Company: DXPE
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001020710-25-000092
Chunk: 11

Company: DXP ENTERPRISES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 11
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 of cash generated that is available to fund acquisitions, make investments, repay debt obligations, repurchase shares of the Company's common stock, and for other activities.

Free Cash Flow is not a measure of liquidity under U.S. GAAP, and may not be defined and calculated by other companies in the same manner. Free Cash Flow should not be considered in isolation or as an alternative to net cash provided by operating activities. Free Cash Flow reconciles to the most directly comparable U.S. GAAP financial measure of cash flows from operations.

The following table sets forth the reconciliation of net cash provided by operating activities to Free Cash Flow (in thousands):

Three Months Ended March 31,20252024Net cash provided by (used in) operating activities$2,973 $26,989 Less: purchases of property and equipment(19,914)(2,894)Free Cash Flow$(16,941)$24,095 

Uses of Liquidity

Internally generated cash flows are the primary source of working capital and growth initiatives, including acquisitions and growth capital expenditures. The Company expects to continue to return excess capital to shareholders through share repurchases, when appropriate.

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Working Capital

Working capital as of March 31, 2025 was $325.3 million, an increase of $34.3 million compared to $291.0 million as of December 31, 2024. The increase was primarily due to sustained sales growth and acquisitions.

Acquisitions

For a discussion of the Company’s acquisitions refer to Note 12. Business Acquisitions. During March 31, 2025 and 2024, the Company invested $12.9 million and $39.3 million, respectively, in acquisitions.

Capital Expenditures

The Company's capital expenditures was $19.9 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively. This includes a purchase of a facility, continued facility enhancements, tools and equipment, software and technology enhancements across the Company.

DISCUSSION OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES

Critical accounting and business policies are those that are both most important to the portrayal of a company's financial position and results of operations, and require management's subjective or complex judgments. These policies have been discussed with the Audit Committee of the Board of Directors of DXP.

The Company's unaudited condensed financial statements are prepared in accordance with U.S. GAAP. The accompanying unaudited Condensed Consolidated Financial