Company: DXPE
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001020710-25-000137
Chunk: 11

Company: DXP ENTERPRISES INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 11
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 year's corresponding period.

Supply Chain Services segment. Sales for the SCS segment increased by $1.1 million, or 0.8 percent, for the six months ended June 30, 2025, compared to the prior year's corresponding period. 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the six months ended June 30, 2025 increased by approximately $26.4 million, or 13.5 percent, to $221.6 million from $195.2 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll related costs, depreciation and amortization, rent and IT expense.

OPERATING INCOME. Operating income for the six months ended June 30, 2025 increased by $20.0 million or 30.1 percent to $86.5 million from $66.5 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC, IPS, and SCS segments.

INTEREST EXPENSE. Interest expense for the six months ended June 30, 2025 decreased $1.5 million compared with the prior year's corresponding period. This decrease was primarily due to the Company refinancing its Term Loan during the fourth quarter of 2024.

INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 24.8 percent for the six months ended June 30, 2025, compared to a tax expense of 27.3 percent for the six months ended June 30, 2024, the effective tax rate decreased primarily due to an increase in changes of income earned by jurisdiction, a higher tax benefit from stock compensation vested during the period, a higher benefit from state income taxes, and higher tax benefits from research and development tax credits (R&D). These benefits were partially offset by recognition of uncertain tax positions related to R&D tax credits.

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NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

Organic Sales and Acquisition Sales

We define and calculate organic sales to include locations and acquisitions under our ownership for at least twelve months. "Acquisition Sales" are sales from acquisitions that have been under our ownership for less than twelve months and are excluded in our calculation of Organic Sales.

The following table sets forth the reconciliation of Acquisition Sales and Organic Sales to the most comparable U.S. GAAP financial measure (in thousands):

Three Months Ended June 30,S