DXP Enterprises Completes Acquisition of Turbo Machinery Repair, Inc.
February 06 2020 - 8:00AM
Business Wire
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced the
completion of the acquisition of Turbo Machinery Repair, Inc.
(“Turbo”), a leading pump and industrial equipment repair,
maintenance, machining and labor services company. DXP funded the
acquisition with cash on the balance sheet.
Founded in 1986, Turbo is headquartered and operates out of a
single location in Richmond, California. Turbo is focused on
serving customers in the chemical, water/wastewater, municipal,
power and general industrial markets with approximately 23
employees.
Financial terms of the transaction were not disclosed. Signing
of the definitive agreement occurred on January 31, 2020. Sales and
adjusted EBITDA were approximately $4 million and $750 thousand,
respectively. Adjusted EBITDA was calculated as income before tax,
plus interest, depreciation and amortization, and non-recurring
items that will not continue after the completion of the
acquisition.
David R. Little, Chairman and CEO remarked, “We are pleased to
welcome the Turbo employees to the DXP team. Turbo is a unique,
well-run business focused on providing value-added service and
repair capabilities to its customers. Turbo will provide DXP’s
Rotating Equipment division with new geographic territory and
enhance DXP’s end market mix. Turbo is a great company with key
differentiators and provides us with high caliber people.”
Kent Yee, CFO added, “We are excited to welcome the talented and
hardworking employees of Turbo to the DXP team. Turbo is our second
acquisition this year and is another exciting addition to DXP.
Turbo provides us with a strong pump repair facility in Northern
California and complements our 2015 acquisition of Cortech. Turbo
complements and diversifies DXP’s products and services and end
market exposure. This transaction will be positive for Turbo and
DXP’s customers, employees and shareholders.”
Non-GAAP Financial Measures
DXP supplements reporting of net income 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 "--Unaudited Reconciliation of Non-GAAP
Financial Information."
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200206005241/en/
Kent Yee Senior Vice President CFO 713-996-4700 –
www.dxpe.com
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