EX-99 3 a4451278_ex991.txt DXP EXHIBIT 99.1 Exhibit 99.1 DXP Enterprises Announces Improved Second Quarter Results HOUSTON--(BUSINESS WIRE)--Aug. 7, 2003--DXP Enterprises Inc. (Nasdaq:DXPE) today announced second quarter 2003 net income of $0.4 million, or earnings per share of $0.10 on a diluted basis, compared to net income of $0.4 million or $0.09 per diluted share for the second quarter of 2002. Revenues for the quarter increased to $37.8 million from $37.2 million for the second quarter of last year. Increased sales of pump products account for the increase. Year-to-date earnings as of June 30, 2003 were $0.9 million or $0.20 per diluted share, compared to $0.8 million or $0.17 per diluted share before the effect of a change in accounting principle for the six months ended June 30, 2002. "I am pleased that sales for the second quarter and second half increased over 2002 levels," said David R. Little, chairman and chief executive officer. "We are aggressively working to increase sales." "The Company's bank has provided additional operational flexibility by reducing interest rates and extending the maturity of our credit facility. The expiration date of the facility, which has a borrowing capacity of $30 million has been extended two years to April 1, 2006," stated Mac McConnell, chief financial officer. In July 2001, new standards were issued relating to accounting for goodwill. These standards took effect for the Company on Jan. 1, 2002. As result of these new standards the Company recorded a transitional impairment loss of $2.5 million before income taxes ($1.7 million after income taxes). This charge was reported as a cumulative effect of a change in accounting principle in the first quarter of 2002. DXP Enterprises Inc., based in Houston, is a leading distributor of products and services for industrial maintenance, repair, operations and capital equipment projects, and provides engineering expertise and logistics capabilities to industrial customers. DXP also provides fluid handling equipment, bearings, power transmission equipment, general mill supplies, safety supplies and electrical products to customers in the general manufacturing, energy, petrochemical, service and repair, and wood products industries. 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. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) THREE MONTHS ENDED SIX MONTHS ENDED ----------------------------------- JUNE 30, JUNE 30, ----------------- ----------------- 2003 2002 2003 2002 -------- -------- -------- -------- Sales $37,766 $37,159 $75,227 $74,762 Cost of sales 28,226 27,558 56,201 55,534 -------- -------- -------- -------- Gross profit 9,540 9,601 19,026 19,228 Selling, general and administrative expense 8,508 8,545 16,922 17,147 -------- -------- -------- -------- Operating income 1,032 1,056 2,104 2,081 Other income 15 18 37 49 Interest expense (327) (437) (670) (856) -------- -------- -------- -------- Income before income taxes 720 637 1,471 1,274 Provision for income taxes 275 238 558 509 -------- -------- -------- -------- Net income before cumulative effect of a change in accounting principle 445 399 913 765 Cumulative effect of a change in accounting principle -- -- -- (1,729) ----------------------------------- Net income (loss) $445 $399 $913 $(964) =================================== Per share and share amounts before cumulative effect of a change in accounting principle Basic earnings per common share $0.10 $0.09 $0.21 $0.18 ======== ======== ======== ======== Common shares outstanding 4,072 4,072 4,072 4,072 ======== ======== ======== ======== Diluted earnings per share $0.10 $0.09 $0.20 $0.17 ======== ======== ======== ======== Common and common equivalent shares outstanding 4,643 4,572 4,591 4,560 ======== ======== ======== ======== Cumulative effect of a change in accounting principle per share - basic and diluted -- -- -- $(0.42) ======== ======== ======== ======== Basic income (loss) per share $0.10 $0.09 $0.21 $(0.25) ======== ======== ======== ======== Common shares outstanding 4,072 4,072 4,072 4,072 ======== ======== ======== ======== Diluted income (loss) per share $0.10 $0.09 $0.20 $(0.25) ======== ======== ======== ======== Common and common equivalent shares outstanding 4,643 4,572 4,591 4,072 ======== ======== ======== ======== CONTACT: DXP Enterprises Inc., Houston Mac McConnell, 713-996-4700 www.dxpe.com