What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 191 added, 164 removed, 292 unchanged (55% of the section changed)

5 unchanged sentences

(in thousands, except per share amounts) (unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Sales $ 476,569 $ 412,635

4 unchanged sentences

Interest expense 14,660 15,544

15,716 12,684 46,644 36,068

Other expense (income), net (Note 15)

Other income, net (Note 15)

( 1,318 ) ( 1,968 )

1 unchanged sentence

Provision for income taxes 6,584 4,223

2,631 5,766 13,165 19,339

Net income 20,589 11,332

15 unchanged sentences

(in thousands, except share amounts) (unaudited)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets:

36 unchanged sentences

Common stock, $ 0.01 par value, 100,000,000 shares authorized;

15,694,883 and 16,177,237 outstanding, respectively

20,402,063 issued and 15,694,290 outstanding at March 31, 2025 and 20,402,861 issued and 15,695,088 outstanding at December 31, 2024

Additional paid-in capital 220,702 219,511

11 unchanged sentences

(in thousands) (unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Amortization of intangibles and fixed assets

17,564 15,206

(Recovery of) provision for credit losses

( 783 ) ( 277 )

Amortization of debt issuance costs 965 895

Gain on sale of property and equipment ( 325 ) —

Recovery of credit losses ( 1,322 ) ( 1,200 )

Payment of contingent consideration liability in excess of acquisition-date fair value — ( 17 )

Fair value adjustment on contingent consideration 183 ( 194 )

Amortization of debt issuance costs 2,678 2,176

Restricted stock compensation expense 1,317 864

Deferred income taxes 3,943 ( 3,056 )

Other non-cash items ( 6,100 ) ( 1,246 )

Changes in operating assets and liabilities, net of effects of businesses acquired:

Accounts receivable, net

( 12,325 ) 2,295

Accounts receivable ( 13,202 ) 8,993

Costs and estimated profits in excess of billings 2,893 7,052

Accounts payable and accrued expenses 16,622 12,868

Prepaid expenses and other assets 2,848 16,583

Inventories ( 3,525 ) 754

Prepaid expenses and other assets ( 2,369 ) ( 2,667 )

Accounts payable

6,505 ( 6,811 )

Accrued expenses

( 3,569 ) ( 892 )

Billings in excess of costs and estimated profits 6,764 ( 1,301 )

Other long-term liabilities ( 1,925 ) ( 7,261 )

Income taxes ( 18,908 ) 6,945

Net cash provided by operating activities $ 2,973 $ 26,989

1 unchanged sentence

Purchase of property and equipment ( 19,914 ) ( 2,894 )

Proceeds from the sale of property and equipment 2,699 —

Acquisition of businesses, net of cash acquired ( 12,850 ) ( 39,261 )

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings on asset-backed credit facility 6,000 7,870

Repayments on asset-backed credit facility ( 6,000 ) ( 7,870 )

Repayments under term loan facility ( 4,125 ) ( 3,276 )

Principal debt payments ( 1,624 ) ( 1,375 )

Debt issuance costs ( 125 ) —

Shares repurchased held in treasury — ( 14,815 )

Payment for acquisition contingent consideration liability ( 3,820 ) ( 983 )

Preferred stock dividends paid ( 23 ) ( 23 )

Shares repurchased held in treasury ( 28,783 ) ( 56,215 )

Payment for employee taxes withheld from stock awards ( 126 ) ( 54 )

12 unchanged sentences

(in thousands) (unaudited)

Series A preferred stock Series B preferred stock Common stock Paid-in capital Retained earnings Treasury stock Accum other comp loss Total equity

Series A preferred stock Series B preferred stock Common stock Paid-in capital Retained earnings Accum other comp loss Treasury Stock Total equity

Balance at December 31, 2024 $ 1 $ 15 $ 204 $ 219,511 $ 389,670 $ ( 33,610 ) $ ( 153,003 ) $ 422,788

4 unchanged sentences

Currency translation adjustment — — — — — 86 — 86

Repurchases of shares — — — — — ( 16,920 ) — ( 16,920 )

Excise tax on share repurchases — — — — — — 28 28

— — — — 20,589 — — 20,589

Balance at March 31, 2025 $ 1 $ 15 $ 204 $ 220,702 $ 410,236 $ ( 33,524 ) $ ( 152,975 ) $ 444,659

Preferred dividends paid — — — — ( 22 ) — — ( 22 )

Compensation expense for restricted stock

— — — 1,212 — — — 1,212

Tax related items for share based awards — — — ( 1,701 ) — — — ( 1,701 )

Currency translation adjustment — — — — — — 93 93

Repurchases of shares — — — — — ( 7,058 ) — ( 7,058 )

— — — — 16,693 — — 16,693

Balance at June 30, 2024 $ 1 $ 15 $ 345 $ 216,803 $ 347,251 $ ( 147,973 ) $ ( 31,761 ) $ 384,681

Preferred dividends paid — — — — ( 23 ) — — ( 23 )

Compensation expense for restricted stock

— — — 1,322 — — — 1,322

Tax related items for share based awards — — — ( 63 ) — — — ( 63 )

Currency translation adjustment — — — — — — 380 380

Repurchases of shares — — — — — ( 5,030 ) — ( 5,030 )

Net income — — — — 21,101 — — 21,101

Balance at September 30, 2024 $ 1 $ 15 $ 345 $ 218,062 $ 368,329 $ ( 153,003 ) $ ( 31,381 ) $ 402,368

Series A preferred stock Series B preferred stock Common stock Paid-in capital Retained earnings Treasury stock Accum other comp loss Total equity

Series A preferred stock Series B preferred stock Common stock Paid-in capital Retained earnings Accum other comp loss Treasury Stock Total equity

Balance at December 31, 2023 $ 1 $ 15 $ 345 $ 216,482 $ 319,271 $ ( 31,240 ) $ ( 123,995 ) $ 380,879

4 unchanged sentences

Repurchases of shares — — — — — — ( 16,805 ) ( 16,805 )

Excise tax on share repurchases — — — — — — ( 115 ) ( 115 )

— — — — 11,332 — — 11,332

Balance at March 31, 2024 $ 1 $ 15 $ 345 $ 217,292 $ 330,580 $ ( 31,854 ) $ ( 140,915 ) $ 375,464

Preferred dividends paid — — — — ( 22 ) — — ( 22 )

Restricted stock compensation expense — — — 871 — — — 871

Tax related items for share based awards — — — ( 328 ) — — — ( 328 )

Currency translation adjustment — — — — — — 659 659

Repurchases of shares — — — — — ( 25,053 ) — ( 25,053 )

— — — — 19,054 — — 19,054

Balance at June 30, 2023 $ 1 $ 15 $ 345 $ 214,852 $ 287,138 $ ( 101,968 ) $ ( 30,918 ) $ 369,465

Preferred dividends paid — — — — ( 22 ) — — ( 22 )

Restricted stock compensation expense — — — 864 — — — 864

Tax related items for share based awards — — — ( 32 ) — — — ( 32 )

Currency translation adjustment — — — — — — ( 844 ) ( 844 )

Repurchases of shares — — — — — ( 22,027 ) — ( 22,027 )

— — — — 16,172 — — 16,172

Balance at September 30, 2023 $ 1 $ 15 $ 345 $ 215,684 $ 303,288 $ ( 123,995 ) $ ( 31,762 ) $ 363,576

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

20 unchanged sentences

Such reclassifications did not have a material effect on our consolidated statements of operations and comprehensive income, balance sheets, cash flows or equity.

The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of results expected for the full fiscal year.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of results expected for the full fiscal year.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company's financial position, results of operations and cash flows for the interim periods presented.

1 unchanged sentence

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”).

ASUs not listed within this Quarterly Report on Form 10-Q were assessed and determined as either not applicable or not material to the Company’s consolidated financial position or result of operations.

Recent Accounting Standards or Updates Not Yet Effective

Segment Reporting In November 2023, the FASB issued an accounting standard update that expands the disclosure requirements for reportable segments, primarily through enhanced disclosures around significant segment expenses.

The accounting standard update will be effective for our fiscal 2024 Form 10-K on a retrospective basis, and early adoption is permitted.

We are currently evaluating the impact of this accounting standard update on our segment disclosures.

Improvements on Income Tax Disclosures In December 2023, the FASB issued an accounting standard update expanding the requirements for disclosure of disaggregated information about the effective tax rate reconciliation and income taxes paid.

The accounting standard update will be effective for our fiscal 2025 Form 10-K.

We are currently evaluating the impact of this accounting standard update on our income tax disclosures.

All new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40).

The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions.

This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses.

The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements.

Early adoption is also permitted.

This ASU would result in additional disclosures being included in our consolidated financial statements, once adopted.

We are currently evaluating the provisions of this ASU.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted.

We are currently evaluating the provisions of this ASU.

NOTE 4 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

5 unchanged sentences

Changes in the fair value of the contingent consideration are measured each reporting period and reflected in our results of operations.

During the nine months ended September 30, 2024, we recorded $ 11.3 million in other current and other long-term liabilities for contingent consideration associated with the recent acquisitions.

The following table provides a reconciliation of the beginning and ending balances and gains or losses recognized during the nine months ended September 30, 2024 ( in thousands ):

As of March 31, 2025, there was $ 12.7 million in other current and other long-term liabilities for contingent consideration associated with the recent acquisitions.

See further discussion at Note 1 2 - Business Acq uisitions .

The following table provides a reconciliation of the beginning and ending balances and gains or losses recognized during the three months ended March 31, 2025 ( in thousands ):

Contingent Consideration

*Beginning balance at December 31, 2024 $ 16,322

Acquisitions and settlements:

Acquisitions ( Note 12 )

2 unchanged sentences

Changes in fair value recorded in other expense (income), net

*Ending Balance at September 30, 2024 $ 15,751

*Amounts included in other current liabilities were $ 7.5 million and $ 5.4 million for the periods ending September 30, 2024 and December 31, 2023, respectively.

Amounts included in other long-term liabilities were $ 8.3 million and $ 3.4 million for the periods ending September 30, 2024 and December 31, 2023, respectively.

*Ending Balance at March 31, 2025 $ 12,685

*Amounts included in other current liabilities were $ 7.2 million and $ 8.0 million for the periods ending March 31, 2025 and December 31, 2024, respectively.

Amounts included in other long-term liabilities were $ 5.5 million and $ 8.3 million for the periods ending March 31, 2025 and December 31, 2024, respectively.

Sensitivity to Changes in Significant Unobservable Inputs

2 unchanged sentences

Changes in our unobservable inputs in isolation would result in a change to our fair value measurement.

As of September 30, 2024, the maximum amount of contingent consideration payable under these arrangements is $ 18.2 million over three years .

Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at September 30, 2024 and December 31, 2023, but which require disclosure of their fair values include:

As of March 31, 2025, the maximum amount of contingent consideration payable under these arrangements is $ 14.5 million over three years .

Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at March 31, 2025 and December 31, 2024, but which require disclosure of their fair values include:

cash, restricted cash, accounts receivable, trade accounts payable and accrued expenses.

The Company believes that the estimated fair value of such instruments at September 30, 2024 and December 31, 2023 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets due to the relative short maturity of these instruments.

The Company believes that the estimated fair value of such instruments at March 31, 2025 and December 31, 2024 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets due to the relative short maturity of these instruments.

See Note 8 - Long-term Debt for fair value disclosures on our asset-backed line of credit and term loan debt under our syndicated credit agreement facilities.

3 unchanged sentences

The carrying values of inventories are as follows ( in thousands ):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Finished goods $ 93,859 $ 89,780

6 unchanged sentences

Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Costs incurred on uncompleted contracts $ 132,231 $ 122,951

3 unchanged sentences

Net $ 28,065 $ 38,073

Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for September 30, 2024 and December 31, 2023 under the following captions ( in thousands ):

September 30, 2024 December 31, 2023

Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2025 and December 31, 2024 under the following captions ( in thousands ):

March 31, 2025 December 31, 2024

Costs and estimated profits in excess of billings $ 47,844 $ 50,735

Billings in excess of costs and estimated profits ( 19,779 ) ( 12,662 )

Translation adjustment ( 2 ) ( 3 )

Net $ 28,065 $ 38,073

During the nine months ended September 30, 2024 and 2023, $ 5.3 million and $ 10.0 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues, respectively.

During the three months ended March 31, 2025 and 2024, $ 5.1 million and $ 1.4 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues, respectively.

Contract asset and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.

1 unchanged sentence

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur.

Our effective tax rate from continuing operations was a tax expense of 11.1 percent for the three months ended September 30, 2024 compared to a tax expense of 26.3 percent for the three months ended September 30, 2023.

Compared to the U.S.

statutory rate for the three months ended September 30, 2024, the effective tax rate was decreased by research and development tax credits and other tax credits and partially offset by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits.

Our effective tax rate from continuing operations was a tax expense of 21.1 percent for the nine months ended September 30, 2024, compared to a tax expense of 26.8 percent for the nine months ended September 30, 2023.

Our effective tax rate from continuing operations was a tax expense of 24.2 percent for the three months ended March 31, 2025 compared to a tax expense of 27.2 percent for the three months ended March 31, 2024.

Compared to the U.S.

statutory rate for the nine months ended September 30, 2024, the effective tax rate was decreased by research and development tax credits and other tax credits and partially offset by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits.

statutory rate for the three months ended March 31, 2025, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, and uncertain tax positions recorded for research and development tax credits and partially offset by research and development tax credits and other tax credits.

To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts would be classified as a component of income tax provision (benefit) in the financial statements consistent with the Company’s policy.

1 unchanged sentence

A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024.

As of September 30, 2024, DXP anticipates the impact of Pillar Two to be immaterial to the Company based on current legislation that has been enacted to date.

As of March 31, 2025, DXP anticipates the impact of Pillar Two to be immaterial to the Company based on current legislation that has been enacted to date.

NOTE 8 – LONG-TERM DEBT

The components of the Company's long-term debt consisted of the following ( in thousands ):

September 30, 2024 December 31, 2023

Long-term debt consisted of the following ( in thousands ):

March 31, 2025 December 31, 2024

ABL Revolver $ — $ —

Senior Secured Term Loan B due October 13, 2030 (1)

Amended Senior Secured Term Loan B due October 13, 2030 (1)

646,253 647,876

Promissory Note due November 1, 2029 1,000 1,000

647,253 648,876

7 unchanged sentences

$ 620,901 $ 621,684

(1) The fair value of the Term Loan B due October 13, 2030 was $ 547.9 million and $ 554.1 million as of September 30, 2024 and December 31, 2023, respectively.

(1) The fair value of the Amended Term Loan B due October 13, 2030 using level 2 input values was $ 645.4 million and $ 657.6 million as of March 31, 2025 and December 31, 2024, respectively.

Senior Secured Term Loan B:

On October 3, 2024, the Company entered into an amendment on its existing Senior Secured Term Loan B (the “Term Loan Amendment”), which provides for, among other things, an additional $ 105.0 million in new incremental commitments.

The Term Loan Amendment refinanced the existing Senior Term Loan B and replaced it with a new Senior Secured Term Loan B with total borrowings of $ 550.0 million.

The new Senior Secured Term Loan B amortizes in equal quarterly installments of 0.25 %, with the remaining balance being payable on October 13, 2030, when the facility matures.

Deferred financing costs associated with the Term Loan Amendment were $ 11.7 million, which is being amortized to Interest expense using the interest method over the remaining maturity of the Senior Secured Term Loan B.

The interest rate for the Senior Secured Term Loan B was 10.16 % and 10.44 % as of September 30, 2024 and December 31, 2023, respectively.

In connection with the Term Loan Amendment the Company expensed third-party fees of $ 0.8 million and recognized a $ 1.2 million loss on debt extinguishment, which were included in Interest expense during 2023.

Quarterly interest payments accrue on outstanding borrowings under the new Senior Secured Term Loan B at a rate equal to Term SOFR (with a floor of 1.00 %) plus 4.75 %, or base rate plus 3.75 %.

The new Senior Secured Term Loan B is guaranteed by each of the Company’s direct and indirect material wholly owned subsidiaries, other than any of the Company’s Canadian subsidiaries and certain other excluded subsidiaries.

As of September 30, 2024 there was $ 544.5 million outstanding under the Senior Secured Term Loan B.

The Company was in compliance with all financial covenants as of September 30, 2024.

The Term Loan Amendment refinanced the existing Senior Term Loan B and replaced it with an Amended Senior Secured Term Loan B with total borrowings of $ 649.5 million.

The Senior Secured Term Loan B amortizes in equal quarterly installments of 0.25 %, with the remaining balance being payable on October 13, 2030, when the facility matures.

As of March 31, 2025 there was $ 646.3 million outstanding under the Amended Senior Secured Term Loan B.

Interest rate

The interest rate for the Amended Senior Secured Term Loan B was 8.07 % and 8.32 % as of March 31, 2025 and December 31, 2024, respectively.

Facility Size Increases

The Senior Secured Term Loan B allows for incremental increases in facility size up to an aggregate of $ 100 million.

We are required to repay the Senior Secured Term Loan B with the proceeds from certain asset sales, certain debt issuances, and certain insurance proceeds.

In addition, on an annual basis, we are required to repay an amount equal to 50 % of excess cash flow, as defined in the Senior Secured Term Loan B, reducing to 25 % if our Total Leverage Ratio is less than or equal to 3.00 to 1.00.

No payment of excess cash flow is required if the Total Leverage Ratio is less than or equal to 2.50 to 1.00.

Restrictive Covenants

The Company’s primary financial covenant under the Term Loan B is a Secured Leverage Ratio, The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio as of March 31, 2025 to be less than 5.75 to 1.00.

As of March 31, 2025, the Company’s Secured Leverage Ratio was 2.50 to 1.00.

ABL Revolver:

4 unchanged sentences

Fees payable on the unused portion of the facility range from 0.25 % to 0.375 % per annum.

At September 30, 2024 the unused line fee was 0.375 % and there were no amounts outstanding under the ABL Revolver.

As of September 30, 2024, the borrowing availability under our credit facility was $ 131.6 million compared to $ 132.1 million at December 31, 2023, primarily as a result of outstanding letters of credit.

The interest rate for the ABL Revolver was 8.25 % and 8.75 % as of September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands ):

At March 31, 2025 the unused line fee was 0.375 % and there were no amounts outstanding under the ABL Revolver.

Each of our current and future wholly owned material U.S.

subsidiaries and DXP Enterprises, Inc.

guarantees the obligations of our borrower under the ABL Revolver.

Additionally, each of our Canadian subsidiaries guarantees the obligations of our Canadian borrower subsidiaries under the ABL Revolver.

Obligations under the U.S.

Borrowing Base are primarily secured, subject to certain exceptions, by a first-priority secure interest in the accounts receivable, inventory and related assets of our wholly owned, material U.S.

subsidiaries.

The security interest in accounts receivable, inventory, and related assets of the U.S.

borrower subsidiaries ranks prior to the security interest in this collateral which secures the Term Loan B.

The obligations under the Canadian Borrowing Base are primarily secured, subject to certain exceptions, by a first-priority secure interest in the accounts receivable, inventory and related assets of our wholly owned, material Canadian subsidiaries and our wholly owned material U.S.

subsidiaries.

Excess Availability

The borrowing availability under our credit facility was $ 108.9 million and $ 125.6 million at March 31, 2025 and December 31, 2024, respectively.

Interest rate

The interest rate for the ABL Revolver was 7.75 % and 7.75 % as of March 31, 2025 and December 31, 2024, respectively.

Facility Size Increases

The ABL Credit Agreement allows for incremental increases in facility size up to an aggregate of $ 50 million.

Financial Covenant

The Company's principal financial covenant under the ABL Credit Agreement include a Fixed Charge Coverage Ratio.

The Fixed Charge Coverage Ratio under the ABL Credit Agreement is defined as the ratio for the most recently completed four-fiscal quarter period, of (a) EBITDA minus capital expenditures (excluding those financed or funded with debt (other than the ABL Loans), (ii) the portion thereof funded with the net proceeds from asset dispositions of equipment or real property which the Company is permitted to reinvest pursuant to the Term Loan and the portion thereof funded with the net proceeds of casualty insurance or condemnation awards in respect of any equipment and real estate which DXP is not required to use to prepay the ABL Loans pursuant to the Term Loan B Agreement or with the proceeds of casualty insurance or condemnation awards in respect of any other property) minus cash taxes paid (net of cash tax refunds received during such period), to (b) fixed charges.

The Company is restricted from allowing its fixed charge coverage ratio be less than 1.00 to 1.00 during a compliance period, which is triggered when the availability under the ABL Revolver falls below a threshold set forth in the ABL Credit Agreement.

As of March 31, 2025, the Company's Fixed Charge Coverage Ratio was 1.88 to 1.00.

The Company was in compliance with all financial covenants as of March 31, 2025.

As of March 31, 2025, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands ):

Thereafter 615,402

4 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Basic earnings per share:

14 unchanged sentences

Per share amount $ 1.25 $ 0.67

As of March 31, 2025 and 2024, the weighted average of the unvested restricted stock awards ("RSAs") were 302,647 and 296,425 shares, respectively.

The preferred stock is convertible into 840,000 shares of common stock.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

NOTE 11 - SEGMENT REPORTING

The Company's reportable business segments are:

Service Centers ("SC"), Innovative Pumping Solutions ("IPS"), and Supply Chain Services ("SCS").

The Service Centers segment is engaged in providing MRO products, equipment and integrated services, including logistics capabilities, to business-to-business customers.

The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, industrial supply, safety products and safety services categories.

We have three reportable and operating segments:

Service Centers, Innovative Pumping Solutions and Supply Chain Services.

The Service Centers segment is engaged in providing maintenance, MRO products and equipment, including logistics capabilities, to industrial customers.

The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products and safety services categories.

The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, re-manufactures pumps, manufactures branded private label pumps, and provides products and process lines for the water and wastewater treatment industries.

The Supply Chain Services segment provides a wide range of MRO products and manages all or part of a customer's supply chain, including warehouse and inventory management.

Sales are shown net of inter-segment eliminations.

Our chief operating decision maker ("CODM") is the Chief Executive Officer.

The Company's CODM directs the allocation of resources to operating or business segments based on revenue and operating income of each respective segment.

Sales are shown net of intersegment eliminations.

Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions.

These segments were determined primarily on the distribution channels of the products and services offered and the nature of the customer markets and the primary driver of the customers spend.

The Company's CODM directs the allocation of resources to these segments based upon historical and current revenue, direct operating expenses, operating income, and capital expenditures of each respective segment.

The allocation of resources across these segments is dependent upon, among other factors, the segments' historical or future expected operating margins;

the segments' historical or future expected returns on capital;

outlook within a specific market;

opportunities to grow profitability;

new products, services or new customer accounts;

confidence in management;

and competitive landscape and intensity.

As a part of the Company's annual business planning, the CODM reviews our reportable segment composition and financial performance.

As a result of this review, on January 1st, 2025, we moved certain branch locations previously reported under our IPS segment to our SC segment.

Prior period segment disclosures have been recast.

Prior period segment information has not been recast, as the changes to our segment composition did not have a material impact on the operating results of our reportable segments.

The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ):

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31, Service Centers Innovative Pumping Solutions Supply Chain Services Total

Total Revenue $ 327,075 $ 86,182 $ 63,312 $ 476,569

Operating income for reportable segments

47,045 13,406 5,564 66,015

Service Centers $ 316,831 $ 294,459 $ 911,783 $ 914,078

Innovative Pumping Solutions 89,825 58,962 225,417 158,440

Supply Chain Services 66,279 65,828 193,926 199,038

Total Sales $ 472,935 $ 419,249 $ 1,331,126 $ 1,271,556

Operating Income

Service Centers $ 46,154 $ 41,912 $ 130,329 $ 134,549

Innovative Pumping Solutions 18,207 10,599 38,543 26,555

Supply Chain Services 5,568 5,589 16,653 16,519

Total Segments Operating Income $ 69,929 $ 58,100 $ 185,525 $ 177,623

The following table presents reconciliations of income from operations for reportable segments to the consolidated income before taxes ( in thousands ):

Three Months Ended September 30, Nine Months Ended September 30,

Identifiable assets at year end 782,602 319,897 88,481 1,190,980

Capital expenditures 2,037 574 — 2,611

Depreciation 937 795 8 1,740

Amortization of finance leases

$ 1,137 $ 192 $ 41 $ 1,370

Three Months Ended March 31, Service Centers Innovative Pumping Solutions Supply Chain Services Total

Total Revenue $ 288,435 $ 62,216 $ 61,984 $ 412,635

Operating income for reportable segments

40,320 6,970 5,262 52,552

Identifiable assets at year end 666,756 261,967 86,850 1,015,573

Capital expenditures 906 640 13 1,559

Depreciation 742 853 8 1,603

Amortization of finance leases

$ 772 $ 94 $ 30 $ 896

The following table presents reconciliations of income from operations for reportable segments to the consolidated income before taxes ( in thousands ):

Three Months Ended March 31,

Income from operations for reportable segments $ 66,015 $ 52,552

5 unchanged sentences

14,660 15,544

Other expense (income), net

Other income, net

( 1,318 ) ( 1,968 )

Income before income taxes $ 27,173 $ 15,555

Corporate expenses includes selling, general, and administrative expenses, amortization of finance leases, and other expenses that are not directly attributable to a reportable segment.

The Company had capital expenditures at corporate of $ 17.3 million and $ 1.3 million for the periods ended March 31, 2025 and 2024, respectively.

The Company had identifiable assets at corporate of $ 191.5 million and $ 168.6 million as of March 31, 2025 and 2024, respectively.

Corporate depreciation was $ 0.6 million and $ 0.6 million for the periods ended March 31, 2025 and 2024, respectively.

Amortization of finance leases for Corporate was $ 0.1 million and $ 0.1 million for the years ended March 31, 2025 and 2024, respectively.

NOTE 12 - BUSINESS ACQUISITIONS

1 unchanged sentence

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its estimate of the fair value of the acquired assets and assumed liabilities.

Subsequent to the acquisition, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate in the reporting period in which the adjustment amounts are determined based on facts and circumstances that existed as of the acquisition date, as applicable.

A summary of the allocation of the total purchase consideration of our five business acquisitions during the nine months ended September 30, 2024 is presented as follows ( in thousands ):

Purchase Price Consideration

Cash payments $ 153,763

Future consideration 11,306

The Company obtains the information used for the purchase price allocation during due diligence and through other sources.

The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized.

Final determination of the fair values may result in further adjustments.

During the first quarter of 2025, the Company acquired one business for a total of $ 12.9 million.

We acquired this company to expand our platforms and to maintain our leading position as the largest distributor of rotating equipment in North America.

A summary of the preliminary allocation of the total purchase consideration of our business acquisition during the three months ended March 31, 2025 is presented as follows ( in thousands ):

Total Acquisitions 1

Total purchase price consideration $ 12,851

Net Tangible Assets Acquired

Purchased Intangible Assets

The total purchase consideration related to our acquisitions during the period consisted primarily of cash consideration.

The total cash and cash equivalents acquired for these acquisitions was $ 4.5 million.

Transaction-related costs included within selling, general, and administrative expenses in the consolidated statements of operations was $ 1.2 million for the nine months ended September 30, 2024.

The goodwill total of approximately $ 104.4 million is attributable primarily to expected synergies and the assembled workforce of each entity and is generally not deductible for tax purposes.

Goodwill assigned to our SC and IPS segments was $ 63.3 million and $ 41.0 million, respectively.

The operating results of these acquisitions are included within the Company's consolidated statements of operations from the date of acquisition, which were not material for the three and nine months ended September 30, 2024.

Tangible assets acquired 8,030

Intangible assets acquired 3,284

Total assets acquired $ 11,314

Total liabilities assumed ( 4,983 )

Net assets acquired 6,331

Goodwill $ 6,520

The total purchase consideration related to our acquisition during the period consisted of cash consideration.

The total cash and cash equivalents acquired for this acquisition was $ 0.1 million.

Transaction-related costs included within selling, general, and administrative expenses in the consolidated statements of operations was $ 0.3 million for the three months ended March 31, 2025.

The goodwill total of approximately $ 6.5 million assigned to our SC segment was primarily attributable to expected synergies and the assembled workforce of the entity.

The total amount of goodwill expected to be deductible for tax purposes is $ 6.5 million.

The acquisition's operating results are included within the Company's consolidated statements of operations from the date of acquisition, which were not material for the three months ended March 31, 2025.

Pro forma results of operations information have not been presented, as the effects of the acquisitions were not material to our financial results.

Of the $ 39.8 million of acquired intangible assets, $ 2.2 million was provisionally assigned to non-compete agreements that are subject to amortization over 5 years and $ 3.7 million was assigned to trade name and will be amortized over a period of 10 years.

In addition, $ 33.9 million was assigned to customer relationships and will be amortized over a period of 8 years.

NOTE 13 - COMMON STOCK AND SHARE REPURCHASES

The following is a summary of changes in outstanding common stock for the period indicated (in thousands ):

Common stock outstanding at December 31, 2022

Common stock issued related to stock compensation expense (1)

Total number of shares purchased

Common stock outstanding at December 31, 2023

Common stock issued related to stock compensation expense (1)

Total number of shares purchased

Common stock outstanding at September 30, 2024 15,695

(1) The number of common stock issued represents issuance net of tax withholding.

Of the $ 3.3 million of acquired intangible assets, $ 0.2 million was provisionally assigned to non-compete agreements that are subject to amortization over 5 years, and $ 3.1 million was assigned to customer relationships and will be amortized over a period of 8 years.

NOTE 13 - SHARE REPURCHASES

On December 15, 2022, the Company announced a new Share Repurchase Program pursuant to which it may repurchase up to $ 85.0 million worth, or 2.8 million shares, of the Company's outstanding common stock over the next 24 months from the date of the announcement.

2 unchanged sentences

Total consideration paid to repurchase the shares was recorded in shareholders’ equity as treasury stock.

Three Months Ended September 30, Nine Months Ended September 30,

The following table represents total number of shares purchased, the amount paid, and the average price paid per share under share repurchase programs authorized by our Board of Directors:

Three Months Ended March 31,

(in thousands, except per share data)

2024 2023 2024 2023

Total number of shares purchased — 326.4

2 unchanged sentences

NOTE 14 - SUPPLEMENTAL CASH FLOW INFORMATION

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Cash paid for income taxes 20,334 14,693

Cash paid for finance lease liability

Non-cash investing and financing activities:

Treasury shares repurchase accruals

NOTE 15 - OTHER EXPENSE AND INCOME, NET

The components of other expense (income), net were as followed:

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands)

$ ( 28 ) $ 2,105

NOTE 15 - OTHER INCOME AND EXPENSES

The components of other (income) expense were as followed:

Three Months Ended March 31,

(in thousands)

Interest income ( 1,032 ) ( 1,873 )

1 unchanged sentence

Other, net ( 469 ) 99

Other expense (income), net

160 1,234 ( 2,844 ) 522

Total ( 1,318 ) ( 1,968 )

NOTE 16 - REVENUE

The Company disaggregates revenue based upon our geography and our reportable segments - Service Centers, Innovative Pumping Solutions and Supply Chain Services.

Each of our geographic and reportable business segments are impacted and influenced by varying factors, including the macroeconomic environment, maintenance and capital spending and commodity prices and exploration and production activity.

As such, we believe this information is important in depicting the nature, timing and uncertainty of our contracts with customers.

The following Geographical Information and Note 11 - Segment Reporting present our revenue disaggregated by source.

Geographical Information

Revenues are presented in geographic area based on location of the facility shipping products or providing services.

The Company’s revenues by geographical location are as follows (in thousands):

Three Months Ended March 31,

United States $ 457,240 $ 394,880

Canada 18,988 17,075

Total $ 476,569 $ 412,635

NOTE 17 - SUBSEQUENT EVENT

On October 3, 2024, the Company entered into an amendment (the “Third Term Loan Amendment”) on its existing Senior Secured Term Loan B, repricing and borrowing an incremental $ 105 million that was added to the existing Senior Secured Term Loan B.

Including the new borrowings, the Company will have $ 649.5 million in Senior Secured Term Loan B borrowings.

The new Senior Secured Term Loan B borrowings mature on October 13, 2030, and are priced at Term SOFR plus an applicable margin of 3.75 percent.

On November 1, 2024, the Company completed the acquisitions of Burt Gurney & Associates and MaxVac Inc.

DXP funded the acquisitions with cash on the balance sheet.

On May 1 st 2025, the Company acquired an industrial repair business located in Sparks, Nevada.

We acquired this business to enhance our repair and service capabilities within the rotating equipment market and expand into the Nevada market.

The Company used cash on its balance sheet to fund the approximate $ 1.0 million purchase.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements