Company: DXPE
Filing Date: 2025-04-30
Form Type: ARS
Source: 0001020710-25-000081
Chunk: 53

Company: DXP ENTERPRISES INC
Filing Date: 2025-04-30
Form: ARS
Chunk 53
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&P”). Both credit rating agencies currently rate the Company’s corporate credit as non-investment grade. The following table summarizes the Company’s credit ratings as of December 31, 2024: Corporate Senior Secured Moody’s B1 B2 S&P B B Free Cash Flow We believe Free Cash Flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to fund acquisitions, make investments, repay debt obligations, repurchase shares of the Company's common stock, and for other activities. Our Free Cash Flow, which is calculated as cash provided by operations less net purchase of property and equipment, was $77.1 million, $94.0 million and $1.0 million for years 2024, 2023 and 2022, respectively. Free Cash Flow is not a measure of liquidity under U.S. GAAP, and may not be defined and calculated by other companies in the same manner. Free Cash Flow should not be considered in isolation or as an alternative to net cash provided by operating activities. Free Cash Flow reconciles to the most directly comparable U.S. GAAP financial measure of cash flows from operations. Table of Contents 39

The following table sets forth the reconciliation of net cash provided by operating activities to Free Cash Flow (in thousands): Twelve Months Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 102,211 $ 106,222 $ 5,894 Less: Purchase of property and equipment, net 25,068 12,263 4,916 Free Cash Flow $ 77,143 $ 93,959 $ 978 Uses of Liquidity Internally generated cash flows are the primary source of working capital and growth initiatives, including acquisitions and growth capital expenditures. The Company expects to continue to return excess capital to shareholders through share repurchases, when appropriate. Working Capital Working capital as of December 31, 2024 was $296.3 million, an increase of $20.9 million compared to $275.4 million as of December 31, 2023. The increase was primarily due to sustained sales growth and acquisitions. Acquisitions For a discussion of the Company’s acquisitions refer to Note 16 to the Consolidated Financial Statements. In 2024 and 2023, the Company invested $156.6 million and $10.4 million, respectively, in acquisitions. Capital Expenditures In fiscal 2024, the Company's capital expenditures were $25