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$37 million in sales and $2.9 million in adjusted EBITDA
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3 New DXP locations in the Pacific Northwest
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Differentiated custom tooling including full service tool and
cutter grinding facility
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Servicing customers in the aerospace, construction, medical and
firearm markets
HOUSTON--(BUSINESS WIRE)--
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced the
completion of the acquisition of Application Specialties, Inc. (“ASI”),
a leading distributor of cutting tools, abrasives, coolants and machine
shop supplies. DXP funded the acquisition with cash on the balance sheet.
Founded in 1989, ASI is headquartered in Auburn, Washington and operates
out of three locations in the state of Washington including Auburn,
Everett and Vancouver. ASI is focused on serving customers in the
aerospace, construction, medical and firearm markets with approximately
33 employees.
Financial terms of the transaction were not disclosed. Signing of the
definitive agreement occurred on January 1, 2018. Sales and adjusted
EBITDA were approximately $37 million and $2.9 million, respectively.
Adjusted EBITDA was calculated as income before tax, plus interest,
depreciation and amortization, and non-recurring items that will not
continue after the completion of the acquisition.
David R. Little, Chairman and CEO remarked, “We are pleased to welcome
the ASI employees to the DXP team. ASI is a unique, well-run business
focused on providing value-added solutions to its customers. ASI will
provide DXP’s Metal Working division with new geographic territory and
enhance DXP’s end market mix. With ASI, we continue to build on our
strategy of providing a breadth of technical products and services on a
regional and local level. ASI provides us scale and access to the U.S.
Pacific Northwest market, while allowing us to continue to serve our
customer's evolving needs. ASI is a great company with key
differentiators and provides us with high caliber people.”
“ASI is pleased to be part of the dynamic DXP family. This is a great
opportunity for our employees and customers. DXP has a great legacy of
growth and we plan to continue that growth. We are excited for the next
stage of ASI and helping DXP become a dominant force within cutting
tools, the aerospace industry and on the Western side of the United
States,” added Mel Whitney, President of ASI.
Kent Yee, CFO added, “We are excited to welcome the talented and
hardworking employees of ASI to the DXP team. ASI is our first
acquisition in some time and is another exciting addition to DXP. ASI
provides us with scale and access into a geographic region we have not
historically served. ASI complements and diversifies DXP’s products and
end markets. This transaction will be positive for ASI and DXP’s
customers, employees and shareholders.”
ASI was advised by Cascadia Capital, LLC.
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.
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180103005421/en/
Source: DXP Enterprises, Inc.