Houston-based DXP Enterprises — No. 19 on Industrial Distribution's Big 50 List — reported its 2016 fourth quarter and full year financial results on Friday, highlighted by continued year-over-year sales declines, while sequential sales declines slowed.
The company posted Q4 sales of $222.3 million, down 20.2 percent year-over-year and down 3.4 percent from Q3. Those figures compare to declines of 24.1 percent year-over-year and 10.2 percent sequentially in Q3. Adjusting for the company's October 2016 sale of Vertex to Houston Wire & Cable, DXP's Q3 sales were down 18.1 percent year-over-year and down 0.3 percent sequentially.
Q4 profit of $7.4 million was an improvement from $240,000 in Q3 and a loss of $2.9 million a year earlier. Q4 operating profit of $7.6 million improved from a $4.4 million loss in Q4 2015.
For the full year, DXP's 2016 sales of $962 million were down 22.9 percent from 2015. Profit of $7.7 million improved from 2015's loss of $38.5 million. Operating profit of $19.3 million in 2016 improved from a $27.9 million loss in 2015.
DXP's organic sales declined by 23.6 percent in 2016.
The company also reduced its selling, general and administrative costs by 19.2 percent in 2016.
"We are encouraged by our finish to the fiscal year and DXP’s operational execution against the challenging oil & gas and industrial environment," said DXP chairman and CEO David Little. "DXP’s fourth quarter results indicate we have bottomed and full-year 2016 results were in-line with our expectations after we adjusted during the first half of the year. We are also encouraged by the general increased optimism about the macroeconomic environment."
By business segment for DXP:
- Service Centers 2016 sales of $621 million declined 24.9 percent year-over-year with a 7.7 percent operating profit margin. Organic sales declined 26.1 percent. In Q4, sales declined 8.1 percent from Q3.
- Supply Chain Services 2016 sales of $154 million declined 7.0 percent year-over-year with a 10.0 percent operating margin. Q4 sales declined 2.8 percent from Q3 with a 10.3 percent operating profit margin.
- Innovative Pumping Solutions 2016 sales of $187.1 million declined 26.6 percent year-over-year with a 5.3 percent operating profit margin. Q4 sales increased 14.3 percent from Q3 with a 5.4 percent operating profit margin.
"We are cautiously optimistic that certain energy and industrial customers’ budgets may improve off current low levels and we anticipate a better fiscal year 2017," Little said. As such, we remain focused on controlling what we can by improving our ability to serve existing and new customers, continually focus on enhancing and improving our operational execution, investing in products and people and strategically aligning DXP for the next up cycle."