DXP Enterprises Q2 Sales & Profit Tumble As Oil Market Slumps

Reduced capital spending, low oil prices, and a strong U.S. dollar continue to hamper DXP's bottom line.

Houston-based DXP Enterprises – No. 19 on Industrial Distribution's 2014 Big 50 List – announced its 2015 second quarter and six-month financial results on Monday for the period ended June 30.

The numbers were highlighted by Q2 sales of $323.7 million, a 15.2 percent year-over-year decline, while profits of $7.2 million were a 51.7 percent drop from a year ago. Sequentially, sales decreased 5.2 percent from Q1. Organic sales decreased 16.3 percent in the quarter, while acquisitions positively impacted sales by $4.4 million. Operating income of $14.0 million in the quarter was nearly half of last year's $27.4 million.

"DXP achieved solid results this quarter in the midst of the cyclical downturn tied to oil and gas," said David Little, DXP Chairman and CEO.

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Little noted the 5.2 percent sequential sales drop and 15.2 percent yearly drop outperformed the 15 percent sequential drop in the North American rig count and the 53 percent decline year over year.

"We appreciate all the hard work from our DXPeople as we work as a team and remain resilient through these tough market conditions," Little continued. "Because we serve cyclical end markets, we focus intently on operational execution, cost control and investing and building DXP for the future. We believe environments like we are currently in are when great businesses are built and while we are focused on managing costs, we are not losing sight of the exciting DXP future. As with our first quarter results, DXP’s performance in the second quarter reflects the dynamics tied to our end market exposure. Reduced capital spending, low oil prices and a strong U.S. dollar continued to impact DXP."

By segment, DXP's Service Centers revenue declined 14.0 percent year over year, with organic revenue down 15.7 percent. Currency headwinds reduced revenue by 1.3 percent. Innovative Pumping Solutions revenue was down 26.1 percent from lst year, with currency headwinds having a negative 1.8 percent revenue impact. Supply Chain Services revenue was up 1.1 percent.

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