Zeev I'm in DXPE 13.70 -3.41 on nice earnings today with the CEO saying the rest of '05 and '06 look strong: DXP Enterprises Announces Third Quarter Results
Wednesday October 26, 4:15 pm ET
Net Income Increases 43%
HOUSTON--(BUSINESS WIRE)--Oct. 26, 2005--DXP Enterprises, Inc. (NASDAQ:DXPE - News) today announced a 43% increase in net income to $1,061,000 for the third quarter ending September 30, 2005, with diluted earnings per share of $.18 compared to net income of $743,000 and diluted earnings per share of $.13 for the third quarter of 2004. Sales increased 1.2% to $43.4 million from $42.9 million for the third quarter of 2004. Gross profit increased 15.2% from the third quarter of 2004.
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Year-to-date earnings as of September 30, 2005 increased 59% to $3.4 million, or $0.59 per diluted share, compared to $2.1 million, or $0.39 per diluted share for the first nine months of 2004. Sales increased 6.3% to $130.6 million from $122.8 million for the first nine months of 2004. Gross profit for the first nine months of 2005 increased 17.1% compared to the same period in 2004.
"Results for the third quarter of 2005 were up substantially from last year despite being negatively impacted by two major hurricanes which struck the U. S. Gulf Coast during August and September", said Mac McConnell, Senior Vice President and Chief Financial Officer. "As a result of the hurricanes, our New Orleans service center was closed for approximately four weeks and 17 of our locations, including the corporate office, were closed for two to six business days. The operations of many of our customers were down for longer periods which disrupted our sales. We feel fortunate that our facilities sustained little damage. The cost of physical damage, relocation of inventory and employee assistance amounted to approximately $200,000 in additional expenses."
David R. Little, Chairman and Chief Executive Officer said, "The devastation of these two major hurricanes disrupted our sales and increased expenses but we are thankful that these losses were not considerably greater. Shortly after hurricane Katrina, we directed our sales team to engage our customers by identifying their strategy to repair and rebuild. This direct involvement with our onshore, offshore and petrochemical customer base has already had a significant impact on short term and long term orders. When hurricane Rita turned our direction, we were ready to proactively plan with our customers. This proactive strategy has had an immediate result in orders and customer satisfaction. The outlook for DXP is strong for the remainder of 2005 through 2006 as our customers rebuild and come back on line."
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to MRO and OEM customers in virtually every industry since 1908. DXP provides innovative pumping solutions, integrated supply and MROP (maintenance, repair, operating and production) services that emphasize and utilize DXP's vast product knowledge and technical expertise in pumps, bearings, power transmission, seals, hose, safety, fluid power, electrical and industrial supplies. 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 innovative pumping solutions provide engineering, fabrication and technical design to meet the capital equipment needs of its global customer base. DXP provides solutions by utilizing manufacturer authorized equipment and certified personnel. Pump packages require MRO and OEM equipment such as pumps, motors and valves, and consumable products. DXP leverages its MROP inventories and technical knowledge to lower the total cost and maintain the quality of the pump package.
SmartSource, a DXP integrated supply program, allows a more efficient way to manage the customer's supply chain needs for MROP products. The program allows the customer to transfer all or part of their supply chain needs to DXP, so the customer can focus on his core business. SmartSource effectively lowers costs by outsourcing purchasing, accounting, and on-site supply management to DXP, which reduces the duplication of effort by the customer and supplier. DXP's broad range of first-tier products provides an efficient measurable solution to reduce cost and streamline procurement and sourcing operations.
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. For more information, review the Company's filings with the Securities and Exchange Commission.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
September 30 September 30
-------------------- --------------------
2005 2004 2005 2004
---------- ------------------- ----------
Sales $43,378 $42,871 $130,630 $122,836
Cost of sales 31,927 32,928 95,966 93,222
---------- --------- --------- ----------
Gross profit 11,451 9,943 34,664 29,614
Selling, general and
administrative expense 9,618 8,563 28,813 25,647
---------- --------- --------- ----------
Operating income 1,833 1,380 5,851 3,967
Other income 9 11 36 40
Interest expense (216) (233) (733) (667)
Minority interest in loss of
consolidated subsidiary 29 - 126 -
---------- --------- --------- ----------
Income before taxes 1,655 1,158 5,280 3,340
Provision for income taxes 594 415 1,888 1,205
---------- --------- --------- ----------
Net income 1,061 743 3,392 2,135
Preferred stock dividend 23 23 68 68
---------- --------- --------- ----------
Net income attributable to
common shareholders $1,038 $720 $3,324 $2,067
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Basic income per share $0.24 $0.18 $0.79 $0.51
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Weighted average common
shares outstanding 4,452 4,015 4,213 4,025
========== ========= ========= ==========
Diluted income per share $0.18 $0.13 $0.59 $0.39
========== ========= ========= ==========
Weighted average common and
common equivalent shares
outstanding 5,895 5,531 5,792 5,488
========== ========= ========= ==========
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Contact:
DXP Enterprises, Inc., Houston
Mac McConnell, 713-996-4700
www.dxpe.com
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Source: DXP Enterprises, Inc.
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