431
Net income			68,812						48,102						15,751
Net loss attributable to noncontrolling interest			—						(53)						(745)
Net income attributable to DXP Enterprises, Inc.			68,812						48,155						16,496
Preferred stock dividend			90						90						90
Net income attributable to common shareholders			$	68,722					$	48,065					$	16,406
Net income			$	68,812					$	48,102					$	15,751
Foreign currency translation adjustments			435						(2,393)						747
Comprehensive income			$	69,247					$	45,709					$	16,498
Basic			$	4.07					$	2.58					$	0.87
Diluted			$	3.89					$	2.47					$	0.83
Weighted average common shares outstanding:
Basic			16,870						18,631						18,949
Diluted			17,710						19,471						19,789

DXP ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

($ thousands, except per share amounts)

			As of December 31,
			2023						2022
ASSETS
Current assets:
Cash			$	173,120					$	46,026
Restricted cash			91						91
Accounts receivable, net of allowance of $5,584 and $7,610, respectively			311,171						320,880
Inventories			103,805						101,392
Costs and estimated profits in excess of billings			42,323						23,588
Prepaid expenses and other current assets			18,044						24,137
Total current assets			648,554						516,114
Property and equipment, net			61,618						45,964
Goodwill			343,991						333,759
Other intangible assets, net			63,895						79,585
Operating lease right of use assets, net			48,729						57,402
Other long-term assets			10,649						4,456
Total assets			$	1,177,436					$	1,037,280
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of debt			$	5,500					$	4,369
Trade accounts payable			96,469						92,805
Accrued wages and benefits			36,238						26,260
Customer advances			12,160						20,128
Billings in excess of costs and estimated profits			9,506						10,411
Short-term operating lease liabilities			15,438						18,083
Other current liabilities			48,854						40,845
Total current liabilities			224,165						212,901
Long-term debt, net of unamortized debt issuance costs and discounts			520,697						409,205
Long-term operating lease liabilities			34,336						40,189
Other long-term liabilities			17,359						9,593
Total long-term liabilities			572,392						458,987
Total liabilities			796,557						671,888
Shareholders' Equity:
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized			1						1
Series B convertible preferred stock, $1.00 par value; 1,000,000 shares authorized			15						15
Common stock, $0.01 par value, 100,000,000 shares authorized; 16,177,237 and 17,690,069 outstanding, respectively			345						345
Additional paid-in capital			216,482						213,937
Retained earnings			319,271						250,549
Accumulated other comprehensive loss			(31,240)						(31,675)
Treasury stock, at cost 4,141,989 and 2,435,352 shares, respectively			(123,995)						(67,780)
Total DXP Enterprises, Inc. equity			380,879						365,392
Total liabilities and equity			$	1,177,436					$	1,037,280

SEGMENT DATA

($ thousands, unaudited)

Reconciliation of Operating Income for Reportable Segments

($ thousands, unaudited)

Unaudited Reconciliation of Non-GAAP Financial Information

($ thousands, unaudited)

Unaudited Reconciliation of Non-GAAP Financial Information

($ thousands, unaudited)

2023 Sales Per Business Day Reconciliation

($ thousands, except Business days, unaudited)

Organic Sales and Acquisition Sales

($ thousands, unaudited)