DXP ENTERPRISES INC
For the period ended Mar 31, 2026. Filed May 7, 2026.
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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.
Mar 31, 2026 · Filed May 7, 2026
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Note
NOTE 10 -COMMITMENTS AND CONTINGENCIES
From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While DXP is unable to predict the outcome or estimate the financial impact of these disputes, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on DXP's consolidated financial position, cash flows, or results of operations.
NOTE 11 -SEGMENT REPORTING
We have three reportable and operating segments: Service Centers, Innovative Pumping Solutions and Supply Chain Services.
The Service Centers segment is engaged in providing maintenance, MRO products and equipment, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products and safety services categories.
The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, re-manufactures pumps, manufactures branded private label pumps, and provides products and process lines for the water and wastewater treatment industries.
The Supply Chain Services segment provides a wide range of MRO products and manages all or part of a customer's supply chain, including warehouse and inventory management.
Sales are shown net of intersegment eliminations.
Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions.
These segments were determined primarily on the distribution channels of the products and services offered and the nature of the customer markets and the primary driver of the customers spend. The Company's CODM directs the allocation of resources to these segments based upon historical and current revenue, direct operating expenses, operating income, and capital expenditures of each respective segment. The allocation of resources across these segments is dependent upon, among other factors, the segments' historical or future expected operating margins; the segments' historical or future expected returns on capital; outlook within a specific market; opportunities to grow profitability; new products, services or new customer accounts; confidence in management; and competitive landscape and intensity.
As a part of the Company's annual business planning, the CODM reviews our reportable segment composition and financial performance. As of March 31, 2026, there was no change to our reportable segment composition.
The following table sets forth financial information related to the Company's segments (in thousands):
| Three Months Ended March 31, 2026 | Service Center | Innovative Pumping Solutions | Supply Chain Services | Total Reportable Segments | Corporate | Total |
|---|---|---|---|---|---|---|
| Sales | $337,976 | $118,660 | $65,022 | $521,658 | $— | $521,658 |
| Operating expenses | 285,714 | 95,794 | 58,529 | 440,037 | — | 440,037 |
| Other expenses | ||||||
| Depreciation | 1,027 | 872 | 7 | 1,906 | 1,040 | 2,946 |
| Amortization of finance lease assets | 1,560 | 322 | 72 | 1,954 | 134 | 2,088 |
| Other(1) | — | — | — | — | 34,113 | 34,113 |
| Operating income (loss) | $49,675 | $21,672 | $6,414 | $77,761 | $(35,287) | $42,474 |
| Interest expense | — | — | — | — | 16,443 | 16,443 |
| Other income, net | — | — | — | — | (594) | (594) |
| Income (loss) before income taxes | $49,675 | $21,672 | $6,414 | $77,761 | $(51,136) | $26,625 |
| Capital expenditures | 1,721 | $651 | $— | 2,372 | $922 | $3,294 |
| (1). Other primarily includes selling, general and administrative expenses of $27.1 million and amortization of intangible assets of $7.0 million. | ||||||
| Three Months Ended March 31, 2025 | Service Center | Innovative Pumping Solutions | Supply Chain Services | Total Reportable Segments | Corporate | Total |
|---|---|---|---|---|---|---|
| Sales | $327,075 | $86,182 | $63,312 | $476,569 | $— | $476,569 |
| Operating expenses | 277,956 | 71,789 | 57,699 | 407,444 | — | 407,444 |
| Other expenses | ||||||
| Depreciation | 937 | 795 | 8 | 1,740 | 576 | 2,316 |
| Amortization of finance lease assets | 1,137 | 192 | 41 | 1,370 | 93 | 1,463 |
| Other(1) | — | — | — | — | 24,831 | 24,831 |
| Operating income (loss) | $47,045 | $13,406 | $5,564 | $66,015 | $(25,500) | $40,515 |
| Interest expense | — | — | — | — | 14,660 | 14,660 |
| Other income, net | — | — | — | — | (1,318) | (1,318) |
| Income (loss) before income taxes | $47,045 | $13,406 | $5,564 | $66,015 | $(38,842) | $27,173 |
| Capital expenditures | $2,037 | $574 | $— | $2,611 | $17,303 | $19,914 |
| (1). Other primarily includes selling, general and administrative expenses of $19.4 million and amortization of intangible assets of $5.4 million. | ||||||
The following table sets forth total assets related to the Company's segments (in thousands):
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| Service Centers | $832,375 | $820,289 |
| Innovative Pumping Solutions | 516,902 | 383,201 |
| Supply Chain Services | 101,627 | 95,045 |
| Total Reportable Segments Assets | $1,450,904 | $1,298,535 |
| Corporate | 273,878 | 386,620 |
| Total Assets | $1,724,782 | $1,685,155 |
NOTE 12 -BUSINESS ACQUISITIONS
The Company enters into strategic acquisitions in an effort to better service existing customers and to attract new customers.
The Company makes an initial allocation of the purchase price at the date of acquisition based upon its estimate of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sources. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized. Final determination of the fair values may result in further adjustments.
During the first quarter of 2026, the Company acquired three businesses for a total of $126.3 million. The Company acquired these businesses to expand its platforms and to maintain its leading position as the largest distributor of rotating equipment in North America.
A summary of the preliminary allocation of the total purchase consideration of our business acquisition during the three months ended March 31, 2026 is presented as follows (in thousands):
| Acquisition 1 | All Other | Total | |
|---|---|---|---|
| Cash payments | $86,959 | $21,982 | $108,941 |
| Contingent consideration | 13,843 | 3,499 | 17,342 |
| Total purchase price consideration | $100,802 | $25,481 | $126,283 |
| Tangible assets acquired | 29,368 | 8,528 | 37,896 |
| Intangible assets acquired | 43,361 | 5,123 | 48,484 |
| Total assets acquired | $72,729 | $13,651 | $86,380 |
| Total liabilities assumed | (14,313) | (2,070) | (16,383) |
| Net assets acquired | 58,416 | 11,581 | 69,997 |
| Goodwill | $42,386 | $13,900 | $56,286 |
The total purchase consideration related to our acquisitions for the three months ended March 31, 2026 consisted primarily of cash consideration. The total cash and cash equivalents acquired for these acquisitions was $6.2 million. Transaction-related costs for acquisitions consummated during the period and included within selling, general, and administrative expenses in the consolidated statements of operations was $0.8 million as of March 31, 2026.
The goodwill total of approximately $56.3 million for the three months ended March 31, 2026 assigned to our IPS segment was primarily attributable to expected synergies and the assembled workforce of the entities. The total amount of goodwill expected to be deductible for tax purposes is $52.5 million.
The acquisitions' operating results are included within the Company's consolidated statements of operations from the date of acquisition, which were not material for the three months ended March 31, 2026. Pro forma results of operations information have not been presented, as the effects of the acquisitions were not material to our financial results.
Of the $48.5 million of acquired intangible assets, $0.3 million was provisionally assigned to non-compete agreements that are subject to amortization over 5 years, $29.7 million was assigned to customer relationships and will be amortized over a period of 8 years, $6.9 million was assigned to trade names and will be amortized over a period of 10 years, and $11.6 million was assigned to dealer relationships and will be amortized over a period of 9 years.
NOTE 13 -SHARE REPURCHASES
On December 15, 2022, the Company announced a Share Repurchase Program pursuant to which it may repurchase up to $85.0 million worth, or 2.8 million shares, of the Company's outstanding common stock over the next 24 months from the date of the announcement. The Company completed the program in August 2024.
On August 28, 2024, the Company announced a new Share Repurchase Program pursuant to which we may repurchase up to $85.0 million worth, or 2.5 million shares of the Company's outstanding common stock over the next 24 months. Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury stock.
There were no shares repurchased under the new Share Repurchase Program for the three months ended March 31, 2026 and 2025, respectively.
NOTE 14 -SUPPLEMENTAL CASH FLOW INFORMATION
| Three Months Ended March 31, | ||
|---|---|---|
| (in thousands) | 2026 | 2025 |
| Supplemental disclosures of cash flow information: | ||
| Cash paid for interest | $14,950 | $13,695 |
| Cash paid for income taxes | 653 | 20,334 |
| Non-cash investing and financing activities: | ||
| Treasury shares repurchase accruals | $— | $(28) |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.