Company: DXPE
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050322
Chunk: 64

Company: DXP ENTERPRISES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 64
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 Gross profit margin for the three months ended September 30, 2025 was 31.4 percent compared to 30.9 percent for the prior year's corresponding period. The gross profit margin for the three months ended September 30, 2025 was positively impacted by 50 basis points due to recent acquisitions and continuing margin expansion efforts.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the three months ended September 30, 2025 increased by $11.1 million, or 10.4 percent, to $117.6 million from $106.5 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 third quarter of 2025 increased by $4.1 million to $43.7 million, from $39.6 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC segment. 

INTEREST EXPENSE. Interest expense for the third quarter of 2025 decreased $0.8 million compared to 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 for continuing operations was 26.6 percent for the three months ended September 30, 2025, compared to 11.1 percent for the three months ended September 30, 2024. Compared to the U.S. statutory rate for the three months ended September 30, 2024, the effective tax rate increased primarily due to a lower tax benefit from research and development tax credits, lower tax benefit from stock compensation vested during the period, partially offset by a higher benefit for state income taxes. 

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Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024

 Nine Months Ended September 30, 2025%2024%Sales$1,488,975 100.0%$1,331,126 100.0%Cost of sales1,019,638 68.5%923,341 69.4%Gross profit469,337 31.5%407,785 30.6%Selling, general and administrative expenses339,138 22.8%301,694 22.7%Income from operations