DXP Enterprises sets $85M stock buyback plan

HOUSTON - DXP Enterprises , Inc. (NASDAQ: NASDAQ:DXPE), a leading distributor of products and services, has announced a new stock repurchase initiative, authorizing the buyback of up to $85 million or 2.5 million shares of its common stock. The program, which allows for purchases in the open market or through privately negotiated transactions, is set to take place over the next 24 months, subject to market conditions.

This announcement follows the completion of the company's previous repurchase program, which began in December 2022 and concluded with the acquisition of $85 million or 2.8 million shares. The new program's purchases will be made at the discretion of management, and there is no assurance as to the precise number of shares to be repurchased. Management retains the right to terminate the program if deemed necessary.

As of June 30, 2024, DXP reported approximately 16.7 million diluted weighted average shares outstanding. The move reflects the Board of Directors' and senior management's confidence in the value of the company's shares and their commitment to enhancing shareholder value. The program is part of a capital allocation strategy that includes potential growth investments, innovation, acquisitions, and shareholder returns.

David R. Little, Chairman and CEO of DXP, stated that the company's resilience in recent years has bolstered confidence in its business and that the share repurchase is viewed as an attractive investment opportunity. Kent Yee, CFO of DXP, echoed this sentiment, highlighting the company's strong cash flow, sales performance, and backlog as indicators of a promising future.

DXP Enterprises serves a diverse range of industries in North America and Dubai, offering solutions in pumping, supply chain services, and maintenance, repair, operating, and production (MROP) services. The company aims to deliver competitive advantages to its customers through its extensive product knowledge and technical expertise.

This article is based on a press release statement from DXP Enterprises, Inc. The company cautions that forward-looking statements contained in the press release involve risks and uncertainties that could impact future results.

In other recent news, DXP Enterprises has reported a strong performance in its Q2 2024 financials, indicating robust financial health. The company's sales grew by 4.1% year-over-year and 8% sequentially, with adjusted EBITDA margins exceeding 10% for the fifth consecutive quarter. The Innovative Pumping Solutions (IPS) segment led the sales growth, while the Supply Chain Services segment remained steady.

Despite a slight decline in service center sales, DXP Enterprises reported significant increases in net income and earnings per share. The company also completed an acquisition and continued its share repurchase program, with plans to close at least two more acquisitions by the end of 2024.

Recent developments also indicate that DXP Enterprises' acquisition pipeline remains active. However, some compression in gross margins is expected due to increased business investments. On the other hand, the company's backlog in energy-related sectors is increasing, and operating income has increased across all business segments. These developments suggest a continued positive outlook for DXP Enterprises.

InvestingPro Insights

DXP Enterprises, Inc. (NASDAQ: DXPE) has demonstrated a strong commitment to shareholder value through its recent announcement of a new stock repurchase program. This initiative is supported by the company's solid financial performance, as reflected in the real-time data from InvestingPro.

InvestingPro Data shows that DXP Enterprises is trading at a favorable price-to-earnings (P/E) ratio of 13.99, which is slightly below the adjusted P/E ratio for the last twelve months as of Q2 2024, standing at 13.52. This indicates that the company is trading at a low P/E ratio relative to its near-term earnings growth, which is an InvestingPro Tip highlighting the potential for investment value.

The company's revenue growth remains positive, with a 2.34% increase over the last twelve months as of Q2 2024. Additionally, DXP Enterprises has reported a substantial six-month price total return of 49.92%, showcasing a large price uptick over this period, which aligns with another InvestingPro Tip.

InvestingPro Tips also reveal that management has been aggressively buying back shares, a strategy that has been well-received by the market, as evidenced by the year-to-date price total return of 57.03%. This aligns with the sentiments expressed by DXP's Chairman and CEO about the company's resilience and attractiveness as an investment opportunity.

For readers interested in further insights, there are additional InvestingPro Tips available, which include predictions on profitability for the year and an assessment of the company's liquidity position, where liquid assets exceed short-term obligations.

To explore more about DXP Enterprises' financial metrics and to access a comprehensive list of InvestingPro Tips, visit https://www.investing.com/pro/DXPE, where exclusive tips and detailed analysis are available to enhance investment decisions.

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