DXP Accelerated Sales Growth as Pumping Business Expanded
Adjusted EBITDA reached a record $70.4 million as margins widened.
DXP Enterprises (DXPE), an industrial-products distributor, posted 15.6% second-quarter sales growth as its pumping business gained momentum and profitability improved.
Sales growth accelerated from 9.5% in the first quarter and 8.6% in the third quarter of 2024. Organic sales rose 11.1%, while revenue from acquisitions more than doubled to $49.8 million from $24.6 million.
Revenue increased to $576.5 million from a year earlier and rose 10.5% sequentially. Net income climbed 21.6% to $28.7 million, reversing the prior quarter’s year-over-year decline, while diluted earnings rose to $1.76 a share from $1.43 and $1.22 in the first quarter.
Innovative Pumping Solutions drove the expansion, with revenue climbing 52.6% to $142.7 million. Growth accelerated from 37.7% in the first quarter, and the segment’s operating margin widened to 18.7% from 18.3%.
Service Centers revenue rose 8.3% to $367.9 million, picking up from 3.3% growth in the first quarter, while its operating margin held at 14.7%. Supply Chain Services revenue increased 0.6% to $65.8 million, and its operating margin remained at 9.9%.
The stronger segment mix lifted adjusted EBITDA margin to 12.2% from 11.5% a year earlier and 11.1% in the first quarter. That marked a break from the roughly 11.0% to 11.2% range maintained over the previous three quarters.
Free cash flow increased to $29.8 million from $8.3 million a year earlier, bringing first-half cash flow to $56.0 million. DXP completed four acquisitions through the quarter and expects more in the second half, supported by a revolving-credit facility whose commitments were increased $40 million to $225 million.