DXP ENTERPRISES INC
For the period ended Sep 30, 2026. Filed Nov 5, 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.
Sep 30, 2026 · Filed Nov 5, 2026
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ITEM 1. Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(in thousands, except per share amounts) (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Sales | $587,180 | $513,724 | $1,685,299 | $1,488,975 |
| Cost of sales | 406,672 | 352,465 | 1,153,118 | 1,019,638 |
| Gross profit | 180,508 | 161,259 | 532,181 | 469,337 |
| Selling, general and administrative expenses | 128,046 | 117,561 | 381,752 | 339,138 |
| Income from operations | 52,462 | 43,698 | 150,429 | 130,199 |
| Interest expense | 16,949 | 14,894 | 50,223 | 44,298 |
| Other income, net (Note 15) | (950) | (648) | (2,603) | (2,320) |
| Income before income taxes | 36,463 | 29,452 | 102,809 | 88,221 |
| Provision for income taxes (Note 7) | 9,593 | 7,821 | 27,253 | 22,389 |
| Net income | 26,870 | 21,631 | 75,556 | 65,832 |
| Preferred stock dividend | 23 | 23 | 68 | 68 |
| Net income attributable to common shareholders | $26,847 | $21,608 | $75,488 | $65,764 |
| Net income | $26,870 | $21,631 | $75,556 | $65,832 |
| Foreign currency translation adjustments | (118) | (709) | (3,073) | 1,940 |
| Comprehensive income | $26,752 | $20,922 | $72,483 | $67,772 |
| Earnings per share (Note 9): | ||||
| Basic | $1.73 | $1.38 | $4.87 | $4.19 |
| Diluted | $1.64 | $1.31 | $4.62 | $3.98 |
| Weighted average common shares outstanding: | ||||
| Basic | 15,513 | 15,686 | 15,517 | 15,693 |
| Diluted | 16,353 | 16,526 | 16,357 | 16,533 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts) (unaudited)
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash | $218,834 | $303,783 |
| Accounts receivable, net of allowance of $4,163 and $3,995, respectively | 472,409 | 397,502 |
| Inventories | 124,100 | 108,144 |
| Costs and estimated profits in excess of billings | 68,504 | 53,855 |
| Prepaid expenses and other current assets | 39,674 | 47,033 |
| Total current assets | 923,521 | 910,317 |
| Property and equipment, net | 122,023 | 114,822 |
| Goodwill | 573,034 | 494,561 |
| Other intangible assets, net | 114,192 | 81,351 |
| Operating lease right of use assets, net | 72,680 | 74,709 |
| Other long-term assets | 12,279 | 9,395 |
| Total assets | $1,817,729 | $1,685,155 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Current maturities of debt | $8,480 | $8,580 |
| Trade accounts payable | 123,767 | 116,765 |
| Accrued wages and benefits | 62,164 | 51,180 |
| Customer advances | 15,872 | 15,460 |
| Billings in excess of costs and estimated profits | 27,735 | 15,689 |
| Short-term operating lease liabilities | 20,042 | 19,038 |
| Other current liabilities | 54,298 | 45,769 |
| Total current liabilities | 312,358 | 272,481 |
| Long-term debt, net of unamortized debt issuance costs and discounts | 814,736 | 818,476 |
| Long-term operating lease liabilities | 54,682 | 57,509 |
| Other long-term liabilities | 65,539 | 38,250 |
| Total long-term liabilities | 934,957 | 914,235 |
| Total liabilities | 1,247,315 | 1,186,716 |
| Commitments and Contingencies (Note 10) | ||
| Shareholders' equity: | ||
| Series A preferred stock, $1.00 par value; 1,000,000 shares authorized | 1 | 1 |
| Series B preferred stock, $1.00 par value; 1,000,000 shares authorized | 15 | 15 |
| Common stock, $0.01 par value, 100,000,000 shares authorized; 20,407,043 issued and 15,516,986 outstanding at September 30, 2026 and 20,403,647 issued and 15,513,590 outstanding at December 31, 2025 | 204 | 204 |
| Additional paid-in capital | 220,241 | 220,681 |
| Retained earnings | 553,745 | 478,257 |
| Accumulated other comprehensive loss | (33,680) | (30,607) |
| Treasury stock, at cost 4,890,057 and 4,890,057 shares, respectively | (170,112) | (170,112) |
| Total DXP Enterprises, Inc. equity | 570,414 | 498,439 |
| Total liabilities and equity | $1,817,729 | $1,685,155 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
| Nine Months Ended September 30, | ||
|---|---|---|
| 2026 | 2025 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income | $75,556 | $65,832 |
| Reconciliation of net income to net cash provided by operating activities: | ||
| Depreciation | 8,992 | 7,646 |
| Amortization of intangibles and finance lease assets | 27,617 | 20,898 |
| Amortization of debt issuance costs | 3,388 | 2,908 |
| Loss (gain) on sale of property and equipment | 144 | (426) |
| Provision for (recovery of) credit losses | 430 | 74 |
| Payment of contingent consideration liability in excess of acquisition-date fair value | (165) | (459) |
| Fair value adjustment on contingent consideration | 1,198 | 932 |
| Restricted stock compensation expense | 4,757 | 4,278 |
| Deferred income taxes | 11,087 | 23,503 |
| Other non-cash items | (10,497) | (8,142) |
| Changes in operating assets and liabilities, net of effects of businesses acquired: | ||
| Accounts receivable | (52,649) | (33,346) |
| Costs and estimated profits in excess of billings | (10,641) | (6,914) |
| Inventories | (13,347) | (1,332) |
| Prepaid expenses and other assets | (2,507) | (9,867) |
| Trade accounts payable | 442 | 6,766 |
| Accrued expenses | 23,524 | 16,947 |
| Billings in excess of costs and estimated profits | 6,009 | 3,989 |
| Income taxes | 7,303 | (36,782) |
| Net cash provided by operating activities | $80,641 | $56,505 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchase of property and equipment | (10,153) | (37,000) |
| Proceeds from the sale of property and equipment | 632 | 2,715 |
| Acquisition of businesses, net of cash acquired | (126,234) | (24,448) |
| Net cash used in investing activities | $(135,755) | $(58,733) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Principal debt payments | (7,260) | (4,871) |
| Debt issuance costs | (1,179) | (325) |
| Shares repurchased held in treasury | — | (1,999) |
| Payment for acquisition contingent consideration liability | (6,085) | (6,874) |
| Preferred stock dividends paid | (68) | (68) |
| Payment for employee taxes withheld from stock awards | (6,682) | (4,460) |
| Principal payments on finance leases | (6,877) | (4,597) |
| Net cash used in financing activities | $(28,151) | $(23,194) |
| Effect of foreign currency on cash | (1,684) | 840 |
| Net change in cash and restricted cash | (84,949) | (24,582) |
| Cash and restricted cash at beginning of period | 303,783 | 148,411 |
| Cash and restricted cash at end of period | $218,834 | $123,829 |
| Supplemental cash flow information (Note 14) | ||
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands) (unaudited)
| Series A preferred stock | Series B preferred stock | Common stock | Paid-in capital | Retained earnings | Accum other comp loss | Treasury Stock | Total equity | |
|---|---|---|---|---|---|---|---|---|
| Balance at December 31, 2025 | $1 | $15 | $204 | $220,681 | $478,257 | $(30,607) | $(170,112) | $498,439 |
| Preferred dividends paid | — | — | — | — | (23) | — | — | (23) |
| Compensation expense for restricted stock | — | — | — | 1,802 | — | — | — | 1,802 |
| Tax related items for share based awards | — | — | — | (6,535) | — | — | — | (6,535) |
| Currency translation adjustment | — | — | — | — | — | (1,464) | — | (1,464) |
| Net income | — | — | — | — | 19,978 | — | — | 19,978 |
| Balance at March 31, 2026 | $1 | $15 | $204 | $215,948 | $498,212 | $(32,071) | $(170,112) | $512,197 |
| Preferred dividends paid | — | — | — | — | (22) | — | — | (22) |
| Compensation expense for restricted stock | — | — | — | 1,466 | — | — | — | 1,466 |
| Tax related items for share based awards | — | — | — | (117) | — | — | — | (117) |
| Currency translation adjustment | — | — | — | — | — | (1,491) | — | (1,491) |
| Net income | — | — | — | — | 28,708 | — | — | 28,708 |
| Balance at June 30, 2026 | $1 | $15 | $204 | $217,297 | $526,898 | $(33,562) | $(170,112) | $540,741 |
| Preferred dividends paid | — | — | — | — | (23) | — | — | (23) |
| Compensation expense for restricted stock | — | — | — | 1,489 | — | — | — | 1,489 |
| Tax related items for share based awards | — | — | — | (30) | — | — | — | (30) |
| Issuance of shares of common stock | — | — | — | 1,485 | — | — | — | 1,485 |
| Currency translation adjustment | — | — | — | — | — | (118) | — | (118) |
| Net income | — | — | — | — | 26,870 | — | — | 26,870 |
| Balance at September 30, 2026 | $1 | $15 | $204 | $220,241 | $553,745 | $(33,680) | $(170,112) | $570,414 |
| Series A preferred stock | Series B preferred stock | Common stock | Paid-in capital | Retained earnings | Accum other comp loss | Treasury Stock | Total equity | |
|---|---|---|---|---|---|---|---|---|
| Balance at December 31, 2024 | $1 | $15 | $204 | $219,511 | $389,670 | $(33,610) | $(153,003) | $422,788 |
| Preferred dividends paid | — | — | — | — | (23) | — | — | (23) |
| Compensation expense for restricted stock | — | — | — | 1,317 | — | — | — | 1,317 |
| Tax related items for share based awards | — | — | — | (126) | — | — | — | (126) |
| Currency translation adjustment | — | — | — | — | — | 86 | — | 86 |
| Excise tax on share repurchases | — | — | — | — | — | — | 28 | 28 |
| Net income | — | — | — | — | 20,589 | — | — | 20,589 |
| Balance at March 31, 2025 | $1 | $15 | $204 | $220,702 | $410,236 | $(33,524) | $(152,975) | $444,659 |
| Preferred dividends paid | — | — | — | — | (22) | — | — | (22) |
| Compensation expense for restricted stock | — | — | — | 1,483 | — | — | — | 1,483 |
| Tax related items for share based awards | — | — | — | (4,203) | — | — | — | (4,203) |
| Currency translation adjustment | — | — | — | — | — | 2,563 | — | 2,563 |
| Net income | — | — | — | — | 23,612 | — | — | 23,612 |
| Balance at June 30, 2025 | $1 | $15 | $204 | $217,982 | $433,826 | $(30,961) | $(152,975) | $468,092 |
| Preferred dividends paid | — | — | — | — | (23) | — | — | (23) |
| Restricted stock compensation expense | — | — | — | 1,478 | — | — | — | 1,478 |
| Tax related items for share based awards | — | — | — | (131) | — | — | — | (131) |
| Currency translation adjustment | — | — | — | — | — | (709) | — | (709) |
| Repurchases of shares | — | — | — | — | — | — | (1,999) | (1,999) |
| Net income | — | — | — | — | 21,631 | — | — | 21,631 |
| Balance at September 30, 2025 | $1 | $15 | $204 | $219,329 | $455,434 | $(31,670) | $(154,974) | $488,339 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -THE COMPANY
DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," the "Company," "us," "we," or "our") was incorporated in Texas on July 26, 1996. The Company and its subsidiaries are engaged in the business of distributing maintenance, repair and operating ("MRO") products, and service to customers serving a variety of end markets. Additionally, the Company provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to energy and industrial customers. The Company is organized into three business segments: Service Centers ("SC"), Innovative Pumping Solutions ("IPS"), and Supply Chain Services ("SCS"). See Note 11 - Segment Reporting for discussion of the business segments.
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES
Basis of Presentation
The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission ("SEC") not all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP are required for interim reporting periods. The unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2025 that are included in our annual report on Form 10-K filed with the SEC on February 26, 2026 (“Annual Report”).
At times, certain reclassifications may be made to the prior year’s unaudited condensed consolidated financial statements to conform to the current year's presentation. Such reclassifications do not have a material effect on our unaudited condensed consolidated statements of operations and comprehensive income, balance sheets, cash flows or equity.
The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company's financial position, results of operations and cash flows for the interim periods presented.
All intercompany accounts and transactions have been eliminated in consolidation.
NOTE 3 -RECENT ACCOUNTING PRONOUNCEMENTS
All new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued Accounting Standards Update ("ASU") 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. We have elected to apply the practical expedient. There was no material impact to our unaudited condensed consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed; management is required to consider whether there is significant uncertainty associated with the development activities of the software. This guidance is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The adoption did not have a material impact to our unaudited condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU would result in additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.
NOTE 4 -FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
Our acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include management's assumptions about the likelihood of payment based on the established benchmarks and discount rates. The fair value measurement includes inputs that are Level 3 inputs as they are not observable in the market. Should actual results increase or decrease as compared to the assumptions used in our analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent consideration are measured each reporting period and reflected in our results of operations.
As of September 30, 2026, there was $30.7 million in other current and other long-term liabilities for contingent consideration.
The following table provides a reconciliation of the beginning and ending balances and gains or losses recognized during the nine months ended September 30, 2026 (in thousands):
| Contingent Consideration | |
|---|---|
| Balance at December 31, 2025(1) | $13,775 |
| Acquisitions and settlements: | |
| Acquisitions(2) (Note 12) | 21,988 |
| Settlements | (6,250) |
| Total remeasurement adjustments: | |
| Changes in fair value recorded in other income, net | 1,198 |
| Balance at September 30, 2026(1) | $30,711 |
| (1). Amounts included in other current liabilities were $13.4 million and $9.4 million for the periods ending September 30, 2026 and December 31, 2025, respectively. Amounts included in other long-term liabilities were $17.3 million and $4.4 million for the periods ending September 30, 2026 and December 31, 2025, respectively. | |
| (2). Includes immaterial impacts from currency translation adjustments. | |
Sensitivity to Changes in Significant Unobservable Inputs
The significant Level 3 unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized EBITDA forecasts developed by the Company's management and the probability of achievement of those EBITDA results. The discount rate used in the calculations was 8.6 percent as of September 30, 2026. Changes in our unobservable inputs in isolation would result in a change to our fair value measurement. As of September 30, 2026, the maximum amount of contingent consideration payable under these arrangements is $34.0 million over three years.
Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at September 30, 2026 and December 31, 2025, but which require disclosure of their fair values include: cash, restricted cash, accounts receivable, trade accounts payable and accrued expenses. The Company believes that the estimated fair value of such instruments at September 30, 2026 and December 31, 2025 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets due to the relative short maturity of these instruments.
See Note 8 - Long-term Debt for fair value disclosures on our asset-backed line of credit and term loan debt under our syndicated credit agreement facilities.
NOTE 5 –INVENTORIES
Inventories are made up of equipment purchased for resale, and materials utilized in the fabrication of industrial and wastewater equipment stated at lower of cost or net realizable value, primarily determined using the weighted average cost method. The Company reviews inventory and records provisions for the difference between cost and net realizable value arising from excess and obsolete items on hand based upon the aging of the inventories, market trends, and continued demand.
The carrying values of inventories are as follows (in thousands):
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Finished goods | $106,865 | $98,089 |
| Work in process | 17,235 | 10,055 |
| Inventories | $124,100 | $108,144 |
NOTE 6 –CONTRACT ASSETS AND LIABILITIES
Under our customized pump production and water and wastewater project contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets presented as "Costs and estimated profits in excess of billings." However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as "Billings in excess of costs and estimated profits" on our unaudited condensed consolidated balance sheets.
Costs and estimated profits on uncompleted contracts and related amounts billed were as follows (in thousands):
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Costs incurred on uncompleted contracts | $257,429 | $147,866 |
| Estimated profits, thereon | 129,766 | 71,260 |
| Total costs and estimated profits on uncompleted contracts | 387,195 | 219,126 |
| Less: billings to date | 346,426 | 180,960 |
| Net | $40,769 | $38,166 |
Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for September 30, 2026 and December 31, 2025 under the following captions (in thousands):
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Costs and estimated profits in excess of billings | $68,504 | $53,855 |
| Billings in excess of costs and estimated profits | (27,735) | (15,689) |
| Net | $40,769 | $38,166 |
During the nine months ended September 30, 2026 and 2025, $4.5 million and $7.9 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues, respectively. Contract asset and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.