Company: DXPE
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001020710-25-000092
Chunk: 53

Company: DXP ENTERPRISES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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.$20,589 $11,332 Plus: Interest expense14,660 15,544 Plus: Provision for income tax expense6,584 4,223 Plus: Depreciation and amortization9,134 7,538 EBITDA$50,967 $38,637 Plus: other non-recurring items(1)235 842 Plus: stock compensation expense1,317 864 Adjusted EBITDA$52,519 $40,343 Operating Income Margin8.5 %7.1 %EBITDA Margin10.7 %9.4 %Adjusted EBITDA Margin11.0 %9.8 %(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs.

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 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 

23

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, repurchasing common stock when deemed appropriate, and manage our capital structure on a short-term and long-term basis.

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