DXP Enterprises Inc. (DXPE, Financial) filed Quarterly Report for the period ended 2010-03-31.
Dxp Enterprises Inc. has a market cap of $193.67 million; its shares were traded at around $14.96 with a P/E ratio of 18.94 and P/S ratio of 0.33. Dxp Enterprises Inc. had an annual average earning growth of 15.7% over the past 10 years.DXPE is in the portfolios of Jim Simons of Renaissance Technologies LLC.
GROSS PROFIT. Gross profit as a percentage of sales decreased to approximately 28.5% for the first quarter of 2010 from 29.2% for the same period in 2009. This decrease is primarily the result of changes in the product mix and competitive pressures of the U. S. economy.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and administrative expense for the quarter ended March 31, 2010 decreased by approximately $4.2 million, or 10.6%, when compared to the same period in 2009. As a percentage of revenue, the 2010 expense decreased to 23.9%, from 25.0% for the quarter ended March 31, 2009. This decrease primarily resulted from reduced salaries, incentive compensation, employee benefits and travel expenses compared to 2009.
OPERATING INCOME. Operating income for the first three months of 2010 increased 0.8% compared to the same period in 2009. Operating income for the MRO segment increased 7.9% as a result of cost reduction measures implemented after the first quarter of 2009. Operating income for the PSCS segment decreased 20.8%, primarily as a result of sales declining at a greater rate than the rate of decline for selling, general and administrative expense for this segment. Operating income for the IPS segment decreased 13.9% as a result of the 25.9% decline in sales for this segment.
On August 28, 2008, DXP entered into the Facility. The Facility was amended on March 15, 2010. The March 15, 2010 amendment to the Facility significantly increased the interest rates and commitment fees applicable at various leverage ratios from levels in effect before March 15, 2010. The Facility consists of a $50 million term loan and a revolving credit facility that provides a $150 million line of credit to the Company. The term loan requires principal payments of $2.5 million per quarter beginning on December 31, 2008. The Facility matures on August 11, 2013. The Facility contains financial covenants defining various financial measures and levels of these measures with which the Company must comply. Covenant compliance is assessed as of each quarter end and certain month ends for the asset test. The asset test is defined under the Facility as the sum of 85% of the Company s net accounts receivable, 60% of net inventory and 50% of the net book value of non-real-estate property and equipment. The Company s borrowing and letter of credit capacity under the revolving credit portion of the Facility at any given time is $150 million less borrowings under the revolving credit portion of the Facility and letters of credit outstanding, subject to the asset test described above.
On March 31, 2010, the LIBOR-based rate on the revolving credit portion of the Facility was LIBOR plus 3.5%, the prime-based rate on the revolving credit portion of the Facility was the prime rate plus 2.5%, the commitment fee was 0.50%, the LIBOR-based rate for the term loan was LIBOR plus 3.0% and the prime-based rate for the term loan was the prime rate plus 4.00%. At March 31, 2010, $106.0 million was borrowed under the Facility at a weighted average interest rate of approximately 3.7% under the LIBOR options. The revolving credit portion of the Facility provides the option of interest at LIBOR plus a margin ranging from 2.25% to 4.00% or at the prime rate plus a margin of 1.25% to 3.00%. Commitment fees of 0.25% to 0.625% per annum are payable on the portion of the Facility capacity not in use for borrowings or letters of credit at any given time. The term loan portion of the Facility provides the option of interest at LIBOR plus a margin ranging from 2.75% to 4.50% or at the prime rate plus a margin of 1.75% to 3.50%. Borrowings under the Facility are secured by all of the Company s accounts receivable, inventory, general intangibles and non-real-estate property and equipment. At March 31, 2010, we had $43.6 million available for borrowing and letters of credit under the Facility.
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Dxp Enterprises Inc. has a market cap of $193.67 million; its shares were traded at around $14.96 with a P/E ratio of 18.94 and P/S ratio of 0.33. Dxp Enterprises Inc. had an annual average earning growth of 15.7% over the past 10 years.DXPE is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
SALES. Sales for the quarter ended March 31, 2010 decreased $10.6 million, or 6.7%, to approximately $147.0 million from $157.6 million for the same period in 2009. Sales for the MRO segment decreased $1.8 million, or 1.8%. This sales decrease is primarily due to decline in the U.S. economy. Sales for the PSCS segment decreased by $4.5 million, or 12.5%, for the current quarter when compared to the same period in 2009. The sales decrease resulted from sales to customers in 2009 which subsequently terminated supply agreements, exceeding sales to customers which had been added since the first quarter of 2009. Sales for the IPS segment decreased by $4.3 million, or 25.9%, for the current quarter when compared to the same period in 2009. The sales decrease resulted from the decline in the economy and the associated decline in capital spending by our customers.GROSS PROFIT. Gross profit as a percentage of sales decreased to approximately 28.5% for the first quarter of 2010 from 29.2% for the same period in 2009. This decrease is primarily the result of changes in the product mix and competitive pressures of the U. S. economy.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and administrative expense for the quarter ended March 31, 2010 decreased by approximately $4.2 million, or 10.6%, when compared to the same period in 2009. As a percentage of revenue, the 2010 expense decreased to 23.9%, from 25.0% for the quarter ended March 31, 2009. This decrease primarily resulted from reduced salaries, incentive compensation, employee benefits and travel expenses compared to 2009.
OPERATING INCOME. Operating income for the first three months of 2010 increased 0.8% compared to the same period in 2009. Operating income for the MRO segment increased 7.9% as a result of cost reduction measures implemented after the first quarter of 2009. Operating income for the PSCS segment decreased 20.8%, primarily as a result of sales declining at a greater rate than the rate of decline for selling, general and administrative expense for this segment. Operating income for the IPS segment decreased 13.9% as a result of the 25.9% decline in sales for this segment.
On August 28, 2008, DXP entered into the Facility. The Facility was amended on March 15, 2010. The March 15, 2010 amendment to the Facility significantly increased the interest rates and commitment fees applicable at various leverage ratios from levels in effect before March 15, 2010. The Facility consists of a $50 million term loan and a revolving credit facility that provides a $150 million line of credit to the Company. The term loan requires principal payments of $2.5 million per quarter beginning on December 31, 2008. The Facility matures on August 11, 2013. The Facility contains financial covenants defining various financial measures and levels of these measures with which the Company must comply. Covenant compliance is assessed as of each quarter end and certain month ends for the asset test. The asset test is defined under the Facility as the sum of 85% of the Company s net accounts receivable, 60% of net inventory and 50% of the net book value of non-real-estate property and equipment. The Company s borrowing and letter of credit capacity under the revolving credit portion of the Facility at any given time is $150 million less borrowings under the revolving credit portion of the Facility and letters of credit outstanding, subject to the asset test described above.
On March 31, 2010, the LIBOR-based rate on the revolving credit portion of the Facility was LIBOR plus 3.5%, the prime-based rate on the revolving credit portion of the Facility was the prime rate plus 2.5%, the commitment fee was 0.50%, the LIBOR-based rate for the term loan was LIBOR plus 3.0% and the prime-based rate for the term loan was the prime rate plus 4.00%. At March 31, 2010, $106.0 million was borrowed under the Facility at a weighted average interest rate of approximately 3.7% under the LIBOR options. The revolving credit portion of the Facility provides the option of interest at LIBOR plus a margin ranging from 2.25% to 4.00% or at the prime rate plus a margin of 1.25% to 3.00%. Commitment fees of 0.25% to 0.625% per annum are payable on the portion of the Facility capacity not in use for borrowings or letters of credit at any given time. The term loan portion of the Facility provides the option of interest at LIBOR plus a margin ranging from 2.75% to 4.50% or at the prime rate plus a margin of 1.75% to 3.50%. Borrowings under the Facility are secured by all of the Company s accounts receivable, inventory, general intangibles and non-real-estate property and equipment. At March 31, 2010, we had $43.6 million available for borrowing and letters of credit under the Facility.
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