DXP Enterprises, Inc. (NASDAQ: DXPE) today released
preliminary unaudited selected financial information for its fiscal
quarter ended September 30, 2016. The information that follows is
preliminary and based upon information available as of today. DXP
expects to release its full fiscal quarter results on November 7,
2016.
As of the date of this release, DXP has not completed its
financial close process for the quarter. During the course of that
process, the Company may identify items that would require it to
make adjustments, which may be material, to the information
presented below. As a result, the estimates below constitute
forward-looking information and are subject to risks and
uncertainties, including possible adjustments to preliminary
operating results.
DXP Enterprises 2016 third quarter preliminary financial
highlights:
- Sales are anticipated to be between
$228.0 million and $231.0 million for the third quarter of 2016,
compared to $256.2 million for the second quarter of 2016, a
decrease between 9.8 percent to 11.0 percent. Compared to sales for
the third quarter of 2015 of $303.1 million, this represents a
decrease of between 23.8 percent and 24.8 percent. The above
comparisons include sales from Vertex, which was sold on October 3,
2016.
- Gross profit is anticipated to be
between $62.0 million and $64.0 million, for the third quarter
2016, compared to $71.6 million for the second quarter of 2016 and
$85.7 million in the third quarter of 2015.
- Net income (loss) is anticipated to be
between $(500) thousand to $500 thousand for the third quarter of
2016, compared to $5.1 million for the second quarter of 2016 and
$(52.4) million in the third quarter of 2015 which included a $58.9
million non-cash impairment charge.
- Earnings before interest, taxes,
depreciation and amortization (EBITDA) is anticipated to be between
$11.0 million and $13.0 million for the third quarter 2016,
compared to $16.3 million in the second quarter of 2016 and $11.3
million in the third quarter of 2015.
Preliminary Unaudited Financial
Disclosures
The sales decline in the third quarter is mainly attributable to
softness in July sales. This was driven by bookings and shipments
softening around the days before and after the July 4th holiday
across all three business segments.
David R. Little, Chairman and CEO remarked, “Our third quarter
performance reflects a departure from our recent trends, which was
primarily associated with lagging sales during the month of July.
August and September sales were more in line with average
year-to-date monthly performance. That said, we do expect
seasonality which can be exacerbated by the upcoming holiday
season, the elections, seasonal customer facility shutdowns as well
as the recent sale of Vertex. We are pleased with our cost
containment measures year-to-date. Free cash flow performance, cash
flow from operations less capital expenditures, continues to be in
line with expectations and, along with our recent announcement
regarding Vertex, continues to provide DXP with resiliency. We look
forward to discussing more detailed financial results on our third
quarter earnings call.”
Balance Sheet and
Liquidity
The Company estimates cash and cash equivalents to be
approximately $3.4 million as of September 30, 2016. Total debt is
expected to be approximately $319.3 million as of September 30,
2016, which includes $6.2 million in net proceeds from issuance of
238,858 shares of common stock, during the quarter. Compared to the
second quarter, debt declined by approximately $28.4 million during
the third quarter. After including the payoff of debt associated
with the sale of Vertex, a non-core master distributor of
industrial fasteners, announced on October 4, 2016, total debt was
approximately $286.3 million as of October 14, 2016.
Mac McConnell, CFO added, “We have a goal of continuing to
reduce the amount outstanding under our credit facility and to
improve terms. While we are pleased with our debt reduction
year-to-date, we intend to, from time to time, opportunistically
access the equity or debt capital markets, sell non-core assets,
and engage in prudent liability or capital structure management
transactions. Ultimate terms and the successful pursuit of these
transactions will be, however, dependent in part on prevailing
economic conditions and other factors, including factors beyond our
control.”
We currently expect that our final results will be within the
ranges described above. It is possible, however, that our final
results will not be within the ranges we currently estimate. We
undertake no obligation to update or supplement the information
provided above until we release our results of operations for the
three and nine months ended September 30, 2016. Hein &
Associates LLP, our independent registered public accounting firm,
has not audited, reviewed, compiled or performed any procedures
with respect to this financial data.
We will host a conference call regarding 2016 third quarter
financial results on the Company’s website (www.dxpe.com) Monday,
November 7, 2016 at 9 a.m. CST. 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.
Non-GAAP Financial Measures
DXP supplements reporting of net income (loss) with non-GAAP
measurements, including EBITDA, Adjusted EBITDA and free cash flow.
This supplemental information should not be considered in isolation
or as a substitute for the unaudited GAAP
measurements. Additional information regarding EBITDA referred
to in this press release is included below under "--Reconciliation
of Non-GAAP Measures."
The Company believes EBITDA provides additional information
about: (i) operating performance, because it assists in comparing
the operating performance of the business, as it removes the impact
of non-cash depreciation and amortization expense as well as items
not directly resulting from core operations such as interest
expense and income taxes and (ii) the performance and the
effectiveness of operational strategies. Additionally, EBITDA
performance is a component of a measure of the Company’s financial
covenants under its credit facility. Furthermore, some investors
use EBITDA as a supplemental measure to evaluate the overall
operating performance of companies in the industry. Management
believes that some investors’ understanding of performance is
enhanced by including this non-GAAP financial measure as a
reasonable basis for comparing ongoing results of operations. By
providing this non-GAAP financial measure, together with a
reconciliation from net income, the Company believes it is
enhancing investors’ understanding of the business and results of
operations, as well as assisting investors in evaluating how well
the Company is executing strategic initiatives.
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, Canada, Mexico
and Dubai. 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, metal working, 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. In some cases, you can identify forward-looking
statements by terminology such as, but not limited to, “may,”
“will,” “should,” “intend,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “goal,” or
“continue” or the negative of such terms or other comparable
terminology. For more information, review the Company’s filings
with the Securities and Exchange Commission.
DXP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
($ thousands)
(unaudited)
Three Months
Ended September 30,
2016 2015 Low High
Actual Sales $ 228,000 $ 231,000 $ 303,080
Gross Profit $ 62,000 $ 64,000 $ 85,706
Net Income (loss) attributable to DXPE $ (500 ) $ 500 $
(52,435 ) Interest expense; Provision for income taxes;
Impairments; and Depreciation and amortization 11,500 12,500 63,713
EBITDA $ 11,000
$ 13,000 $ 11,278
**EBITDA – earnings before impairments, interest, taxes,
depreciation and amortization
Nine Months
Ended September 30,
2016 2015 Low
High Actual Sales $ 737,776 $ 740,776 $
968,362 Gross Profit $ 202,421 $ 204,421 $
275,054 Net Income (loss) attributable to DXPE $ (442
) $ 558 $ (35,617 ) Interest expense; Provision for income
taxes; Impairments; and Depreciation and amortization 33,470 34,470
95,969 EBITDA $
33,028 $ 35,028 $ 60,352
**EBITDA – earnings before impairments, interest, taxes,
depreciation and amortization
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161019006413/en/
DXP Enterprises, Inc.Mac McConnell, 713-996-4700Senior Vice
President, Finance & CFOwww.dxpe.com
DXP Enterprises (NASDAQ:DXPE)
Historical Stock Chart
From Mar 2024 to Apr 2024
DXP Enterprises (NASDAQ:DXPE)
Historical Stock Chart
From Apr 2023 to Apr 2024