Company: DXPE
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001020710-25-000137
Chunk: 69

Company: DXP ENTERPRISES INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 69
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4 %8.9 %7.7 %Net Income Margin4.7 %3.7 %4.5 %3.3 %EBITDA Margin11.2 %10.4 %11.0 %9.9 %Adjusted EBITDA Margin11.5 %10.8 %11.3 %10.3 %(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs.

30

Free Cash Flow

We define and calculate free cash flow as net cash (used in) provided by operating activities less purchases of property and equipment.

The following table sets forth the reconciliation of Free Cash Flow to the most comparable U.S. GAAP financial measure (in thousands):

Three Months Ended June 30,Six Months Ended June 30,2025202420252024Net cash provided by operating activities$18,646 $14,735 $21,619 $41,724 Less: purchases of property and equipment(10,346)(8,825)(30,260)(11,719)Free Cash Flow$8,300 $5,910 $(8,641)$30,005 

LIQUIDITY AND CAPITAL RESOURCES

General Overview

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. We continue to generate adequate cash from operating activities. We believe that our operating cash flow, cash on hand, and other sources of liquidity including our ABL and Term Loan B, will be sufficient to allow us to continue investing in the business including capital expenditures, strategic acquisitions and investments, paying interest and servicing debt, and repurchasing common stock when deemed appropriate.

Our primary source of capital is cash flow from operations, supplemented as necessary by bank borrowings or other sources of debt and existing cash balances. As a distributor of MRO products and services, we require certain amounts of working capital to primarily fund inventories and accounts receivables. Additional cash is required for capital items for information technology, warehouse equipment, leasehold improvements, pump manufacturing and safety services equipment. We also require cash to pay our lease obligations, fund project work-in-process and to service our debt.

Cash

As of June 30, 2025, we had available cash of $112.9 million and credit facility availability of $106.3 million. We have a $135.0 million asset-backed line of