DXP Enterprises, Inc. (NASDAQ: DXPE) has reported its financial results for the fourth quarter and fiscal year ended December 31, 2023. The company's fiscal 2023 sales amounted to $1.7 billion, marking a notable increase of 13.4% from fiscal 2022. Furthermore, the company achieved solid full-year GAAP diluted earnings per share (EPS) of $3.89 and net income of $68.8 million, compared to $48.2 million in fiscal 2022.
During the fiscal year, the company also managed to refinance its senior secured term loan B, raising $550 million, and repurchased 1.7 million shares for $54.7 million. Additionally, it closed three acquisitions * Florida Valve, Riordan, and Alliance Pump & Mechanical.
In the fourth quarter of 2023, DXP Enterprises saw sales of $407.0 million, up slightly from $406.3 million in the fourth quarter of 2022. The diluted earnings per share for the fourth quarter was $0.94, based on 17.0 million diluted shares, compared to $0.37 per share in the fourth quarter of 2022 based on 19.3 million diluted shares.
Adjusted earnings before interest, taxes, depreciation, and amortization and other non-cash charges ("adjusted EBITDA") for the fourth quarter of 2023 was reported at $41.9 million, marking an increase from $31.6 million for the fourth quarter of 2022. The adjusted EBITDA as a percentage of sales also improved to 10.3%, up from 7.8% in the same period the previous year.
For the fiscal year 2023, the company's adjusted EBITDA amounted to $174.3 million, a significant increase from $126.8 million for 2022. The adjusted EBITDA as a percentage of sales was reported at 10.4%, up from 8.6% in the previous fiscal year.
Moreover, DXP Enterprises' free cash flow for the fiscal year 2023 reached $94.0 million, representing 55.2% of EBITDA, compared to $1.0 million in fiscal 2022.
In terms of business segments, the company's service centers' revenue for the fiscal year was $1.1 billion, showing a 13.4% year-over-year increase with a 14.3% operating income margin. Innovative Pumping Solutions' revenue for the fiscal year was $273.2 million, marking an 18.2% year-over-year increase with a 16.2% operating income margin. Additionally, supply chain services' revenue for the fiscal year amounted to $260.4 million, reflecting an 8.3% year-over-year increase with an 8.3% operating margin.
David R. Little, Chairman, and CEO of DXP Enterprises, expressed his satisfaction with the company's performance, highlighting strong results across all business segments. He also noted the positive sales momentum from the fourth quarter, emphasizing the company's balanced end markets and its ability to execute on acquisitions, which has positioned it for further success in 2024.
In conclusion, Kent Yee, CFO of DXP Enterprises, commented on the company's financial performance, attributing it to end-market diversification efforts, organic growth, continuous improvement in operations and efficiency. He also underscored the company's positioning of its balance sheet to support growth plans in 2024, emphasizing the positive outlook for both organic and acquisition-driven growth.
DXP Enterprises, Inc. is a leading products and service distributor providing value and total cost savings solutions to industrial customers across the United States, Canada, Mexico, and Dubai. The company offers innovative pumping solutions, supply chain services, and maintenance, repair, operating, and production ("MROP") services.
Following these announcements, the company's shares moved 7.3%, and are now trading at a price of $43.01. For more information, read the company's full 8-K submission here.
