Slides
Page 1
DXP THE INDUSTRIAL DISTRIBUTION EXPERTS Presented by : David Little Chairman , President & CEO Kent Yee Senior Vice President & CFO NASDAQ : DXPE Results for Q2 Fiscal 2026 Earnings Announcement : August 6 , 2026 ( Quarter Ending June 30 , 2026 )
Page 2
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the U.S. federal securities laws that involve risks and uncertainties. Certain statements contained in this report are not purely historical, including statements regarding our expectations, beliefs, intentions or strategies regarding the future that are forward-looking. These statements include statements concerning projected revenues, expenses, gross profit, income, gross margins or other financial items. All forward-looking statements speak only as of the date of this presentation. You should not place undue reliance on these forward-looking statements. Although we believe our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this presentation are reasonable, we may be unable to achieve these plans, intentions or expectations. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. Risks and uncertainties that could cause actual results to differ from those in the forward-looking statements are described in “Risk Factors” and “Forward-Looking Statements” in our Quarterly Reports on Form 10-Q and in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Statement Regarding use of Non-GAAP Measures: The Non-GAAP financial measures contained in this presentation (including, without limitation, EBITDA, Adjusted EBITDA, Free Cash Flow, Return on Invested Capital (ROIC) and variations thereof are not measures of financial performance calculated in accordance with GAAP and should not be considered as alternatives to net income (loss) or any other performance measure derived in accordance with GAAP or as alternatives to cash flows from operating activities as a measure of our liquidity. They should be viewed in addition to, and not as a substitute for, analysis of our results reported in accordance with GAAP, or as alternative measures of liquidity. Management believes that certain non-GAAP financial measures provide a view to measures similar to those used in evaluating our compliance with certain financial covenants under our credit facilities and provide financial statement users meaningful comparisons between current and prior year period results. They are also used as a metric to determine certain components of performance- based compensation. The adjustments and Adjusted EBITDA are based on currently available information and certain adjustments that we believe are reasonable and are presented as an aid in understanding our operating results. They are not necessarily indicative of future results of operations that may be obtained by the Company. 2
Page 3
Please refer to the appendix of this presentation for reconciliations of the Non-GAAP financial measures to the most directly comparable GAAP measures. Q2 2026 KEY TAKEAWAYS 3 • Sales increased 15.6 percent to $576.5 million compared to $498.7 million for the second quarter of 2025, and increased 10.5 percent sequentially from $521.7 million for the first quarter of 2026. ◦ Organic sales grew 11.1 percent year over year and 9.5 percent sequentially ◦ Acquisition sales contributed $49.8 million in sales ◦ Sales per business day of $9.2 million • Adjusted EBITDA for the second quarter was $70.4 million compared to $57.3 million for the second quarter of 2025, and $57.8 million for the first quarter of 2026. ◦ Adjusted EBITDA as a percentage of sales, or Adjusted EBITDA margin, was 12.2 percent, 11.5 percent, and 11.1 percent, respectively • Net income increased 21.6 percent for the second quarter to $28.7 million, compared to $23.6 million for the second quarter of 2025, and increased 43.7 percent sequentially from $20.0 million from the first quarter of 2026. • Earnings per diluted share for the second quarter was $1.76 based upon 16.3 million diluted shares, compared to $1.43 earnings per diluted share in the second quarter of 2025, based on 16.5 million diluted shares. • Cash flow from operating activities for the second quarter was $32.4 million, compared to $18.6 million for the second quarter of 2025 and $29.6 million for the first quarter of 2026. • Free Cash Flow (cash flow from operating activities less capital expenditures) for the second quarter was $29.8 million, compared to $8.3 million for the second quarter of 2025 and $26.3 million for the first quarter of 2026. • Closed one acquisition during the second quarter and one subsequent to quarter end.
Page 4
Please refer to the appendix of this presentation for reconciliations of the Non-GAAP financial measures to the most directly comparable GAAP measures. Q2 2026 INCOME STATEMENT HIGHLIGHTS (in thousands, except percentages and per share data) QTD QTD QTD 06/30/25 03/31/26 06/30/26 Sales $ 498,682 $ 521,658 $ 576,461 % growth y/y 11.9 % 9.5 % 15.6 % % growth seq 4.6 % (1.1) % 10.5 % Gross Profit $ 157,813 $ 168,606 $ 183,067 % margin 31.6 % 32.3 % 31.8 % Operating Income $ 45,986 $ 42,474 $ 55,493 % margin 9.2 % 8.1 % 9.6 % Net Income $ 23,612 $ 19,978 $ 28,708 % margin 4.7 % 3.8 % 5.0 % Adj. EBITDA $ 57,313 $ 57,812 $ 70,376 % margin 11.5 % 11.1 % 12.2 % Net cash provided by Operating Activities $ 18,646 $ 29,569 $ 32,386 Free Cash Flow $ 8,300 $ 26,275 $ 29,765 Diluted EPS $ 1.43 $ 1.22 $ 1.76 Diluted Shares 16,534 16,371 16,345 Adj. Diluted EPS $ 1.43 $ 1.26 $ 1.76 Sales Per Business Day $ 7,916 $ 8,280 $ 9,150 4
Page 5
Return on invested capital is defined as tax-effected LTM EBITDA / average total net operating assets. SALES AND GROSS MARGIN $446 $473 $471 $477 $499 $514 $527 $522 $576 30.9% 30.9% 31.5% 31.5% 31.6% 31.4% 31.6% 32.3% 31.8% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 DILUTED EARNINGS PER SHARE* $1.00 $1.27 $1.29 $1.25 $1.43 $1.31 $1.39 $1.22 $1.76 Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 ADJ. EBITDA AND ADJ. EBITDA MARGIN $48 $52 $50 $53 $57 $57 $59 $58 $70 10.8% 11.1% 10.7% 11.0% 11.5% 11.0% 11.2% 11.1% 12.2% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 RETURN ON INVESTED CAPITAL (ROIC%) 36.0% 36.3% 37.4% 36.8% 34.8% 33.5% 34.1% 34.1% 34.7% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 QUARTERLY FINANCIAL HIGHLIGHTS (in millions, except percentages and per share data) 5
Page 6
SALES SALES MIX OPERATING PROFIT (OP) OP CONTRIBUTION OPERATING MARGIN $367.9 64% $54.2 62% 14.7% $142.7 25% $26.7 31% 18.7% $65.8 11% $6.5 7% 9.9% SEGMENT TOTAL $576.5 $87.3 15.1% CORPORATE (expenses & amortization of intangibles) $— $(31.8) TOTAL $576.5 $55.5 9.6% 6 QUARTERLY OPERATING PERFORMANCE BY SEGMENT (in millions, except percentages)* *Amounts may not foot/reconcile due to rounding
Page 7
QUARTERLY CASH FLOW AND WORKING CAPITAL (in thousands, except percentages) QTD QTD QTD 6/30/2025 3/31/2026 6/30/2026 Net Income $ 23,612 $ 19,978 $ 28,708 Depreciation and Amortization 9,490 12,051 12,203 Change in Net Working Capital (21,537) (7,170) (11,241) Other Operating Cash Flows, Net 7,081 4,710 2,716 Net Cash provided by Operating Activities $ 18,646 $ 29,569 $ 32,386 Purchase of Property & Equipment (10,346) (3,294) (2,621) Free Cash Flow $ 8,300 $ 26,275 $ 29,765 Other Investing Cash Flows, Net (994) (102,693) (9,685) Net Cash used in Investing Activities $ (11,340) $ (105,987) $ (12,306) Net Cash used in Financing Activities $ (9,511) $ (13,116) $ (5,858) Effect of foreign currency on cash $ 852 $ (868) $ (985) Net change in cash and restricted cash $ (1,353) $ (90,402) $ 13,237 Cash and restricted cash at beginning of the period $ 114,283 $ 303,783 $ 213,381 Cash and restricted cash at end of the period $ 112,930 $ 213,381 $ 226,618 Supplemental Information Purchase of businesses, net $ 1,010 $ 102,702 $ 10,243 Cash paid for interest $ 13,003 $ 14,950 $ 15,147 Cash paid for income taxes $ 13,614 $ 653 $ 3,664 Net Debt $ 532,699 $ 631,284 $ 615,927 NET WORKING CAPITAL (in millions) $287 $291 $291 $325 $349 $365 $362 $380 $393 17.0%16.7%16.1% 17.4%18.2%18.6%17.9%18.4%18.4% Q2 '24Q3 '24Q4 '24Q1 '25Q2 '25Q3 '25Q4 '25Q1 '26Q2 '26 7 FREE CASH FLOW (in millions) $6 $24 $23 $(17) $8 $28 $34 $26 $30 12.3% 46.5%45.2% (32.3)% 14.5% 49.8%58.5%45.4%42.3% Q2 '24Q3 '24Q4 '24Q1 '25Q2 '25Q3 '25Q4 '25Q1 '26Q2 '26 FCF Conversion % (1) (2) Notes: (1) Net working capital is calculated as current assets less current liabilities excluding cash and restricted cash, short term debt obligations, and short term operating leases. (2) Free cash flow conversion percentage is calculated as free cash flow over adjusted EBITDA. % of LTM Sales
Page 8
• Flexible share repurchase program that allows opportunistic buyback of DXP stock • ROIC should continue to improve as the company focuses on margins and operating leverage and improving run rate EBITDA • Disciplined M&A strategy focused on end market diversification, portfolio enhancement and geographic expansion • Track record of sustainable and proactive debt management through the cycle • Net leverage target of ≤ 3.5x • Flexible capital deployment policy with ability to shift capital based on business requirements DISCIPLINED CAPITAL ALLOCATION PRIORITIES 8 2021 - 2026 Capital Allocation* 60% 46% 12% 72% 49% 92% 3% 3% 6% 3% 6% 3% 6% 5% 15% 12% 32% 5%31% 46% 67% 13% 14% M&A Net Debt Repayment Net Capex Net Share Repurchases 2021 2022 2023 2024 2025 YTD 2026 Balanced Capital Deployment *Amounts may not foot/reconcile due to rounding
Page 9
APPENDIX
Page 10
Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating Income for Reportable Segments $ 87,310 $ 74,042 $ 165,071 $ 140,056 Adjustments for: Amortization of intangibles 6,798 5,327 13,815 10,684 Corporate expenses 25,019 22,729 53,289 42,871 Total Operating Income $ 55,493 $ 45,986 $ 97,967 $ 86,501 Interest Expense 16,831 14,744 33,274 29,404 Other (Income) expense, net (1,059) (354) (1,653) (1,672) Income before Income Taxes $ 39,721 $ 31,596 $ 66,346 $ 58,769 10 RECONCILIATION OF OPERATING INCOME (in thousands)
Page 11
Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Service Centers $ 367,898 $ 339,731 $ 705,874 $ 666,806 Innovative Pumping Solutions 142,739 93,540 261,399 179,722 Supply Chain Services 65,824 65,411 130,846 128,723 Total DXP Sales $ 576,461 $ 498,682 $ 1,098,119 $ 975,251 Acquisition Sales $ 49,848 $ 24,605 $ 90,593 $ 55,717 Organic Sales $ 526,613 $ 474,077 $ 1,007,526 $ 919,534 Business Days 63 63 126 126 Sales per Business Day $ 9,150 $ 7,916 $ 8,715 $ 7,740 Organic Sales per Business Day $ 8,359 $ 7,525 $ 7,996 $ 7,298 Net Income $ 28,708 $ 23,612 $ 48,686 $ 44,201 Interest expense 16,831 14,744 33,274 29,404 Provision for income taxes 11,013 7,984 17,660 14,568 Depreciation and Amortization 12,203 9,490 24,254 18,624 EBITDA $ 68,755 $ 55,830 $ 123,874 $ 106,797 Plus: stock compensation expense 1,466 1,483 3,268 2,800 Plus: other non-recurring items 155 — 1,046 235 Adjusted EBITDA $ 70,376 $ 57,313 $ 128,188 $ 109,832 11 RECONCILIATION OF NON-GAAP MEASURES (in thousands, except days)
Page 12
Organic Sales and Acquisition Sales We define and calculate organic sales to include locations and acquisitions under our ownership for at least twelve months. "Acquisition Sales" are sales from acquisitions that have been under our ownership for less than twelve months and are excluded in our calculation of Organic Sales. Business Days "Business Days" are days of the week, excluding Saturdays, Sundays, and holidays, that our locations are open during the year. Depending on the location and the season, our branches may be open on Saturdays and Sundays; however, for consistency, those days have been excluded from the calculation of Business Days. Sales per Business Day We define and calculate Sales per Business Day as sales divided by the number of Business Days in the relevant reporting period. Organic Sales per Business Days We define and calculate Organic Sales per Business Day as Organic Sales divided by the number of Business Days in the relevant reporting period. EBITDA and Adjusted EBITDA We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization plus stock-based compensation expense, and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations. EBITDA Margin and Adjusted EBITDA Margin We define and calculate EBITDA Margin as EBITDA divided by sales. We define and calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by sales. Free Cash Flow We define and calculate free cash flow as net cash (used in) provided by operating activities less purchases of property and equipment. 12 DEFINITIONS