Oil Market Drags On DXP Enterprises' Q1 Sales, Profit

Despite a healthy sales increase in its Supply Chain Services segment revenue, rig decline and falling oil prices hurt overall sales and profit.

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Houston-based DXP Enterprises – No. 19 on Industrial Distribution's 2014 Big 50 List – reported its 2015 first quarter financial earnings on Thursday for the period ended March 31.

The company posted total sales of $341.6 million, down 2.0 percent year-over-year from Q1 2014. Organic sales decreased 5.2 percent, while acquisitions positively impacted sales by $11.3 million.

​DXP's net income for the quarter was $9.6 million, a 12.0 percent year-over-year decrease from last year. Operating income was $18.1 million, down from $21.2 million last year.

DXP Chairman and CEO David Little said the company's Q1 sales figures were a reflection of a noted 42 percent decline in rig count and 53 percent drop in oil price from March 2014 through the end of the quarter.

"We appreciate all the hard work from our DXPeople as we work as a team through these tough market conditions," he said. "That said, the first quarter results were in line with our expectations and reflect our end market exposure discussed during our Q4 earnings call. Our customer base during the first quarter has responded to market conditions by cutting capital budgets, seeking pricing concessions and delaying order placement and project timing. However, our plans remain unchanged."

DXP's Supply Chain Services segment revenue was up 11.1 percent year-over-year with a 7.9 percent operating margin.

Service Center segment revenue was down 2.4 percent year-over-year, including a 10.1 percent operating income margin and a 7.3 percent decrease in organic revenue.

Innovative Pumping Solutions revenue was down 7.0 percent year-over-year, with an 11.6 percent operating income margin.