Company: DXPE
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001020710-25-000092
Chunk: 35

Company: DXP ENTERPRISES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 profits" on our unaudited condensed consolidated balance sheets.Costs and estimated profits on uncompleted contracts and related amounts billed were as follows (in thousands): March 31, 2025December 31, 2024Costs incurred on uncompleted contracts$132,231 $122,951 Estimated profits, thereon63,609 58,373 Total costs and estimated profits on uncompleted contracts195,840 181,324 Less: billings to date167,775 143,251 Net$28,065 $38,073 Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2025 and December 31, 2024 under the following captions (in thousands): March 31, 2025December 31, 2024Costs and estimated profits in excess of billings$47,844 $50,735 Billings in excess of costs and estimated profits(19,779)(12,662)Net$28,065 $38,073 During the three months ended March 31, 2025 and 2024, $5.1 million and $1.4 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues, respectively. Contract asset and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.

NOTE 7 – INCOME TAXES

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur.Our effective tax rate from continuing operations was a tax expense of 24.2 percent for the three months ended March 31, 2025 compared to a tax expense of 27.2 percent for the three months ended March 31, 2024. Compared to the U.S. statutory rate for the three months ended March 31, 2025, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, and uncertain tax positions recorded for research and development tax credits and partially offset by research and development tax credits and other tax credits.

9

To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts would be classified as a component of income tax provision (benefit) in the financial statements consistent with the Company’s policy.The Organization of Economic Cooperation and Development (OECD) continues to release additional