DXP ENTERPRISES INC

Previous wording

The following management discussion and analysis ("MD&A") of the financial condition and results of operations of DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") for the three and six months ended June 30, 2024 should be read in conjunction with our previous Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the consolidated financial statements and notes thereto included in such reports. The Company's consolidated financial statements are prepared in accordance with U.S. GAAP.

Current wording

The following management discussion and analysis ("MD&A") of the financial condition and results of operations of DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") for the three and nine months ended September 30, 2024 should be read in conjunction with our previous Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the consolidated financial statements and notes thereto included in such reports. The Company's consolidated financial statements are prepared in accordance with U.S. GAAP.

Previous wording

This Quarterly Report on Form 10-Q (this "Report") contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include without limitation those about the Company’s expectations regarding the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. Such forward-looking statements can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "might", "estimates", "will", "should", "could", "would", "suspect", "potential", "current", "achieve", "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and actual results may vary materially from those discussed in the forward-looking statements or historical performance as a result of various factors. These factors include, but are not limited to, the effectiveness of management's strategies and decisions; our ability to implement our internal growth and acquisition growth strategies; general economic and business conditions specific to our primary customers; changes in government regulations; our ability to effectively integrate businesses we may acquire; new or modified statutory or regulatory requirements; availability of materials and labor; inability to obtain or delay in obtaining government or third-party approvals and permits; non-performance by third parties of their contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto; cyber-attacks adversely affecting our operations; other geological, operating and economic considerations and declining prices and market conditions, including reduced oil and gas prices and supply or demand for maintenance, repair and operating products, equipment and service; decreases in oil and natural gas industry capital expenditure levels, which may result from decreased oil and natural gas prices or other factors; our ability to manage changes and the continued health or availability of management personnel; and our ability to obtain financing on favorable terms or amend our credit facilities, as needed. This Report identifies other factors that could cause such differences. We cannot assure that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in "Risk Factors", in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2024. We assume no obligation and do not intend to update these forward-looking statements. Unless the context otherwise requires, references in thi…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q (this "Report") contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include without limitation those about the Company’s expectations regarding the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. Such forward-looking statements can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "might", "estimates", "will", "should", "could", "would", "suspect", "potential", "current", "achieve", "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and actual results may vary materially from those discussed in the forward-looking statements or historical performance as a result of various factors. These factors include, but are not limited to, the effectiveness of management's strategies and decisions; our ability to implement our internal growth and acquisition growth strategies; general economic and business conditions specific to our primary customers; changes in government regulations; our ability to effectively integrate businesses we may acquire; new or modified statutory or regulatory requirements; availability of materials and labor; inability to obtain or delay in obtaining government or third-party approvals and permits; non-performance by third parties of their contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto; cyber-attacks adversely affecting our operations; other geological, operating and economic considerations and declining prices and market conditions, including reduced oil and gas prices and supply or demand for maintenance, repair and operating products, equipment and service; decreases in oil and natural gas industry capital expenditure levels, which may result from decreased oil and natural gas prices or other factors; our ability to manage changes and the continued health or availability of management personnel; and our ability to obtain financing on favorable terms or amend our credit facilities, as needed. This Report identifies other factors that could cause such differences. We cannot assure that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in "Risk Factors", in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 11, 2024. We assume no obligation and do not intend to update these forward-looking statements. Unless the context otherwise requires, reference…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In an effort to provide investors with additional information regarding our results of operations as determined by accounting principles generally accepted in the United States of America ("U.S. GAAP"), we disclose non-GAAP financial measures. The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.

Current wording

In an effort to provide investors with additional information regarding our results of operations as determined by U.S. GAAP, we disclose non-GAAP financial measures. The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.

Previous wording

We regularly monitor several financial and operating metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Our key non-GAAP business metrics may be calculated in a different manner than similarly titled metrics used by other companies. See “Non-GAAP Financial Measures and Reconciliations” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

Current wording

We regularly monitor several financial and operating metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Our key non-GAAP business metrics may be calculated in a different manner than similarly titled metrics used by other companies. See “Non-GAAP Financial Measures and Reconciliations” for additional information on non-GAAP financial measures and a reconciliation to the most comparable U.S. GAAP measures.

Previous wording

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization, and non-controlling interest. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization minus stock-based compensation expense, non-controlling interest before taxes and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

Current wording

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization minus stock-based compensation expense and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

Previous wording

There were 127 business days during the six months ended June 30, 2024 and 128 business days during the six months ended June 30, 2023.

Current wording

There were 64 business days during the three months ended September 30, 2024 and 63 business days during the three months ended September 30, 2023.

Previous wording

The replacement and mission-critical nature of our products and services within the Company's Service Centers and Innovative Pumping Solutions business segments and industrial and manufacturing environments and processes drives a demand and outlook that are correlated with global, national and regional industrial production, capacity utilization and long-term GDP growth. The Company's recent order activity improved as markets strengthened. For the six months ended June 30, 2024, we had approximately $730.5 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 1.6% compared to the six months ended June 30, 2023. Our performance has been strengthened by price increases from our vendors and suppliers. During the six months ended June 30, 2024, $25.0 million was associated with recent acquisitions in the water and wastewater markets. We expect to continue to benefit from the increased oil and gas activity throughout the remainder of 2024. Additionally, we expect to benefit from the recent water and wastewater acquisitions as we continue to scale this platform both organically and by positioning DXP Water to bid on projects that historically may have not been available to the separate acquisitions on a standalone basis.

Current wording

The replacement and mission-critical nature of our products and services within the Company's Service Centers and Innovative Pumping Solutions business segments and industrial and manufacturing environments and processes drives a demand and outlook that are correlated with global, national and regional industrial production, capacity utilization and long-term GDP growth. For the nine months ended September 30, 2024, we had approximately $1,137.2 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 6.0 percent compared to the nine months ended September 30, 2023. Our performance has been strengthened by price increases from our vendors and suppliers and the Company's acquisition activity. During the nine months ended September 30, 2024, $40.5 million was associated with recent acquisitions in the water and wastewater markets. We are encouraged by the tapering effects of inflation and believe as we move forward, demand should be consistent across all the end markets we provide products and service.

Previous wording

For the six months ended June 30, 2024, we had approximately $127.6 million in sales in our Supply Chain Services segment, a decrease of approximately 4.2 percent compared to the six months ended June 30, 2023 due to some facility closures with some of our customers as well as efficiencies we brought to our new diversified chemical customer that we added last year. As we move forward and given our increasing demand, we expect our performance to be driven by either the addition of new customers or an increase in spend by our existing customers.

Current wording

For the nine months ended September 30, 2024, we had approximately $193.9 million in sales in our Supply Chain Services segment, a decrease of approximately 2.6 percent compared to the nine months ended September 30, 2023. This is primarily due to some facility closures with some of our customers as well as the inherent efficiencies we bring to customers as part of our value proposition. As we move forward and given our increasing demand, we expect our performance to be driven by either the addition of new customers or an increase in spend by our existing customers.

Previous wording

SALES. Sales for the three months ended June 30, 2024 increased $17.5 million, or 4.1 percent, to approximately $445.6 million from $428.0 million for the prior year's corresponding period. The overall increase in sales was the result of an increase in sales in our IPS segment of $25.3 million, offset by a decrease in sales in our SC and SCS segments of $7.3 million and $0.5 million, respectively. The fluctuations in sales are further explained in our business segment discussions below.

Current wording

SALES. Sales for the three months ended September 30, 2024 increased $53.7 million, or 12.8 percent, to approximately $472.9 million from $419.2 million for the prior year's corresponding period. The overall increase in sales was the result of an increase in sales in our SC, IPS, and SCS segments of $22.4 million, $30.9 million, and $0.5 million, respectively. The fluctuations in sales are further explained in our business segment discussions below.

Previous wording

Service Centers segment. Sales for the SC segment decreased $7.3 million, or 2.3 percent, for the three months ended June 30, 2024, compared to the prior year's corresponding period. This sales decrease is primarily the result of the timing of jobs and business mix.

Current wording

Service Centers segment. Sales for the SC segment increased $22.4 million, or 7.6 percent, for the three months ended September 30, 2024, compared to the prior year's corresponding period. This sales increase is primarily the result of the timing of jobs and business mix, as well as $13.0 million associated with recent acquisition.

Previous wording

Innovative Pumping Solutions segment. Sales for the IPS segment increased $25.3 million, or 52.7 percent, for the three months ended June 30, 2024, compared to the prior year's corresponding period. $14.7 million was associated with recent acquisitions in the water and wastewater markets.

Current wording

Innovative Pumping Solutions segment. Sales for the IPS segment increased $30.9 million, or 52.3 percent, for the three months ended September 30, 2024, compared to the prior year's corresponding period. This sales increase is primarily the result of the timing of jobs, increased project related work, and $15.6 million was associated with recent acquisitions in the water and wastewater markets.

Previous wording

Supply Chain Services segment. Sales for the SCS segment decreased by $0.5 million, or 0.8 percent, for the three months ended June 30, 2024, compared to the prior year's corresponding period. The decrease in sales was primarily the result of facility closures with existing customers.

Current wording

Supply Chain Services segment. Sales for the SCS segment increased by $0.5 million, or 0.7 percent, for the three months ended September 30, 2024, compared to the prior year's corresponding period. The increase in sales was primarily the result of increased business activity.

Previous wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the three months ended June 30, 2024 increased by $6.1 million, or 6.4 percent, to $100.4 million from $94.4 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll, incentive compensation and related taxes and 401(k) expenses.

Current wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the three months ended September 30, 2024 increased by $16.8 million, or 18.7 percent, to $106.5 million from $89.7 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll, incentive compensation and related taxes and 401(k) expenses.

Previous wording

OPERATING INCOME. Operating income for the second quarter of 2024 decreased by $0.1 million to $37.4 million, from $37.5 million in the prior year's corresponding period. This decrease in operating income was driven by the increase in SG&A during the period.

Current wording

OPERATING INCOME. Operating income for the third quarter of 2024 increased by $3.8 million to $39.6 million, from $35.9 million in the prior year's corresponding period. This increase in operating income was driven by the increase in sales during the period.

Previous wording

INTEREST EXPENSE. Interest expense for the second quarter of 2024 increased $3.5 million compared to the prior year's corresponding period. This increase was primarily due to the Company borrowing an additional $125.0 million on its Term Loan during the fourth quarter of 2023 and incurring higher than average interest rates on such debt due to changes in the macroeconomic environment and the associated increasing interest rate policy by the U.S. Federal Reserve Bank.

Current wording

INTEREST EXPENSE. Interest expense for the third quarter of 2024 increased $3.0 million compared to the prior year's corresponding period. This increase was primarily due to the Company borrowing an additional $125.0 million on its Term Loan during the fourth quarter of 2023.

Previous wording

INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 27.4 percent for the three months ended June 30, 2024, compared to a tax expense of 26.3 percent for the three months ended June 30, 2023. Compared to the U.S. statutory rate for the three months ended June 30, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits and was partially offset by research and development tax credits and other tax credits.

Current wording

INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 11.1 percent for the three months ended September 30, 2024, compared to a tax expense of 26.3 percent for the three months ended September 30, 2023. Compared to the U.S. statutory rate for the three months ended September 30, 2024, the effective tax rate was decreased by research and development tax credits and other tax credits and partially offset by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits.

Previous wording

SALES. Sales for the six months ended June 30, 2024 increased $5.9 million, or 0.7 percent, to approximately $858.2 million from $852.3 million for the prior year's corresponding period. The overall increase in sales was the result of an increase in sales within our IPS of $36.1 million, offset by decreases in sales in our SC and SCS segments of $24.7 million and $5.6 million respectively. The fluctuations in sales are further explained in our business segment discussions below.

Current wording

SALES. Sales for the nine months ended September 30, 2024 increased $59.6 million, or 4.7 percent, to approximately $1,331.1 million from $1,271.6 million for the prior year's corresponding period. The overall increase in sales was the result of an increase in sales within our IPS segment of $67.0 million, offset by decreases in sales in our SC and SCS segments of $2.3 million and $5.1 million, respectively. The fluctuations in sales are further explained in our business segment discussions below.

Previous wording

Service Centers segment. Sales for the SC segment decreased by $24.7 million, or 4.0 percent for the six months ended June 30, 2024, compared to the prior year's corresponding period. Sales from acquisitions for the SC segment decreased $8.9 million compared to the corresponding period. Total sales for the SC segment excluding acquisitions decreased $15.8 million from the prior year's corresponding period. This sales decrease is primarily the result of timing and business mix within the segment.

Current wording

Service Centers segment. Sales for the SC segment decreased by $2.3 million, or 0.3 percent for the nine months ended September 30, 2024, compared to the prior year's corresponding period. Sales from acquisitions for the SC segment increased $4.1 million compared to the corresponding period. Total sales for the SC segment excluding acquisitions decreased $6.4 million from the prior year's corresponding period. This sales decrease is primarily the result of timing and business mix within the segment.

Previous wording

Innovative Pumping Solutions segment. Sales for the IPS segment increased by $36.1 million, or 36.3 percent for the six months ended June 30, 2024 compared to the prior year's corresponding period. Sales from acquisitions for the IPS segment increased $17.7 million compared to the corresponding period. Total sales for the IPS segment excluding acquisitions increased $18.4 million from the prior year's corresponding period. This increase was primarily the result of an increase in the capital spending by oil and gas producers and renewables sector.

Current wording

Innovative Pumping Solutions segment. Sales for the IPS segment increased by $67.0 million, or 42.3 percent for the nine months ended September 30, 2024 compared to the prior year's corresponding period. Sales from acquisitions for the IPS segment increased $29.4 million compared to the corresponding period. Total sales for the IPS segment excluding acquisitions increased $37.6 million from the prior year's corresponding period. This increase was primarily the result of an increase in project related jobs due to increased capital spending by oil and gas producers and renewables sector.

Previous wording

Supply Chain Services segment. Sales for the SCS segment decreased by $5.6 million, or 4.2 percent, for the six months ended June 30, 2024, compared to the prior year's corresponding period. The decrease in sales was primarily the result of facility closures with existing customers.

Current wording

Supply Chain Services segment. Sales for the SCS segment decreased by $5.1 million, or 2.6 percent, for the nine months ended September 30, 2024, compared to the prior year's corresponding period. The decrease in sales was primarily the result of customer facilities closing where we operated.

Previous wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the six months ended June 30, 2024 increased by approximately $11.2 million, or 6.1 percent, to $195.2 million from $184.0 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll, incentive compensation and related taxes and 401(k) expenses as a result of increased business activity.

Current wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the nine months ended September 30, 2024 increased by approximately $28.0 million, or 10.2 percent, to $301.7 million from $273.7 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll, incentive compensation and related taxes and 401(k) expenses as a result of increased business activity.

Previous wording

OPERATING INCOME. Operating income for the six months ended June 30, 2024 decreased by $6.4 million or 8.8% to $66.5 million from $72.9 million in the prior year's corresponding period. This decrease in operating income is primarily related to the aforementioned increase in SG&A.

Current wording

OPERATING INCOME. Operating income for the nine months ended September 30, 2024 decreased by $2.6 million or 2.4% to $106.1 million from $108.7 million in the prior year's corresponding period. This decrease in operating income is primarily related to the aforementioned increase in SG&A.

Previous wording

INTEREST EXPENSE. Interest expense for the six months ended June 30, 2024 increased $7.5 million compared with the prior year's corresponding period. This increase was primarily due to the Company borrowing an additional $125.0 million on its Term Loan during the fourth quarter of 2023 and incurring higher than average interest rates on such debt due to changes in the macroeconomic environment and the associated increasing interest rate policy by the U.S. Federal Reserve Bank.

Current wording

INTEREST EXPENSE. Interest expense for the nine months ended September 30, 2024 increased $10.6 million compared with the prior year's corresponding period. This increase was primarily due to the Company borrowing an additional $125.0 million on its Term Loan during the fourth quarter of 2023 and incurring higher than average interest rates on such debt due to changes in the macroeconomic environment and the associated increasing interest rate policy by the U.S. Federal Reserve Bank.

Previous wording

INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 27.3 percent for the six months ended June 30, 2024, compared to a tax expense of 27.0 percent for the six months ended June 30, 2023. Compared to the U.S. statutory rate for the six months ended June 30, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits and was partially offset by research and development tax credits and other tax credits.

Current wording

INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 21.1 percent for the nine months ended September 30, 2024, compared to a tax expense of 26.8 percent for the nine months ended September 30, 2023. Compared to the U.S. statutory rate for the nine months ended September 30, 2024, the effective tax rate was decreased by research and development tax credits and other tax credits and partially offset by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits.

Previous wording

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization, and non-controlling interest. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization minus stock-based compensation expense, non-controlling interest before taxes and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

Current wording

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization minus stock-based compensation expense and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

Previous wording

As of June 30, 2024, we had available cash of $49.9 million and credit facility availability of $131.4 million. We have a $135.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $3.6 million. We had no borrowings outstanding on our ABL Revolver as of June 30, 2024. During the six months ended June 30, 2024, we did not draw down on our ABL Revolver.

Current wording

As of September 30, 2024, we had available cash of $35.0 million and credit facility availability of $131.6 million. We have a $135.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $3.4 million. We had no borrowings outstanding on our ABL Revolver as of September 30, 2024.

Previous wording

The Company generated $41.7 million of cash from operating activities during the six months ended June 30, 2024 compared to $24.0 million of cash generated during the prior year's corresponding period.

Current wording

The Company generated $70.1 million of cash from operating activities during the nine months ended September 30, 2024 compared to $63.8 million of cash generated during the prior year's corresponding period.

Previous wording

For the six months ended June 30, 2024, net cash used in investing activities was $130.7 million compared to a $14.1 million use of cash during the prior year’s corresponding period. This $116.6 million increase was primarily driven by acquisition activity during the six months ended June 30, 2024. Total cash paid for acquisitions, net of cash acquired, was $119.0 million compared to $8.5 million for the six months ended June 30, 2023. The increase was partially offset by purchases of property and equipment of $11.7 million for the six months ended June 30, 2024 compared to $5.6 million for the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, net cash used in investing activities was $165.1 million compared to a $16.0 million use of cash during the prior year’s corresponding period. This $149.2 million increase was primarily driven by acquisition activity during the nine months ended September 30, 2024. Total cash paid for acquisitions, net of cash acquired, was $149.4 million compared to $8.8 million for the nine months ended September 30, 2023. The increase is also driven by purchases of property and equipment of $15.7 million for the nine months ended September 30, 2024 compared to $7.1 million for the nine months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024, net cash used in financing activities was $35.0 million, compared to net cash used in financing activities of $40.2 million during the prior year’s corresponding period. The increase was primarily due to share repurchases of $24.0 million for the six months ended June 30, 2024 compared to $33.6 million for the six months ended June 30, 2023. The Company also paid contingent consideration of $4.5 million for the six months ended June 30, 2024 compared to $4.0 million for the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, net cash used in financing activities was $42.4 million, compared to net cash used in financing activities of $66.7 million during the prior year’s corresponding period. The decrease was primarily due to share repurchases of $28.8 million for the nine months ended September 30, 2024 compared to $56.2 million for the nine months ended September 30, 2023. The Company also paid contingent consideration of $4.6 million for the nine months ended September 30, 2024 compared to $5.1 million for the nine months ended September 30, 2023.

Previous wording

As of June 30, 2024, the Company's Fixed Charge Coverage Ratio was 1.39 to 1.00.

Current wording

As of September 30, 2024, the Company's Fixed Charge Coverage Ratio was 1.72 to 1.00.

Previous wording

As of June 30, 2024, the Company’s Secured Leverage Ratio was 2.64 to 1.00.

Current wording

As of September 30, 2024, the Company’s Secured Leverage Ratio was 2.54 to 1.00.

Previous wording

The Company's unaudited condensed financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying unaudited Condensed Consolidated Financial Statements have been prepared on substantially the same basis as our annual Consolidated Financial Statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2024. The results of operations for the six months ended June 30, 2024 are not necessarily indicative of results expected for the full fiscal year.

Current wording

The Company's unaudited condensed financial statements are prepared in accordance with U.S. GAAP. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared on substantially the same basis as our annual Consolidated Financial Statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the SEC on March 11, 2024. The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of results expected for the full fiscal year.