DXP Enterprises Announces Second Quarter Results

DXP Enterprises, Inc. (NASDAQ:DXPE) today announced net income of $6,373,000 for the second quarter ended June 30, 2008, with diluted earnings per share of $.93 compared to net income of $3,417,000 and diluted earnings per share of $.56 for the second quarter of 2007. Sales increased 120.1% to $187.8 million from $85.3 million for the second quarter of last year. Excluding second quarter 2008 sales of $76.1 million from businesses acquired in 2007 and 2008, sales for the 2008 second quarter increased 30.9% from the 2007 second quarter. Net income for the six months ended June 30, 2008 was $11,812,000, with diluted earnings per share of $1.73 compared to net income of $7,144,000 and diluted earnings per share of $1.20 for the first half of 2007. Sales increased 110.9% to $356.3 million from $169.0 million for the first half of 2007. Excluding first half 2008 sales of $149.7 million from businesses acquired in 2007 and 2008, sales for the first half of 2008 increased 22.3% from the 2007 first half. David R. Little, Chairman and Chief Executive Officer said, "We continue to execute our three-pronged growth strategy of organic growth, operational efficiencies and acquisitions. Our performance of organic growth of 31% and earnings per share growth of 66% illustrates that our execution is gaining market share and creating value for our shareholders. With our ability to enhance profits and grow the companies we acquire plus the opportunities we have for growth through Super Centers, Innovative Pumping Solutions and Supply Chain Solutions our outlook remains strong.” Mac McConnell, Senior Vice President and Chief Financial Officer said, "I am very pleased that DXP’s working capital has increased $15.9 million at June 30, 2008 from December 31, 2007 and earnings before interest, income taxes, depreciation and amortization ("EBITDA”) for the twelve months ended June 30, 2008 are $49.4 million. These measures have increased the availability of funds under our line of credit for future growth.” DXP Enterprises, Inc. is a leading products and service distributor focused on adding 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 its supply chain needs to DXP, so the customer can focus on its 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. DXP ENTERPRISES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)     Three Months Ended Six Months Ended June 30, June 30, 2008   2007 2008   2007 Sales $ 187,802   $ 85,323 $ 356,301 $ 168,954 Cost of sales   135,926       60,812     258,479     119,506   Gross profit 51,876 24,511 97,822 49,448 Selling, general and administrative expense   40,391     18,416     75,769     36,647   Operating income 11,485 6,095 22,053 12,801 Other income 27 81 40 99 Interest expense   (1,176 )     (517 )   (2,559 )   (1,107 ) Income before income taxes 10,336 5,659 19,534 11,793 Provision for income taxes   3,963       2,242     7,722     4,649   Net income 6,373 3,417 11,812 7,144 Preferred stock dividend   (23 )     (22 )   (45 )   (45 ) Net income attributable to common shareholders $ 6,350     $ 3,395   $ 11,767   $ 7,099     Basic income per share $ 1.00     $ 0.61   $ 1.86   $ 1.32   Weighted average common shares outstanding   6,325       5,600     6,324     5,366   Diluted income per share $ 0.93     $ 0.56   $ 1.73   $ 1.20   Weighted average common and common equivalent shares outstanding     6,846       6,111     6,840     5,936     Unaudited Reconciliation of Non-GAAP Financial Information   The following table is a reconciliation of EBITDA*; a non-GAAP financial measure, to income before income taxes, calculated and reported in accordance with U.S. GAAP;     Three Months Ended June 30, Six Months Ended June 30, 2008   2007 2008   2007 Income before income taxes $ 10,336 $ 5,659 $ 19,534 $ 11,793 Plus interest expense 1,176 517 2,559 1,107 Plus depreciation and amortization   2,286   1,060   4,496   1,488 EBITDA $ 13,798 $ 7,236 $ 26,589 $ 14,388   *EBITDA – earnings before interest, taxes, depreciation and amortization