Company: DXPE
Filing Date: 2025-04-30
Form Type: ARS
Source: 0001020710-25-000081
Chunk: 50

Company: DXP ENTERPRISES INC
Filing Date: 2025-04-30
Form: ARS
Chunk 50
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: Provision for income tax expense 14,483 18,119 17,799 Plus: Depreciation and amortization 33,405 30,105 28,500 EBITDA $ 182,304 $ 170,182 $ 123,536 Plus: NCI income before tax — — 227 Plus: other non-recurring items(1) 4,292 1,051 1,193 Plus: stock compensation expense 4,714 3,072 1,850 Adjusted EBITDA $ 191,310 $ 174,305 $ 126,806 Operating Income Margin 8.1 % 8.3 % 6.6 % EBITDA Margin 10.1 % 10.1 % 8.3 % Adjusted EBITDA Margin 10.6 % 10.4 % 8.6 % (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 provided by operating activities less net 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): Twelve Months Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 102,211 $ 106,222 $ 5,894 Less: purchases of property and equipment, net (25,068) (12,263) (4,916) Free Cash Flow $ 77,143 $ 93,959 $ 978 Table of Contents 37

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 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