DXP Enterprises, Inc. (“DXP” or the “Company”) (NASDAQ: DXPE) has released its financial results for the third quarter ended September 30, 2024. Below are key highlights comparing the three months ended September 30, 2024, with results from September 30, 2023, and June 30, 2024. A detailed reconciliation of non-GAAP financial measures is available at the end of this press release.
Third Quarter 2024 Financial Highlights:
- Sales Growth: Sales rose by 6.1% sequentially to $472.9 million, compared to $445.6 million in the previous quarter, and increased by 12.8% from $419.2 million in Q3 2023.
- Net Income: The Company reported net income of $21.1 million for the third quarter, up from $16.2 million in the same quarter of 2023 and $16.7 million in Q2 2024.
- Earnings Per Share (EPS): Earnings per diluted share reached $1.27 based on 16.6 million diluted shares, compared to $0.93 in Q3 2023 (17.4 million diluted shares). Adjusted diluted EPS for the quarter was $1.43, up from $0.96 year-over-year.
- Adjusted EBITDA: Adjusted EBITDA for Q3 was $52.4 million, an increase from $44.0 million in Q3 2023 and $48.2 million in Q2 2024. The adjusted EBITDA margin was 11.1%, compared to 10.5% and 10.8% in the respective prior periods.
- Free Cash Flow: The Company generated free cash flow of $24.4 million, down from $38.3 million in Q3 2023.
Management Commentary:
David R. Little, Chairman and Chief Executive Officer, stated, “We delivered strong financial results in a challenging economic environment marked by easing inflation and varied spending patterns across end markets. Our results demonstrate the successful implementation of our growth strategy and the positive impact of our acquisition program. We are encouraged by our sequential sales growth and robust adjusted EBITDA margins, which contributed to earnings per share of $1.27.”
In Q3 2024, DXP’s sales breakdown included $316.8 million from Service Centers, $89.8 million from Innovative Pumping Solutions, and $66.3 million from Supply Chain Services. Little expressed satisfaction with the Company’s performance and its ongoing growth trajectory.
Kent Yee, Chief Financial Officer and Senior Vice President, added, “This quarter marks another record for DXP with a 6.1% increase in sales and an 11.1% adjusted EBITDA margin. We completed five acquisitions through Q3 and added two more in Q4 2024. Our financial results reflect our strategic objectives, reduced exposure to the energy sector, and a strong balance sheet to support our initiatives. Following the third quarter, we successfully repriced our existing debt and secured an additional $105 million, resulting in a savings of 100 basis points on our debt. As of September 30, 2024, total debt outstanding was $544.5 million, with a secured leverage ratio of 2.54:1.0 and a covenant EBITDA of $200.7 million for the trailing twelve months. We anticipate finishing fiscal year 2024 on a strong note, carrying momentum into 2025.