Key Takeaways

• DXP is a distribution management company that offers a wide range of innovative pumping solutions (IPS), supply chain services and MROP products and services. The company was founded in 1908.
• DXP Enterprises has had two funding rounds where it raised about $377M.  
• According to DXP’s press release, the company recorded an annual revenue of $1.1 billion in 2021.
• Two corporate challenges faced by DXP Enterprises include taxes due challenges and supply chain challenges.
• According to Zoominfo, the company's stack include Oracle Marketing Cloud, Neustar Identity Data Management, OpenX Ad Exchange, and Clickagy.

Introduction

Company Overview

• DXP is a distribution management company that offers a wide range of innovative pumping solutions (IPS), supply chain services and MROP products and services. The company was founded in 1908.
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Funding History/ Revenue

• DXP Enterprises has had two funding rounds where it raised about $377M.  
• The company raised about $330 million in a Debt funding round in 2020.

• They also raised about $47 million in a Stock Issuance/Offering round in 2007.

• According to DXP’s press release, the company recorded an annual revenue of $1.1 billion in 2021.

Products/Services

• DXP Enterprises offers products in the category of Pumps and pump parts, LACT Units, Bearings & power transmission, Metalworking products, Safety supplies, Industrial supplies, and Hose Seals.
• The company's Rotating Equipment products, includes Centrifugal Pumps, Positive Displacement Pumps, Submersible Pumps, Metering Pumps, Specialty Pumps, Vacuum Pumps & Blowers, Air Compressors, Mechanical Seals & Packing, Electric Motors, Service/ Repair/ Re manufacturing, Condition Monitoring & Controls, Engineered Fabrication, Predict-Plus, Fabricated Measurement Skids, and Energy Recovery.
• Bearings and Power Transmission products, include Chemicals, Bearings, Fluid Power, Hose, Linear Motion Products, Material Handling, Mechanical Power Transmission, Seals, and Clutches & Brakes.
• Metal Working products include abrasives, Clamping & Workholding, Holemaking, Lubricants, Fluids & Coolants, Marking & Labeling, Material Handling & Storage, End Mills, Milling Holders, Power Tools, Precision Instruments & Gauging, Saw Blades, Threading, Lathe, Turning & Boring
• Safety products include apparel-FR, Apparel-Other, Ergonomics, Eye and Face Protection, Facility Management, Fall Protection, Fire Protection, First Aid, Foot Protection, Hand Protection, and more.
• Industrial Supplies include Abrasives, Chemicals & Coatings, Electrical Supplies, Fasteners, Janitorial Equipment, Industrial Pipe, Valves and Fittings, Tools, and Welding Supplies & Equipment.
• Renewable Energy products include Biomethane Capture systems, Biodiesel Slurry Pumps, Biogas Tanker Truck Loading/Offloading, Bioethanol Pumps and Systems, Biofuel Plant Heat Exchangers, Vacuum Pumps and Compressors, Geothermal Brine Re-Injection, and Renewable Hydrogen Production systems.

Corporate Value and Missions

• DXP Enterprises' mission is to support its clients by "acquiring a diverse group of companies with a powerful corporate focus on product expertise, technical services, and Industrial MRO supply chain management."
• The company has three key corporate values include knowledge, diversity, and performance. 

Strategic Initiatives

• The company's 2020 and 2021 annual report did not mention any internal digital strategic initiatives. Basically, DXP Enterprise offers technical expertise to "ensure that their pumps and pump packages are built to meet the highest standards." The company offers about five tech products including Predict-Plus, B2B Web Solutions, CMMS Software — SmartChase, Vending and Scanning, and Virtual Storeroom Management.
• Their approach to increasing productivity comprises "consolidated purchasing programs, centralizing product distribution, customer service, inside sales functions, and using information technology to increase employee productivity."
• On February 6, 2020, DXP Enterprises acquired a leading pump and industrial equipment repair, maintenance, machining and labor services company called Turbo Machinery Repair, In. 

Quote On Digital Strategy

• David R. Little, the CEO of DXP Enterprise quoted that “We are pleased to welcome the Sullivan employees to the DXP team. Sullivan is a unique, well-run business focused on providing equipment and services to customers in the municipal and industrial water and wastewater market. We have had a successful year in scaling our water and wastewater efforts via acquisition and we look forward to Sullivan adding to an already growing and successful end market for DXP. Sullivan as well as DXP, continue to perform in the current dynamic market and we look forward to its contribution in DXP’s third quarter. Sullivan provides DXP with exceptional sales expertise that will enhance the company’s efforts and ability to collaborate and serve the customers. Sullivan is another great addition that will enhance DXP’s end market mix, margins, and cash flow profile.”
• In the company's 2021 sec filling, David R. Little comment that “Today, based on preliminary financial information, we are pleased to announce sequential sales growth in all three business segments for the second quarter of 2021. I am pleased that DXP’s performance continues to strengthen as we accelerate into the COVID-19 recovery. Most of our customers and the markets we serve continue to show improvement. We remain encouraged by the sequential increases despite the continued choppiness. Thank you to all our customers and DXPeople for the support and efforts to remain safe and healthy while moving forward.”

Marketing Tech Stack

• The company's stack include Oracle Marketing Cloud, Neustar Identity Data Management, OpenX Ad Exchange, and Clickagy
• According to BuiltWith, DXP Enterprises is currently using 95 technologies for its website including Viewport Meta, IPhone / Mobile Compatible, SPF and more.
• According to Slintel, the company has about 158 technologies across 18 categories.

Corporate Challenges

Taxes Due Challenges

• According to DXP Enterprises, they occasionally get audited by the federal, state and foreign tax authorities and often encounter challenges with taxes due. These taxes challenges are linked to the "timing and amount of deductions and the allocation of income among various tax jurisdictions."
• DXP Enterprises establishes that despite having sufficient reserved for their wavering tax positions, there is often no affirmation regarding the final resolution.
• The company often modifies its reserves for uncertain tax situations because of the ever-changing realities and occurrences, including judicial rulings, refinement of estimates, closing of a tax audit, and more.
• According to the company, the outcome of the taxes is often different from the recorded amount, which generally impacts the provision for income taxes in that particular period. The company's effective tax rate in time could be affected if, "upon final resolution with taxing authorities, the company prevails on positions for which unrecognized tax benefits have been accrued."

Supply Chain Challenges

• DXP Enterprises is experiencing pressure due to supply chain challenges. According to the company, the supply chain issue was fueled by the inflation and COVID-19 pandemic in 2021.
• According to the annual report, DXPeople worked as a team to manage through the supply chain challenges and "get in front of rising product costs." 
• The company has implemented some SmartSolutions programs to enable clients to improve supply chain efficiencies, obtain expert technical support, and product costs.

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