Houston-based DXP Enterprises — No. 20 on Industrial Distribution's 2015 Big 50 List — reported its 2016 second quarter financial results on Tuesday, led by continued large declines in year-over-year sales and profit.
The company posted Q2 sales of $256.2 million, down 20.8 percent from a year earlier and up 1.1 percent from Q1. Profit of $5.1 million was down 27.9 percent from a year earlier, but an improvement from Q1's net loss of $5.2 million. Q2's gross profit of $71.6 million was down 21.6 percent from a year earlier, while operating profit of $8.8 million compared with $14.0 million a year earlier.
"The market continues to show volatility and remains uncertain, but we are responding by aggressively removing costs and improving operations," said DXP CEO David Little. "Despite the challenging environment, we remain confident in our future and the opportunities ahead for DXP."
By business segment:
- Service Centers Q2 sales of $161.8 million (63.2 percent of total) declined 24.4 percent year-over-year and 3.4 percent from Q1, with a 7.8 percent operating income margin. DXP said the declines were primarily the result of weaked sales of bearings, pumps, metalworking products, and safety services to customers engaged in the upstream oil and gas markets, or manufacturing equipment for the upstream oil and gas markets.
- Innovative Pumping Solutions Q2 sales of $54.4 million declined 18.8 percent year-over-year and increased 14.6 percent from Q1, with a 10.1 percent operating income margin. DXP said the decrease was primarily the result of the decline in capital spending by oil and gas producers and related businesses.
- Supply Chain Services Q2 sales of $40.0 million declined 6.2 percent year-over-year and increased 3.6 percent from Q1, with a 10.5 percent operating margin. DXP said the decrease in sales was primarily related to decreased sales to customers in the oilfield services, oilfield equipment manufacturing, and trucking industries.
DXP's Q2 selling, general and administrative expenses were down 11.4 percent from Q1, and the company attributes the majority of the decline to 2016 headcount and salary reductions.
Through the first six months of 2016, DXP sales were down 23.4 percent year-over-year, while a $13,000 profit was down an even 100 percent.