q42011release.htm
Exhibit
99.1
News Release Contact: Mac McConnell
Senior Vice President, Finance
713-996-4700
www.dxpe.com
DXP ENTERPRISES ANNOUNCES 2011 FOURTH QUARTER AND YEAR END RESULTS
Houston, TX, -- February 29, 2012 – DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that for the fourth quarter ended December 31, 2011 it earned net income of $9.2 million, or $0.61 per fully diluted share. Sequentially, earnings per share improved 10.9% from $0.55 per fully diluted share, or $8.3 million in net income for the third quarter ended September 30, 2011. Compared to fourth quarter 2010 earnings of $5.9 million or $0.39 per fully diluted share, fourth quarter 2011 earnings per share improved 56.4%.
For the year ended December 31, 2011, DXP reported net income of $31.4 million, with diluted EPS of $2.08 compared to year end December 31, 2010 net income of $19.4 million, with EPS of $1.32 for an improvement of $12 million in net income or 57.6% per fully diluted share.
Sales for the fourth quarter of 2011 increased $48.7 million, or 28.7% to approximately $218.4 million from $169.7 million for the same period in 2010.
For the year ended December 31, 2011, DXP reported a sales increase of $150.8 million, or 23.0% to approximately $807.0 million from $656.2 million for 2010.
David R. Little, Chairman and Chief Executive Officer remarked, “We are pleased to report a strong fourth quarter and a rewarding 2011. Our expert workforce ("DXPeople") continue to do an amazing job. All three segments grew revenues and profits with Innovative Pumping Solutions leading the way with 33% and 64% revenue and profit growth, respectively. DXP Service Centers was second with an excellent 24% and 28% revenue and profit growth, respectively. DXP Supply Chain Services finished with 14% and 19% revenue and profit growth, respectively. We are excited about our two acquisitions, Kenneth Crosby and C.W. Rod, which will now make a fifth product division called
Metal Workings Products. Note that the other four product divisions; Rotating Equipment, Bearings & Power Transmissions, Safety Services and Industrial Supply all had excellent revenue growth in 2011. We grew EBITDA margins from 7.1% in 2010 to 8.1% and we still feel good about our 10% EBITDA margin goal by 2013. Our after tax return on invested capital is one of the highest returns in our Industry at 30 plus percent. DXPeople increased from approximately 1,800 to 2,100. Our DXP Service Center Segment added six new SuperCenters for a total of 28. We built a new Atlantic ballistic distribution center to improve customer service in the South Atlantic area.
Our total number of DXP Service Centers increased from 112 to 123. I added two new members to our senior executive team for growth. Our balance sheet is strong as we continue to manage working capital and our debt structure. Our bank increased our line of credit from $150 million to $200 million. DXPeople certainly had many accomplishments in 2011 and I feel that this will position us to have an even stronger 2012."
Mac McConnell, Senior Vice President and CFO, added, “We are excited about our fourth quarter and annual financial results which reflect our continued focus on customers and growth in the market. The revenue growth, combined with our operating discipline, helped us improve margins quarter-over-quarter and year-over-year, while growing EBITDA. I was also very pleased that DXP was able to generate over $21.7 million in free cash flow which was primarily used to complete two significant acquisitions. As of December 31, 2011, $78.2 million was available to be borrowed under our credit facility. Our balance sheet is strong and our pipeline of future acquisitions is
full."
We will host a conference call regarding 2011 fourth quarter and year end results to be web cast live on the Company’s website (www.dxpe.com) today at 5:00 P.M. Eastern time. Web participants are encouraged to go to the Company’s website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. The online archived replay will be available immediately after the conference call at www.dxpe.com and at www.viavid.net.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States and Sonora, Mexico in virtually every industry since 1908. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer driven, creating competitive advantages for our
customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to;
ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. For more information, review the Company’s filings with the Securities and Exchange Commission.
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DXP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
|
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Years ending
December 31,
|
Three Months Ending
December 31,
|
| |
2011
|
2010
|
2011
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2010
|
|
Sales
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$ 807,005
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$ 656,202
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$ 218,388
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$ 169,669
|
|
Cost of sales
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575,169
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467,807
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155,715
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120,021
|
|
Gross profit
|
231,836
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188,395
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62,673
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49,648
|
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Selling, general and administrative expense
|
176,351
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151,304
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46,797
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38,591
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Operating income
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55,485
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37,091
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15,876
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11,057
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Other income
|
28
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249
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(12)
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6
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Interest expense
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(3,518)
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(5,208)
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(713)
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(1,185)
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Income before provision for income taxes
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51,995
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32,132
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15,151
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9,878
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Provision for income taxes
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20,558
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12,751
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5,941
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4,018
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Net income
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31,437
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19,381
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9,210
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5,860
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Preferred stock dividend
|
(90)
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(90)
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22
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22
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31,347
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19,291
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9,188
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5,838
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|
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Per share and share amounts
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|
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Basic earnings per common share
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$ 2.19
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$ 1.40
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$ 0.64
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$ 0.41
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Common shares outstanding
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14,301
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13,821
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14,281
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14,149
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Diluted earnings per share
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$ 2.08
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$ 1.32
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$ 0.61
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$ 0.39
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Common and common equivalent shares outstanding
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15,141
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14,821
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15,121
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14,989
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SALES BY SEGMENT
(in thousands)
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| |
Years Ended
December 31,
|
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Three Months Ended
December 31,
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2011
|
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2010
|
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2011
|
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2010
|
| |
|
|
|
|
|
|
|
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Service Centers
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$ 560,233
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$ 452,719
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$ 147,362
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$ 114,595
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Innovative Pumping Solutions
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102,305
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77,024
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32,464
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23,428
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Supply Chain Services
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144,467
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126,459
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38,562
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31,646
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Total Sales
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$ 807,005
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$ 656,202
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$ 218,388
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$ 169,669
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Unaudited Reconciliation of Non-GAAP Financial Information
The following table is a reconciliation of EBITDA**, a non-GAAP financial measure, to income before income taxes, calculated and reported in accordance with U.S. GAAP (in thousands)
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Years Ended
December 31,
|
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Three Months Ended
December 31,
|
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2011
|
|
2010
|
|
2011
|
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2010
|
| |
|
|
|
|
|
|
|
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Income before income taxes
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$ 51,995
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$ 32,132
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$ 15,151
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$ 9,878
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Plus interest expense
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3,518
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5,208
|
|
713
|
|
1,185
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Plus depreciation and amortization
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10,082
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9,568
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|
2,562
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2,447
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EBITDA
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$ 65,595
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$ 46,908
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$ 18,426
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$ 13,510
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**EBITDA – earnings before interest, taxes, depreciation and amortization
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