Company: DXPE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001020710-25-000036
Chunk: 153

Company: DXP ENTERPRISES INC
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7
Chunk 153
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 to non-controlling interest (NCI)— — (53)Plus: Interest expense63,927 53,146 29,135 Plus: Provision for income tax expense14,483 18,119 17,799 Plus: Depreciation and amortization33,405 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 expense4,714 3,072 1,850 Adjusted EBITDA$191,310 $174,305 $126,806 Operating Income Margin8.1 %8.3 %6.6 %EBITDA Margin10.1 %10.1 %8.3 %Adjusted EBITDA Margin10.6 %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 31,202420232022Net 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 

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,