DXP ENTERPRISES INC
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
DXPE$140.68+5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001020710-25-000092
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001020710-25-000137
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 112 current paragraphs.
74 unchanged; 24 reworded; 10 added; 0 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 9 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
The following tables sets forth the disaggregation of revenue from sales associated with acquisitions for the three and six months ended June 30, 2025 and 2024(in thousands) :
Current report
SALES. Sales for the three months ended June 30, 2025 increased $53.1 million, or 11.9 percent, to approximately $498.7 million from $445.6 million for the prior year's corresponding period, of which acquisitions contributed $24.6 million. Additionally, the overall increase in sales was the result of an increase in sales in our SC and IPS segments of $33.2 million and $20.2 million, slightly offset by a decrease in our SCS segment of $0.3 million. The fluctuations in sales are further explained in our business segment discussions below.
Current report
GROSS PROFIT. Gross profit margin for the three months ended June 30, 2025 was 31.6 percent compared to 30.9 percent for the prior year's corresponding period. The gross profit margin for the three months ended June 30, 2025 was positively impacted by 70 basis points due to recent acquisitions and continuing margin expansion opportunities.
Current report
Six Months Ended June 30, 2025 compared to Six Months Ended June 30, 2024
Current report
GROSS PROFIT. Gross profit margin for the six months ended June 30, 2025 was 31.6 percent compared to 30.5 percent for the prior year's corresponding period. The gross profit margin for the six months ended June 30, 2025 was positively impacted by 110 basis points due to recent acquisitions and continuing margin expansion opportunities.
Current report
Service Centers segment. Sales for the SC segment increased by $71.9 million, or 12.1 percent for the six months ended June 30, 2025, compared to the prior year's corresponding period. Sales from acquisitions for the SC segment contributed $33.5 million during the period as compared to $10.2 million during the six months ended June 30, 2024. Total sales for the SC segment excluding acquisitions increased $48.6 million from the prior year's corresponding period. This sales increase was primarily the result of increased business activity within the majority of our regions, offset by a decrease in our North Rockies region compared to the prior year's corresponding period.
Current report
Innovative Pumping Solutions segment. Sales for the IPS segment increased by $44.1 million, or 32.5 percent for the six months ended June 30, 2025 compared to the prior year's corresponding period. Sales from acquisitions for the IPS segment contributed $22.2 million during the period compared to $25.0 million during the six months ended June 30, 2024. Additionally, organic sales increased within our fabrication and global solutions division, and our water and wastewater end market, partially offset by a decrease due to the timing of project related jobs totaling $46.9 million compared to the prior year's corresponding period.
Current report
Supply Chain Services segment. Sales for the SCS segment increased by $1.1 million, or 0.8 percent, for the six months ended June 30, 2025, compared to the prior year's corresponding period.
Current report
INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 24.8 percent for the six months ended June 30, 2025, compared to a tax expense of 27.3 percent for the six months ended June 30, 2024, the effective tax rate decreased primarily due to an increase in changes of income earned by jurisdiction, a higher tax benefit from stock compensation vested during the period, a higher benefit from state income taxes, and higher tax benefits from research and development tax credits (R&D). These benefits were partially offset by recognition of uncertain tax positions related to R&D tax credits.
Current report
On July 1, 2025 the Company entered into an Increase Agreement (the “Increase Agreement”) that provided for a $185.0 million asset-backed revolving line of credit (the "ABL Revolver"). The aggregate commitments under the Company’s existing asset-based revolving credit facility (the “ABL Facility”) were increased by $50 million. Following the effectiveness of the Increase Agreement, the total commitments under the ABL Facility increased from $135 million to $185 million.
Reworded paragraphs (24)
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 months ended March 31, 2025 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 six months ended June 30, 2025 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
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 three months ended March 31, 2025, we had approximately $413.3 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 17.9 percent compared to the three months ended March 31, 2024. Our performance has been strengthened by price increases from our vendors and suppliers and the Company's acquisition activity. During the three months ended March 31, 2025, $13.2 million was associated with recent acquisitions in the water and wastewater markets.
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 six months ended June 30, 2025, we had approximately $846.5 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 15.9 percent compared to the six months ended June 30, 2024. Our performance has been strengthened by price increases from our vendors and suppliers and the Company's acquisition activity. During the six months ended June 30, 2025, $22.2 million in sales was associated with recent acquisitions in the water and wastewater markets.
Previous wording
For the three months ended March 31, 2025, we had approximately $63.3 million in sales in our Supply Chain Services segment, an increase of approximately 2.1 percent compared to the three months ended March 31, 2024. This is primarily due to new customer facilities, slightly offset by facility closures due to 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.
Current wording
For the six months ended June 30, 2025, we had approximately $128.7 million in sales in our Supply Chain Services segment, an increase of approximately 0.8 percent compared to the six months ended June 30, 2024. This is primarily due to new customer facilities, slightly offset by facility closures due to 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
Our results of operations are not directly comparable on a year-over-year basis due to various prior acquisitions and the varying size and number of acquisitions in any comparable period. We account for acquisitions under Accounting Standards Codification 805, Business Combinations ("ASC 805"). Accordingly, the results of acquisitions are included subsequent to their respective acquisition dates and the Company provides detail around Organic and Acquisition Sales as defined in our Key Business Metrics. During the three months ended March 31, 2025, acquisition sales were $31.1 million compared $11.8 million for the three months ended March 31, 2024.
Current wording
Our results of operations are not directly comparable on a year-over-year basis due to various prior acquisitions and the varying size and number of acquisitions in any comparable period. Accordingly, the results of acquisitions are included subsequent to their respective acquisition dates and the Company provides detail around Organic and Acquisition Sales as defined in our Key Business Metrics. During the six months ended June 30, 2025, acquisition sales were $55.7 million compared to $35.2 million for the six months ended June 30, 2024.
Previous wording
From time to time, typically based upon a leap year, our comparable business days may not equal each other. There were 63 business days during the three months ended March 31, 2025 and 63 business days during the three months ended March 31, 2024, as such there was no comparability impact this quarter.
Current wording
From time to time, typically based upon a leap year, our comparable business days may not equal each other. There were 126 business days during the six months ended June 30, 2025 and 127 business days during the six months ended June 30, 2024. As such, during the second quarter, there was one less business day compared to the prior year's corresponding period.
Previous wording
Service Centers segment. Sales for the SC segment increased $38.6 million, or 13.4 percent, for the three months ended March 31, 2025, compared to the prior year's corresponding period. This sales increase was the result of increases within our Texas Gulf Coast, Ohio River Valley, and California regions, offset by decreases in our North Rockies region. Additionally, $17.9 million in sales increase was associated with recent acquisitions.
Current wording
Service Centers segment. Sales for the SC segment increased $33.2 million, or 10.8 percent, for the three months ended June 30, 2025, compared to the prior year's corresponding period. Organic sales grew $26.4 million, this sales increase was the result of increases within our Ohio River Valley, California and South Central and Rockies regions totaling $12.4 million. Additionally, the increase was also attributable to an overall increase in our rotating equipment and air compressors product categories totaling $14.6 million. Sales attributable to recent acquisitions was $15.6 million during the period as compared to $8.7 million in the three months ended June 30, 2024.
Previous wording
Innovative Pumping Solutions segment. Sales for the IPS segment increased $24.0 million, or 38.5 percent, for the three months ended March 31, 2025, compared to the prior year's corresponding period. This sales increase was the result of increases within our fabrication and global solutions groups. Additionally, $13.2 million was associated with recent acquisitions in the water and wastewater markets.
Current wording
Innovative Pumping Solutions segment. Sales for the IPS segment increased $20.2 million, or 27.5 percent, for the three months ended June 30, 2025, compared to the prior year's corresponding period. This sales increase was the result of increases within our fabrication, global solutions division, and our water and wastewater division totaling $25.8 million. Sales attributable to recent acquisitions was $9.0 million during the period as compared to $14.7 million for the three months ended June 30, 2024.
Previous wording
Supply Chain Services segment. Sales for the SCS segment increased by $1.3 million, or 2.1 percent, for the three months ended March 31, 2025, compared to the prior year's corresponding period. The increase in sales was primarily the result of increases within our oil and gas end market, offset by decreases in our bearings and powertrain end markets.
Current wording
Supply Chain Services segment. Sales for the SCS segment decreased by $0.3 million, or 0.4 percent, for the three months ended June 30, 2025, compared to the prior year's corresponding period.
Previous wording
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the three months ended March 31, 2025 increased by $15.0 million, or 15.8 percent, to $109.8 million from $94.8 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 June 30, 2025 increased by $11.4 million, or 11.3 percent, to $111.8 million from $100.4 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll related costs, depreciation and amortization, rent and IT expense.
Previous wording
OPERATING INCOME. Operating income for the first quarter of 2025 increased by $11.4 million to $40.5 million, from $29.1 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC and IPS segments.
Current wording
OPERATING INCOME. Operating income for the second quarter of 2025 increased by $8.6 million to $46.0 million, from $37.4 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC and IPS segments.
Previous wording
INTEREST EXPENSE. Interest expense for the first quarter of 2025 decreased $0.9 million compared to the prior year's corresponding period. This decrease was primarily due to the Company refinancing its Term Loan during the fourth quarter of 2024.
Current wording
INTEREST EXPENSE. Interest expense for the second quarter of 2025 decreased $0.6 million compared to the prior year's corresponding period. This decrease was primarily due to the Company refinancing its Term Loan during the fourth quarter of 2024.
Previous wording
INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 24.2 percent for the three months ended March 31, 2025, compared to a tax expense of 27.2 percent for the three months ended March 31, 2024. Compared to the U.S. statutory rate for the three months ended March 31, 2025, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, and uncertain tax positions recorded for research and development tax credits and partially offset by research and development tax credits and other tax credits.
Current wording
INCOME TAXES. Our effective tax rate for continuing operations was 25.3 percent for the three months ended June 30, 2025, compared to 27.4 percent for the three months ended June 30, 2024. Compared to the U.S. statutory rate for the three months ended June 30, 2024, the effective tax rate decreased primarily due to a higher tax benefit from stock compensation vested during the period, a higher benefit from state income taxes, and higher tax benefits from research and development tax credits (R&D). These benefits were partially offset by recognition of uncertain tax positions related to R&D tax credits.
Previous wording
SALES. Sales for the three months ended March 31, 2025 increased $63.9 million, or 15.5 percent, to approximately $476.6 million from $412.6 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 $38.6 million, $24.0 million, and $1.3 million, respectively. The fluctuations in sales are further explained in our business segment discussions below.
Current wording
SALES. Sales for the six months ended June 30, 2025 increased $117.1 million, or 13.6 percent, to approximately $975.3 million from $858.2 million for the prior year's corresponding period, of which acquisitions contributed $55.7 million. Additionally, the overall increase in sales was the result of an increase in sales within our SC, IPS, and SCS segments of $71.9 million, $44.1 million, and $1.1 million, respectively. The fluctuations in sales are further explained in our business segment discussions below.
Previous wording
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. We continue to generate adequate cash from operating activities. We believe that our operating cash flow, cash on hand, and other sources of liquidity including our ABL and Term Loan B, will be sufficient to allow us to continue investing in the business including capital expenditures, strategic acquisitions and investments, paying interest and servicing debt, repurchasing common stock when deemed appropriate, and manage our capital structure on a short-term and long-term basis.
Current wording
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. We continue to generate adequate cash from operating activities. We believe that our operating cash flow, cash on hand, and other sources of liquidity including our ABL and Term Loan B, will be sufficient to allow us to continue investing in the business including capital expenditures, strategic acquisitions and investments, paying interest and servicing debt, and repurchasing common stock when deemed appropriate.
Previous wording
As of March 31, 2025, we had available cash of $114.3 million and credit facility availability of $108.9 million. We have a $135.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $26.1 million. We had no borrowings outstanding on our ABL Revolver as of March 31, 2025.
Current wording
As of June 30, 2025, we had available cash of $112.9 million and credit facility availability of $106.3 million. We have a $135.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $28.7 million. We had no borrowings outstanding on our ABL Revolver as of June 30, 2025.
Previous wording
The Company generated $3.0 million of cash from operating activities during the three months ended March 31, 2025 compared to $27.0 million of cash generated during the prior year's corresponding period.
Current wording
The Company generated $21.6 million of cash from operating activities during the six months ended June 30, 2025 compared to $41.7 million of cash generated during the prior year's corresponding period. The decrease of $20.1 million was primarily due to the higher payment of income taxes in 2025 compared to 2024.
Previous wording
For the three months ended March 31, 2025, net cash used in investing activities was $30.1 million compared to a $42.2 million million use of cash during the prior year’s corresponding period. This $12.1 million decrease was primarily driven by lower acquisition activity during the three months ended March 31, 2025. Total cash paid for acquisitions, net of cash acquired, was $12.9 million compared to $39.3 million for the three months ended March 31, 2024.
Current wording
For the six months ended June 30, 2025, net cash used in investing activities was $41.4 million compared to a $130.7 million use of cash during the prior year’s corresponding period. This $89.3 million decrease was primarily driven by lower acquisition activity during the six months ended June 30, 2025. Total cash paid for acquisitions, net of cash acquired, was $13.9 million compared to $119.0 million for the six months ended June 30, 2024.
Previous wording
For the three months ended March 31, 2025, net cash used in financing activities was $7.1 million, compared to net cash used in financing activities of $18.1 million during the prior year’s corresponding period. The decrease was primarily due to share repurchase activity during the three months ended March 31, 2024.
Current wording
For the six months ended June 30, 2025, net cash used in financing activities was $16.6 million, compared to net cash used in financing activities of $35.0 million during the prior year’s corresponding period. The decrease was primarily due to share repurchase activity during the six months ended June 30, 2024 with no comparable activity for the six months ended June 30, 2025.
Previous wording
At March 31, 2025, our total outstanding debt was $647.3 million, or 59.3 percent of total capitalization (total debt plus shareholders' equity) of $1.1 billion. $646.3 million of this outstanding debt bears interest at various floating rates. For a further discussion of the Company's debt refer to Note 8. Long-Term Debt.
Current wording
At June 30, 2025, our total outstanding debt was $645.6 million, or 58.0 percent of total capitalization (total debt plus shareholders' equity) of $1.1 billion. $644.6 million of this outstanding debt bears interest at various floating rates. For a further discussion of the Company's debt refer to Note 8. Long-Term Debt.
Previous wording
At March 31, 2025, the Company had $223.2 million of liquidity including $114.3 million in cash and $108.9 million in availability under the ABL Revolver.
Current wording
At June 30, 2025, the Company had $219.2 million of liquidity including $112.9 million in cash and $106.3 million in availability under the ABL Revolver.
Previous wording
Working capital as of March 31, 2025 was $325.3 million, an increase of $34.3 million compared to $291.0 million as of December 31, 2024. The increase was primarily due to sustained sales growth and acquisitions.
Current wording
Working capital as of June 30, 2025 was $348.9 million, an increase of $58.0 million compared to $291.0 million as of December 31, 2024. The increase was primarily due to sustained sales growth and acquisitions.
Previous wording
For a discussion of the Company’s acquisitions refer to Note 12. Business Acquisitions. During March 31, 2025 and 2024, the Company invested $12.9 million and $39.3 million, respectively, in acquisitions.
Current wording
For a discussion of the Company’s acquisitions refer to Note 12. Business Acquisitions. During June 30, 2025 and 2024, the Company invested $13.9 million and $119.0 million, respectively, in acquisitions.
Previous wording
The Company's capital expenditures was $19.9 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively. This includes a purchase of a facility, continued facility enhancements, tools and equipment, software and technology enhancements across the Company.
Current wording
The Company's capital expenditures was $30.3 million and $11.7 million for the six months ended June 30, 2025 and 2024 respectively. This includes a purchase of a facility, continued facility upgrades and enhancements, tools and equipment, software and technology investments and enhancements across the Company.
Previous 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, 2024. 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 10, 2025. The results of operations for the three months ended March 31, 2025 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, 2024. 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 10, 2025. The results of operations for the six months ended June 30, 2025 are not necessarily indicative of results expected for the full fiscal year.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the six months ended June 30, 2025 increased by approximately $26.4 million, or 13.5 percent, to $221.6 million from $195.2 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll related costs, depreciation and amortization, rent and IT expense.
Current report — wording carried from elsewhere
OPERATING INCOME. Operating income for the six months ended June 30, 2025 increased by $20.0 million or 30.1 percent to $86.5 million from $66.5 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC, IPS, and SCS segments.
Current report — wording carried from elsewhere
INTEREST EXPENSE. Interest expense for the six months ended June 30, 2025 decreased $1.5 million compared with the prior year's corresponding period. This decrease was primarily due to the Company refinancing its Term Loan during the fourth quarter of 2024.
Current report — wording carried from elsewhere
The following table sets forth the reconciliation of Acquisition Sales and Organic Sales to the most comparable U.S. GAAP financial measure(in thousands):