Dxp Enterprises, Inc. · NASDAQ:DXPE
Dxp Enterprises — Stephens Inc Fall Investor Conference 2023
21 slides from Dxp Enterprises's conference presentation, Nov 14, 2023
Slide 1: Investor Presentation
Presented by: David Little Chairman, President & CEO Nick Little INVESTOR PRESENTATION Senior Vice President & COO NASDAQ: DXPE Kent Yee NOVEMBER 2023 Senior Vice President & CFO David Santos Vice President & CAO
Slide 2: Safe Harbor and Regulation G Disclosures
SAFE HARBOR AND REGULATION G DISCLOSURES Forward-Looking Statements: Statement Regarding use of Non-GAAP Measures: This presentation contains forward-looking statements within the The Non-GAAP financial measures contained in this presentation meaning of the U.S. federal securities laws that involve
Slide 3: DXP Enterprises… Differentiated Business Model
DXP ENTERPRISES… DIFFERENTIATED BUSINESS MODEL ($ millions) Company Description FY2022 Sales By Segment By End Market By Region1 • Leading technical distributor of maintenance, repair and operating (“MRO”) products and services Other Canada SCS 5% • Operates via 3 segments: Service Centers, 16% 24%
Slide 4: Why DXP: Compelling Investor Value Proposition
WHY DXP: COMPELLING INVESTOR VALUE PROPOSITION 1 2 3 4 5 4 Please refer to the appendix of this presentation for current period reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP measures.
Slide 5: Unique Market Approach Across Three Segments
1 UNIQUE MARKET APPROACH ACROSS THREE SEGMENTS ($ millions) LTM Q3 2023 LTM Q3 2023 LTM Q3 2023 Sales: $1,167 Sales: $246 Sales: $265 Operating Income: $162 Operating Income: $38 Operating Income: $22 Technical expertise and logistics Single source for engineering, modular Manages supply chains incl
Slide 6: Diversified Counter Cyclical End Markets
1 DIVERSIFIED COUNTER CYCLICAL END MARKETS DXP End Market Transformation and Diversification FY2014 FY2019 FY 2022 Other End-markets 34% Oil & Gas Oil & Oil & 30% Gas Gas 66% 43% Other Other End-markets End-markets 57% 70% DXP is a leading player in diverse, growing, and recession-resistant end mark
Slide 7: Comprehensive Product Portfolio with Emphasis on Highly Engineered Solutions
2 COMPREHENSIVE PRODUCT PORTFOLIO WITH EMPHASIS ON HIGHLY ENGINEERED SOLUTIONS DXP Product Divisions1 Safety A breadth of technical products and services. . . . . . Products and Industrial Services Supplies 6% ✓ Single source for engineering, system design, 13% and fabrication of custom pump package
Slide 8: Balanced Strategy Has Accelerated Growth
3 BALANCED STRATEGY HAS ACCELERATED GROWTH Annual Goals Results Recent Acquisitions (2020 – YTD 2023) Date Acquisition Product Division Region • Completing first national pump distribution platform Organic Growth North Remains a Top • SuperCenters – unmatched branch model Nov-23 Alliance Pump & Mech
Slide 9: Healthy Financial Performance Driving Returns
4 HEALTHY FINANCIAL PERFORMANCE DRIVING RETURNS Sales and Gross Margin Diluted Earnings Per Share ($ millions) ($ actuals)* 30.8% 33.0% 28.8% 27.4% 29.5% 30.0% 450 1.2 31.0% 30.0% 29.7% 28.4% 428 400 424 419 28.9% 406 29.0% 387 350 1.06 1 368 0.95 0.93 27.0% 319 300 0.8 289 293 25.0% 250 0.74 0.75 0
Slide 10: Strong Cash Flow Generation Through Cycles
4 STRONG CASH FLOW GENERATION THROUGH CYCLES ($ millions) Free Cash Flow 1 $164 2 Adj. EBITDA 1 $140 $127 $123 $109 $103 $96 $95 $89 $84 $82 $74 $70 $66 $59 $61 $59 $58 $55 $50 $47 $44 $37 $35 $37 $33 $29 $23 $22 $19 $12 $13 $10 $3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202
Slide 11: Capital Allocation Priorities
4 CAPITAL ALLOCATION PRIORITIES 2014 – LTM Q3 2023 Capital Allocation1 Balanced Capital Deployment • Flexible share repurchase 3.7% 1.4% 1.0% 1.8% • Track record of program that allows for 100% sustainable and 3.7% opportunistic buyback of 3.4% 9.8% proactive debt DXP stock management 24.4% 31.6% th
Slide 12: Appendix
APPENDIX
Slide 13: Service Centers Segment
SERVICE CENTERS SEGMENT ($ millions) Segment Description End Markets and Financial Performance • DXP Service Centers provides MRO and OEM products, equipment and services, including FY 2022A Sales by End Market technical expertise and logistics capabilities Other • Serves a diverse customer base in
Slide 14: Innovative Pumping Solutions Segment
INNOVATIVE PUMPING SOLUTIONS SEGMENT ($ millions) Segment Description End Markets and Financial Performance • Provides integrated, custom pump skid packages, pump remanufacturing and private label pumps to FY 2022A Sales by End Market meet customers’ capital equipment needs • Leading single source p
Slide 15: Supply Chain Services Segment
SUPPLY CHAIN SERVICES SEGMENT ($ millions) Segment Description End Markets and Financial Performance • Manages all or part of customer supply chains, including procurement and inventory management FY 2022A Sales by End Market • Provides fully outsourced solutions for sourcing Other MRO products, inc
Slide 16: Q3 Income Statement Highlights
Q3 INCOME STATEMENT HIGHLIGHTS ($ thousands) Prior Yr Prior Qtr Current Qtr Sep 30, 2022 Jun 30, 2023 Sep 30, 2023 Sales $ 387,314 $ 428,040 $ 419,249 % growth - yoy 33.8% 16.4% 8.2% % growth - seq 5.3% 0.9% -2.1% Gross Profit 111,633 131,852 125,562 % margin 28.8% 30.8% 29.9% Operating Income 26,53
Slide 17: Q3 Operating Performance by Segment
Q3 OPERATING PERFORMANCE BY SEGMENT ($ millions) Sales Sales $ Mix OP$ OP% 14.1% $ 294.5 70% $ 41.4 14.1% 5.0 20.0 18.9% 14% $ 58.9 $ 11.2 18.9% 2.0 20.0 8.5% $ 65.8 16% $ 5.6 8.5% 5.0 20.0 Corporate* --- $ (22.3) Total DXP $ 419.2 100% $ 35.9 8.6% 17 *Corporate expense includes amortization of inta
Slide 18: Cash Flow & Working Capital
CASH FLOW & WORKING CAPITAL Prior Qtr Current Qtr Jun 30, 2023 Sept. 30, 2023 NET WORKING CAPITAL ($ millions) GAAP net income $ 19,054 $ 16,173 19.5% Depreciation and amortization 6,703 7,983 20.0% 19.9% 17.9% 18.4% 18.7% 18.2% 17.1% Change in net working capital (27,233) 18,535 15.0% 16.7% 16.1% O
Slide 19: Reconciliation of Operating Income
RECONCILIATION OF OPERATING INCOME ($ thousands) Three Months Ended September 30, 2023 2022 Operating income for reportable segments $58,189 $48,377 Adjustments for: Amortization of intangibles 5,866 5,132 Corporate expenses 16,467 16,706 Total operating income 35,855 26,539 Interest expense 12,684
Slide 20: Reconciliation of Non-GAAP Measures: Income Before Income Taxes to EBITDA and Adjusted EBITDA
RECONCILIATION OF NON-GAAP MEASURES: INCOME BEFORE INCOME TAXES TO EBITDA and ADJUSTED EBITDA ($ thousands) The following table is a reconciliation of EBITDA and adjusted EBITDA, non-GAAP financial measures, to income before income taxes, calculated and reported in accordance with U.S. GAAP. Three M
Slide 21: NASDAQ: DXPE November 2023
NASDAQ: DXPE NOVEMBER 2023 21
DXP Enterprises — Stephens Inc Fall Investor Conference 2023 on 6ix