DXP Enterprises Announces Third Quarter Results

DXP Enterprises, Inc. (NASDAQ:DXPE) today announced net income of $2,684,000 for the third quarter ended September 30, 2009, with diluted earnings per share of $0.19 compared to net income of $7,026,000 and diluted earnings per share of $0.51 for the third quarter of 2008. Sales decreased $43.5 million, or 23.3%, to approximately $143.4 million from $186.9 million for the same period in 2008. Sales by businesses acquired in 2008, on a same store sales basis, accounted for $8.6 million of 2009 sales for the three month period. Excluding these sales by the acquired businesses, sales decreased 27.9%.

Net income for the third quarter of 2009 increased 23.9% compared to the second quarter of 2009. Sales for the third quarter of 2009 declined 0.7% compared to the second quarter of 2009.

Net income for the nine months ended September 30, 2009 was $8,022,000, with diluted earnings per share of $0.57 compared to net income of $18,838,000 and diluted earnings per share of $1.36 for the first nine months of 2008. Sales for the nine months ended September 30, 2009 decreased $97.8 million, or 18.0%, to approximately $445.4 million from $543.2 million for the same period in 2008. Excluding first nine months 2009 sales of $34.8 million by the businesses acquired in 2008, sales decreased 24.4% from the first nine months of 2008.

David R. Little, Chairman and Chief Executive Officer said, “Thanks to everyone involved in converting 50 Precision Service Centers to DXP’s Information Technology System. Your resilience, determination and long hours allowed us to accomplish this task with minimum customer disruptions and I am truly appreciative. This conversion will give us the ability to streamline operations and maximize inventory fill rates resulting in increased customer service and profits. We will continue to proactively grow our market share, invest in our growth strategies and position ourselves to take advantage of opportunities as the economy recovers.”

Mac McConnell, Senior Vice President and Chief Financial Officer said, “We continue to aggressively manage our costs and working capital to strengthen our balance sheet and profits. We reduced selling, general and administrative expense by approximately $1.1 million, or 3.1% during the third quarter of 2009 from the second quarter of 2009 and by $6.9 million, or 17.6%, from the third quarter of 2008 excluding two businesses acquired after June 30, 2008. We continue to manage our working capital which resulted in reducing total debt by approximately $16.1 million from June 30, 2009.”

DXP Enterprises, Inc. is a leading products and service distributor focused on adding value and total cost savings solutions to MRO and OEM customers in virtually every industry since 1908. DXP provides innovative pumping solutions, supply chain services and MROP (maintenance, repair, operating and production) services that emphasize and utilize DXP’s vast product knowledge and technical expertise in pumps, bearings, power transmission, seals, hose, safety, fluid power, electrical and industrial supplies. DXP’s breadth of MROP products and service solutions allows DXP to be flexible and customer driven, creating competitive advantages for our customers.

DXP’s innovative pumping solutions provide engineering, fabrication and technical design to meet the capital equipment needs of its global customer base. DXP provides solutions by utilizing manufacturer authorized equipment and certified personnel. Pump packages require MRO and OEM equipment such as pumps, motors and valves, and consumable products. DXP leverages its MROP inventories and technical knowledge to lower the total cost and maintain the quality of the pump package.

Precision Supply Chain Services, a DXP integrated supply and category management program, provides a more efficient way to manage the customer’s supply chain needs for indirect products. Our programs allow the customer to transfer all or part of its supply chain needs to DXP, so the customer can focus on its core business. By outsourcing purchasing, accounting, and on-site supply management to DXP, our customers effectively lower their supply chain costs and eliminate redundancies in the supply chain. DXP's broad range of first-tier products provides an efficient measurable solution to reduce cost and streamline procurement and sourcing operations.

The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. For more information, review the Company's filings with the Securities and Exchange Commission.