HOUSTON--(BUSINESS WIRE)--DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that is has completed the acquisitions of Riordan Materials Corporation (“Riordan”) and Florida Valve & Equipment Corp. and Environmental MD (“Florida Valve EMD”). DXP funded the acquisitions with cash on the balance sheet.
Riordan is a leading provider of products for water treatment, wastewater treatment, odor control, solids handling, pumping and biosolid processes in the states of Maryland, New Jersey, Pennsylvania, Delaware and Virginia. Florida Valve EMD is a leading provider of valve and related products and services for the municipal water markets in the state of Florida.
David R. Little, Chairman and CEO, remarked, “We are pleased to welcome the Riordan and Florida Valve employees to the DXP team. Both are well-run businesses focused on providing value-added products and services to the water market. Riordan will provide DXP’s Water division with new geographic territory and Florida Valve will provide enhanced product capabilities. Riordan and Florida Valve are great companies with key differentiators and provides us with high caliber people.”
Signing of the definitive agreements occurred on May 1, 2023. Sales and adjusted EBITDA for Riordan and Florida Valve EMD for the last twelve months ending March 31, 2023, were approximately $14.2 million and $3.2 million, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, depreciation and amortization, plus non-recurring items that will not continue after the acquisition.
Saade Chibani, President of DXP Water, commented, “Our expertise in the water and wastewater market continues to accelerate along with depth and reach of the DXP Water platform. We have now completed eight acquisitions over the last three years and look forward to continuing to build our presence. Riordan and Florida Valve strengthen our efforts and we look forward to our growth going forward.”
Kent Yee, CFO, added, “We are excited to welcome the talented and hardworking employees of Riordan and Florida Valve EMD to the DXP team. The combination of Riordan and Florida Valve furthers us in our mission to build DXP Water into a full-line products and service focused platform servicing the municipal and industrial water and wastewater treatment markets. We look forward to continuing on this path in 2023 as we scale DXP.”
Non-GAAP Financial Measures
DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, Adjusted EBITDA and free cash flow. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA referred to in this press release is included below under "--Unaudited Reconciliation of Non-GAAP Financial Information."
The Company believes EBITDA provides additional information about: (i) operating performance, because it assists in comparing the operating performance of the business, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from core operations such as interest expense and income taxes and (ii) the performance and the effectiveness of operational strategies. Additionally, EBITDA performance is a component of a measure of the Company’s financial covenants under its credit facility. Furthermore, some investors use EBITDA as a supplemental measure to evaluate the overall operating performance of companies in the industry. Management believes that some investors’ understanding of performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing ongoing results of operations. By providing this non-GAAP financial measure, together with a reconciliation from net income, the Company believes it is enhancing investors’ understanding of the business and results of operations, as well as assisting investors in evaluating how well the Company is executing strategic initiatives.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.