DXP Enterprises, Inc. Q1 FY2026 earnings call

• Sales in January were soft but improved in February and March, with bookings growing during the quarter and continuing in April. - Maintained gross margin discipline and generated meaningful free cash flow. - Consolidated sales were 521.7 million, up 9.5% year-over-year; sales per business day increased to 8.28 million from 7.57 million. - Gross profit margins expanded to 32.3%, nearly 80 basis points higher. - Adjusted EBITDA was 57.8 million, or 11.1% margin. - Operating income totaled 42.5 million. - Adjusted diluted earnings per share was 1.26. - Free cash flow was 26.3 million. - Growth driven by organic growth, favorable mix, operating execution, and contributions from accretive acquisitions. - SG&A was higher due to unique and non-recurring items but expected to normalize as the year progresses. - Focused on markets like water and wastewater, energy infrastructure, general industry, and selected technology-driven markets. - Growth coming from expanding technical and engineered solutions, broadening solutions around pumps, etc., leveraging decentralized model and integrating acquisitions effectively.

Innovative Pumping Solutions: Sales increased 37.7% to $111.7 million. Growth driven by energy-related and water and wastewater activity, along with contributions from recent acquisitions. Revenue contribution %: Approximately 21.4% (111.7 million / 521.7 million). Service Centers: Sales grew 3.3% year-over-year. Supply Chain Services: Sales grew 2.7% year-over-year.

• Anticipates 2026 to be a strong year. - Q1 showed strength in sales during February and March, strong gross margin performance, and good free cash flow generation. - Bookings are trending higher, and backlog remains healthy to higher. - Expect supply chain services to be stronger in 2026 as new customers are onboarded.